CASI Pharmaceuticals, Inc. (Form: 10-Q, Received: 05/15/2019 10:04:33)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________.

Commission file number 0-20713

CASI PHARMACEUTICALS, INC .

(Exact name of registrant as specified in its charter)

Delaware	58-1959440
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9620 Medical Center Drive, Suite 300

Rockville, Maryland

(Address of principal executive offices)

20850

(Zip code)

(240) 864-2600

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨

Accelerated filer þ

Non-accelerated filer ¨

Smaller reporting company þ

Emerging growth

company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock		CASI		Nasdaq Capital Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most recent practicable date.

Class		Outstanding at May 8, 2019
Common Stock $.01 Par Value		95,717,052

CASI PHARMACEUTICALS, INC.

Table of Contents

		PAGE
PART I.	FINANCIAL INFORMATION

Item 1 —	Consolidated Financial Statements

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018		4

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018		5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018		6

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018		7

Notes to Unaudited Condensed Consolidated Financial Statements		8

Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3 —	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4 —	Controls and Procedures	26

Part II. OTHER INFORMATION

Item 1 —	Legal Proceedings	26

Item 1A —	Risk Factors	27

Item 2 —	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3 —	Defaults Upon Senior Securities	27

Item 4 —	Mine Safety Disclosures	27

Item 5 —	Other Information	27

Item 6 —	Exhibits	27

EXHIBIT INDEX		28

SIGNATURES		29

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements also may be included in other statements that we make. All statements that are not descriptions of historical facts are forward-looking statements. These statements can generally be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” or “anticipates” or similar terminology. These forward-looking statements include, among others, statements regarding the timing of our clinical trials, our cash position and future expenses, and our future revenues.

Our forward-looking statements are based on information available to us today, and we will not update these statements. Actual results could differ materially from those currently anticipated due to a number of factors, including: risks relating to interests of our largest stockholders that differ from our other stockholders; the difficulty of executing our business strategy in China; the risk that we will not be able to effectively select, register and commercialize products from our recently acquired portfolio of abbreviated new drug applications (ANDAs); our lack of experience in manufacturing products and uncertainty about our resources and capabilities to do so on a clinical or commercial scale; risks relating to the commercialization, if any, of our products and proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); our inability to predict when or if our product candidates will be approved for marketing by the China National Medical Products Administration authorities; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; the volatility in the market price of our common stock; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; risk that results in preclinical and early clinical models are not necessarily indicative of later clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; and our dependence on third parties. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. Additional information about the factors and risks that could affect our business, financial condition and results of operations, are contained in our filings with the U.S. Securities and Exchange Commission (“SEC”), which are available at www.sec.gov.

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Balance Sheets

	March 31, 2019			December 31, 2018
				(Note 1)
ASSETS
Current assets:

Cash and cash equivalents	$	99,733,620		$	84,204,809
Investment in equity securities, at fair value		957,589			912,200
Prepaid expenses and other		6,993,387			7,447,611
Total current assets		107,684,596			92,564,620

Property and equipment, net		1,902,170			1,750,630
Intangible assets, net		18,349,662			18,784,727
Other assets		3,123,873			310,024
Total assets	$	131,060,301		$	113,410,001

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,383,376		$	968,048
Accrued liabilities		2,120,911			1,406,434
Note payable, net of discount		1,499,639			1,499,462
Total current liabilities		5,003,926			3,873,944

Other liabilities		1,843,212			73,591
Total liabilities		6,847,138			3,947,535

Commitments and contingencies (Note 15)

Redeemable noncontrolling interest, at redemption value (Note 7)		20,016,917			-

Stockholders' equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized and 0 shares issued and outstanding at March 31, 2019 and December 31, 2018		-			-
Common stock, $.01 par value: 170,000,000 shares authorized at March 31, 2019 and December 31, 2018; 95,796,597 shares and 95,366,813 shares issued at March 31, 2019 and December 31, 2018; 95,717,052 shares and 95,287,268 shares outstanding at March 31, 2019 and December 31, 2018, respectively		957,965			953,667
Additional paid-in capital		599,301,966			596,710,648
Treasury stock, at cost: 79,545 shares held at March 31, 2019 and December 31, 2018		(8,034,244	)		(8,034,244	)
Accumulated other comprehensive loss		(914,535	)		(1,226,320	)
Accumulated deficit		(487,114,906	)		(478,941,285	)
Total stockholders' equity		104,196,246			109,462,466
Total liabilities, redeemable noncontrolling interest and stockholders' equity	$	131,060,301		$	113,410,001

See accompanying condensed notes.

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

	Three Months Ended
	March 31, 2019			March 31, 2018
Revenues:
Product sales	$	-		$	-

Costs and expenses
Research and development		2,614,657			1,697,232
General and administrative		5,709,687			1,303,122
Acquired in-process research and development		-			686,998
		8,324,344			3,687,352

Interest income, net		(48,584	)		(6,729	)
Foreign exchange gains		(71,109	)		-
Changes in fair value of investment in equity securities		(45,389	)		(89,713	)
Net loss		(8,159,262	)		(3,590,910	)
Less: Income attributable to redeemable noncontrolling interest		14,359			-
Net loss attributable to CASI Pharmaceuticals, Inc.		(8,173,621	)		(3,590,910	)

Net loss per share (basic and diluted)	$	(0.09	)	$	(0.05	)
Weight average number of shares outstanding (basic and diluted)		95,649,773			71,215,000

Comprehensive loss:
Net loss	$	(8,159,262	)	$	(3,590,910	)
Foreign currency translation adjustment		311,785			527,251
Total comprehensive loss	$	(7,847,477	)	$	(3,063,659	)
Less: Comprehensive income attributable to redeemable noncontrolling interest		14,359			-
Comprehensive loss attributable to common stockholders	$	(7,861,836	)	$	(3,063,659	)

See accompanying condensed notes.

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

															Accumulated
												Additional			Other
	Preferred Stock				Common Stock				Treasury			Paid-in			Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Stock			Capital			Loss			Deficit			Total
Balance at December 31, 2018	$	-	$	-	$	95,287,268	$	953,667	$	(8,034,244	)	$	596,710,648		$	(1,226,320	)	$	(478,941,285	)	$	109,462,466
Accretion of redeemable noncontrolling interest		-		-		-		-		-			(2,558	)		-			-			(2,558	)
Issuance of common stock for options exercised		-		-		18,262		183		-			38,119			-			-			38,302
Repurchase of stock options to satisfy tax withholding obligations		-		-		-		-		-			(11,749	)		-			-			(11,749	)
Issuance of common stock from exercise of warrants		-		-		411,522		4,115		-			691,357			-			-			695,472
Stock issuance costs		-		-		-		-		-			(6,697	)		-			-			(6,697	)
Stock-based compensation expense, net of forfeitures		-		-		-		-		-			1,882,846			-			-			1,882,846
Foreign currency translation adjustment		-		-		-		-		-			-			311,785			-			311,785
Net loss attributable to CASI Pharmaceuticals, Inc.		-		-		-		-		-			-			-			(8,173,621	)		(8,173,621	)

Balance at March 31, 2019		-	$	-		95,717,052	$	957,965	$	(8,034,244	)	$	599,301,966		$	(914,535	)	$	(487,114,906	)	$	104,196,246

