Document:

Exhibit

Exhibit 10.1

***Text Omitted and Filed Separately
Execution Copy
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Section 20080(b)(4) and Rule 406 of the
Securities Act of 1933, as amended.

EXECUTION VERSION 
CONFIDENTIAL

COLLABORATION AND LICENSE AGREEMENT

by and between

Kite Pharma EU B.V. And
Daiichi Sankyo Company, Limited

ARTICLE I    DEFINITIONS    1
ARTICLE II    LICENSES, OPTION AND EXCLUSIVITY    15
		
	2.1
	License to DS    15

		
	2.2
	DS Option    18

		
	2.3
	License to Kite    20

		
	2.4
	No Implied License    20

		
	2.5
	DS Exclusivity    20

		
	2.6
	Kite Exclusivity    21

		
	2.7
	Trademark Licenses    22

		
	2.8
	Use of Know-How outside the Collaboration    23

		
	2.9
	Use of Patents Outside Collaboration    24

		
	2.10
	Right of First Negotiation    24

ARTICLE III    GOVERNANCE    26
		
	3.1
	Alliance Managers    26

		
	3.2
	JSC Formation and Purpose    26

		
	3.3
	JOC Formation and Purpose    27

		
	3.4
	Membership and Procedures    27

		
	3.5
	Decision-Making    28

		
	3.6
	Day-to-Day Responsibilities    29

		
	3.7
	Limitation of Authority    29

		
	3.8
	Expenses    29

		
	3.9
	Discontinuation of the JSC    29

ARTICLE IV    DEVELOPMENT    30
		
	4.1
	Overview    30

		
	4.2
	Development Plan    30

		
	4.3
	Development Diligence    30

		
	4.4
	Development Records    30

		
	4.5
	Development Reports    31

		
	4.6
	Subcontractors    31

		
	4.7
	Kite Assistance    31

		
	4.8
	Cross-Territory Development Coordination; Data Exchange    31

		
	4.9
	References to Kite    32

ARTICLE V    REGULATORY MATTERS    32
		
	5.1
	Regulatory Responsibilities    32

		
	5.2
	Regulatory Filings    33

		
	5.3
	Regulatory Meetings    34

		
	5.4
	Rights of Reference    34

		
	5.5
	Audit; Inspection    34

		
	5.6
	Regulatory Matters Outside the Territory    35

		
	5.7
	Safety; Adverse Event Reporting    35

		
	5.8
	Remedial Action    36

ARTICLE VI    COMMERCIALIZATION    36
		
	6.1
	Overview    36

		
	6.2
	Commercialization Plan    37

		
	6.3
	Commercial Diligence    37

		
	6.4
	Pricing    37

		
	6.5
	Marketing and Promotional Materials    37

		
	6.6
	Labeling Marking    37

		
	6.7
	Selection of Product Trade Name    38

		
	6.8
	Reports    38

		
	6.9
	Cross Territory Coordination    38

		
	6.10
	Marketing and Sales in the Kite Territory    38

ARTICLE VII    MANUFACTURE AND SUPPLY    39
		
	7.1
	Product Supply    39

		
	7.2
	Manufacturing Technology Transfer    39

ARTICLE VIII    FINANCIAL TERMS    40
		
	8.1
	Upfront Payment    40

		
	8.2
	Development and Commercialization Milestones    40

		
	8.3
	Sales Milestones    41

		
	8.4
	Running Royalties.    41

		
	8.5
	Payment under In-License Agreements    43

ARTICLE IX    RECORDS AND REPORTS    44
		
	9.1
	Royalty Reports; Payment    44

		
	9.2
	Currency    44

		
	9.3
	Interest on Late Payments    44

		
	9.4
	Taxes    44

		
	9.5
	Records; Audits    46

ARTICLE X    INTELLECTUAL PROPERTY    46
		
	10.1
	Ownership of Inventions    46

		
	10.2
	Disclosure of Inventions    47

		
	10.3
	Prosecution of Patents    47

		
	10.4
	Patent Term Extensions in the Territory    48

		
	10.5
	Infringement of Patents by Third Parties    48

		
	10.6
	Infringement of Third Party Rights in the Territory    50

		
	10.7
	Patent Oppositions and Other Proceedings    50

		
	10.8
	Patent Licensed To or From Third Parties    51

ARTICLE XI    CONFIDENTIALITY    52
		
	11.1
	Nondisclosure    52

		
	11.2
	Authorized Disclosure    52

		
	11.3
	Publications    53

		
	11.4
	Publicity    54

ARTICLE XII    REPRESENTATIONS, WARRANTIES, & COVENANTS    55
		
	12.1
	Mutual Representations and Warranties    55

		
	12.2
	DS’s Representations and Warranties    55

		
	12.3
	Kite’s Representations and Warranties    55

		
	12.4
	DS Covenants    57

		
	12.5
	Kite Covenants    58

		
	12.6
	Disclaimer    58

ARTICLE XIII    INDEMNIFICATION AND INSURANCE    58
		
	13.1
	Indemnification by Kite    58

		
	13.2
	Indemnification by DS    59

		
	13.3
	Indemnification Procedures    59

		
	13.4
	Mitigation of Loss    60

		
	13.5
	Limitation of Liability    60

		
	13.6
	Insurance    60

ARTICLE XIV    TERM AND TERMINATION    60
		
	14.1
	Term    60

		
	14.2
	Early Termination    60

		
	14.3
	Effect of Expiration or Termination    61

		
	14.4
	Rights in Bankruptcy    63

		
	14.5
	Survival    64

ARTICLE XV    DISPUTE RESOLUTION    64
		
	15.1
	Disputes    64

		
	15.2
	Arising Between the Parties    64

		
	15.3
	Binding Arbitration    64

		
	15.4
	Patent and Trademark Dispute Resolution    65

		
	15.5
	Injunctive Relief    65

ARTICLE XVI    OTHER PROVISIONS    65
		
	16.1
	Governing Law    65

		
	16.2
	Performance Through Affiliates    65

		
	16.3
	Force Majeure    66

		
	16.4
	Assignment    66

		
	16.5
	Severability    66

		
	16.6
	Notices    66

		
	16.7
	Entire Agreement; Amendments    67

		
	16.8
	Relationship of the Parties    68

		
	16.9
	Waiver    68

		
	16.10
	Third Party Beneficiaries    68

		
	16.11
	Further Assurances    68

		
	16.12
	Counterparts    68

		
	16.13
	Interpretation    68

COLLABORATION AND LICENSE AGREEMENT
This COLLABORATION AND LICENSE (this “Agreement”) effective as of January 5, 2017 (the “Effective Date”), is by and between KITE PHARMA EU B.V., a corporation organized and existing under the laws of The Netherlands having a place of business at Science Park 408, 1098 XH Amsterdam (“Kite”) and DAIICHI SANKYO COMPANY, LIMITED, a corporation organized and existing under the laws of Japan, having a place of business at 3-5-1 Nihonbashi-honcho, Chuo-ku, Tokyo 103-8426 (“DS”). Kite is a wholly-owned indirect subsidiary of Kite Pharma, Inc. (“ParentCo”). Kite and DS may be referred to herein each as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS, Kite, a biopharmaceutical company focused on the development of novel cancer immunotherapy products, is developing proprietary chimeric antigen receptor (CAR) products and T cell receptor (TCR) products, including KTE-C19;
WHEREAS, DS is a Japanese company with experience in developing and commercializing pharmaceutical products in Japan;
WHEREAS, DS wishes to obtain from Kite the exclusive right to develop and commercialize KTE-C19 and other selected Kite CAR and TCR products in Japan, and Kite is willing to grant such rights to DS, all on the terms and conditions set forth herein; and
WHEREAS, ParentCo has entered into a Guarantee of even date herewith pursuant to which it has provided DS certain guarantees, representations, warranties and assurances in connection with the transactions hereunder (the “Guarantee”).
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the Parties hereby agree as follows:
Article I 
DEFINITIONS
1.1    “Adverse Event” means any adverse medical occurrence in a patient or clinical investigation subject to whom a Licensed Product is administered and which could, but does not necessarily, have a causal relationship with the Licensed Product, including any unfavorable and unintended sign (including an abnormal laboratory finding, for example), symptom, or disease temporally associated with the administration of the Licensed Product, whether or not considered related to Licensed Product administration.
1.2    “Affiliate”, with respect to a Party, means any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with that Party. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of a legal entity, whether through

the ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) the ownership, directly or indirectly, of 50% or more of the voting securities or other ownership interest of a legal entity; provided, that if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.
1.3    “Anti-Corruption Laws” means the UK Bribery Act 2010, as amended, the United States Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. 78dd-1 et seq. and any other applicable anti-corruption laws and laws for the prevention of fraud, racketeering, money laundering or terrorism.
1.4    “Applicable Laws” means any federal, state, local, national, and supra-national laws, statutes, rules and/or regulations, including any rules, regulations, guidance, guidelines, or requirements of Regulatory Authorities, national securities exchanges, or securities listing organizations, that may be in effect from time to time during the Term and apply to a particular activity hereunder and including laws, regulations, and guidelines governing the import, export, Development, manufacture, transport, handling, storage, distribution, or Commercialization of any Licensed Product in or for the Territory.
1.5    “Approved CMO” means a contract manufacturing organization approved in writing by Kite (which approval shall not be unreasonably withheld, conditioned or delayed) to receive Kite Know-How in order to perform manufacturing services for DS or its Affiliates.
1.6    “Business Day” means a day that is not a Saturday, Sunday, or a day on which banking institutions in Tokyo, Japan, Los Angeles, California, or Amsterdam, The Netherlands, are required by law to remain closed.
1.7    “Calendar Quarter” means each successive period of three (3) consecutive calendar months ending on March 31, June 30, September 30, or December 31; provided, however that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the last day of the Calendar Quarter in which the Effective Date falls; and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement.
1.8    “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided however, that (a) the first Calendar Year of the Term shall extend from the Effective Date to the last day of the Calendar Year in which the Effective Date falls; and (b) the last Calendar Year of the Term shall end upon the expiration or termination of this Agreement.
1.9    “CAR” means a chimeric antigen receptor.
1.10    “CAR-T Product” means a pharmaceutical or biologic product containing an engineered autologous T cell expressing a CAR directed against a particular Target.
1.11    “Collaboration Data” has the meaning ascribed in Section 4.8.2.1.

1.12    “Collaboration Know-How” means Know-How conceived, discovered, developed or otherwise made by (a) DS, its Affiliates and their respective employees, agents or contractors, and/or (b) Kite, its Affiliates and their respective employees, agents or contractors, in each case from and after the Effective Date and during the Term, in the conduct of research, Development, manufacturing or Commercialization activities for the Licensed Products, or otherwise pursuant to this Agreement, but excluding the Collaboration Data.
1.13    “Collaboration Patent” means any Patent which claims an Invention.
1.14    “Collaboration Technology” means all Collaboration Know-How and all Collaboration Patents.
1.15    “Commercialization” means any and all activities undertaken before and after obtaining Regulatory Approval relating specifically to the pre-launch, launch, promotion, marketing, sale, and distribution (including importing, exporting, transporting, customs clearance, warehousing, invoicing, handling, and delivering the Licensed Product to customers) of the Licensed Products, including: (a) strategic marketing, sales force detailing, advertising, medical education and liaison, and market and product support; (b) any post-approval clinical trials that are not conducted for obtaining Regulatory Approval(s) (but, for clarity, excluding any post-approval clinical trials that must be conducted to maintain Regulatory Approval), and (c) all customer support, invoicing and sales activities. “Commercialize” means to engage in Commercialization activities.
1.16    “Commercially Reasonable Efforts” means, with respect to a Party in the performance of its obligations hereunder in relation to the Licensed Products, the application by or on behalf of such Party of a level of efforts that a [...***...] pharmaceutical or biotechnology company, as the case may be, would apply to such activities in relation to a similar pharmaceutical or biologic product, as applicable, owned by it or to which it has exclusive rights, which product is at a similar stage in its development or product life and is of similar market potential and strategic value (in each case as compared to the Licensed Product) taking into account efficacy, safety, expected and actual Regulatory Authority approved labeling, the competitiveness of alternative products in the marketplace and market conditions, the patent, regulatory (i.e. regulatory exclusivity) and other proprietary position of the Licensed Product, the likelihood of regulatory approval of the Licensed Product given the regulatory structure involved, the expected and actual profitability of the Licensed Product (excluding [...***...]), and other relevant factors, based on conditions then prevailing.
1.17    “Competing Product” means (a) any CAR-T Product or TCR-T Product directed to the same Target as a Licensed Product, including CD19 (the Target of KTE-C19); and (b) to the extent not covered by clause (a), any CAR-T Product or TCR-T Product directed to the same Target as any IND Product that is or was part of a Product Evaluation by DS pursuant to Section 2.2.2 and for which DS did not exercise the Option (including the IND Product that was the subject of such unexercised Option), provided in the case of (b), such CAR-T Product or TCR-T Product shall no longer be deemed a Competing Product [...***...] ([...***...]) years after [...***...] (the “Tail Period”) (however, subclause (a) above shall continue to apply); but excluding any Licensed Product for use in the Field in the Territory in each case of (a) and (b).  Where DS has elected not to exercise the Option for [...***...] or more IND

Products directed to the same Target, the applicable date from which the Tail Period is measured shall be the date that [...***...].

1.18    “Confidential Information” means all non-public information disclosed by a Party to the other Party under this Agreement, including any such information related to any scientific, clinical, engineering, manufacturing, marketing, financial, or personnel matters relating to a Party, or related to a Party’s present or future products, sales, suppliers, customers, employees, investors, business plans, Know-How, regulatory filings, data, compounds, research projects, work in progress, future developments or business, in all such cases whether disclosed in oral, written, graphic or electronic form, and whether or not specifically marked as confidential or proprietary, where under the circumstances in which such disclosure was made or given the nature of information disclosed, a reasonable person would consider such information confidential; provided, however, that in any event, Confidential Information excludes any information that (a) is known by the receiving Party at the time of disclosure, and not through a prior disclosure by or on behalf of the disclosing Party, as documented by the receiving Party’s written records in existence prior to the receipt of such information; (b) is or becomes in the public domain, other than through the receiving Party’s breach of the confidentiality obligations set forth in this Agreement; (c) is subsequently rightfully disclosed to the receiving Party by a Third Party who is not directly or indirectly under an obligation of confidentiality to the disclosing Party; or (d) is developed by or for the receiving Party independently of, and without reference to or use of, the information received from the disclosing Party. Confidential Information shall include: (i) the terms and conditions of this Agreement; and (ii) information disclosed by either Party pursuant to the Confidentiality Agreement.
1.19    “Confidentiality Agreement” means that certain Mutual Confidentiality Agreement between Kite and DS dated as of April 25, 2016.
1.20    “Control” means with respect to any Know-How, Patent, or other intellectual property right, possession of the right, whether directly or indirectly, and whether by ownership, license, or otherwise, to grant a license, sublicense, or other right to or under, such Know-How, Patent, or other intellectual property right as required herein without violating the terms of any agreement or other arrangements with any Third Party.
1.21    “CTN” means the Clinical Trial Notification filed with Japan’s Pharmaceuticals and Medical Devices Agency for the purpose of conducting clinical trials of a pharmaceutically active agent in humans in Japan.
1.22    “Development” means all development activities for the Licensed Products that are directed to obtaining Regulatory Approval(s) of the Licensed Products, including all non- clinical, preclinical, and clinical testing and studies of the Licensed Products; toxicology, pharmacokinetic, and pharmacological studies; CMC activities; statistical analyses; assay development; protocol design and development; the preparation, filing, and prosecution of any MAA for the Licensed Products; development activities directed to label expansion and/or obtaining Regulatory Approval for one or more additional indications following initial Regulatory Approval; development activities conducted after the launch, excluding any post- approval clinical trials that are not conducted for obtaining Regulatory Approval(s) (but, for
1.23    

clarity, including any post-approval clinical trials that must be conducted to maintain Regulatory Approval); and all regulatory affairs related to any of the foregoing including negotiations with Regulatory Authority and the product labeling or label change. “Develop” and “Developing” have correlative meanings.
1.24    “Disclosed Know-How” has the meaning set forth in Section 2.8.1.
1.25    “Dollar” means United States dollars, and “$” shall be interpreted accordingly.
1.26    “DS Housemark” means any trademark or trade name, and registrations and applications therefor, owned or Controlled by DS and covering DS’s (or its Affiliate’s) corporate name or company logo.
1.27    “DS Know-How” means any Know-How that (a) is Controlled by DS or its Affiliates as of the Effective Date or during the Term, and (b) is necessary or actually useful for the Development, manufacture or Commercialization of the Licensed Products in the Field, but excluding all Collaboration Know-How and DS Patents.
1.28    “DS Patent” means any Patent that (a) is Controlled by DS or its Affiliates as of the Effective Date or during the Term, and (b) is necessary or reasonably useful for the Development, manufacture or Commercialization of the Licensed Products in the Field, but excluding all Collaboration Patents.
1.29    “DS Target” means a Target against which DS or its Affiliates is researching one or more CAR-T Products or TCR-T Products following the commencement of (i) for CAR-T Products, [...***...]; and (ii) for TCR-T Products, [...***...].
1.30    “DS Technology” means all DS Know-How and all DS Patents.
1.31    “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules, regulations, and schedules promulgated thereunder.
1.32    “Executive Officers” means the Chief Executive Officer in the case of Kite and the Chief Executive Officer in the case of DS, provided that either Chief Executive Officer may designate any employee with a title of executive vice president or above as an Executive Officer.
1.33    “FDA” means the United States Food and Drug Administration or any successor agency thereto.
1.34    “Field” means all human therapeutic and prophylactic uses.
1.35    “First Commercial Sale” means, with respect to any Licensed Product, the first sale, transfer or disposition for value of such Licensed Product by DS, its Affiliates or Sublicensees to an end user or prescriber for use, consumption, or resale anywhere in the Territory. [...***...]

[...***...] shall not constitute a First Commercial Sale.
1.36    “FTE” means the efforts of one or more employees or independent contractors equivalent to the efforts of a full time employee based upon a total of [...***...] for a [...***...] period.
1.37    “FTE Rate” means an initial rate of [...***...] Dollars ($[...***...]) per FTE per year. Commencing January 1, 2018, the FTE Rate shall be changed [...***...] basis to reflect any [...***...] (as the case may be) in the applicable [...***...] (based on the change in the [...***...] as of the Effective Date to [...***...] as of the date of the calculation of such revised FTE Rate).
1.38    “Generic Product” means, with respect to a Licensed Product, any product sold by a Third Party (including a “generic product,” “biogeneric,” “follow-on biologic,” “follow-on biological product,” “follow-on protein product,” “follow-on CAR-T Product,” “follow-on TCR- T Product,” “similar biological medicinal product,” or “biosimilar product”) approved by way of an abbreviated regulatory mechanism by the Regulatory Authority in the Territory that, in each case, (a) has not been licensed by DS or its Affiliates to such Third Party in the Territory, and (b) in the Territory, meets the equivalency determination by the applicable Regulatory Authority (including a determination that the product is “comparable,” “interchangeable,” “bioequivalent,” “biosimilar” or other term of similar meaning, with respect to the Licensed Product), in each case, as is necessary to permit substitution of one product for another product under Applicable Law.
1.39    “Good Clinical Practices” or “GCP” means the then-current standards, regulations, practices and procedures promulgated or endorsed by the FDA for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials as set forth in the guidelines adopted by the ICH, titled “Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance” (or any successor document), and the equivalent promulgated or endorsed by any other Regulatory Authority, in each case as they may be updated from time to time.
1.40    “Good Laboratory Practices” or “GLP” means the then-current standards, regulations, practices, and procedures for laboratory activities of biologics promulgated or endorsed by the FDA as set forth in 21 C.F.R. § 58 (or any successor statute or regulation) or the Good Laboratory Practice principles of the Organization for Economic Co-Operation and Development (OECD)), and the equivalent promulgated or endorsed by any other Regulatory Authority, in each case as they may be updated from time to time.
1.41    “Good Manufacturing Practices” or “GMP” means the then-current good manufacturing practices required by the FDA and other Applicable Laws in the United States relating to the manufacture and testing of biopharmaceutical materials, and comparable Applicable Laws and requirements of Regulatory Authorities in the Territory relating to the manufacture and testing of biopharmaceutical materials, in each case as they may be updated from time to time, including applicable rules and guidelines promulgated under the ICH.
1.42    “ICH” means the International Conference on Harmonization.

1.43    “IFRS” or “International Financial Reporting Standards” means an integrated system of International Accounting Standards and International Financial Reporting Standards, consistently applied.
1.44    “Initiation” means, with respect to a clinical trial, the enrollment of the first subject in such clinical trial.
1.45    “In-License Agreements” means any Third Party agreements under which Kite or its Affiliates obtained rights to any Kite Technology. The In-License Agreements existing as of the Effective Date are set forth in Schedule 1.44. Additional In-License Agreements may be added in accordance with Section 2.1.5.1.
1.46    “IND” means an Investigational New Drug Application filed with the FDA pursuant to 21 CFR 312.20 or any successor regulation thereto.
1.47    “IND Product” means any Product (a) that is listed on Schedule 1.46; or (b) for which Kite, its Affiliates, agents or marketing or development partners have submitted an IND to the FDA during the Option Exercising Period.
1.48    “Invention” means any process, method, composition of matter, article of manufacture, invention, discovery or finding, patentable or otherwise, that is discovered, conceived of and/or reduced to practice as a result of a Party exercising its rights or carrying out its obligations under this Agreement, whether directly or via its Affiliates, agents or contractors, including all rights, title and interest in and to the intellectual property rights therein.
1.49    “Japanese Yen” or “JPY” means the official currency of Japan and “¥” shall be interpreted accordingly.
1.50    “Kite Housemark” means any trademark or trade name, including registrations and applications therefor, owned or Controlled by Kite covering Kite’s corporate name and/or company logo.
1.51    “Kite Know-How” means any Know-How that (a) is Controlled by Kite or its Affiliates as of the Effective Date or during the Term (but subject to Section 2.1.5), and (b) is necessary or actually useful for the Development, manufacture or Commercialization of the Licensed Products in the Field in the Territory, but excluding all Collaboration Technology and Kite Patents.

1.52    “Kite Patents” means any Patent that (a) is Controlled by Kite or its Affiliates as of the Effective Date or during the Term (but subject to Section 2.1.5), and (b) claims the Licensed Products or would otherwise be infringed, but for the license granted herein, by the Development, manufacture or Commercialization of the Licensed Products in the Field in the Territory, but excluding all Collaboration Patents. Kite Patents existing as of the Effective Date are listed on Schedule 1.51.
1.53    “Kite Target” means [...***...]

[...***...]
1.54    “Kite Technology” means all Kite Know-How and all Kite Patents.
1.55    “Kite Territory” means worldwide outside the Territory.
1.56    “Know-How” means any non-public knowledge, know-how, technology, information, data, trade secrets, formulas, formulations, processes, techniques, inventions, methods, discoveries, specifications, formulations, compositions, materials, ideas, developments, test procedures and results.
1.57    “Knowledge” of a Party means the actual or constructive knowledge of the senior executives of such Party, including the chief executive officer, and any executive vice president, the general counsel, or the chief medical officer of a Party, or any personnel holding positions equivalent to such job titles (but only to the extent such positions exist at such Party).
1.58    “KTE-C19” means Kite’s proprietary anti-CD19 CAR-T Product known as KTE- C19 and as described in Schedule 1.57.
1.59    “Licensed Products” means (a) KTE-C19 and (b) any Opt-in Product(s) (each, a “Licensed Product”).
1.60    “MAA” or “Marketing Authorization Application” means an application to the appropriate Regulatory Authority for approval to market a Licensed Product (but excluding Pricing Approval) in any particular jurisdiction and all amendments and supplements thereto.
1.61    “Manufacturing Cost” means, with respect to the Licensed Products supplied by Kite to DS under this Agreement:
1.61.1    If such Licensed Product is manufactured by a Third Party under contract with Kite or its Affiliates, and supplied to DS by Third Party contract manufacturer(s) either directly to DS, or indirectly to Kite or its Affiliates for further supply to DS, the Manufacturing Cost means [...***...]. As used in this paragraph, “Additional Costs” means (a) [...***...]

[...***...].
1.61.2    If such Licensed Product is manufactured by Kite or its Affiliates, the Manufacturing Cost means [...***...]. As used herein:
1.61.2.1    “Direct Expenses” are those material and labor and services expenses captured in time sheets, invoices, and the like that are [...***...].
1.61.2.2    “Indirect Expenses” means a reasonable allocation of expenses associated with [...***...] but, in each case, excluding any Direct Expenses. Indirect Expenses shall be calculated in accordance with Kite’s standard accounting methodology.
1.62    “Medical Affairs Activities” means: (a) the coordination of medical information requests and field based medical liaisons in the Territory with respect to Licensed Products commercially launched in the Territory; and (b) those clinical studies conducted in the Territory after Regulatory Approval of a Licensed Product has been obtained which are neither intended nor designed to support a Regulatory Filing, including medical affairs studies, post marketing studies, and investigator and physician-initiated studies, in all such cases initiated by or under the control or direction of DS.
1.63    “Necessary IP” means one or more Patents that are (a) owned or controlled by a Third Party and to which Kite acquires a license following the Effective Date or (b) acquired by Kite following the Effective Date, [...***...].

1.64    “Net Sales” means with respect to any Licensed Product, the gross amounts invoiced by DS or its Affiliates or Sublicensees to any Third Party for sales of the Licensed Products, less the following deductions, to the extent such deductions are actually paid, incurred, or otherwise taken, and are reasonable and customary:
1.64.1    [...***...];
1.64.2    [...***...];
1.64.3    [...***...]; and
1.64.4    [...***...].
Components of Net Sales shall be determined in the ordinary course of business in accordance with IFRS, consistently applied. For purposes of determining when a sale of any Licensed Product occurs for purposes of calculating Net Sales, [...***...]. For purposes of determining Net Sales, a “sale” shall not include [...***...].
In the event that DS sells a Licensed Product (a) [...***...]. In the event that DS [...***...].

1.65    “NIH Product” means a product developed by the National Cancer Institute (“NCI”) pursuant to a cooperative research and development agreement between Kite and NCI that is subject to a license agreement between Kite and the National Institutes of Health and for which NCI has completed a technology transfer to Kite relating to the manufacture of such product.
1.66    “Opt-in Product” means any IND Product(s) for which DS has timely exercised its Option to include such product as a Licensed Product under this Agreement.
1.67    “Option” has the meaning set forth in Section 2.2.1.
1.68    “Option Exercising Period” means the [...***...] period after the Effective Date and any extension thereof in accordance with Section 2.2.5.
1.69    “Opt-out Product” means any IND Product(s) (a) for which DS has affirmatively elected during the applicable Evaluation Period to not exercise its Option; or (b) for which DS has not exercised its Option during the applicable Evaluation Period to include such product as a Licensed Product under this Agreement.
1.70    “Patents” means all patents and patent applications (which for the purpose of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including all divisionals, continuations, substitutions, continuations-in-part, re- examinations, reissues, additions, renewals, revalidations, extensions, and supplemental protection and the like of any such patents and patent applications, and any and all foreign equivalents of the foregoing.
1.71    “Person” means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal entity or organization.
1.72    “Pricing Approval” means the approval, agreement, determination or governmental decision of a Regulatory Authority establishing the price for a Licensed Product that can be charged and/or reimbursed in regulatory jurisdictions where the applicable Regulatory Authority approves or determines the price and/or reimbursement of pharmaceutical and biologic products.
1.73    “Products” means any CAR-T Product or TCR-T Product Controlled by Kite (i) as of the Effective Date and set forth on Schedule 1.72 ([...***...]) or (ii) during the Option Exercising Period ([...***...]).
1.74    “Product Trademarks” means the trade names, trademarks, service marks, design and logos for the Licensed Products selected pursuant to Section 6.7 for use in connection with the Commercialization of Licensed Products. Product Trademarks excludes any trade names, trademarks, service marks, design or logos that include any corporate name or logo of the Parties or their Affiliates.

1.75    “Quality Agreement” has the meaning set forth in Section 7.1.1.
1.76    “Regulatory Approval” means any approval, product and establishment license, registration, or authorization, including pricing approvals and reimbursement approvals, of any Regulatory Authority required for the manufacture, use, storage, import, transport, or Commercialization of a Licensed Product in accordance with Applicable Laws.
1.77    “Regulatory Authority” means any applicable government regulatory authority involved in granting approvals for the manufacture, Development, Commercialization, reimbursement, and/or pricing of a Licensed Product in the Territory. “Regulatory Authority” in the Territory includes Japan’s Ministry of Health, Labor and Welfare, the Japanese Pharmaceuticals and Medical Devices Agency, or any successor agency of the foregoing having regulatory jurisdiction over the manufacture, Development, Commercialization, reimbursement, and/or pricing of drugs or biologics in the Territory.
1.78    “Regulatory Filings” means all documentation, correspondence, submissions, applications and notifications submitted to or received from a Regulatory Authority that are necessary or reasonably useful in order to Develop, manufacture and Commercialize a Licensed Product in the Field.  Regulatory Filings include, with respect to each Licensed Product, all INDs, CTAs, CTNs, MAAs, Regulatory Approvals, and amendments and supplements of any of the foregoing, as well as the contents of any minutes from formal meetings (whether in person or by audio conference or videoconference) with a Regulatory Authority.
1.79    “ROFN Product” has the meaning set forth in Section 2.10.1.
1.80    “Safety Agreement” has the meaning set forth in Section 5.7.2.
1.81    “Sublicensee” means a Third Party or an Affiliate of DS, in each case which is granted a sublicense by DS to any of the Kite Technology pursuant to Section 2.1.2.
1.82    “Target” means an antigen expressed on or in a tumor cell.
1.83    “Tax” or “Taxes” means (a) any taxes, assessments, fees, including income, profits, gross receipts, net proceeds, sales, alternative or add on minimum, ad valorem, turnover, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, social contributions, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and (b) any liability for the payment of any amounts of the type described in clause (a) as a result of the operation of law or any express obligation to indemnify any other person.
1.84    “TCR” means a T cell receptor.
1.85    “TCR-T Product” means a pharmaceutical or biologic product containing an engineered autologous T cell expressing a TCR directed against a particular Target.
1.86    “Territory” means Japan.

1.87    Third Party” means a Person other than DS, Kite, or their respective Affiliates.
1.88    “Third Party Agent” has the meaning set forth in Section 2.8.2.
1.89    “Transaction Agreements” means, individually and collectively, this Agreement and the various other agreements expressly referenced herein to be entered into between the Parties including the Safety Agreement and the Quality Agreement, once executed and the ROFN Agreement, if and when executed.
1.90    “Valid Claim” means a claim of any issued and unexpired patent (as may be extended through supplementary protection certificate or patent term extension or the like) or pending patent application included within Kite Patents, Kite Sole Patents or Joint Patents, which claim has not been revoked, held invalid, unpatentable, or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable judgment (or judgment from which no appeal was taken within the allowable time period) and which claim has not been disclaimed, denied or admitted to be invalid, unpatentable, or unenforceable through reissue, re-examination or disclaimer or otherwise. In the case of patent applications, in order to be considered within the scope of a Valid Claim, a patent application cannot have a priority date that is [...***...] or more years earlier than any date on which the patent application was pending, provided that upon the issuance of a patent from such patent application, the claims therein shall again be deemed to be Valid Claims (subject to the preceding sentence).
1.91    Additional Definitions. The following table identifies the location of definitions set forth in various Sections of the Agreement:
	
		
	Defined Term
	Section

	Action
	10.5.2.1

	Alliance Manager
	3.1

	Claims
	13.1

	Clinical Data
	2.2.2

	Code
	14.4

	Commercialization Plan
	6.2

	Development Plan
	4.2

	DS Group
	13.2

	DS Indemnitees
	13.1

	DS Wind Down Period
	2.5.2

	Evaluation Period
	2.2.3

	Extension Fee
	2.2.5

	Grantee
	2.8.1

	Grantor
	2.8.1

	Guarantee
	Recitals

	Indemnified Party
	13.3

	Indemnifying Party
	13.3

	Japan Milestone Payment
	8.5.2

	
		
	Defined Term
	Section

	Joint Inventions
	10.1

	JOC
	3.3

	Joint Patents
	10.1

	JSC
	3.2

	Key Regulatory Filings
	5.2.1

	Kite Indemnitees
	13.2

	Kite Manufacturing Know-How
	7.2.2

	Kite Partner
	4.8.3

	Kite Partner Agreement
	4.8.3

	Kite Wind Down Period
	2.6.3

	Kite-Prosecuted Patents
	10.3.1

	Negotiation Period
	2.10.1

	New Affiliate IP
	2.1.5.3

	NIH Agreement
	Schedule 1.44

	Opt-in Fee
	2.2.4

	Option
	2.2.1

	Option Term
	2.2.1

	ParentCo
	1st Paragraph

	Pre-IND Data
	2.2.2

	Product Evaluation
	2.2.2

	Product Infringement
	10.5

	Product Trademarks
	6.7

	Remedial Action
	5.8.2

	ROFN Agreement
	2.11.1

	ROFN Protection Period
	2.10.2

	Royalty Term
	8.4.2

	Sole Inventions
	10.1

	Sole Patents
	10.1

	Successful Completion
	7.2.4

	Technology Transfer
	7.2

	Term
	14.1

	Third Party Agent
	2.8.2

	Third Party Offer
	2.11.1

	Trademark License
	2.7.1

	SEC
	11.4.3

	Second Negotiation Period
	2.10.1

	VAT
	9.4.5

ARTICLE II     
LICENSES, OPTION AND EXCLUSIVITY

2.1    License to DS.

2.1.1    License Grant. Subject to the terms and conditions of this Agreement, Kite hereby grants to DS an exclusive (even as to Kite and its Affiliates), royalty-bearing and sublicenseable (solely as set forth in Section 2.1.2) license under the Kite Technology and Kite’s interest in the Collaboration Technology to Develop, use, manufacture, have manufactured (solely through an Approved CMO), sell, offer for sale, have sold, import, export, and otherwise Commercialize the Licensed Products in the Field in the Territory. The scope of the license granted in this Section will include the rights to manufacture and have manufactured (solely through an Approved CMO) in the Kite Territory (excluding sell, offer for sale, have sold, Commercialize activities) only for the purpose of Commercializing the Licensed Products in the Territory.

2.1.2    Sublicense Rights. Subject to the terms and conditions of this Agreement, DS shall have the right to sublicense the rights granted to it under Section 2.1.1 without Kite’s consent: (a) to its Affiliates, provided that such sublicense shall automatically terminate if such Sublicensee ceases to be an Affiliate of DS (without the right to further sublicense except as set forth in subclause (b) or (c)); (b) to its Third Party subcontractors (without the right to further sublicense) for the sole purpose of performing part of DS’s obligations with respect to the Development of the Licensed Products; and (c) to an Approved CMO (without the right to further sublicense) for the sole purpose of manufacturing and supply the Licensed Products to DS. DS shall not grant any other sublicense without Kite’s express prior written consent. Each sublicense granted by DS shall be consistent with the terms and conditions of this Agreement, and DS shall ensure that each Sublicensee agrees in writing to comply with the terms and conditions of this Agreement that are applicable to such Sublicensee’s activities under such sublicense. DS shall remain fully responsible for all of its Sublicensees’ activities, including any and all failures by its Sublicensees to comply with the applicable terms and conditions of this Agreement. Within [...***...] after the grant of a sublicense with a Third Party for which DS needs to obtain Kite’s prior written consent under this Section, DS shall notify Kite and shall provide Kite with a true and complete copy of the sublicense agreement (redacted as to economic terms and other commercially sensitive numbers and provisions unrelated to this Agreement).
2.1.3    Retained Rights.  Kite hereby expressly retains: (a) the right under the Kite Technology to exercise its rights and perform its obligations under this Agreement, whether directly or through one or more licensees (other than DS) or subcontractors; (b) subject to Section 2.6, all rights to practice and license the Kite Technology outside of the scope of the licenses granted in Section 2.1.1, including the exclusive right to Develop, use, manufacture, have manufactured, import, export, and otherwise Commercialize the Licensed Products in the Kite Territory. DS acknowledges that an In-License Agreement may also provide for retained rights by the licensor of the Kite Technology under such In-License Agreement and that DS’s license hereunder is subject to such retained rights.

2.1.4    In-License Agreements.  DS acknowledges that certain of the Kite Technology has been licensed to Kite under the In-License Agreements, and that DS’s license under such Kite Technology is therefore a sublicense under and subject in all cases to the terms of the In-License Agreements, and DS agrees to comply with all applicable provisions of the In-License Agreements. For clarity, Kite is required to obtain consent prior to sublicensing any NIH Product to DS. Kite hereby warrants that it has obtained such consent for KTE-C19 as of the Effective Date, and will use reasonable efforts to obtain such consent for all other NIH Products. DS further acknowledges that the licensed field of use under an In-License Agreement may be narrower than the Field and agrees that, in such case, DS’s sublicense under the applicable Kite Technology shall be limited to the scope of the licensed field of use under such In-License Agreement.

2.1.5    New Kite Technology.

2.1.5.1    If, during the Term, Kite obtains Control of any Necessary IP (except as set forth in Section 2.1.5.4), then Kite will share the terms and conditions of the agreement through which Kite obtained such Necessary IP with DS promptly after the execution of such agreement.
(a)    If DS determines, [...***...], then DS shall notify Kite in writing thereof. Upon Kite’s receipt of such notice, (i) such Necessary IP shall be included in the Kite Technology, (ii) the agreement through which Kite obtained such Necessary IP shall be deemed to be an In-License Agreement, and (iii) Section 8.5.4 shall apply with regard to such Necessary IP relating to KTE-C19 and Section 8.5.2 shall apply with regard to such Necessary IP relating to all other Licensed Products (but not KTE-C19).
(b)    If DS determines [...***...], then DS shall notify Kite in writing thereof and (i) such Necessary IP shall not be included in the Kite Technology, (ii) the agreement through which Kite obtained such Necessary IP shall not be deemed to be an In-License Agreement, and (iii) Section 8.5.4 and Section 8.5.2 shall not apply with regard to such Necessary IP relating to Licensed Products. If DS determines, [...***...], for the Development, manufacture, or Commercialization of the Products in the Field in the Territory, then the Parties will follow the licensing process according to Section 2.1.5.2.
(c)    If DS determines [...***...], then DS shall have the option to terminate such Licensed Product(s) to which such Necessary IP relates pursuant to Section 14.2.4.
2.1.5.2    If during the Term, Kite obtains Control of any intellectual property rights that are owned or controlled by a Third Party that are not Necessary IP [...***...], then Kite may bring such new intellectual property rights to the attention of DS in writing, including a description of such intellectual property rights, and the Parties in good faith will discuss whether such new intellectual property rights should be made

available for use by DS pursuant to this Agreement for the Development, manufacture or Commercialization of Licensed Products in the Field in the Territory. [...***...]. The Parties will discuss the rationale of including the new intellectual property rights and [...***...].
(a)If the Parties agree in writing [...***...] for such new intellectual property rights, then (i) such new intellectual property rights shall thereafter be included in the Kite Technology, and (ii) the agreement through which Kite obtained such new intellectual property rights shall thereafter be deemed an In-License Agreement.
(b)If DS [...***...], then (i) such intellectual property rights shall not be included in the Kite Technology, and (ii) the agreement through which Kite obtained such new intellectual property rights shall not be considered an In-License Agreement.
2.1.5.3    If during the Term, a Third Party becomes an Affiliate of Kite as a result of a merger with, acquisition, consolidation or similar transaction of Kite, any intellectual property rights owned or controlled by such new Affiliate as of the closing of such transaction or developed by such new Affiliate thereafter independent of Kite’s activities under this Agreement and without using any Kite Technology (“New Affiliate IP”) shall be excluded from the Kite Technology and shall not be licensed to DS under this Agreement except as expressly set forth below.
(a)If such Third Party was a party to an In-License Agreement at the timing of such merger or acquisition, then the sublicenses to such New Affiliate IP granted to DS, its Affiliates or Sublicensees under this Agreement based on such In-License Agreements will continue to be in force even after such merger or acquisition.
(b)If such New Affiliate IP includes any Necessary IP that is not subject to subsection (a) above, then [...***...]. If the Parties cannot agree in writing upon such terms within [...***...] of engaging in such discussions, then DS shall have the option to terminate this Agreement with respect to any Licensed Product(s) to which such Necessary IP relates pursuant to Section 14.2.4.
2.1.5.4    If during the Term, [...***...]

[...***...], the Parties shall discuss the necessity of licensing in such rights in good faith, employing qualified individuals to participate in such discussions.
2.1.6    Patent License Registration.  Kite agrees to register itself, or to cooperate with DS to register, the exclusive license of the Kite Patents granted under Section 2.1.1 to DS in the Territory as a “Senyou Jisshiken” in accordance with Article 77 of the Japanese Patent Law of 1959, or a “Kari-Senyo Jisshiken” in accordance with Article 34-2 thereof, in Japan, at DS’s request and expense.

2.2    DS Option.
2.2.1    Option Grant. Subject to the terms and conditions of this Agreement, from the Effective Date until later of (a) [...***...] or (b) [...***...], Kite hereby grants to DS the exclusive option to include any Product as a Licensed Product under this Agreement (the “Option”), which option may be exercised as set forth in Section 2.2.3 below. During the Option Term, Kite shall not commercialize any Product in the Territory or grant any Third Party the right to develop and commercialize any Product in the Territory unless and until DS’s Option for such Product expires under Section 2.2.3.

2.2.2    Evaluation. After the Effective Date and during the Option Exercising Period, upon DS’s request, Kite shall promptly provide DS with Pre-IND Data and Clinical Data for the IND Product(s) so requested. If any Product becomes an IND Product during the Option Exercising Period, Kite shall promptly inform DS of such achievement and of the Target of such IND Product. Upon DS’s request, Kite shall provide DS with Pre-IND Data and Clinical Data and intellectual property rights information for such IND Product (including any then-existing agreement(s) that, if DS were to exercise its Option for such IND Product, would be deemed an In-License Agreement(s)).  Following the delivery of Pre-IND Data and Clinical Data and intellectual property rights information for the IND Product(s) so requested, upon DS’s reasonable request during the Evaluation Period for such IND Product(s), Kite shall keep DS updated on the Development of such IND Product(s) and shall provide DS with additional Pre-IND Data and Clinical Data and intellectual property rights information (including new agreement(s) that have been executed in the interim that, if DS were to exercise its Option for such IND Product, would be deemed an In-License Agreement(s)) for such IND Product(s) as such information become available. In addition, upon DS’s reasonable request during the Evaluation Period for such IND Product(s) so requested, Kite shall provide any additional information, including Confidential Information, for such IND Product. DS shall use the Pre-IND Data and Clinical Data and intellectual property rights information provided by Kite solely to evaluate whether to exercise its Option for such IND Product.  DS’s evaluation of Pre-IND Data and Clinical Data and intellectual property rights information of a requested IND Product shall be referred to as a “Product Evaluation” under this Agreement.  As used herein, “Pre-IND Data” means [...***...], and “Clinical Data” means the [...***...]

[...***...]. Notwithstanding the foregoing, for NIH Products, Pre-IND Data and Clinical Data shall only include such data as is in Kite’s possession or control and Kite shall not be obligated to obtain additional data from NCI.

2.2.3    Option Exercise and Expiration. DS may exercise the Option, on an IND Product-by-IND Product basis, by providing written notice of exercise to Kite before [...***...] after the date of filing of the IND (or [...***...] from the Effective Date, if longer) for such IND Product by Kite (the “Evaluation Period”). Notwithstanding the foregoing, if the dosing of the first patient in a clinical trial for a particular IND Product occurs later than [...***...] following the date of filing of a Kite IND for such IND Product, then the Evaluation Period for such IND Product shall be extended for [...***...].  If Kite does not receive the exercise notice for an IND Product before the expiration of the applicable Evaluation Period or if DS affirmatively elects prior to the expiration of the applicable Evaluation Period to not exercise its Option for an IND Product and delivers notice of such election, then the Option for such IND Product shall automatically expire and, notwithstanding Section 2.6, Kite shall have the right to continue the Development and Commercialization of such IND Product in the Territory, either on its own or with a Third Party, with no further obligations to DS.
2.2.4    Opt-in Payment.  On a IND Product-by-IND Product basis, within [...***...] after DS’s exercise of the Option for an IND Product in accordance with Section 2.2.3, DS shall pay to Kite a non-refundable, non-creditable option exercise fee (the “Opt-in Fee”) of [...***...] Dollars ($[...***...]). Notwithstanding the foregoing, if such IND Product is directed to the same Target as another IND Product for which DS has already paid the Opt-in Fee, then the Opt-in Fee for such IND Product shall be reduced to [...***...] Dollars ($[...***...]). For clarity, no Opt-in Fee shall be owed for KTE-C19.

2.2.5    Extension of Option Exercising Period. DS shall have the right to extend the Option Exercising Period by successive additional [...***...] periods if (a) DS provides Kite with a written extension notice no later than [...***...] before the expiration of the then current Option Exercising Period and Kite does not, at least [...***...] before the expiration of the then-current Option Exercising Period, provide DS with written notice that Kite does not wish to extend the Option Exercising Period, and (b) DS pays Kite an extension fee of [...***...] Dollars ($[...***...]) for each year it extends the Option Exercising Period (the “Extension Fee”), which amount shall be paid no later than [...***...] before the expiration of the then-current Option Exercising Period.
2.2.6    Effect of Expiration of the Option Exercising Period. For clarity, expiration of the Option Exercising Period shall not affect any Evaluation Period and if the Option Exercising Period expires while an Evaluation Period is in effect, DS shall have the right to continue the evaluation and to exercise the applicable Option until the expiration of such Evaluation Period.

2.3    License to Kite. Subject to the terms and conditions of this Agreement, DS hereby grants to Kite a non-exclusive, royalty free license under DS Technology and DS’s interest in the Collaboration Technology solely to Develop, make, have made, use, sell, offer for sale, have sold, import, export, and otherwise Commercialize Licensed Products in the Kite Territory and to perform Kite’s obligations under this Agreement. The foregoing license may be sublicensed through multiple tiers, provided that Kite requires each such sublicensee to comply with all applicable terms and conditions of this Agreement. Kite shall remain fully responsible for any and all failures by its sublicensees to comply with the applicable terms and conditions of this Agreement.
2.4    No Implied License. Neither Party grants to the other Party any rights or licenses in or to any intellectual property, whether by implication, estoppel, or otherwise, other than the license rights that are expressly granted under this Agreement. For clarity, the license granted to DS under any particular Kite Technology shall be exclusive as to any Third Party only to the extent Kite Controls the exclusive rights to such Kite Technology. DS shall not, and shall not permit any of its Affiliates or Sublicensees to, practice any Kite Technology or any Collaboration Technology solely owned by Kite outside the scope of the licenses granted to it under this Agreement. Kite shall not, and shall not permit any of its Affiliates or sublicensees of the DS Technology or Collaboration Technology solely owned by DS to, practice any DS Technology or any Collaboration Technology solely owned by DS outside the scope of the licenses granted to it under this Agreement.

2.5    DS Exclusivity.
2.5.1    Subject to Section 2.5.2, during the Term, DS shall not, and shall cause its Affiliates not to, either itself or together or through the grant of rights to any Third Party, [...***...] any Competing Product for use [...***...].
2.5.2    Notwithstanding the above, if DS or its Affiliate obtains rights to develop or commercialize any Competing Product as a result of (a) a merger with, or acquisition of or by, any Third Party, or (b) the acquisition of assets that include the business of developing or commercializing a Competing Product, DS shall have [...***...] from the closing of such merger or acquisition to wind down and/or divest, or cause its relevant Affiliate to wind down and/or divest, such Competing Product (or such longer period as DS (or its Affiliate) is actively engaged in bona fide efforts to divest such Competing Product) (the “DS Wind Down Period”), whether by asset sale, license or otherwise, and DS’s development or commercialization of the Competing Product during the DS Wind Down Period shall not be deemed a breach of DS’s exclusivity obligations set forth above. The Parties agree that (i) DS’s (or its Affiliate’s) development or commercialization of the Competing Product shall be conducted independently of DS’s (or its Affiliate’s) activities under this Agreement and without the use of any Kite Technology, Kite Confidential Information or Collaboration Technology; (ii) [...***...]; (iii) for a 

reasonable period of time ([...***...]) and solely as reasonably necessary to transfer the Competing Product to the acquirer or licensee of such Competing Product, DS (or its Affiliate) shall be permitted to manufacture such Competing Product for such acquirer or licensee, and to provide technology transfer and transition services for such Competing Product to such acquirer or licensee [...***...]; (iv) DS (or its Affiliate) shall have the right to take back rights to the Competing Product from the acquirer or licensee in the event that DS (or its Affiliate) terminates the acquisition or license agreement for such Competing Product due to a breach or other termination event triggered by such acquirer or licensee, in which event DS shall be required again to divest such Competing Product in accordance with this Section. For clarity, if DS (or its Affiliate) winds down but is unable to divest such Competing Product during the DS Wind Down Period, DS and its Affiliates shall [...***...].

2.6    Kite Exclusivity.
2.6.1    During the Term, Kite shall not, and shall cause its Affiliates not to, either itself or together or through the grant of rights to any Third Party, Commercialize or have Commercialized any Licensed Product for use in the Field in the Territory.
2.6.2    Subject to Section 2.6.3, during the Term, Kite shall not, and shall cause its Affiliates not to, either itself or together or through the grant of rights to any Third Party, Commercialize or have Commercialized any ROFN Product for use in the Field in the Territory unless Kite has first met the requirements of Section 2.10 with respect to such ROFN Product.
2.6.3    Notwithstanding the above, if Kite or its Affiliate obtains rights to commercialize any ROFN Product as a result of (a) a merger with, or acquisition of or by, any Third Party, or (b) the acquisition of assets that include the business of commercializing a ROFN Product, and, pursuant to Section 2.10.3, elects not to offer such ROFN Product to DS pursuant to Section 2.10, then Kite shall have [...***...] from the closing of such merger or acquisition to wind down and/or divest, or cause its relevant Affiliate to wind down and/or divest, such ROFN Product (or such longer period as Kite (or its Affiliate) is actively engaged in bona fide efforts to divest such ROFN Product) (the “Kite Wind Down Period”), whether by asset sale, license or otherwise, and Kite’s commercialization of the ROFN Product during the Kite Wind Down Period shall not be deemed a breach of Kite's exclusivity obligations set forth above. The Parties agree that (i) Kite’s (or its Affiliate’s) commercialization of the ROFN Product shall be conducted independently of Kite’s (or its Affiliate’s) activities under this Agreement and without the use of any Kite Technology, Kite Confidential Information or Collaboration Technology; (ii) [...***...]; (iii) for a reasonable period of time (not to exceed [...***...]) and solely as reasonably necessary to transfer the ROFN Product to the acquirer or licensee of such ROFN Product, Kite (or its Affiliate) shall be permitted to manufacture such ROFN Product for such acquirer or licensee, and to provide technology transfer and transition services for such ROFN Product to such acquirer or licensee [...***...]; (iv) Kite (or its Affiliate) shall have the right to take back rights to the ROFN Product from the

acquirer or licensee in the event that Kite (or its Affiliate) terminates the acquisition or license agreement for such ROFN Product due to a breach or other termination event triggered by such acquirer or licensee, in which event Kite shall be required again to divest such ROFN Product in accordance with this Section. For clarity, if Kite (or its Affiliate) winds down but is unable to divest such ROFN Product during the Kite Wind Down Period, Kite and its Affiliates shall [...***...].

2.7    Trademark Licenses.

2.7.1    Kite hereby grants to DS an exclusive (even as to Kite and its Affiliates) license to use the Product Trademarks and Kite Housemarks solely in connection with DS’s exercise of the license granted to it pursuant to Section 2.1 above, including the limited right to sublicense to Sublicensees as provided for in such license (the “Trademark License”). DS will use (a) the Product Trademarks solely in the manner specified in this Agreement in connection with Licensed Products and not for any other goods or services, and (b) the Kite Housemarks on the Licensed Products only in the form and manner as reasonably prescribed in writing to DS in advance from time to time by Kite (provided, however, that DS shall have a reasonable period of time to modify any of its promotional, marketing, regulatory, or other practices, including in light of Applicable Laws, or cease use of the Product Trademarks and Kite Housemarks, as may be reasonably necessary to comply with any such form and manner prescriptions or any changes thereto). Without limiting the foregoing, any use by DS of a Product Trademark for a Licensed Product should be accompanied, if reasonably possible (e.g. space perspective), by a trademark notice that states that such Licensed Product Trademark is a trademark (or a registered trademark, if applicable) of Kite. Any use by DS of the Product Trademarks and Kite Housemarks, and Kite’s maintenance of the Product Trademarks and Kite Housemarks, shall be in compliance with all Applicable Laws, including those relating to the licensing of trademarks, in the Territory. DS and Kite agree to promptly correct any failure to comply with this Section 2.7.1. For the avoidance of doubt, DS shall have no responsibility or obligation for (and Kite shall be solely responsible for) the filing, maintenance, registration, prosecution, and enforcement of the Product Trademarks and Kite Housemark, which shall be at Kite’s sole cost and expense.
2.7.2    DS acknowledges Kite’s ownership of all right, title, and interest in and to the Product Trademarks and Kite Housemark, and agrees that it will do nothing inconsistent with such ownership, that all use of the Product Trademarks and Kite Housemark by DS will inure to the benefit of and be on behalf of Kite, and that any goodwill associated with the use of any Product Trademark and Kite Housemark by DS will inure to the benefit of Kite. DS agrees that nothing in this Agreement will give DS any right, title, or interest in the Product Trademarks and Kite Housemarks other than the right to use the Product Trademarks and Kite Housemarks in accordance with this Agreement. Anything in this Agreement to the contrary notwithstanding, if by virtue of DS’s use of the Product Trademarks and Kite Housemarks, DS acquires any equity, title, or other rights in or to the Product Trademarks and Kite Housemarks, DS hereby agrees all such equity, title, or other rights in or to the Product Trademark and Kite Housemark belong to Kite upon creation of the value, and DS agrees to and hereby does assign and transfer any such Product Trademark

or Kite Housemark rights to Kite. DS agrees not to use (a) any trademark or trade name that is confusingly similar to any Product Trademark or Kite Housemark or (b) file any application to register any trademark or trade name that is identical or confusingly similar to any Product Trademark or Kite Housemark.
2.7.3    Kite agrees to register itself, or to cooperate with DS to register, the exclusive license of the Product Trademark granted under Section 2.7.1 to DS in the Territory as a “Senyou Shiyouken” in accordance with Article 30 of the Japanese Trademark Law of 1959, in Japan, at DS’s request and expense.