															Accumulated
												Additional			Other
	Preferred Stock				Common Stock				Treasury			Paid-in			Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Stock			Capital			Loss			Deficit			Total
Balance at December 31, 2017	$	-	$	-	$	69,822,080	$	699,015	$	(8,034,244	)	$	498,577,372		$	-		$	(452,702,029	)	$	38,540,114
Correction of immaterial error in prior year and cumulative effect adjustment due to the adoption of ASU 2016-01		-		-		-		-		-			-			-			1,232,312			1,232,312
Issuance of common stock and warrants pursuant to financing agreements		-		-		9,186,452		91,865		-			29,698,352			-			-			29,790,217
Issuance of common stock for options exercised		-		-		57,214		572		-			97,450			-			-			98,022
Issuance of common stock from exercise of warrants		-		-		576,130		5,762		-			967,898			-			-			973,660
Stock issuance costs		-		-		-		-		-			(211,685	)		-			-			(211,685	)
Stock-based compensation expense, net of forfeitures		-		-		-		-		-			260,040			-			-			260,040
Foreign currency translation adjustment		-		-		-		-		-			-			527,251			-			527,251
Net loss attributable to CASI Pharmaceuticals, Inc.		-		-		-		-		-			-			-			(3,590,910	)		(3,590,910	)

Balance at March 31, 2018		-	$	-		79,641,876	$	797,214	$	(8,034,244	)	$	529,389,427		$	527,251		$	(455,060,627	)	$	67,619,021

See accompanying condensed notes.

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

	Three Months Ended March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(8,159,262	)	$	(3,590,910	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization for property and equipment		138,880			65,822
Net loss on disposal of furniture and equipment		1,142			-
Amortization of intangible assets		386,673			250,141
Impairment loss related to intangible assets		48,391			-
Stock-based compensation expense		1,882,846			260,040
Acquired in-process research and development		-			552,863
Change in fair value of investment in equity securities		(45,389	)		(89,713	)
Non-cash interest		177			177
Changes in operating assets and liabilities:
Prepaid expenses and other assets		702,887			(377,087	)
Accounts payable		404,606			(522,274	)
Payable to related party		-			(2,228,366	)
Accrued liabilities and other liabilities		(579,718	)		(287,672	)
Net cash used in operating activities		(5,218,767	)		(5,966,979	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of furniture and equipment		30			-
Purchases of property and equipment		(252,071	)		(155,144	)
Acquisition of abbreviated new drug applications and related items		-			(18,607,848	)
Net cash used in investing activities		(252,041	)		(18,762,992	)

CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuance costs		(6,697	)		(211,685	)
Proceeds from sale of common stock and warrants		-			29,790,217
Cash contribution from redeemable noncontrolling interest		20,000,000			-
Proceeds from exercise of stock options		38,302			98,022
Repurchase of stock options to satisfy tax withholding obligations		(11,749	)		-
Proceeds from exercise of warrants		695,472			973,660
Net cash provided by financing activities		20,715,328			30,650,214

Effect of exchange rate change on cash and cash equivalents		284,291			477,422
Net increase in cash and cash equivalents		15,528,811			6,397,665

Cash and cash equivalents at beginning of period		84,204,809			43,489,935
Cash and cash equivalents at end of period	$	99,733,620		$	49,887,600

Supplemental disclosure of cash flow information:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

See accompanying condensed notes.

CASI Pharmaceuticals, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Basis of Presentation

CASI Pharmaceuticals, Inc. (“CASI” or the “Company”) (Nasdaq: CASI) is a U.S. pharmaceutical company with a platform to develop and accelerate the launch of pharmaceutical products and innovative therapeutics in China, U.S., and throughout the world. The Company is focused on acquiring, licensing, developing and commercializing products that address areas of unmet medical needs. The Company intends to execute its plan to become a leading platform to launch medicines in the greater China market leveraging its China-based regulatory and commercial competencies and its global drug development expertise.

The Company’s China operations are conducted through its wholly-owned subsidiary, CASI Pharmaceuticals (Beijing) Co., Ltd. (“CASI China”), which is based in Beijing, China. CASI China has established China operations that are growing as the Company continues to further in-license or acquire products for its pipeline.

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries, in which CASI, directly or indirectly, has a controlling financial interest. These subsidiaries include Miikana Therapeutics, Inc. (“Miikana”), CASI China, and CASI Pharmaceuticals (Wuxi) Co., Ltd. (“CASI Wuxi”). CASI China is a non-stock Chinese entity with 100% of its interest owned by CASI. CASI China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. CASI Wuxi was established on December 26, 2018 in China to develop a manufacturing capability in China in 2019. The Company controls CASI Wuxi by virtue of its 80% voting rights (see Note 7). Accordingly, the financial statements of CASI Wuxi have been consolidated in the Company’s consolidated financial statements since its inception. All inter-company balances and transactions have been eliminated in consolidation. The Company currently operates in one operating segment, which is the development of innovative therapeutics addressing cancer and other unmet medical needs for the global market.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, such condensed consolidated financial statements do not include all of the information and disclosures required by U.S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying December 31, 2018 financial information was derived from the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Operating results for the three month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or any other future period. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in its Form 10-K for the year ended December 31, 2018.

Certain line items in the prior-year unaudited condensed consolidated statement of cash flows relating to the acquired in-process research and development have been reclassified to conform to the December 31, 2018 presentation.

Liquidity Risks and Management’s Plans

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $487.1 million. The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical and development activities.

Taking into consideration the cash balance as of March 31, 2019 and its commitments to fund CASI Wuxi, the Company believes that it has sufficient resources to fund its operations at least through May 15, 2020. As of March 31, 2019, approximately $12.6 million of the Company’s cash balance was held by CASI China, and approximately $41.0 million was held by CASI Wuxi. The Company intends to continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive capital raising arrangements in China to support the Company’s dual-country approach to drug development.

New Accounting Pronouncements

Recently Adopted Pronouncements

Effective January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”). The guidance amends the accounting requirements for leases and requires lessees to recognize assets and liabilities related to long-term leases on the balance sheets and expands disclosure requirements regarding leasing arrangements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. The Company adopted this guidance effective January 1, 2019 using the following practical expedients:

the Company did not reassess if any expired or existing contracts are or contain leases

the Company did not reassess the classification of any expired or existing leases.

Additionally, the Company made ongoing accounting policy elections whereby it (i) does not recognize Right-of-use (“ROU”) assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease components for facilities leases, which primarily relate to ancillary expenses such as common area maintenance charges and management fees of operating leases.

Upon adoption of the new guidance on January 1, 2019, the Company recorded right of use assets of approximately $3.0 million and recognized lease liabilities of approximately $3.2 million; there was no cumulative effect impact to accumulated deficit as of January 1, 2019. No adjustments were made to prior comparative periods.

There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company's financial position, results of operations or cash flows.

Investment in Equity Securities

The Company has an equity investment in the common stock of a publicly traded company. The fair value of this security was measured using its quoted market price, a Level 1 input as of March 31, 2019 and December 31, 2018 (see Note 12). The following table summarizes the Company’s investment as of March 31, 2019:

Description	Classification		Cost		Gross unrealized gains		Aggregate fair value

Common stock		Investment	$	-	$	957,589	$	957,589

Unrealized gains on the Company’s equity investment for the three months ended March 31, 2019 and 2018 were $45,389 and $89,713, respectively, and are recognized as change in fair value of investment in equity securities in the accompanying condensed consolidated statements of operations and comprehensive loss.