2.8    Use of Know-How outside the Collaboration.
2.8.1    License Grant. The Parties recognize that each Party will share Know-How and other intellectual property with the other Party during the course of the collaboration under this Agreement that may have usefulness and applicability outside the scope of such collaboration. As such, subject to Sections 2.5 and 2.6 and the exclusive licenses granted hereunder, each Party (the “Grantor”) hereby grants the other Party (the “Grantee”) a non-exclusive, royalty-free license, with the right to sublicense (without the right to further sublicense) solely to (a) its Affiliates, and (b) Third Party contractors to perform services for the sole benefit of the Grantee and its Affiliates, under the Grantor’s or its Affiliates’ Know-How (excluding (a) all Know-How in-licensed by the Grantor or its Affiliates, and (b) all Patents owned or Controlled by the Grantor or its Affiliates) that has been disclosed by the Grantor or its Affiliates to the Grantee (the “Disclosed Know-How”) to research, develop, use, manufacture, offer for sale, sell, have sold, import, market, distribute and otherwise commercialize any product or service in the Territory or outside the Territory during the Term and thereafter; provided that the foregoing license granted by Kite to DS expressly excludes (i) [...***...] (other than a Licensed Product in the Field in the Territory in accordance with this Agreement), and (ii) the right to grant a sublicense to manufacture any product to any entity other than an Approved CMO. Each sublicense granted by the Grantee of its rights under this Section 2.8.1 shall be consistent with the terms and conditions of this Agreement, and the Grantee shall ensure that each such sublicensee agrees in writing to comply with the terms and conditions of this Agreement that are applicable to such sublicensee’s activities under such sublicense. The Grantee shall remain fully responsible for all of its sublicensees’ activities, including any and all failures by its sublicensees to comply with the applicable terms and conditions of this Agreement.
2.8.2    Know-How Procedures for DS. Within [...***...] of the Effective Date or such longer period as the Parties may agree in writing, the Parties shall discuss in good faith and enter into a third party reviewer agreement with a mutually agreed Third Party to perform the activities described in this Section 2.8.2 (the “Third Party Agent”). The Parties may replace the Third Party Agent by written agreement.  If DS wants to use Kite’s Disclosed Know-How in the Territory or outside of the Territory to develop, manufacture or commercialize any CAR-T Product or TCR-T Product (other than a Licensed Product in the Field in the Territory), DS shall notify the Third Party Agent in writing of the DS Target against which such CAR-T Product or TCR-T Product is intended to be

developed, manufactured or commercialized by DS (which notice shall include an officer’s certificate certifying that such Target meets the definition of DS Target herein) and shall simultaneously notify Kite in writing that it has so notified the Third Party Agent.  Within [...***...] of its receipt of DS’s notice, Kite shall provide the Third Party Agent with its list of Kite Targets.  Within [...***...], the Third Party Agent shall  either inform the Parties in writing whether or not such DS Target is also a Kite Target, without disclosing the identity of such DS Target or any Kite Target, or request such additional information from the Parties as the Third Party Agent requires to make such determination.  In any event, the Third Party Agent shall inform both Parties in writing within [...***...] of its receiving all necessary information of its determination as to whether or not such DS Target is also a Kite Target, without disclosing the identity of such DS Target or any Kite Target. If such DS Target is not a Kite Target, then DS shall be free to develop, manufacture and commercialize any CAR-T Product or TCR-T Product against such DS Target in the Territory and outside of the Territory, even if such DS Target subsequently becomes a Kite Target.  If such DS Target is the same as a Kite Target, DS shall be prohibited from using any of Kite’s Disclosed Know-How in the development, manufacture and commercialization of any CAR-T Product or TCR-T Product against such Kite Target in the Territory and outside of the Territory until such time that the DS Target is no longer a Kite Target, as determined through the Third Party Agent process set forth above. For clarity, DS shall be free to develop, manufacture or commercialize any CAR-T Product or TCR-T Product against a Kite Target in the Territory and outside of the Territory if no Kite’s Disclosed Know-How is utilized in such development, manufacture or commercialization, subject to Section 2.5.
2.9    Use of Patents Outside Collaboration. To the extent that either Party owns or controls any Patents that could be useful outside the collaboration, at the request of either Party, the Parties will discuss licensing such Patents, provided that neither Party shall have any obligation to grant such license.
2.10    Right of First Negotiation. Upon expiration of the Option Exercising Period and during the Term thereafter, the following provisions shall apply, subject to Section 2.6.3 and the exclusive licenses granted hereunder:
2.10.1    If Kite intends to develop or commercialize a ROFN Product (as defined below) in the Territory, Kite shall send a written notice to DS that includes a non- binding term sheet with the material financial terms for a license to DS for such ROFN Product in the Territory. Within [...***...] of receipt of such term sheet, DS shall provide to Kite written notice of its non-binding acceptance or desire to further negotiate, or non- acceptance of such term sheet. If DS accepts or desires to further negotiate such term sheet, Kite and DS will negotiate in good faith, for up to [...***...] following Kite’s receipt of DS’s notice or such longer period as the Parties may agree in writing (the “Negotiation Period”), with the goal of reaching agreement on a license agreement for such ROFN Product in the Territory on commercially reasonable terms that is satisfactory to each Party in its sole discretion. During the Negotiation Period, Kite will provide to DS due diligence information and data reasonably requested by DS, including, if applicable, [...***...]

[...***...]. If DS does not notify Kite in writing of its acceptance of the term sheet or its desire to further negotiate such terms prior to expiration of the applicable [...***...] period, if DS does not accept Kite’s term sheet, or if the Parties do not reach agreement upon and execute a license agreement in accordance herewith upon expiration of the Negotiation Period, then, in each such case, Kite shall have the right to proceed with the development and commercialization of such ROFN Product in the Territory, either on its own or with a Third Party, subject to Section 2.10.2. As used herein, “ROFN Product” means any CAR-T Product or TCR-T Product directed against [...***...].
2.10.2    If the Parties engaged in a negotiation for a license agreement for a ROFN Product in the Territory in accordance with Section 2.10.1 where such agreement was not executed within the Negotiation Period, and within the [...***...] period (the “ROFN Protection Period”) following the expiration of the Negotiation Period, Kite negotiates a final term sheet (i.e., a term sheet that is to be the basis of a draft agreement), letter of intent or similar agreement with a Third Party for a license to such ROFN Product in the Territory on terms that, [...***...] (a “Third Party Offer”), Kite will notify DS and provide it with the material terms and conditions of such Third Party Offer (but will not identify such Third Party) within [...***...] after completing negotiations of the Third Party Offer. DS will treat the Third Party Offer as the Confidential Information of Kite. DS will have [...***...] after receipt of the Third Party Offer to notify Kite whether it wishes to enter into a new agreement with Kite in accordance with all of the material terms and conditions of the Third Party Offer (the “ROFN Agreement”). If DS notifies Kite that it intends to enter into the ROFN Agreement, Kite agrees (i) to the extent not previously provided to DS and provided to such Third Party, to provide to DS additional due diligence information and data reasonably requested by DS, including, if applicable, any data package submitted to the FDA to support the initiation of the first human clinical trial of such ROFN Product and any results at a pre-defined interim analysis or at primary analysis of any clinical trial of such ROFN Product, including documents describing the top line results of a Phase 1 clinical trial of such ROFN Product along with any patent or in-license information related to such ROFN Product in the Territory, and (ii) to negotiate a new collaboration and license agreement for such ROFN Product in the Territory with DS in good faith in accordance with the terms and conditions contained in the Third Party Offer for [...***...] following its receipt of DS’s notice or such longer period as the Parties may agree in writing (the “Second Negotiation Period”). If DS declines to enter into the ROFN Agreement, or if DS does not notify Kite within the [...***...] period described above that DS wishes to enter into the ROFN Agreement, or if the Parties do not enter into the ROFN Agreement prior to the expiration of the Second Negotiation Period, then, during the remainder of the ROFN Protection Period, Kite may enter into an agreement with any Third Party for such ROFN Product in the Territory on terms and conditions that are the [...***...], taken as a whole, taken as a whole, to Kite, as those contained in the Third Party Offer. Following the

expiration of the ROFN Protection Period, Kite will have no further obligations to DS under this Section 2.10 with respect to such ROFN Product.
2.10.3    For clarity, if Kite or its Affiliate obtains rights to commercialize any ROFN Product as a result of (a) a merger with, or acquisition of or by, any Third Party, or (b) the acquisition of assets that include the business of commercializing a ROFN Product, then Kite (or its successor) may elect in its sole discretion to either offer such ROFN Product to DS pursuant to this Section 2.10 or to wind down and/or divest, or cause its relevant Affiliate to wind down and/or divest, such ROFN Product in accordance with Section 2.6.3.
ARTICLE III     
GOVERNANCE
3.1    Alliance Managers. Promptly after the Effective Date, each Party shall appoint an individual who shall be an employee of such Party having appropriate qualifications and experience to act as the alliance manager for such Party (the “Alliance Manager”). Each Alliance Manager shall be responsible for coordinating and managing processes and interfacing between the Parties on a day-to-day basis throughout the Term. Each Alliance Manager shall be permitted to attend meetings of the JSC, JOC and any subcommittee as non-voting participants. The Alliance Managers shall be the primary contact for the Parties regarding the activities contemplated by this Agreement and shall facilitate all such activities hereunder. Each Party may replace its Alliance Manager with an alternative representative at any time with prior written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager. Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment between the Parties. [...***...].
3.2    JSC Formation and Purpose. Within [...***...]of the Effective Date, the Parties shall establish a joint steering committee (the “JSC”), composed of three (3) senior executive officers from each Party, to coordinate and oversee the Parties’ activities under this Agreement. Except as otherwise provided herein, the role of the JSC will be to:
3.2.1    oversee and provide strategic direction to the Parties’ collaboration under this Agreement, and coordinate the Parties’ activities under this Agreement;
3.2.2    provide a forum for and facilitate communications and discussions between the Parties under this Agreement;
3.2.3    oversee the operation of the JOC and other subcommittees that may be created by the JSC as it deems appropriate, including to resolve any disputed matters of the JOC and other subcommittees;
3.2.4    consult and coordinate with respect to the Development and Commercialization of the Licensed Products in the Kite Territory;

3.2.5    perform such other functions as may be appropriate to further the purpose of this Agreement as expressly assigned to the JSC in this Agreement or by the Parties’ written agreement; and
3.2.6    oversee the status or stage of the research and development of the Products and the three-year plan of future IND submission or approval for such Product, provided that no Pre-IND Data, Clinical Data and intellectual property rights information for any particular IND Product (including any then-existing agreement(s) that would be deemed to be In-License Agreement(s) if DS were to exercise its Option for such IND Product) shall be provided until such time that DS requests the same pursuant to Article II.
3.3    JOC Formation and Purpose. On a Licensed Product-by-Licensed Product basis, within [...***...] after the Effective Date (for KTE-C19) or [...***...] after DS’s exercise of the Option (for any Opt-in Product), the Parties shall establish a joint operating committee (the “JOC”), composed of three (3) representatives from each Party with appropriate qualifications and expertise to oversee the Development and Commercialization of such Licensed Product under this Agreement. The JOC shall be subordinate to the JSC and shall:
3.3.1    oversee the Development and Commercialization of the applicable Licensed Product in the Field in the Territory;
3.3.2    oversee the manufacturing of the applicable Licensed Product in the Field for the Territory;
3.3.3    review, discuss, and approve the overall strategy for seeking Regulatory Approval of the applicable Licensed Product in the Field in the Territory;
3.3.4    review, discuss and approve the Development Plan for the applicable Licensed Product, including any amendments or revisions thereto, and oversee the implementation of the Development Plan;
3.3.5    review, discuss and approve the Commercialization Plan for the applicable Licensed Product, including any amendments or revisions thereto, and oversee the implementation of the Commercialization Plan; and
3.3.6    perform such other functions as may be appropriate to further the Development and Commercialization of the applicable Licensed Product, as directed by the JSC within the scope of its authority.

3.4    Membership and Procedures.
3.4.1    Membership. Within [...***...] after the Effective Date (or DS’s exercise of the Option, as applicable), each Party shall appoint its representatives on the JSC and the JOC.  The Parties may agree in writing to vary the number of representatives that serve on the JSC or JOC, provided that in all cases the JSC and JOC maintain an equal number of representatives from each Party. Each Party may replace its representatives on the JSC or JOC at any time upon written notice to the other Party. Each Party shall appoint one 

(1) of its representatives on the JSC and JOC to act as a co-chairperson of such committee. The co-chairpersons shall jointly be responsible for organizing meetings, preparing and circulating an agenda in advance of each meeting, and preparing minutes of each meeting. Each committee representative shall review and approve such minutes in writing; provided that if a representative does not object to the accuracy of such minutes within [...***...] after the circulation of such minutes, such minutes shall be deemed approved by such representative.
3.4.2    Meetings. Unless the Parties otherwise agree, the JSC and JOC shall each hold meetings [...***...] for the JSC and [...***...] for the JOC. Additional meetings may also be held as required under this Agreement or with the consent of each Party and neither Party will unreasonably withhold or delay its consent to hold such an additional meeting. Meetings of any joint committee shall be effective only if at least one (1) representative of each Party is present or participating. The JSC and JOC may meet either in person at either Party’s facilities or at such locations as the Parties may otherwise agree, or by audio or video teleconference.
3.4.3    Non-Member Attendance. With the prior consent of the other Party’s representatives (such consent not to be unreasonably withheld or delayed), each Party may invite a reasonable number of non-members to participate in the discussions and meetings of the JSC and JOC, provided that such participants shall have no right to vote in such meetings and shall be subject to the confidentiality provisions set forth in ARTICLE XI.

3.5    Decision-Making.
3.5.1    All decisions of the JSC and JOC (or a joint subcommittee) shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JOC (or a joint subcommittee), the representatives of the Parties cannot reach an agreement as to such matter within [...***...] after such matter was brought or referred to such committee for resolution, such disagreement shall be referred to the JSC for resolution. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JSC, the representatives of the Parties cannot reach an agreement as to such matter within [...***...] after such matter was brought or referred to such committee for resolution, such disagreement shall be referred to the Executive Officers for resolution. If the Executive Officers cannot resolve such matter within [...***...] after such matter has been referred to them, then:
3.5.1.1    [...***...], provided that if Kite believes that there is a reasonable likelihood that [...***...]; and

3.5.1.2    [...***...], subject to the limitations described in Section 3.5.3.
3.5.2    None of the JSC, JOC or DS shall have any decision-making authority with respect to the Development, manufacture and Commercialization of the Licensed Products for the Kite Territory.
3.5.3    Any dispute regarding the interpretation of this Agreement, the performance or alleged nonperformance of a Party’s obligations under this Agreement, [...***...], or any alleged breach of this Agreement will be resolved in accordance with the terms of ARTICLE XV and shall not be subject to the JSC’s, JOC’s or any other joint committee’s decision-making authority.
3.6    Day-to-Day Responsibilities. Each Party shall: (a) [...***...]; and (b) keep the other Party informed as to the progress of such activities as reasonably requested by the other Party and as otherwise determined by the JOC.
3.7    Limitation of Authority. The JSC and JOC shall have only such powers as are specifically delegated to it hereunder and will not be a substitute for the rights of the Parties. Without limiting the generality of the foregoing, the JSC and JOC will not have any power to amend this Agreement (without limiting its right to approve amendments to the Development Plans) or waive compliance with any term or condition of this Agreement, and the JSC and JOC are otherwise subject to the express terms and conditions of this Agreement. Any amendment to the terms and conditions of this Agreement may only be implemented pursuant to Section 16.7.
3.8    Expenses. Each Party will be responsible for [...***...].
3.9    Discontinuation of the JSC. The activities to be performed by the JSC and JOC shall solely relate to governance under this Agreement, and are not intended to be or involve the delivery of services.  Each joint committee shall continue to exist until the first to occur of: (a) the Parties mutually agree to disband such committee; or (b) Kite provides written notice to DS of its intention to disband and no longer participate in such committee.  Once the Parties mutually agree or Kite has provided written notice to disband a committee, such committee shall have no further obligations under this Agreement and, thereafter, each Party shall designate a contact person for the exchange of information under this Agreement or such exchange of information shall be made through the Alliance Managers. In the event a committee is disbanded as provided above, any decisions that are designated under this Agreement as being subject to the review or approval of such committee shall be subject to the review and approval of the Parties directly, subject to the other terms and conditions of this Agreement.

ARTICLE IV     
DEVELOPMENT
4.1    Overview. Subject to, and in accordance with, the terms and conditions of this Agreement, the Parties shall collaborate with respect to the Development of the Licensed Products in the Field in the Territory and the Kite Territory and shall share the data resulting from such collaboration to facilitate the Development of the Licensed Products in the Field. [...***...].
4.2    Development Plan. The Development of each Licensed Product in the Field in the Territory shall be conducted pursuant to a comprehensive written development plan which sets forth the timeline and details of all pre-clinical, clinical and regulatory activities to be conducted by or on behalf of DS or its Affiliates or Sublicensees to obtain Regulatory Approval of such Licensed Product in the Territory (each, a “Development Plan”). DS shall prepare and submit to Kite for review and comment a Development Plan for each Opt-in Product within [...***...] after the Option exercise therefor, or, in the case of KTE-C19, within [...***...] after the Effective Date. DS shall [...***...] update and amend, as appropriate, the then-current Development Plan for each Licensed Product and submit such updated or amended Development Plan to the JOC for review and approval. Once approved by the JOC, the updated or amended Development Plan shall become effective and supersede the previous Development Plan. If the terms of any Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.
4.3    Development Diligence. DS shall use Commercially Reasonable Efforts to Develop each Licensed Product according to the applicable Development Plan and obtain Regulatory Approval for each Licensed Product in the Territory.
4.4    Development Records. DS shall (and shall ensure its Affiliates and Sublicensees will) maintain complete, current and accurate records of all Development activities for the Licensed Products in the Territory, and all data, results and other information resulting from such activities. Such records shall fully and properly reflect all work done and results achieved in the performance of the Development activities in good scientific manner appropriate for regulatory and patent purposes. DS shall document all non-clinical studies and clinical trials in formal written study records according to Applicable Laws, including applicable national and international guidelines such as ICH, GCP and GLP.  Kite shall have the right to review and copy such records maintained by DS, its Affiliates and Sublicensees [...***...] and to obtain access to the original to the extent necessary or useful for regulatory and patent purposes.
4.5    Development Reports. DS shall provide the JOC with written reports (in English) summarizing the Development activities for the Licensed Products in the Territory and the results of such activities at JOC meeting, but no more than [...***...]. Such reports shall include reasonable level of details to be agreed by the JOC; provided, however, that 

any such report shall include at least a summary of the data for all preclinical studies and all clinical trials of the Licensed Product in the Territory. The Parties shall discuss the status, progress and results of the Development of the Licensed Products in the Territory at JOC meetings.
4.6    Subcontractors. DS, its Affiliates and Sublicensees shall have the right to engage subcontractors to Develop the Licensed Products in the Territory, provided that any such subcontractor is bound by written obligations of confidentiality and non-use consistent with this Agreement and has agreed to assign to DS all inventions or other intellectual property made by such subcontractor in the course of performing such subcontracted work that relate to the Licensed Products or their use, manufacture or sale. DS shall remain responsible for any obligations that have been delegated or subcontracted to any subcontractor, and shall be responsible for its subcontractors’ performance.
4.7    Kite Assistance. Upon DS’s reasonable request, Kite shall provide reasonable research and technical assistance to DS in connection with the pre-clinical Development of the Licensed Products in the Territory. Such assistance may include providing DS with access to Kite’s technical personnel, training and information that may help DS to understand and use the Kite Technology to Develop the Licensed Products. DS shall [...***...]. At any time Kite provides assistance pursuant to this Section 4.7 in an aggregate amount of more than [...***...], DS shall [...***...] of Kite personnel (calculated at the FTE Rate) allocated to the efforts spent to provide such assistance within [...***...] of the end of the applicable Calendar Quarter. To the extent necessary for DS’s Regulatory Filings for the Licensed Products, including maintenance of the same, in the Territory, Kite shall maintain or cause to be maintained records of Development activities for the Licensed Products in the Kite Territory in accordance with Applicable Laws and shall make such records available to DS upon DS’s reasonable request and to Regulatory Authorities in the Territory as required by Applicable Laws.

4.8    Cross-Territory Development Coordination; Data Exchange.
4.8.1    Global Development Program. As between the Parties, Kite shall [...***...]. Subject to Section 4.8.3, if DS exercises its Option for a Opt-in Product [...***...] by Kite for such Opt-in Product (i.e., within [...***...] of such date), then [...***...] of such Product, the Parties shall discuss in good faith whether to include the Territory as part of a global development program for such Opt-in Product, and if so, how DS will participate in such global development program. For clarity, if the Parties agree to include the Territory in a global development program, DS shall [...***...].
4.8.2    Mutual Data Exchange and Use. DS shall own all data and results generated by or on behalf of DS in the Development of the Licensed Products in the

Territory. Kite shall own all data and results generated by or on behalf of Kite in the Development of the Licensed Products in the Kite Territory.  Subject to Section 4.8.3:
4.8.2.1    In addition to its adverse event and safety data reporting obligations pursuant to Section 5.7, each Party shall promptly provide the other Party with copies of all data and results and all supporting documentation (e.g. protocols, CRFs, analysis plans) generated from such Party’s Development of the Licensed Products for its territory (collectively, the “Collaboration Data”); and
4.8.2.2    Each Party shall have the right to use and reference to, without additional consideration, any and all Collaboration Data generated by or on behalf of the other Party for the purpose of Developing the Licensed Products, obtaining and maintaining Regulatory Approval for the Licensed Products, and Commercializing the Licensed Products, in each case in its own territory.

4.8.3    Kite Partner. DS acknowledges that Kite may, in its sole discretion, enter into one or more agreements with Third Parties and grant such Third Parties a license to Develop and/or Commercialize the Licensed Products in the Kite Territory (each such Third Party, a “Kite Partner” and each such agreement, a “Kite Partner Agreement”). If Kite enters into such a Kite Partner Agreement, then Kite’s obligation to allow DS’s participation in the global development program and to share the safety data related to the Licensed Products generated by Kite Partner for DS’s use in the Territory in accordance with Applicable Laws shall be stipulated in the Kite Partner Agreement. Kite shall use reasonable efforts to include in each Kite Partner Agreement the right for DS to use efficacy data for Licensed Products generated by such Kite Partner in the Territory, provided that should such right not be included in a particular Kite Partner Agreement, DS shall not be required to share, and Kite shall be prohibited from sharing, any clinical study data generated under this Agreement with such Kite Partner until such time that such efficacy data generated by such Kite Partner is shared with DS or such Kite Partner Agreement is amended to provide for the same.
4.9    References to Kite. DS shall not name Kite or any of its Affiliates as a sponsor of any clinical trial for any Licensed Product in the Territory nor state or otherwise imply in any Regulatory Filing or other documentation relating to any clinical trial of any Licensed Product in the Territory (including, without limitation, any informed consent document) that Kite or any of its Affiliates has any responsibility or liability in connection with the conduct of such clinical trial.
ARTICLE V     
REGULATORY MATTERS
5.1    Regulatory Responsibilities. Each Development Plan shall set forth the regulatory strategy for seeking Regulatory Approval for the applicable Licensed Product in the Territory. DS shall [...***...], which activities shall be conducted in accordance with the regulatory strategy set forth in the applicable Development Plan. DS shall keep Kite informed, via participation on the JOC, of regulatory developments related to the Licensed Products in the 

Territory. The JOC shall discuss regulatory matters relating to the Licensed Products in the Territory and, Kite, through participation on the JOC, shall have the right to contribute to the regulatory plans and strategies.
5.2    Regulatory Filings.

5.2.1    Preparation and Review. DS shall prepare and submit all Regulatory Filings for the Licensed Products in the Territory and shall own all Regulatory Filings and Regulatory Approvals for the Licensed Products in the Territory. The JOC shall coordinate communication and the exchange of information between the Parties with respect to Regulatory Filings for the Licensed Products to be prepared and submitted by or for DS to Regulatory Authorities in the Territory. Without limiting the foregoing, DS will provide Kite with summaries, overviews, or excerpts (in English) of all Key Regulatory Filings (as defined below) prior to filing thereof. DS shall not submit any MAA for any Licensed Product in the Territory until Kite has had the opportunity to review and comment on the content of such MAA filing, provided that Kite’s review shall not exceed [...***...]. DS shall give reasonable consideration to Kite’s comments with respect to such MAA filing and, in any event, except as required by Applicable Laws, shall not include in any MAA filing any information or statement that is inconsistent with any previously submitted Kite MAA filing for the same Licensed Product (and received by DS) without having first discussed the inconsistency with Kite in good faith during Kite’s review period. Except as required by Applicable Laws, DS shall not submit any Regulatory Filings to, or communicate with, any Regulatory Authority in the Kite Territory regarding the Licensed Products. As used herein, “Key Regulatory Filings” means IND, CTA, CTN and MAA filings, protocols and substantive protocol amendments, substantive amendments to CTN and MAA, or any material documents, information or correspondence received from or delivered to a Regulatory Authority, in each case for the Licensed Product. For purposes of this Section 5.2.1, material documents, information or correspondence includes any communications from a Regulatory Authority that could potentially impact safety or labeling for a Licensed Product in the Territory.
5.2.2    Accelerated Reporting.  In the event that a Regulatory Authority in the Territory requires DS to report information related to any regulatory activity on an accelerated basis such that DS is unable to comply with Section 5.2.1, DS will nonetheless provide to Kite a prompt and detailed description of the event that triggered the accelerated reporting obligation as soon as reasonably practicable after DS obtains actual knowledge of such triggering event, and, in any event, in accordance with the safety agreement described in Section 5.7.2.
5.2.3    Copies. Each Party will provide: (a) electronic copies of Key Regulatory Filings for the Licensed Products as submitted to or received from Regulatory Authorities promptly following submission or receipt, and summaries of such Regulatory Filing in English, (b) summaries (in English) of material communications to the other Party from any Regulatory Authority in the Territory with respect to the Licensed Products, promptly following receipt thereof, and (c) a brief statement (in English) of any material changes in the final Key Regulatory Filings from the summaries previously provided to the other Party. For the avoidance of doubt, Kite shall have the right to provide copies of all Key Regulatory Filings

it receives from DS (and extend its rights therein) to Kite Partners. To the extent permitted under the applicable Kite Partner Agreement, Kite shall provide copies of Key Regulatory Filings it receives from Kite Partner (and extend its rights therein) to DS upon DS’s request. Kite shall use reasonable efforts to include in each Kite Partner Agreement the right for DS to receive a copy of Key Regulatory Filings for Licensed Products received from a Kite Partner, provided that should such right not be included in a particular Kite Partner Agreement DS shall not be required to share, and Kite shall be prohibited from sharing, any Key Regulatory Filings generated under this Agreement with such Kite Partner until such time that such Key Regulatory Filings generated by the Kite Partner are shared with DS or such Kite Partner Agreement is amended to provide for the same.
5.3    Regulatory Meetings. DS shall provide Kite with reasonable advance notice of any scheduled formal meeting related to the Licensed Products with any Regulatory Authority in the Territory, and shall provide Kite with a brief description (in English) of the topics to be presented or discussed at each such meeting. DS shall take into account any advice Kite provides in relation to the topics to be discussed and provide a summary of such meeting to Kite. In the event that Regulatory Authority require DS to hold a meeting on an accelerated basis such that DS is unable to comply with this Section, DS will nonetheless provide to Kite a prompt and detailed description of the event that triggered the accelerated reporting obligation as soon as reasonably practicable after the meeting.
5.4    Rights of Reference. Kite hereby grants to DS a right of reference to all Regulatory Filings for the Licensed Products filed by or on behalf of Kite, which right of reference DS may use for the sole purpose of seeking, obtaining and maintaining Regulatory Approvals of the Licensed Products in the Territory.  DS hereby grants to Kite a right of reference to all Regulatory Filings for the Licensed Products filed by or on behalf of DS, which right of reference Kite may use for the sole purpose of seeking, obtaining and maintaining Regulatory Approvals of the Licensed Products in the Kite Territory.  Each Party shall support the other Party, as reasonably requested by such other Party and at such other Party’s expense, in obtaining Regulatory Approvals for the Licensed Products in such other Party’s territory, including (a) providing necessary documents or other materials required by Applicable Laws, (b) participation in meeting with Regulatory Authority, and (c) respond to queries from Regulatory Authority to obtain Regulatory Approval in such territory, all in accordance with the terms and conditions of this Agreement.
5.5    Audit; Inspection.  Upon reasonable advance notice ([...***...]), DS shall (and shall cause its Affiliate and Sublicensees to) permit Kite’s authorized representatives to examine and inspect DS’s (and its Affiliates’ and Sublicensees’) facilities used in the Development, manufacture and/or Commercialization of the Licensed Products in the Territory and the data, documentation and work products relating thereto. In addition, DS shall promptly notify Kite of any inspections relating to the Development, manufacture and/or Commercialization of the Licensed Products by or on behalf of any Regulatory Authorities in the Territory of which it becomes aware. Unless prohibited by Applicable Laws, DS shall permit Kite’s representative to observe such inspection. DS shall also provide Kite with copies of all correspondence submitted to or received from the Regulatory Authority relating to such inspection. Kite will cooperate reasonably with DS for inspections

relating to the Licensed Products implemented by or on behalf of any Regulatory Authorities in the Territory and DS shall reimburse Kite for such activities at the FTE Rate. Kite will share the information about inspections conducted at Kite’s and its Affiliates’ manufacturing facilities in the Kite Territory for the Licensed Products including the inspection results and the measures to be taken. Kite will share the information about inspections conducted at any Kite Partner’s manufacturing facilities in the Kite Territory for a Licensed Product that would reasonably be expected to indicate a potential safety issue for such Licensed Product or that would otherwise reasonably be expected to have a material impact on such Licensed Product in the Territory.

5.6    Regulatory Matters Outside the Territory. As between the Parties, Kite shall [...***...]. Kite, through the JOC, shall keep DS reasonably informed of all material events and developments occurring in the course of the regulatory activities with respect to the Licensed Products in the Kite Territory, including the overall content and outcome of any strategy discussions and meetings with applicable Regulatory Authorities in the Kite Territory which relate to the Licensed Products.
5.7    Safety; Adverse Event Reporting.
5.7.1    Pharmacovigilance and Drug Safety Data. Kite shall establish and maintain, [...***...], a global drug safety management system for the Licensed Products. DS shall have the right to access by requesting from Kite such global drug safety database all drug safety data necessary for DS to comply with all Applicable Laws in the Territory. DS will [...***...].  Kite shall have the right to provide information received by Kite pursuant to this Section 5.7 to its Affiliates, Kite Partners and appropriate Regulatory Authorities within the Kite Territory. Upon reasonable prior notice and during normal business hours [...***...], Kite has the right to review DS’s internal processes and procedures for the collection and processing of safety data relating to the Licensed Products.  For clarity, this review by Kite could occur in a variety of formats, including through questionnaires, meetings, quality assessments, onsite visits and audits.
5.7.2    Safety Agreement. Prior to the initiation of any clinical trial of any Licensed Products in the Territory, the JSC will develop a mutually acceptable safety agreement (to be agreed upon and executed by the Parties) setting forth the Parties’ respective obligations in detail regarding pharmacovigilance and the exchange of drug safety data with respect to the Licensed Products (the “Safety Agreement”). Such safety agreement shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, and exchange (as between the Parties) of adverse event reports, pregnancy reports, and any other information concerning the safety of any Licensed Products. Such guidelines and procedures shall be in accordance with, and enable the Parties to fulfill, local and national regulatory reporting obligations under Applicable

Laws. Furthermore, such agreed procedure shall be consistent with relevant ICH guidelines, except where said guidelines may conflict with existing local regulatory reporting safety reporting requirement, in which case local reporting requirement shall prevail.

5.8    Remedial Action.
5.8.1    DS and Kite will, through the JSC, confer upon and coordinate their respective internal standard operating procedures (and any changes thereto) with respect to Licensed Product recalls and the treatment of and response to Licensed Product complaints and inquiries regarding the safety, quality or efficacy of the Licensed Products.
5.8.2    If either Party becomes aware of information indicating that any Licensed Product may be subject to any withdrawal, corrective action or other regulatory action with respect to such Licensed Product taken by virtual of Applicable Laws (a “Remedial Action”), it shall [...***...] (but in any event within such period of time as the Parties may mutually establish to ensure their respective compliance with Applicable Laws) so notify the other Party. The Parties will assist each other in gathering and evaluating such information as is necessary to determine the necessity of conducting a Remedial Action. Each Party shall, and shall ensure that its Affiliates, licensees and Sublicensees will, maintain adequate records to permit the Parties to trace the manufacture, distribution and use of the Licensed Products. In the event DS determines that any Remedial Action with respect to a Licensed Product in the Territory should be commenced or is required by applicable Regulatory Authority, DS shall, at its expense, control and coordinate all efforts necessary to conduct such Remedial Action in the Territory. In the event Kite determines that any Remedial Action with respect to a Licensed Product in the Kite Territory should be commenced or is required by applicable Regulatory Authority, Kite shall, at its expense, control and coordinate all efforts necessary to conduct such Remedial Action in the Kite Territory.

ARTICLE VI     
COMMERCIALIZATION
6.1    Overview. Subject to, and in accordance with, the terms and conditions of this Agreement and all Applicable Laws, DS, [...***...].
6.2    Commercialization Plan. Without limiting the generality of the other provisions in this ARTICLE VI, DS will prepare and submit to the JOC a plan containing the strategy and proposed activities and timelines for the Commercialization of each Licensed Product in the Territory (the “Commercialization Plan”). DS will submit a proposed draft of the

Commercialization Plan for a Licensed Product to the JOC for review and approval no later than [...***...] prior to the anticipated date of the Regulatory Approval of such Licensed Product in the Territory. DS will deliver to the JOC an update of the relevant sections of the Commercialization Plan [...***...] during the Term.  DS will [...***...].

6.3    Commercial Diligence. DS shall use Commercially Reasonable Efforts to Commercialize each Licensed Product in the Territory after it receives Regulatory Approval for such Licensed Product in the Territory.

6.4    Pricing.
6.4.1    DS shall be responsible, [...***...], for seeking Pricing Approval for each Licensed Product in the Territory. Kite shall provide DS [...***...]. DS shall keep Kite informed on an ongoing basis of DS’s strategy for seeking, and the results it obtains in seeking, Pricing Approval, including, without limitation, the results of any material discussion or other communication with relevant governmental authorities regarding Pricing Approval, via regular reports to the JOC no less frequently than such committee is required to meet. DS shall use Commercially Reasonable Efforts to obtain Pricing Approval for the Licensed Products in the Territory.
6.4.2    Subject to Section 6.4.3, DS [...***...]. Notwithstanding anything in this Agreement to the contrary, Kite shall [...***...]. DS shall [...***...].

6.4.3    In the event DS [...***...].
6.5    Marketing and Promotional Materials. DS shall prepare all marketing and promotional materials related to Licensed Products for use in the Territory in accordance with Applicable Laws, and, if requested by Kite or otherwise required herein, shall provide Kite with copies. Upon DS’s reasonable request, Kite shall provide DS with copies of its applicable marketing materials and global brand plans.
6.6    Labeling Marking.  Subject to, and in accordance with, Applicable Laws, DS may identify Kite as the licensor of the Licensed Products using the Kite Housemarks designated by Kite for such use in marketing and promotional materials for the Licensed Products in the Territory where such identification is appropriate, in a manner approved in advance in writing by both Parties, and in accordance with (and subject to) the Trademark License set forth in Section 2.7.1.  To the extent permitted by Applicable Law, DS will mark all Licensed Products sold in

the Territory by DS, its Affiliates, or Sublicensees with appropriate Product Trademarks. DS may, in its sole discretion, include any DS Housemark on the Licensed Products, and on the labels, packaging, promotional materials, and other materials therefor, in compliance with Applicable Law.

6.7    Selection of Product Trade Name. The trade names for use in connection with the Commercialization of Licensed Products in the Territory in the Field shall be determined in accordance with this Section 6.7. DS acknowledges that Kite intends to have each Licensed Product commercialized worldwide under a global product trade names (including key distinctive colors, logos, images and symbols), where feasible and appropriate.  Accordingly, Kite shall have the right to select and propose such global product trade names for the Licensed Products, and DS agrees to, at good time in course of the Development, evaluate in good faith such Kite proposed trade names for use in connection with the Commercialization of the Licensed Products in the Territory, including the appropriateness of such trade names for the Japanese market, any existing confusingly similar trademarks or trade names of any drug product, etc.  If DS in good faith believes that any Kite proposed trade name is not appropriate for the Territory, it shall so inform Kite, and shall propose [...***...] potential trade name as alternatives to the Kite proposed trade name for use in the Territory.  The Parties shall then review and discuss such proposed alternative trade names for the Licensed Products, and DS shall have the right to proceed with the alternative trade names but only if approved and agreed to by Kite, which approval not to be unreasonably withheld or delayed. The trade names selected in accordance with this Section 6.7 for use in connection with the Commercialization of  Licensed Products, whether it is a Kite proposed trade name or an alternative proposed by DS and agreed upon by Kite, shall be deemed the “Product Trademarks” and shall solely be owned by Kite throughout the world.
6.8    Reports. DS shall update the JOC at each regularly scheduled meeting regarding DS’s significant Commercialization activities (such as promotion campaign and planned Phase 4 studies) for the Licensed Products in the Territory. In addition, DS shall present [...***...] written reports (in English) to the JOC summarizing DS’s significant Commercialization activities for the Licensed Products in the Territory. Such reports shall cover subject matter at a level of detail reasonably sufficient to enable Kite to determine DS’s compliance with its diligence obligations pursuant to Section 6.3.
6.9    Cross Territory Coordination.  The Parties recognize that their collaboration may benefit from the coordination of certain activities in support of the Commercialization of the Licensed Products in both the Territory and the Kite Territory. As such, the Parties will coordinate such activities where appropriate, which may include scientific, clinical and medical communication, pricing and product positioning.
6.10    Marketing and Sales in the Kite Territory. Beginning approximately [...***...] prior to the first commercial sale of a Licensed Product in the Kite Territory, Kite, through the JOC, shall keep DS reasonably informed of all material activities and developments with respect to the marketing and sale of Licensed Products in the Kite Territory.  Subject to DS’s prior written approval on a case by case basis, Kite shall have the right to use the DS Housemark, only in the form and manner as reasonably prescribed in writing to Kite in advance from time to time by DS, on the Licensed Products, and on the labels, packaging, promotional materials, and

other materials therefor, solely in connection with marketing activities or medical affairs activities in the Kite Territory that describe DS as Kite’s partner with respect to the Licensed Product in the Territory.
ARTICLE VII     
MANUFACTURE AND SUPPLY

7.1    Product Supply.

7.1.1    Supply by Kite. Until the completion of the Technology Transfer for a Licensed Product set forth in Section 7.2 below, Kite shall, either by itself or through a Third Party contractor, [...***...] for Development use in the Territory, [...***...]. The Parties shall discuss and agree on a reasonable forecasting and ordering mechanism for the supply of the Licensed Products by Kite to DS, which shall take into account [...***...]. Kite shall manufacture the Licensed Products in accordance with all Applicable Laws, including GMP, and all Licensed Products supplied by Kite to DS shall comply with the specifications mutually agreed by the Parties for such Licensed Products. DS shall [...***...].  Kite and DS shall execute a mutually acceptable quality agreement that allocates roles and responsibilities to each Party with respect to quality control and regulatory compliance with respect to the manufacture and supply of Licensed Products hereunder (the “Quality Agreement”).
7.1.2    Supply by DS. Except for the supply of the Licensed Products by Kite under Section 7.1.1, DS shall [...***...]. If the Technology Transfer is not completed (or in DS’s reasonable opinion, will not be completed) in time for DS to be able to manufacture and supply commercial quantities of any Licensed Product for Commercialization use following Regulatory Approval in the Territory, then upon DS’s request, the Parties shall promptly discuss in good faith mutually agreeable terms to ensure the availability of the commercial supply of the Licensed Products for the Territory.

7.2    Manufacturing Technology Transfer. In order to enable DS to manufacture and supply the Licensed Products, Kite shall perform a manufacturing technology transfer (the “Technology Transfer”) to DS or the Approved CMO as set forth below:
7.2.1    [...***...], the Parties shall discuss and agree on a plan for the Technology Transfer for such Licensed Product, which plan shall set forth the schedule and each Party’s role and responsibility for such Technology Transfer. The Parties shall perform the Technology Transfer in accordance with such agreed plan as expeditiously as is reasonably practicable. The JOC shall establish a subcommittee to oversee the Technology Transfer.

7.2.2    Pursuant to the Technology Transfer plan agreed by the Parties, Kite shall make available and transfer to DS or the Approved CMO copies of the Kite Know- How that are necessary or reasonably useful for DS or the Approved CMO to manufacture the applicable Licensed Product and as of such time are being used or have been used by Kite to manufacture such Licensed Product (the “Kite Manufacturing Know-How”). Subject to the provisions in Article 2.8, DS and the Approved CMO shall use the Kite Manufacturing Know-How solely to manufacture and supply the Licensed Product to DS. Upon DS’s reasonable request, Kite shall make available to DS or the Approved CMO [...***...] of appropriately trained personnel to provide, on a mutually convenient time and place, technical assistance in the transfer and demonstration of the Kite Manufacturing Know-How in the manufacture of the Licensed Products. In addition, upon DS’s reasonable request, Kite shall provide DS or the Approved CMO with a reasonable opportunity to observe the manufacture of the Licensed Products at Kite’s facility for the purpose of facilitating an effective and efficient Technology Transfer. Furthermore, Kite shall make reasonable efforts to make available to DS, [...***...], the raw materials available from single source suppliers necessary for the manufacturing of the Licensed Products for the Territory. DS shall use any such materials solely in connection with Kite’s processes for such Licensed Products.
7.2.3    DS shall [...***...] after the end of the applicable Calendar Quarter.
7.2.4    The Technology Transfer for a Licensed Product shall be deemed completed (“Successful Completion”) when DS [...***...] by the Applicable Laws.
ARTICLE VIII     
FINANCIAL TERMS
8.1    Upfront Payment. Within [...***...] after the Effective Date, as a material inducement to Kite entering into this Agreement and to forego pursuing other commercial arrangements for the Licensed Products in the Territory, DS shall pay to Kite a non- refundable, non-creditable upfront payment of fifty million Dollars ($50,000,000).

8.2    Development and Commercialization Milestones. On a Licensed Product-by- Licensed Product basis, DS shall pay to Kite the non-refundable, non-creditable milestone payments set forth in the table below within [...***...] of the first achievement by such Licensed Product of the applicable milestone event (whether by DS or its Affiliate or Sublicensee). For the avoidance of doubt, [...***...].

	
			
	

Development and Commercialization
Milestone Events
	Development and/or Commercialization Milestone Payment (in US$)

	KTE-C19
	Opt-in Product

	1) [...***...]
	$[...***...]
	$[...***...]

	2) [...***...]
	$[...***...]
	$[...***...]

	3) [...***...
	$[...***...]
	$[...***...]*

* [...***...]

8.3    Sales Milestones. On a Licensed Product-by-Licensed Product basis, DS shall pay to Kite the additional non-refundable, non-creditable milestone payments set forth in the table below within [...***...] of the end of the Calendar Quarter during which the aggregated annual Net Sales of such Licensed Product in the Territory first reach the values indicated below. If two or more sales milestone events are achieved in the same Calendar Quarter, then DS shall pay to Kite all of the applicable milestone payments achieved in such Calendar Quarter.  [...***...].

	
		
	Aggregate annual Net Sales of the Licensed Product in the Territory
	Sales Milestone Payment (in US$)

	[...***...]
	$[...***...]

	[...***...]
	$[...***...]

	[...***...]
	$[...***...]

	[...***...]
	$[...***...]

	[...***...]
	$[...***...]

8.4    Running Royalties.

8.4.1    Royalty Rate. Subject to the other terms of this Section 8.4 and on a Licensed Product-by-Licensed Product basis, DS shall make [...***...] non-refundable, non-creditable royalty payments to Kite on the Net Sales of such Licensed Product sold in the Territory, as calculated by [...***...].

	
		
	For the portion of annual Net Sales of a Licensed Product in the Territory
	Royalty Rate

	[...***...]
	[...***...]%

	[...***...]
	[...***...]%

	[...***...]
	[...***...]%

	[...***...]
	[...***...]%

8.4.2    Royalty Term. DS shall pay the royalties to Kite on the Net Sales of each Licensed Product for as long as DS, its Affiliates and Sublicensees continues to Commercialize such Licensed Product in the Territory (“Royalty Term”).
8.4.3    Royalty Reductions.

8.4.3.1    Royalty Rate Reductions.  Subject to Section 8.4.3.3:
(a)    On a Licensed Product-by-Licensed Product basis, for Net Sales of Licensed Product sold after the later of: (i) [...***...] from the First Commercial Sale of such Licensed Product in the Territory, and (ii) the expiration of the last-to-expire Valid Claim in the Territory that claims the composition of matter, manufacture, use, sale, importation or distribution of such Licensed Product, the royalty rate applicable to such Net Sales shall be reduced to [...***...] ([...***...]%) of the royalty rate(s) otherwise applicable under Section 8.4.1. Once the royalty rate is reduced for a Licensed Product to [...***...] ([...***...]%) of the royalty rate(s) otherwise applicable under Section 8.4.1 pursuant to this Section 8.4.3.1(a)(ii), such royalty rate reduction shall be maintained during the Royalty Term even if a subsequent Valid Claim that claims the composition of matter, manufacture, use, sale, importation or distribution of such Licensed Product subsequently issues.
(b)    The applicable royalty rate under Section 8.4.1 will be reduced by [...***...] ([...***...]%) if during the Royalty Term a Generic Product is sold in the Territory in the Field.
8.4.3.2    Patent Payment Offset. Subject to Section 8.4.3.3:
(a)    If DS finds any Patent rights that are owned or controlled by a Third Party and which DS believes is necessary to sell a Licensed Product in the Territory, DS will notify Kite in writing of such Patent rights. If the Parties agree that it is necessary for DS to obtain a license from such Third Party under such Patent in the Territory in order to sell a Licensed Product in the Territory, such agreement not to be unreasonably withheld, conditioned, or delayed, and DS obtains such a license, DS may deduct, from the royalty payment that would otherwise have been due pursuant to Section 8.4.1 with respect to Net Sales of such Licensed Product in the Territory [...***...], an amount equal to [...***...] ([...***...]%) of the royalties

paid by DS to such Third Party pursuant to such license on account of the sale of such Licensed Product in the Territory during such [...***...].
(b)    If any Necessary IP for the Development, manufacture or Commercialization of KTE-C19 in the Territory is included in the Kite Technology pursuant to Section 2.1.5.2, then DS may deduct an amount equal to [...***...] ([...***...]%) of its share of such Third Party royalty payment (DS’s share of the Third Party royalty payment shall be calculated pursuant to Section 8.5.4) in a particular [...***...] from the royalty payment that would otherwise have been due from DS to Kite with respect to Net Sales of KTE-C19 in the Territory during such [...***...].
8.4.3.3    Royalty Floor. In no event will the royalty payable to Kite hereunder for any sale of any Licensed Product be less than [...***...] ([...***...]%) of the applicable royalty rate set forth in in Section 8.4.1.

8.5    Payment under In-License Agreements.
8.5.1    Kite shall [...***...] arising from the Development, manufacture and Commercialization of KTE-C19.
8.5.2    Kite and DS shall [...***...] (as defined below) under all In-License Agreements arising from the Development, manufacture and Commercialization of Licensed Products, other than KTE-C19, in the Territory. With respect to any In-License Agreements existing as of the Effective Date, in no event and at no time shall DS be responsible for more than an aggregate of such third party royalty obligations in excess of [...***...]% of Net Sales of the applicable Licensed Product.  For clarity, the foregoing up to [...***...]% limit shall not apply to any In-License Agreement that became an In-License Agreement pursuant to Section 2.1.5. “Japan Milestone Payment” means [...***...], to be agreed in good faith by the Parties.
8.5.3    DS shall [...***...] for any intellectual property rights that are useful but not necessary for the Development, manufacture and Commercialization of the Licensed Products in the Territory, and [...***...] under Section 8.4.3.1. For clarity, such license from Third Party shall neither be deemed as DS Technology nor the Collaboration Technology and shall not be sublicensed to Kite [...***...].

8.5.4    Subject to the royalty offset described in Section 8.4.3.2(b), Kite and DS shall [...***...] under all In-License Agreements entered into during the Term arising from the Development, manufacture and Commercialization of KTE-C19 in the Territory.
ARTICLE IX     
RECORDS AND REPORTS
9.1    Royalty Reports; Payment. Within [...***...] after each Calendar Quarter, commencing with the Calendar Quarter during which the First Commercial Sale of a Licensed Product is made anywhere in the Territory, DS shall provide Kite with a report that contains the following information for the applicable Calendar Quarter, on a Licensed Product-by-Licensed Product basis: (a) the amount of gross sales of the Licensed Products, (b) an itemized calculation of Net Sales in the Territory showing separately each type of deduction provided for in the definition of “Net Sales”, and (c) a calculation of the royalty payment due on such sales, including the application of any reduction made in accordance with Section 8.4.3. In addition, if and as requested by Kite, DS shall provide Kite with any additional information relating to the sales of Licensed Products in the Territory during such Calendar Quarter that is necessary for Kite to calculate the payments owed under the applicable In-License Agreement(s). Within [...***...] after delivery of the applicable quarterly report, DS shall pay Kite in Dollars all royalties owed with respect to Net Sales of the Licensed Products for such Calendar Quarter.
9.2    Currency. All payments to be made by DS to Kite under this Agreement shall be made in Dollars by bank wire transfer in immediately available funds to a bank account designated by written notice from Kite.  The rate of exchange to be used in computing the amount of currency equivalent in Dollars owed to a Party under this Agreement shall be the monthly average exchange rate between each currency of origin and Dollars as reported by [...***...]. The monthly average exchange rate shall be the average of (a) the exchange rate published on the last day of the month; and (b) the exchange rate published on the last day of the preceding month.

9.3    Interest on Late Payments. Any amounts not paid when due under this Agreement will be subject to interest from and after the date payment is due through and including the date upon which such amount is paid at the annual interest rate equal to [...***...] or the maximum rate allowable by Applicable Law, compounded monthly. The payment of such interest shall not limit or restrict any other remedies available for the lateness of any payment.

9.4    Taxes.
9.4.1    Taxes on Income. Each Party shall be solely responsible for the payment of all Taxes imposed on its share of income arising directly or indirectly from the collaborative efforts of the Parties under this Agreement.
9.4.2    Cooperation and Coordination. The Parties acknowledge and agree that it is their mutual objective and intent to minimize Taxes in accordance with 

applicable Law with respect to their collaborative efforts under this Agreement and that they shall use all commercially reasonable efforts to cooperate and coordinate with each other to achieve such objective.
9.4.3    Tax Withholding.
9.4.3.1    If DS is required under any Applicable Law to withhold or deduct any Taxes with respect to payments under this Agreement, [...***...], DS will make necessary steps to pay such withholding Tax on behalf of Kite or its designee. Kite or its designee will bear such withholding Tax and the amount of the consideration to be borne by DS under this Agreement will not change as stipulated in this Agreement.
9.4.3.2    DS and Kite shall reasonably cooperate to reduce otherwise applicable withholding Taxes by providing tax forms requested by either Party for the purpose of claiming reductions or exemptions in otherwise applicable Taxes. DS also agrees to inform Kite of any audit of DS with respect to withholding of Taxes hereunder, and in such event to reasonably consult with Kite with respect to such matter. Kite shall provide DS with appropriate certification from relevant revenue authorities that Kite is a tax resident of that jurisdiction, if Kite wishes to claim the benefits of an income tax treaty to which that jurisdiction is a party. Upon the receipt thereof, any deduction and withholding of taxes shall be made at the appropriate treaty tax rate.
9.4.3.3    In the event that a governmental authority requires Kite to provide additional information and records to establish its right to a credit, exemption or refund of any amounts withheld by DS, DS shall fully and promptly cooperate with Kite and provide to Kite, no later than [...***...] of Kite’s request, such additional information and records as Kite may request. DS shall provide Kite with such assistance and documentation as Kite shall request in connection with any application by Kite to qualify for the benefit of a reduced rate of withholding taxation under the terms of any applicable tax treaty.
9.4.4    Assessment. Either Party may, at its own expense, protest any assessment, proposed assessment, or other claim by any Governmental Authority for any additional amount of taxes, interest or penalties or seek a refund of such amounts paid if permitted to do so by applicable Law. The Parties shall cooperate with each other in any protest by providing records and such additional information as may reasonably be necessary for a Party to pursue such protest.
9.4.5    Other Tax Liability. In the case of value added or similar taxes incurred by a Party with respect to payments made hereunder or the activities underlying such payments (“VAT”), each Party and their Affiliates will use Commercially Reasonable Efforts to secure available exemption(s) from VAT and/or to cooperate with the other Party’s efforts to obtain maximum recovery of VAT paid or incurred by such Party or any Affiliate, to the extent permitted by Applicable Law.

9.4.6    Payments Treated as Royalties for Tax Purposes. The Parties agree that, to the extent consistent with Applicable Law, the payments under Section 2.2.4 (Opt-In Payment), Section 2.2.5 (Extension Fee), Section 8.1 (Upfront Payment), Section 8.2 (Development Milestones), Section 8.3 (Sales Milestones) and Section 8.4 (Running Royalties) are payments received as consideration for the use of, or the right to use, a patent or patents, a secret process, or information concerning industrial, commercial, or scientific experience between Japan and United States and, if applicable, within the meaning of the Income Tax Convention for the Avoidance of Double Taxation between Japan and The Netherlands. Accordingly, such payments constitute “royalties” for Tax purposes, and the Parties intend and agree (to the extent consistent with Applicable Law) to treat them as such for Tax purposes.
9.5    Records; Audits. DS shall (and shall ensure that its Affiliates and Sublicenses will) maintain complete and accurate records in sufficient detail in relation to this Agreement to permit Kite to confirm the accuracy of the royalty payments and other amounts payable under this Agreement and to verify the achievement of any sales milestones. DS will keep such books and records for at least [...***...] following the end of the Calendar Year to which they pertain. Upon reasonable prior notice, such records may be inspected during regular business hours at such place or places where such records are customarily kept by an independent certified public accountant selected by Kite for the sole purpose of verifying for Kite the accuracy of the financial reports furnished by DS pursuant to this Agreement or of any payments made, or required to be made, by DS to Kite pursuant to this Agreement. Such audits shall occur no more often than once each Calendar Year. Kite shall only be entitled to audit the books and records from the [...***...] prior to the Calendar Year in which the audit request is made. Such auditor shall not disclose DS’s Confidential Information, except to the extent such disclosure is necessary to verify the accuracy of the financial reports furnished by DS or the amount of payments by DS under this Agreement.  Any amounts shown to be owed but unpaid as a result of such audit shall be paid within [...***...] from the auditor’s report (plus interest on such amounts pursuant to Section 9.3). Any amounts shown to have been overpaid shall be credited along with interest (as calculated herein) against future payment due from DS to Kite.  Kite shall bear the full cost of such audit unless such audit discloses an underpayment of the amount actually owed of more than [...***...] ([...***...]%), in which case DS shall bear the full out-of-pocket, external cost of such audit.

ARTICLE X     
INTELLECTUAL PROPERTY
10.1    Ownership of Inventions. Ownership of all Inventions shall be based on inventorship, as determined in accordance with the rules of inventorship under United States patent laws. Each Party shall solely own any Inventions made solely by its and its Affiliates’ employees, agents, or independent contractors (“Sole Inventions”). All Patents claiming Sole Inventions shall be referred to herein as “Sole Patents”. The Parties shall jointly own any Inventions that are made jointly by employees, agents, or independent contractors of one Party and its Affiliates together with by employees, agents, or independent contractors of the other Party and its Affiliates (“Joint Inventions”). All Patents claiming Joint Inventions shall be referred to herein as “Joint Patents”. Except to the extent either Party is restricted by the

licenses and covenants granted to the other Party under this Agreement, each Party shall be entitled to practice, license, assign and otherwise exploit the Joint Inventions and Joint Patents without the duty of accounting or seeking consent from the other Party.
10.2    Disclosure of Inventions. Each Party shall promptly disclose to the other Party all Sole Inventions of such Party and all Joint Inventions, including any invention disclosures, or other similar documents, submitted to it by its employees, agents or independent contractors describing such Inventions, and shall promptly respond to reasonable request from the other Party for additional information relating to such Inventions.

10.3    Prosecution of Patents.

10.3.1    Kite-Prosecuted Patents. As between the Parties, Kite shall have the sole right and authority to prepare, file, prosecute, and maintain the Kite Patents, Kite’s Sole Patents and the Joint Patents (collectively, “Kite-Prosecuted Patents”) in the Kite Territory and the first right and authority to prepare, file, prosecute, and maintain the Kite- Prosecuted Patents in the Territory, all at Kite’s own cost and expense. Kite shall provide DS reasonable opportunity to review and comment on such efforts regarding the Kite-Prosecuted Patents in the Territory, including by providing DS with a copy of material communications from any patent authority in the Territory regarding the Kite-Prosecuted Patents, and by providing drafts of any material filings or responses to be made to any patent authorities in the Territory in advance of submitting such filings or responses. If Kite determines in its sole discretion to abandon or not maintain any Kite-Prosecuted Patent in the Territory, then Kite shall provide DS with written notice of such determination at least [...***...] prior to any filing or payment due date, or any other due date that requires action, for such Kite- Prosecuted Patent. In such event, Kite shall permit DS, at its discretion and expense, to continue prosecution or maintenance of such Kite-Prosecuted Patent in the Territory. DS’s prosecution or maintenance of such Kite-Prosecuted Patent in the Territory shall not change the Parties’ respective rights and obligations under this Agreement with respect to such Kite- Prosecuted Patent other than as expressly set forth in this Section 10.3.1.
10.3.2    DS Sole Patents. DS shall have the first right and authority to prepare, file, prosecute, and maintain DS’s Sole Patents anywhere in the world, at DS’s own cost and expense. DS shall provide Kite reasonable opportunity to review and comment on such efforts regarding DS’s Sole Patents, including by providing Kite with a copy of material communications from any patent authority regarding DS’s Sole Patents, and by providing drafts of any material filings or responses to be made to any patent authorities in advance of submitting such filings or responses.  If DS determines in its sole discretion to abandon or not maintain any of DS’s Sole Patents in any country, then DS shall provide Kite with written notice of such determination at least [...***...] prior to any filing or payment due date, or any other due date that requires action, for such Sole Patent. In such event, DS shall permit Kite, at its discretion and expense, to continue prosecution or maintenance of such Sole Patent in such country, provided that Kite shall provide DS with the same rights of review and comment as set forth above for Kite. Kite’s prosecution or maintenance of such Sole Patent in such country shall not change the Parties’ respective rights and obligations under this Agreement with respect to such Sole Patent other than as expressly set forth in this Section 10.3.2.

10.3.3    Cooperation in Prosecution. Each Party shall provide the other Party all reasonable assistance and cooperation in the Patent prosecution efforts provided above in this Section 10.3, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution. As used herein, “prosecution” of such Patents shall include, without limitation, all communication and other interaction with any patent office or patent authority having jurisdiction over a patent application throughout the world in connection with pre-grant proceedings. Post-grant proceedings shall be governed by Sections 10.5 and 10.7.
10.3.4    Confidential Information. All communications between the Parties relating to the preparation, filing, prosecution, or maintenance of the Kite Patents, DS Patents, or Joint Patents, including copies of any draft or final documents or any communications received from or sent to patent offices or patenting authorities with respect to such Patents, shall be considered Confidential Information and subject to the confidentiality provisions of ARTICLE XI.

10.4    Patent Term Extensions in the Territory.  The JSC will discuss and recommend for which, if any, of the Patents within the Kite Patents and Collaboration Patents in the Territory the Parties should seek patent term extensions in the Territory. Kite, in the case of the Kite Patents, and DS in the case of the Collaboration Patents, shall have the final decision- making authority with respect to applying for any such patent term extension in the Territory, and will act with reasonable promptness in light of the development stage of applicable Licensed Product(s) to apply for any such patent term extension, where it so elects; provided, however, that if in the Territory only one such Patent can obtain a patent term extension, then the Parties will consult in good faith to determine which such Patent(s) should be the subject of efforts to obtain a patent term extension. The Party that does not apply for an extension hereunder will cooperate fully with the other Party in making such filings or actions, for example and without limitation, making available all required regulatory data and information and executing any required authorizations to apply for such patent term extension. All expenses incurred in connection with activities of each Party with respect to the Patent(s) for which such Party seeks patent term extensions pursuant to this Section 10.4 shall be solely borne by [...***...].
10.5    Infringement of Patents by Third Parties.

10.5.1    Notification. Each Party will notify the other within [...***...] of becoming aware of any actual or potential infringement by a Third Party of any of the Kite Patents, Collaboration Patents or DS Patents through the making, using or selling of a Licensed Product or any Competing Product in the Field in the Territory, including any declaratory judgment, opposition, or similar action alleging the invalidity, unenforceability or non-infringement of any of such Patent Rights in the Territory (collectively “Product Infringement”).

10.5.2    Enforcement.
10.5.2.1    For any Product Infringement of a Kite Patent, as between the Parties, Kite shall have the first right, but not the obligation, to bring an appropriate suit or other action (an “Action”) to enforce such Kite Patent against such Product Infringement. Kite

shall have a period of [...***...] after the first notice under 10.5.1 to elect to enforce such Kite Patent against such Product Infringement. In the event Kite does not so elect, Kite shall so notify DS in writing, and DS shall have the right to bring an Action to enforce the applicable Kite Patent against such Third Party perpetrating such Product Infringement in the Territory.
10.5.2.2    For any Product Infringement of a Collaboration Patent, as between the Parties, DS shall have the first right, but not the obligation, to bring an Action to enforce such Collaboration Patent against such Product Infringement. DS shall have a period of [...***...] after the first notice under 10.5.1 to elect to enforce such Collaboration Patent against such Product Infringement. In the event DS does not so elect, DS shall so notify Kite in writing, and Kite shall have the right to bring an Action to enforce the applicable Collaboration Patent against such Third Party perpetrating such Product Infringement in the Territory.
10.5.3    Cooperation. Each Party shall provide to the Party bringing any Action under Section 10.5.2 reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such Action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the other Party regularly informed of the status and progress of such enforcement efforts and shall reasonably consider the other Party’s comments on any such efforts. The non-enforcing Party shall be entitled to separate representation in such matter by counsel of its own choice and at its own expense, but shall at all times cooperate fully with the enforcing Party in such enforcement Action.
10.5.4    Settlement. In connection with any enforcement Action under Section 10.5.2, the enforcing Party shall not enter into any settlement admitting the invalidity of, or otherwise impairing the other Party’s rights in, the Kite Patents or Collaboration Patents without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Nothing in this ARTICLE X shall require a Party to consent to any settlement that is reasonably anticipated by such Party to have a materially adverse impact upon any Kite Patent or Collaboration Patent in its territory, or the Commercialization, manufacture, use, importation or exportation of the Licensed Products in its territory.

10.5.5    Expenses and Recoveries. [...***...] shall be solely responsible for the costs and expenses incurred by the Parties in connection with any enforcement Action under Section 10.5.2. Any recoveries resulting from an Action against Product Infringement shall be first applied pro rata against payment of each Party’s costs and expenses in connection therewith. Any such recoveries in excess of such costs and expenses shall be retained by [...***...], provided that any such recoveries retained by DS shall be deemed Net Sales subject to royalty payment to Kite under Section 8.4.
10.5.6    Other Infringement of Kite Patents and Joint Patents. For any and all infringement of Kite Patents or Joint Patents that is not a Product Infringement, as between the Parties, Kite shall have the sole and exclusive right to bring an appropriate suit or other action against any Person engaged in such other infringement of any Kite Patents or Joint Patents, in its sole discretion, and shall bear all related expenses and retain all related recoveries. 
10.5.7    

10.6    Infringement of Third Party Rights in the Territory.

10.6.1    Notice; Defense. If the manufacture, sale, or use of a Licensed Product in the Territory pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by DS (or its Affiliates or Sublicensees), DS will promptly notify Kite thereof in writing. Subject to the provisions of Section 10.6.2, DS will have the first right, but not the obligation to defend and control the defense of any such claim, suit or proceeding at its own expense, using counsel of its own choice. Upon DS’s request, Kite shall participate in any such claim, suit or proceeding with counsel of its choice at DS’s expense.  In addition, Kite may participate in any such claim, suit or proceeding with counsel of its choice at its own expense. If DS elects (in a written communication submitted to Kite within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit or proceeding, within such time periods so that Kite is not prejudiced by any delays, Kite may conduct and control the defense of any such claim, suit or proceeding at its own expense. Each Party will keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Each Party agrees to provide the other Party with copies of all pleadings filed in such action and to allow the other Party reasonable opportunity to participate in the defense of the claims. If DS is controlling the defense of any such claim, suit or proceeding, DS agrees to provide at [...***...] English translations, or summaries thereof, of all pleadings, discovery-requests, and key documents filed with the court reasonably promptly.

10.6.2    Possible Claims in Kite Territory. In addition to the DS obligations set out in the preceding paragraph, and regardless of whether Kite elects to participate in the defense of the claim, suit or proceeding under Section 10.6.1, DS further agrees that, in the event such claim, suit or preceding is brought by a Third Party that is also pursuing or has threatened to pursue similar claims outside the Territory against Kite, its Affiliates, agents or marketing or development partners, DS shall: (a) provide to Kite at Kite’s expense English translation drafts of all official papers or other statements (whether written or oral) prior to their submission to the court in the lawsuit, in sufficient time to allow Kite to review, consider and substantively comment thereon; (b) reasonably consider taking action to incorporate Kite comments on all such official papers and statements, (c) not take positions in its defense that are inconsistent or at odds with positions that Kite is taking in defense, or anticipated defense, of related claims outside the Territory, to the extent such positions have been communicated to DS; (d) allow Kite the opportunity to participate in preparation of witnesses or other participants in the claim, suit or proceeding; (e) not settle any such claim, suit or proceeding without Kite’s prior consent, which consent shall not be unreasonably withheld or delayed, and (f) enter into a reasonable and customary joint defense agreement with Kite, upon Kite’s request.

10.7    Patent Oppositions and Other Proceedings.

10.7.1    Challenges to Third-Party Patent Rights. If either Party desires to bring an opposition, action for declaratory judgment, nullity action, invalidation action, interference, declaration for non-infringement, reexamination, inter partes review (IPR), post

grant review (PGR), or other attack upon the validity, title, or enforceability of a Patent owned or controlled by a Third Party and having one or more claims that covers the Licensed Products, or the manufacture, use, sale, offer for sale, or importation of the Licensed Products, in each case in the Territory (except insofar as such action is a counterclaim to or defense of, or accompanies a defense of, a Third Party’s claim or assertion of infringement under Section 10.6, in which case the provisions of Section 10.6 shall govern), such Party shall so notify the other Party and the Parties shall promptly confer to determine whether to bring such action or the manner in which to settle such action. Kite shall have the exclusive right, but not the obligation, to bring at its own expense and in its sole control such action in the Kite Territory and DS shall have the first right, but not the obligation, to bring at its own expense and in its sole control such action in the Territory. If DS does not bring such an action in the Territory, within [...***...] of notification thereof pursuant to this Section 10.7.1 (or earlier, if required by the nature of the proceeding), then Kite shall have the right, but not the obligation, to bring, at [...***...] sole expense, such action. The Party not bringing an action under this Section 10.7.1 shall be entitled to separate representation in such proceeding by counsel of its own choice and at [...***...] expense, and shall cooperate fully with the Party bringing such action at the request and expense of [...***...] action. Any awards or amounts received in bringing any such action shall be allocated between the Parties as provided in Section 10.5.5.
10.7.2    Parties’ Patent Rights. If a Kite Patent or Collaboration Patent becomes the subject of any proceeding commenced by a Third Party within the Territory in connection with an opposition, reexamination request, action for declaratory judgment, nullity action, invalidation action, interference, or other attack upon the validity, title, or enforceability thereof (except insofar as such action is a counterclaim to or defense of, or accompanies a defense of, an action for infringement against a Third Party under Section 10.5, in which case the provisions of Section 10.5 shall govern), then the Party responsible for filing, preparing, prosecuting, and maintaining such Patent as set forth in Section 10.3 shall have the right to control such defense at [...***...]. The controlling Party shall permit the non-controlling Party to participate in the proceeding to the extent permissible under Applicable Law, and to be represented by its own counsel in such proceeding, at [...***...] expense. If either Party decides that it does not wish to defend against such action, then, to the extent the other Party has a backup prosecution right under Section 10.3, such other Party shall have a backup right to assume defense of such Third-Party action at [...***...]. Any awards or amounts received in defending any such Third-Party action shall be allocated between the Parties as provided in Section 10.5.5.
10.8    Patent Licensed To or From Third Parties. DS’s rights under this ARTICLE X with respect to the prosecution, maintenance, defense and enforcement of any Kite Patents that is licensed by Kite from a Third Party shall be subject to the rights of such Third Party to prosecute, maintain and enforce such Patents.

ARTICLE XI     
CONFIDENTIALITY
11.1    Nondisclosure. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, during the Term and [...***...] thereafter, the receiving Party shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in this Agreement any Confidential Information of the other Party, and both Parties shall keep confidential and, subject to Sections 11.2, 11.3, and 11.4, shall not publish or otherwise disclose the terms of this Agreement. Notwithstanding the foregoing, a receiving Party’s obligation of confidentiality and restriction on use with respect to the disclosing Party’s Confidential Information identified as trade secrets, or typically held in the pharmaceutical industry as trade secrets such as applicable CMC Know- How and promotional and marketing information, shall continue perpetually for so long as none of the exceptions set forth in Section 1.18 (a), (b), (c), or (d) applies to such Confidential Information. Each Party may use the other Party’s Confidential Information solely to the extent required to accomplish the purposes of this Agreement, including exercising such Party’s rights or performing its obligations under this Agreement.  Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but no less than reasonable care) to ensure that its employees, agents, consultants, contractors, and other representatives do not disclose or make any unauthorized use of the Confidential Information of the other Party. Each Party will promptly notify the other Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party.

11.2    Authorized Disclosure. The receiving Party may disclose Confidential Information belonging to the disclosing Party only to the extent such disclosure is reasonably necessary in the following instances:
11.2.1    filing or prosecuting Patents as permitted by this Agreement;

11.2.2    filing Regulatory Filings in order to obtain or maintain Regulatory Approvals;
11.2.3    prosecuting or defending litigation, including responding to a subpoena in a Third Party litigation;

11.2.4    complying with Applicable Laws or regulations (including regulations promulgated by securities exchanges) or court or administrative orders;
11.2.5    to its Affiliates, actual or prospective licensees, sublicensees, subcontractors, consultants, agents, and advisors on a “need-to-know” basis in order for the receiving Party to exercise its rights or fulfill its obligations under this Agreement, each of whom prior to disclosure must be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than those set forth in this ARTICLE XI; provided, however, that, in each of the above situations, the receiving Party shall remain responsible for any failure by any Third Party who receives Confidential Information pursuant to this Section 11.2 to treat such Confidential Information as required under this ARTICLE XI; or

11.2.6    to bona fide potential and actual investors, acquirors, merger partners, licensees, and other financial or commercial partners solely for the purpose of evaluating or carrying out an actual or potential investment, acquisition, or collaboration, in each case under written obligations of confidentiality and non-use at least as stringent as those herein.
11.2.7    Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Sections 11.2.2 through 11.2.4, it will, except where impracticable, give at least [...***...] advance notice to the other Party of such disclosure, reasonably consider the comments of the other Party with respect to limiting such disclosure, and use efforts to secure confidential treatment of such Confidential Information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder.  Any information disclosed pursuant to Sections 11.2.2 through 11.2.4 shall remain the Confidential Information of the disclosing Party and subject to the restrictions set forth in this Agreement, including the foregoing provisions of this ARTICLE XI.

11.3    Publications.
11.3.1    Prior to public disclosure or submission for publication of a proposed publication describing the results of any Development activities for the Licensed Product conducted under this Agreement, DS shall provide Kite with a copy of the proposed publication and shall allow Kite a reasonable time period (but no less than [...***...] from the date of confirmed receipt) in which to determine whether the proposed publication contains subject matter for which patent protection should be sought (prior to publication of such proposed publication) for the purpose of protecting an invention, or whether the proposed publication contains the Confidential Information of Kite. Following the expiration of the applicable time period for review, DS shall be free to submit such proposed publication for publication or otherwise disclose to the public such scientific or clinical results, subject to the procedures set forth in Section 11.3.2.

11.3.2    If Kite believes that the subject matter of the proposed publication or other disclosure contains Confidential Information of Kite or a patentable Invention, then prior to the expiration of the applicable time period for review, Kite shall notify DS in writing. Upon receipt of such written notice from Kite, DS shall remove Kite’s Confidential Information from such proposed publication or disclosure, and shall delay public disclosure of such information or submission of the proposed publication for an additional period of [...***...] (or such other time period mutually agreed by the Parties in writing) to permit preparation and filing of a patent application on the disclosed subject matter.
11.3.3    Prior to public disclosure of a publication describing the results of any Development activities for any Licensed Product conducted outside of the Territory, Kite shall provide DS with a copy of the proposed publication.

11.4    Publicity.
11.4.1    The Parties agree that the both Party will issue a public announcement on the same day after the execution of this Agreement, however the contents of the announcement to be issued by each Party may be different and may be written in English and/or Japanese. Each Party will review the contents of such announcement of the other Party before the other Party issues the announcement, and will have the right to determine to approve it or not, which approval shall not be unreasonably withheld or delayed.

11.4.2    After release of such initial press release, if either Party desires to make a public announcement concerning the material terms of this Agreement, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein), such approval not to be unreasonably withheld or delayed. A Party commenting on such a proposed press release shall provide its comments, if any, within [...***...] after receiving the press release for review. Where required by Applicable Law or by the regulations of the applicable securities exchange upon which a Party may be listed, such Party shall have the right to make a press release announcing the achievement of each milestone under this Agreement as it is achieved, and the achievements of Regulatory Approvals in the Territory as they occur, subject only to the review procedure set forth in the preceding sentence. In relation to DS’s review of such an announcement, DS may make specific, reasonable comments on such proposed press release within the prescribed time for commentary, but shall not withhold its consent to disclosure of the information that the relevant milestone has been achieved and triggered a payment hereunder. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 11.4.2, provided such information continues as of such time to be accurate.
11.4.3    The Parties acknowledge that Kite may be obligated to file a copy of this Agreement with the U.S. Securities and Exchange Commission (the “SEC”) or other applicable entity having regulatory authority over Kite securities or the exchange thereof, as a material agreement of Kite. Kite shall be entitled to make such a required filing, provided that it requests confidential treatment of certain commercial terms and sensitive technical terms hereof to the extent such confidential treatment is reasonably available to Kite, and to the extent consistent with the legal requirements governing redaction of information from material agreements that must be publicly filed. In the event of any such filing, Kite will provide DS with a copy of the Agreement marked to show provisions for which Kite intends to seek confidential treatment and shall reasonably consider and incorporate DS’s comments thereon to the extent consistent with the legal requirements governing redaction of information from material agreements that must be publicly filed. DS will as promptly as practical provide any such comments. DS recognizes that U.S. laws and SEC policies and regulations to which Kite is and may become subject to may require Kite to publicly disclose certain terms of this Agreement that DS may prefer not be disclosed, and that Kite is in all cases entitled hereunder to make such required disclosures to the extent necessary to comply with such U.S. laws and SEC policies and regulations.

ARTICLE XII     
REPRESENTATIONS, WARRANTIES, & COVENANTS
12.1    Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that as of the Effective Date:
12.1.1    Corporate Existence and Power. It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including, without limitation, the right to grant the licenses granted by it hereunder.
12.1.2    Authority and Binding Agreement. As of the Effective Date, (a) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (b) it has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder; and (c) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms.
12.1.3    No Conflict; Covenant. It is not a party to any agreement that would materially prevent it from granting the rights granted to the other Party under this Agreement or performing its obligations under this Agreement. During the Term of this Agreement, each Party covenants that it will not enter into any contractually binding agreement which would in any way materially impair its ability to complete its obligations under this Agreement in a timely fashion.
12.1.4    No Debarment. In the course of the Development of Licensed Products, neither Party shall use, during the term of this Agreement, any employee or consultant who has been debarred by any Regulatory Authority, or, to the best of such Party’s Knowledge, is the subject of debarment proceedings by a Regulatory Authority.
12.2    DS’s Representations and Warranties. DS hereby represents and warrants to Kite that as of the Effective Date DS has no Knowledge of any pending filing, complaint, matter, or action against or involving either DS or its Affiliates with any Regulatory Authority that could be reasonably anticipated to have a material adverse effect on its ability to obtain Regulatory Approvals for the Licensed Products in the Territory.
12.3    Kite’s Representations and Warranties. Kite hereby represents and warrants to DS as of the Effective Date:
12.3.1    Kite Patents. Kite owns, or has an exclusive license to, the Kite Patents listed on Schedule 1.51 is a complete list of all patents and patent applications Controlled by Kite as of the Effective Date which claim the Licensed Products, or the manufacture or use thereof in the Territory.

12.3.2    Title; Encumbrances. Kite has sufficient legal and/or beneficial title, ownership or license, free and clear from any Third Party mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of the Kite Technology to grant the licenses to DS as purported to be granted pursuant to this Agreement.
12.3.3    No Conflict. Kite has not granted any assignment, license, covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party relating to any patent, know-how, or other proprietary right that conflicts with or limits the rights granted to DS hereunder or which falls within the scope of the licenses granted in ARTICLE II.
12.3.4    Non-Infringement of Third Party’s Patents. To Kite’s Knowledge, the Development, manufacture, and Commercialization of the Licensed Products and IND Products can be carried out in the Territory in the manner reasonably contemplated as of the Effective Date without infringing any issued Patents of any Third Party.
12.3.5    Non-Infringement of Kite Technology by Third Parties. To Kite’s Knowledge, Kite is not aware of any activities by Third Parties that constitute infringement or misappropriation of the Kite Technology within the Territory.
12.3.6    No Claims of Third Party Rights. Kite has not received any written notice, claim, or demand from any Person asserting that the development, manufacture, use or sale of the Licensed Products and IND Products infringes a patent of a Third Party in the Territory.
12.3.7    No Action or Claim. To Kite’s Knowledge, there are no actual, pending, or threatened in writing, adverse actions, suits, claims, interferences, or formal governmental investigations involving the IND Products, or Kite Technology by or against Kite, any of its Affiliates, licensees, or contractors in or before any court, governmental entity or Regulatory Authority.
12.3.8    No Adverse Patent Proceedings. To Kite’s Knowledge, none of the Kite Patents are subject to any pending re-examination, opposition, interference or litigation proceedings as of the Effective Date.
12.3.9    Compliance. To Kite’s Knowledge, Kite, its Affiliates, licensees and contractors have performed in all material respects development work, including manufacturing, supply, packaging, and distribution of clinical supplies, in compliance with all Applicable Laws (including GMP and the Anti-Corruption Laws); and there is no actual, pending, or threatened in writing, adverse action of any Regulatory Authority, with respect to the IND Products, or Kite Technology.
12.3.10    Regulatory Materials. To Kite’s Knowledge, no Regulatory Authority has commenced or threatened in writing to initiate any action or proceeding to refuse to file, reject, not approve, or withdraw any Regulatory Filings related to the IND Products, nor has Kite received any notice to such effect.

12.3.11    Third Party Agreements. Schedule 1.44 contains a complete list of all Third Party agreements under which rights to any Kite Technology are granted, licensed or otherwise provided to Kite or its Affiliates as of the Effective Date. All In- License Agreements existing as of the Effective Date are in full force and effect and no material breach has occurred thereunder (and Kite and its Affiliates have not received any notice of any such breach thereunder) as of the Effective Date.
12.3.12    Third Party Agreements. All of Kite's employees have executed agreements requiring assignment to Kite of all inventions made during the course of and as a result of their association with Kite obligating each such employee to maintain as confidential the Confidential Information of Kite for reasonable periods of time, in each case material to the Development, manufacture or Commercialization of Licensed Products for the Field in the Territory.
12.3.13    Disbarred Employees. Neither Kite and none of their employees or officers, who have rendered or will render services relating to the Licensed Products: (i) has ever been debarred or is subject or debarment or convicted of a crime for which an entity or person could be debarred under 21 U.S.C. Section 335a or its foreign equivalent or (ii) has ever been under indictment for a crime for which a person or entity could be debarred under any such provision.
12.3.14    Protection of Know-How. Kite has entered into agreements with its employees, agents and Third Party manufacturers sufficient to maintain the confidentiality of the Know-How owned or controlled by Kite for a reasonable period of time consistent with customs in the pharmaceutical industry.

12.4    DS Covenants.
12.4.1    DS will comply in all material respects with all Applicable Laws related to its Development, manufacture and Commercialization of the Licensed Products. Without limiting the generality of the foregoing, DS will not promote any of the Licensed Products in a manner that would conflict with Applicable Laws.
12.4.2    DS will conduct all Medical Affairs Activities in a manner consistent with Licensed Product labeling, including all package inserts for a Licensed Product, except to the extent otherwise required by Applicable Laws, and will conduct all Medical Affairs Activities in accordance with Applicable Laws.
12.4.3    DS will, and will ensure that its Affiliates and Sublicensees will, Commercialize the Licensed Products solely within the Territory for use in the Field pursuant to the authority, rights, and licenses granted to DS under this Agreement. DS agrees and acknowledges that it has not been granted any rights other than within the scope of express license granted to Licensed Products under this Agreement, and consequently DS agrees that during the Term it will not, and will ensure that its Affiliates and Sublicensees will not, (i) directly or indirectly Commercialize any Licensed Product outside of the Territory or within the Territory for re-sale outside of the Territory, or (ii) provide any Licensed Product to any

Person if it knows or reasonably believes that such Person, either directly or indirectly, has sold, is selling, or intends to sell such Licensed Product outside the Territory.

12.5    Kite Covenants.
12.5.1    Kite will not, during the Term, (a) amend any provision of an In- License Agreement that would adversely impact DS’s rights under this Agreement, or (b) assign (except an assignment to a party to which this Agreement has been assigned as permitted under Section 16.4 or to any Affiliate), in whole or in part, any of the In-License Agreements in any manner that would adversely impact DS’s rights under this Agreement, in each case, without the prior written consent of DS (not to be unreasonably withheld, conditioned or delayed).

12.6    Disclaimer.
12.6.1    EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY MAKES NO AND EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PRODUCTS, KITE TECHNOLOGY, DS TECHNOLOGY OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
12.6.2    EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY BY KITE THAT THE KITE TECHNOLOGY IS NOT INFRINGED BY ANY THIRD PARTY OR THAT THE PRACTICE OF THE KITE TECHNOLOGY WILL NOT INFRINGE ANY INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY. FURTHER, DS ACKNOWLEDGES THAT THE PRODUCTS ARE SUBJECT TO ONGOING RESEARCH AND DEVELOPMENT AND KITE MAKES NO REPRESENTATION OR WARRANTY THAT THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED AND COMMERCIALIZED.

ARTICLE XIII     
INDEMNIFICATION AND INSURANCE

13.1    Indemnification by Kite. Kite shall defend, indemnify, and hold DS and its Affiliates, and DS’s and its Affiliates’ officers, directors, employees, and agents (the “DS Indemnitees”) harmless from and against any and all Third Party claims, suits, proceedings, damages, expenses (including court costs and reasonable attorneys’ fees and expenses), and recoveries (collectively, “Claims”) to the extent that such Claims arise out of, are based on, or result from (a) the Development, manufacture, storage, handling, use, promotion, sale, offer for sale, and importation of the Licensed Products by Kite or its Affiliates, contract manufacturers, distributors, or licensees (other than DS Group, as defined below); (b) a breach of any of Kite’s representations, warranties, and obligations under this Agreement; or (c) the willful misconduct or negligent acts of Kite, its Affiliates, or the officers, directors, employees, or agents of Kite or

its Affiliates in connection with their performance under this Agreement; or (d) any claim of infringement due to Kite’s failure to notify DS, as a Necessary IP, of a Patent which would be infringed by the Development, manufacture, or Commercialization of a Licensed Product in the Field in the Territory in the absence of a license under such Patent, in accordance with Section 2.1.5.1. The foregoing indemnity obligation shall not apply to the extent that the DS Indemnitees fail to comply with the indemnification procedures set forth in Section 13.3 and Kite’s defense of the relevant Claims is prejudiced by such failure, or to the extent that any Claim arises from, is based on, or results from (i) the Development, manufacture, storage, handling, use, promotion, sale, offer for sale, and importation of the Licensed Products by DS Group; (ii) a breach of any of DS’s representations, warranties, and obligations under this Agreement; (iii) the willful misconduct or negligent acts of DS or its Affiliates, or the officers, directors, employees, or agents of DS or its Affiliates; or (iv) any claim of infringement due to DS’s failure to obtain a license to any Necessary IP in accordance with Section 2.1.5.1.

13.2    Indemnification by DS. DS shall defend, indemnify, and hold Kite, its Affiliates and Kite’s and its Affiliates’ officers, directors, employees, and agents (the “Kite Indemnitees”) harmless from and against any and all Claims to the extent that such Claims arise out of, are based on, or result from (a) the Development, manufacture, storage, handling, use, promotion, sale, offer for sale, and importation of the Licensed Products by DS or its Affiliates, or its or their Sublicensees, contractors, or distributors (the “DS Group”); (b) a breach of any of DS’s representations, warranties, and obligations under this Agreement; (c) the willful misconduct or negligent acts of DS or its Affiliates, or the officers, directors, employees, or agents of DS or its Affiliates in connection with their performance under this Agreement or (d) any claim of infringement due to DS’s failure to obtain a license to any Necessary IP in accordance with Section 2.1.5.1. The foregoing indemnity obligation shall not apply to the extent that the Kite Indemnitees fail to comply with the indemnification procedures set forth in Section 13.3 and DS’s defense of the relevant Claims is prejudiced by such failure, or to the extent that any Claim arises from, is based on, or results from (i) the Development, manufacture, storage, handling, use, promotion, sale, offer for sale, and importation of the Licensed Products by Kite or its Affiliates, contract manufacturers, distributors, or licensees (other than DS Group); (ii) a breach of any of Kite’s representations, warranties, and obligations under this Agreement; or (iii) the willful misconduct or negligent acts of Kite, its Affiliates, or the officers, directors, employees, or agents of Kite or its Affiliates; or (d) any claim of infringement due to Kite’s failure to notify DS, as a Necessary IP, of a Patent which would be infringed by the Development, manufacture, or Commercialization of a Licensed Product in the Field in the Territory in the absence of a license under such Patent, in accordance with Section 2.1.5.1.

13.3    Indemnification Procedures. The Party claiming indemnity under this ARTICLE XIII (the “Indemnified Party”) shall give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of such Claim. The Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of the claim for which indemnity is being sought. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, that the Indemnifying Party shall have the right to assume and conduct the defense of the claim with counsel of its choice. The Indemnifying Party shall not settle any claim without the prior written consent of the

Indemnified Party, not to be unreasonably withheld, conditioned, or delayed, unless the settlement involves only the payment of money, and no admission of wrong-doing or fault by the Indemnified Party. So long as the Indemnifying Party is actively defending the claim in good faith, the Indemnified Party shall not settle any such claim without the prior written consent of the Indemnifying Party.  If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (a) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnifying Party will remain responsible to indemnify the Indemnified Party as provided in this ARTICLE XIII.

13.4    Mitigation of Loss. Each Indemnified Party shall take and shall procure that its indemnitees take all such reasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate any Claims (or potential losses or damages) under this ARTICLE XIII. Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.
13.5    Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 13.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 13.1 OR 13.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE XI.
13.6    Insurance. Each Party shall procure and maintain insurance, including product liability insurance, adequate to cover its obligations hereunder and which are consistent with normal business practices of prudent companies [...***...] at all times during which any Product is being clinically tested in human subjects or commercially distributed or sold by such Party. It is understood that such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this ARTICLE XIII. Each Party shall provide the other Party with written evidence of such insurance upon request. Each Party shall provide the other Party with written notice at least [...***...] prior to the cancellation, non-renewal, or material change in such insurance or self-insurance which materially adversely affects the rights of the other Party hereunder.

ARTICLE XIV     
TERM AND TERMINATION
14.1    Term. This Agreement shall commence on the Effective Date and, unless terminated earlier as provided in this ARTICLE XIV or by mutual written agreement of the Parties, shall continue, on a Licensed Product-by-Licensed Product basis, until DS permanently ceases at its sole discretion all Development, manufacture and Commercialization of such Licensed Product in the Territory (the “Term”).

14.2    Early Termination.
14.2.1    Termination for Breach. If either Party believes that the other Party is in breach of its material obligations hereunder, then such Party may deliver notice of such breach to the other Party. For all breaches other than a breach of payment obligations under this Agreement, the allegedly breaching Party shall have [...***...] from the receipt of the notice to cure or dispute such breach. For any breach of payment obligations under this Agreement, the allegedly breaching Party shall have [...***...] from the receipt of the notice to cure or dispute such breach.  If the alleged breaching Party fails to cure or dispute the breach within the applicable period set forth above, then the Party originally delivering the notice of breach may terminate this Agreement on written notice of termination.  If the allegedly breaching Party in good faith disputes such breach or disputes the failure to cure such breach and provides written notice of that dispute to the other Party within the above time periods, the matter will be addressed under the dispute resolution provisions in Section 15.3, and the notifying Party may not terminate this Agreement until it has been determined under Section 15.3 that the allegedly breaching Party is in material breach of this Agreement, and such breaching Party further fails to cure such breach within [...***...] after the conclusion of the dispute resolution procedure (and such termination shall then be effective upon written notification from the notifying Party to the breaching Party).
14.2.2    Termination for Bankruptcy. Each Party shall have the right to terminate this Agreement immediately in its entirety upon written notice to the other Party if such other Party makes a general assignment for the benefit of creditors, files an insolvency petition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets, commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors or becomes a party to any proceeding or action of the type described above and such proceeding is not dismissed within [...***...] after the commencement thereof.
14.2.3    Termination for Patent Challenge. Except to the extent the following is unenforceable under the laws of a particular jurisdiction, Kite may terminate this Agreement immediately upon written notice to DS if DS or its Affiliates or Sublicensees, individually or in association with any other Person, commences a legal action challenging the validity, enforceability or scope of any Kite Patent.
14.2.4    Termination Related to New Kite Technology. DS may terminate this Agreement with respect to a particular Licensed Product on [...***...] prior written notice to Kite pursuant to its option set forth in Sections 2.1.5.1(c) and 2.1.5.3(b).
14.3    Effect of Expiration or Termination. Upon the expiration or termination of this Agreement for any reason, on a Licensed Product by Licensed Product basis, the following shall apply (if this Agreement is terminated only for a particular Licensed Product, then the following shall apply only to the terminated Licensed Product):

14.3.1    License to DS.
14.3.1.1    Except as set forth in Section 14.3.1.2, all licenses and other rights granted by Kite to DS hereunder shall terminate, and all sublicenses granted by DS thereunder shall also terminate.
14.3.1.2    Notwithstanding Section 14.3.1.1, the license granted by Kite to DS pursuant to Section 2.8 shall survive (i) expiration of this Agreement, and (ii) termination of this Agreement, unless Kite has terminated this Agreement pursuant to Section 14.2.1, 14.2.2 or 14.2.3. Notwithstanding the foregoing, such surviving license shall immediately terminate (a) if DS, its Affiliates or their sublicensees practice any of Kite’s Disclosed Know-How outside of the scope of such license, or (b) if DS or its Affiliates or sublicensees, individually or in association with any other Person, commences a legal action challenging the validity, enforceability or scope of any Kite Patent.
14.3.1.3    License to Kite.
14.3.1.4    Except as set forth in Sections 14.3.2.2 and 14.3.2.3., all licenses and other rights granted by DS to Kite hereunder shall terminate, and all sublicenses granted by Kite thereunder shall also terminate.
14.3.1.5    Notwithstanding Section 14.3.2.1, the license granted by DS to Kite pursuant to Section 2.8 shall survive (a) expiration of this Agreement, and (b) termination of this Agreement, unless DS has terminated this Agreement pursuant to Sections 14.2.1 or 14.2.2.  Notwithstanding the foregoing, such license shall immediately terminate if Kite, its Affiliates or their sublicensees practice any of DS’s Disclosed Know-How outside of the scope of such license.
14.3.1.6    Notwithstanding Section 14.3.2.1, unless DS has terminated this Agreement pursuant to Sections 14.2.1 or 14.2.2, DS hereby grants to Kite, effective only in event of such expiration or termination, an non-exclusive, perpetual, irrevocable, royalty-free and sublicenseable (through multiple tiers) license under the DS’s interest in the Collaboration Technology and Collaboration Data to Develop, make, have made, use, sell, offer for sale, have sold, import, and otherwise Commercialize the Licensed Products world-wide. Notwithstanding the foregoing, the license by DS to Kite provided in this Section will not survive if the termination is due to the breach of this Agreement by Kite, its Affiliate or partners.
14.3.2    Regulatory Materials; Data. Within [...***...] of the effective date of such termination, DS shall transfer and assign to Kite, at no cost to Kite, all Regulatory Filings and Regulatory Approvals of the Licensed Products in the Territory, and all data from preclinical, non-clinical and clinical studies conducted by or on behalf of DS, its Affiliates or Sublicensees on the Licensed Products and all pharmacovigilance data (including all adverse event database) on the Licensed Products. At Kite’s request, DS shall provide Kite with reasonable assistance in connection with any inquiries and correspondence with Regulatory Authorities in the Territory for a period of [...***...] after such termination.

14.3.3    Transition Assistance. If Kite notifies DS that Kite will assume Development and Commercialization of the Licensed Product in the Territory after the Termination, then DS shall reasonably cooperate with Kite to facilitate the orderly transition of the Development and Commercialization of the Licensed Products to Kite. Such assistance shall be [...***...], unless DS has terminated this Agreement for Kite’s material breach, except as expressly set forth otherwise. Without limiting the foregoing:
14.3.3.1    DS shall promptly provide Kite with a copy of each license agreement, collaboration agreement, manufacturing agreement and/or vendor agreement then in effect between DS (or its Affiliates) and a Third Party with respect to the Development, manufacture and/or Commercialization of the Licensed Products in the Territory, and, upon Kite’s request, DS shall assign or sublicense, and shall ensure that its Affiliates assign or sublicense, to Kite (a) any such agreement that solely relates to the Licensed Products, and (b) for any agreement that does not solely relates to the Licensed Products and to the extent permitted under the terms of such agreement, the portion of such agreement (e.g., a work order) that relates solely to the Licensed Products. Upon Kite’s request, DS shall provide reasonable assistance to Kite in connection with any such agreement that is not assignable to Kite, such as introducing Kite to such Third Party and cooperating with Kite with respect to the negotiation of a new agreement with such Third Party.
14.3.3.2    DS shall provide Kite with reasonable technical assistance and transfer (including when available, in electronic format) all DS Know-How used in the Development, manufacture and/or Commercialization of the Licensed Products as of termination, in each case to the extent not already in Kite’s possession and necessary or useful for Kite to commence or continue the Development, manufacture and/or Commercialization of the Licensed Products in the Territory.
14.3.3.3    If at the time of such termination, DS is conducting any clinical trials for the Licensed Products in the Territory, then DS shall, [...***...].
14.3.4    Coordination of Public Disclosure. In the event of termination of this Agreement for any reason and subject to the provisions of Section 11.4, the Parties shall cooperate in good faith to coordinate public disclosure of such termination and the reasons therefor, and shall not, except to the extent required by Applicable Law, disclose such information without the prior approval of the other Party. The principles to be observed in such disclosures shall be accuracy, compliance with Applicable Law and regulatory guidance documents, and reasonable sensitivity to potential negative reactions to such news.
14.4    Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by a Party to the other Party are, and will otherwise be deemed to be, for purposes of Section 365(n) of the US Bankruptcy Code and any similar laws in other countries (the “Code”), licenses of rights to “intellectual property” as defined under Section 101 of the Code. The Parties agree that each Party, as licensee of such rights under this Agreement, will retain and may

fully exercise all of its protections, rights and elections under the Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party, the other Party will be entitled to a complete duplicate of (or complete access to, as such other Party deems appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, will be promptly delivered to it: (a) upon any such commencement of a bankruptcy proceeding upon its written request therefor, unless the bankrupting Party elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered under (a) above, upon written request therefor by the other Party following the rejection of this Agreement by or on behalf of the bankrupting Party.
14.5    Survival. Expiration or termination of this Agreement shall not affect any rights or obligations of either Party that have accrued prior to such expiration or termination. Without limiting the foregoing, the following provisions shall survive any expiration or termination of this Agreement: Articles I, XIII, XV and XVI, and Sections 2.1.4 (1st sentence only, to the extent that any In-License Agreement has obligations that survive the termination of DS’s sublicense thereunder), 2.8, 4.4 (to the extent required by Applicable Laws), 4.6, 5.3, 5.5 (to the extent required by Applicable Laws), 5.7 (to the extent required by Applicable Laws), 5.8 (to the extent required by Applicable Laws), 6.7 (last sentence only), 9.1 (with respect to sales of Licensed Products occurring prior to termination), 9.2, 9.3, 9.4, 9.5, 10.1, 11.1, 11.2, 11.3, 12.6, 14.3, 14.4 and 14.5.

ARTICLE XV     
DISPUTE RESOLUTION
15.1    Disputes. The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations hereunder. It is the Parties’ objective to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this ARTICLE XV to resolve any controversy or claim arising out of, relating to, or in connection with any provision of this Agreement if and when a dispute arises under this Agreement.

15.2    Arising Between the Parties. With respect to all disputes arising between the Parties, including, without limitation, any alleged failure to perform, or breach, of this Agreement, or any issue relating to the interpretation or application of this Agreement, if the Parties are unable to resolve such dispute within [...***...] after such dispute is first identified by either Party in writing to the other Party, the Parties shall refer such dispute to the Executive Officers for attempted resolution by good faith negotiations during the subsequent [...***...] period.

15.3    Binding Arbitration. If the Executive Officers are not able to resolve such dispute referred to them under Section 15.2 within such [...***...] period, such dispute shall be resolved through binding arbitration, which arbitration may be initiated by either Party at any time after the conclusion of such period, on the following basis:
15.3.1    The place of arbitration shall be Los Angeles, California, USA.

15.3.2    The arbitration shall be made in accordance with the current Rules of Arbitration of International Chamber of Commerce (ICC).
15.3.3    Judgment upon the award rendered by such arbitrator shall be binding on the Parties and may be entered by any court or forum having jurisdiction.
15.3.4    Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Further, either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of such Party pending the arbitration award.
15.3.5    The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages.
15.3.6    Each Party shall bear its own costs and expenses and attorneys’ fees and an equal share of the arbitrators’ and any administrative fees of arbitration.
15.3.7    Except to the extent necessary to confirm an award or as may be required by Applicable Laws, neither Party nor any arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties.
15.3.8    In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy, or claim would be barred by the applicable statute of limitations.
15.4    Patent and Trademark Dispute Resolution. Any dispute, controversy, or claim relating to the scope, validity, enforceability, or infringement of any patent rights covering the manufacture, use, or sale of any Licensed Product or of any trademark rights relating to any Licensed Product shall be submitted to a court of competent jurisdiction in the country or jurisdiction in which such patent or trademark rights were granted or arose.
15.5    Injunctive Relief. Nothing herein may prevent either Party from seeking preliminary injunction or temporary restraint order in any court of competent jurisdiction in order to prevent any Confidential Information from being disclosed without appropriate authorization under this Agreement.
ARTICLE XVI     
OTHER PROVISIONS
16.1    Governing Law. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by, and construed and enforced in accordance with, the laws of the State of California, United States, without reference to its conflicts of law principles.
16.2    Performance Through Affiliates. Each Party may discharge any obligation and exercise any right hereunder through any of its Affiliates (without an assignment of this

Agreement), provided that such Party shall remain directly responsible for the performance of its Affiliates.
16.3    Force Majeure. Both Parties will be excused from the performance of their obligations under this Agreement, and neither Party will be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement, to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice thereof to the other Party. Such excuse will be continued so long as the condition constituting a force majeure event continues and the nonperforming Party uses reasonable efforts to remove the condition. For purposes of this Agreement, a force majeure event will include conditions beyond the reasonable control and without the fault of a Party, such as an act of God, voluntary or involuntary compliance with any regulation, law, or order of any government, war, an act of terrorism, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm, or like catastrophe, inability to procure necessary raw materials in a commercially reasonable manner or default of suppliers or sub-contractors. Notwithstanding the foregoing, if the payment of invoices due and owing hereunder is delayed by the payor because of a force majeure affecting the payor for more than [...***...], then the payee may terminate this Agreement upon [...***...] prior written notice.

16.4    Assignment. Neither this Agreement nor any obligation of a Party hereunder may be assigned by either Party without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement in its entirety without such consent to (a) any of its Affiliates, or (b) any purchaser of all, or substantially all, of its assets to which this Agreement relates, or (c) any successor corporation resulting from any merger, consolidation, share exchange, or other similar transaction provided that any such successor corporation shall assume all obligations of its assignor under this Agreement; and provided further that either Party may assign or sell its rights to receive any amounts due hereunder. This Agreement will inure to the benefit of DS and Kite and their respective successors and permitted assigns. Any assignment of this Agreement that is not made in accordance with this Section 16.4 shall be null and void and of no legal force or effect.
16.5    Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby. The Parties will in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal, and enforceable provision(s) that implement the purposes of this Agreement.
16.6    Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, or by (i) air mail (postage prepaid) requiring return receipt, (ii) overnight courier, or (iii) email confirmed thereafter by any of the foregoing, to the Party to be notified at its address(es) given below, or at any address such Party may designate by prior written notice to the other Party in accordance with this Section 16.6. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if air mailed, [...***...] after the date of postmark; (c) if delivered by overnight courier, the next 

day the overnight courier regularly makes deliveries or (d) if sent by email, the date of confirmation of receipt if during the recipient’s normal business hours, otherwise the next Business Day.
If to Kite, notices must be addressed to:
Kite Pharma EU B.V.
Science Park 408
1098 XH Amsterdam
Attention: VP, Operations
Email: mvelders@kitepharma.com
Kite Pharma, Inc.
2225 Colorado Avenue Santa Monica, CA
USA
Attention: Corporate Counsel
Tel: 310-824-9999
Email: legal@kitepharma.com
With a copy to (which shall not constitute notice):
Cooley LLP
3175 Hanover Street
Palo Alto, CA 94304-1130
Attention: Barbara A. Kosacz
Tel: 650-843-5000
Email: bkosacz@cooley.com
If to DS, notices must be addressed to:
Daiichi Sankyo Company, Limited
3-5-1, Nihonbashi Honcho
Chuo-ku, Tokyo 103-8426
Japan
Attention: VP, Business Development and Licensing
Tel:  +81-3-6225-1008
Fax:  +81-3-6225-1903

16.7    Entire Agreement; Amendments. This Agreement, including the schedules, and the other Transaction Agreements and the Guarantee contains the entire understanding of the Parties (and ParentCo) with respect to the subject matter herein. This Agreement supersedes all prior and contemporaneous agreements and communications, whether oral, written, or otherwise, concerning any and all matters contained herein. For clarity, the Confidentiality Agreement will terminate as of the Effective Date. Except as expressly set forth herein, this Agreement may be amended or modified only by a written instrument duly executed by both Parties.

16.8    Relationship of the Parties. It is expressly agreed that Kite and DS are independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture, or agency. Neither Kite nor DS will have the authority to make any statements, representations, or commitments of any kind, or to take any action, which will be binding on the other Party, without the prior written consent of the other Party. Nothing contained in this Agreement shall be deemed to make any member of the JSC, JOC or any subcommittee (or any other committees or working groups) a partner, agent, or legal representative of the other Party, or to create any fiduciary relationship for any purpose whatsoever. Except as may be explicitly provided this Agreement, no member of the JSC, JOC any subcommittee (or any other committee or working group) will have any authority to act for, or to assume any obligation or responsibility on behalf of, any member of the other Party.
16.9    Waiver. The waiver by either Party of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. Any waiver by a Party of a particular term or condition will be effective only if set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition.
16.10    Third Party Beneficiaries. Except as otherwise expressly provided in this Agreement, nothing herein expressed or implied is intended or will be construed to confer upon or to give to any Third Party any rights or remedies by reason of this Agreement. Except as otherwise expressly provided in this Agreement, there are no intended Third Party beneficiaries under or by reason of this Agreement.
16.11    Further Assurances. Upon the other Party’s request, each Party agrees to execute, acknowledge, and deliver such further instruments, and to do all such other acts, as may be reasonably agreed by the Parties as necessary or appropriate to carry out the purposes and intent of this Agreement.
16.12    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered electronically or by facsimile and upon such delivery such electronic or facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other Party.
16.13    Interpretation. The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction. All references in this Agreement to the singular shall include the plural where applicable. Unless otherwise specified, references in this Agreement to any Article shall include all Sections, subsections, and paragraphs in such Article, references to any Section shall include all subsections and paragraphs in such Section, and references in this Agreement to any subsection shall include all paragraphs in such subsection. The word “including” and similar words means including without limitation. The word “or” means “and/or” unless the context dictates otherwise because the subject of the conjunction are mutually exclusive. The words “herein,” “hereof,” and “hereunder” and other words of similar

import refer to this Agreement as a whole and not to any particular Section or other subdivision. All references to days in this Agreement mean calendar days, unless otherwise specified. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language.

{Signature Page Follows}

IN WITNESS WHEREOF, the Patties have executed this Collaboration and License Agreement to be effective as of the Effective Date.
	
		
	KITE PHARMA EU B.V.
	DAIICHI SANKYO COMPANY, LIMITED

	By:   /s/ Markwin P. Velders   
Name:   Markwin P. Velders   
Title:   Managing Director   
	By:      
Name:   Joji Nakayama
Title:   Representative Director 
President and CEO

IN WITNESS WHEREOF, the Patties have executed this Collaboration and License Agreement to be effective as of the Effective Date.
	
		
	KITE PHARMA EU B.V.
	DAIICHI SANKYO COMPANY, LIMITED

	By:      
Name:      
Title:      
	By:   /s/ Joji Nakayama   
Name:   Joji Nakayama
Title:   Representative Director 
President and CEO

List of Schedules
Schedule 1.44    List of Existing In-License Agreements
Schedule 1.46    List of Existing IND Products
Schedule 1.51    List of Existing Kite Patents
Schedule 1.57    Description of KTE-C19
Schedule 1.72    List of Products

Schedule 1.44
List of Existing In-License Agreements

Patent License Agreement (L-268-2016/0) – Exclusive between Kite Pharma, Inc. and The U.S. Department of Health and Human Services, as represented by National Cancer Institute dated September 15, 2016 (the “NIH Agreement”).
As required by Paragraph 4.2 of the NIH Agreement, Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10 of the NIH Agreement, to the extent applicable, shall be binding upon DS as if DS were a party to the NIH Agreement. These Paragraphs are set forth as Appendix 1 to this Schedule. Capitalized terms used in this Schedule and Appendix 1 and not otherwise defined shall have the meaning ascribed in the NIH Agreement.
Pursuant to Paragraph 4.3 of the NIH Agreement, upon termination of the NIH Agreement under Article 13 thereof, DS’s sublicense under the NIH Agreement shall terminate or convert to a license directly between DS and the IC, at the option of DS. This conversion is subject to IC approval and contingent upon acceptance by DS of the remaining provisions of the NIH Agreement.

Appendix 1
To Schedule 1.44
Required Paragraphs From NIH Agreement
5.1    The IC reserves:
(a)    on behalf of the Government an irrevocable, nonexclusive, nontransferable, royalty free license for the practice of all inventions licensed under the Licensed Patent Rights throughout the world by or on behalf of the Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the Government is a signatory.  Prior to the First Commercial Sale, the Licensee agrees to provide the IC with reasonable quantities of Licensed Products or materials or procedures associated with the Licensed Products or materials made through the Licensed Processes for the IC research use. Given the nature of the envisioned Licensed Products as personalized autologous cell therapy products, if any Licensed Products or materials made through the Licensed Processes are not available in reasonable quantities for IC research use, they shall not be subject to the foregoing obligation; and
(b)    in the event that the Licensed Patent Rights are Subject Inventions made under a Cooperative Research and Development Agreement (“CRADA”), the Licensee grants to the Government, pursuant to 15 U.S.C. §3710a(b)(1)(A), a nonexclusive, nontransferable, irrevocable, paid up license to practice Licensed Patent Rights or have Licensed Patent Rights practiced throughout the world by or on behalf of the Government. In the exercise of this license, the Government shall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of 5 U.S.C.
§552(b)(4) or which would be considered as such if it had been obtained from a non Federal party. Prior to the First Commercial Sale, the Licensee agrees to provide the IC reasonable quantities of Licensed Products or materials made through the Licensed Processes for the IC research use. Given the nature of the envisioned Licensed Products as personalized autologous cell therapy products, if any Licensed Products or materials made through the Licensed Processes are not available in reasonable quantities for IC research use, they shall not be subject to the foregoing obligation.
5.2    The Licensee agrees that products used or sold in the United States embodying the Licensed Products or produced through use of Licensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from the IC.
5.3    The Licensee acknowledges that the IC may enter into future CRADAs under the Federal Technology Transfer Act of 1986 that relate to the subject matter of this Agreement. The Licensee agrees not to unreasonably deny requests for a Research License from future collaborators with the IC when acquiring these rights is necessary in order to make a CRADA project feasible. The Licensee may request an opportunity to join as a party to the proposed CRADA.