Inventories

Inventories consist of raw materials and are stated at the lower of cost or net realizable value. Cost is determined using a first-in, first-out method. The carrying value of raw materials inventory was approximately $283,000 as of March 31, 2019 and is included in “prepaid expenses and other” in the accompanying condensed consolidated balance sheets.

Leases

As discussed in Note 2, effective January 1, 2019, the Company adopted Topic 842. At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Rent expense is recognized on a straight-line basis over the lease term.

The Company has made certain accounting policy elections whereby it (i) does not recognize ROU assets or lease liabilities for short-term leases (those with original terms of 12-months or less) and (ii) combines lease and non-lease components for facilities leases, which primarily relate to ancillary expenses such as common area maintenance charges and management fees of its operating leases. Operating lease ROU assets are included in other assets (noncurrent) and operating lease liabilities (see below) are included in accrued liabilities and other liabilities (noncurrent) in the condensed consolidated balance sheets as of March 31, 2019. As of March 31, 2019, the Company did not have any finance leases.

All of the Company’s existing leases as of March 31, 2019 are classified as operating leases. As of March 31, 2019, the Company has four material operating leases for facilities and office equipment with remaining terms expiring from 2021 through 2022 and a weighted average remaining lease term of 2.66 years. The Company has fair value renewal options for many of the Company’s existing leases, none of which have considered reasonably certain of being exercised or included in the minimum lease term. Discount rates used in the calculation of the lease liability is 5.4%. The discount rates reflect the estimated incremental borrowing rate, which includes an assessment of the credit rating to determine the rate that the Company would have to pay to borrow, on a collateralized basis for a similar term, an amount equal to the lease payments in a similar economic environment.

Rent expense for the three months ended March 31, 2019 consisted of approximately $301,000 of total operating lease cost. There was no variable lease cost or sublease income for the three months ended March 31, 2019.

The impact of Topic 842 on the March 31, 2019 condensed consolidated balance sheet was as follows:

	March 31, 2019

Other assets	$	2,833,385

Accrued liabilities	$	1,114,909
Other liabilities		1,843,212
Total lease liabilities	$	2,958,121

Supplemental cash flow information related to leases was as follows:

	Three Month Period ended
	March 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	308,260

Right of use assets obtained in exchange for lease obligations:	$	3,030,126

A maturity analysis of our operating leases as of March 31, 2019 follows:

Future undiscounted cash flows:

2019 (remaining nine months)	$	951,826
2020		1,279,327
2021		839,024
2022		144,643
Thereafter		-

Total		3,214,820
Discount factor		(256,699	)
Lease liability		2,958,121
Amounts due within 12 months		1,114,909
Non-current lease liability	$	1,843,212

In 2018 the Company entered into a lease on behalf of CASI Wuxi. As of March 31, 2019, the underlying asset of the lease has not been made available for use by the Company. The minimum lease payments for this lease, totaling approximately $3,789,000, beginning in November 2019 and expiring in 2024, are not included in the above table.

As previously disclosed in the consolidated financial statement for the year ended December 31, 2018 and under the previous lease standard (Topic 840), future minimum annual lease payments for the years subsequent to December 31, 2018 and in aggregate are as follows:

2019	$	1,311,707
2020		1,297,102
2021		856,832
2022		129,918
Thereafter		-
Total minimum payments	$	3,595,559

Rental expense for the year ended December 31, 2018 was approximately $916,000.

Intangible Assets

Intangible assets were acquired as part of 2018 asset acquisitions and include ANDAs for previously marketed generic products. These intangible assets were originally recorded at relative estimated fair values based on the purchase price for the asset acquisitions and are stated net of accumulated amortization.

The ANDAs are being amortized over their estimated useful lives of 13 years, using the straight-line method. Management reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in a manner similar to that for property and equipment. An impairment loss of $48,391 related to intangible assets was recognized in the three months ended March 31, 2019 and classified as research and development expenses.

Net definite-lived intangible assets at March 31, 2019, excluding the withdrawn ANDAs discussed above consists of the following:

Asset	Gross Value		Accumulated Amortization			Estimated useful lives
ANDAs	$	18,001,762	$	(1,634,155	)	13 years
TDF ANDA	$	2,035,121	$	(53,066	)	13 years
Total	$	20,036,883	$	(1,687,221	)

Expected future amortization expense is as follows as of March 31, 2019:

2019 (remaining nine months)	$	1,156,949
2020		1,542,599
2021		1,542,599
2022		1,542,599
2023		1,542,599
2024 and thereafter		11,022,317

Redeemable Noncontrolling Interest

As discussed in Note 1, on December 26, 2018, the Company, together with Wuxi Jintou Huicun Investment Enterprise, a limited partnership organized under Chinese law (“Wuxi LP”) established CASI Wuxi to build and operate a manufacturing facility in the Wuxi Huishan Economic Development Zone in Jiangsu Province, China. The Company holds 80% of the equity interests in CASI Wuxi and will invest, over time, $80 million in CASI Wuxi. The Company’s investment will consist of (i) $21 million in cash (paid in February 2019), (ii) a transfer of selected ANDAs valued at $30 million, and (iii) an additional $29 million cash payment within three years from the date of establishment of CASI Wuxi. Wuxi LP holds 20% of the equity interest in CASI Wuxi through investment in RMB of $20 million in cash (paid in March 2019).

Pursuant to the investment contract between the Company and Wuxi LP and Articles of Association of CASI Wuxi, the Company has the call option to purchase the 20% equity interest in CASI Wuxi held by Wuxi LP at any time within 5 years from the date of establishment of CASI Wuxi (i.e. up to December 26, 2023). Wuxi LP has the put option to require the Company to redeem the 20% equity interest in CASI Wuxi at any time after December 26, 2023. The redemption value under both the Company’s embedded put option and Wuxi LP’s embedded call option is equal to $20 million plus interest at the bank loan interest rate issued by the People's Bank of China for the period beginning with the initial capital contribution by Wuxi LP to the date of redemption. In addition, Wuxi LP has the put option to require the Company to redeem the 20% equity interest in CASI Wuxi at $20 million upon the occurrence of any of the following conditions: (i) the Company fails to fulfill its investment obligation to CASI Wuxi; (ii) CASI Wuxi suffers serious losses, discontinued operation, dissolution, goes into process of bankruptcy liquidation; or (iii) the Company substantially violates the investment contract and Articles of Association of CASI Wuxi.

The investment of Wuxi LP to CASI Wuxi is treated as redeemable noncontrolling interest and is classified outside of permanent equity on the consolidated balance sheets because (1) the noncontrolling interest is not mandatorily redeemable financial instruments, and (2) it is redeemable at the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company. The Company initially recorded the redeemable noncontrolling interest at its fair value of $20 million. The carrying amount of the redeemable noncontrolling interest is subsequently recorded at the greater of the amount of (1) the initial carrying amount, increased or decreased for the redeemable noncontrolling interest’s share of net income or loss in CASI Wuxi or (2) the redemption value, assuming the noncontrolling interest is redeemable at the balance sheet date. Accretion of the carrying amount of redeemable noncontrolling interests to the redemption value is recorded in additional paid-in capital.