5.4
(a)    In addition to the reserved license of Paragraph 5.1, the IC reserves the right to grant Research Licenses directly or to require the Licensee to grant Research Licenses on reasonable terms. In the exercise of this reserved right, the IC shall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of 5 U.S.C. §552(b)(4) or which would be considered as such if it had been obtained from a non Federal party. The purpose of these Research Licenses is to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard the Licensed Patent Rights, however, before granting to commercial entities a Research License or providing to them research samples of materials made through the Licensed Processes, (i) the IC shall give to the Licensee advance written notice to which the IC proposes to grant a Research License, (ii) the IC shall provide the Licensee reasonable opportunity to raise objections thereto and comment thereon, to be provided within [...***...], and (iii) the IC shall consult with the Licensee to consider in good faith the objections and comments of the Licensee before granting to commercial entities a Research License or providing to them research samples of materials made through the Licensed Processes; and
(b)    In exceptional circumstances, and in the event that Licensed Patent Rights are Subject Inventions made under a CRADA, the Government, pursuant to 15 U.S.C.
§3710a(b)(1)(B), retains the right to require the Licensee to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use the Licensed Patent Rights in the Licensed Field of Use on terms that are reasonable under the circumstances, or if the Licensee fails to grant this license, the Government retains the right to grant the license itself. The exercise of these rights by the Government shall only be in exceptional circumstances and only if the Government determines:
(i)    the action is necessary to meet health or safety needs that are not reasonably satisfied by the Licensee;
(ii)    the action is necessary to meet requirements for public use specified by Federal regulations, and these requirements are not reasonably satisfied by or on behalf of the Licensee; or
(iii)    the Licensee has failed to comply with an agreement containing provisions described in 15 U.S.C. §3710a(c)(4)(B); and
(c)    The determination made by the Government under this Paragraph 5.4 is subject to administrative appeal and judicial review under 35 U.S.C. §203(b).; and
(d)    The IC acknowledges and agrees that a Research License or other right granted pursuant to this Paragraph 5.3 shall only pertain to the Licensed Patent Rights and shall not include a right or license to any patent or other intellectual property right solely owned or solely controlled by the Licensee or its Affiliates other than the Licensed Patent Rights. Without limiting the foregoing, except as expressly provided herein, nothing contained in this Agreement shall be construed as granting, by implication, estoppel or

otherwise, any licenses or rights under any patents or other intellectual property rights other than the Licensed Patent Rights.
10.1    The Licensee shall use its reasonable commercial efforts to bring Licensed Products and the Licensed Processes to Practical Application. “Reasonable commercial efforts” for the purposes of this provision shall include adherence to the Commercial Development Plan in Appendix E and performance of the Benchmarks in Appendix D. The efforts of a sublicensee shall be considered the efforts of the Licensee.
10.2    Upon the First Commercial Sale, until the expiration or termination of this Agreement, the Licensee shall use its reasonable commercial efforts to make Licensed Products and Licensed Processes reasonably accessible to the United States public.
12.5    The Licensee shall indemnify and hold the IC, its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage to the extent arising out of any suit or proceeding brought by a third party for:
(a)    the use by or on behalf of the Licensee, its sublicensees, Affiliates, or their respective directors, employees, or third parties (on behalf of the Licensee, its sublicensees or Affiliates) of any Licensed Patent Rights; or
(b)    the design, manufacture, distribution, or use of any Licensed Products, Licensed Processes or other materials, products or processes developed by or on behalf of the Licensee, its sublicensees or Affiliates in connection with or arising out of the Licensed Patent Rights.
13.8    The IC reserves the right according to 35 U.S.C. §209(d)(3) to terminate or modify this Agreement upon written notice to the Licensee if it is determined that this action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by the Licensee within ninety (90) days following written notice from the IC.
13.9    Within thirty (30) days after receipt of written notice of the IC’s unilateral decision to modify or terminate this Agreement, the Licensee may, consistent with the provisions of 37 C.F.R. §404.11, appeal the decision by written submission to the designated IC official or designee. The decision of the designated IC official or designee shall be the final agency decision. The Licensee may thereafter exercise any and all administrative or judicial remedies that may be available.
13.10    Within ninety (90) days after expiration or termination of this Agreement under this Article 13, a final report shall be submitted by the Licensee. Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to the IC shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their

sublicenses to direct licenses with the IC pursuant to Paragraph 4.3.  Unless otherwise specifically provided for under this Agreement, upon termination of this Agreement, the Licensee shall have the right to offer for sale and sell any existing inventory of Licensed Products for [...***...] following the effective termination date of this Agreement, subject to the royalty obligations as set forth in Appendix C. After this [...***...] period, the Licensee shall return all remaining Licensed Products or other materials included within the Licensed Patent Rights to the IC or provide the IC with certification of the destruction thereof. The Licensee may not be granted additional IC licenses if the final reporting requirement is not fulfilled.

Schedule 1.46
List of Existing IND Products

[...***...]

Schedule 1.51
List of Existing Kite Patents

	
				
	STATUS
	IDENTIFIER
	SERIAL NO.
	SUBJECT MATTER

	Published
	KN-1019.01
	61/935,833
	Kite Manufacturing Closed System

	Published
	KN-1019.03
	14/614,400
PCT/US2015/014520
	Kite Manufacturing Closed System

	Published
	KN-1025.01 SKGF 3653.0020000
	62/167,750
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1025.02 SKGF 3653.002000
	62/262,143
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1025.03 SKGF 3653.0020001
	15/167,977
PCT/US2016/034888
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1026.01 SKGF 3653.0030000
	62/167,738
	Biomarkers for Preconditioning Treatment

	Published
	KN-1026.02 3653.0030001
	62/262,111
	Biomarkers for Preconditioning Treatment

	Published
	KN-1026.03 3653.0030002
	PCT/US2016/034885
	Biomarkers for Preconditioning Treatment

	[...***...]
	[...***...]
	[...***...]
	[...***...]

	[...***...]
	[...***...]
	[...***...]
	[...***...]

	[...***...]
	[...***...]
	[...***...]

	[...***...]

Schedule 1.57 
Description of KTE-C19
[...***...]

EXECUTION VERSION 
CONFIDENTIAL

Schedule 1.72
List of Products

Chimeric Antigen Receptor
[...***...]
        Cell Receptor
[...***...]

Schedule 1.72 – Page 1
*** Confidential Treatment RequestExhibit

Exhibit 10.2

***Text Omitted and Filed Separately
Execution Copy
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Section 20080(b)(4) and Rule 406 of the
Securities Act of 1933, as amended.

Execution Version

Sino-foreign Co-operative Joint Venture Contract
by and between
KP EU C.V.
and
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd.
regarding establishment of Fosun Pharma Kite Biotechnology Co., Ltd.

Table of Contents
Preamble
		
	Article 1
	Parties to this Contract    3

		
	Article 2
	Definitions and Interpretations    4

		
	Article 3
	Establishment, Name and Address of the Company    10

		
	Article 4
	Legal Form and Independence of the Company    11

		
	Article 5
	Goals of the Cooperation    12

		
	Article 6
	Scope of Operation    12

		
	Article 7
	Total Investment and Registered Capital    12

		
	Article 8
	Co-operative Conditions    14

		
	Article 9
	Assignment of Equity Interest    15

		
	Article 10
	Limitation on Encumbrances on Equity Interest    16

		
	Article 11
	Increase of Registered Capital    17

		
	Article 12
	Reduction of Registered Capital    18

		
	Article 13
	Further Financing    18

		
	Article 14
	Responsibilities of the Parties    19

		
	Article 15
	Board of Directors    22

		
	Article 16
	Board Meetings    26

		
	Article 17
	Supervisor    29

		
	Article 18
	Management Personnel    30

		
	Article 19
	Premises    32

		
	Article 20
	Know-how and Trademarks    33

		
	Article 21
	Procurement    34

		
	Article 22
	Labor Management and Trade Union    34

		
	Article 23
	Financial Affairs, Accounting and Shareholder Auditing    36

		
	Article 24
	Profit Distribution    39

		
	Article 25
	Taxation and Insurance    39

		
	Article 26
	Confidentiality, Non-competition and Non-solicitation    40

		
	Article 27
	Term    44

		
	Article 28
	Representations and Warranties    45

		
	Article 29
	Termination and Consequences of Termination    50

		
	Article 30
	Liquidation and Continuing Obligations    52

		
	Article 31
	Breach of Contract    54

		
	Article 32
	Force Majeure    54

		
	Article 33
	Dispute Settlement    55

		
	Article 34
	Applicable Law    56

		
	Article 35
	Miscellaneous Provisions    56

Appendix 1 – Product and Know-how License Agreement
Appendix 2 – Technology License Agreement
Appendix 3 – Key Terms of Technical Service Agreement
Appendix 4 – Preliminary Business Plan
Appendix 5 – Articles of Association
Appendix 6 – Trademark and Name License Agreement
Schedule 1 – Kite Products
Schedule 2 – Description of KTE-C19

This Sino-foreign Co-operative Joint Venture Contract is executed on January 10, 2017 (“Effective Date”) by and between
KP EU C.V. (“Kite”)
and
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (“Fosun”)
(Kite and Fosun may be individually referred to as “Party” or collectively referred to as “Parties”.)
Preamble
Whereas Kite is a clinical-stage biotechnology company engaged, through its Affiliates, in the research, development and commercialization of novel cellular and other immunotherapies, including for the treatment of cancer.
Whereas Fosun is a leading pharmaceutical and healthcare company in PRC.
Whereas both Parties wish to join forces in the Chinese cancer immunotherapy market by setting up a co-operative joint venture in China.
Now, after friendly negotiations held between the Parties conducted in accordance with the principle of equality and mutual benefit, and pursuant to applicable published laws and regulations of the PRC, the Parties hereby agree as follows:
Article 1 
 
Parties to this Contract
		
	1.1
	Parties to this Contract

The Parties to this Contract are:
		
	(a)
	KP EU C.V., a limited partnership that is governed by the laws of the Netherlands, having its registered seat at Amsterdam, the Netherlands and its business address at 190 Elgin

Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands, registered with the Dutch trade register under number 64185958.
		
	(b)
	Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a joint stock company duly organized and existing under the laws of the PRC, with its registered address at Room 350, No.25 Kangshi Road, Shanghai, PRC and registered with the Shanghai Administration for Industry & Commerce under No. 913101157340514991. Legal Representative: Wu Yifang.

		
	1.2
	Change of Legal Representative

Each Party shall have the right to change its legal representative(s) without requirement to amend this Contract, and shall promptly notify the other Party of such change and the name, position and nationality of its/their new legal representative(s).
Article 2 
 
Definitions and Interpretations
		
	2.1
	Definitions

Unless the terms or context of this Contract provide otherwise, for the purpose of this Contract the following terms shall have the meanings as set out below:
“Affiliate” shall, for the purpose of this Contract, mean, as to a Party, any entity directly or indirectly controlling, controlled by or under common control with such Party, where “control” means (a) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
“Annual Business Plan” means the official business plan, including financial projections, covering a [...***...] of the Company formulated and approved annually according to Article 6.2.
“Articles of Association” shall mean the Company’s articles of association attached as Appendix 5 and signed by Kite and Fosun which shall become effective on the Establishment Date.
“Board” or “Board of Directors” means the Board of Directors of the Company set up according to Article 15.

“Business Day” means a day that is not a Saturday, a Sunday, a statutory holiday in China, or a day on which banking institutions are required by law to be closed in China.
“Business License” means the initial business license of the Company to be issued by the Registration Authority fully reflecting the relevant terms of this Contract and the Articles of Association.
“Chinese Market” means, for the sole purpose of this Contract, the mainland of PRC, the Hong Kong Special Administration Region and the Macau Special Administration Region, but excluding Taiwan.
“Chop Management Protocols” shall mean the internal regulations which stipulate the rules on affixing various corporate stamps on legal documents, including but not limited to the rules regarding company chop, financial chop, legal representative chop and contract chop.
“Clinical Trial” means clinical research, studies and experiments on human participants in the Chinese Market for the purpose of examining the safety and efficacy of investigational pharmaceutical products, and as a precondition for a license application in the Chinese 
 
Market.
“Company” means the Sino-foreign co-operative joint venture company to be established in Shanghai by the Parties as shareholders pursuant to this Contract and the Articles of Association.
“Competitor” means any enterprise, entity or natural person, regardless of legal structure, which is not a Party nor an Affiliate of a Party and which either (1) is engaged in the business of T cell immunotherapy research, development, manufacturing, distribution or commercialization, or (2) controls an enterprise or entity coming within the same scope of business above. The term “control” means (a) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
“Confidential Information” means formulas, manufacturing know-how, technical process, technical specifications, release specifications, batch records, computer software, database, research and development record, technical reports, examining reports, experimental data, drawings, patterns, samples, prototypes, models, molds, operation manual, technical documentations, related correspondence in relation to KTE-C19 and any other cancer immunotherapy therapy or treatment, which is (i) licensed or otherwise provided for use by Kite to the Company, (ii) disclosed or provided by Kite to Fosun or its Affiliates in the process of negotiating this Contract, setting up and operating the Company, or (iii) developed by the Company during Clinical Trial, license application and any commercialization process of the KTE-C19 or any other cancer immunotherapy treatment. Confidential Information shall in particular include but not limited to any information or method provided by Kite to the Company under the Product and Know-how License Agreement and the Technology License Agreement attached as Appendix 1 and 2 of this Contract.
“Contract” means this Sino-foreign Co-operative Joint Venture Contract signed by the Parties which shall become effective on the Effective Date.
“Date of Termination” has the meaning provided in Article 29.6.
“Employment Handbook” has the meaning specified in Article 22.1 and includes any amendments thereof.
“Encumbrance” means any lease, loan, mortgage, pledge, right of use or any other form of security interest, including any conditional sale or other title retention agreement or arrangement, or any attachment or any other encumbrance on property, other than any such encumbrance that does not materially affect the use or value of such property.
“Establishment Date” means the date of establishment of the Company as shown on the Business License.
“Force Majeure” means any unforeseen, unavoidable and insurmountable events which are beyond the control of a Party to this Contract, and which arise after the Effective Date preventing total or partial performance by any Party. Such events shall include in particular earthquakes, typhoons, flood, fire, other acts of nature, war, riots, hostility, public disturbance, acts of public enemies, prohibitions or acts of any Governmental Authority or public agency, strikes or other work stoppage, epidemics (including SARS, bird flu, N7H9) or any other events which are accepted as force majeure in general international commercial practice. For clarity, acts by Medical Authorities relating to the Company’s product candidates shall not be considered a “Force Majeure” event.
“Fosun Sale” means the sale of all or substantially all of Fosun’s assets, equity or business or a merger, reorganization or consolidation involving at least fifty percent (50%) or more of the voting equity securities of Fosun.
“Governmental Approval” means any consent, approval, authorization, waiver, permit, grant, franchise, concession, contract, license, certificate, exemption, order, registration, declaration, filing, report or notice of, with, by or to any Governmental Authority.
“Governmental Authority” means any governmental ministry, administration, agency or other public authority (and/or any branch of the foregoing), whether at the national, provincial, municipal or local level, or any official of the national or any provincial, municipal or local government in the respective country, including without limitation the Registration Authority.
“Intellectual Property Rights (IPR)” means any and all rights in any invention, discovery, improvement, utility model, copyrightable work, industrial design or mask work, algorithm, data structure, trade secrets or know-how, Confidential Information, or any idea having commercial value. IPR shall include any trade mark, trade dress, trade name, domain name, or other marks that serve to identify and distinguish goods or services as coming from, or falling under the control of, a single source. IPR shall include all rights of whatsoever nature in computer software and data, all intangible rights or privileges of a nature similar to any of the foregoing in every case in any part of the world and whether or not registered, and all rights in any applications and granted registrations for any of the foregoing rights.
“Kite Product” means the product candidates listed on Schedule 1 hereto.
“Kite Sale” means the sale of all or substantially all of Kite Pharma, Inc.’s (“Kite Parent”) assets, equity or business or a merger, reorganization or consolidation involving at least fifty percent (50%) or more of the voting equity securities of Kite Parent.
“KTE-C19” means chimeric antigen receptor (“CAR”), transduced autologous T cells directed against the CD19 antigen for the treatment of B-cell lymphomas and leukemias, as described on Schedule 2.
“Legal Representative” means, for a company registered in PRC the person registered as legal representative on the business license of a company, who is authorized under PRC law to legally represent the company.
“Liability” or “Liabilities” means damages, claims, losses, charges, actions, suits, proceedings, deficiencies, taxes, interest, penalties, fines, settlement, judgments and costs and expenses (including without limitation, attorney fees and expenses, removal costs, remediation costs, government response costs, fines, penalties and expenses of investigation and ongoing monitoring), whether direct or indirect, present or future, known or unknown, or fixed or contingent.
“Management By-Laws” mean the management by-laws of the Company regarding powers, responsibilities and duties of the Management Personnel including any amendments thereof.
“Management Personnel” mean the CEO, Head of Finance and Chief Technical Officer and any other important management position agreed by both Parties to be part of the Management Personnel.
“Medical Authority” means the National Health and Family Planning Commission of the PRC, the China Food and Drug Administration (“CFDA”) or any competent authority 
 
(including any of their competent branches) which have the power to approve the Clinical Trial or commercialization of KTE-C19 or any other cancer immunotherapy products licensed by or developed by the Company for the Chinese Market.

“Passive Investment” means the acquisition or ownership by a Party or its Affiliate of (a) up to [...***...] percent of the common stock or other voting stock of a Public-traded Company (including any preferred stock, notes, bonds, interests, rights, derivatives or other instruments acquired or owned and convertible into or exchangeable or exercisable for any such common stock or other voting stock or otherwise granting control of such company), or (b) up to [...***...] percent of the common stock or other voting stock of a company that is not publicly-traded (including any preferred stock, notes, bonds, interests, rights, derivatives or other instruments acquired or owned and convertible into or exchangeable or exercisable for any such common stock or other voting stock or otherwise granting control of such company), in each case so long as such Party does not have any management role or Board seat with such company. “Public-traded company” means a company listed on the main board of any of the following stock exchanges: (i) Shanghai Stock Exchange; (ii) Shenzhen Stock Exchange; (iii) Taiwan Stock Exchange; (iv) Korea Stock Exchange; (v) Singapore Exchange; (vi) Tokyo Stock Exchange; (vii) Hong Kong Exchanges; (viii) London Stock Exchange; (ix) Euronext; (x) New York Stock Exchange; (xi) NASDAQ, or any other international major stock exchanges or any succeeding exchange to any such exchanges.
“PRC” means the mainland of People’s Republic of China, excluding, for the sole purpose of this Contract, the Hong Kong Special Administration Region, the Macao Special Administration Region, and the Taiwan Area.
“Preliminary Business Plan” means, in accordance with Appendix 4, the high level 
 
business plan for the initial [...***...] after the Establishment Date, developed by the Parties to guide the development of the first Annual Business Plan.
“Proxy” means a representative appointed by a Party or by a Board member and as further detailed in this Contract.
“Registration Authority” means the Shanghai Administration for Industry and Commerce or any competent authority which has the power to register the Contract and the Articles of Association, and issue the Business License.
“Related Agreements” means:
		
	•
	Appendix 1 – Product and Know-how License Agreement,

		
	•
	Appendix 2 – Technology License Agreement,

		
	•
	Technical Service Agreement,

		
	•
	Appendix 6 – Trademark and Name License Agreement

or any other related party agreements concluded between the Company and a Party or any of such Party’s Affiliates.
“Related Party” means any entity that a Party or its Affiliates have a beneficial ownership interest of greater than [...***...] percent ([...***...]%) of the voting equity of such entity.
“RMB” means Renminbi, the lawful currency of the PRC.
“Target” means an antigen expressed on or in a tumor cell.
“Term” means the business term of the Company as set forth in Article 27.1, approved by the Registration Authority and shown on the Business License, including any extension of such term pursuant to Article 27.2.
“Three Funds” means the Company’s reserve fund, expansion fund and employee welfare and bonus fund as provided in the PRC laws.
“USA” means the United States of America.
“USD” means United States dollar, the lawful currency of USA.
“Verification Run” means the manufacturing and processing of KTE-C19 that meets the required specifications pursuant to investigational new drug application (IND) filing requirements of the U.S. Food and Drug Administration.
“Working Personnel” means all employees and staff of the Company, other than the Management Personnel.
		
	2.2
	Interpretation:

		
	(a)
	Articles and headings are inserted for the purpose of convenience and reference only and shall not affect the interpretation or construction of this Contract.

		
	(b)
	In this Contract, except where the context requires otherwise:

		
	(i)
	words indicating one gender include all genders;

		
	(ii)
	words indicating the singular also include the plural and words indicating the plural also include the singular;

		
	(iii)
	provisions including the word “agree”, “agreed” or “agreement” require the agreement to be recorded in writing, and

		
	(iv)
	“written” or “in writing” means hand-written, type-written, printed or electronically made, and resulting in a permanent record.

Article 3 
 
Establishment, Name and Address of the Company
		
	3.1
	Establishment of the Company

The Parties hereby agree to establish the Company in accordance with the Company Law of PRC, other relevant laws and regulations, the provisions of this Contract and the Articles of Association.
		
	3.2
	Name of the Company

		
	(a)
	The name of the Company shall be:

In Chinese:  
In English: “Fosun Pharma Kite Biotechnology Co., Ltd.”
		
	(b)
	The Parties acknowledge that the aforesaid Chinese name is subject to approval by and registration with Registration Authority and agree that in the event that the aforesaid Chinese name is rejected by Registration Authority, the Parties will enter into amendment to the Contract and the Articles of Association with respect to the Chinese name only.

		
	(c)
	After expiry or termination of this Contract, neither a Party nor any Affiliates of a Party shall be permitted to the subsequent use of such name without the prior written consent of both Parties.

		
	3.3
	Legal Address of the Company

The legal address of the Company shall be at No.222 Kangnan Road, Shanghai 201203, 
 
PRC.
		
	3.4
	Branches, Liaison Offices and Subsidiary Companies

In accordance with its business needs, the Company may establish branches, liaison offices and subsidiary companies, provided that the establishment of subsidiary companies and branch companies shall be approved by the Board.
Article 4 
 
Legal Form and Independence of the Company
		
	4.1
	The Company is a limited liability company. Except as explicitly otherwise provided in this Contract or in any other written contract, a Party shall only be liable to render its subscribed contribution to the Company’s registered capital and the committed co-operative conditions, and shall not be liable to make any additional payment. Unless otherwise stipulated in the Contract or in any other written contract, once a Party has paid in its subscribed registered capital and the committed co-operative conditions, it shall not be required to provide any further funds to or on behalf of the Company by way of capital contribution, loan, advance, guarantee or otherwise.

		
	4.2
	The Company is a legal person under the laws of the PRC. The activities of the Company shall be governed and protected by the promulgated and publicly available laws, decrees and relevant rules and regulations of the PRC.

		
	4.3
	The Parties shall cause the Company to act in its own name and in no case as an agent of either Party, unless otherwise explicitly provided for in writing.

		
	4.4
	The Parties shall cause the Company to indemnify each Party against and hold it harmless from any and all Liabilities suffered by that Party or its board members, officers, employees or agents in respect of any third party claims arising out of the operation of the Company; provided that the Liability does not result from intentional misconduct, gross negligence or a violation of criminal laws by the Party (or its board members, officers, employees or agents), which shall be otherwise indemnified. The Company shall be independent from the Parties and shall not be burdened by or charged with or responsible for any Liability of a Party. Neither Party shall impose any obligation or Liability on the Company in the name of the Company or bind the Company otherwise towards third parties, unless explicitly otherwise provided in a written agreement between the Company and that Party as approved by the Board pursuant to the terms of this Contract.

Article 5 
 
Goals of the Cooperation
The goals of the Parties in entering into this Contract and establishing the Company are to enhance international economic cooperation, and to contribute to the advancement of KTE-C19 and potentially additional cancer immunotherapy products in the PRC. The Parties agree to use advanced and appropriate methods for developing and commercializing KTE-C19 and potentially additional cancer immunotherapy products with the aim of increasing the long-term economic benefits for each Party, and to establish local clinical and commercial manufacturing capacity within the Chinese Market.
Article 6 
 
Scope of Operation
		
	6.1
	The business scope of the Company shall be technical development, technical transfer, technical consulting and technical services in the areas of bio technology and medical technology; biopharmaceutical manufacturing; import & export, wholesale and commission agency (excluding auction) of chemical products (excluding hazardous chemicals, monitored chemicals, fireworks, civil explosives and precursor chemicals), instrument and meters, mechanical equipment and medical devices; investment consulting and management.

		
	6.2
	The Annual Business Plan of the Company shall be formulated by the Management Personnel and approved by the Board of Directors in view of actual market conditions, any sales volumes, the employees’ capacities, financial condition and any other factors considered important by the Board. The approved Annual Business Plan may be adjusted by the unanimous consent of the Board from time to time in the light of market and other relevant conditions.

Article 7 
 
Total Investment and Registered Capital
		
	7.1
	Total amount of investment

The total amount of investment of the Company shall be USD one hundred million (100,000,000).

		
	7.2
	Registered capital

The registered capital of the Company shall be USD forty million (40,000,000).
		
	7.3
	Equity ratio

		
	(a)
	Kite’s subscribed contribution to the registered capital of the Company is USD twenty million (20,000,000), representing a fifty percent (50%) equity interest in the

 
Company.
		
	(b)
	Fosun’s subscribed contribution to the registered capital of the Company is USD twenty million (20,000,000), representing a fifty percent (50%) equity interest in the Company.

		
	7.4
	Payment of registered capital

		
	(a)
	Subject to a valuation report on its market value, Kite shall contribute the registered

 
capital in kind by the exclusive commercial rights as set forth in the Product and 
 
Know-how License Agreement. Kite shall complete the capital contribution in kind by signing the Product and Know-how License Agreement as attached to this Contract as Appendix 1 within twenty (20) Business Days upon the Establishment Date. [...***...].
		
	(b)
	Fosun shall contribute the registered capital in cash in RMB. Fosun shall complete

 
the capital contribution within [...***...] upon the Establishment Date. Conversion between USD and RMB shall be made at the [...***...].
		
	(c)
	After each Party’s contribution to the registered capital of the Company has been

 
made, the Company shall issue an investment certificate to each Party. Failure by the Company to issue any such investment certificate as described above shall not affect the rights or interests of either Party with respect to any equity interest in the Company.
		
	(d)
	Within [...***...] after the Parties have made their contribution to the

 
registered capital of the Company, the Company shall hire a qualified certified public accountant to issue a capital verification report regarding the capital contributions from both Parties.

		
	7.5
	Delay or failure to contribute

		
	(a)
	The Parties shall pay their contribution to the registered capital as set out herein in

 
accordance with the agreed schedule in Article 7.4. In the event that any Party fails to make its capital contribution, in whole or in part, in due time as agreed between the Parties pursuant to Article 7.4, such Party shall be liable to pay interest to the Company for such amount at a rate of [...***...] percent ([...***...]%) per [...***...] during the delay period.
		
	(b)
	If a contribution is not made by a Party (the “Breaching Party”) within [...***...]

 
after the Breaching Party’s receipt of a written demand by the non-breaching Party that payment or contribution be made pursuant to Article 7.4, the 
 
non-breaching Party shall have the right to terminate this Contract and claim damages from the breaching Party in the amount of USD [...***...].
		
	7.6
	Profit distribution ratio

The Parties agree that, considering the equity ratio and the committed co-operative conditions by the Parties to the Company and subject to properly resolved Board resolutions, Kite shall be entitled to forty percent (40%) and Fosun shall be entitled to sixty percent (60%) of the distributable profits of the Company. For the avoidance of doubt, each Party shall cause its Directors appointed to the Board to approve such profit distribution from time to time according to this Article 7.6.
Article 8 
 
Co-operative Conditions
		
	8.1
	Fosun shall pay to the Company as capital reserve, [...***...] upon the Establishment Date, the co-operative condition of USD forty million (40,000,000) in cash, which shall be used to pay to Kite the Entrance Fee (as defined in the Technology License Agreement as attached to this Contract as Appendix 2). [...***...] so that Kite receives USD forty million (40,000,000) in cash [...***...].

For clarity, such payment by Fosun [...***...].

		
	8.2
	Each Party shall make its appointed Board members to approve in signing with Kite the Technology License Agreement in line with Appendix 2.

		
	8.3
	If the Company has met its obligations under the Technical Services Agreement, but does not achieve [...***...] successful Verification Runs within [...***...] from the initiation of the first Verification Run and investigations show that the primary cause of the Verification Run failures was due to the protocols, procedures and instructions which were provided by Kite as outlined in Section 5 of Appendix 3, the period for achieving three consecutive successful Verification Runs would be extended by an additional [...***...] period and Kite shall pay to the Company as capital reserve, USD [...***...], which shall be used as additional working capital. If the Company does not achieve [...***...] successful Verification Runs after a [...***...] period from the initiation of the first Verification Run and such failure was due to Kite’s gross negligence or willful misconduct, then Fosun shall have the right to terminate this Agreement pursuant to Article 29.4(a) as if Kite materially breached this Agreement and, upon termination, Kite shall pay Fosun liquidated damages of USD [...***...].

Article 9 
 
Assignment of Equity Interest
		
	9.1
	A Party may sell, transfer or otherwise dispose of all or any part of its equity interest in the registered capital of the Company to any third party only with the prior written consent of the other Party, except that (i) Kite shall have the sole discretion for transfer of any or all of its equity interest in the Company to any of its Affiliates or in connection with a Kite Sale without any obligation mentioned hereof, and Fosun shall promptly cooperate with Kite to effect such assignment in a timely manner; and (ii) Fosun shall have the sole discretion for transfer of any or all of its equity interest in the Company to any of its Affiliates or in connection with a Fosun Sale without any obligation mentioned hereof, and Kite shall promptly cooperate with Fosun to effect such assignment in a timely manner. The Company shall file the equity change with the Registration Authority within [...***...] upon effectiveness of the equity transfer. Notwithstanding the foregoing, the Party shall only transfer equity to an Affiliate which has the ability to duly perform the obligations under this Contract in all material respects.

		
	9.2
	If a Party (the “Assigning Party”) proposes to transfer all or any part of its equity interest (“Offered Equity Interests”) in the Company to a third party (“Third Party Transferee”) and has obtained consent of the other Party pursuant to Article 9.1, the other Party shall have the

pre-emptive right to purchase the interest under the same commercial conditions offered to the third party. The Assigning Party shall notify in writing the terms and conditions of the proposed transfer to the other Party (“Transfer Notice”). If the other Party does not exercise its preemptive right of purchase within [...***...] after delivery of the notice, the other Party shall be deemed to have waived its pre-emptive rights.
		
	9.3
	Under the situation in above 9.2, however, the other Party shall be entitled to sell its equity interest in the Company on a pro rata basis (“Tag Along Equity Interests”) to the same buyer at the same commercial conditions offered by the Assigning Party. If the Third Party Transferee does not so acquire both the relevant Offered Equity Interests and the Tag Along Equity Interests on such terms within the time frame set forth in this Article 9.3 hereof, the Assigning Party shall not be permitted to transfer any of its equity shares to the Third Party Transferee as provided herein. If the other Party does not exercise its tag along right as stated in this Article 9.3 within [...***...] after receipt of the Transfer Notice, the Assigning Party shall be free from selling the Offered Equity Interests to such Third Party Transferee.

		
	9.4
	If a Party desires to sell all or part of its equity interest in the Company to the other Party, and the other Party desires to purchase that equity interest of registered capital, the Parties shall request an independent appraiser to conduct a valuation of the Company. The valuation determined by the independent appraiser shall be used as a reference in determining the equity purchase price for the purposes of this provision.

Article 10 
 
Limitation on Encumbrances on Equity Interest
Unless the other Party has agreed otherwise in writing in advance, neither Party shall grant any Encumbrance on its equity interest in the Company, nor shall either Party allow any Encumbrance to exist.

Article 11 
 
Increase of Registered Capital
		
	11.1
	Principle

		
	(a)
	Any increase in the registered capital of the Company shall be subject to both (i) a related written agreement between the Parties, and (ii) a subsequent Board resolution. Any so agreed and approved increase of the Company’s registered capital shall be submitted to all relevant Governmental Authorities for respective filing and/or registration, if and to the extent required by law.

		
	(b)
	In principal, any such increase in the Company’s registered capital shall be subscribed by the Parties at the following proportion, forty percent (40%) for Kite and sixty percent (60%) for Fosun, unless otherwise agreed by the Parties.

		
	(c)
	Any such increase in the Company’s registered capital, whether or not subscribed by the Parties in accordance with the proportion as set out in the above (b), shall not change the Board structure as set forth in Article 15, except for otherwise agreed by the Parties.

		
	11.2
	Obligation in capital increase

If Kite or Fosun considers it necessary for the development and business operations of the Company, it may request a capital increase under Article 11.1 in writing to the other Party (which request shall contain details as to the amount of increase of both the total amount of investment as well as the registered capital of the Company). For clarity, the Parties must mutually agree to any additional capital increase by either Party.
		
	11.3
	Company documentation

In case of any increase of the Company’s registered capital as provided for herein, the Parties undertake to modify this Contract and the Articles of Association accordingly. The Company shall also, to the extent as required by PRC laws, file and/or register the capital increase and the so modified Contract and the Articles of Association with all relevant Governmental Authorities.
		
	11.4
	Delay or failure to contribute the increased capital

In the event an increase of the Company’s registered capital has been agreed as set out herein and approved by the Governmental Authorities, the Parties shall pay their additional

contributions to the registered capital which they may have subscribed in accordance with the related contribution schedule. In the event that a Party fails to make its capital contribution, in whole or in part, in due time as agreed between the Parties, such Party shall be liable with interest and liabilities as such pursuant to Article 7.5, provided that any claim for damages shall not exceed the amount of the additional capital contribution.
Article 12 
 
Reduction of Registered Capital
Upon agreement of the Parties and a subsequent resolution of the Board, the Company may reduce its registered capital in accordance with PRC law. The same rules in Article 11.1 on the percentage of equity interest and Board structure shall apply to a capital reduction.
Article 13 
 
Further Financing
		
	13.1
	Subject to an Annual Business Plan approved by the Board, the Company shall spend up to USD [...***...], or the RMB equivalent to cover the Company expenditures in [...***...] commencing from the Establishment Date.

		
	13.2
	If additional funding is needed according to the respective Annual Business Plan approved by the Board, each Party shall use its reasonable efforts to support the Company for obtaining such additional funding. For clarity, neither Party shall be obligated to provide additional funding other than as provided for in Article 13.4 and 13.5.

		
	13.3
	Unless otherwise provided under this Contract or approved by the Board of Directors, the Company shall not raise any loans or similar instruments from Fosun or another entity, or grant loans or credit to any other entity or individual, provided that such approval shall not be required for raising any loans or similar instruments as stipulated in the Preliminary Business Plan or the Annual Business Plan then in effect.

		
	13.4
	If during the first [...***...] after Establishment Date, the Company has less than USD [...***...] of working capital, Fosun or one of its Affiliates shall provide 

the Company a shareholder loan to the Company in an amount up to USD [...***...] or RMB equivalent. The interest rate shall be between [...***...]. Such shareholder loan shall only be repaid after [...***...]. For clarity, working capital shall mean the Company’s total current assets less total current liabilities.
		
	13.5
	If the Company has insufficient working capital to pay for the first milestone payment of USD [...***...] under the Technology License Agreement, Fosun or one of its Affiliates shall provide the Company a separate shareholder loan to the Company in amount up to USD [...***...] or RMB equivalent. The interest rate shall be between [...***...]. Such shareholder loan shall only be repaid after [...***...].

Article 14 
 
Responsibilities of the Parties
		
	14.1
	Responsibilities of both Parties

In addition to its other obligations under this Contract, each Party shall have the following responsibilities:
		
	(a)
	assist the other Party and the Company with its reasonable best efforts in applying for and obtaining in due time all relevant Governmental Approvals from the competent Governmental Authorities required for the due performance of this Contract, including all Governmental Approvals / formalities required for the establishment of the Company;

		
	(b)
	as of the Establishment Date, to assist the Company in applying for all Governmental Approvals, in particular the legally required approval / filing with the Medical Authorities for Clinical Trial and commercial approval of KTE-C19 and any other cancer immunotherapy licensed by or developed by the Company;

		
	(c)
	assist the Company in recruiting various types of qualified Working Personnel and Management Personnel;

		
	(d)
	assist the Company in developing the Preliminary Business Plan;

		
	(e)
	[...***...];

		
	(f)
	assist the Company in obtaining all necessary entry visas, work permits, residence permits and other necessary documents for its expatriate personnel, and assist the Company in obtaining or providing housing for its expatriate personnel;

		
	(g)
	cause the Company to comply with, on top of the applicable PRC law, the Foreign Corrupt Practices Act of 1977 and any other international compliance rules that apply to either Party or its Affiliates;

		
	(h)
	to the extent permitted by PRC law, use its reasonable best efforts to cause the Company to submit Clinical Trial data and any other relevant information of KTE-C19 or any other Kite Product to Kite in order to submit to in-charge medical authorities and governmental authorities with jurisdiction over such product(s) outside the Chinese Market;

		
	(i)
	cause its appointed Board members to take all measures required or 

 
recommendable to timely perform this Contract; and
		
	(j)
	all other matters entrusted by the Company and agreed to with the other Party from time to time.

		
	14.2
	Responsibilities of Kite

In addition to its other responsibilities under this Contract, Kite shall have the following responsibilities:
		
	(a)
	with terms and conditions agreed in the Product and Know-how License Agreement and the Technology License Agreement attached as Appendix 1 and 2 of this Contract, provide (or through any Affiliate provide) Clinical Trial advice, manufacturing technology transfer and know-how support to the Company;

		
	(b)
	with terms and conditions agreed in the Appendix 1 — Product and Know-How License Agreement concluded between Kite and the Company, grant exclusive commercial right of KTE-C19 to the Company within the Chinese Market;

		
	(c)
	with terms and conditions agreed in the Technical Service Agreement, which shall be concluded between Kite and the Company in line with the key terms in Appendix 

 
3 within twenty (20) Business Days after the Establishment Date, provide (or through any Affiliate provide) technical support and assistance in commercializing KTE-C19 or any licensed Kite Product in the Chinese Market;
		
	(d)
	subject to the Company’s exercise of the option right as provided in Article 28.2(d) and the Board’s approval thereof, and with terms and conditions agreed in this Con-tract and a separate license agreement concluded between Kite and the Company, grant the exclusive commercial right to the Company KITE-439 and/or KITE-718;

		
	(e)
	handle other matters agreed between the Parties or entrusted by the Company from time to time;

		
	(f)
	Use its reasonable best efforts to assist the Company in any tax filing related to any payments made by the Company to Kite as well as any other tax filing on behalf of 

 
Kite in China.
		
	14.3
	Responsibilities of Fosun

In addition to its other responsibilities under this Contract, Fosun shall have the following responsibilities:
		
	(a)
	fulfill the co-operative conditions pursuant to Article 8;

		
	(b)
	use its reasonable best efforts to prevent the disclosure of any IPR and/or Confidential Information to any entity other than the Company, including without limitation to cause any Management Personnel and Working Personnel hired by Fosun or its Affiliates and seconded or assigned to the Company to be bound by confidentiality obligations according to Article 26.1 of this Contract;

		
	(c)
	subject to the Board’s approval pursuant to Article 22.2, provide certain services (e.g. sales, marketing, human resource, general and administrative) to the Company via its Affiliates (without subcontracting to any third party distributors), subject to the terms and conditions agreed in a Sales, General and Administrative Service Agreement to be concluded between the Company and such Fosun’s Affiliate; and

		
	(d)
	handle other matters agreed between the Parties or entrusted by the Company from time to time.

		
	(e)
	Use its reasonable best effort to assist the Company in making any tax filing related to any payments made by Fosun to the Company.

		
	14.4
	Costs and Expenses

Unless otherwise agreed by the Parties under this Contract or in another written agreement, [...***...].

		
	14.5
	Should one Party fail to fulfil its obligation under this Article 14, [...***...].

Article 15 
 
Board of Directors
		
	15.1
	Formation of the Board of Directors

		
	(a)
	The Board of Directors shall comprise of six (6) Board members including the Chairman of the Board (“Chairman”) and Vice Chairman of the Board (“Vice Chairman”). Each Party shall appoint three (3) Board members including the Chairman and the Vice Chairman. The Board of Directors shall be officially 

 
established on the Establishment Date.
		
	(b)
	Each Board member shall be appointed for a term of three (3) years, provided that the Party which has appointed a Board member may remove that Board member and appoint a replacement at its discretion and at any time to serve out such Board member’s term. A Board member may serve consecutive terms if re-appointed. If a seat on the Board is vacated by the retirement, resignation, removal, disability or 

 
death of a Board member, the Party which originally appointed such Board member 
 
shall appoint a successor to serve out such Board member’s term.
		
	(c)
	Fosun shall be entitled to appoint one of its Board members as the Chairman and Kite shall be entitled to appoint one of its Board members as the Vice Chairman. A Party may object to the appointment of Chairman or Vice Chairman upon reasonable grounds. If the position of the Chairman or Vice Chairman is vacated by the retirement, resignation, removal (as provided in subparagraph (e)), disability or death of the incumbent, the Party which originally appointed the Chairman or Vice Chairman, as the case may be, shall appoint a successor to serve out the Chairman’s or Vice Chairman’s current term.

		
	(d)
	The Chairman and the Vice Chairman shall carry out all functions and tasks as stipulated in this Contract, the Articles of Association or as specifically authorized by the Board of Directors. Whenever the Chairman is unable to perform his responsibilities for any reason, the Vice Chairman shall be authorized by the Chairman to exercise the Chairman’s functions.

		
	(e)
	Kite or Fosun, as the case may be, shall notify the other Party and the Company in writing to appoint or remove a Board member, including the Chairman or Vice Chairman. Appointment and removal of Board members shall become effective upon 

receipt of such notice by the other Party and by the Company. Any appointment and removal of Board members shall be filed with the relevant Governmental Authorities to the extent required by law.
		
	(f)
	The Company shall, in accordance with relevant PRC laws, indemnify each Board

 
member against all claims and Liabilities incurred by reason of his being a Board member of the Company and in the course of performing his official duties as a Board member of the Company, provided that the Liability does not result from intentional misconduct or gross negligence or a violation of criminal laws by the Board member.
		
	(g)
	Unless concurrently serving as an employee of the Company, Board members shall

 
serve [...***...], pursuant to the Company’s travel policy then in effect.
		
	15.2
	Powers of the Board of Directors

		
	(a)
	The Board of Directors shall be the highest authority of the Company.

		
	(b)
	The Board of Directors shall decide all strategic business issues of major importance

 
to the Company pursuant to a validly adopted resolution at a duly convened meeting described under Article 16, including, but not limited to, the following matters:
		
	(i)
	change the legal form of the Company, or amendment of the Articles of

 
Association (except changes as otherwise set forth in this Agreement);
		
	(ii)
	formation of, investment in, or merger with another legal entity, or formation

 
of, participation in, or withdrawal from any economic organization;
		
	(iii)
	division of the Company, or spin-off of any assets of the Company in

 
connection with the formation of a new legal entity;
		
	(iv)
	termination (other than in consequence of the unilateral termination of this

 
Contract by a Party as provided for in this Contract), liquidation or dissolution of the Company or the suspension of all or a substantial part of the operation;
		
	(v)
	increase or decrease of the Company’s registered capital;

		
	(vi)
	establishment and substantial alteration of the Chop Management Protocols

 
and any amendments thereto proposed by the Management Personnel;
		
	(vii)
	entrance into any research, collaboration, partnership or other business

 
development agreement not covered by the Preliminary Business Plan or the

Annual Business Plan, and with a total commitment in excess of RMB seven million (7,000,000);
		
	(viii)
	establishment of subsidiaries or branch companies;

		
	(ix)
	change of the registered company name;

		
	(x)
	conclusion, amendment or termination by the Company of any Related

 
Agreements or waiver of any material rights in such agreements, unless it is covered by the Preliminary Business Plan or the Annual Business Plan or the total commitment is lower than USD one hundred thousand (100,000);
		
	(xi)
	approval of the Company’s Annual Business Plan, and any changes thereto,

 
relating for example to:
		
	-
	scope of business

		
	-
	sales and marketing plan (including ex-factory price and pricing 

 
strategy)
		
	-
	financial plans

		
	-
	number of Working Personnel and Management Personnel

		
	-
	capital plan

		
	-
	clinical development plan

		
	-
	technical operation plan

		
	-
	any significant change of the Company’s organizational structure;

		
	(xii)
	approval of quarterly and annual financial statements of the Company

 
(balance sheet, profit and loss statement, cash flow statement) formulated in accordance with PRC GAAP and converted into US Generally Accepted Accounting Principles (“US GAAP”), which shall be done in a timely manner after completion of such statements and shall not be unreasonably withheld by Directors appointed by both Parties;
		
	(xiii)
	approval of the establishment of and any major changes to the Company’s accounting system and procedures in accordance with Article 23.1;

		
	(xiv)
	establishment of and any changes to compliance policies, which shall be recommended by the Head of Finance based on the laws and regulations applicable to the Company and to both Parties;

		
	(xv)
	appointment and dismissal of the Chief Executive Officer (“CEO”), the Head

 
of Finance or the Chief Technical Officer;
		
	(xvi)
	approve the Company’s auditor and any change to the auditor pursuant to

Article 23.3(a);
		
	(xvii)
	any debt or other financing of the Company, and any repayment of debt or repurchase of equity, except for as stipulated in the Preliminary Business 

 
Plan or the Annual Business Plan then in effect;
		
	(xviii)
	approval of the exercise by the Company of the option set forth in Article 

 
28.2(d);
		
	(xix)
	sale or purchase by the Company of any fixed or intangible assets with a 

 
value in excess of (i) in case of sale or purchase in the ordinary course of 
 
business, RMB 1,000,000 of a single sale or purchase, or RMB 5,000,000 in aggregate in any fiscal year; (ii) in case of sale or purchase not in the ordinary course of business, RMB 200,000 of a single sale or purchase, or RMB 1,000,000 in aggregate in any fiscal year, or such higher value determined 
 
by the Board of Directors from time to time, except for any sale or purchase as stipulated in the Preliminary Business Plan or the Annual Business Plan 
 
then in effect;
		
	(xx)
	conclusion, amendment and termination of any contracts not covered by the Preliminary Business Plan or the Annual Business Plan in excess of RMB seven million (7,000,000), or such higher value determined by the Board of Directors from time to time, and any waiver of material rights in such contracts;

		
	(xxi)
	subject to the provisions of Article 24.1, the amount of allocations to the Three Funds and any expenditure from the Three Funds and distribution of any 

 
after-tax profits to the Parties in any fiscal year; and
		
	(xxii)
	any other matters assigned to the Board of Directors by law, this Contract or the Articles of Association.

		
	(c)
	Any Board resolutions on the above matters (i) to (xix) shall require the unanimous affirmative vote of the Board of Directors. Board resolutions on any other matters shall require a simple majority of the Board members present in person or by Proxy 

 
at a respective Board meeting duly called for and held or pursuant to a unanimous written consent pursuant to Article 16.
		
	(d)
	Within [...***...] after Establishment Date, the Board shall meet and review this Article 15.2 in particular regarding the matters subject to Board approval, and recommend to the Parties any amendments thereto.

		
	15.3
	The Board of Directors shall approve the first Annual Business Plan within [...***...] of the Establishment Date, which shall be guided by the Preliminary

Business Plan, and thereafter no later than [...***...] of every year by a formally adopted resolution approve the Annual Business Plan of the Company for the next fiscal year, which shall include reasonable details for the following [...***...] formulated in accordance with the forecast and strategic planning process adopted by the Company. Unless decided otherwise by the Board of Directors, such Annual Business Plan shall be strictly implemented by the Company. If the Board cannot agree on the Annual Business Plan, the Company may operate under the prior approved business plan, including the Preliminary Business Plan if the first Annual Business Plan is not agreed upon, until the Board agrees on the new Annual Business Plan.
Article 16 
 
Board Meetings
		
	16.1
	The first Board meeting shall be held within twenty (20) Business Days after the Establishment Date. At such first Board meeting the Board shall:

		
	(a)
	appoint the CEO in full compliance with this Contract;

		
	(b)
	adopt the Chop Management Protocols regarding in particular the management rules for using and keeping record for use of the company chop, finance chop, legal representative chop and any other chops the Company may apply;

		
	(c)
	adopt the Preliminary Business Plan agreed between the Parties as attached in the Contract as Appendix 4;

		
	(d)
	appoint the Company’s auditor;

		
	(e)
	approve the execution of the Product and Know-how License Agreement, the Technology License Agreement, the Trademark and Name License Agreement, and the Technical Service Agreement with key terms in line with Appendix 3 of this Contract; and

		
	(f)
	adopt the initial compliance policies of the Company.

		
	16.2
	After the first Board meeting, the Board shall hold at least four (4) regular Board meetings in each calendar year. Upon the written request of one (1) or more Board members specifying the matters to be discussed, the Chairman shall convene an interim Board meeting within thirty (30) days after receiving such request. If the Chairman fails to do so, the Vice Chairman shall convene the interim Board meeting accordingly.

		
	16.3
	The Chairman (or the Vice Chairman, as the case may be) shall give written notice in English of each Board meeting to each of the Board members at least thirty (30) days prior to such meeting. Each such notice shall include the time, place and agenda of the meeting, together with any draft of documents to be approved by the Board members at the meeting. A Board meeting held without proper notice having been given to any Board member shall be invalid unless such Board member attends the meeting or, either before or after the meeting, promptly delivers a written waiver of notice to the Chairman. Board meetings shall be held at the registered address of the Company or such other location in the PRC or abroad as may be agreed by the Chairman and the Vice Chairman, provided that any Board member may attend by teleconference. Board meetings may also be held by video or telephone conference upon the request of any Board member. The Chairman shall be responsible for convening and presiding over such meetings.

		
	16.4
	A minimum of two (2) Board members from each Party out of all Board members in office, present in person or by Proxy (including presence by way of a video or telephone conference) shall constitute a quorum and a duly convened Board meeting. If no quorum is constituted at any meeting, then the Chairman shall call another meeting with fifteen (15) days’ written notice to each Board member with the same agenda. Any such second meeting called in line with this Article 16.4 shall be entitled to adopt decisions on matters set out in such agenda regardless of the number of Board members present in person or by Proxy, which shall be explicitly stated in the Chairman’s notice for such second meeting.

		
	16.5
	A Board member who is unable to attend a Board meeting may issue a Proxy, signed by him, to a designee of his choice (who does not need to be another Board member) to attend the meeting on his behalf. Each person acting as the Proxy of a Board member shall have the same rights and powers as the designating Board member. One Proxy may represent more than one Board members. A Proxy shall be in writing, signed by the designating Board member, and addressed to the Chairman. A Proxy may be presented in email or electronic format, provided the signature is clearly shown thereon.

		
	16.6
	Board resolutions may be validly adopted by unanimous written consent (including by email) without holding a Board meeting, provided that all Board members are given written notice (including by email) of the resolutions proposed for adoption without a meeting in the same manner as provided in Article 16.3, and agree to such procedure in writing or as otherwise waived by executing the written consent. Electronical signatures of Board members shall be binding for this purpose. Written resolutions adopted in this manner shall have the same force and effect as a resolution adopted at a Board meeting.

		
	16.7
	The Board of Directors shall cause complete and accurate minutes in English and Chinese to be kept of all Board meetings. Draft minutes of a Board meeting shall be distributed to all Board members within fifteen (15) days from the date of such meeting. Any Board member who wishes to propose an amendment or addition shall submit the same in writing to the Chairman within ten (10) days after receipt of the draft minutes. Once a Board member (either directly or through his Proxy) has signed his approval of the text of a minutes at a Board meeting, he may not propose any subsequent amendments or additions to such minutes. The Chairman shall complete the final minutes and distribute them to all Board members and each Party no later than forty-five (45) days after the meeting. If the Board members cannot agree on any part of the text of the minutes or if there is discrepancy between the English and Chinese versions which cannot be solved via a translation check, they shall complete and distribute the rest of the final minutes as provided above, and the issue at dispute shall be placed on the agenda for the next Board meeting. The Company shall maintain a file of all Board meeting minutes and make the same freely available to the Parties and their authorized representatives.

		
	16.8
	The CEO, with the assistance of other Management Personnel, shall provide the Board with briefings on major operational issues on a regular basis and shall provide timely responses to reasonable inquiries from the Board regarding major operational issues. Details shall be set out in the Management By-laws.

		
	16.9
	The CEO, the Head of Finance and the Chief Technical Officer shall have the right to attend Board meetings, but do not have voting rights (unless concurrently serving as Board members). Further, each Board member shall have the right to bring along advisors or other support staff to a Board meeting. Such advisors or other support staff shall have no voting rights at the meeting. Notwithstanding the foregoing, the Board may, at its discretion, hold private sessions without the attendance of some or all of the CEO, Head of Finance or the Chief Technical Officer.

Article 17 
 
Supervisor
		
	17.1
	The Company shall have one (1) Supervisor to be appointed by Kite. The term of office of the Supervisor shall be three (3) years and may be renewed if re-appointed. Any Board member and the Management Personnel are not allowed to concurrently serve as the Supervisor.

		
	17.2
	The Supervisor shall exercise the following functions and powers:

		
	(a)
	to examine the Company’s financial affairs;

		
	(b)
	to supervise the Board members and Management Personnel in the performance of

 
their company duties and to propose the dismissal of Board members and Management Personnel who violate laws, administrative regulations, the Company’s compliance policies or breach the Articles of Association;
		
	(c)
	if an act of any Board member or Management Personnel is detrimental to the

 
interests of the Company, to require him to rectify such act;
		
	(d)
	to propose interim Board meetings and, in the event that the Chairman and the Vice

 
Chairman fail to convene and preside over a Board meeting in person, telephonically or by Proxy, to convene and preside over such a meeting;
		
	(e)
	to submit motions to Board meetings;

		
	(f)
	to institute, upon written request by each Party, legal proceedings against the Board

 
members or Management Personnel if a Board member or Management Personnel violates laws, administrative regulations or the Articles of Association in the course of performing his or her company duties, thereby causing the Company to incur a 
 
loss.
		
	17.3
	The Supervisor shall have the right to participate in Board meetings as non-voting attendees. For clarity, the Supervisor shall not be a Board member. Reasonable and evidenced expenses incurred by the Supervisor in connection with their function as supervisor of the Company shall be reimbursed by the Company.

Article 18 
 
Management Personnel
		
	18.1
	Management Personnel

		
	(a)
	Management Personnel shall consist of one (1) CEO, one (1) Head of Finance and one (1) Chief Technical Officer. The term of the members of the Management Personnel shall be three (3) years, unless otherwise approved by the Board.

		
	(b)
	The CEO shall be nominated by Fosun and appointed by the Board. The Head of Finance, which shall be the Chief Financial Officer or the most senior finance officer until such time a Chief Financial Officer is appointed, and the Chief Technical Officer shall be nominated by Kite and appointed by the Board. Unless with reasonable ground, Fosun shall cause its appointed Board members to vote for approval of the nominated Head of Finance and the Chief Technical Officer, and Kite shall cause its appointed Board members to vote for approval of the nominated CEO. After launch of KTE-C19 in the Chinese Market, and if the Chief Technical Officer resigns, term of such appointment expired or is terminated, the subsequent Chief Technical Officer shall be nominated by the CEO and appointed by the Board.

		
	(c)
	The nomination right of the Head of Finance and Chief Technical Officer by Kite shall include the right to revoke at any time the appointed Head of Finance and the Chief Technical Officer and to nominate a replacement, except for as otherwise stipulated 

 
in the above Article 18.1 (b).
		
	(d)
	The nomination right of the CEO by Fosun shall include the right to revoke 

 
at any time the appointed CEO and to nominate a replacement.
		
	(e)
	The remuneration and benefits of all Management Personnel shall be discussed and approved by the Board.

		
	18.2
	Responsibilities and duties of Management Personnel

		
	(a)
	The Management Personnel, in addition to other executive officers who may be appointed to the Company and report to the CEO, shall be in charge of the day-to-day operation and management of the Company, in particular shall:

		
	(i)
	submit proposals to the Board;

		
	(ii)
	approval of the Employment Handbook and other employment rules;

		
	(iii)
	approval of the Management By-Laws, except those Management By-Laws 

 
which according to this Contract should be approved by the Board;
		
	(iv)
	manage the production and business operations of the Company, and implement resolutions passed by the Board;

		
	(v)
	implement the Preliminary Business Plan and Annual Business Plan of the Company approved by the Board;

		
	(vi)
	approval of any employee benefit plan;

		
	(vii)
	formulate the internal management rules of the Company;

		
	(viii)
	appointment or dismissal of management staff other than Management 

 
Personnel;
		
	(ix)
	provision of any external collateral or other security by the Company to any 

 
entity;
		
	(x)
	carry out all matters designated by this Contract, the Articles of Association, the Management By-laws, etc.;

		
	(xi)
	any other matters that are not included in Article 15.2 (b), or as resolved by the Board of Directors to be the responsibility of the Management 

 
Personnel.
		
	(b)
	The CEO shall be the Legal Representative of the Company. The Legal Representa-tive shall carry out all functions and tasks as stipulated in this Contract, the Articles of Association or as authorized specifically by the Board of Directors. The Legal Representative may only represent and bind the Company in accordance with this JV Contract, the Articles of Association, the Management By-Laws or otherwise specif-ically authorized by the Board of Directors in writing.

		
	(c)
	The CEO shall coordinate and lead the activities of management. The Head of Finance is responsible for finance, accounting, tax and audit over internal controls, and compliance in accordance with the Board approved compliance policies. The Chief Technical Officer is responsible for manufacturing, quality and supply chain. Both the Head of Finance and the Chief Technical Officer shall report to the CEO, except that the Head of Finance shall also report to the Board.

		
	(d)
	Within the limits of the power of attorney specified in single resolutions of the Board of Directors or in this JV Contract, the Articles of Association or as contained in a budget approved by the Board of Directors, Management Personnel shall be 

 
permitted to represent the Company in dealing with third parties and to authorize expenditures and incur Liabilities on behalf of the Company. Matters set out 
 
elsewhere in this Contract and/or the Articles of Association to be decided by the Board of Directors shall require prior approval of the Board of Directors, unless delegated by the Board of Directors to Management Personnel or contained in an approved budget.
		
	18.3
	Other regulations

		
	(a)
	The CEO, the Head of Finance and the Chief Technical Officer shall perform their duties on a full-time basis and not concurrently serve as a director, a manager or other employee of or have any other non-employed contractual relationship to work for any other company or enterprise, unless otherwise approved by the Board of Directors in writing. The CEO, the Head of Finance and the Chief Technical Officer may not serve as a director of or consultant to, or hold any material interest in, any company or enterprise that is a Competitor of the Company.

		
	(b)
	If any Management Personnel incurs Liabilities towards third parties in the course of performing their duties for the Company, he shall be indemnified by the Company except for intentional misconduct, gross negligence or graft or serious dereliction of duties or breach of criminal laws.

		
	(c)
	Subject to a respective Board resolution and no later than the commercial launch of the Company, the Company shall hire a Compliance Manager who shall report 

 
directly to the Head of Finance.
Article 19 
 
Premises
		
	19.1
	The Company shall lease manufacturing sites and facilities from a qualified property owner by concluding a facility lease agreement in line with Preliminary Business Plan or Annual Business Plan then in effect.

		
	19.2
	The Company shall apply for GMP certification for the facility. Both Parties shall provide all necessary assistance in the application.

Article 20 
 
Know-how and Trademarks
		
	20.1
	Know-how

		
	(a)
	Within twenty (20) Business Days upon the Establishment Date, Kite shall conclude with the Company the Product and Know-How License Agreement in line with the terms and conditions of Appendix 1 of this Contract.

		
	(b)
	Within twenty (20) Business Days upon the Establishment Date, Kite shall conclude with the Company the Technology License Agreement in line with the terms and conditions of Appendix 2 of this Contract.

		
	20.2
	Trademarks and name

		
	(a)
	In case the Company wishes to obtain from Kite and/or any of their Affiliates the right to use respective trademarks and/or names in relation to the Company name or the products and services, such use right shall be [...***...] and subject to the conclusion of a written Trademark and Name License Agreement as attached as Appendix 6 to be concluded within [...***...] after the Establishment Date between the Company and the owner of the respective trademarks and/or names.

		
	(b)
	The Company shall create Chinese specific brand(s) for the Company name, commercialization of products / services of the Company in the Chinese Market, which shall be approved by the Board.

		
	20.3
	Use after termination

		
	(a)
	Upon termination of this Contract, the respective Product and Know-How License Agreement, the Technology License Agreement and Trademark and Name License Agreement shall be concurrently terminated and the respective exclusive commercial right shall cease to be valid.

		
	(b)
	Upon termination of this Contract, unless with written consent from the other Party, each Party shall not and shall use its reasonable best efforts to cause the Company and its Affiliate not to use the Company name, the name of the products and/or services, and any similar names to the above.

Article 21 
 
Procurement
		
	21.1
	The Company may purchase items and services required for the Company’s operation from sources within and outside the PRC, on the basis of the competitiveness of the terms and conditions of procurement, quality, quantity, pricing, and delivery terms of the products and in accordance with the procurement policy formulated by the CEO from time to time.

		
	21.2
	Where any Party or any of their respective Affiliates is willing to provide services and/or products to the Company, the Company shall only procure such services and/or products on an arm’s length basis and, if required pursuant to Article 15.2.(b).(x), subject to review and approval by the Board of Directors. In order for the Board to make an informed decision, the interested Party shall present to the Board all relevant information to the Board’s decision, including but not limited to a description of (1) all the parties thereto, (2) the interests, direct and indirect, of any related person in the transaction in sufficient detail so as to enable the Board to fully assess such interests, (3) a description of the purpose of the transaction, (4) all of the material facts of the proposed transaction, including the proposed aggregate value of such transaction, or in the case of debt, the amount of principal that would be involved, (5) the benefits to the Company of the proposed transaction, (6) if applicable, the availability of other sources of comparable products or services, (7) an assessment of whether the proposed transaction is on terms that are comparable to the terms available to or from, as the case may be, unrelated third parties, and (8) the Management Personnel recommendation with respect to the transaction. Any services and/or products proposed to be provided by a Related Party involving a total commitment of greater than USD [...***...] must be disclosed to the Board in the Annual Business Plan (both the total commitment and the Related Party’s relationship with a Party) or otherwise if such services and/or products were not covered in the Annual Business Plan.

Article 22 
 
Labor Management and Trade Union
		
	22.1
	Governing principles 

Matters relating to the recruitment, employment, dismissal, resignation, wages, labor insurance, labor discipline, assessment, rewards, bonus and welfare of the Working Personnel and Management Personnel of the Company shall be handled in accordance with

the PRC Labor Law, the PRC Labor Contract Law and related PRC laws and regulations (hereinafter collectively referred to as the “Labor Laws”).
The Company’s labor rules and policies (including compliance) shall be set out in more detail in the Employment Handbook set up in accordance with the Labor Laws.
		
	22.2
	Personnel

		
	(a)
	Working Personnel shall be locally employed and appointed by the Management

 
Personnel in accordance with the terms of an individual labor contract entered into 
 
by the Company and the Working Personnel.
		
	(b)
	Management Personnel shall be employed by the Company, in accordance with the

 
terms of individual employment contracts, which shall include non-compete provisions with non-compete terms to the maximum extent allowed by law unless otherwise approved by the Board. Other members of senior management shall also have employment agreements with non-compete provisions which contain non-compete duration to be approved by the Board.
		
	(c)
	The first labor contract entered into between the Company and an individual

 
employee shall provide for a probation period. Employment contracts with any Management Personnel may provide for such probation period.
		
	(d)
	Personnel to be employed by the Company shall be selected according to their

 
professional qualification and working experience criteria to be formulated by the Management Personnel.
		
	22.3
	Reward and disciplinary measures

		
	(a)
	All Working Personnel and Management Personnel must observe PRC laws and the

 
relevant Company regulations as well as undertake responsibilities diligently in accordance with their job descriptions. The Management Personnel shall implement a performance evaluation system for all employees.
		
	(b)
	The Company shall have the right to effect reward and disciplinary measures in

 
accordance with relevant regulations of the Company to be set up by the Management Personnel.
		
	22.4
	Labor union

The employees of the Company shall have the right to establish a labor union in accordance with the Labor Laws. If required by mandatory laws, the Company shall allot the required amount for payment into a labor union fund for financing the activities of the labor union. The labor union may use these funds in accordance with the relevant control measures for labor union funds formulated by the All-China Federation of Labor Unions. Labor union activities are, whenever possible, to be conducted after normal working hours and, in any event, in 
 
such a manner as not to hinder the operation of the Company.
Article 23 
 
Financial Affairs, Accounting and Shareholder Auditing
		
	23.1
	Accounting system

		
	(a)
	The Company shall set up its accounting system and procedures in accordance with

 
relevant PRC accounting regulations and with a conversion to US GAAP on a monthly basis. The accounting system and procedures to be adopted by the Company shall be approved by the Board of Directors and be filed with the relevant local departments of finance and tax for record to the extent required by law. The accounting system and procedures approved by the Board of Directors shall, to the maximum extent possible, comply with the accounting and reporting requirements of either Party as may be requested by both Parties from time to time.
		
	(b)
	The Company shall adopt RMB as its bookkeeping base currency, but shall, as

 
requested by either Party and to the extent permitted by law, also adopt USD as a supplementary bookkeeping currency.
		
	(c)
	All accounting records, vouchers, books shall be made and kept in the Chinese

 
language, and the financial statements and reports of the Company must be made and kept in the Chinese and English language.
		
	(d)
	For its accounting and bookkeeping the Company shall adopt an IT system which is

 
accepted by both Parties, available in both English and Chinese languages, and meets the requirements of the Company’s operation and the Parties’ applied accounting and bookkeeping standards.
		
	23.2
	Reports

		
	(a)
	The CEO and Head of Finance shall report directly to the Board of Directors at least on a quarterly basis and the CEO shall be responsible for the operating results of the Company.    

		
	(b)
	The Parties, as well as the Chairman, Vice Chairman and Supervisor shall have full

 
and equal access to the Company’s accounts and financial statements, which shall be kept at the legal address of the Company. The Company shall, in the form required by the Parties, furnish to the Parties financial reports on a [...***...] and [...***...] basis within [...***...] of the applicable period end date, in accordance with the reporting requirements of both Parties and their respective banks (which shall, upon request by either Party, be audited) so that they may continuously be informed about the Company’s financial performance. The Company shall in addition provide a Party with planning financial statements in the form and at the times as required by that Party.
		
	(c)
	The Head of Finance shall be responsible for the timely and accurate preparation of

 
financial reports including but not limited to quarterly and annual financial statements of the Company (balance sheet, profit and loss statement and cash flow statement) formulated in accordance with PRC GAAP and converted into US GAAP.
		
	(d)
	In the event that the Head of Finance or other suitably qualified person nominated by

 
Kite is not available to complete financial reports, the Company shall engage one of the “Big Four” international practicing accounting firms registered in the PRC that is not the Company’s auditor to prepare its quarterly and annual accounts until such time as a Head of Finance is appointed to the Company.
		
	23.3
	Auditing

		
	(a)
	The Company shall engage one of the “Big Four” international practicing accounting firms registered in the PRC to audit its accounts. Such firm shall be nominated by Fosun and retained by the Company upon Board approval, which shall not be unreasonably withheld. Drafts of the audited financial statements and report shall be provided to each Party and to the Board of Directors for review within [...***...] after the end of each fiscal year, and the final audited financial statements and report shall be completed and provided to the Parties no later than [...***...] after the end of each fiscal year. Such financial statements shall be prepared in accordance with PRC law and regulations and pursuant to Article 23.1 (a). In case any Board member doubts the service provided by this audit firm, such Board member may propose a replacement of this firm, which shall be discussed and decided by the Board of Directors. For clarity, any such replacement approved by the Board of Directors must continue to be one of the “Big Four” international practicing accounting firms registered in the PRC to audit its accounts.

		
	(b)
	Each Party may appoint an accountant registered abroad or registered in the PRC to audit the accounts of the Company on behalf of such Party. Access to the Company’s financial records shall be given to such accountant and such accountant shall keep confidential all documents examined while conducting audits. All expenses for such audit shall be borne by the Party which has appointed the auditor, unless:

		
	(i)
	events in the Company (including but not limited to fraud, bribery, loss of records) have required such audit; or

		
	(ii)
	the Company’s auditor regulated in Article 23.3 (a) has refused to confirm the Company’s records.

In such events the Company [...***...].
		
	23.4
	Bank accounts and foreign exchange

		
	(a)
	The Company shall separately maintain foreign exchange accounts and RMB

 
accounts at banks within the PRC authorized to conduct foreign exchange operations.
		
	(b)
	The Company’s foreign exchange transactions shall be handled in accordance with

 
relevant PRC regulations relating to foreign exchange control. [...***...].
		
	23.5
	Fiscal year

The Company shall adopt the calendar year as its fiscal year, with the result that each fiscal year shall begin on January 1 and end on December 31 of the same year, except for the first and last fiscal year which shall start / end according to the Term.
		
	23.6
	Shareholder auditing

Each Party may, on its own or by engaging a third party professional advisor with relevant expertise on behalf of such Party (“Professional Advisor”), audit important Company matters, including but not limited to finance, IPR protection status, local compliance, sales practices and business operation. Access to the Company’s financial records, business records, clinical records and other documents shall be given to the Party, and both the Party

and such Professional Advisors shall keep confidential all documents examined while conducting audits. All expenses for such audits shall be borne as set forth in Article 23.3 (b).
Article 24 
 
Profit Distribution
		
	24.1
	After the payment of enterprise income tax by the Company, the Company shall make the annual allocations from after-tax profits to the Three Funds, if and to the extent required by law. The amount of any annual allocation to such funds shall be determined by the Board of Directors.

		
	24.2
	The Board of Directors shall, at least once every year by a formally adopted resolution, decide the profit distribution plan according to the agreed percentage of profit distribution in Article 7.6.

		
	24.3
	No profit shall be distributed unless the Company’s deficit from the previous years is made up. Profits retained by the Company and carried over from the previous years may be distributed together with any distributable profits of the current year. Profits for distribution shall be after-tax profits, as defined under PRC GAAP, and after annual allocation to the Three Funds. For clarity, any payment of milestone or royalties shall be treated as expenses or asset costs for the calculation of profits.

		
	24.4
	All remittance of profits and other sums payable to Kite out of PRC under this Contract shall be made to a foreign bank account designated by Kite respectively in RMB, USD or other freely convertible foreign currencies, as so informed by Kite in writing and in accordance with the foreign exchange regulations in PRC.

Article 25 
 
Taxation and Insurance
		
	25.1
	Income tax, customs duties and other taxes

		
	(a)
	The Company shall timely pay taxes and customs duty under the relevant national and local laws and regulations of the PRC, subject to any further tax holidays, tax reductions, waivers, exemptions, or exclusions granted to the Company from time to

time by any Governmental Authorities, and applicable treaties for the avoidance of double taxation in effect between the PRC and other countries. The Company shall provide copies of all tax filings to the Parties immediately after filing.
		
	(b)
	The Company’s Chinese and expatriate staff shall pay individual income tax and other Taxes in accordance with the Individual Income Tax Law of the PRC and relevant treaties for the avoidance of double taxation in effect between the PRC and other countries.

		
	(c)
	In any case the Company shall apply for all available tax and customs exemptions, holidays and reductions.

		
	(d)
	In any case the Company is required to withhold taxes from the payments to either Party or the Affiliates of either Party, the following shall apply:

		
	(i)
	The Company shall exercise its best effort to attain that the payment to both

 
Parties or their respective Affiliates will be taxed at the lowest taxation rate available (in particular under double taxation treaties) at the time of payment.
		
	(ii)
	The Company shall provide both Parties or their Affiliates with an original copy

 
of the tax assessment and the tax receipt without undue delay, and no later than [...***...]. These documents shall specify both Parties or their Affiliates as the taxpayer, the amount of tax paid, the tax rate or the amount of fee on which such rate is based, the tax law and the legal regulation on which such tax payment is based, and the date of payment of the tax.
		
	(iii)
	If the documents of the tax authority are issued in a language other than English, the Company shall have the documents translated into English at its own expense at the request of Kite.

		
	25.2
	Insurance

The Company shall, throughout the Term, maintain insurance coverage of the types and in the amount as the Management Personnel determined. The Company shall obtain insurance from insurance companies or organizations in compliance with PRC laws and regulations.
Article 26 
 
Confidentiality, Non-competition and Non-solicitation
		
	26.1
	Confidentiality

Each Party covenants that, during the Term and for [...***...] thereafter it shall:

		
	(a)
	maintain the confidentiality of any Confidential Information;

		
	(b)
	not disclose the Confidential Information to any person or entity, including its or its

 
Affiliate’s directors, managers, staff and advisors, except to those who are associated with the Company’s business operation and the confidential Information is only disclosed on a strict “must-know” basis, provided that the recipient is subject to legally binding nondisclosure restrictions; and
		
	(c)
	not use or exploit the Confidential Information in any way, except use within the

 
permitted business scope of the Company and any other agreement by both Parties;
		
	26.2
	Safeguarding Confidential Information

		
	(a)
	Each Party shall advise its board members, managers, senior or other relevant staff and other employees, advisors, and those of their Affiliates, who receive any Confidential Information of the other Party or its Affiliates of the existence and importance of complying with the obligations set forth in Article 26.1, and require such persons to sign a confidentiality undertaking in a form acceptable to the Parties. Each Party shall be jointly and severally liable for breach of the confidentiality liability of its Affiliate, their directors, managers, senior or other relevant staff and other employees, advisors etc.

		
	(b)
	The Parties shall cause the Company to formulate rules and regulations to cause the Board members, Management Personnel and Working Personnel to also comply with the confidentiality obligations set forth in this Article 26.1. All Board members, Management Personnel and Working Personnel having access to Confidential Information shall be required to sign a confidentiality undertaking in a form acceptable to the Parties.

		
	26.3
	Exceptions to confidentiality

The provisions of Article 26.1 shall not apply to Confidential Information that can be proven:
		
	(i)
	to be known by one Party by written records made prior to disclosure by the other

 
Party;
		
	(ii)
	is or becomes public knowledge other than through either Party’s breach of this

 
Contract;
		
	(iii)
	was obtained by one Party from a third party having no obligation of confidentiality

 
with respect to such Confidential Information; or
		
	(iv)
	is required by laws, regulations, stock exchange rules or by order of any

competent court, Governmental Authority to be disclosed.
Each Party shall have the right to issue a press release to announce the execution of this Agreement as approved in writing by the other Party, which shall not be unreasonably withheld by the other Party.
		
	26.4
	Fosun Non-competition

Fosun undertakes that, for the duration of this Contract and for an additional (i) [...***...] if terminated due to a breach of this Contract by Fosun or (ii) [...***...] if terminated under Articles 29.2(a) (unless Kite has provided any of its know-how to the Company pursuant to the Technical Services Agreement, in which case Article 26.4(i) shall apply. If the Contract is terminated due to Kite not making its capital contribution in kind, this Article 26.4 shall [...***...]), 29.2 (c) and 29.2(d) of this Contract, it will not (a) engage, either directly or indirectly via any of its Affiliates, in the research (other than to meet the definition of a Fosun Target), development, commercialization, manufacturing or sale of T cell immunotherapy products; and (b) enter into any undertaking or co-operation with third parties in the research (other than to meet the definition of a Fosun Target), development, commercialization, manufacturing, sale of T cell immunotherapy products, be it a joint venture company or any other contractual cooperation form, either directly or indirectly via an Affiliate (collectively, the “Fosun Non-Compete”). For the avoidance of doubt, any Passive Investment by Fosun or any of its Affiliates shall not be considered as a breach of this Article 26.4. Notwithstanding the foregoing, the Fosun Non-Compete shall not apply in any territory outside of the Chinese Market with respect to any T cell immunotherapy product that is not directed against a Kite Target. Prior to Fosun or any of its Affiliates engaging in any of the activities covered by the Fosun Non-Compete in any territory outside of the Chinese Market, Fosun or its applicable Fosun Affiliate shall notify Kite in writing of the T cell immunotherapy product that is directed against a bona fide Fosun Target it intends to advance and Kite will inform Fosun or the applicable Fosun Affiliate in writing within [...***...] and with reasonable ground following its receipt thereof whether such Target is a bona fide Kite Target, failure of which or upon Kite’s confirmation that such Target is not a Kite Target shall entitle Fosun or its applicable Fosun Affiliate to advance with such Target. “Fosun Target” means a Target (a) against which Fosun or its Affiliates is researching one or more CAR or TCR products following the commencement of (i) for CAR products, [...***...]; and (ii) for TCR products, [...***...]. “Kite Target” means (a) a Target listed in a separate letter delivered to Fosun on the Effective Date, or (b) a Target against which Kite or its Affiliates (or their respective Third Party 

partners) is researching one or more CAR products or TCR products following the commencement of (i) for CAR products, [...***...]; and (ii) for TCR products, [...***...]. For clarity, Kite Target shall exclude any product of the Third Party partner of Kite or its Affiliates which is not the subject of cooperation between Kite or its Affiliates and the Third Party partner. For the avoidance of doubt, this Article 26.4 shall not prohibit any of Fosun’s Affiliates in the medical service sector to sell, or offer for sale any third party T cell immunotherapy products and related medical services to the patients of such Fosun Affiliate, provided that, subject to the exception herewith, such Fosun Affiliate shall still comply with its non-compete obligations according to this Contract.
		
	26.5
	Kite Non-competition

Kite undertakes that in the Chinese Market, for the duration of this Contract and for an additional [...***...] if terminated due to a breach of this Contract by Kite, it will not (a) engage, either directly or indirectly via any of its Affiliates, in the research, development, commercialization, manufacturing or sale of any T cell immunotherapy products being developed or sold by the Company; and (b) enter into any undertaking or co-operation with third parties for the research, development, commercialization, manufacturing or sale of any T cell immunotherapy products being developed or sold by the Company, be it a joint venture company or any other contractual cooperation form, either directly or indirectly via an Affiliate. For purposes of this Article 26.5, “Affiliate” shall not include any entity that controls Kite Parent after the consummation of a Kite Sale or any of such controlling entity’s Affiliates that were not Affiliates of Kite prior to the Kite Sale, provided that such Affiliates do not use Kite technology in contravention of this Article 26.5. “Kite technology” refers to any technology (including but not limited to patents, trade-marks or know-how, data, and other technical information) licensed to the Company from Kite. For the avoidance of doubt, any Passive Investment by Kite or any of its Affiliates shall not be considered as a breach of this Article 
 
26.5.
		
	26.6
	Liability

If a Party breaches any provisions of this Article 26 (other than Article 26.7), for each single case of breach, the breaching Party shall pay liquidated damages of USD [...***...] to the non-breaching Party. If a Party breaches the undertakings under Article 26.7, for each single case of breach, the breaching Party shall pay liquidated damages of USD [...***...] to the non-breaching Party. If the liquidated damages

is not sufficient to cover the non-breaching Party’s actual damage, the non-breaching Party may further claim for damage compensation from the breaching Party according to this Contract and according to law.
		
	26.7
	Non-solicitation

Each Party undertakes that, during the Term and, with respect to any Breaching Party an additional [...***...] after the termination of this Contract, without obtaining the prior written consent of the other Party, it shall not and shall cause its Affiliates not to, directly or indirectly, for itself or on behalf of a third party:
		
	(a)
	solicit for employment or otherwise induce to terminate employment with the other Party, its Affiliates, or the Company, or employ or engage as an independent contractor, any directors, managers or key staff; or

		
	(b)
	solicit business from or induce, any client, customer, supplier or other similar third party of the other Party, its Affiliates, or the Company to alter, terminate or breach its contractual or other business relationship with the Company or the other Party. Notwithstanding the foregoing, nothing in this Article 26.7 (b) shall restrict any business relationship with the above mentioned parties in the normal course of business, so long as no Confidential Information is used by the Party or its Affiliate in the business relationship.

Article 27  Term
		
	27.1
	Term

The Term shall be twenty (20) years, commencing on the Establishment Date. Unless otherwise mutually agreed by both Parties in writing, this Contract, together with the Appendices, shall become effective on the Effective Date and shall expire on the date of expiry of the Term, unless the Term is extended according to Article 27.2.
		
	27.2
	Extension of the Term

The Term may be extended upon agreement by the Parties. In such case the Parties shall amend this Contract and the Articles of Association, and shall cause the Company to timely apply for all relevant Governmental Approvals or filings to the extent as required by law.

Article 28 
 
Representations and Warranties
		
	28.1
	Representations, warranties and Undertakings

In addition to any other representations, warranties or guarantees made by either Party in this Contract and its Appendices, each Party represents, warrants and undertakes to the other Party as of the Effective Date that:
		
	(a)
	it is a corporation duly incorporated and validly existing under the laws of the place 

 
of its establishment or incorporation;
		
	(b)
	it has all requisite power, authority and approvals required to enter into this Contract and its Appendices and upon the Effective Date will have all requisite power, authority and approvals to perform its obligations under this Contract;

		
	(c)
	it has taken all action necessary to be authorized to enter into this Contract and its Appendices and such Party’s representative whose signature is affixed to this Contract is fully authorized to sign this Contract and its Appendices;

		
	(d)
	as of the Effective Date, this Contract shall constitute its legal, valid and binding obligation;

		
	(e)
	neither the execution of this Contract, nor the performance of such Party’s obligations under this Contract, will conflict with, or result in a breach of, or constitute a default under, any provision of its documents on establishment, business licence, by-laws or articles of association, or any law, rule, regulation, authorization or approval of any government agency or body under its jurisdiction of incorporation, or of any contract or agreement to which it is a party or is subject;

		
	(f)
	it (or in the case of Kite, Kite’s Parent) has established and maintains reasonable internal policies and controls, including codes of conduct and ethics and reasonable reporting requirements, intended to insure compliance with anti-corruption laws and other applicable laws in relevant legislations, to the extent applicable to such Party, including healthcare compliance, privacy protection, environmental protection and data security laws.

		
	(g)
	there is no litigation, administrative investigation or any other dispute pending or, to the best of its knowledge, threatened against it with respect to the subject matter of this Contract or that would affect in any way its ability to enter into or perform this Contract; and

		
	(h)
	it has no outstanding commitments or obligations, contractual or otherwise, which would in any way impede its ability and right to enter into and perform this Contract 

 
or the Articles of Association.
		
	28.2
	Representations, Warranties and Undertakings of Kite

In addition to any other representations, warranties or guarantees made by Kite in this Contract and its Appendices, Kite further represents, warrants and undertakes to Fosun:
		
	(a)
	as of the Effective Date, it has full power and authority to grant the licenses according to Article 7.4 without the consent of any other party;

		
	(b)
	as of the Effective Date, it is not aware of any patents, patent applications, trademarks, trademark applications, or other intellectual property rights belonging to third parties and covering, in whole or part, the practice of the Licensed Know-how as defined in the Product and Know-How License Agreement in the Territory;

		
	(c)
	as of the Effective Date and the Establishment Date and until the Date of Termination that, it will comply with any of its obligations under the Product and Know-how License Agreement, the Technology License Agreement and the Technical Service Agreement.

		
	(d)
	as of the Effective Date and the Establishment Date and until [...***...] after the Establishment Date, the Company enjoys an option to license two (2) additional products from Kite for an option of USD [...***...], such option can be exercised by the Company upon unanimous Board approval:

		
	(i)
	KITE-439, a T cell receptor (“TCR”) therapy directed against the human

 
papillomavirus type 16 E7 (HPV-16 E7) oncoprotein that is believed to cause several different cancers, including cervical, head and neck and other urogenital cancers; and
		
	(ii)
	KITE-718, a TCR therapy directed against MAGE A3/A6 that is believed to cause several different cancers, including non-small cell lung cancer and bladder 

 
cancer.
This option shall expire [...***...] after the Establishment Date, and such 
 
products shall not be considered Kite Products for purposes of Article 28.2(g) after the option expiration date.
For each option product Kite is entitled to charge, based on a related license 
 
agreement, (i) [...***...]% royalties of its commercial revenue, and (ii) total milestone payments of USD [...***...], which consists of USD [...***...] for CFDA approval, USD [...***...] for annual sales of

USD [...***...] and USD [...***...] for annual sales of USD [...***...] in the Chinese Market.
		
	(e)
	as of the Effective Date and the Establishment Date and until [...***...] after the Establishment Date, if Kite or Kite’s Parent initiates the development of an engineered autologous CAR T cell-based product targeting CD19 utilizing a Switch Technology and has the right to develop and commercialize such product in the Chinese Market, the Company and Kite shall negotiate a license for such product for the Chinese Market. “Switch Technology” means a [...***...]. The terms of such license shall be negotiated in good faith by Kite and the Company, subject to approval by Fosun. For clarity, such product shall be considered a Kite Product for purposes of Article 28.2(g) if no license is agreed upon during the initial [...***...] period.

		
	(f)
	as of the Effective Date and the Establishment Date and until [...***...] after the Establishment Date, the Company enjoys an option to license an engineered autologous fully human CAR T cell-based product targeting CD19 for the Chinese Market that is subject to a Kite or Kite Parent investigational new drug application in the USA. The terms of such license shall be negotiated in good faith by Kite and the Company, subject to approval by Fosun, but in no case [...***...]. For clarity, such product shall be considered a Kite Product for purposes of Article 28.2(g) [...***...]. Fosun acknowledges that certain of the Kite technology to be licensed pursuant to Article 28.2(d), (e), (f) or (g) has been licensed to Kite under third party agreements, and that any Company license under such Kite technology is therefore a sublicense under and subject in all cases to the terms of such agreements.

		
	(g)
	as of the Effective Date and the Establishment Date and until [...***...] after the Establishment Date, if Kite intends, whether directly or through any of its Affiliates to develop or commercialize any of the Kite Products or any products directed against a Target that is the same Target as a product licensed by the Company from Kite in the Chinese Market or intends, whether directly or through any of its Affiliates to develop or commercialize any products licensed to the Company in the [...***...] (“Proposed Transaction”) through a third party (including for the sole purpose of this Article 28.2(g) any Affiliate of Kite in the Chinese Market) licensee (“Third Party Licensee”), Kite shall send a written notice (“Transaction Notice”) to the Company 

and Fosun that includes a written non-binding term sheet inclusive of the material financial terms for a license to such Kite Product that have been agreed upon with a Third Party Licensee. Within [...***...] of receipt of such term sheet, Fosun, on behalf of the Company, shall provide to Kite written notice of its acceptance of such term sheet. If Fosun has not exercised its right upon expiration of the applicable [...***...] period, or if Fosun does not accept the term sheet, or if the Parties do not reach agreement upon and execute a license agreement in accordance herewith within a [...***...] period, then, in each such case, Kite shall be free during the next [...***...] period to enter into the Proposed Transaction or any transaction more beneficial to Kite with any third party. For clarity, Kite shall not be obligated to disclose the name of such third party. This Article 28.2(g) shall only apply for a period of [...***...] after the Establishment Date.
		
	(h)
	As of the Establishment Date, if Kite intends, whether directly or through any of its Affiliates, to develop or commercialize any of the Kite Products or any products directed against a Target that is the same Target as a product licensed by the Company from Kite in the Chinese Market through a Third Party Licensee, and under the conditions that: (i) the Company and Kite failed to reach agreement for concluding a definite license agreement as according to Paragraph (e) of this Article 28.2; (ii) Kite and any third party entered into a definite license agreement as according to Paragraph (e) of this Article 28.2, then Kite shall (i) cause such Third Party Licensee to negotiate with the Company for a exclusivity period of [...***...]; (ii) and use commercially reasonable efforts to support the Company during such [...***...] negotiation period in the negotiation for a definite agreement of granting the Company with the exclusive clinical manufacturing rights. For purposes of Article 28.2(g) and 28.2(h), “Affiliate” shall not include any entity that controls Kite Parent after the consummation of a Kite Sale or any of such controlling entity’s Affiliates that were not Affiliates of Kite prior to the Kite Sale, provided that such Affiliates do not use Kite technology in contravention of Article 28.2(g) and 28.2(h). “Kite technology” refers to any technology (including but not limited to patents, trade-marks or know-how, data, and other technical information) licensed to the Company from Kite.

		
	(i)
	As of the Establishment Date, during the term of the Product and Know-how License

 
Agreement, Technology License Agreement and Technical Service Agreement (“the Agreements”), Kite will not exercise its termination right under the Agreements based on material breach of the Agreements by the Company, if such breach is caused by any directors and/or management personnel appointed or nominated by Kite according to the Joint Venture Contract.

		
	28.3
	Representations, Warranties and Undertakings of Fosun

In addition to any other representations, warranties or guarantees made by Fosun in this Contract and its Appendices, Fosun further represents, warrants and undertakes to Kite as of the Effective Date that:
		
	(a)
	it will use its reasonable best efforts to cause the Company not to use, apply, test or have trials of any services/products of the Company on any patients before [...***...]; and

		
	(b)
	it is not a State-owned enterprise and is not aware of any corporate merger, acquisition or consolidation of Fosun which will, directly or indirectly, concert Fosun into a State-owned enterprise. For clarity, “State-owned enterprise” means an enterprise directly or indirectly controlled by, or with majority of the property right directly or indirectly held by, government departments, government agencies or public institutions.

		
	28.4
	Indemnification

		
	(a)
	If any representation and warranty made by a Party (“Breaching Party”) in this Contract is found to be untrue, the Breaching Party shall, [...***...] upon written request of the other Party (“Non-Breaching Party”) undertake to provide every remedy necessary to put the Non-Breaching Party (or, at the Non-Breaching Party’s election in writing, the Company) in the position the Non-Breaching Party (or the Company, if so elected by the Non-Breaching Party) would have been in, should the representation and warranty be true. For clarity, the Breaching Party may dispute such breach, which shall be governed by Article 33.

		
	(b)
	Notwithstanding the Breaching Party’s obligation to take any such remedial measures, the Breaching Party shall [...***...] indemnify the Non-Breaching Party for and hold the Non-Breaching Party (or, at the Non-Breaching Party’s election in writing, the Company) harmless against all losses and damages (including direct, indirect and consequential damages) the Non-Breaching Party (or, at the Non-Breaching Party’s election in writing, the Company) may suffer due to any untrue representation and warranty given by the Breaching Party or any covenant or undertaking not performed in a complete and timely manner. Nothing in this Article 28 shall give the Company the right to make a direct claim against the Breaching Party unless and until the Non-Breaching Party has made its election in writing to require the Breaching Party to indemnify the Company instead of indemnifying the Non-Breaching Party. Each decision by the Non-Breaching Party whether to make such election shall be solely within the Non-Breaching Party’s discretion.

Article 29 
 
Termination and Consequences of Termination
		
	29.1
	Termination upon expiry or by agreement

This Contract shall be automatically terminated upon the expiry of the Term set forth in Article 27.1, unless extended pursuant to Article 27.2. Additionally it may be terminated at any time by the written agreement of the Parties.
		
	29.2
	Termination upon failure to meet certain conditions

In the event that:
		
	(a)
	any of the capital contribution and/or co-operative conditions pursuant to Article 7,

 
Article 8 and Article 11 is not fulfilled in time, or is still not remedied within a [...***...] grace period (if any) or Article 16.3(b) occurs under the Technology License Agreement; or
		
	(b)
	the Establishment Date (i.e. issuance of the Business License) does not occur within

 
[...***...] after the Effective Date, and is still not rectified within an additional [...***...] grace period; or
		
	(c)
	the Company fails to achieve cash flow positive until [...***...], or any

 
mutually agreed grace period (if any); for avoidance of doubt, “cash flow positive” means, for an agreed period of time, a balanced financial statement of the Company where accumulative cash inflow - other than capital investment of the Parties – exceeds the accumulative cash outflow of the Company; provided that if the Company exercises its option for an additional product or otherwise develops or in-licenses an additional product, the Company shall have an additional [...***...] from [...***...] to achieve positive cash flow; or
		
	(d)
	after the Establishment Date, if any Governmental Authority (including for this purpose

 
any court) having authority over the other Party requires any provision of this Contract to be revised in such a way as to cause significant adverse consequences to the Company or either Party;
then Kite and Fosun shall each have the right to terminate this Contract by notifying the other Party in writing, pursuant to the procedures set forth in Article 29.5 and Article 29.6 below; provided that if the condition of Article 29.2(c) is met, the Parties shall first discuss for a period of [...***...] in good faith whether the Company shall continue to operate prior to either Party exercising its right to terminate pursuant to Article 29.2(c).
		
	29.3
	Unilateral termination by a Party due to Governmental Action or Force Majeure

		
	(a)
	if any Governmental Authority (including for this purpose any court) expropriates,

 
requisitions, or orders the expropriation or requisition of, all or material portion of the assets or properties of a Party or the Company, and such expropriation or requisition is considered by either the Company or the other Party as adversely influencing the performance of the Company’s original objectives, a Party over which the government authority mentioned above does not have authority may terminate this Contract; or
		
	(b)
	Without prejudice to any other termination rights set out elsewhere in this Contract,

 
this Contract may be unilaterally terminated by the written notice of a Party to the other Party pursuant to the procedure set forth in Articles 29.5 and 29.6, if the conditions or consequences of Force Majeure significantly interfere with the Company’s ability to operate pursuant to the Annual Business Plan for a period in excess of [...***...] and the Parties have been unable to find an equitable solution pursuant to Article 29.5.
		
	29.4
	Unilateral termination by a non-breaching Party

Without prejudice to any other termination rights set out elsewhere in this Contract, this Contract may unilaterally be terminated by the written notice of the non-breaching Party to the other Party pursuant to the procedure set forth in Article 29.5 and Article 29.6 below:
		
	(a)
	if the other Party (“Breaching Party”) materially breaches this Contract or violates the Articles of Association and such breach or violation is not cured within [...***...] after receipt of a written notice by the Breaching Party from the non-breaching Party in which it identifies the breach and demands that it be cured by the Breaching Party; or

		
	(b)
	if the other Party (“Breaching Party”) becomes bankrupt, is the subject of proceedings for insolvency, liquidation or dissolution, ceases or is unable to carry on business in accordance with this Contract, becomes unable to pay overdue debts for more than [...***...], or any of its equity interest in the Company is seized or frozen by a court order and not released within [...***...] upon such seizure; or

		
	(c)
	Without any limitation to clause (a), if the other Party (“Breaching Party”) or its Affiliates materially breaches any confidentiality obligations pursuant to Article 26.1 or materially breaches any non-competition obligation pursuant to Article 26.4 or Article 26.5.

		
	29.5
	Negotiations to solve problems

If a Party entitled to give a notice pursuant to Article 29.2, Article 29.3 or Article 29.4 gives a notice of its desire to terminate this Contract, the Parties shall immediately conduct negotiations and attempt to resolve the situation which results in the giving of such notice. If (i) no resolution of the dispute is reached to the satisfaction of the notifying Party within [...***...] after issuance of such notice, or (ii) the notified Party fails to cooperate by promptly commencing negotiations within such [...***...] period, the notifying Party shall be entitled to terminate this Contract immediately upon giving a second notice to the breaching Party.
		
	29.6
	Date of termination

For purposes of this Article 29, the “Date of Termination” shall be (i) the date of expiry of the Term or the date of the agreement by the Parties on termination of this Contract, if the termination is effected pursuant to Article 29.1, or (ii) the date of when the notified Party of notice of unilateral termination of this Contract receives the second notice for immediate termination of this Contract, if the termination is effected pursuant to Article 29.5.
		
	29.7
	Further Rights

The termination rights under this Contract shall be in addition to and not in substitution of any other claims or remedies that may be available to the non-breaching Party, and any termination shall not relieve the breaching Party from any accrued Liabilities against the non-breaching Party nor the Company.
Article 30 
 
Liquidation and Continuing Obligations
		
	30.1
	Liquidation

If upon termination of this Contract in accordance with Article 29, the Company will not be continued by either Party, as the case may be, within [...***...] following the Date of Termination, then the Board shall promptly adopt a resolution on the dissolution and liquidation of the Company. The liquidation shall be conducted in accordance with relevant PRC laws and regulations and with the provisions set forth below (in so far as they do not conflict with such laws and regulations):

		
	(a)
	A liquidation group shall be established within [...***...] from the Date of

 
Termination, which is made up of a number of members appointed by each Party in accordance with the number of the Board members each Party is entitled to appoint to the Board of Directors under Article 15.1 (a). For the avoidance of doubt, Fosun shall be entitled to appoint the Chairman of the liquidation group, who will lead all the activities of the liquidation group. In such case Kite may decide to retain one of the “Big Four” accounting firms to supervise or check the liquidation process, with the related cost being part of the liquidation expenses.
		
	(b)
	The liquidation group shall initiate the necessary appraisal and valuation of the property

 
of the Company which shall be performed by the liquidation group or, if so decided by the liquidation group, by an international practicing accounting firm registered in the PRC and selected by the liquidation group, provided that such accounting firm must be independent of both Parties. In the course of valuation and appraisal of the Company’s property, the selected accounting firm shall apply such appraisal and valuation method as is appropriate and internationally applied. The liquidation group shall develop a liquidation plan on the basis of the final valuation report prepared by the selected accounting firm.
		
	(c)
	In developing and executing the liquidation plan, the liquidation group shall use every

 
reasonable effort to obtain the highest possible price for the Company’s assets.
		
	(d)
	After the liquidation and division of the Company’s assets and the settlement of all of

 
its outstanding debts, [...***...], and any remaining assets (if any) thereafter shall be paid over to the Parties in the profit distribution proportion according to Article 7.6. However, in case of termination of this Contact according to Article 29.4, the non-breaching Party shall [...***...].
		
	(e)
	After liquidation of the Company, the liquidation group shall report to the relevant

 
Government Authorities to cancel its registration and business license. Additionally, the Company shall publish a formal announcement of the termination and liquidation of the Company.
		
	(f)
	Either Party, at its own expense, shall have the right to obtain copies of all of the

 
Company’s accounting vouchers, account books, account statements, minutes and Board resolutions, and other relevant documents after the conclusion of liquidation.

		
	30.2
	Continuing obligations

The rights, benefits and obligations provided in this Contract in relation to compensation of damages, indemnification, confidentiality, non-competition, settlement of disputes, termination, buy-out and liquidation of the Company shall survive the termination of this Contract.
Article 31 
 
Breach of Contract
		
	31.1
	In the event of a breach of contract committed by a Party, the breaching Party shall bear Liabilities towards the other Party and/or the Company. In the event that a breach of contract is committed by more than one Party, each Party shall bear its individual share of the Liabilities towards the other Party and the Company. Any Liability shall include both direct losses and indirect or consequential losses or damages (including reasonably foreseeable profits), unless otherwise provided in this Contract or in any of the Related Agreements.

		
	31.2
	Notwithstanding anything to the contrary herein, other than for indemnification obligations relating to third party claims, breaches of confidentiality, intentional torts, intentional violations of law, gross negligence or intentional misconduct, neither Party shall be liable to the other Party (or the Company) for any indirect, special, incidental, punitive, exemplary, lost profit, cover, or consequential damages arising out of or resulting from this Contract, even if aware of the possibility of such damages.

Article 32 
 
Force Majeure
		
	32.1
	If an event of Force Majeure occurs, a Party’s contractual obligations under this Contract affected by such an event shall be suspended during the period of delay caused by the Force Majeure and shall be automatically extended, without penalty or responsibility for any damage, for a period equal to such suspension.

		
	32.2
	The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish within [...***...] thereafter sufficient proof of the occurrence and duration of

such Force Majeure. The Party claiming Force Majeure shall also use all reasonable efforts to terminate the Force Majeure and to mitigate the effect of the Force Majeure.
		
	32.3
	In the event of Force Majeure, the Parties shall immediately consult with each other in order to find an equitable solution and shall use all reasonable efforts to minimize the consequences of such Force Majeure.

Article 33 
 
Dispute Settlement
		
	33.1
	If any dispute arises between the Parties out of or in relation to this Contract, including any dispute regarding its existence, validity, interpretation, performance, breach or termination, or if the Board is deadlocked on a matter for approval, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations.

		
	33.2
	If the dispute has not been resolved by such friendly consultation within [...***...] after either Party has given written notice to the other Party requesting the commencement of friendly consultation, then the Parties shall attempt to settle it by talks between the CEOs of both Parties.

		
	33.3
	If the dispute has not been resolved by CEO discussions within [...***...] after either Party has given written notice to the other Party requesting the commencement of such CEO discussions, then either Party may submit the dispute to the Hong Kong International Arbitration Center (“HKIAC”) for arbitration in accordance with its then applicable arbitration rules. The arbitration shall be conducted by three (3) arbitrators appointed in accordance with the said arbitration rules and in accordance with the following directions:

		
	(a)
	The arbitration proceedings shall be conducted in English and the arbitration tribunal

 
shall refer to the English version of this Contract only;
		
	(b)
	all arbitrators shall be fluent in English;

		
	(c)
	the arbitration proceedings shall be administered by HKIAC in Hong Kong and the seat

 
of arbitration as well as the place of hearings and other procedural steps shall be Hong Kong;

		
	(d)
	The losing Party shall bear, in proportion to the percentage it has lost the case, the arbitration costs and other Party’s reasonable attorney fees.

		
	33.4
	The Parties hereby agree that any arbitration award rendered in accordance with the provisions of this Article 33 shall be final and binding upon the Parties, and the Parties further agree that such award may be enforced by any court having jurisdiction over any Party against which the award has been rendered, or where the assets of such Party is located.

		
	33.5
	In any arbitration proceedings, any legal proceedings to enforce the arbitration award, or any other legal proceedings between the Parties pursuant to or relating to this Contract, each Party expressly waives the defence of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state or is otherwise entitled to immunity.

		
	33.6
	Upon submission of any dispute to arbitration, the Parties shall continue to exercise their remaining respective rights, and fulfil their remaining respective obligations under this Contract, except for any matters related to the dispute in arbitration.

Article 34 
 
Applicable Law
The formation, validity, interpretation and implementation of this Contract shall be governed by the laws of the PRC. Contracts which are attached as Appendices to this Contract shall be governed by the law stated in those contracts.
Article 35 
 
Miscellaneous Provisions
		
	35.1
	Waiver 

To the extent permitted by PRC law, the failure or delay on the part of a Party to exercise a right, power or privilege under this Contract and any contracts attached as Appendices hereto shall not operate as a waiver thereof, nor shall any single or partial exercise of a right,

power or privilege preclude any other future exercise thereof, unless explicitly otherwise regulated herein.
		
	35.2
	Assignment

Except as otherwise agreed in this Contract, including permitted assignments of equity pursuant to Article 9, this Contract may not be assigned in whole or in part by any Party without the prior written consent of the other Party hereto.
		
	35.3
	Binding Effect and Amendments

This Contract is made for the benefit of the Parties and their respective lawful successors and assignees. No amendment or other modification of this Contract shall in any event be effective unless the same is made in writing and signed by an authorized representative of each Party. To the extent required by law, the effectively amended Contract shall be submitted to the relevant Governmental Authorities for filing and/or registration.
		
	35.4
	Severability 

If any part of this Contract shall become or be declared void or invalid by virtue of law or government order or court decision, the remaining parts shall remain valid and this Contract shall be fulfilled by the Parties in accordance with its general principles, and the void or invalid provision(s) shall be replaced by such valid provision(s) agreed to by the Parties as closest reflecting the economic intentions of the Parties at the time of signing this Contract.
		
	35.5
	Language

This Contract is executed in the Chinese and English language in six (6) originals each (at least one (1) for Kite and one (1) for Fosun and the remaining four (4) originals for submission to the Governmental Authorities. The English and Chinese version shall be equally binding.
		
	35.6
	Entire Contract

This Contract and the Appendices attached hereto together constitute the entire agreement between the Parties with respect to the subject matter of this Contract and they together supersede all prior discussions, negotiation and agreements between the Parties. In the event of any conflict between the terms and provisions of this Contract and the Articles of Association, the terms and provisions of this Contract shall prevail.

		
	35.7
	Notice

Any notice or written communication provided for in this Contract by each Party to the other shall be made in English by email or by courier service delivered letter, promptly transmitted or addressed to the appropriate Party. The date of receipt of a notice or communication hereunder shall be deemed to be [...***...] after the letter is given to the courier service in the case of a courier service delivered letter and [...***...] after dispatch of an email, unless an earlier delivery date can be evidenced. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.
Kite:
KP EU C.V.
190 Elgin Avenue, George Town,
Grand Cayman KY1-9005, Cayman Islands
E-mail: legal@kitepharma.com
Fosun:
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd.
Building A, No.1289 Yishan Road, Shanghai 200233, PRC
E-mail: qiyy@fosunpharma.com
[Signature Page Follows]

This Contract has been duly executed by the duly authorized representatives of the Parties at the date set out above.
KP EU C.V.
By   Intertrust Directors (Cayman) Ltd.
Name: L.I. da Ascencăo    Jacqueline Haynes
Title:   authorised signatories
Signature:  /s/ L.I. da Ascencăo            /s/ Jacqueline Haynes
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (Chop)
By
Name:
Title:
Signature:

This Contract has been duly executed by the duly authorized representatives of the Parties at the date set out above.
KP EU C.V.
By
Name:
Title:
Signature:
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (Chop)
By
Name:    Wu Yifang
Title:    Legal Representative
Signature:    /s/ Wu Yifang

Appendix 1
PRODUCT AND KNOW-HOW LICENSE AGREEMENT
between
KP EU C.V.
and
Fosun Pharma Kite Biotechnology Co., Ltd.

Contents

Article
1.    Definitions         3
2.    License        6
3.    Deliver Licensed Know-how        6
4.    Quality Control        7
5.    Improvements        7
6.    Consideration        9
7.    Protection of the Intellectual Property Rights         10
8.    Confidentiality        11
9.    Non-compete        12
10.    Right to Swap        13
11.    Additional Obligations of the Company        13
12.    Additional Obligations of Kite        14
13.    Assignment        15
14.    Duration and Termination         15
15.    Effect of Termination         16
16.    Force Majeure        17
17.    Liability, Indemnity and Insurance        17
18.    Governing Law and Dispute Settlement        18
19.    Miscellaneous        19

Schedule 1: List of Licensed Know-how 
Schedule 2: Valuation Report
Schedule 3: Capital Contribution Agreement

This License Agreement (the “Agreement”) is effective as of April 27th, 2017 by and between:
		
	(1)
	KP EU C.V., a limited partnership that is governed by the laws of The Netherlands, having its registered seat at Amsterdam, the Netherlands and its business address at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands, registered with the Dutch trade register under number 64185958 (“Kite”).

		
	(2)
	Fosun Pharma Kite Biotechnology Co., Ltd.  , a limited liability company organized and existing under laws of the People’s Republic of China whose registered office is at No.222 Kangnan Road, Shanghai 201203, PRC. (the “Company” or the “Licensee”).

(Kite and the Company are hereinafter referred to individually as a “Party” and collectively as the “Parties”)
Preambles
WHEREAS, the Company is a joint venture established by Kite and Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (“Fosun”) in the pursuit of successful commercialization of KTE-C19 and potentially additional cancer immunotherapy products in the Territory (as defined below).
WHEREAS, pursuant to the Sino-foreign Co-operative Joint Venture Contract concluded between Kite and Fosun on January 10, 2017 (“JV Contract”), Kite has agreed to grant, and the Licensee has agreed to be granted with the license of exclusive commercial use rights in the Territory (as defined below) for the related know-how.
NOW THEREFORE, in consideration of the mutual promises of the Parties, and for good and valuable consideration, it is agreed by and between the Parties as follows:
		
	1.
	Definitions

Unless otherwise provided herein, the capitalized terms used in this Agreement shall have the same meanings as defined in the JV Contract. For the purposes of this Agreement the following capitalized terms are defined in this Article 1 and shall have the meaning specified herein.
		
	1.1
	“Affiliate” means, for the purpose of this Agreement, mean, as to a Party, any entity directly or indirectly controlling, controlled by or under common control with such Party, where “control” means (i) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (ii) the possession, directly or

indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
		
	1.2
	“Clinical Trial” means clinical research, studies and experiments on human participants for the purpose of examining the safety and efficacy of investigational pharmaceutical products, and as a precondition for a license application.

		
	1.3
	“Company Improvements” mean any improvement, enhancement or modification to the technology that is the subject of or in relation to the Licensed Know-how and/or the Licensed Product and made, discovered, invented or otherwise acquired by the Company.

		
	1.4
	“Confidential Information” has the meaning set forth in Article 9.1 (a).

		
	1.5
	“Effective Date” means the date when this Agreement is signed by both Parties and become legally effective.

		
	1.6
	“Field of Use” means engineered autologous T-cell therapy for the treatment of cancer.

		
	1.7
	“Fosun” means Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd.

		
	1.8
	“Governmental Authority” means any governmental ministry, administration, agency or other public authority (and/or any branch of the foregoing), whether at the national, provincial, municipal or local level, or any official of the national or any provincial, municipal or local government in the respective country.

		
	1.9
	“Intellectual Property Rights” means patent rights, rights to inventions, utility models and applications, supplementary protection certificates, know-how and trade secrets, copyright and related rights, trade marks and services marks, trade names and domain names, rights in goodwill and the right to sue for passing off and unfair competition, rights in designs, rights in computer software, database rights, rights to preserve the confidentiality of information, rights to apply for any related intellectual property right registration or certificate, rights to apply any of the above and any related improvements, renewals or extensions in commercial use, as well as rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist, now or in the future, in any part of the world.

		
	1.10
	“JV Contract” means the Sino-foreign Co-operative Joint Venture Contract concluded between Kite and Fosun on January 10, 2017. 

		
	1.11
	“Kite Improvements” mean any improvement, enhancement or modification to the Licensed Know-how and/or the Licensed Product made, discovered, invented or acquired solely by Kite during the Term that is necessary or reasonably useful to develop, manufacture or commercialize the Licensed Product in the Field in the Territory and that is not subject to the approval of any third party for granting the Company with such right to use the Kite Improvements, provided that if such approval is required, Kite shall use its commercially reasonable efforts to obtain such approval.

		
	1.12
	“Kite Territory” means worldwide outside the Territory.

		
	1.13
	“Licensed Know-how” means processes, practices, specifications, formulations, formulae, procedures, and other special knowledge, skill and experience pertaining to the Licensed Product, in any tangible or intangible form, controlled by Kite and listed in Schedule 1 of this Agreement, any Company Improvements and any Kite Improvements relating to any of the foregoing.

		
	1.14
	“Licensed Product” means KTE-C19, or if swapped pursuant to Article 10, the swapped Kite Product provided to the Licensee according to Article 10.

		
	1.15
	“Medical Authority” means the National Health and Family Planning Commission of the PRC, the China Food and Drug Administration (CFDA) or any other competent authorities (including any of their competent branches) which have the power to approve the Clinical Trial or commercialization of the Licensed Products in the Territory.

		
	1.16
	“Regulatory Approval” means any and all approvals (including regulatory approval applications, supplements, amendments, and pre- and post-approvals, where applicable), licenses, registrations, filings or authorizations of any Medical Authority that are necessary for the commercialization of the Licensed Product in the Territory.

		
	1.17
	“Technical Service Agreement” means the Technical Service Agreement to be concluded between Kite and the Company pursuant to the key terms and conditions stipulated under the JV Contract.

		
	1.18
	“Term” has the meaning set forth in Article 15.1.

		
	1.19
	“Territory” means, for the sole purpose of this Agreement, the mainland of People's Republic of China, the Hong Kong Special Administration Region and the Macao Special Administration Region, but excluding Taiwan.

		
	1.20
	"US" means the United States of America.

		
	1.21
	"USD" means US Dollar, the lawful currency of the US.

		
	2.
	License

		
	2.1
	Exclusive Commercial Rights

Subject to the terms and conditions of this Agreement, Kite hereby grants to the Company an exclusive license to (i) the development, manufacturing, use, distribution, sale (and offer for sale or contract to sell), promotion, marketing and otherwise commercialization of the Licensed Product, and (ii) the Licensed Know-how for the purposes of development, manufacturing, use, distribution, sale (and offer for sale or contract to sell), promotion, marketing and otherwise commercialization of the Licensed Product in the Field of Use in the Territory.
		
	2.2
	Retained Intellectual Property Rights

Except for the exclusive commercial use rights as described in above 2.1, Kite shall own and retain all rights, title and interest in and to the Licensed Product and Licensed Know-how, including all Intellectual Property Rights therein. For avoidance of doubt, any rights not expressly granted under this Agreement shall be reserved to be the retained rights of Kite, unless otherwise consented to by Kite.
		