Changes in redeemable noncontrolling interest during the three months ended March 31, 2019 are as follows:

Balance as of January 1, 2019	$	-
Cash contribution by Wuxi LP		20,000,000
Share of CASI Wuxi net income		14,359
Accretion of redeemable noncontrolling interest		2,558
Balance as of March 31, 2019	$	20,016,917

Stockholders’ Equity

Stock purchase warrants activity for the three months ended March 31, 2019 is as follows:

	Number of Warrants			Weighted Average Exercise Price
Outstanding at January 1, 2019		11,781,825		$	3.98
Issued		-		$	-
Exercised		(411,522	)	$	1.69
Expired		-		$	-
Outstanding at March 31, 2019		11,370,303		$	4.06
Exercisable at March 31, 2019		11,370,303		$	4.06

All outstanding warrants are equity classified.

Net Loss Per Share

Net loss per share (basic and diluted) was computed by dividing net loss attributable to common stockholders, considering the accretions to redemption value of the redeemable noncontrolling interest, by the weighted average number of shares of common stock outstanding. Outstanding stock options and warrants totaling 30,306,159 and 21,207,452 as of March 31, 2019 and 2018, respectively, were anti-dilutive and, therefore, were not included in the computation of weighted average shares used in computing diluted loss per share.

10.

Stock-Based Compensation

As of March 31, 2019, a total of 6,302,234 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan.

The Company’s net loss for the three months ended March 31, 2019 and 2018 includes $1,882,846 and $260,040, respectively, of non-cash compensation expense related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	Three Month Period ended March 31,
	2019		2018
Research and development	$	116,215	$	103,767
General and administrative		1,766,631		156,273
Share-based compensation expense	$	1,882,846	$	260,040

Compensation expense related to stock options is recognized over the requisite service period, which is generally the option vesting term of up to five years. Awards with performance conditions are expensed when it is probable that the performance condition will be achieved. For the three months ended March 31, 2019, approximately $27,600 was expensed for share awards with performance conditions that became probable during that period. There was no expense recorded for share awards with performance conditions during the three months ended March 31, 2018.

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of service based and performance-based stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk free rate of interest, expected dividend yield, expected volatility, and the expected life of the award. Following are the weighted-average assumptions used in valuing the stock options granted to employees during the three-month periods ended March 31, 2019 and 2018:

	Three Month Period ended March 31,
	2019			2018
Expected volatility		80.44	%		79.51	%
Risk free interest rate		2.57	%		2.63	%
Expected term of option		6.62 years			6.31 years
Expected dividend yield		0.00	%		0.00	%

The weighted average fair value of stock options granted during the three-month periods ended March 31, 2019 and 2018 were $2.69 and $2.61, respectively.

A summary of the Company's stock option plans and of changes in options outstanding under the plans during the three-month period ended March 31, 2019 is as follows:

	Number of Options			Weighted Average Exercise Price
Outstanding at January 1, 2019		18,429,308		$	2.44
Exercised		(21,362	)	$	1.79
Granted		540,000		$	3.72
Expired		(4,090	)	$	1.87
Forfeited		(8,000	)	$	3.43
Outstanding at March 31, 2019		18,935,856		$	2.48
Exercisable at March 31, 2019		10,910,743		$	1.76

Cash received from option exercises under all share-based payment arrangements for the three months ended March 31, 2019 and 2018 was $38,302 and $98,022, respectively.

Upon the recommendation of the Compensation Committee, the Company’s Board of Directors (the “Board”) approved a grant of stock options to the Company’s Chairman and CEO, effective April 2, 2019. Under the terms of the grant, subject to stockholder approval and cancellation of his existing performance-based option, on April 2, 2019 he received a stock option covering 4 million shares of common stock, at an exercise price of $2.85, the closing price on the grant date, vesting at the earlier of (i) the completion of a transformative event by the Company as determined in the discretion of the Compensation Committee and (ii) the second anniversary of the date of grant. The grant is conditioned upon stockholder approval at the 2019 Annual Meeting of Stockholders and is not included in the above table.

11.

Income Taxes

At December 31, 2018, the Company had a $3.0 million unrecognized tax benefit. The Company recorded a full valuation allowance on the net deferred tax asset recognized in the consolidated financial statements as of December 31, 2018.

During the three months ended March 31, 2019, there were no material changes to the measurement of unrecognized tax benefits in various taxing jurisdictions. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense.

The tax returns for all years in the Company’s major tax jurisdictions are not settled as of March 31, 2019. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

12.

Fair Value Measurements

The majority of the Company’s financial instruments (consisting principally of cash and cash equivalents, accounts payable and accrued liabilities) are carried at cost which approximates their fair values due to the short-term nature of the instruments. The Company’s investment in equity securities is carried at fair value (see Note 3). The Company’s note payable is carried at amortized cost which approximates fair value due to its classification as a short-term note payable.

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2—Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.

Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the hierarchy.

The Company has an equity investment in the common stock of publicly traded company. The Company’s investment in this equity security is carried at its estimated fair value, with changes in fair value reported in the consolidated statement of operations and comprehensive loss each reporting period (see Note 3).

The following tables presents the Company’s financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, by level within the fair value hierarchy:

Description	Fair Value at March 31, 2019		Level 1		Level 2		Level 3

Investment in common stock	$	957,589	$	957,589	$	-	$	-

Description	Fair Value at December 31, 2018		Level 1		Level 2		Level 3

Investment in common stock	$	912,200	$	912,200	$	-	$	-

Financial Liabilities Measured at Fair Value on a Non-Recurring Basis

In connection with entering into the various securities purchase agreements in 2018, the Company issued shares of its common stock along with detachable stock purchase warrants. The Company allocates the proceeds received to the common stock and warrants on a relative fair value basis. The fair value of the common stock is based on quoted market price for the Company’s common stock, a Level 1 input. The fair value of the stock purchase warrants is determined using the Black-Scholes-Merton option pricing model which uses Level 3 unobservable inputs.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company has no non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures its long-lived assets, including property and equipment and intangible assets, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. An impairment loss of $48,391 was recognized in the three months ended March 31, 2019. No such fair value impairment was recognized in the three months ended 2018.

In 2018, the Company acquired certain ANDAs pursuant to transactions accounted for as asset acquisitions. The intangible assets acquired from Sandoz were estimated using the discounted cash flow method (an income approach), which involves the use of Level 3 inputs such as estimates for projected sales, expenses, and cash flows, expected income and value-added tax rates, and a required rate of return adjusted for both industry and Company-specific risks, among other inputs. The fair values of the remaining ANDAs were estimated using a multiple of values method (an income approach), which involved using Level 3 inputs such as estimated addressable markets and market penetration rates. The fair value of the API was estimated using Level 2 inputs, such as quoted market prices for similar API from various suppliers or other sources.

13.

Related Party Transactions

The Company has supply agreements with Spectrum for the purchase of EVOMELA, ZEVALIN, and MARQIBO in China for quality testing purposes to support CASI’s application for import drug registration and for commercialization purposes. The former CEO of Spectrum is also a member of CASI’s Board, and Spectrum is a greater than 10% shareholder of the Company. In 2018 and 2019, the Company entered into commercial purchase obligation commitments for EVOMELA from Spectrum totaling approximately $12.3 million. As of March 31, 2019, the Company paid $4,850,000 as a deposit for the purchase of EVOMELA expected to be delivered in 2019. The advance payments made to Spectrum are reflected as prepaid expenses and other in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018. In April 2019, the Company paid additional deposits for EVOMELA to Spectrum totaling $2.8 million. There were no other materials purchased from Spectrum during the three months ended March 31, 2019 or 2018. As of March 31, 2019 and December 31, 2018, there were no material amounts payable to Spectrum.