	2.3
	Sub-licensing

Without Kite's prior written consent, the Company shall not grant any sub-licenses under this Agreement to any third party or Fosun or any Affiliates of Fosun for use of the Licensed Product or Licensed Know-How.
		
	2.4
	Nothing in this Agreement shall constitute any representation or warranty regarding the safety, efficacy or quality of the Licensed Product in the Territory of the Licensed Know-How, except for otherwise stated in this Agreement.

		
	3.
	Deliver Licensed Know-how

		
	3.1
	Within [...***...] after the Effective Date, Kite shall provide, access to the Company of the Licensed Know-How according to Schedule 1 of this Agreement that is available in documents or written forms or plans, provided that the Tech Ops and Quality Know-How, including techniques and other tools, listed on Schedule 1 shall be delivered pursuant to a mutually agreed upon technology transfer plan as will be attached to the Technical Service Agreement.

		
	3.2
	The Parties acknowledge and agree that Kite shall have met its obligations pursuant to this Article 3.2 by delivering the Licensed Know-how pursuant to this Agreement and completing the technical transfer pursuant to the JV Contract and Technical Service Agreement.

		
	4.
	Quality Control and Data Exchange

		
	4.1
	The Company shall, in exercising its rights under this Agreement, comply with the specifications, standards and directions relating to the Licensed Product as notified in writing by Kite from time to time and with all applicable laws, regulations and codes of practice, provided that such specifications, standards, and directions shall be reasonable and workable for the development, manufacturing, and commercialization of the Licensed Product in the Territory.

		
	4.2
	The Company shall promptly provide Kite with copies of material written and email communications, including also summary updates of important verbal communications, relating to Clinical Trial, manufacturing, supply chain and commercialization of the Licensed Product, with any regulatory, industry or other authorities, in particular with the Medical Authority.

		
	4.3
	The Company shall not submit a package for the Licensed Product to obtain the Regulatory Approval (i) for launching Clinical Trial and (ii) for starting commercialized use in the Territory without Kite’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

		
	4.4
	The Company shall, on Kite’s request, provide Kite with details of any product complaints and adverse events it has received relating to the Licensed Product together with reports on the manner in which such complaints are being, or have been, dealt with, and shall comply with the terms and conditions set forth in the Pharmacovigilence Agreement which shall include standard terms and conditions and concluded between Kite and the Company prior to the first Clinical Trial of the Licensed Product.

		
	5.
	Development and Marketing

		
	5.1
	The Company shall not name Kite or any of its Affiliates (for the sole purpose of this Article 5.1, excluding the Company) as an entity responsible for any clinical trial for any Licensed Product in the Territory nor state or otherwise imply in any regulatory filing or other documentation relating to any clinical trial of any Licensed Product in the Territory (including, without limitation, any informed consent document) that Kite or any of its Affiliates has any responsibility or liability in

connection with the conduct of such clinical trial, except for as required by any Governmental Authority.
		
	5.2
	The Company shall use its commercially reasonable efforts to launch, promote and sell the Licensed Product in the Territory.

		
	6.
	Improvements

		
	6.1
	Any Company Improvements made, discovered, invented or otherwise acquired by the Company arising out of or in relation to use of the Licensed Know-how and Licensed Product shall be immediately without delay notified to Kite by the Company.

		
	6.2
	The Parties agree that for Company Improvements related to the subject matter of the licenses under this Agreement, Kite and the Company shall jointly own and otherwise have right, title, and interest in such Company Improvements, including the right to research, study, make, use, sell, offer for sale (other than the prohibited use under this Agreement), and apply for registration of the know-how.

		
	6.3
	The Company shall hand over the Company Improvements related technical information to Kite within [...***...] of the Company notification to Kite.

		
	6.4
	The Company, during the Term of this Agreement, shall have an exclusive commercial license to make, use, sell, and offer for sale, such Kite Improvements that are necessary, or, unless subject to Article 6.5, reasonable useful in the Territory and Field of Use, [...***...].

		
	6.5
	If during the Term, Kite obtains control of any Intellectual Property Rights that are owned or controlled by a third party that are not necessary, but are reasonably useful for the development, manufacture, or commercialization of the Licensed Products in the Field of Use in the Territory, then Kite may bring such new Intellectual Property Rights to the attention of the Company in writing, including a description of such Intellectual Property Rights, and the Parties in good faith will discuss whether such new Intellectual Property Rights should be made available for use by the Company pursuant to this Agreement for the development, manufacture or commercialization of Licensed Products in the Field of Use in the Territory. Kite will [...***...]

 

[...***...]. The Parties will discuss the rationale of including the new Intellectual Property Rights and the proposed payment allocation. If the Parties agree in writing on the economic terms for the allocation of payments for such new Intellectual Property Rights, then such new Intellectual Property Rights shall thereafter be included in the Kite Improvements. If the Company concludes that such new Intellectual Property Rights should not be licensed pursuant to this Agreement or the Parties cannot agree on the economic terms for the allocation of the payments in connection therewith, then such Intellectual Property Rights shall not be included in the Kite Improvements.
		
	6.6
	Kite shall hand over the Kite Improvements related technical information to the Company within [...***...] of the Kite notification to the Company.

		
	7.
	Capital Contribution

		
	7.1
	Based on (i) original copy of the Valuation Report which is attached to this Agreement as Schedule 2, and (ii) a Capital Contribution Agreement concluded between Kite and Fosun, which is attached to this Agreement as Schedule 3, by signing this Agreement, both Parties agree that Kite has fulfilled its capital contribution obligation under Article 7.4(a) of the JV Contract.

		
	7.2
	Taxes

[...***...]. The Company shall be responsible for reporting and [...***...] to the proper tax authority at its own cost, applying the correct amount and in a timely manner. The Company shall indemnify Kite against any liability or expense incurred by Kite as a result of not fulfilling any tax obligation relating to any payment under this Agreement. The Company shall send evidence of the tax obligation, together with proof of tax payment, to Kite within [...***...] following that tax payment to enable Kite to support a claim (if permissible) for income tax credit in respect of any amount so levied. The Company shall cooperate with Kite in claiming exemptions from such deductions or withholdings under any agreement or treaty

in effect from time to time. Kite shall cooperate with the Company to comply with any requirement from the tax authority.
		
	8.
	Protection of the Intellectual Property Rights

		
	8.1
	The Company shall immediately notify Kite in writing, giving full particulars, if any of the following matters come to its attention in the Territory:

		
	(a)
	any actual, suspected or threatened unauthorised disclosure, misappropriation or misuse of the Licensed Know-how;

		
	(b)
	any claim made or threatened that commercialization of the Licensed Product infringes third party rights;

		
	(c)
	any other form of attack, charge or claim which may affect performance of the license under this Agreement.

		
	8.2
	In respect of any of the matters listed in Article 8.1:

		
	(a)
	Kite shall, in its absolute discretion, decide what action, if any, to take, provided that such action or inaction shall not cause any material adverse effect on the Company;

		
	(b)
	Kite shall have exclusive control over, and conduct of, all claims and proceedings;

		
	(c)
	Kite shall bear the cost of any proceedings and shall be entitled to retain all sums recovered in any action for its own account;

		
	(d)
	the Company shall not make any admission other than to Kite and shall at the Kite’s expense provide Kite with all assistance that it may reasonably require in the conduct of any claims or proceedings.

		
	8.3
	The Company agrees not to commence any infringement actions in respect of any of the matters listed in Article 8.1, unless otherwise agreed in writing by Kite, or according to Article 8.4.

		
	8.4
	If any third party infringement of any of the Licensed Know-how or any Intellectual Property Rights pertaining to the Licensed Product in the Territory interferes materially in the Company’s business of the Licensed Product and Kite decides not to commence infringement actions by itself, prior to commencing any action in connection therewith, the Company shall consult with Kite and consider Kite’s recommendations regarding such action. Subject to receiving advice from experienced patent counsel that infringement proceedings stand a reasonable

chance of success, the Company shall be entitled to commence proceedings at its own cost and retain all related recoveries, and may require Kite to give the respective authorization to such proceedings and provide reasonable assistance.
		
	8.5
	The provisions of this Article 8 shall survive the termination or expiry of this Agreement.

		
	9.
	Confidentiality

		
	9.1
	During the Term and within [...***...] after expiry or termination of this Agreement, the Company shall:

		
	(a)
	maintain the confidentiality of all Intellectual Property Rights, Licensed Know-how, and any other information (whether or not technical) or method provided to the Company or its Affiliates by, or on behalf of Kite, either preparatory to, or as a result of, this Agreement, and terms and conditions of this Agreement (collectively, “Confidential Information”);

		
	(b)
	not use the Confidential Information for any purpose except for the purpose of exercising or performing its rights and obligations under this Agreement;

		
	(c)
	not disclose the Confidential Information to any third party or any of its Affiliates, including its or its Affiliate's directors, officers, employees, advisors and agents, except to those who are associated with the Company's business operation and the Confidential Information is only disclosed on a strict "must-know" basis, provided that the Company has requested the recipient to conclude a similar confidentiality commitment before disclosure.

		
	9.2
	The Company shall advise its directors, officers, employees, advisors, agents and those of its Affiliates, who receive any Confidential Information of the existence and importance of complying with the obligations set forth in Article 9.1, and require such persons to sign a confidentiality undertaking in a form acceptable to Kite. The Company shall be jointly and severally liable for breach of the confidentiality liability of its Affiliate, their directors, officers, employees, advisors and agents.

		
	9.3
	The Company shall formulate rules and regulations to cause its directors, officers, employees and agents to also comply with the confidentiality obligations set forth in this Article 9. All directors, officers, employees, advisors and agents having access to Confidential Information shall be required to sign a confidentiality undertaking in a form acceptable to Kite.

		
	9.4
	The provisions of Article 9.1 shall not apply to Confidential Information that can be proven:

		
	(a)
	to be known by the Company by written records made prior to disclosure by Kite or the Effective Date, whichever is earlier;

		
	(b)
	is or becomes public knowledge otherwise than through a breach of this Agreement;

		
	(c)
	was obtained by the Company from a third party having no obligation of confidentiality with respect to such Confidential Information; or

		
	(d)
	is required by laws, regulations, stock exchange rules, or by order of any competent court or Governmental Authority to be disclosed, provided that it gives Kite prior notice of such disclosure and takes into account the reasonable requests of Kite in relation to the content of such disclosure.

		
	9.5
	The Company will not be entitled to claim that a Confidential Information had already been known to it or was rightfully obtained from a third party, if the Company fails to inform Kite in writing (by stating the relevant circumstances) of its prior knowledge of the Confidential Information or of the rightful obtaining of the Confidential Information from a third party within a period of [...***...] after the particular Confidential Information was known by, disclosed to or obtained by the Company.

		
	9.6
	Each Party shall have the right to issue a press release to announce the execution of this Agreement as approved in writing by the other Party, which shall not be unreasonably withheld by the other Party.

		
	9.7
	The provisions of this Article 9 shall remain in force notwithstanding expiry or earlier termination of this Agreement.

		
	10.
	Non-compete

		
	10.1
	During the Term and for an additional [...***...] thereafter if terminated due to a breach of this Contract by Kite, Kite shall not:

		
	(a)
	grant any commercial use right, exclusive or non-exclusive for the Licensed Product in the Territory in the Field of Use, to any third party regarding the Licensed Know-how; and

		
	(b)
	conduct any research, development, manufacturing or other clinical or commercial activities for the Licensed Product with the Licensed Know-how (or with any other technology) in the Territory in the Field of Use, except as otherwise mutually agreed by the Parties in writing.

For the avoidance of doubt, any Passive Investment by Kite or any of its Affiliates shall not be considered as a breach of this Article 10.1.
		
	10.2
	During the Term and for an additional five (5) years thereafter if terminated due to a breach by the Company, the Company shall not and shall use its reasonable best efforts to cause its Affiliates, not to own or operate any business engaging T cell immunotherapy except as mutually agreed by the Parties in writing. For avoidance of doubt, the concept of "own" shall mean any type of actual control of a business by way of equity control, control of the board of directors, control of the management board, control by a variable interest entity, etc.

		
	11.
	Right to Swap

In the event that any U.S. FDA Approval for KTE-C19 in the US is not completed by [...***...] and no Regulatory Approval in the Territory either, the Company may request to swap KTE-C19 with another Kite Product available in the Territory, subject to the same terms and conditions under this Agreement, by providing written notice to Kite by [...***...]. For avoidance of doubt, any product which commercialized by Kite in the Territory, and which has been rejected by the Company in the exercise of the first right of refusal according to the JV Contract, shall not be raised by the Company for the swap purpose herewith.
		
	12.
	Additional Obligations of the Company 

		
	12.1
	The Company shall:

		
	(a)
	be responsible to register this Agreement with the competent authority for administration of technology import contract registration in the Territory, if required by law.

		
	(b)
	ensure to provide safe and compliant premises for the Licensed Product regarding Clinical Trial and commercialized operation;

		
	(c)
	obtain at its own expense all licenses, permits, filing and consents necessary for the Clinical Trial and commercialization of the Licensed Product in the Territory, and promptly supply copies of all of these to Kite and such further information as Kite may reasonably require;

		
	(d)
	perform its obligations in connection with the commercialization of the Licensed Product with all due skill, care and diligence including good industry practice;

		
	(e)
	only make use of the rights granted under this Agreement for the exact and sole purpose of carrying out the commercial operation as described and authorised in this Agreement;

		
	(f)
	comply with all regulations and practices in force in the Territory to safeguard Kite’s rights in the Licensed Know-how and Licensed Product.

		
	12.2
	The Company shall not, directly nor indirectly, assist any third party including its Affiliates in diminishing the rights of Kite in the Licensed Know-how and Licensed Product.

		
	12.3
	The Company acknowledges and agrees that the exercise of the license granted to the Company under this Agreement is subject to all applicable laws, enactments, regulations and other similar instruments in the Territory, and the Company understands and agrees that it shall at all times be solely liable and responsible for such due observance and performance.

		
	13.
	Additional Obligations of Kite

		
	13.1
	Kite shall use its reasonable efforts to assist the Company to register this Agreement with the competent authority for administration of technology import contract registration in the Territory, if required by law.

		
	13.2
	Kite acknowledges and agrees that the exercise of the license granted to the Company under this Agreement is subject to all applicable laws, enactments, regulations and other similar instruments in the Territory or any other jurisdiction, and Kite understands and agrees that it shall at all times be solely liable and responsible for such due observance and performance.

		
	13.3
	Kite hereby represents and warrants to the Company that it has full power and authority to grant the licenses herein granted, without the consent of any other party, and, to Kite’s knowledge, without infringing any third party’s rights.

		
	13.4
	Kite and its Affiliates represents and warrants that it has not entered into any agreement with any third party which is in conflict with the rights granted to the Company in the Territory and pursuant to this Agreement. For clarity, under this Agreement, Kite is not granting any sublicense to any agreement between Kite and a third party.

		
	13.5
	Kite and its Affiliates represents that, as of the Effective Date, it is not aware of any patents, patent applications, trademarks, trademark applications, or other intellectual property rights belonging to third parties and covering, in whole or part, 

the practice of the Licensed Know-how and Licensed Product in the Field of Use in the Territory as contemplated herein.
		
	13.6
	Kite represents that the Schedule 1 shall contain enabling Know-how that to Kite’s knowledge, and together with the licensed Technical Information under the Technology License Agreement, represents all of the material information that Kite has control of that is necessary or reasonably useful for the development, manufacturing, and commercialization of the Licensed Product in the Chinese Market, and all the Licensed Know-how as provided to the Company shall be true, accurate and not misleading in all material respects.

		
	14.
	Assignment

		
	14.1
	The Company shall not assign, transfer, mortgage, charge or deal in any other manner of its rights and obligations under this Agreement without the prior written consent of Kite.

		
	14.2
	Kite shall not assign, transfer, mortgage, charge or deal in any other manner of its rights and obligations under this Agreement without the prior written consent of the Company, except for an assignment by Kite under a Kite Sale or to a Kite Affiliate, provided however that Kite may assign this Agreement to a third party or Kite Affiliate which is capable of performing the duties and obligations under this Agreement.

		
	15.
	Duration and Termination

		
	15.1
	This Agreement shall come into force on the Effective Date and shall continue in full force and effective for a period of twenty (20) years from the Effective Date, unless terminated earlier in accordance with Article 15.2 or Article 15.3 (“Term”).

		
	15.2
	Both Parties may mutually agree to terminate this Agreement by concluding a mutual termination agreement.

		
	15.3
	Without prejudice to any rights and remedies that have accrued under this Agreement, any Party may terminate this Agreement immediately by giving a [...***...] written notice to the other Party if any of the following circumstances occurs:

		
	(a)
	the other Party commits a material breach of this Agreement and (if such breach is remediable) fails to remedy that breach within a [...***...] grace period;

		
	(b)
	a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the liquidation and early dissolution of the other Party;

		
	(c)
	the other Party is declared bankrupt or insolvent in accordance with law;

		
	(d)
	the other Party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business;

		
	(e)
	the JV Contract is terminated;

		
	(f)
	Either Party is unable to perform this Agreement due to the change of laws and regulations.

		
	15.4
	Notwithstanding any of the foregoing, for so long as Kite owns at least 40% of the equity of the Company, the termination rights as provided in this Article 15.3 shall be conditioned upon the termination of the JV Contract, except for Article 15.3(e) or as mutually agreed by both Parties.

		
	16.
	Effect of Termination

		
	16.1
	On expiration or termination of this Agreement for any reason and subject to any express provisions set out elsewhere in this Agreement:

		
	(a)
	All rights and licenses granted pursuant to this Agreement shall cease and the Company shall not thereafter use, manufacture, advertise, sell or otherwise dispose of any Licensed Know-how and Licensed Product in the Territory or elsewhere;

		
	(b)
	The Company shall be responsible in the cancellation of any registration and licenses registered pursuant to this Agreement and according to law;

		
	(c)
	Within [...***...] after the date of expiration or termination, the Company shall hand back to Kite, or at Kite’s request, destroy, at no cost to Kite all the information (whether or not technical) of a confidential nature communicated to it by Kite. The Company shall not retain copies of any such information required to be handed back to Kite or destroyed. The Company shall furnish to Kite satisfactory evidence of such destruction;

		
	(d)
	The Company shall provide Kite with copies of all Company Improvement and, at Kite’s cost, such further information as is reasonably requested by Kite; and

		
	(e)
	The Company shall stop using in any manner the names for the Licensed Product as provided under this Agreement or pursuant to the Trademark and

Name License Agreement to be concluded between the Kite and the Company.
For the avoidance of doubt, Article 16.1(d) shall not apply in case of termination by the Company due to material breach of Kite.
		
	16.2
	The expiry or termination of this Agreement, for any reason, shall not affect any provision of this Agreement which is expressed to survive or operate in the event of expiry or termination, and shall be without prejudice to any rights of either Party which may have accrued to the date of such expiry or termination.

		
	17.
	Force Majeure

Neither Party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure result from Force Majeure. In such circumstances the affected Party shall be entitled to a reasonable extension of the time for performing such obligations. If the period of delay or non-performance continues for [...***...], the Party not affected by such event may terminate this Agreement by giving a [...***...] written notice to the affected Party.
		
	18.
	Liability, Indemnity and Insurance

		
	18.1
	The Company shall indemnify Kite against any and all liabilities, costs, expenses, damages or losses (including any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal and other professional costs and expenses) suffered or incurred by Kite arising out of any breach by the Company of the terms of this Agreement.

		
	18.2
	Kite shall indemnify the Company against any and all liabilities, costs, expenses, damages or losses (including any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal and other professional costs and expenses) suffered or incurred by the Company arising out of any breach by Kite of the terms of this Agreement. Notwithstanding anything to the contrary herein, other than for indemnification obligations relating to third party claims, breaches of confidentiality, intentional torts, intentional violations of law, gross negligence or intentional misconduct, Kite shall not be liable to the Company for any indirect, special, incidental, punitive, exemplary, lost profit, cover, or consequential damages arising out of or resulting from this Agreement, even if aware of the possibility of such damages.

		
	18.3
	The Company shall, at its expense, carry product liability and comprehensive general liability insurance coverage of an amount adequate to support its liabilities under this Agreement. The Company shall ensure that such insurance policy names Kite and Fosun as co-insured with the Company and remains in effect throughout the duration of this Agreement and for a period of [...***...] after termination or expiry of the Agreement, and shall supply Kite with a copy of such policy on request.

		
	18.4
	Nothing in this Agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by any Party's gross negligence, fraud or breach of criminal laws.

		
	18.5
	Without prejudice to any other rights or remedies that any Party may have, each Party acknowledges and agrees that damages alone may not be an adequate remedy for any breach of the terms of this Agreement by itself. Accordingly, each Party shall be entitled to the remedies of injunction, specific performance or other discretionary relief for any threatened or actual breach of the terms of this Agreement.

		
	19.
	Governing Law and Dispute Settlement

		
	19.1
	The formation, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the People’s Republic of China.

		
	19.2
	In the event of any dispute arises between the Parties out of or in relation to this Agreement, including any dispute regarding its existence, validity, interpretation, performance, breach or termination, the Parties shall attempt in the first instance to resolve such dispute through amicable means.

		
	19.3
	If the dispute has not been resolved by amicable means within [...***...] after either Party has given written notice to the other Party requesting the commencement of such consultation, then the dispute shall be submitted to the discussion between CEOs of both shareholders of the Company, in line with Article 33.2 of the Company's JV Contract.

		
	19.4
	If the dispute is still not resolved within [...***...] upon the CEOs discussion in above 18.3, then either Party may submit the dispute to the Hong Kong International Arbitration Center (“HKIAC”) for arbitration in accordance with its then applicable arbitration rules. The arbitration shall be conducted by three (3)

arbitrators appointed in accordance with the said arbitration rules and in accordance with the following directions:
		
	(a)
	The arbitration proceedings shall be conducted in English and the arbitration tribunal shall refer to the English version of this Agreement only;

		
	(b)
	all arbitrators shall be fluent in English;

		
	(c)
	the arbitration proceedings shall be administered by HKIAC in Hong Kong and the seat of arbitration as well as the place of hearings and other procedural steps shall be Hong Kong;

		
	(d)
	The losing Party shall bear, in proportion to the percentage it has lost the case, the arbitration costs and other Party's reasonable attorney fees.

		
	19.5
	The Parties hereby agree that any arbitration award rendered in accordance with the provisions of this Article 18 shall be final and binding upon the Parties, and the Parties further agree that such award may be enforced by any court having jurisdiction over any Party against which the award has been rendered, or where the assets of such Party is located.

		
	19.6
	In any arbitration proceedings, any legal proceedings to enforce the arbitration award, or any other legal proceedings between the Parties pursuant to or relating to this Agreement, each Party expressly waives the defence of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state or is otherwise entitled to immunity.

		
	19.7
	Upon submission of any dispute to arbitration, the Parties shall continue to exercise their remaining respective rights, and fulfil their remaining respective obligations under this Agreement, except for any matters related to the dispute in arbitration.

		
	20.
	Miscellaneous

		
	20.1
	Waiver

To the extent permitted by PRC law, the failure or delay on the part of a Party to exercise a right, power or privilege under this Agreement and any contracts attached as Appendices hereto shall not operate as a waiver thereof, nor shall any single or partial exercise of a right, power or privilege preclude any other future exercise thereof, unless explicitly otherwise regulated herein.
		
	20.2
	Binding Effect and Amendments

This Agreement is made for the benefit of the Parties and their respective lawful successors and assignees. No amendment or other modification of this Agreement shall in any event be effective unless the same is made in writing and signed by an authorized representative of each Party. To the extent required by law, the effectively amended Agreement shall be submitted to the relevant Governmental Authorities for filing and/or registration.
		
	20.3
	Severability

If any part of this Agreement shall become or be declared void or invalid by virtue of law or government order or court decision, the remaining parts shall remain valid and this Agreement shall be fulfilled by the Parties in accordance with its general principles, and the void or invalid provision(s) shall be replaced by such valid provision(s) agreed to by the Parties as closest reflecting the economic intentions of the Parties at the time of signing this Agreement.
20.7    Language
This Agreement is executed in English language in four (4) originals each (at least one (1) for Kite and one (1) for the Company and the remaining two (2) originals for submission to the Governmental Authorities, where necessary Chinese translation shall be prepared for this Agreement.
20.8    Entire Agreement
This Agreement and the Appendices attached hereto together constitute the entire agreement between the Parties with respect to the subject matter of this Agreement and they together supersede all prior discussions, negotiation and agreements between the Parties.
20.9    No Partnership or Agency
Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the Parties, constitute either Party the agent of the other Party, or authorise either Party to make or enter into any commitments for or on behalf of the other Party.
20.10    Notices
Any notice or written communication provided for in this Agreement by each Party to the other shall be made in English by courier service delivered letter, email, promptly transmitted or addressed to the appropriate Party. The date of receipt of a notice or communication hereunder shall be deemed to be [...***...] after the letter is given to the courier service in the case of a courier service delivered letter

and [...***...] days after dispatch of an E-mail, unless an earlier delivery date can be evidenced. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.
		
	(a)
	Kite

KP EU C.V.
190 Elgin Avenue, George Town,
Grand Cayman KY1-9005, Cayman Islands
E-mail: legal@kitepharma.com
		
	(b)
	The Company

Fosun Pharma Kite Biotechnology Co., Ltd.
2/F, Pilot Building, No.222 Kangnan Road, China (Shanghai) Pilot Free
Trade Zone, Shanghai 201203, PRC
E-mail: qiyy@fosunpharma.com

This Agreement has been duly signed by the Parties as follows:
KP EU C.V.
By:             Intertrust Directors (Cayman) Ltd.
Name:       Padraig Hoare
Title:         Authorized Signatory
Signature:     /s/ Padraig Hoare
and
Name:         Julie Hughes
Title:         Authorized Signatory
Signature:     /s/ Julie Hughes
Fosun Kite Biotechnology Co, Ltd. (Chop)
By
Name:         Richard Liqun Wang
Title:         Legal Representative
Signature:    /s/ Richard Liqun Wang

Schedule 1
List of Licensed Know-how
Ÿ    [...***...]

Schedule 2
Valuation Report
Valuation report 
KTE-C19 related exclusive license 
to be contributed by KP EU C.V. 
Reference No:    H.W.P.B.Z. (2017) 
No.001
Shanghai Huwei Assets Valuation Co., Ltd. 
January 5, 2017

Important message to any person not authorized to have access to this report
Any person who is not Kite Pharma Inc. (“Kite”, ”you” or the “Engaging Party”) or who has not signed and returned to Shanghai Huwei Assets Valuation Co., Ltd. (“we” or “Huwei”) a waiver letter is not authorized to have access to this report.
Should any unauthorized person obtain access to and read this report, by reading this report and making use of its contents, such person accepts and agrees to the following terms:
The reader of this report understands that the work performed by Huwei was performed in accordance with the terms of engagement agreed between Kite and Huwei, and the work was performed exclusively for target audience’s sole benefit and use. The basis of preparation of the attached report is discussed in the important notice on page 2.
The reader of this report acknowledges that this report was prepared at the requirements of target audience, which is responsible for determining whether relevant terms and the report consider all aspects that may be relevant to target audience’s needs. The report reflects the specific information requirements of target audience and may not consider all aspects that may be relevant for the needs of the reader. The report shall thus not be regarded as suitable for use by any person or persons other than target audience.
The reader of this report acknowledges that we carried out our work subject to our terms of business as agreed in our engagement letter dated November 18, 2016 (the “Engagement Letter”) and the variation letter signed on January 1, 2017 (“Variation Letter”). The terms of business contain, inter alia, clauses that limit Huwei's liability towards such amount as agreed in our Engagement Letter. We point out that the possible risk in connection with this report may be higher than the maximum liability as stated within our Engagement Letter.
The reader of this report acknowledges that a party (including the addressee's legal and other professional advisers) other than the addressee may only rely on this report if it has executed a formal letter of reliance with Huwei. If the reader has not executed a formal letter of reliance with Huwei, we (including the legal representative, chief valuer, public valuers and other valuation practitioners who possess professional valuation knowledge):
		
	—
	owe the reader no duty (whether in contract or in tort or under statute or otherwise) with respect to or in connection with the report or any part thereof;

		
	—
	will have no liability to the reader for any loss or damage suffered or costs incurred by the reader or any other person arising out of or in connection with the provision to the reader of the report or any part thereof, however the loss or damage is caused, including, but not limited to, as a result of negligence but not as a result of the fraud or dishonesty of Huwei.

Important Notice
Kite, through one of its subsidiaries, KP EU C.V. (“KP EU” or the “Owner of Target Assets”), is contemplating to contribute an exclusive license to commercialization of KTE-C19, and relevant know-how for the purposes of commercialization of KTE-C19 in China mainland, Hong Kong and Macao (the “Subject” or the “Exclusive License”) to setup a joint venture (“JV”) (the “Proposed Transaction”). Kite, as the engaging party, engaged us to estimate the market value of the Subject as at December 31, 2016 (the “Valuation Date”).
We attach the valuation report in English in accordance with the Engagement Letter and its Variation Letter. The Engagement Letter (and the Variation Letter) is contained in Appendix 1. Please note this document is an English-language translation of the Chinese valuation report, prepared for your reference only. In the event of conflict of meaning between the English and Chinese versions, the Chinese version shall prevail.
Our work commenced on November 18, 2016 and was completed on January 5, 2017. We have not undertaken the responsibility to update our report for events, circumstances or information provided after that date. Notwithstanding this, we reserve the right, should we consider it necessary, to revise our estimate of market value in light of any information which existed at the Valuation Date but which becomes known to us subsequent to the date of this report.
In performing the valuation analysis, the information we used was primarily provided by the management of Kite and KP EU (the “Management”). We do not assume any responsibility or liability for the reliability of the information which shall be held by the Management. Details of our principal information sources are set out in the report and we have satisfied ourselves, so far as possible, that the information presented in our report is consistent with other information that was made available to us in the course of our work in accordance with the terms of our Engagement Letter.
This engagement is not an assurance engagement conducted in accordance with any generally accepted assurance standards and consequently no assurance opinion is expressed.
We must emphasize that the realization of any prospective financial information set out within our report is dependent on the continuing validity of the assumptions on which it is based. The assumptions will need to be reviewed and revised to reflect such changes in trading patterns, cost structures or the direction of the business as they emerge. We accept no responsibility for the realization of any prospective financial information. Actual results are likely to differ from those shown in the prospective financial information because events and circumstances frequently do not occur as expected, and the differences may be material.
Except as otherwise provided by applicable law, this valuation is solely for your own use, on a confidential basis, in connection with the purpose mentioned earlier, and is not to be quoted or referred to, in whole or in part, in any other connection without our prior written consent in each specific instance. We do not assume responsibility or liability for losses incurred by any party whatsoever as a result of the circulation, publication, reproduction or use of this report contrary to the provisions of this term.
Statement by the valuation professionals
Kite, through one of its subsidiaries, KP EU, is contemplating to contribute the Exclusive License to a to-be-setup JV. Kite engaged us to estimate the market value of the Subject as at December 31, 2016. As the valuation professionals (including public valuers and other valuation practitioners who possess professional valuation knowledge and practice experience) who execute this engagement, we declare the following:
		
	—
	We comply with the related laws, regulations and “Asset Valuation Guidelines of the People’s Republic of China” (“PRC Asset Valuation Guidelines”), and abide by the principles of independence, objectivity and impartiality. The contents of our valuation report are objective, and we are responsible for the reasonableness of the valuation conclusion based on the information obtained in the course of our valuation work.

		
	—
	The “Valuation Data Pack Provided to Valuation Professionals” as provided by the Owner of Target Assets is confirmed by the Owner of Target Assets through signing or stamping on each page of such pack. It is the Owner of Target Assets’ responsibility to ensure the information provided are authentic, legitimate, and complete. It is your responsibility and responsibility of any other involved party who might have access to this report to use this report appropriately.

		
	—
	We have no existing or prospective interest in the Subject as stated in this report, nor with any involved party that are stated in this report. We are not biased for or against any involved party that are stated in this report.

		
	—
	We did not perform site inspection of the Subject and involved assets as stated in the valuation report. We have given the necessary attention to the legal ownership of the Subject and involved assets and verified the corresponding legal documentations. We disclosed our findings faithfully in this valuation report. In order to satisfy the requirements of issuing the report, we have requested the client and involved parties to complete necessary procedures to make the legal ownership uncontroversial.

		
	—
	Our analysis, judgments and conclusion are limited by the assumptions and conditions as stated in this report. The readers should consider the information stated in Section IX and XI of this report and their impact to the valuation conclusion.

		
	—
	Our work is to analyze, estimate and present our professional opinions on the market value of the Subject as at the Valuation Date. We do not accept responsibility of the decision made by the Engaging Party and involved parties, and the valuation conclusion only acts as a reference rather than as the guarantee of the realizable price.

Contents
Abstract of Valuation Report    6
Valuation Report    7
		
	I.
	The Engaging Party, the Owner of Target Assets and other users

of the valuation report as agreed    7
		
	II.
	Purpose of valuation    8

		
	III.
	Subject and scope of valuation    8

		
	IV.
	Value definition    9

		
	V.
	Valuation Date    10

		
	VI.
	Basis of valuation and sources of information    10

		
	VII.
	Valuation methodologies    12

		
	VIII.
	Implementation of valuation procedures    13

		
	IX.
	Valuation assumptions    14

		
	X.
	Valuation conclusions    15

		
	XI.
	Special notes to the reader    16

		
	XII.
	Restrictions on the use of this report    17

		
	XIII.
	Report date    18

Appendix19

Abstract of Valuation Report
KTE-C19 related exclusive license to be contributed by KP EU C.V.
Reference No:  H.W.P.B.Z. (2017) No. 001
[...***...] 

Valuation Report
KTE-C19 related exclusive license to be contributed by KP EU C.V.
Reference No:  H.W.P.B.Z. (2017) No. 001
 [...***...] 

[...***...] 

[...***...] 

[...***...] 

[...***...] 

[...***...] 

[...***...] 

[...***...] 

[...***...] .

[...***...] 

[...***...] 

[...***...]

I.    Report date
Report date is January 5, 2017.

Legal representative:  Faye Fei

Public valuer:  Faye Fei

Public valuer:  Doris Liu
Shanghai Huwei Assets Valuation Co., Ltd.
January 5, 2017

Appendix
Contents
Appendix 1:    Copy of the supporting document for the Proposed Transaction and purpose of valuation
		
	—
	Copy of Engagement Letter (and Variation Letter)

Appendix 2:    Copy of the Engaging Party’s and the Owner of Target Assets’ corporate business licenses
Appendix 3:  Copy of the legal ownership documents
		
	—
	Platform Contribution Transaction Agreements (2015 and 2017);

		
	—
	Amendment No 1, 2 and 3 to 2015 Platform Contribution Transaction Agreement; and

		
	—
	Amended and Restated Research And Development Cost Sharing Agreement

Appendix 4: Representation letters of the Engaging Party and the Owner of Target Assets
Appendix 5: Signed original representation letter of the public valuers
Appendix 6:     Qualification of Huwei
Appendix 7:    Copy of Huwei’s business license
Appendix 8:    Copy of certificates of the public valuers
Appendix 9:    Standard Valuation Schedules
 

Schedule 3
Format of Capital Contribution Agreement
Party A: Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. 
Party B: KP EU C.V.
Party A and Party B are shareholders of the Sino-foreign joint venture Fosun Pharma Kite Biotechnology Co., Ltd. (“JV”). Both parties hereby agree that, the JV shall use the exclusive license from Party B to the JV for commercialization of KTE-C19 in the Territory as defined and described under the Product and Know-how License Agreement concluded between Party B and the JV.
According to a Valuation Report issued by [valuation firm] on [date], such exclusive license is evaluated to have a market value of [ ... ]. Based on such and the signed Product and Know-how License Agreement, both Parties agree that the exclusive license under the Product and Know-how License Agreement shall be the capital contribution from Party B to the JV, at an amount of USD [...***...] (USD [...***...]).
By signing the Product and Know-how License Agreement, Party B has fulfilled its capital contribution obligation under the respective Joint Venture Contract, and the JV shall arrange for a capital verification report to be issued by a licensed CPA in China.
Party A:    Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd.
By
Name: [...] 
Title: [...]
Signature:

Party B:    KP EU C.V.
By
Name: [...] 
Title: [...]
Signature:

Appendix 2
TECHNOLOGY LICENSE AGREEMENT

between
KP EU C.V.
and
Fosun Pharma Kite Biotechnology Co., Ltd.

		
	1.
	Definitions    4

		
	2.
	License    7

		
	3.
	Deliver Technical Information    7

		
	4.
	Provision of Technical Assistance    8

		
	5.
	Quality Control and Data Exchange    8

		
	6.
	Development and Marketing    9

		
	7.
	Improvements    9

		
	8.
	Fees    10

		
	9.
	Protection of the Intellectual Property Rights    14

		
	10.
	Confidentiality    15

		
	11.
	Non-compete    17

		
	12.
	Right to Swap    18

		
	13.
	Additional Obligations of the Company    18

		
	14.
	Additional Obligations of Kite    19

		
	15.
	Assignment    21

		
	16.
	Duration and Termination    21

		
	17.
	Effect of Termination    22

		
	18.
	Force Majeure    23

		
	19.
	Liability, Indemnity and Insurance    23

		
	20.
	Governing law and dispute resolution    24

		
	21.
	Miscellaneous    25

Schedule 1: List of KTE-C19 Licensed Patents
Schedule 1: List of KTE-C19 Licensed Data
Schedule 3: NIH Agreement

This License Agreement (the “Agreement”) is effective as of April 27th, 2017 by and between:
		
	(1)
	KP EU C.V., a limited partnership that is governed by the laws of The Netherlands, having its registered seat at Amsterdam, the Netherlands and its business address at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands, registered with the Dutch trade register under number 64185958 (“Kite”).

		
	(2)
	Fosun Pharma Kite Biotechnology Co., Ltd.  
a limited liability company organized and existing under laws of the People’s Republic of China whose registered office is at No.222 Kangnan Road, Shanghai 201203, PRC. (the “Company”).

(Kite and the Company are hereinafter referred to individually as a “Party” and collectively as the “Parties”)
Preambles
WHEREAS, the Company is a joint venture established by Kite and Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (“Fosun”) in the pursuit of successful commercialization of KTE-C19 and potentially additional cancer immunotherapy products in the Territory (as defined below).
WHEREAS, Kite is in possession of certain technology pertaining to the Clinical Trial (as defined below), manufacturing, using, distribution, selling, promotion, marketing and otherwise commercialization of the Licensed Product (as defined below).
WHEREAS, Kite and the Company have concluded a Product and Know-how License Agreement for the exclusive commercial use right of KTE-C19 in the Territory (as defined below) and commercialization of KTE-C19 relies on a series of related enabling patents and data, which should be subject to a separate license arrangement between the Parties.
WHEREAS, Kite has agreed to grant, and the Company has agreed to purchase an exclusive license to such enabling patents and data in the Territory (as defined below), subject to certain terms and conditions.
NOW THEREFORE, in consideration of the mutual promises of the Parties, and for good and valuable consideration, it is agreed by and between the Parties as follows:

		
	1.
	Definitions

Unless otherwise provided herein, the capitalized terms used in this Agreement shall have the same meanings as defined in the JV Contract. For the purposes of this Agreement the following capitalized terms are defined in this Article 1 and shall have the meaning specified herein.
1.1    “Affiliate” means, for the purpose of this Agreement, mean, as to a Party, any entity directly or indirectly controlling, controlled by or under common control with such Party, where “control” means (i) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (ii) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
1.2    “Clinical Trial” means clinical research, studies and experiments on human participants for the purpose of examining the safety and efficacy of investigational pharmaceutical products, and as a precondition for a license application.
1.3    “Company Improvements” means any improvement, enhancement or modification to the technology that is the subject of or in relation to the Licensed Technology, Licensed Patents, the Licensed Data and/or the Licensed Product and made, discovered, invented or otherwise acquired by the Company.
1.4    “Confidential Information” has the meaning set forth in Article 10. 1 (a).
1.5    “Effective Date” means the date when this Agreement is signed by both Parties and become legally effective.
1.6    “Field of Use” means engineered autologous T-cell therapy for the treatment of cancer.
1.7    “Fosun” means Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd.
1.8    “Governmental Authority” means any governmental ministry, administration, agency or other public authority (and/or any branch of the foregoing), whether at the national, provincial, municipal or local level, or any official of the national or any provincial, municipal or local government in the respective country.
1.9    “Intellectual Property Rights” means patent rights, rights to inventions, utility models and applications, supplementary protection certificates, know-how and trade secrets, copyright and related rights, trade marks and services marks, trade names and domain names, rights in goodwill and the right to sue for passing off and unfair competition, rights in designs, rights in computer software, database rights, rights to preserve the confidentiality of information, rights to apply for any related intellectual property right registration or certificate, rights to apply any of the above and any related improvements, renewals or extensions in commercial use, as well as rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist, now or in the future, in any part of the world.
1.10    “JV Contract” means the Sino-foreign Co-operative Joint Venture Contract concluded between Kite and Fosun on January 10, 2017.
1.11    “Kite Improvements” mean any improvement, enhancement or modification to the Licensed Technology made, discovered, invented or acquired solely by Kite during the Term that is necessary or reasonable useful to develop, manufacture or commercialize the Licensed Product in the Field in the Territory and that is not subject to the approval of any third party for granting the Company with such right to use the Kite Improvements, provided that if such approval is required, Kite shall use its commercially reasonable efforts to obtain such approval.
1.12    “Kite Territory” means worldwide outside the Territory.
1.13    “Licensed Data” means any and all Licensed Product related commercialization enabling data including pre-clinical data, Clinical Trial data, analytical and quality control data, stability data and other manufacturing data, controlled by Kite and necessary in the manufacture, sale or use of the Licensed Product and listed in Schedule 2 of this Agreement or provided pursuant to the Technical Service Agreement, any Company Improvements and any Kite Improvements relating to any of the foregoing.
1.14    “Licensed Patents” means the patents and patent applications related to the enabling items of the Licensed Product, including registered patents and patent applications in the Territory, any divisionals, continuations, reissues, re-examinations and the like, short particulars of which are set out in Schedule 1 to this Agreement.
1.15    “Licensed Product” means KTE-C19 or if swapped pursuant to Article 12, the swapped Kite Product, the exclusive commercial rights of which has been granted by Kite to the Company under the Product and Know-How License Agreement entered into by Kite and the Company as of __________, 2017.
1.16    “Licensed Technology” means any technical information and data licensed or transferred from Kite to the Company in connection to this Agreement, including but not limited to the Licensed Patents, Licensed Data and Licensed Product.
1.17    “Medical Authority” means the National Health and Family Planning Commission of the PRC, the China Food and Drug Administration (CFDA) or any other competent authorities (including any of their competent branches) which have the power to approve the Clinical Trial or commercialization of the Licensed Products in the Territory.

1.18    “Net Sales” means with respect to any Licensed Product, the gross sales price of such Licensed Product invoiced by the Company, its Affiliates, sub-licensees or their respective Affiliates to customers who are not Affiliates (or are Affiliates but are the end users of such Licensed Product) in bona fide arms-length transactions, less, [...***...] such Licensed Product. If any sales of Licensed Products are made in transactions that are not at arm’s length, the gross amount for such Licensed Products to be included in the calculation of Net Sales [...***...]. Net Sales shall be determined from the books and records of Company or its Affiliates or sub-licensees, maintained in accordance with U.S. generally accepted accounting principles, consistently applied, or in the case of sub-licensees, such similar accounting principles, consistently applied.
1.19    “Regulatory Approval” means any and all approvals (including regulatory approval applications, supplements, amendments, and pre- and post-approvals, where applicable), licenses, registrations, filings or authorizations of any Medical Authority that are necessary for the commercialization of the Licensed Product in the Territory.
1.20    “Technical Information” means the information and data listed in Schedule 2.
1.21    “Technical Service Agreement” means the Technical Service Agreement concluded between Kite and the Company pursuant to the key terms and conditions stipulated under the JV Contract.

1.22    “Term” has the meaning set forth in Article 16.1.
1.23    “Territory” means, for the sole purpose of this Agreement, the mainland of People’s Republic of China, the Hong Kong Special Administration Region and the Macao Special Administration Region, but excluding Taiwan.
1.24    “US” means the United States of America.
1.25    “USD” means US Dollar, the lawful currency of the US.
		
	2.
	License

2.1    Technology License
Subject to the terms and conditions of this Agreement, Kite hereby grants to the Company an exclusive license to use the Licensed Patents and Licensed Data to enable the development, manufacturing, use, distribution, sale (and offer for sale or contract to sell), promotion, marketing, and otherwise commercialization of the Licensed Product in the Field of Use in the Territory.
2.2    Retained Intellectual Property Rights
Except for the exclusive license as described in above 2.1, Kite shall own and retain all rights, title and interest in and to the Licensed Patents, Licensed Data and Licensed Product, including all Intellectual Property Rights therein. For avoidance of doubt, any rights not expressly granted under this Agreement shall be reserved to be the retained rights of Kite, unless otherwise consented to by Kite.
2.3    Sub-licensing
Without Kite’s prior written consent, the Company shall not grant any sub-licenses under this Agreement to any third party or Fosun or any Affiliates of Fosun for any use of the Licensed Technology.
2.4    Nothing in this Agreement shall constitute any representation or warranty regarding the safety, efficacy or quality of the Licensed Product in the Territory of the Licensed Patents or Licensed Data.
		
	3.
	Deliver Technical Information

3.1    Within [...***...] after the Company has fully paid the entrance fee pursuant to Article 8, Kite shall provide access to the Company of the Technical Information on the list of Technical Information in the Schedule 2 to this Agreement, except the US Biologics License Application which shall be provided after U.S. FDA approval has been granted. For any delivery, the Company shall be responsible for the payment of all reasonable shipping cost within [...***...] of an invoice from Kite.
		
	4.
	Provision of Technical Assistance

During the Term, Kite shall provide reasonable technical assistance, [...***...] and according to the terms and conditions set forth in the Technical Service Agreement concluded between Kite and the Company, to enable the Company to exploit the license under this Agreement.

Each Party further undertakes that it will comply with any of its obligations under the Technical Service Agreement.
		
	5.
	Quality Control and Data Exchange

5.1    The Company shall, in exercising its rights under this Agreement, comply with the specifications, standards and directions relating to the Licensed Product as notified in writing by Kite from time to time and with all applicable laws, regulations and codes of practice, provided that such specifications, standards, and directions shall be reasonable and workable for the development, manufacturing, and commercialization of the Licensed Product in the Territory.
5.2    The Company shall promptly provide Kite with copies of material written and email communications, including also summary update of important verbal communications, relating to Clinical Trial, manufacturing, supply chain and commercialization of the Licensed Product, with any regulatory, industry or other authorities, in particular with the Medical Authority.
5.3    The Company shall not submit a package for the Licensed Product to obtain the Regulatory Approval (i) for launching Clinical Trial and (ii) for starting commercialized use in the Territory without Kite’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
5.4    The Company shall provide Kite with details of any product complaints and adverse events it has received relating to the Licensed Product together with reports on the manner in which such complaints are being, or have been, dealt with, and shall comply with the terms and conditions set forth in the Pharmacovigilence Agreement which shall include standard terms and conditions and concluded between Kite and the Company prior to the first Clinical Trial of the Licensed Product.
		
	6.
	Development and Marketing

6.1    The Company shall not name Kite or any of its Affiliates (for the sole purpose of this Article 6.1, excluding the Company) as an entity responsible for any clinical trial for any Licensed Product in the Territory nor state or otherwise imply in any regulatory filing or other documentation relating to any clinical trial of any Licensed Product in the Territory (including, without limitation, any informed consent document) that Kite or any of its Affiliates has any responsibility or liability in connection with the conduct of such clinical trial, except for as required by any Governmental Authority.

6.2    The Company shall use its commercially reasonable efforts to launch, promote and sell the Licensed Product in the Territory.
		
	7.
	Improvements

7.1    Any Company Improvements made, discovered, invented or otherwise acquired by the Company arising out of or in relation to use of the Licensed Patents and Licensed Data shall be immediately without delay notified to Kite by Company.
7.2    The Parties agree that for Company Improvements related to the subject matter of the licenses under this Agreement, Kite and the Company shall jointly own and otherwise have right, title, and interest in such Company Improvements, including the right to research, study, make, use, sell, offer for sale (other than the prohibited use under this Agreement), and apply for registration of the Intellectual Property Rights related thereto.
7.3    The Company shall hand over the Company Improvements related technical data to Kite within [...***...] of the Company notification to Kite.
7.4    The Company, during the Term of this Agreement, shall have an exclusive commercial license to make, use, sell, and offer for sale, such Kite Improvements that are necessary, or, unless subject to Article 7.5, reasonable useful in the Territory and Field of Use, without the need to [...***...], provided that [...***...].
7.5    If during the Term, Kite obtains control of any Intellectual Property Rights that are owned or controlled by a third party that are not necessary, but are reasonably useful for the development, manufacture, or commercialization of the Licensed Products in the Field of Use in the Territory, then Kite may bring such new Intellectual Property Rights to the attention of the Company in writing, including a description of such Intellectual Property Rights, and the Parties in good faith will discuss whether such new Intellectual Property Rights should be made available for use by the Company pursuant to this Agreement for the development, manufacture or commercialization of Licensed Products in the Field of Use in the Territory. Kite will propose an equitable allocation of any non-product specific upfront payments, milestone payments or similar payments payable under such third party license for such new Intellectual Property Rights (including, for example, an upfront payment to access technology, milestone payments that are not product specific or are

payable upon the first product to achieve the applicable milestone event, etc.). The Parties will discuss the rationale of including the new Intellectual Property Rights and the proposed payment allocation. If the Parties agree in writing on the economic terms for the allocation of payments for such new Intellectual Property Rights, then such new Intellectual Property Rights shall thereafter be included in the Kite Improvements. If the Company concludes that such new Intellectual Property Rights should not be licensed pursuant to this Agreement or the Parties cannot agree on the economic terms for the allocation of the payments in connection therewith, then such Intellectual Property Rights shall not be included in the Kite Improvements.
7.6    Kite shall hand over the Kite Improvements related technical data to the Company within [...***...] of the Kite notification to the Company.
		
	8.
	Fees

8.1    Entrance Fee
Within [...***...] after the Effective Date, the Company shall pay to Kite the sum of USD forty million (40,000,000) as entrance fee.
8.2    Milestone payments
Without prejudice to the entrance fee and the royalties agreed in this Agreement, the Company shall make the milestone payments set forth below to Kite within [...***...] after achievement of each milestone event.
	
		
	Milestone Event
	Milestone  
Payment

	(a)  [...***...]
	USD [...***...]

	(b)  [...***...]
	USD [...***...]

	(c)  [...***...]
	USD [...***...]

8.3    Royalties

Without prejudice to the entrance fee and milestone payments agreed in this Agreement, as of [...***...], Kite shall be entitled to receive royalties equal to [...***...] percent ([...***...]%) of the Net Sales of the Company.
8.4    Payment of royalty payments
The royalty payments are due and payable within [...***...] after the financial report of the previous quarter has been approved by the Company’s board of directors. For purpose of calculating the payable amount, the financial figures in the Company’s reviewed quarterly report for the previous quarter shall apply.
8.5    Taxes
		
	(a)
	The Parties acknowledge that the Company may be legally required to withhold and remit a portion of the entrance fee, milestone payments, and royalties to the tax authority in the Territory as a tax, charge or duty. The Company shall be responsible for reporting and payment of all the taxes to the proper tax authority in the Territory at its own cost, applying the correct amount and in a timely manner. The Company shall indemnify Kite against any liability or expense incurred by Kite as a result of not fulfilling any tax obligation relating to any payment under this Agreement. The Company shall send evidence of 

		
	(b)
	the tax obligation, together with proof of tax payment, to Kite within [...***...] following that tax payment to enable Kite to support a claim (if permissible) for income tax credit in respect of any amount so withheld. The Company shall cooperate with Kite in claiming exemptions from such deductions or withholdings under any agreement or treaty in effect from time to time.

		
	(c)
	The Parties agree that the entrance fee, milestone payments, royalties and any other sums payable under this Agreement are [...***...]. For clarity, any taxes or levies which the tax authority in the Territory requires to be charged on any payments made by the Company to Kite under this Agreement shall be [...***...]. 

Any other taxes imposed by the tax authority in Kite’s jurisdiction related to Kite’s charge under this Agreement shall be [...***...]. Kite shall cooperate with the Company to comply with any requirement from the tax authority.
8.6    Payment Method
All payments under this Agreement shall be paid in cash in USD to the bank account to be designated in writing by Kite.
If the Company is prevented or blocked by a Governmental Authority in any country from making any payment due under this Agreement then the Company shall, within the prescribed period for making such payment, use its best endeavours to secure from any such authority permission to make such payment and shall make it within [...***...] of receiving all the permission. If such permission is not received within [...***...] of the Company making a request for such permission then, Kite and the Company shall negotiate in good faith for a solution, provided that if no solution is found and payment is not made within [...***...] of the original payment due date, Kite may terminate this Agreement.
8.7    Late Payment
		
	(a)
	In the event of any delay in paying any sum due under this Agreement by the due date, for each day of delay in payment, the Company shall pay to Kite a liquidated damages equal to [...***...] percent ([...***...]%) of the total overdue payment amount

		
	(b)
	In the event that the Company proves any delay in payment, as according to the reasonable judgement of the CEO of the Company, is caused by delay of the in charge tax authority, technology import contract registration authority, foreign exchange authority or any other Governmental Authorities, which is not attributable to the Company in failure to provide any legally required tax filing or foreign exchange administration related documentation, a reasonable grace period shall be given to the Company, of no more than [...***...], during which the liquidated damages in above Article 8.7(a) shall not apply. In such case the Company shall proactively communicate with the related Governmental Authority and provide a solution, and Kite shall provide reasonable assistance that is necessary. For the avoidance of doubt, if such payment can’t be made within the abovementioned grace period due to the reason that is attributed to any Governmental Authority, then Article 8.6 shall apply.

		
	(c)
	In the event that the late payment of the entrance fee set forth in Article 8.1 is caused by Kite’s failure to provide a valuation report as according to Article 14.7 of this Agreement, the due date of such payment shall be extended by [...***...]. If Governmental Authorities do not permit the entrance fee payment after delivery of the valuation report, the Parties shall in good faith work together to resolve the Governmental Authorities concerns over a [...***...] following the delivery of the valuation report. During such period, the liquidated damages in above Article 8.7(a) shall not apply. If the full entrance fee can’t be made within the abovementioned grace period, then Article 8.6 shall apply. For clarity, in no event shall the entrance fee or any other payment due to Kite and set forth herein be adjusted due to the valuation or any Governmental Authority view of valuation.

8.8    File of payment records
The Company shall keep proper records and books of account showing the detailed information as are required to determine the payments due under this Agreement, and any other particulars Kite may reasonably require. All such books, records, and accounts shall be retained by the Company until (i) [...***...] after the termination of this Agreement; or (ii) the expiration of the statutory retention periods as may be required by law, whichever is later. Such records and books shall be open during normal business hours to inspection and audit by Kite (or its authorised representative), who shall be entitled to take copies of or extracts from them. If such inspection or audit should reveal a discrepancy in the fees paid from those payable under this Agreement, the Company shall immediately make up the shortfall and reimburse Kite in respect of any professional charges incurred for such audit or inspection.
8.9    Third party royalties
The Company shall be responsible for [...***...], which is attached to this Agreement as Schedule 3 — NIH Agreement. Third party royalty means [...***...].
Upon Kite’s written notice of any payable third party royalties, [...***...] shall settle such payment within [...***...]. The payment related

provisions in Articles 8.5, 8.6 and 8.7 shall apply to payment of any third party royalties.
		
	9.
	Protection of the Intellectual Property Rights

9.1    The Company shall immediately notify Kite in writing, with detailed particulars, if any of the following matters come to its attention in the Territory:
		
	(a)
	any actual, suspected or threatened infringement of any of the Licensed Patents;

		
	(b)
	any actual, suspected or threatened unauthorised disclosure, misappropriation or misuse of the Licensed Data;

		
	(c)
	any claim made or threatened that commercialization of the Licensed Product infringes third party rights;

		
	(d)
	any challenge to Intellectual Property Rights under the Agreement;

		
	(e)
	any other form of attack, charge or claim which may affect performance of the license under this Agreement.

9.2    In respect of any of the matters listed in Article 9.1:
		
	(a)
	Kite shall, in its absolute discretion, decide what action, if any, to take, provided that such action or inaction shall not cause any material adverse effect on the Company;

		
	(b)
	Kite shall have exclusive control over, and conduct of, all claims and proceedings;

		
	(c)
	Kite shall bear the out-of-pocket cost of any proceedings and shall be entitled to retain all sums recovered in any action for its own account;

		
	(d)
	The Company shall not make any admissions other than to Kite and shall at the Kite’s expense provide Kite with all assistance that it may reasonably require in the conduct of any claims or proceedings.

9.3    The Company agrees not to commence any infringement actions in respect of any of the matters listed in Article 9, unless otherwise agreed in writing by Kite, or according to Article 9.4.
9.4    If any third party infringement of any of the Licensed Patents or Licensed Data in the Territory interferes materially in the Company’s business and Kite decides not to commence infringement actions by itself, prior to commencing any action in connection therewith, the Company shall consult with Kite and consider Kite’s recommendations

regarding such action. Subject to receiving advice from patent counsel that infringement proceedings stand a reasonable chance of success, the Company shall be entitled to commence proceedings at its own cost and retain all related recoveries, and may require Kite to give the respective authorization to such proceedings and provide reasonable assistance.
9.5    Nothing in this Agreement shall constitute any representation or warranty that:
		
	(a)
	any Licensed Patents are technically valid or commercially merchantable;

		
	(b)
	any Licensed Patents (if a patent application) will be approved or otherwise granted from the relevant competent patent office.

9.6    The provisions of this Article 9 (except for Article 9.4) shall survive the termination or expiry of this Agreement.
		
	10.
	Confidentiality

10.1    During the Term and within [...***...] after expiry or termination of this Agreement, the Company shall:
		
	(a)
	maintain the confidentiality of all Intellectual Property Rights, Licensed Technology, Licensed Patents, Licensed Data, and any other information (whether or not technical) or method provided to the Company or its Affiliates by, or on behalf of Kite, either preparatory to, or as a result of, this Agreement, and terms and conditions of this Agreement (collectively, “Confidential Information”);

		
	(b)
	not use the Confidential Information for any purpose except for the purpose of exercising or performing its rights and obligations under this Agreement

		
	(c)
	not disclose the Confidential Information to any third party or any of its Affiliates, including its or its Affiliate’s directors, officers, employees, advisors and agents, except to those who are associated with the Company’s business operation and the Confidential Information is only disclosed on a strict “must-know” basis, provided that the Company has requested the recipient to conclude a similar confidentiality commitment before disclosure.

10.2    The Company shall advise its directors, officers, employees, advisors, agents and those of its Affiliates, who receive any Confidential Information of the existence and importance of complying with the obligations set forth in Article 10.1, and require such persons to sign a confidentiality undertaking in a form acceptable to Kite. The Company

shall be jointly and severally liable for breach of the confidentiality liability of its Affiliate, their directors, officers, employees, advisors and agents.
10.3    The Company shall formulate rules and regulations to cause its directors, officers, employees and agents to also comply with the confidentiality obligations set forth in this Article 10. All directors, officers, employees and agents having access to Confidential Information shall be required to sign a confidentiality undertaking in a form acceptable to Kite.
10.4    The provisions of Article 10.1 shall not apply to Confidential Information that can be proven:
		
	(a)
	to be known by the Company by written records made prior to disclosure by Kite or the Effective Date, whichever is earlier;

		
	(b)
	is or becomes public knowledge otherwise than through a breach of this Agreement;

		
	(c)
	was obtained by the Company from a third party having no obligation of confidentiality with respect to such Confidential Information; or

		
	(d)
	is required by laws, regulations, stock exchange rules, or order of any competent court or Governmental Authority to be disclosed, provided that it gives Kite prior notice of such disclosure and takes into account the reasonable requests of Kite in relation to the content of such disclosure.

10.5    The Company will not be entitled to claim that a Confidential Information had already been known to it or was rightfully obtained from a third party, if the Company fails to inform Kite in writing (by stating the relevant circumstances) of its prior knowledge of the Confidential Information or of the rightful obtaining of the Confidential Information from a third party within a period of [...***...] after the particular Confidential Information was known by, disclosed to or obtained by the Company.
10.6    Each Party shall have the right to issue a press release to announce the execution of this Agreement as approved in writing by the other Party, which shall not be unreasonably withheld by the other Party.
10.7    The provisions of this Article 10 shall remain in force notwithstanding expiry or earlier termination of this Agreement.
		
	11.
	Non-compete

11.1    During the Term and for an additional [...***...] thereafter if terminated due to a breach of this Contract by Kite, Kite shall not:

		
	(a)
	grant any commercial use right, exclusive or non-exclusive for the Licensed Product in the Territory in the Field of Use, to any third party regarding the Licensed Technology; and

		
	(b)
	conduct any research, development, manufacturing or other clinical or commercial activities for the Licensed Product with the Licensed Technology (or with any other technology) in the Territory in the Field of Use, except as otherwise mutually agreed by the Parties in writing.

For the avoidance of doubt, any Passive Investment by Kite or any of its Affiliates shall not be considered as a breach of this Article 11.1.
11.2    During the Term and for an additional [...***...] thereafter if terminated due to a breach by the Company, the Company shall not and shall use its reasonable best efforts to cause its Affiliates not to own or operate any business engaging T cell immunotherapy except as mutually agreed by the Parties in writing. For avoidance of doubt, the concept of “own” shall mean any type of actual control of a business by way of equity control, control of the board of directors, control of the management board, control by a variable interest entity, etc.
		
	12.
	Right to Swap

In the event that any U.S. FDA Approval for KTE-C19 in the US is not completed by [...***...] and no Regulatory Approval in the Territory either, the Company may request to swap the KTE-C19 related Licensed Patents and Licensed Data with patents and data related to another Kite Product of Kite available in the Territory, subject to the same terms and conditions under this Agreement, by providing written notice to Kite by [...***...]. For avoidance of doubt, any product which commercialized by Kite in the Territory, and which has been rejected by the Company in the exercise of the first right of refusal according to the JV Contract, shall not be raised by the Company for the swap purpose herewith.
		
	13.
	Additional Obligations of the Company

13.1    The Company shall:
		
	(a)
	be responsible to register this Agreement with the competent authority for administration of technology import contract registration in the Territory, if required by law.

		
	(b)
	ensure to provide safe and compliant premises for the Licensed Product regarding Clinical Trial and commercialized operation;

		
	(c)
	obtain at its own expense all licences, permits, filing and consents necessary for the Clinical Trial and commercialization of the Licensed Product in the Territory, and promptly supply copies of all of these to Kite and such further information as Kite may reasonably require;

		
	(d)
	perform its obligations in connection with the commercialization of the Licensed Product with all due skill, care and diligence including good industry practice;

		
	(e)
	only make use of the rights granted under this Agreement for the exact and sole purpose of carrying out the commercial operation as described and authorised in this Agreement;

		
	(f)
	comply with all regulations and practices in force in the Territory to safeguard Kite’s rights in the Licensed Technology, Licensed Patents, Licensed Data and Licensed Product.

13.2    The Company shall not, directly nor indirectly, assist any third party including its Affiliates in diminishing the rights of Kite in the Licensed Technology, Licensed Patents, Licensed Data and Licensed Product.
13.3    The Company acknowledges and agrees that the exercise of the license granted to the Company under this Agreement is subject to all applicable laws, enactments, regulations and other similar instruments in the Territory, and the Company understands and agrees that it shall at all times be solely liable and responsible for such due observance and performance.
13.4    As required by Paragraph 4.2 of the NIH Agreement (defined below), Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10 of the NIH Agreement, to the extent applicable, shall be binding upon the Company as if the Company were a party to the NIH Agreement. These Paragraphs are set forth in the NIH Agreement, which is set forth in Schedule 3. Pursuant to Paragraph 4.3 of the NIH Agreement, upon termination of the NIH Agreement under Article 13 thereof, the Company’s sublicense under the NIH Agreement shall terminate or convert to a license directly between the Company and the IC, at the option of the Company. This conversion is subject to IC approval, which Kite shall use commercially reasonable efforts to obtain on behalf of the Company, and contingent upon acceptance by the Company of the remaining provisions of the NIH Agreement.
		
	14.
	Additional Obligations of Kite

14.1    Kite shall use its reasonable best efforts to assist the Company to register this Agreement with the competent authority for administration of technology import contract registration in the Territory, if required by law.
14.2    Kite acknowledges and agrees that the exercise of the license granted to the Company under this Agreement is subject to all applicable laws, enactments, regulations and other similar instruments in the Territory or any other jurisdiction, and Kite understands and agrees that it shall at all times be solely liable and responsible for its due observance and performance.
14.3    Kite hereby represents and warrants to the Company that it has full power and authority to grant the licenses herein granted, or will be granted if exercised by the Company of the right to swap according to Article 10 without the consent of any other party, and without infringing any third party’s rights, except for the consent required under the Patent License Agreement – Exclusive between Kite Pharma, Inc. and The U.S. Department of Health and Human Services, as represented by National Cancer Institute dated September 15, 2016 (the “NIH Agreement”). Kite hereby warrants that it has obtained such consent for KTE-C19 as of the Effective Date, and will use its commercially reasonable efforts to obtain any consent related to the swapped product. Kite agrees that it shall use commercially reasonable efforts to maintain the NIH Agreement.  If the NIH Agreement is terminated between the NIH and the Company, Kite shall i) continue to provide a non-exclusive license to the Company to the same intellectual property rights covered by the NIH Agreement, ii) not provide such non-exclusive license to any third party in the Territory to the same intellectual property rights covered by the NIH Agreement for the Licensed Product, and iii) subject to reasonable fees to be paid by the JV to Kite, provide to the JV with an exclusive right in the Territory for the use of all the substitution technology for the Licensed Product that are used by Kite or any of its Affiliates for the development, manufacture, and commercialization of the Licensed Product in the USA. For clarity, under this Agreement, Kite is not granting any sublicense to any agreement between Kite and a third party, other than the NIH Agreement.
14.4    Kite and its Affiliates represents and warrants that it has not entered into any agreement with any third party which is in conflict with the rights granted to the Company in the Territory and pursuant to this Agreement.
14.5    Kite and its Affiliates represents that, as of the Effective Date, it is not aware of any patents, patent applications, trademarks, trademark applications, or other intellectual property rights belonging to third parties and covering, in whole or part, the practice of the

Licensed Technology and Licensed Product in the Field of Use in the Territory as contemplated herein.
14.6    Kite represents that the Schedule 1 and Schedule 2 shall contain Technical Information that to Kite’s knowledge, and together with the licensed Know-how under the Product and Know-how License Agreement, represents all of the material information that Kite has control of that is necessary or reasonably useful for the development, manufacturing, and commercialization of the Licensed Product in the Chinese Market, and all the Technical Information provided to the Company shall be true, accurate and not misleading in all material respects.
14.7    In order to support the Company to make any payment to Kite according to this Agreement, Kite shall provide a valuation report by a valuation firm licensed in China if required by any Governmental Authority, and provide any other documentation reasonably requested by any Governmental Authority relating to the valuation.
		
	15.
	Assignment

15.1    The Company shall not assign, transfer, mortgage, charge or deal in any other manner of its rights and obligations under this Agreement without the prior written consent of Kite.
15.2    Kite shall not assign, transfer, mortgage, charge or deal in any other manner of its rights and obligations under this Agreement without the prior written consent of the Company, except for an assignment by Kite under a Kite Sale or to a Kite Affiliate, provided however that in the case of such assignment, the assignee is capable of performing the duties and obligations under this Agreement.
		
	16.
	Duration and Termination

16.1    This Agreement shall come into force on the Effective Date and shall continue in full force and effective for a period of twenty (20) years from the Effective Date unless terminated earlier in accordance with Article 16.2 or Article 16.3.
16.2    Both Parties may mutually agree to terminate this Agreement by concluding a mutual termination agreement.
16.3    Without prejudice to any rights and remedies that have accrued under this Agreement, any Party may terminate this Agreement immediately by giving a [...***...] written notice to the other Party if any of the following circumstances occurs:

		
	(a)
	the other Party commits a material breach of this Agreement and (if such breach is remediable) fails to remedy that breach within a [...***...] grace period, except for Company’s delay in making any payments out of the reasons as described in above Article 8.7 (b);

		
	(b)
	failure by the Company to pay any amount under Article 8 of this Agreement, due to reasons described in above Article 8.7 (b) and cannot be solved within [...***...] upon the respective payment due date;

		
	(c)
	a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the liquidation and early dissolution of the other Party;

		
	(d)
	the other Party is declared bankrupt or insolvent in accordance with law;

		
	(e)
	the other Party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business;

		
	(f)
	the JV Contract is terminated;

		
	(g)
	Either Party is unable to perform this Agreement due to the change of laws and regulations.

Notwithstanding any of the foregoing, for so long as Kite owns at least 40% of the equity of the Company, the termination rights as provided in this Article 16.3 shall be conditioned upon the termination of the JV Contract, except for Article 16.3(f) or as mutually agreed by both Parties.
		
	17.
	Effect of Termination

17.1    On expiration or termination of this Agreement for any reason and subject to any express provisions set out elsewhere in this Agreement:
		
	(a)
	All outstanding sums payable by the Company to Kite shall become immediately due and payable or, in the case of termination due to Kite’s breach, shall become due and payable according to the terms of this Agreement as if this Agreement had not been terminated;

		
	(b)
	All rights and licences granted pursuant to this Agreement shall cease and the Company shall not thereafter use, manufacture, advertise, sell or otherwise dispose of any Licensed Technology, Licensed Patents, Licensed Data and Licensed Product in the Territory or elsewhere;

		
	(c)
	The Company shall be responsible for the cancellation of any registration and licences registered pursuant to this Agreement and according to law;

		
	(d)
	Within [...***...] after the date of expiration or termination, the Company shall return to Kite, or at Kite’s request, destroy, at no cost to Kite all the Confidential Information or any other information (whether or not technical) of a confidential nature communicated to it by Kite. The Company shall not retain copies of any such information required to be handed back to Kite or destroyed. The Company shall furnish to Kite satisfactory evidence of such destruction;

		
	(e)
	The Company shall provide Kite with copies of all Company Improvements and, at Kite’s cost, such further information as is reasonably requested by Kite; and

		
	(f)
	The Company shall stop using in any manner the names for the Licensed Product as provided under this Agreement or pursuant to the Trademark and Name License Agreement to be concluded between the Kite and the Company.

For the avoidance of doubt, Article 17.1(e) shall not apply in case of termination by the Company due to material breach of Kite.
17.2    The expiry or termination of this Agreement, for any reason, shall not affect any provision of this Agreement which is expressed to survive or operate in the event of expiry or termination, and shall be without prejudice to any rights of either Party which may have accrued to the date of such expiry or termination.
		
	18.
	Force Majeure

Neither Party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure result from Force Majeure.  In such circumstances the affected Party shall be entitled to a reasonable extension of the time for performing such obligations. If the period of delay or non-performance continues for [...***...], the Party not affected by such event may terminate this Agreement by giving a [...***...] written notice to the affected Party.
		
	19.
	Liability, Indemnity and Insurance

19.1    The Company shall indemnify Kite against any and all liabilities, costs, expenses, damages or losses (including any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal and other professional costs and

expenses) suffered or incurred by Kite arising out of any breach by the Company of the terms of this Agreement.
19.2    Kite shall indemnify the Company against any and all liabilities, costs, expenses, damages or losses (including any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal and other professional costs and expenses) suffered or incurred by the Company arising out of any breach by Kite of the terms of this Agreement. Notwithstanding anything to the contrary herein, other than for indemnification obligations relating to third party claims, breaches of confidentiality, intentional torts, intentional violations of law, gross negligence or intentional misconduct, Kite shall not be liable to the Company for any indirect, special, incidental, punitive, exemplary, lost profit, cover, or consequential damages arising out of or resulting from this Agreement, even if aware of the possibility of such damages.
19.3    The Company shall, at its expense, carry product liability and comprehensive general liability insurance coverage of an amount adequate to support its liabilities under this Agreement. The Company shall ensure that such insurance policy names Kite and Fosun as co-insured with the Company and remains in effect throughout the duration of this Agreement and for a period of [...***...] after termination or expiry of the Agreement, and shall supply Kite with a copy of such policy on request.
19.4    Nothing in this Agreement shall have the effect of excluding or limiting any liability for death or personal injury caused by any Party’s gross negligence, fraud or breach of criminal laws.
19.5    Without prejudice to any other rights or remedies that any Party may have, each Party acknowledges and agrees that damages alone may not be an adequate remedy for any breach of the terms of this Agreement by itself. Accordingly, each Party shall be entitled to the remedies of injunction, specific performance or other discretionary relief for any threatened or actual breach of the terms of this Agreement.
		
	20.
	Governing law and dispute resolution

20.1    The formation, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the law of the People’s Republic of China.
20.2    In the event of any dispute arises between the Parties out of or in relation to this Agreement, including any dispute regarding its existence, validity, interpretation, performance, breach or termination, the Parties shall attempt in the first instance to resolve such dispute through amicable means.

20.3    If the dispute has not been resolved by such amicable means within [...***...] after either Party has given written notice to the other Party requesting the commencement of such consultation, then the dispute shall be submitted to the discussion between CEOs of both shareholders of the Company, in line with Article 33.2 of the Company’s JV Contract.
20.4    If the dispute is still not resolved within [...***...] upon the CEOs discussion in above 20.3, then either Party may submit the dispute to the Hong Kong International Arbitration Center (“HKIAC”) for arbitration in accordance with its then applicable arbitration rules. The arbitration shall be conducted by three (3) arbitrators appointed in accordance with the said arbitration rules and in accordance with the following directions:
		
	(a)
	The arbitration proceedings shall be conducted in English and the arbitration tribunal shall refer to the English version of this Agreement only;

		
	(b)
	all arbitrators shall be fluent in English;

		
	(c)
	the arbitration proceedings shall be administered by HKIAC in Hong Kong and the seat of arbitration as well as the place of hearings and other procedural steps shall be Hong Kong;

		
	(d)
	The losing Party shall bear, in proportion to the percentage it has lost the case, the arbitration costs and other Party’s reasonable attorney fees.

20.5    The Parties hereby agree that any arbitration award rendered in accordance with the provisions of this Article 20 shall be final and binding upon the Parties, and the Parties further agree that such award may be enforced by any court having jurisdiction over any Party against which the award has been rendered, or where the assets of such Party is located.
20.6    In any arbitration proceedings, any legal proceedings to enforce the arbitration award, or any other legal proceedings between the Parties pursuant to or relating to this Agreement, each Party expressly waives the defence of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state or is otherwise entitled to immunity.
20.7    Upon submission of any dispute to arbitration, the Parties shall continue to exercise their remaining respective rights, and fulfil their remaining respective obligations under this Agreement, except for any matters related to the dispute in arbitration.
		
	21.
	Miscellaneous

21.1    Waiver

To the extent permitted by PRC law, the failure or delay on the part of a Party to exercise a right, power or privilege under this Agreement shall not operate as a waiver thereof, nor shall any single or partial exercise of a right, power or privilege preclude any other future exercise thereof, unless explicitly otherwise regulated herein.
21.2    Binding Effect and Amendments
This Agreement is made for the benefit of the Parties and their respective lawful successors and assignees. No amendment or other modification of this Agreement shall in any event be effective unless the same is made in writing and signed by an authorized representative of each Party. To the extent required by law, the effectively amended Agreement shall be submitted to the relevant Governmental Authorities for filing and/or registration.
21.3    Severability
If any part of this Agreement shall become or be declared void or invalid by virtue of law or government order or court decision, the remaining parts shall remain valid and this Agreement shall be fulfilled by the Parties in accordance with its general principles, and the void or invalid provision(s) shall be replaced by such valid provision(s) agreed to by the Parties as closest reflecting the economic intentions of the Parties at the time of signing this Agreement.
21.7    Language
This Agreement is executed in the English language in four (4) originals each (at least one (1) for Kite and one (1) for the Company and the remaining two (2) originals for submission to the Governmental Authorities. Where necessary Chinese translation shall be prepared for this Agreement.
21.8    Entire Agreement
This Agreement and the Appendices attached hereto together constitute the entire agreement between the Parties with respect to the subject matter of this Agreement and they together supersede all prior discussions, negotiation and agreements between the Parties.
21.9    No Partnership or Agency
Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the Parties, constitute either Party the agent of the other Party, or authorise either Party to make or enter into any commitments for or on behalf of the other Party.

21.10    Notices
Any notice or written communication provided for in this Agreement by each Party to the other shall be made in English by courier service delivered letter, and emails, promptly transmitted or addressed to the appropriate Party. The date of receipt of a notice or communication hereunder shall be deemed to be [...***...] after the letter is given to the courier service in the case of a courier service delivered letter. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.
		
	(a)
	Kite

KP EU C.V.
190 Elgin Avenue, George Town,
Grand Cayman KY1-9005, Cayman Islands
E-mail: legal@kitepharma.com
		
	(b)
	The Company

Fosun Pharma Kite Biotechnology Co., Ltd.
2/F, Pilot Building, No.222 Kangnan Road, China (Shanghai) Pilot Free
Trade Zone, Shanghai 201203, PRC
E-mail: qiyy@fosunpharma.com

This Agreement has been duly signed by the Parties as follows:
KP EU C.V.
By:             Intertrust Directors (Cayman) Ltd.
Name:       Padraig Hoare
Title:         Authorized Signatory
Signature:     /s/ Padraig Hoare
and
Name:         Julie Hughes
Title:         Authorized Signatory
Signature:     /s/ Julie Hughes
Fosun Kite Biotechnology Co, Ltd. (Chop)
By
Name:         Richard Liqun Wang
Title:         Legal Representative
Signature:    /s/ Richard Liqun Wang

Schedule 1 List of KTE-C19 Licensed Patents
	
				
	STATUS
	IDENTIFIER
	SERIAL NO.
	SUBJECT MATTER

	Published
	KN-1019.01
	61/935,833
	Kite Manufacturing Closed System

	Published
	KN-1019.03
	14/614,400
PCT/US2015/014520
	Kite Manufacturing Closed System

	Published
	KN-1025.01 
SKGF 3653.0020000
	62/167,750
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1025.02  
SKGF 3653.002000
	62/262,143
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1025.03  
SKGF 3653.0020001
	15/167,977 PCT/US2016/034888
	Pre-conditioning Regimen (Cytoxan + Fludarabine)

	Published
	KN-1026.01  
SKGF 3653.0030000
	62/167,738
	Biomarkers for Preconditioning Treatment

	Published
	KN-1026.02 3653.0030001
	62/262,111
	Biomarkers for Preconditioning Treatment

	Published
	KN-1026.03 3653.0030002
	PCT/US2016/034885
	Biomarkers for Preconditioning Treatment

	[...***...]
	[...***...]
	[...***...]
	[...***...]

	[...***...]
	[...***...]
	[...***...]
	[...***...]

	[...***...]
	[...***...]
	[...***...]
	[...***...]

Schedule 2 List of KTE-C1 9 Licensed Data
[...***...]

Schedule 3 NIH Agreement

Appendix 3
Key Terms of Technical Service Agreement
		
	1.
	Kite shall provide on-site and off-site technical services for the clinical activities and manufacturing activities to the company. Kite shall provide the Services in accordance with Technical Service Agreement in all material respects.

		
	2.
	Kite shall appoint an on-site representative on technical operations side and a representative on clinical side for the Services (collectively, the “Kite Representatives”). The Kite Representatives shall serve as Kite’s primary contacts with respect to this Agreement and shall have the authority to contractually bind Kite on matters relating to the Services (including signing off the Change Order and/or Project Plan). The Company shall be entitled to ask for replacement for any of Kite Representatives by giving [...***...] prior written notice to Kite with a list of reasonable grounds and Kite shall in good faith take into consideration such grounds but shall have the sole discretion and right to replace such Kite Representative. For clarity, the Kite Representatives may be based in the PRC or travel from the USA to deliver the Services.

		
	3.
	Kite shall designate experts and employees sufficient to perform the Services, (collectively with the Kite Representatives, the “Kite Personnel”). Kite may replace the Kite Personnel from time to time where reasonably necessary in the interest of the Services. The Company shall be entitled to ask for replacement for any of Kite Personnel by giving [...***...] prior written notice to Kite with a list of reasonable grounds and Kite shall in good faith take into consideration such grounds but shall have the sole discretion and right to replace such Kite Personnel

		
	4.
	Kite and the Company shall discuss and formulate a project plan for technology transfer and clinical support, setting out the specifications of the services, including a description of what work is to be done, an estimated timetable and a detailed schedule of the process. Such project plan shall be later on part of the Technical Service Agreement as a schedule and based on the following:

[...***...]
		
	5.
	The Company shall pay to Kite a fee for the services in relation to the time spent with the Company and in travelling to and from the Company at a USD [...***...], which shall be [...***...]. The Parties shall agree in good faith on the [...***...] based on [...***...]. The Parties agree that the to be agreed upon [...***...] will apply through [...***...] and will increase by [...***...]% on an [...***...] basis for each [...***...] thereafter.

		
	6.
	The Company shall reimburse Kite for all reasonable expenses incurred in connection with the performance of the Services, including but not limited to the [...***...]. The reimbursable expenses shall be payable [...***...].

Fosun Pharma Kite Biotechnology Co., Ltd.
Preliminary Business Plan January 4, 2017

Table of Contents

		
	1.
	Executive Summary

		
	2.
	Key Functional Assumptions

		
	a)
	R&D

		
	b)
	Tech Ops

		
	c)
	Commercial

		
	d)
	G&A

		
	3.
	Detailed Financials and Headcount

 

1

Executive Summary

2

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

		
	a)
	Research & Development

8

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

		
	b)
	Technical Operations

25

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

		
	c)
	Commercial

41

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

[...***...]

		
	d)
	General & Administrative

59

[...***...]

G&A Processes and Systems
G&A
G&A

		
	•
	The Company will set up its accounting system and procedures in accordance with relevant PRC accounting regulations and with a conversion to US GAAP on a monthly basis.

		
	•
	For its accounting and bookkeeping, the Company shall adopt an IT system which is accepted by both Parties, available in both English and Chinese languages, and meets the requirements of the Company’s operation and the Parties’ applied accounting and bookkeeping standards.

		
	•
	The Company shall engage one of the “Big Four” international practicing accounting firms registered in the PRC to audit its accounts.

		
	•
	Drafts of the audited financial statements and report shall be provided to each Party and to the Board of Directors for review within [...***...] after the end of each fiscal year.

		
	•
	Final audited financial statements and report shall be completed and provided to the Parties no later than [...***...] after the end of each fiscal year.

61

Detailed Financials and Headcount

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request

[...***...]

*** Confidential Treatment Request
62

62
Appendix 5
Articles of Association
of
Fosun Pharma Kite Biotechnology Co., Ltd.
Date: January 10, 2017

		
	Article 1
	Shareholders of the Company    3

		
	Article 2
	Definitions and Interpretations    3

		
	Article 3
	Establishment, Name and Address of the Company    8

		
	Article 4
	Legal Form of the Company    8

		
	Article 5
	Purpose of the Company    9

		
	Article 6
	Scope of Operation    9

		
	Article 7
	Total Investment and Registered Capital    9

		
	Article 8
	Co-operative Conditions    11

		
	Article 9
	Assignment of Equity Interest    11

		
	Article 10
	Limitation on Encumbrances on Equity Interest    12

		
	Article 11
	Increase of Registered Capital    13

		
	Article 12
	Reduction of Registered Capital    14

		
	Article 13
	Further Financing    14

		
	Article 14
	Board of Directors    14

		
	Article 15
	Board Meetings    19

		
	Article 16
	Supervisor    22

		
	Article 17
	Management Personnel    23

		
	Article 18
	Premises    25

		
	Article 19
	Procurement    26

		
	Article 20
	Labor Management and Trade Union    26

		
	Article 21
	Financial Affairs, Accounting and Shareholder Auditing    28

		
	Article 22
	Profit Distribution    31

		
	Article 23
	Taxation and Insurance    32

		
	Article 24
	Term    33

		
	Article 25
	Termination    33

		
	Article 26
	Liquidation and Continuing Obligations    36

		
	Article 27
	Applicable Law    37

		
	Article 28
	Miscellaneous Provisions    37

This Articles of Association is executed on January 10, 2017.
Preamble
Whereas, after friendly negotiations held between the below mentioned Parties conducted in accordance with the principle of equality and mutual benefit, and pursuant to applicable published laws and regulations of the PRC, the Parties decide to set up a co-operative joint venture in China and hereby agree as follows:
Article 1 
Shareholders of the Company
The shareholders of the Company are:
		
	(a)
	KP EU C.V. (“Kite”), a limited partnership that is governed by the laws of the Netherlands, having its registered seat at Amsterdam, the Netherlands and its business address at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands, registered with the Dutch trade register under number 64185958.

		
	(b)
	Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (“Fosun”), a joint stock company duly organized and existing under the laws of the PRC, with its registered address at Room 350, No.25 Kangshi Road, Shanghai, PRC and registered with the Shanghai Administration for Industry & Commerce under No. 913101157340514991. Legal Representative: Wu Yifang.

Kite and Fosun may be individually referred to as “Party” or collectively referred to as “Parties”.
Article 2 
Definitions and Interpretations
		
	2.1
	Definitions

Unless the terms or context of the Articles of Association provide otherwise, for the purpose of the Articles of Association the following terms shall have the meanings as set out below:

“Affiliate” shall, for the purpose of the Articles of Association, mean, as to a Party, any entity directly or indirectly controlling, controlled by or under common control with such Party, where “control” means (a) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
“Annual Business Plan” means the official business plan, including financial projections, covering a [...***...] period of the Company formulated and approved annually by the Board.
“Articles of Association” shall mean the articles of association of the Company signed by Kite and Fosun which shall become effective on the Establishment Date.
“Board” or “Board of Directors” means the Board of Directors of the Company set up according to Article 14.
“Business Day” means a day that is not a Saturday, a Sunday, a statutory holiday in China, or a day on which banking institutions are required by law to be closed in China.
“Business License” means the initial business license of the Company to be issued by the Registration Authority fully reflecting the relevant terms of the Joint Venture Contract and the Articles of Association.
“Chinese Market” means, for the sole purpose of the Articles of Association, the mainland of PRC, the Hong Kong Special Administration Region and the Macau Special Administration Region, but excluding Taiwan.
“Chop Management Protocols” shall mean the internal regulations which stipulate the rules on affixing various corporate stamps on legal documents, including but not limited to the rules regarding company chop, financial chop, legal representative chop and contract chop.
“Company” means the Sino-foreign co-operative joint venture company to be established in Shanghai by the Parties as shareholders pursuant to the Joint Venture Contract and the Articles of Association.
“Competitor” means any enterprise, entity or natural person, regardless of legal structure, which is not a Party nor an Affiliate of a Party and which either (1) is engaged in the business of T cell immunotherapy research, development, manufacturing, distribution or commercialization, or (2) controls an enterprise or entity coming within the same scope of business above. The term “control” means (a) beneficial ownership of greater than fifty percent (50%) of the voting equity interests in such entity or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management 

and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
“Date of Termination” has the meaning provided in Article 25.6.
“Employment Handbook” has the meaning specified in Article 20.1 and includes any amendments thereof.
“Encumbrance” means any lease, loan, mortgage, pledge, right of use or any other form of security interest, including any conditional sale or other title retention agreement or arrangement, or any attachment or any other encumbrance on property, other than any such encumbrance that does not materially affect the use or value of such property.
“Establishment Date” means the date of establishment of the Company as shown on the Business License.
“Force Majeure” means any unforeseen, unavoidable and insurmountable events which are beyond the control of a Party, and which arise after the Establishment Date preventing total or partial performance by any Party. Such events shall include in particular earthquakes, typhoons, flood, fire, other acts of nature, war, riots, hostility, public disturbance, acts of public enemies, prohibitions or acts of any Governmental Authority or public agency, strikes or other work stoppage, epidemics (including SARS, bird flu, N7H9) or any other events which are accepted as force majeure in general international commercial practice. For clarity, acts by the National Health and Family Planning Commission, the China Food or any competent authority (including any of their competent branches) which have the power to approve the Clinical Trial or commercialization of KTE- C19 or any other cancer immunotherapy products licensed by or developed by the Company for the Chinese Market shall not be considered a “Force Majeure” event. “Clinical Trial” means clinical research, studies and experiments on human participants in the Chinese Market for the purpose of examining the safety and efficacy of investigational pharmaceutical products, and as a precondition for a license application in the Chinese Market.
“Fosun Sale” means the sale of all or substantially all of Fosun’s assets, equity or business or a merger, reorganization or consolidation involving at least fifty percent (50%) or more of the voting equity securities of Fosun.
“Governmental Approval” means any consent, approval, authorization, waiver, permit, grant, franchise, concession, contract, license, certificate, exemption, order, registration, declaration, filing, report or notice of, with, by or to any Governmental Authority.
“Governmental Authority” means any governmental ministry, administration, agency or other public authority (and/or any branch of the foregoing), whether at the national, provincial, municipal or local level, or any official of the national or any provincial, municipal 

or local government in the respective country, including without limitation the Registration Authority.
“Joint Venture Contract” means the Sino-foreign Co-operative Joint Venture Contract signed by the Parties which shall become effective on January 10, 2017.
“Kite Sale” means the sale of all or substantially all of Kite Pharma, Inc.’s (“Kite Parent”) assets, equity or business or a merger, reorganization or consolidation involving at least fifty percent (50%) or more of the voting equity securities of Kite Parent.
“KTE-C19” means chimeric antigen receptor (“CAR”), transduced autologous T cells directed against the CD19 antigen for the treatment of B-cell lymphomas and leukemias, as described in the Joint Venture Contract.
“Legal Representative” means, for a company registered in PRC the person registered as legal representative on the business license of a company, who is authorized under PRC law to legally represent the company.
“Liability” or “Liabilities” means damages, claims, losses, charges, actions, suits, proceedings, deficiencies, taxes, interest, penalties, fines, settlement, judgments and costs and expenses (including without limitation, attorney fees and expenses, removal costs, remediation costs, government response costs, fines, penalties and expenses of investigation and ongoing monitoring), whether direct or indirect, present or future, known or unknown, or fixed or contingent.
“Management By-Laws” mean the management by-laws of the Company regarding powers, responsibilities and duties of the Management Personnel including any amendments thereof.
“Management Personnel” mean the CEO, Head of Finance and Chief Technical Officer, and any other important management position agreed by both Parties to be part of the Management Personnel.
“PRC” means the mainland of People’s Republic of China, excluding, for the sole purpose of the Articles of Association, the Hong Kong Special Administration Region, the Macao Special Administration Region, and the Taiwan Area.
“Preliminary Business Plan” means, in accordance with Appendix 4 of the Joint Venture Contract, the high level business plan for the initial [...***...] after the Establishment date, developed by the Parties to guide the development of the first Annual Business Plan.
“Proxy” means a representative appointed by a Party or by a Board member and as further detailed in the Articles of Association.

“Registration Authority” means the Shanghai Administration for Industry and Commerce or any competent authority which has the power to register the Articles of Association, and issue the Business License.
“Related Agreements” means any related party agreements concluded between the Company and a Party or any of such Party’s Affiliates.
“Related Party” means any entity that a Party or its Affiliates have a beneficial ownership interest of greater than twenty percent (20%) of the voting equity of such entity.
“RMB” means Renminbi, the lawful currency of the PRC.
“Term” means the business term of the Company as set forth in Article 24.1, approved by the Registration Authority and shown on the Business License, including any extension of such term pursuant to Article 24.2.
“Three Funds” means the Company’s reserve fund, expansion fund and employee welfare and bonus fund as provided in the PRC laws.
“USA” means the United States of America.
“USD” means United States dollar, the lawful currency of USA.
“Working Personnel” means all employees and staff of the Company, other than the Management Personnel.
		
	2.2
	Interpretation:

		
	(a)
	Articles and headings are inserted for the purpose of convenience and reference only and shall not affect the interpretation or construction of the Articles of Association.

		
	(b)
	In the Articles of Association, except where the context requires otherwise:

		
	(i)
	words indicating one gender include all genders;

		
	(ii)
	words indicating the singular also include the plural and words indicating the plural also include the singular;

		
	(iii)
	provisions including the word “agree”, “agreed” or “agreement” require the agreement to be recorded in writing, and

		
	(iv)
	“written” or “in writing” means hand-written, type-written, printed or electronical-ly made, and resulting in a permanent record.

Article 3 
Establishment, Name and Address of the Company
		
	3.1
	Establishment of the Company

The Parties hereby agree to establish the Company in accordance with the Company Law of PRC, other relevant laws and regulations, the provisions of the Joint Venture Contract and the Articles of Association.
		
	3.2
	Name of the Company

		
	(a)
	The name of the Company shall be:

In Chinese: 
In English: “Fosun Pharma Kite Biotechnology Co., Ltd.”
		
	(b)
	The Parties acknowledge that the aforesaid Chinese name is subject to approval by and registration with Registration Authority and agree that in the event that the aforesaid Chinese name is rejected by Registration Authority, the Parties will enter into amendment to the Articles of Association with respect to the Chinese name only.

		
	3.3
	Legal Address of the Company

The legal address of the Company shall be at No.222 Kangnan Road, Shanghai, 201203, PRC.
		
	3.4
	Branches, Liaison Offices and Subsidiary Companies

In accordance with its business needs, the Company may establish branches, liaison office and subsidiary companies, provided that the establishment of subsidiary Companies and branch companies shall be approved by the Board.
Article 4 
Legal Form of the Company
		
	4.1
	The form of organization of the Company is a limited liability company.

		
	4.2
	The Company is a legal person under the laws of the PRC. The activities of the Company shall be governed and protected by the promulgated and publicly available laws, decrees and relevant rules and regulations of the PRC.

Article 5 
Purpose of the Company
The purpose of the Company is to enhance international economic cooperation, and to contribute to the advancement of KTE-C19 and potentially additional cancer immunotherapy products in the PRC. The Parties agree to use advanced and appropriate methods for developing and commercializing KTE-C19 and potentially additional cancer immunotherapy products with the aim of increasing the long-term economic benefits for each Party, and to establish local clinical and commercial manufacturing capacity within the Chinese Market.
Article 6 
Scope of Operation
The business scope of the Company shall be technical development, technical transfer, technical consulting and technical services in the areas of bio technology and medical technology; biopharmaceutical manufacturing; import & export, wholesale and commission agency (excluding auction) of chemical products (excluding hazardous chemicals, monitored chemicals, fireworks, civil explosives and precursor chemicals), instrument and meters, mechanical equipment and medical devices; investment consulting and management.
Article 7 
Total Investment and Registered Capital
		
	7.1
	Total amount of investment

The total amount of investment of the Company shall be USD one hundred million (100,000,000).
		
	7.2
	Registered capital

The registered capital of the Company shall be USD forty million (40,000,000).
		
	7.3
	Equity ratio

		
	(a)
	Kite’s subscribed contribution to the registered capital of the Company is USD twenty million (20,000,000), representing a fifty percent (50%) equity interest in the Company.

		
	(b)
	Fosun’s subscribed contribution to the registered capital of the Company is USD twenty million (20,000,000), representing a fifty percent (50%) equity interest in the Company.

		
	7.4
	Payment of registered capital

		
	(a)
	Kite shall contribute the registered capital in kind by a license of the exclusive commercial rights of KTE-C19. Kite shall complete the capital contribution in kind within twenty (20) Business Days upon the Establishment Date.

		
	(b)
	Fosun shall contribute the registered capital in cash in RMB. Fosun shall complete the capital contribution within [...***...] upon the Establishment Date. Conversion between USD and RMB shall be made at the [...***...].

		
	(c)
	After each Party’s contribution to the registered capital of the Company has been made, the Company shall issue an investment certificate to each Party. Failure by the Company to issue any such investment certificate as described above shall not affect the rights or interests of either Party with respect to any equity interest in the Company.

		
	(d)
	Within [...***...] after the Parties have made their contribution to the registered capital of the Company, the Company shall hire a qualified certified public accountant to issue a capital verification report regarding the capital contributions from both Parties.

		
	7.5
	Delay or failure to contribute

The Parties shall pay their contribution to the registered capital as set out herein in accordance with the agreed schedule in Article 7.4. In the event that any Party fails to make its capital contribution, in whole or in part, in due time as agreed between the Parties 
 

pursuant to Article 7.4, such Party shall be liable to pay interest to the Company for such amount at a rate of [...***...] percent ([...***...]%) per day during the delay period.
		
	7.6
	Profit distribution ratio

The Parties agree that, considering the equity ratio and the committed co-operative conditions by the Parties to the Company and subject to properly resolved Board resolutions, Kite shall be entitled to forty percent (40%) and Fosun shall be entitled to sixty percent (60%) of the distributable profits of the Company. For the avoidance of doubt, each Party shall cause its Directors appointed to the Board to approve such profit distribution from time to time according to this Article 7.6.
Article 8 
Co-operative Conditions
		
	8.1
	Fosun shall pay to the Company as capital reserve, within [...***...] upon the Establishment Date, the co-operative condition of USD [...***...] in cash.

For clarity, such payment by Fosun [...***...].
Article 9 
Assignment of Equity Interest
A Party may sell, transfer or otherwise dispose of all or any part of its equity interest in the registered capital of the Company to any third party only with the prior written consent of the other Party, except that (i) Kite shall have the sole discretion for transfer of any or all of its equity interest in the Company to any of its Affiliates or in connection with a Kite Sale without any obligation mentioned hereof, and Fosun shall promptly cooperate with Kite to effect such assignment in a timely manner; and (ii) Fosun shall have the sole discretion for transfer of any or all of its equity interest in the Company to any of its Affiliates or in connection with a Fosun Sale without any obligation mentioned hereof, and Kite shall promptly cooperate with Fosun to effect such assignment in a timely manner. The Company shall file the equity change with the Registration Authority within [...***...] upon effectiveness of the equity transfer. Notwithstanding the foregoing, the Party shall only transfer equity to an Affiliate 
 

which has the ability to duly perform the obligations under the Articles of Association in all material respects.
		
	9.1
	If a Party (the “Assigning Party”) proposes to transfer all or any part of its equity interest (“Offered Equity Interests”) in the Company to a third party (“Third Party Transferee”) and has obtained consent of the other Party pursuant to Article 9.1, the other Party shall have the pre-emptive right to purchase the interest under the same commercial conditions offered to the third party. The Assigning Party shall notify in writing the terms and conditions of the pro- posed transfer to the other Party (“Transfer Notice”). If the other Party does not exercise its pre-emptive right of purchase within [...***...] after delivery of the notice, the other Par-ty shall be deemed to have waived its pre-emptive rights.

		
	9.2
	Under the situation in above 9.2, however, the other Party shall be entitled to sell its equity interest in the Company on a pro rata basis (“Tag Along Equity Interests”) to the same buyer at the same commercial conditions offered by the Assigning Party. If the Third Party Transferee does not so acquire both the relevant Offered Equity Interests and the Tag Along Equity Interests on such terms within the time frame set forth in this Article 9.3 hereof, the Assigning Party shall not be permitted to transfer any of its equity shares to the Third Party Transferee as provided herein. If the other Party does not exercise its tag along right as stat-ed in this Article 9.3 within [...***...] after receipt of the Transfer Notice, the Assigning Party shall be free from selling the Offered Equity Interests to such Third Party Transferee.

		
	9.3
	If a Party desires to sell all or part of its equity interest in the Company to the other Party, and the other Party desires to purchase that equity interest of registered capital, the Parties shall request an independent appraiser to conduct a valuation of the Company. The valuation de-termined by the independent appraiser shall be used as a reference in determining the equity purchase price for the purposes of this provision.

Article 10 
Limitation on Encumbrances on Equity Interest
Unless the other Party has agreed otherwise in writing in advance, neither Party shall grant any Encumbrance on its equity interest in the Company, nor shall either Party allow any Encumbrance to exist.

Article 11 
Increase of Registered Capital
		
	11.1
	Principle

		
	(a)
	Any increase in the registered capital of the Company shall be subject to both (i) a related written agreement between the Parties, and (ii) a subsequent Board resolution. Any so agreed and approved increase of the Company’s registered capital shall be submitted to all relevant Governmental Authorities for respective filing and/or registration, if and to the extent required by law.

		
	(b)
	In principal, any such increase in the Company’s registered capital shall be subscribed by the Parties at the following proportion, forty percent (40%) for Kite and sixty percent (60%) for Fosun, unless otherwise agreed by the Parties.

		
	(c)
	Any such increase in the Company’s registered capital, whether or not subscribed by the Parties in accordance with the proportion as set out in the above (b), shall not change the Board structure as set forth in Article 14, except for otherwise agreed by the Parties.

		
	11.2
	Obligation in capital increase

If Kite or Fosun considers it necessary for the development and business operations of the Company, it may request a capital increase under Article 11.1 in writing to the other Party (which request shall contain details as to the amount of increase of both the total amount of investment as well as the registered capital of the Company). For clarity, the Parties must mutually agree to any additional capital increase by either Party.
		
	11.3
	Company documentation

In case of any increase of the Company’s registered capital as provided for herein, the Board shall modify the Articles of Association accordingly. The Company shall also, to the extent as required by PRC laws, file and/or register the capital increase and the so modified Articles of Association with all relevant Governmental Authorities.
		
	11.4
	Delay or failure to contribute the increased capital

In the event an increase of the Company’s registered capital has been agreed as set out herein and approved by the Governmental Authorities, the Parties shall pay their additional contributions to the registered capital which they may have subscribed in accordance with 

the related contribution schedule. In the event that a Party fails to make its capital contribution, in whole or in part, in due time as agreed between the Parties, such Party shall be liable with interest and liabilities as such pursuant to Article 7.5, provided that any claim for damages shall not exceed the amount of the additional capital contribution.
Article 12 
Reduction of Registered Capital
Upon agreement of the Parties and a subsequent resolution of the Board, the Company may reduce its registered capital in accordance with PRC law. The same rules in Article 11.1 on the percentage of equity interest and Board structure shall apply to a capital reduction.
Article 13 
Further Financing
Unless otherwise provided under the Articles of Association, the Joint Venture Contract or approved by the Board of Directors, the Company shall not raise any loans or similar instruments from Fosun or another entity, or grant loans or credit to any other entity or individual, provided that such approval shall not be required for raising any loans or similar instruments as stipulated in the Preliminary Business Plan or the Annual Business Plan then in effect.
Article 14 
Board of Directors
		
	14.1
	Formation of the Board of Directors

		
	(a)
	The Board of Directors shall comprise of six (6) Board members including the Chairman of the Board (“Chairman”) and Vice Chairman of the Board (“Vice Chairman”). Each Party shall appoint three (3) Board members including the Chairman and the Vice Chairman. The Board of Directors shall be officially established on the Establishment Date.

		
	(b)
	Each Board member shall be appointed for a term of three (3) years, provided that the Party which has appointed a Board member may remove that Board member and appoint a replacement at its discretion and at any time to serve out such Board member’s term. A Board member may serve consecutive terms if re-appointed. If a seat on the Board is vacated by the retirement, resignation, removal, disability or death of a Board member, the Party which originally appointed such Board member shall appoint a successor to serve out such Board member’s term.

		
	(c)
	Fosun shall be entitled to appoint one of its Board members as the Chairman and Kite shall be entitled to appoint one of its Board members as the Vice Chairman. A Party may object to the appointment of Chairman or Vice Chairman upon reasonable grounds. If the position of the Chairman or Vice Chairman is vacated by the retirement, resignation, removal (as provided in subparagraph (e)), disability or death of the incumbent, the Party which originally appointed the Chairman or Vice Chairman, as the case may be, shall appoint a successor to serve out the Chairman’s or Vice Chairman’s current term.

		
	(d)
	The Chairman and the Vice Chairman shall carry out all functions and tasks as stipulated in these Articles of Association or as specifically authorized by the Board of Directors. Whenever the Chairman is unable to perform his responsibilities for any reason, the Vice Chairman shall be authorized by the Chairman to exercise the Chairman’s functions.

		
	(e)
	Kite or Fosun, as the case may be, shall notify the other Party and the Company in writing to appoint or remove a Board member, including the Chairman or Vice Chairman. Appointment and removal of Board members shall become effective upon receipt of such notice by the other Party and by the Company. Any appointment and removal of Board members shall be filed with the relevant Governmental Authorities to the extent required by law.

		
	(f)
	The Company shall, in accordance with relevant PRC laws, indemnify each Board member against all claims and Liabilities incurred by reason of his being a Board member of the Company and in the course of performing his official duties as a Board member of the Company, provided that the Liability does not result from intentional misconduct or gross negligence or a violation of criminal laws by the Board member.

		
	(g)
	Unless concurrently serving as an employee of the Company, Board members shall serve [...***...] 

[...***...] pursuant to the Company’s travel policy then in effect.
		
	14.2
	Powers of the Board of Directors

		
	(a)
	The Board of Directors shall be the highest authority of the Company.

		
	(b)
	The Board of Directors shall decide all strategic business issues of major importance to the Company pursuant to a validly adopted resolution at a duly convened meeting described under Article 15, including, but not limited to, the following matters:

		
	(i)
	change the legal form of the Company, or amendment of the Articles of Association (except changes as otherwise set forth in the Joint Venture Contract);

		
	(ii)
	formation of, investment in, or merger with another legal entity, or formation of, participation in, or withdrawal from any economic organization;

		
	(iii)
	division of the Company, or spin-off of any assets of the Company in connection with the formation of a new legal entity;

		
	(iv)
	termination (other than in consequence of the unilateral termination of the Joint Venture Contract by a Party as provided for in the Joint Venture Contract), liquidation or dissolution of the Company or the suspension of all or a substantial part of the operation;

		
	(v)
	increase or decrease of the Company’s registered capital;

		
	(vi)
	establishment and substantial alteration of the Chop Management Protocols and any amendments thereto proposed by the Management Personnel;

		
	(vii)
	entrance into any research, collaboration, partnership or other business development agreement not covered by the Preliminary Business Plan or the Annual Business Plan and with a total commitment in excess of RMB seven million (7,000,000);

		
	(viii)
	establishment of subsidiaries or branch companies;

		
	(ix)
	change of the registered company name;

		
	(x)
	conclusion, amendment or termination by the Company of any Related Agreements or waiver of any material rights in such agreements, unless it is covered by the Preliminary Business Plan or the Annual Business Plan or the total commitment is lower than USD one hundred thousand (100,000);

		
	(xi)
	approval of the Company’s Annual Business Plan, and any changes thereto, relating for example to:

		
	-
	scope of business

		
	-
	sales and marketing plan (including ex-factory price and pricing strategy)

		
	-
	financial plans

		
	-
	number of Working Personnel and Management Personnel

		
	-
	capital plan

		
	-
	clinical development plan

		
	-
	technical operation plan

		
	-
	any significant change of the Company’s organizational structure;

		
	(xii)
	approval of quarterly and annual financial statements of the Company (balance sheet, profit and loss statement, cash flow statement) formulated in accordance with PRC GAAP and converted into US Generally Accepted Accounting Principles (“US GAAP”), which shall be done in a timely manner after completion of such statements and shall not be unreasonably withheld by Directors appointed by both Parties;

		
	(xiii)
	approval of the establishment of and any major changes to the Company’s accounting system and procedures in accordance with Article 21.1;

		
	(xiv)
	establishment of and any changes to compliance policies, which shall be recommended by the Head of Finance based on the laws and regulations applicable to the Company and to both Parties;

		
	(xv)
	appointment and dismissal of the Chief Executive Officer (“CEO”), the Head of Finance or the Chief Technical Officer;

		
	(xvi)
	approve the Company’s auditor and any change to the auditor pursuant to Article 21.3(a);

		
	(xvii)
	any debt or other financing of the Company, and any repayment of debt or repurchase of equity, except for as stipulated in the Preliminary Business Plan or the Annual Business Plan then in effect;

		
	(xviii)
	approval of the exercise by the Company of the option to license two (2) additional products from Kite as set forth in the Joint Venture Contract;

		
	(xix)
	sale or purchase by the Company of any fixed or intangible assets with a value in excess of: (i) in case of sale or purchase in the ordinary course of 

business, RMB 1,000,000 of a single sale or purchase, or RMB 5,000,000 in aggregate in any fiscal year; (ii) in case of sale or purchase not in the ordinary course of business, RMB 200,000 of a single sale or purchase, or RMB 1,000,000 in aggregate in any fiscal year, or such higher value determined by the Board of Directors from time to time, except for any sale or purchase as stipulated in the Preliminary Business Plan or the Annual Business Plan then in effect;
		
	(xx)
	conclusion, amendment and termination of any contracts not covered by the Preliminary Business Plan or the Annual Business Plan in excess of RMB seven million (7,000,000), or such higher value determined by the Board of Directors from time to time, and any waiver of material rights in such contracts;

		
	(xxi)
	subject to the provisions of Article 22.1, the amount of allocations to the Three Funds and any expenditure from the Three Funds and, distribution of any after-tax profits to the Parties in any fiscal year; and

		
	(xxii)
	any other matters assigned to the Board of Directors by law, the Joint Venture Contract or the Articles of Association.

		
	(c)
	Any Board resolutions on the above matters (i) to (xix) shall require the unanimous affirmative vote of the Board of Directors. Board resolutions on any other matters shall require a simple majority of the Board members present in person or by Proxy at a respective Board meeting duly called for and held or pursuant to a unanimous written consent pursuant to Article 15.

		
	(d)
	Within [...***...] after Establishment Date, the Board shall meet and review this Article 14.2 in particular regarding the matters subject to Board approval, and recommend to the Parties any amendments thereto.

		
	14.3
	The Board of Directors shall approve the first Annual Business Plan within [...***...] of the Establishment Date, which shall be guided by the Preliminary Business Plan, and thereafter no later than [...***...] of every year by a formally adopted resolution approve the Annual Business Plan of the Company for the next fiscal year, which shall include reasonable details for the following [...***...] formulated in accordance with the forecast and strategic planning process adopted by the Company. Unless decided otherwise by the Board of Directors, such Annual Business Plan shall be  

strictly implemented by the Company. If the Board cannot agree on the Annual Business Plan, the Company may operate under the prior approved business plan, including the Preliminary Business Plan if the first Annual Business Plan is not agreed upon, until the Board agrees on the new Annual Business Plan.
		
	14.4
	If the Board is deadlocked on a matter for approval, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations. If the dispute has not been resolved by such friendly consultation within [...***...] after either Party has given written notice to the other Party requesting the commencement of friendly consultation, then the Parties shall attempt to settle it by talks between the CEOs of both Parties.