14.

License Arrangements

The Company has certain product rights and perpetual exclusive licenses from Acrotech BioPharma L.L.C. (“Acrotech”) to develop and commercialize the following commercial oncology drugs and drug candidates in the greater China region (which includes China, Taiwan, Hong Kong and Macau) (the “Territories”):

Melphalan Hydrochloride For Injection (EVOMELA)(“EVOMELA”);

Ibritumomab Tiuxetan (ZEVALIN) (“ZEVALIN”); and

Vincristine Sulfate Liposome Injection (MARQIBO), (“MARQIBO”).

CASI is responsible for developing and commercializing these three drugs in the Territories, including the submission of import drug registration applications and conducting confirmatory clinical trials as needed.

In March 2016, Spectrum, the former owner of EVOMELA, ZEVALIN and MARQIBO, received notification from the FDA of the grant of approval of its New Drug Application (NDA) for EVOMELA primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma. In December 2016, the China National Medical Products Administration (“NMPA”) accepted for review the Company’s import drug registration application for EVOMELA and in 2017 granted priority review of the import drug registration clinical trial application (CTA). On December 3, 2018 the Company received NMPA’s approval for importation, marketing and sales in China for EVOMELA. The Company is building an internal commercial team to prepare for the commercial launch EVOMELA in 2019. The Company is also preparing for a post-marketing study.

The Company is in various stages of the regulatory and development process to obtain marketing approval for ZEVALIN and MARQIBO in its territorial region, with ZEVALIN commercially available in Hong Kong. In 2017, the NMPA accepted for review the Company’s import drug registration for ZEVALIN including both the antibody kit and the radioactive Yttrium-90 component. On February 12, 2019, the Company received NMPA’s approval of the Company’s CTA to allow for a confirmatory registration trial to evaluate the efficacy and safety of ZEVALIN. In 2016, the NMPA accepted for review the Company’s import drug registration application for MARQIBO. On March 4, 2019 the Company received NMPA’s approval of the Company’s CTA to allow for a confirmatory registration trial to evaluate the efficacy and safety of MARQIBO. The Company intends to advance both of these products.

15.

Commitments

In 2018, the Company entered into purchase obligation commitments for EVOMELA from Spectrum for approximately $9.2 million. In March 2019, the Company entered into an additional purchase obligation commitment for EVOMELA from Spectrum for approximately $3.1 million. The Company expects all of the EVOMELA product to be delivered in 2019. In 2018, the Company paid $4.8 million as a deposit for the purchase of EVOMELA. The deposits made to Spectrum are reflected as prepaid expense and other in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018. In April 2019, the Company paid additional deposits for EVOMELA to Spectrum totaling $2.8 million.

In 2018, the Company committed to invest $80 million in CASI Wuxi, of which $21 million was invested in February 2019 (see Note 7).

16.

Subsequent Event

On April 16, 2019, the Company entered into a License Agreement (the “License Agreement”) with Black Belt Therapeutics Limited (“Black Belt”), a company established under the laws of England, pursuant to which the Company obtained an exclusive, worldwide license for an investigational anti-CD38 monoclonal antibody (Mab), CID-103.

Pursuant to the License Agreement, the Company made an upfront payment of 5,000,000 euro, and will make potential future payments of development and sales milestones and royalties. The Company will also make an equity investment of 2,000,000 euro in a newly established company that will carry on the work of Black Belt in new therapeutic areas. CASI will be responsible for all development and commercialization activities worldwide.

The License Agreement contains customary representations, warranties, covenants and indemnification provisions.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

We are a U.S. pharmaceutical company with a platform to develop and accelerate the launch of pharmaceutical products and innovative therapeutics in China, U.S., and throughout the world. We are focused on acquiring, licensing, developing and commercializing products that address areas of unmet medical need. We intend to execute our plan to become a leading platform to launch medicines in the greater China market leveraging our China-based regulatory and commercial competencies and our global drug development expertise. Our China operations are conducted through our wholly-owned subsidiary, CASI China, which is based in Beijing, China. CASI China has established China operations that are growing as we continue to further in-license or acquire products for our pipeline.

Our product pipeline features the following: (1) CID-103, an anti-CD38 monoclonal antibody being developed for the treatment of hematological cancers; (2) U.S. FDA-approved hematology oncology drugs in-licensed from Spectrum for the greater China market, consisting of Melphalan Hydrochloride For Injection (EVOMELA), Ibritumomab Tiuxetan (ZEVALIN) and Vincristine Sulfate Liposome Injection (MARQIBO), (3) a portfolio of FDA-approved abbreviated new drug applications (“ANDAs”), including entecavir and TDF indicated for hepatitis B virus; and (4) four pipeline ANDAs that are pending FDA approval. We intend to prioritize a select subset of the ANDAs for product registration and commercialization in China. In addition to these advanced products, our pipeline includes a proprietary Phase 2 drug candidate, ENMD-2076, that we have previously determined not to pursue as a single agent, and instead we are exploring the feasibility of combination as a clinical strategy. We also have proprietary early-stage immune-oncological potential candidates in preclinical development.

We believe our product mix reflects a risk-balanced approach between products in various stages of development, between products that are branded and non-branded, and between products that are proprietary and generic. We intend to continue building a significant product pipeline of high quality pharmaceuticals, as well as innovative drug candidates for commercialization in China and for the rest of the world. For in-licensed products, we use a market-oriented approach to identify pharmaceutical candidates that we believe have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under our drug development strategy. For our FDA-approved ANDAs, we intend to select and commercialize certain niche products from the portfolio that complement our therapeutic focus areas and which offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S.

We believe the China operations offer a significant market and growth potential due to extraordinary increase in demand for high quality medicine coupled with regulatory reforms in China that make it easier for global pharmaceutical companies to introduce new pharmaceutical products into the country. We will continue to in-license clinical-stage and late-stage drug candidates, and leverage our platform and expertise, and hope to be the partner of choice to provide access to the China market. We expect the implementation of our plans will include leveraging our resources and expertise in both the U.S. and China so that we can maximize development and clinical strategies concurrently under U.S. FDA and China NMPA regulatory regimes.

In order to capitalize on the drug development and capital resources available in China, we are doing business in China through our wholly-owned China-based subsidiary that will execute the China portion of our drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing our commercial launches. In December 2018, we received NMPA approval of Melphalan Hydrochloride For Injection (EVOMELA), for:

use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, and

the palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate.

We intend to begin commercializing this drug through CASI China in 2019 using EVOMELA supplied through Spectrum and its suppliers. All future needs will be sourced from Acrotech and its suppliers.

The Company is building an internal commercial team to prepare for the launch of our first commercial product, Melphalan Hydrochloride for Injection (EVOMELA) in 2019. As part of the strategy to support our future clinical and commercial manufacturing needs and to manage our supply chain for certain products, the Company has established CASI Wuxi to construct a cGMP manufacturing facility in Wuxi, China. On November 16, 2018, the Company announced that it had entered into framework agreements to establish CASI Wuxi to build and operate a manufacturing facility in the Wuxi Huishan Economic Development Zone in Jiangsu Province, China. We intend to invest, over time, $80 million in CASI Wuxi. We invested $21 million in cash in February 2019 and will invest, over time, an additional $59 million, to consist of the transfer of selected ANDAs valued at $30 million, and an additional $29 million cash payment by December 26, 2021. Additionally, Wuxi LP contributed the equivalent in RMB of USD $20 million in cash in CASI Wuxi in March 2019. The site is currently in pre-construction phase with ongoing design and engineering activities. Through CASI China, we will focus on the China market, devoting more resources and investment going forward.

Additional funds raised by issuing equity securities may result in dilution to existing stockholders.

RESULTS OF OPERATIONS

For the Three Months Ended March 31, 2019 and 2018.

Revenues and Cost of Product Sales . There were no revenues recorded for the three months ended March 31, 2019 and 2018.

Research and Development Expenses. Our research and development expenses for the three months ended March 31, 2019 totaled approximately $2,615,000 and $1,697,000 for the corresponding 2018 period. Included in our research and development expenses for the three-month period ended March 31, 2019 are direct project costs of $1,570,000 related to our ANDAs acquired in 2018, $42,000 for ENMD-2076, $265,000 for drugs in-licensed from Spectrum, and $323,000 for preclinical development activities primarily in China. The 2018 R&D expenses for the comparable period included direct project costs of $441,000 related to our ANDAs acquired in January 2018, $113,000 for ENMD-2076, $142,000 for drugs in-licensed from Spectrum, and $498,000 for preclinical development activities in China. The overall increase in research and development costs in the three months ended March 31, 2019, as compared to same period in 2018, primarily reflects higher regulatory costs associated with our ANDAs in 2019.

At March 31, 2019, accumulated direct project expenses for our ANDAs acquired in 2018 totaled $3,758,000; $28,664,000 for ENMD-2076; $5,788,000 for drugs in-licensed from Spectrum; and for preclinical development activities primarily in China, accumulated project expenses totaled $5,357,000. Our research and development expenses also include non-cash stock-based compensation totaling $116,000 for the three months ended March 31, 2019, and $104,000 for the corresponding 2018 period. Our research and development expenditures includes facility costs and other departmental overhead, expenditures related to the non-clinical support of our programs, and non-cash amortization expense of acquired ANDAs.

We expect the majority of our research and development expenses for 2019 to be devoted to advancing our in-licensed products towards market approval in China, the technology transfer activities and regulatory support associated with our ANDA portfolio, and our early-stage candidates in preclinical development. We expect our expenses for 2019 to increase based on our commercial and clinical development plan. Completion of clinical development may take several years or more, but the length of time generally varies substantially according to the type, complexity, novelty and intended use of a product candidate.

We estimate that clinical trials of the type we generally conduct are typically completed over the following timelines:

Global FDA Trial:

*CLINICAL PHASE*		*ESTIMATED* *COMPLETION* *PERIOD*
Phase 1		1-2 Years
Phase 2		2-3 Years
Phase 3		2-4 Years

Local NMPA Trial:

*CLINICAL PHASE*		*ESTIMATED* *COMPLETION* *PERIOD*
Phase 1		1 Year
Phase 2		2 Years
Phase 3		2-3 Years

The duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

the number of patients that ultimately participate in the trial;

the duration of patient follow-up that seems appropriate in view of the results;

the number of clinical sites included in the trials; and

the length of time required to enroll suitable patient subjects.

We test our potential product candidates in numerous preclinical studies to identify indications for which they may be product candidates. We may conduct multiple clinical trials to cover a variety of indications for each product candidate. As we obtain results from trials, we may elect to discontinue clinical trials for certain indications in order to focus our resources on more promising indications.

Our proprietary product candidates have also not yet achieved regulatory approval, which is required before we can market them as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, regulatory agencies must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical testing and early clinical trials have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

Our business strategy includes being opportunistic with collaborative arrangements with third parties to complete the development and commercialization of our product candidates. In the event that third parties take over the clinical trial process for one of our product candidates, the estimated completion date would largely be under the control of that third party rather than us. We cannot forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our capital requirements.

As a result of the uncertainties discussed above, among others, we are unable to estimate the duration and completion costs of our research and development projects. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our business strategy. There can be no assurance that we will be able to successfully access external sources of financing in the future. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with internal and contract preclinical testing and clinical trials of our product candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, facilities expenses, and amortization expense of acquired ANDAs. Overall research and development expenses increased to $2,615,000 during the three months ended March 31, 2019 from $1,697,000 for the corresponding period in 2018. The fluctuations in research and development expenditures during the three months ended March 31, 2019 were specifically impacted by the following:

Outside Services – We utilize outsourcing to conduct our product development activities. In the three-month period ended March 31, 2019, we spent $655,000 on outside service activities versus $343,000 in the same 2018 period. The increase in 2019 as compared to 2018 primarily reflects regulatory costs associated with our ANDAs acquired in 2018.

Clinical Trial Costs – Clinical trial costs, which include clinical site fees, monitoring costs and data management costs, decreased to $(4,000) in the three months ended March 31, 2019 from $77,000 in the three-month period ended March 31, 2018. This decrease primarily relates to higher patient costs and clinical trial management costs associated with our Phase 2 clinical trial in advanced fibrolamellar carcinoma (FLC) during the 2018 period compared to the 2019 period as the trial has completed.

Lab Supplies – Laboratory supplies associated with our pre-clinical activities for the three-month period ended March 31, 2019 decreased to $15,000 from $101,000 during the same period in 2018. The variance is due to the decrease in activities at our China research and development lab.

Contract Manufacturing Costs – The costs of manufacturing the material used in clinical trials for our product candidates is reflected in contract manufacturing. These costs include bulk manufacturing, encapsulation and fill and finish services, product release costs and storage fees. Contract manufacturing costs for the three months ended March 31, 2019 increased to $291,000 from $5,000 during the same period in 2018 due to pre-manufacturing costs associated with the Company’s Entecavir ANDA incurred during the 2019 period.

Personnel Costs – Personnel costs increased to $721,000 in the three-month period ended March 31, 2019 from $668,000 in the corresponding 2018 period. This increase is primarily attributed to increased salary and benefit costs associated with new employees hired in 2018 and 2019.

Also reflected in our 2019 research and development expenses for the three-month period ended March 31, 2019 are outsourced consultant costs of $196,000, facility and related expenses of $230,000, and amortization of acquired ANDAs of $387,000. In the corresponding 2018 period, these expenses totaled $34,000, $157,000, and $250,000 respectively. The variance in outsourced consultant costs reflect the timing of services related to regulatory activities. The increase in facilities and related expenses is due to new leased office space in China in April and October 2018. The increase in amortization of acquired ANDAs is due to the 2018 acquisition of ANDAs.