Article 15 
Board Meetings
		
	15.1
	The first Board meeting shall be held within twenty (20) Business Days after the Establishment Date. At such first Board meeting the Board shall:

		
	(a)
	appoint the CEO in full compliance with the Articles of Association;

		
	(b)
	adopt the Chop Management Protocols regarding in particular the management rules for using and keeping record for use of the company chop, finance chop, legal representative chop and any other chops the Company may apply;

		
	(c)
	adopt the Preliminary Business Plan agreed between the Parties;

		
	(d)
	appoint the Company’s auditor;

		
	(e)
	approve the execution of the Product and Know-how License Agreement, the Technology License Agreement, and the Trademark and Name License Agreement attached as appendices of the Joint Venture Contract, and the Technical Service Agreement with key terms in line with Appendix 3 of the Joint Venture Contract; and

		
	(f)
	adopt the initial compliance policies of the Company.

		
	15.2
	After the first Board meeting, the Board shall hold at least four (4) regular Board meetings in each calendar year. Upon the written request of one (1) or more Board members specifying the matters to be discussed, the Chairman shall convene an interim Board 

 

 

meeting within thirty (30) days after receiving such request. If the Chairman fails to do so, the Vice Chairman shall convene the interim Board meeting accordingly.
		
	15.3
	The Chairman (or the Vice Chairman, as the case may be) shall give written notice in English of each Board meeting to each of the Board members at least thirty (30) days prior to such meeting. Each such notice shall include the time, place and agenda of the meeting, together with any draft of documents to be approved by the Board members at the meeting. A Board meeting held without proper notice having been given to any Board member shall be invalid unless such Board member attends the meeting or, either before or after the meeting, promptly delivers a written waiver of notice to the Chairman. Board meetings shall be held at the registered address of the Company or such other location in the PRC or abroad as may be agreed by the Chairman and the Vice Chairman, provided that any Board member may attend by teleconference. Board meetings may also be held by video or telephone conference upon the request of any Board member. The Chairman shall be responsible for convening and presiding over such meetings.

		
	15.4
	A minimum of two (2) Board members from each Party out of all Board members in office, present in person or by Proxy (including presence by way of a video or telephone conference) shall constitute a quorum and a duly convened Board meeting. If no quorum is constituted at any meeting, then the Chairman shall call another meeting with fifteen (15) days’ written notice to each Board member with the same agenda. Any such second meeting called in line with this Article 15.4 shall be entitled to adopt decisions on matters set out in such agenda regardless of the number of Board members present in person or by Proxy, which shall be explicitly stated in the Chairman’s notice for such second meeting.

		
	15.5
	A Board member who is unable to attend a Board meeting may issue a Proxy, signed by him, to a designee of his choice (who does not need to be another Board member) to attend the meeting on his behalf. Each person acting as the Proxy of a Board member shall have the same rights and powers as the designating Board member. One Proxy may represent more than one Board members. A Proxy shall be in writing, signed by the designating Board member, and addressed to the Chairman. A Proxy may be presented in email or electronic format, provided the signature is clearly shown thereon.

		
	15.6
	Board resolutions may be validly adopted by unanimous written consent (including by email) without holding a Board meeting, provided that all Board members are given written notice (including by email) of the resolutions proposed for adoption without a meeting in the 

 

 

same manner as provided in Article 15.3, and agree to such procedure in writing or as otherwise waived by executing the written consent. Electronical signatures of Board members shall be binding for this purpose. Written resolutions adopted in this manner shall have the same force and effect as a resolution adopted at a Board meeting.
		
	15.7
	The Board of Directors shall cause complete and accurate minutes in English and Chinese to be kept of all Board meetings. Draft minutes of a Board meeting shall be distributed to all Board members within fifteen (15) days from the date of such meeting. Any Board member who wishes to propose an amendment or addition shall submit the same in writing to the Chairman within ten (10) days after receipt of the draft minutes. Once a Board member (either directly or through his Proxy) has signed his approval of the text of a minutes at a Board meeting, he may not propose any subsequent amendments or additions to such minutes. The Chairman shall complete the final minutes and distribute them to all Board members and each Party no later than forty-five (45) days after the meeting. If the Board members cannot agree on any part of the text of the minutes, or if there is discrepancy between the English and Chinese versions which cannot be solved via a translation check, they shall complete and distribute the rest of the final minutes as provided above, and the issue at dispute shall be placed on the agenda for the next Board meeting. The Company shall maintain a file of all Board meeting minutes and make the same freely available to the Parties and their authorized representatives.

		
	15.8
	The CEO, with the assistance of other Management Personnel, shall provide the Board with briefings on major operational issues on a regular basis and shall provide timely responses to reasonable inquiries from the Board regarding major operational issues. Details shall be set out in the Management By-laws.

		
	15.9
	The CEO, the Head of Finance and the Chief Technical Officer shall have the right to attend Board meetings, but do not have voting rights (unless concurrently serving as Board members). Further, each Board member shall have the right to bring along advisors or other support staff to a Board meeting. Such advisors or other support staff shall have no voting rights at the meeting. Notwithstanding the foregoing, the Board may, at its discretion, hold private sessions without the attendance of some or all of the CEO, Head of Finance or the Chief Technical Officer.

Article 16 
Supervisor
		
	16.1
	The Company shall have one (1) Supervisor to be appointed by Kite. The term of office of the Supervisor shall be three (3) years and may be renewed if re-appointed. Any Board member and the Management Personnel are not allowed to concurrently serve as the Supervisor.

		
	16.2
	The Supervisor shall exercise the following functions and powers:

		
	(a)
	to examine the Company’s financial affairs;

		
	(b)
	to supervise the Board members and Management Personnel in the performance of their company duties and to propose the dismissal of Board members and Management Personnel who violate laws, administrative regulations, the Company’s compliance policies or breach the Articles of Association;

		
	(c)
	if an act of any Board member or Management Personnel is detrimental to the interests of the Company, to require him to rectify such act;

		
	(d)
	to propose interim Board meetings and, in the event that the Chairman and the Vice Chairman fail to convene and preside over a Board meeting in person, telephonically or by Proxy, to convene and preside over such a meeting;

		
	(e)
	to submit motions to Board meetings;

		
	(f)
	Management Personnel if a Board member or Management to institute, upon written request by each Party, legal proceedings against the Board members or Personnel violates laws, administrative regulations or the Articles of Association in the course of performing his or her company duties, thereby causing the Company to incur a loss.

		
	16.3
	The Supervisor shall have the right to participate in Board meetings as non-voting attendees. For clarity, the Supervisor shall not be a Board member. Reasonable and evidenced expenses incurred by the Supervisor in connection with their function as supervisor of the Company shall be reimbursed by the Company.

Article 17 
Management Personnel
		
	17.1
	Management Personnel

		
	(a)
	Management Personnel shall consist of one (1) CEO, one (1) Head of Finance and one (1) Chief Technical Officer. The term of the members of the Management Personnel shall be three (3) years, unless otherwise approved by the Board.

		
	(b)
	The CEO shall be nominated by Fosun and appointed by the Board. The Head of Finance, which shall be the Chief Financial Officer or the most senior finance officer until such time a Chief Financial Officer is appointed, and the Chief Technical Officer shall be nominated by Kite and appointed by the Board. Unless with reasonable ground, Fosun shall cause its appointed Board members to vote for approval of the nominated Head of Finance and the Chief Technical Officer, and Kite shall cause its appointed Board members to vote for approval of the nominated CEO. After launch of KTE-C19 in the Chinese Market, and if the Chief Technical Officer resigns, term of such appointment expired or is terminated, the subsequent Chief Technical Officer shall be nominated by the CEO and appointed by the Board.

		
	(c)
	The nomination right of the Head of Finance and Chief Technical Officer by Kite shall include the right to revoke at any time the appointed Head of Finance and the Chief Technical Officer and to nominate a replacement, except for as otherwise stipulated in the above Article 17.1 (b).

		
	(d)
	The nomination right of the CEO by Fosun shall include the right to revoke at any time the appointed CEO and to nominate a replacement.

		
	(e)
	The remuneration and benefits of all Management Personnel shall be discussed and approved by the Board.

		
	17.2
	Responsibilities and duties of Management Personnel

		
	(a)
	The Management Personnel, in addition to other executive officers who may be appointed to the Company and report to the CEO, shall be in charge of the day-to-day operation and management of the Company, in particular shall:

		
	(i)
	submit proposals to the Board;

		
	(ii)
	approval of the Employment Handbook and other employment rules;

		
	(iii)
	approval of the Management By-Laws, except those Management By-Laws which according to the Articles of Association should be approved by the Board;

		
	(iv)
	manage the production and business operations of the company, and implement resolutions passed by the Board;

		
	(v)
	implement the Preliminary Business Plan and Annual Business Plan of the Company approved by the Board;

		
	(vi)
	approval of any employee benefit plan;

		
	(vii)
	formulate the internal management rules of the Company;

		
	(viii)
	appointment or dismissal of management staff other than Management Personnel;

		
	(ix)
	provision of any external collateral or other security by the Company to any entity;

		
	(x)
	carry out all matters designated by the Joint Venture Contract, the Articles of Association, the Management By-laws, etc.;

		
	(xi)
	any other matters that are not included in Article 14.2 (b), or as resolved by the Board of Directors to be the responsibility of the Management Personnel.

		
	(b)
	The CEO shall be the Legal Representative of the Company. The Legal Repre-sentative shall carry out all functions and tasks as stipulated in the Joint Venture Contract, the Articles of Association or as authorized specifically by the Board of Di-rectors. The Legal Representative may only represent and bind the Company in accordance with the Joint Venture Contract, the Articles of Association, the Man-agement By-laws, or otherwise specifically authorized by the Board of Directors in writing.

		
	(c)
	The CEO shall coordinate and lead the activities of management. The Head of Finance is responsible for finance, accounting, tax and audit over internal controls, and compliance in accordance with the Board approved compliance policies. The Chief Technical Officer is responsible for manufacturing, quality and supply chain. Both the Head of Finance and the Chief Technical Officer shall report to the CEO, except that the Head of Finance shall also report to the Board.

		
	(d)
	Within the limits of the power of attorney specified in single resolutions of the Board of Directors or in the Joint Venture Contract, the Articles of Association or as contained in a budget approved by the Board of Directors, Management Personnel shall be permitted to represent the Company in dealing with third parties and to

authorize expenditures and incur Liabilities on behalf of the Company. Matters set out elsewhere in the Joint Venture Contract and/or the Articles of Association to be decided by the Board of Directors shall require prior approval of the Board of Directors, unless delegated by the Board of Directors to Management Personnel or contained in an approved budget.
		
	17.3
	Other regulations

		
	(a)
	The CEO, the Head of Finance and the Chief Technical Officer shall perform their duties on a full-time basis and not concurrently serve as a director, a manager or other employee of or have any other non-employed contractual relationship to work for any other company or enterprise, unless otherwise approved by the Board of Directors in writing. The CEO, the Head of Finance and the Chief Technical Officer may not serve as a director of or consultant to, or hold any material interest in, any company or enterprise that is a Competitor of the Company.

		
	(b)
	If any Management Personnel incurs Liabilities towards third parties in the course of performing their duties for the Company, he shall be indemnified by the Company except for intentional misconduct, gross negligence or graft or serious dereliction of duties or breach of criminal laws.

		
	(c)
	Subject to a respective Board resolution and no later than the commercial launch of the Company, the Company shall hire a Compliance Manager who shall report directly to the Head of Finance.

Article 18 
Premises
		
	18.1
	The Company shall lease manufacturing sites and facilities from a qualified property owner, by concluding a facility lease agreement in line with Preliminary Business Plan or Annual Business Plan then in effect.

		
	18.2
	The Company shall apply for GMP certification for the facility. Both Parties shall provide all necessary assistance in the application.

Article 19 
Procurement
		
	19.1
	The Company may purchase items and services required for the Company’s operation from sources within and outside the PRC, on the basis of the competitiveness of the terms and conditions of procurement, quality, quantity, pricing, and delivery terms of the products and in accordance with the procurement policy formulated by the CEO from time to time.

		
	19.2
	Where any Party or any of their respective Affiliates is willing to provide services and/or products to the Company, the Company shall only procure such services and/or products on an arm’s length basis and, if required pursuant to Article 14.2. (b). (x), subject to review and approval by the Board of Directors. In order for the Board to make an informed decision, the interested Party shall present to the Board all relevant information to the Board’s decision, including but not limited to a description of (1) all the parties thereto, (2) the interests, direct and indirect, of any related person in the transaction in sufficient detail so as to enable the Board to fully assess such interests, (3) a description of the purpose of the transaction, (4) all of the material facts of the proposed transaction, including the proposed aggregate value of such transaction, or in the case of debt, the amount of principal that would be involved, (5) the benefits to the Company of the proposed transaction, (6) if applicable, the availability of other sources of comparable products or services, (7) an assessment of whether the proposed transaction is on terms that are comparable to the terms available to or from, as the case may be, unrelated third parties, and (8) the Management Personnel recommendation with respect to the transaction. Any services and/or products proposed to be provided by a Related Party involving a total commitment of greater than USD [...***...] must be disclosed to the Board in the Annual Business Plan (both the total commitment and the Related Party’s relationship with a Party) or otherwise if such services and/or products were not covered in the Annual Business Plan.

Article 20 
Labor Management and Trade Union
		
	20.1
	Governing principles

Matters relating to the recruitment, employment, dismissal, resignation, wages, labor insurance, labor discipline, assessment, rewards, bonus and welfare of the Working 
 

Personnel and Management Personnel of the Company shall be handled in accordance with the PRC Labor Law, the PRC Labor Contract Law and related PRC laws and regulations (hereinafter collectively referred to as the “Labor Laws”).
The Company’s labor rules and policies (including compliance) shall be set out in more detail in the Employment Handbook set up in accordance with the Labor Laws.
		
	20.2
	Personnel

		
	(a)
	Working Personnel shall be locally employed and appointed by the Management Personnel in accordance with the terms of an individual labor contract entered into by the Company and the Working Personnel.

		
	(b)
	Management Personnel shall be employed by the Company, in accordance with the terms of individual employment contracts, which shall include non-compete provisions with non-compete terms to the maximum extent allowed by law unless otherwise approved by the Board. Other members of senior management shall also have employment agreements with non-compete provisions which contain non-compete duration to be approved by the Board.

		
	(c)
	The first labor contract entered into between the Company and an individual employee shall provide for a probation period. Employment contracts with any Management Personnel may provide for such probation period.

		
	(d)
	Personnel to be employed by the Company shall be selected according to their professional qualification and working experience criteria to be formulated by the Management Personnel.

		
	20.3
	Reward and disciplinary measures

		
	(a)
	All Working Personnel and Management Personnel must observe PRC laws and the relevant Company regulations as well as undertake responsibilities diligently in accordance with their job descriptions. The Management Personnel shall implement a performance evaluation system for all employees.

		
	(b)
	The Company shall have the right to effect reward and disciplinary measures in accordance with relevant regulations of the Company to be set up by the Management Personnel.

		
	20.4
	Labor union

The employees of the Company shall have the right to establish a labor union in accordance with the Labor Laws. If required by mandatory laws, the Company shall allot the required amount for payment into a labor union fund for financing the activities of the labor union. The labor union may use these funds in accordance with the relevant control measures for labor union funds formulated by the All-China Federation of Labor Unions. Labor union activities are, whenever possible, to be conducted after normal working hours and, in any event, in such a manner as not to hinder the operation of the Company.
Article 21 
Financial Affairs, Accounting and Shareholder Auditing
		
	21.1
	Accounting system

		
	(a)
	The Company shall set up its accounting system and procedures in accordance with relevant PRC accounting regulations and with a conversion to US GAAP on a monthly basis. The accounting system and procedures to be adopted by the Company shall be approved by the Board of Directors and be filed with the relevant local departments of finance and tax for record to the extent required by law. The accounting system and procedures approved by the Board of Directors shall, to the maximum extent possible, comply with the accounting and reporting requirements of either Party as may be requested by both Parties from time to time.

		
	(b)
	The Company shall adopt RMB as its bookkeeping base currency, but shall, as requested by either Party and to the extent permitted by law, also adopt USD as a supplementary bookkeeping currency.

		
	(c)
	All accounting records, vouchers, books shall be made and kept in the Chinese language, and the financial statements and reports of the Company must be made and kept in the Chinese and English language.

		
	(d)
	For its accounting and bookkeeping the Company shall adopt an IT system which is accepted by both Parties, available in both English and Chinese languages, and meets the requirements of the Company’s operation and the Parties’ applied accounting and bookkeeping standards.

		
	21.2
	Reports

		
	(a)
	The CEO and Head of Finance shall report directly to the Board of Directors at least on a quarterly basis and the CEO shall be responsible for the operating results of the Company.

		
	(b)
	The Parties, as well as the Chairman, Vice Chairman and Supervisor shall have full and equal access to the Company’s accounts and financial statements, which shall be kept at the legal address of the Company. The Company shall, in the form required by the Parties, furnish to the Parties financial reports on a [...***...] and [...***...] basis within [...***...] of the applicable period end date, in accordance with the reporting requirements of both Parties and their respective banks (which shall, upon request by either Party, be audited) so that they may continuously be informed about the Company’s financial performance. The Company shall in addition provide a Party with planning financial statements in the form and at the times as required by that Party.

		
	(c)
	The Head of Finance shall be responsible for the timely and accurate preparation of financial reports including but not limited to quarterly and annual financial statements of the Company (balance sheet, profit and loss statement and cash flow statement) formulated in accordance with PRC GAAP and converted into US GAAP.

		
	(d)
	In the event that the Head of Finance or other suitably qualified person nominated by Kite is not available to complete financial reports, the Company shall engage one of the “Big Four” international practicing accounting firms registered in the PRC that is not the Company’s auditor to prepare its quarterly and annual accounts until such time as a Head of Finance is appointed to the Company.

		
	21.3
	Auditing

		
	(a)
	The Company shall engage one of the “Big Four” international practicing accounting firms registered in the PRC to audit its accounts. Such firm shall be nominated by Fosun and retained by the Company upon Board approval, which shall not be unreasonably withheld. Drafts of the audited financial statements and report shall be provided to each Party and to the Board of Directors for review within [...***...] after the end of each fiscal year, and the final audited financial statements and report shall be completed and provided to the Parties no later than [...***...] after the end of each fiscal year. Such financial statements shall be prepared in accordance with PRC law and regulations and pursuant to Article 21.1 (a). In case any Board member doubts the service

 

provided by this audit firm, such Board member may propose a replacement of this firm, which shall be discussed and decided by the Board of Directors. For clarity, any such replacement approved by the Board of Directors must continue to be one of the “Big Four” international practicing accounting firms registered in the PRC to audit its accounts.
		
	(b)
	Each Party may appoint an accountant registered abroad or registered in the PRC to audit the accounts of the Company on behalf of such Party. Access to the Company’s financial records shall be given to such accountant and such accountant shall keep confidential all documents examined while conducting audits. All expenses for such audit shall be borne by the Party which has appointed the auditor, unless:

		
	(i)
	events in the Company (including but not limited to fraud, bribery, loss of records) have required such audit; or

		
	(ii)
	the Company’s auditor regulated in Article 21.3 (a) has refused to confirm the Company’s records.

In such events the Company shall [...***...].
		
	21.4
	Bank accounts and foreign exchange

		
	(a)
	The Company shall separately maintain foreign exchange accounts and RMB accounts at banks within the PRC authorized to conduct foreign exchange operations.

		
	(b)
	The Company’s foreign exchange transactions shall be handled in accordance with relevant PRC regulations relating to foreign exchange control. [...***...].

		
	21.5
	Fiscal year

The Company shall adopt the calendar year as its fiscal year, with the result that each fiscal year shall begin on January 1 and end on December 31 of the same year, except for the first and last fiscal year which shall start / end according to the Term.

		
	21.6
	Shareholder auditing

Each Party may, on its own or by engaging a third party professional advisor with relevant expertise on behalf of such Party (“Professional Advisor”), audit important Company matters, including but not limited to finance, IPR protection status, local compliance, sales practices and business operation. Access to the Company’s financial records, business records, clinical records and other documents shall be given to the Party, and both the Party and such Professional Advisors shall keep confidential all documents examined while conducting audits. All expenses for such audits shall be borne as set forth in Article 21.3(b).
Article 22 
Profit Distribution
		
	22.1
	After the payment of enterprise income tax by the Company, the Company shall make the annual allocations from after-tax profits to the Three Funds, if and to the extent required by law. The amount of any annual allocation to such funds shall be determined by the Board of Directors.

		
	22.2
	The Board of Directors shall, at least once every year by a formally adopted resolution, decide the profit distribution plan according to the agreed percentage of profit distribution in Article 7.6.

		
	22.3
	No profit shall be distributed unless the Company’s deficit from the previous years is made up. Profits retained by the Company and carried over from the previous years may be distributed together with any distributable profits of the current year. Profits for distribution shall be after-tax profits, as defined under PRC GAAP, and after annual allocation to the Three Funds. For clarity, any payment of milestone or royalties shall be treated as expenses or asset costs for the calculation of profits.

		
	22.4
	All remittance of profits and other sums payable to Kite out of PRC under the Articles of Association shall be made to a foreign bank account designated by Kite respectively in RMB, USD or other freely convertible foreign currencies, as so informed by Kite in writing and in accordance with the foreign exchange regulations in PRC.

Article 23 
Taxation and Insurance
		
	23.1
	Income tax, customs duties and other taxes

		
	(a)
	The Company shall timely pay taxes and customs duty under the relevant national and local laws and regulations of the PRC, subject to any further tax holidays, tax reductions, waivers, exemptions, or exclusions granted to the Company from time to time by any Governmental Authorities, and applicable treaties for the avoidance of double taxation in effect between the PRC and other countries. The Company shall provide copies of all tax filings to the Parties immediately after filing.

		
	(b)
	The Company’s Chinese and expatriate staff shall pay individual income tax and other Taxes in accordance with the Individual Income Tax Law of the PRC and relevant treaties for the avoidance of double taxation in effect between the PRC and other countries.

		
	(c)
	In any case the Company shall apply for all available tax and customs exemptions, holidays and reductions.

		
	(d)
	In any case the Company is required to withhold taxes from the payments to either Party or the Affiliates of either Party, the following shall apply:

		
	(i)
	The Company shall exercise its best effort to attain that the payment to both Parties or their respective Affiliates will be taxed at the lowest taxation rate available (in particular under double taxation treaties) at the time of payment.

		
	(ii)
	The Company shall provide both Parties or their Affiliates with an original copy of the tax assessment and the tax receipt without undue delay, and no later than [...***...]. These documents shall specify both Parties or their Affiliates as the taxpayer, the amount of tax paid, the tax rate or the amount of fee on which such rate is based, the tax law and the legal regulation on which such tax payment is based, and the date of payment of the tax.

		
	(iii)
	If the documents of the tax authority are issued in a language other than English, the Company shall have the documents translated into English at its own expense at the request of Kite.

		
	23.2
	Insurance

The Company shall, throughout the Term, maintain insurance coverage of the types and in the amount as the Management Personnel determined. The Company shall obtain insurance from insurance companies or organizations in compliance with PRC laws and regulations.
Article 24 
Term
		
	24.1
	Term

The Term shall be twenty (20) years, commencing on the Establishment Date, unless otherwise the Term is extended according to Article 24.2.
		
	24.2
	Extension of the Term

The Term may be extended upon agreement by the Parties. In such case the Board shall unanimously approves the extension of the Term and amend the Articles of Association, and the Company shall timely apply for all relevant Governmental Approvals or filings to the extent as required by law.
Article 25 
Termination
		
	25.1
	Termination upon expiry or by agreement

The Articles of Association shall be automatically terminated upon the expiry of the Term set forth in Article 24.1, unless extended pursuant to Article 24.2. Additionally it may be terminated at any time by the written agreement of the Parties.
		
	25.2
	Termination upon failure to meet certain conditions In the event that:

		
	(a)
	any of the capital contribution and/or co-operative conditions pursuant to Article 7, Article 8 and Article 11 is not fulfilled in time, or is still not remedied within a [...***...]

 

 

[...***...] grace period (if any) or Article 16.3(b) occurs under the Technology License Agreement attached as appendices of the Joint Venture Contract; or
		
	(b)
	The Company fails to achieve cash flow positive until [...***...], or any mutually agreed grace period (if any); for avoidance of doubt, “cash flow positive” means, for an agreed period of time, a balanced financial statement of the Company where accumulative cash inflow - other than capital investment of the Parties – exceeds the accumulative cash outflow of the Company; provided that if the Company exercises its option for an additional product or otherwise develops or in-licenses an additional product, the Company shall have an additional [...***...] from [...***...] to achieve positive cash flow; or

		
	(c)
	after the Establishment Date, if any Governmental Authority (including for this purpose any court) having authority over the other Party requires any provision of the Joint Venture Contract or the Articles of Association to be revised in such a way as to cause significant adverse consequences to the Company or either Party; 

then Kite and Fosun shall each have the right to terminate the Articles of Association by notifying the other Party in writing, pursuant to the procedures set forth in Article 25.5 and Article 25.6 below; provided that if the condition of Article 25.2(c) is met, the Parties shall first discuss for a period of [...***...] in good faith whether the Company shall continue to operate prior to either Party exercising its right to terminate pursuant to Article 25.2(c).
		
	25.3
	Unilateral termination by a Party due to Governmental Action or Force Majeure

		
	(a)
	if any Governmental Authority (including for this purpose any court) expropriates, requisitions, or orders the expropriation or requisition of, all or material portion of the assets or properties of a Party or the Company, and such expropriation or requisition is considered by either the Company or the other Party as adversely influencing the performance of the Company’s original objectives, a Party over which the government authority mentioned above does not have authority may terminate this Joint Venture Contract or the Articles of Association; or

		
	(b)
	Without prejudice to any other termination rights set out elsewhere in the Articles of Association, the Articles of Association may be unilaterally terminated by the written notice of a Party to the other Party pursuant to the procedure set forth in Articles 25.5 and Article 25.6, if the conditions or consequences of Force Majeure significantly interfere with the Company’s ability to operate pursuant to the Annual Business Plan for a period in excess of [...***...] and the Parties have been unable to find an equitable solution pursuant to Article 25.5.

		
	25.4
	Unilateral termination by a non-breaching Party

Without prejudice to any other termination rights set out elsewhere in the Articles of Association, the Articles of Association may unilaterally be terminated by the written notice of the non-breaching Party to the other Party pursuant to the procedure set forth in Article 25.5 and Article 25.6 below:
		
	(a)
	if the other Party (“Breaching Party”) materially breaches the Joint Venture Contract and/or the Articles of Association and such breach or violation is not cured within [...***...] after receipt of a written notice by the Breaching Party from the non-breaching Party in which it identifies the breach and demands that it be cured by the breaching Party; or

		
	(b)
	if the other Party (“Breaching Party”) becomes bankrupt, is the subject of proceedings for insolvency, liquidation or dissolution, ceases or is unable to carry on business in accordance with the Articles of Association, becomes unable to pay overdue debts for more than [...***...], or any of its equity interest in the Company is seized or frozen by a court order and not released within [...***...] upon such seizure.

		
	25.5
	Negotiations to solve problems

If a Party entitled to give a notice pursuant to Article 25.2, Article 25.3 or Article 25.4 gives a notice of its desire to terminate the Articles of Association, the Parties shall immediately conduct negotiations and attempt to resolve the situation which results in the giving of such notice. If (i) no resolution of the dispute is reached to the satisfaction of the notifying Party within [...***...] after issuance of such notice, or (ii) the notified Party fails to cooperate by promptly commencing negotiations within such [...***...] period, the notifying Party shall be entitled to terminate the Articles of Association immediately upon giving a second notice to the breaching Party.
		
	25.6
	Date of termination

For purposes of this Article 25, the “Date of Termination” shall be (i) the date of expiry of the Term or the date of the agreement by the Parties on termination of the Articles of Association, if the termination is effected pursuant to Article 25.1, or (ii) the date of when the notified Party of notice of unilateral termination of the Articles of Association receives the second notice for immediate termination of the Articles of Association, if the termination is effected pursuant to Article 25.5.

Article 26 
Liquidation and Continuing Obligations
		
	26.1
	Liquidation

If upon termination of the Articles of Association in accordance with Article 25, the Company will not be continued by either Party, as the case may be, within [...***...] following the Date of Termination, then the Board shall promptly adopt a resolution on the dissolution and liquidation of the Company. The liquidation shall be conducted in accordance with relevant PRC laws and regulations and with the provisions set forth below (in so far as they do not conflict with such laws and regulations):
		
	(a)
	A liquidation group shall be established within [...***...] from the Date of Termination, which is made up of a number of members appointed by each Party in accordance with the number of the Board members each Party is entitled to appoint to the Board of Directors under Article 14.1 (a). For the avoidance of doubt, Fosun shall be entitled to appoint the Chairman of the liquidation group, who will lead all the activities of the liquidation group. In such case Kite may decide to retain one of the Big Four accounting firms to supervise or check the liquidation process, with the related cost being part of the liquidation expenses.

		
	(b)
	The liquidation group shall initiate the necessary appraisal and valuation of the property of the Company which shall be performed by the liquidation group or, if so decided by the liquidation group, by an international practicing accounting firm registered in the PRC and selected by the liquidation group, provided that such accounting firm must be independent of both Parties. In the course of valuation and appraisal of the Company’s property, the selected accounting firm shall apply such appraisal and valuation method as is appropriate and internationally applied. The liquidation group shall develop a liquidation plan on the basis of the final valuation report prepared by the selected accounting firm.

		
	(c)
	In developing and executing the liquidation plan, the liquidation group shall use every reasonable effort to obtain the highest possible price for the Company’s assets.

		
	(d)
	After the liquidation and division of the Company’s assets and the settlement of all of its outstanding debts, [...***...], and any remaining assets (if any) thereafter shall be paid over to the Parties in the profit distribution 

 

proportion according to Article 7.6. However, in case of termination of the Articles of Association according to Article 25.4 the non-breaching Party shall [...***...].
		
	(e)
	After liquidation of the Company, the liquidation group shall report to the relevant Government Authorities to cancel its registration and business license. Additionally, the Company shall publish a formal announcement of the termination and liquidation of the Company.

		
	(f)
	Either Party, at its own expense, shall have the right to obtain copies of all of the Company’s accounting vouchers, account books, account statements, minutes and Board resolutions, and other relevant documents after the conclusion of liquidation.

		
	26.2
	Continuing obligations

The rights, benefits and obligations provided in the Articles of Association in relation to compensation of damages, indemnification, settlement of disputes, termination and liquidation of the Company shall survive the termination of the Articles of Association.
Article 27 
Applicable Law
The formation, validity, interpretation and implementation of the Articles of Association shall be governed by the laws of the PRC.
Article 28 
Miscellaneous Provisions
		
	28.1
	Assignment

The Articles of Association may not be assigned in whole or in part by any Party without the prior written consent of the other Party hereto and the approval of Governmental Authorities applicable under PRC law.
		
	28.2
	Language

The Articles of Association is executed in the Chinese and English language in seven (7) originals each (at least one (1) for Kite, one (1) for Fosun, one (1) to be kept by the Company and the remaining four (4) originals for submission to the Governmental Authorities. The English and Chinese version shall be equally binding.
		
	28.3
	Notice

Any notice or written communication provided for in the Articles of Association by each Party to the other shall be made in English by email or by courier service delivered letter, promptly transmitted or addressed to the appropriate Party. The date of receipt of a notice or communication hereunder shall be deemed to be [...***...] after the letter is given to the courier service in the case of a courier service delivered letter and [...***...] after dispatch of an email, unless an earlier delivery date can be evidenced. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.
Kite:
KP EU C.V.
190 Elgin Avenue, George Town,
Grand Cayman KY1-9005, Cayman Islands 
E-mail: legal@kitepharma.com
Fosun:
Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. 
Building A, No.1289 Yishan Road, Shanghai 200233, PRC
E-mail: qiyy@fosunpharma.com
[Signature Page Follows]

The Articles of Association have been duly executed by the duly authorized representatives of the Parties at the date set out above.
KP EU C.V.
By     Intertrust Directors (Cayman) Ltd.
Name:     L.I. da Ascenção    Jacqueline Haynes

Title:    Authorised signatories
Signature:    /s/ L.I. da Ascencao    /s/ Jacqueline Haynes

Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (Chop)
By 
Name:    Wu Yifang
Title:    Legal Representative
Signature: /s/ Wu Yifang

Appendix 6
TRADEMARK AND NAME LICENSE AGREEMENT

between
KP EU C.V.
and
FOSUN PHARMA KITE BIOTECHNOLOGY CO., LTD.

		
	1.
	DEFINITIONS    3

		
	2.
	LICENSE    5

		
	3.
	OWNERSHIP    6

		
	4.
	USE OF THE LICENSED PROPERTY    6

		
	5.
	QUALITY CONTROL    7

		
	6.
	MARKETING, ADVERTISING AND PROMOTION    7

		
	7.
	TRADEMARK LICENSE REGISTRATION    8

		
	8.
	PROTECTION OF THE LICENSED PROPERTY    8

		
	9.
	REPRESENTATIONS AND WARRANTIES    9

		
	10.
	DURATION AND TERMINATION    9

		
	11.
	EFFECT OF TERMINATION    10

		
	12.
	FORCE MAJEURE    10

		
	13.
	INDEMNITY    10

		
	14.
	GOVERNING LAW AND DISPUTE SETTLEMENT    11

		
	15.
	MISCELLANEOUS    12

Schedule 1:  List of Kite Marks

This License Agreement (the “Agreement”) is effective as of April 27th, 2017 by and between:
		
	(1)
	KP EU C.V., a limited partnership that is governed by the laws of The Netherlands, having its registered seat at Amsterdam, the Netherlands and its business address at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands, registered with the Dutch trade register under number 64185958 (“Kite”).

		
	(2)
	Fosun Pharma Kite Biotechnology Co., Ltd. 

 
 a limited liability company organized and existing under laws of the People’s Republic of China whose registered office is at No.222 Kangnan Road, Shanghai 201203, PRC (the “Company”).
(Kite and the Company are hereinafter referred to individually as a “Party” and collectively as the “Parties”)
Preambles
WHEREAS, Kite Pharma, Inc. (“Kite Parent”) is the owner of the trade name “Kite” or “Kite Pharma” and the Kite Marks (as defined below) and has granted Kite the rights to use and sublicense such trade name and the Kite Marks.
WHEREAS, the Company is a joint venture established by Kite and Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd. (“Fosun”) in the pursuit of successful commercialization of KTE-C19 and potentially additional cancer immunotherapy products in the Territory (as defined below).
WHEREAS, pursuant to the Sino-foreign Co-operative Joint Venture Contract concluded between Kite and Fosun on January 10, 2017 (“JV Contract”), the Company wishes to use and Kite is willing to sublicense the Company to use the Licensed Property (as defined below) in connection with the Company’s business in the Territory (as defined below) under the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual promises of the Parties, and for good and valuable consideration, it is agreed by and between the Parties as follows:
		
	1.
	Definitions

Unless otherwise provided herein, the capitalized terms used in this Agreement shall have the same meanings as defined in the JV Contract.  For the purposes of this Agreement the following capitalized terms are defined in this Article 1 and shall have the meaning specified herein.
		
	1.1
	“Affiliate” shall, for the purpose of this Contract, mean, as to a Party, any entity directly or indirectly controlling, controlled by or under common control with such Party, where “control” means (a) beneficial ownership of greater than fifty percent 

(50%) of the voting equity interests in such entity or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.
		
	1.2
	“Effective Date” means the date when this Agreement is signed by both Parties and become legally effective.

		
	1.3
	“Force Majeure” means any unforeseen, unavoidable and insurmountable events which are beyond the control of a Party to this Agreement, and which arise after the Effective Date preventing total or partial performance by any Party.  Such events shall include in particular earthquakes, typhoons, flood, fire, other acts of nature, war, riots, hostility, public disturbance, acts of public enemies, prohibitions or acts of any Governmental Authority or public agency, strikes or other work stoppage, epidemics (including SARS, bird flu, N7H9) or any other events which are accepted as force majeure in general international commercial practice.  For clarity, acts by medical authorities relating to the Company’s product candidates shall not be considered a “Force Majeure” event.

		
	1.4
	“Fosun” means Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

		
	1.5
	“Governmental Authority” means any governmental ministry, administration, agency or other public authority (and/or any branch of the foregoing), whether at the national, provincial, municipal or local level, or any official of the national or any provincial, municipal or local government in the respective country.

		
	1.6
	“JV Contract” means the Sino-foreign Co-operative Joint Venture Contract concluded between Kite and Fosun on January 10, 2017.

		
	1.7
	“Kite Marks” means the logos and trademarks, registered or not registered in the Territory, as listed in Schedule 1 to this Agreement, including the New Marks as defined in Article 2.4 of this Agreement, and any further logos and trademarks which may be notified in writing by Kite to the Company from time to time.

		
	1.8
	“Kite Sale” means the sale of all or substantially all of Kite Parent’s assets, equity or business or a merger, reorganization or consolidation involving at least fifty percent (50%) or more of the voting equity securities of Kite Parent.

		
	1.9
	“Licensed Name” means the trade name “Kite” and/or “Kite Pharma”.

		
	1.10
	“Licensed Property” means the Licensed Name and the Kite Marks.  

		
	1.11
	“Term” has the meaning set forth in Article 10.1.

		
	1.12
	“Territory” means, for the sole purpose of this Agreement, mainland of the People’s Republic of China, the Hong Kong Special Administration Region, the Macao Special Administration Region, but excluding Taiwan.

		
	2.
	License

		
	2.1
	Trademark License

Subject to the terms and conditions of this Agreement, Kite hereby grants to the Company, during the Term and in connection with the Company’s business, a non-exclusive, non-assignable, royalty-free license to use the Kite Marks for purposes of marketing, promotion, advertisement, distribution and sale of the products and services of the Company in the Territory.
		
	2.2
	Name License

Subject to the terms and conditions of this Agreement, Kite hereby grants to the Company, during the Term and in connection with the Company’s business, a non-exclusive, non-assignable, royalty-free license to use the Licensed Name in its company name and trade name solely in the form of “Fosun Pharma Kite” with or without one or more additional words (e.g., “Fosun Pharma Kite Biotechnology Co., Ltd.”) in the Territory.
		
	2.3
	Internet

Subject to the terms and conditions contained herein, the Company is also granted, during the Term and in connection with the Company’s business, a non-exclusive, non-assignable, royalty-free right to use the Licensed Property on the Company’s website hosted on servers located in the Territory.
		
	2.4
	Changes in Kite Marks

Upon written notice to the Company, Kite may, from time to time in its sole discretion, elect to (a) discontinue any Kite Marks and/or (b) replace any Kite Marks with or use new or different logos or trademarks (“New Marks”).  In the event that Kite discontinues any Kite Marks or introduces a New Mark, the Company shall, within a reasonable period of time but not exceeding [...***...], cease to use such discontinued Kite Marks or begin to use the New Marks.
		
	2.5
	Sub-licensing

Without Kite’s prior written consent, the Company shall neither grant any sub-licenses under this Agreement to any third party or Fosun or any Affiliates of Fosun for any use of the Licensed Property.
		
	3.
	Ownership

		
	3.1
	The Company acknowledges and agrees that Kite Parent is the owner of the Licensed Property and all rights, title and interest in and to the Licensed Property shall remain with Kite Parent.  The Company shall not contest, dispute, challenge, oppose or seek to cancel Kite Parent’s right, title, and interest in and to the Licensed Property.

		
	3.2
	The Company recognizes the value of the goodwill associated with the Licensed Property.  Any goodwill derived from the use by the Company of the License Property shall inure to the exclusive benefit of Kite Parent.

		
	3.3
	The Company shall not do, or omit to do, or permit to be done, any act that will in any way impair Kite Parent’s rights in and to the Licensed Property, or that may weaken or damage the Licensed Property or the reputation or goodwill associated with the Licensed Property.

		
	3.4
	The Company shall not at any time, without the prior written consent of Kite, prosecute any application for registration of the Licensed Property, or any component, variation or derivation thereof, or any name or mark confusingly similar thereto, for any products or services in any country, or seek to register the Licensed Name as a domain name or part of any domain name.  If the Company at any time, without the prior written consent of Kite, apply for, or obtain, in its own name or otherwise on its behalf, registration of the Licensed Property or otherwise takes steps under applicable laws to obtain trademark or other protection of the Licensed Property in any country, the Company shall, at the direction of Kite, either (i) assign and transfer to Kite or any Affiliates of Kite, without further consideration, all rights, title and interest in or to the Licensed Property in such country, territory or jurisdiction, or (ii) cancel or withdraw such registration or application for registration.

		
	3.5
	The Company shall cooperate fully and in good faith with Kite for the purpose of securing and preserving Kite Parent’s rights in and to the Licensed Property.  In connection therewith, the Company shall, without limitation, execute and deliver to Kite in such form as it may reasonably request, all instruments necessary to (i) effectuate trademark protection, (ii) record the Company as a registered user of any trademarks pursuant to this Agreement, or (iii) cancel any such registration.

		
	4.
	Use of the Licensed Property

		
	4.1
	Except for the phrase “Fosun Pharma”, the Company shall not join any name, mark or logo with the Licensed Property so as to form a composite trade name or mark, without obtaining the prior written consent of Kite.

		
	4.2
	All use of Kite Marks made hereunder shall faithfully reproduce the design and appearance of Kite Marks as reflected in Schedule 1.  The Company shall not change or modify Kite Marks, or create any design variation of Kite Marks, without the prior written consent of Kite.

		
	4.3
	The Company shall comply strictly with the directions of Kite regarding the form and manner in applying the Kite Marks, including the labels of Kite Marks.

		
	4.4
	Other than the licensed use under this Agreement, the Company shall not use any word confusingly similar to the Licensed Name as, or as part of, its company or trade name and shall not use any other marks confusingly similar to Kite Marks.

		
	4.5
	The Company shall not use the Licensed Property for the purposes otherwise than authorized in this Agreement or in any manner that is not necessary or beneficial for the Company’s business.

		
	5.
	Quality Control

		
	5.1
	The Company acknowledges that the Licensed Property represent the goodwill that Kite and Kite Parent has earned for itself and are well recognized by the public and that it is of great importance to each Party that at all times, the Company shall use the Licensed Property in accordance with such quality standards and specifications as may be established by Kite and Kite Parent and communicated to the Company in writing from time to time.

		
	5.2
	The Company shall, in exercising its right under this Agreement, comply with all applicable laws, regulations, industry standards and codes of practice.

		
	5.3
	The Company shall promptly provide Kite with copies of material written and email communications, including also summary update of important verbal communications, relating to the Licensed Property, with any regulatory, industry or other authority.

		
	6.
	Marketing, advertising and promotion

		
	6.1
	The Company undertakes to ensure that its advertising, marketing and promotion of its products and services shall in no way reduce or diminish the reputation, image and prestige of the Licensed Property.

		
	6.2
	If requested by Kite in writing, the Company shall send to Kite for its prior written approval, the text and layout of all proposed advertisements and marketing and promotional material bearing Licensed Property.  If Kite disapproves of such material, it shall give written notice of such disapproval to the Company within [...***...] of receipt by Kite of the material.  The Company shall not use any material in the advertising, marketing or promotion bearing the License Property that has not been approved by Kite.

		
	7.
	Trademark License Registration

If applicable and required by law, Kite shall register such license to the Company of any registered trademark with the China Trademark Office.  The Company shall provide all necessary assistance in such registration process.
		
	8.
	Protection of the Licensed Property

		
	8.1
	The Company shall immediately notify Kite in writing, giving full particulars, if any of the following matters come to its attention in the Territory:

		
	(a)
	any registrations of, or applications for registration of, marks in the Territory that do or may conflict with any Licensed Property;

		
	(b)
	any infringements, imitations, or illegal use or misuse of the Licensed Property in the Territory.

		
	(c)
	any actual or threatened claim that the Licensed Property is invalid;

		
	(d)
	any claim made or threatened that use of the Licensed Property infringes the rights of any third party;

		
	(e)
	any other form of attack, charge or claim to which the Licensed Property may be subject.

		
	8.2
	In respect of any of the matters listed in Article 8.1:

		
	(a)
	Kite shall, in its absolute discretion, decide what action, if any, to take, provided that such action or inaction shall not cause any material adverse effect on the Company;

		
	(b)
	Kite shall have exclusive control over, and conduct of, all claims and proceedings;

		
	(c)
	Kite shall [...***...].

		
	(d)
	the Company shall not make any admission other than to Kite and shall at the Company’s expense provide Kite with all assistance that it may reasonably require in the conduct of any claims or proceedings.  Kite will [...***...], 

incurred by the Company in connection with such assistance at Kite’s specific request.
		
	8.3
	The Company agrees not to commence any infringement actions in respect of any of the matters listed in Article 8.1, unless otherwise agreed in writing by Kite.

		
	8.4
	The provisions of this Article 8 shall survive the termination or expiry of this Agreement.

		
	9.
	Representations and Warranties

		
	9.1
	Kite hereby represents and warrants to the Company that it has full power and authority to grant the licenses herein granted without infringing any third party’s rights.

		
	9.2
	Kite represents that, as of the Effective Date, it is not aware of any trademarks, trademark applications belonging to third parties and covering, in whole or part, the use of the Kite Marks in the Territory as contemplated herein.

		
	9.3
	The Company acknowledges that some of the Kite Marks has not yet been registered, and that the Company accepts this license on an “as is” basis.  The Company acknowledges that Kite makes no explicit or implicit representation or warranty as to the registrability, validity or enforceability of the Licensed Property in the Territory, or as to Company’s ability to use the Kite Marks without infringing or otherwise violating the rights of others in the Territory.

		
	10.
	Duration and Termination

		
	10.1
	This Agreement shall come into force on the Effective Date and shall continue in full force and effective for a period of twenty (20) years from the Effective Date unless terminated earlier in accordance with Article 10.2 or Article 10.3.  (“Term”).

		
	10.2
	Both Parties may mutually agree to terminate this Agreement by concluding a mutual termination agreement.

		
	10.3
	Without prejudice to any rights and remedies that have accrued under this Agreement, Kite may terminate this Agreement immediately by giving a [...***...] written notice to the Company if any of the following circumstances occurs:

		
	(a)
	the Company commits a material breach of contract under this Agreement and (if such breach is remediable) fails to remedy that breach within a [...***...] grace period;

		
	(b)
	a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the liquidation and early dissolution of the Company;

		
	(c)
	the Company is declared bankrupt or insolvent in accordance with law;

		
	(d)
	the Company suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business;

		
	(e)
	the JV Contract is terminated; or

		
	(f)
	Either Party is unable to perform this Agreement due to the change of laws and regulations.

		
	11.
	Effect of Termination

		
	11.1
	On expiration or termination of this Agreement for any reason and subject to any express provisions set out elsewhere in this Agreement:

		
	(a)
	all rights and licenses granted pursuant to this Agreement shall cease and the Company shall cease all use of the Licensed Property in the Territory or elsewhere as soon as possible but in any event within [...***...] of termination;

		
	(b)
	the Company shall immediately change its company name by deleting the term “Kite” and seek for company change approval from the competent Governmental Authority;

		
	(c)
	the Company shall cooperate with Kite in the cancellation of any license registered pursuant to this Agreement and shall execute such documents and do all acts and things as may be necessary to effect such cancellation;

		
	(d)
	the Company shall immediately destroy all materials used for reproducing the Licensed Property;

		
	(e)
	the Company will not use or do business under, or assist any third party in using or doing business under, any name, logo or mark using any of the Licensed Property or any name, logo or mark that Kite reasonably deems confusingly similar thereto.

		
	11.2
	The expiry or termination of this Agreement, for any reason, shall not affect any provision of this Agreement which is expressed to survive or operate in the event of expiry or termination, and shall be without prejudice to any rights of either Party which may have accrued to the date of such expiry or termination.

		
	12.
	Force Majeure

Neither Party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure result from Force Majeure.  In such circumstances the affected Party shall be entitled to a reasonable extension of the time for performing such obligations.  If the period of delay or non-performance continues for [...***...], the Party not affected by such event may terminate this Agreement by giving a [...***...] written notice to the affected Party.

		
	13.
	Indemnity

		
	13.1
	To the fullest extent permitted by law, Kite shall not be liable to the Company for any costs, expenses, loss or damage (whether direct, indirect or consequential and whether economic or other) arising from the Company’s exercise of the rights granted to it under this Agreement.

		
	13.2
	The Company shall indemnify Kite against any and all liabilities, costs, expenses, damages or losses (including any direct or indirect consequential losses, loss of profit, loss of reputation and all interest, penalties and legal and other professional costs and expenses) suffered or incurred by Kite arising out of or in connection with the Company’s exercise of its rights granted under this Agreement or any breach by the Company of the terms of this Agreement, including use of the Licensed Property in false advertising and defects in the products and services offered by the Company under the Licensed Property.

		
	14.
	Governing Law and Dispute Settlement

		
	14.1
	The formation, validity, performance and interpretation of this Agreement shall be governed by and construed in accordance with the law of the People’s Republic of China.

		
	14.2
	In the event of any dispute arises between the Parties out of or in relation to this Agreement, including any dispute regarding its existence, validity, interpretation, performance, breach or termination, the Parties shall attempt in the first instance to resolve such dispute through amicable means.

		
	14.3
	If the dispute has not been resolved by amicable means within [...***...] after either Party has given written notice to the other Party requesting the commencement of such consultation, then the dispute shall be submitted to the discussion between CEOs of both shareholders of the Company, in line with Article 33.2 of the Company’s JV Contract.

		
	14.4
	If the dispute is still not resolved within [...***...] upon the CEOs discussion in above Article 14.3, then either Party may submit the dispute to the Hong Kong International Arbitration Center (“HKIAC”) for arbitration in accordance with its then applicable arbitration rules.  The arbitration shall be conducted by three (3) arbitrators appointed in accordance with the said arbitration rules and in accordance with the following directions:

		
	(a)
	The arbitration proceedings shall be conducted in English and the arbitration tribunal shall refer to the English version of this Agreement only;

		
	(b)
	all arbitrators shall be fluent in English;

		
	(c)
	the arbitration proceedings shall be administered by HKIAC in Hong Kong and the seat of arbitration as well as the place of hearings and other procedural steps shall be Hong Kong;

		
	(d)
	The losing Party shall bear, in proportion to the percentage it has lost the case, the arbitration costs and other Party’s attorney fees.

		
	14.5
	The Parties hereby agree that any arbitration award rendered in accordance with the provisions of this Article 14 shall be final and binding upon the Parties, and the Parties further agree that such award may be enforced by any court having jurisdiction over any Party against which the award has been rendered, or where the assets of such Party is located.

		
	14.6
	In any arbitration proceedings, any legal proceedings to enforce the arbitration award, or any other legal proceedings between the Parties pursuant to or relating to this Agreement, each Party expressly waives the defence of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state or is otherwise entitled to immunity.

		
	14.7
	Upon submission of any dispute to arbitration, the Parties shall continue to exercise their remaining respective rights, and fulfil their remaining respective obligations under this Agreement, except for any matters related to the dispute in arbitration.

		
	15.
	Miscellaneous

		
	15.1
	Waiver

To the extent permitted by PRC law, the failure or delay on the part of a Party to exercise a right, power or privilege under this Agreement and any contracts attached as Appendices hereto shall not operate as a waiver thereof, nor shall any single or partial exercise of a right, power or privilege preclude any other future exercise thereof, unless explicitly otherwise regulated herein.
		
	15.2
	Assignment

This Contract may not be assigned in whole or in part by any Party without the prior written consent of the other Party hereto, provided that Kite may assign without consent under a Kite Sale or to an Affiliate of Kite.  In case of such an assignment, Kite shall guarantee that the assignee is capable of performing the duties and obligations under this Agreement.
		
	15.3
	Binding Effect and Amendments

This Agreement is made for the benefit of the Parties and their respective lawful successors and assignees.  No amendment or other modification of this Agreement shall in any event be effective unless the same is made in writing and signed by an authorized representative of each Party.  To the extent required by 

law, the effectively amended Agreement shall be submitted to the relevant Governmental Authorities for filing and/or registration.
		
	15.4
	Severability

If any part of this Agreement shall become or be declared void or invalid by virtue of law or government order or court decision, the remaining parts shall remain valid and this Agreement shall be fulfilled by the Parties in accordance with its general principles, and the void or invalid provision(s) shall be replaced by such valid provision(s) agreed to by the Parties as closest reflecting the economic intentions of the Parties at the time of signing this Agreement.
		
	15.7
	Language

This Agreement is executed in the English language in four (4) originals, one (1) for Kite and one (1) for the Company, the other copies are for registration/filing purpose.  Where necessary Chinese translation shall be prepared for this Agreement.
		
	15.8
	Entire Agreement

This Agreement and the Appendices attached hereto together constitute the entire agreement between the Parties with respect to the subject matter of this Agreement and they together supersede all prior discussions, negotiation and agreements between the Parties.
		
	15.9
	No Partnership or Agency

Nothing in this Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the Parties, constitute either Party the agent of the other Party, or authorise either Party to make or enter into any commitments for or on behalf of the other Party.
		
	15.10
	Notices

Any notice or written communication provided for in this Agreement by each Party to the other shall be made in English by email, or by courier service delivered letter, promptly transmitted or addressed to the appropriate Party.  The date of receipt of a notice or communication hereunder shall be deemed to be [...***...] after the letter is given to the courier service in the case of a courier service delivered letter and [...***...] after dispatch of an email, unless an earlier delivery date can be evidenced.  All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party.
		
	(a)
	Kite

KP EU C.V.

190 Elgin Avenue, George Town,
Grand Cayman KY1-9005, Cayman Islands
E-mail: legal@kitepharma.com
		
	(b)
	The Company

Fosun Kite Biotechnology Co., Ltd.
2/F, Pilot Building, No.222 Kangnan Road, China (Shanghai) Pilot Free
Trade Zone, Shanghai 201203, PRC
E-mail: qiyy@fosunpharma.com

This Agreement has been duly signed by the Parties as follows:
KP EU C.V.
By:             Intertrust Directors (Cayman) Ltd.
Name:       Padraig Hoare
Title:         Authorized Signatory
Signature:     /s/ Padraig Hoare
and
Name:         Julie Hughes
Title:         Authorized Signatory
Signature:     /s/ Julie Hughes
Fosun Kite Biotechnology Co, Ltd. (Chop)
By
Name:         Richard Liqun Wang
Title:         Legal Representative
Signature:    /s/ Richard Liqun Wang

Schedule 1
Kite Trademarks
1.  Registered trademarks in China
	
						
	No.
	Mark
	App./regn. No
	Date of app./regn.
	Classes
	Products/services list

	1.
	
	G1255238
	April 3, 2015
	5
	Drugs for cancer prevention or treatment; immunotherapy namely, pharmaceutical preparations for treatment of cancer and tumors;, T-cell therapy pharmaceutical preparations, biologic preparations for treatment of cancer and tumors etc.

2.  Pending unregistered trademarks in China
	
						
	No.
	Mark
	App./regn. No
	Date of app./regn.
	Classes
	Products/services list

	2.
	KITE PHARMA
	17908471
	Sept 16, 2015
	5,40,42
	Int. Pharmaceutical preparations, including preparations for use in the treatment of cancer and tumors; pharmaceutical preparations for immunotherapy, including T Cell therapy; Int. Processing of drug/medicinal ingredients; processing and handling of chemical reagents; custom assembling of material (for others); Int. Pharmaceutical research and development; medical research, namely, clinical trial services

	3.
	
	TBA
	07-Dec-2016
	5,40,42
	Int. Pharmaceutical preparations; Int. Manufacturing services; Int. Pharmaceutical research and development services

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