General and Administrative Expenses. General and administrative expenses include compensation and other expenses related to finance, business development and administrative personnel, professional services, investor relations and facilities. General and administrative expenses increased to $5,710,000 in the three-month period ended March 31, 2019 from $1,303,000 in the corresponding 2018 period. This variance relates to an increase in non-cash stock-based compensation expense totaling approximately $1,610,000, primarily associated with stock option awards issued in 2018 to the Company’s Chairman and also to the President of CASI China; an increase in salary, benefits and recruitment expense totaling approximately $920,000 in China, primarily related to sales and marketing efforts to prepare for the anticipated launch of the Company’s first commercial product in China, as well as other general and administrative functions; approximately $547,000 related to increased audit fees, professional services fees and investor and public relations activities; and increased facility costs of $244,000 due to new leased office space in China.

Acquired In-process Research and Development . Acquired in-process research and development for the three months ended March 31, 2019 and 2018 was $0 and $686,998, respectively. In January 2018, we acquired a portfolio of 29 ANDAs, including 25 FDA-approved ANDAs and four pipeline ANDAs that are pending FDA approval, limited quantities of API, and certain manufacturing and other information related to the products (collectively, the ANDAs, API and other information are referred to as the “Acquired Assets”). The total purchase price for the Acquired Assets was $18.0 million in cash. We accounted for the purchase of the Acquired Assets as an asset acquisition (consisting of a concentrated group of similar identifiable assets, including ANDAs and API). The total purchase price, along with approximately $1.2 million of transaction expenses, was allocated to the Acquired Assets based on their relative fair values. Of the total value allocated to the ANDAs, approximately $553,000 was immediately expensed as acquired in-process research and development since the underlying ANDAs have not been approved by the FDA, and of the total value allocated to the API, approximately $134,000 was immediately expensed as acquired in-process research and development since the Company does not intend to use all the API.

Interest income, net. Interest income, net for the three months ended March 31, 2019 and 2018 was $48,584 and $6,729, respectively. This includes interest income of $50,636 and $8,781 for March 31, 2019 and 2018, respectively, offset by interest on our note payable of $1,875 for both periods and non-cash interest of $177 for both periods, representing the amortization of the debt discount.

Change in fair value of investment in equity securities. The change in fair value of investment in equity securities for the three months ended March 31, 2019 and 2018 was $45,389 and $89,713, respectively, representing unrealized gains on the Company’s equity investment securities.

LIQUIDITY AND CAPITAL RESOURCES

To date, we have been engaged primarily in research and development activities. As a result, we have incurred and expect to continue to incur operating losses in 2019 and the foreseeable future before we commercialize any products and penetrate significant markets such as China. Based on our current plans, we expect our current available cash and cash equivalents to meet our cash requirements for at least through May 15, 2020.

We will require significant additional funding to fund operations until such time, if ever, we become profitable. We intend to augment our cash balances by pursuing other forms of capital infusion, including strategic alliances or collaborative development opportunities with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of our potential product candidates that we intend to pursue to commercialization. If we seek strategic alliances, licenses, or other alternative arrangements, such as arrangements with collaborative partners or others, to raise further financing, we may need to relinquish rights to certain of our existing product candidates, or products we would otherwise seek to develop or commercialize on our own, or to license the rights to our product candidates on terms that are not favorable to us.

We will continue to seek to raise additional capital to fund our commercialization efforts, expansion of our operations, research and development, and for the acquisition of new product candidates, if any. We intend to explore one or more of the following alternatives to raise additional capital:

selling additional equity securities;

out-licensing product candidates to one or more corporate partners;

completing an outright sale of non-priority assets; and/or

engaging in one or more strategic transactions.

We also will continue to manage our cash resources prudently and cost-effectively.

There can be no assurance that adequate additional financing under such arrangements will be available to us on terms that we deem acceptable, if at all. If additional funds are raised by issuing equity securities, dilution to existing stockholders may result, or the equity securities may have rights, preferences, or privileges senior to those of the holders of our common stock. If we fail to obtain additional capital when needed, we may be required to delay or scale back our commercialization efforts, our advancement of the Spectrum products, and the ANDA products, or plans for other product candidates, if any.

At March 31, 2019, we had cash and cash equivalents of approximately $99.7 million, with working capital of approximately $103.1 million. As of March 31, 2019, approximately $12.6 million of the Company’s cash balance was held by the Company’s wholly-owned subsidiary in China and approximately $41.0 million was held by CASI Wuxi.

FINANCING ACTIVITIES

“Shelf” Registration Statement

We have an effective shelf registration statement, which allows us to sell debt or equity securities in one or more offerings up to a total public offering price of $100 million. We believe that this shelf registration statement currently provides us additional flexibility with regard to potential financings that we may undertake when market conditions permit or our financial condition may require.

Common Stock Sales Agreement

On February 23, 2018, the Company entered into a Common Stock Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“HCW”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time, at its option, shares of the Company’s common stock, through HCW, as sales agent, with an aggregate sales price of up to $25 million.

Any sales of shares pursuant to the Sales Agreement will be made under the Company’s effective “shelf” registration statement on Form S-3 (File No. 333-222046) which became effective on December 22, 2017 and the related prospectus supplement and the accompanying prospectus, as filed with the SEC on February 23, 2018.

In 2018, the Company issued 143,248 shares under the Sales Agreement resulting in net proceeds to the Company of approximately $475,000. As of March 31, 2019, approximately $24.5 million remained available under the Sales Agreement.

INFLATION AND INTEREST RATE CHANGES

Management does not believe that our working capital needs are sensitive to inflation and changes in interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investment activities is to preserve our capital until it is required to fund operations while at the same time maximizing the income we receive from our investments without incurring investment market volatility risk. Our investment income is sensitive to the general level of U.S. and China interest rates. In this regard, changes in the U.S. and China interest rates affect the interest earned on our cash and cash equivalents. Due to the short-term nature of our cash and cash equivalent holdings, a 10% movement in market interest rates would not materially impact the total fair market value of our portfolio as of March 31, 2019.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of March 31, 2019 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control Over Financial Reporting

During the first quarter of 2019, we implemented a new financial system that is designed to improve the efficiency and effectiveness of our operational and financial accounting processes. This implementation is expected to continue through 2019. Consistent with any process change that we implement, the design of the internal controls has and will continue to be evaluated for effectiveness as part of our overall assessment of the effectiveness of our disclosure controls and procedures. We expect that the implementation of this system will improve our internal controls over financial reporting.

Other than the implementation of a new financial system noted previously, there have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, unless otherwise disclosed herein, are material.

ITEM 1A. RISK FACTORS

For information regarding factors that could affect the Company’s results of operations, financial condition and liquidity, see the risk factors discussion set forth in Item 1A of CASI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and the information under “Special Note Regarding Forward-Looking Statements” included in this report. There have been no material changes to our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

4.1		Form of CASI Pharmaceuticals, Inc. Performance-Contingent 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in China) * **
4.2		Form of CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in China) * **
4.3		Form of CASI Pharmaceuticals, Inc. Performance-Contingent 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in the US) * **
4.4		Form of CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in the US) * **
10.1		Exclusive Distribution Agreement, effective as of March 5, 2019, by and among CASI Pharmaceuticals, Inc., China Resources Guokang Pharmaceuticals Co., Ltd. and CASI (Beijing) Biopharmaceuticals Technology Co., Ltd. **
10.2		Offer Letter from CASI Pharmaceuticals, Inc. to Dr. He dated March 22, 2019, effective April 2, 2019 * **
10.3		License Agreement by and between CASI Pharmaceuticals, Inc. and Black Belt Therapeutics Limited entered into as of April 16, 2019 + **
31.1		Rule 13a-14(a) Certification of Chief Executive Officer**
31.2		Rule 13a-14(a) Certification of Chief Financial Officer**
32.1		Section 1350 Certification of Chief Executive Officer**
32.2		Section 1350 Certification of Chief Financial Officer**
101		The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) Unaudited Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018, (ii) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018, (iii) Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.**

Management Contract or any compensatory plan, contract or arrangement.

+ Certain portions of this exhibit have been omitted based upon a request for confidential treatment under 17 C.F.R. §§200.80(b)(4) and 230.406. The confidential portions of this exhibit have been omitted and are marked accordingly. The confidential portions have been filed separately with the SEC pursuant to our confidential treatment request.

Filed Herewith

EXHIBIT INDEX

4.1		Form of CASI Pharmaceuticals, Inc. Performance-Contingent 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in China) * **
4.2		Form of CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in China) * **
4.3		Form of CASI Pharmaceuticals, Inc. Performance-Contingent 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in the US) * **
4.4		Form of CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan Non-Qualified Stock Option Grant Agreement (for Optionees in the US) * **
10.1		Exclusive Distribution Agreement, effective as of March 5, 2019, by and among CASI Pharmaceuticals, Inc., China Resources Guokang Pharmaceuticals Co., Ltd. and CASI (Beijing) Biopharmaceuticals Technology Co., Ltd. **
10.2		Offer Letter from CASI Pharmaceuticals, Inc. to Dr. He dated March 22, 2019, effective April 2, 2019 * **
10.3		License Agreement by and between CASI Pharmaceuticals, Inc. and Black Belt Therapeutics Limited entered into as of April 16, 2019 + **
31.1		Rule 13a-14(a) Certification of Chief Executive Officer**
31.2		Rule 13a-14(a) Certification of Chief Financial Officer**
32.1		Section 1350 Certification of Chief Executive Officer**
32.2		Section 1350 Certification of Chief Financial Officer**
101		The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) Unaudited Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018, (ii) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018, (iii) Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018, (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.**

* Management Contract or any compensatory plan, contract or arrangement.

Filed Herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CASI PHARMACEUTICALS, INC.
	(Registrant)

Date: May 15, 2019	/s/ Wei-Wu He
	Wei-Wu He
	Chief Executive Officer

Date: May 15, 2019	/s/George Chi
	George Chi
	Chief Financial Officer

Exhibit 4.1

OPTIONEE:

DATE OF GRANT:

EXERCISE PRICE:

COVERED SHARES:

PERFORMANCE-CONTINGENT STOCK OPTIONS

(For Optionees in China)
CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan

Non-Qualified Stock Option Grant Agreement

1. Definitions . Definitions for defined terms used in this Agreement are provided under Section 11 below.

2. Grant of Option . Pursuant to the Plan and subject to the terms of this Agreement, the Corporation hereby grants to the Optionee, as of the Date of Grant, the Option to purchase from the Corporation that number of shares identified as the “Covered Shares” on page 1 of this Agreement, exercisable at the Exercise Price.

3. Terms of the Option .

3.1 Type of Option; Option Period; Exercisability (Vesting) . The Option is intended to be a nonstatutory stock option. The Option may be exercised in whole shares during the period commencing on the vesting date of the Option (or portion of the Option, if applicable) and terminating on the Date of Expiration. The Option will vest in accordance with the following performance condition (s) :

[ DESCRIBE VESTING CONDITION , SAMPLE BELOW:

(i)

fifty percent (50%) upon the first ANDA manufactured at the Corporation’s Wuxi site and approved by China’s NMPA (formerly, the CFDA); and

(ii)

fifty percent (50%) upon the second ANDA manufactured at the Corporation’s Wuxi site and approved by China’s NMPA.]

3.2 The occurrence of the performance condition is subject to and shall be certified by the Corporation’s Compensation Committee. The Option automatically expires and is cancelled if the vesting date /performance condition does not occur by [ PERFORMANCE DEADLINE, IF ANY.] [NOTE TO DRAFT: FOR NEW EMPLOYEES, THE VESTING DATE SHALL NOT BE EARLIER THAN 90 DAYS AFTER THE DATE OF GRANT.]

Notwithstanding the foregoing, upon a Change of Control, the Option shall thereupon vest and become exercisable at any time prior to the Date of Expiration, as to the full number of Covered Shares. In no event shall the number of Covered Shares as to which the Option is exercisable increase after termination of the Optionee’s Service.

3.3 Nontransferability . The Option is not transferable by the Optionee other than by will or by the laws of descent and distribution or as otherwise permitted by the Administrator, and is exercisable, during the Optionee’s lifetime, only by the Optionee, or, in the event of the Optionee’s legal disability, by the Optionee’s legal representative.

China Stock Option Agreement (Performance-Based)

3.4 Exercise Method, Payment of the Exercise Price . The Optionee, upon exercise, in whole or in part, of the Option, may pay the Exercise Price as follows:

(a) if at the time of exercise, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system and in accordance with such rules as may be specified by the Administrator, delivery to the Corporation of a properly executed exercise notice and irrevocable instructions to a registered securities broker promptly to sell all shares received from the exercise and to deliver to the Corporation cash equal to total proceeds from the sale, net of any brokerage and other expenses deducted by the broker, which includes the Exercise Price for that portion of the Option being exercised, and any applicable federal, state and local tax withholding requirements.

(b) if the Common Stock is not listed for trading on a national securities exchange or automated dealer quotation system, the Optionee may not exercise the Options.

Optionee agrees that any proceeds to be received under the Plan and this Agreement shall be repatriated to a special Chinese domestic corporate bank account for employee stock incentive plans as approved by the State Administration for Foreign Exchange (SAFE) for distribution to Optionee in accordance with relevant Chinese foreign exchange regulations.

4. Capital Adjustments . The number of Covered Shares as to which the Option has not been exercised, the Exercise Price, and the type of stock or other consideration to be received on exercise of the Option shall be subject to such adjustment or change, if any, as the Administrator in its sole discretion deems appropriate to reflect such events as stock dividends, split-ups, spin-offs, recapitalizations, reclassifications, combinations or exchanges of shares, mergers, consolidations, liquidations, or the like, of or by the Corporation. Any adjustment determined to be appropriate by the Administrator shall be conclusive and shall be binding on the Optionee.

5. Exercise .

5.1 Notice . The Option shall be exercised, in whole or in part, by the delivery to the Corporation of written notice of such exercise, in such form as the Administrator may from time to time prescribe, accompanied by full payment (or means of full payment permitted by Section 3.4 hereof) of the Exercise Price with respect to that portion of the Option being exercised. Until the Administrator notifies the Optionee to the contrary, the form attached to this Agreement as Exhibit A shall be used to exercise the Option.

5.2 Withholding . The Corporation’s obligation to issue or deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements as well as any foreign tax withholding obligations. The Corporation or an Affiliate shall have the right to withhold individual income tax on any proceeds received by the Optionee under the Plan and this Agreement pursuant to the applicable Chinees tax rules.

5.3 Effect . The exercise, in whole or in part, of the Option shall cause a reduction in the number of Covered Shares as to which the Option may be exercised in an amount equal to the number of shares of Common Stock as to which the Option is exercised.

5.4 Restrictions on Exercise . Notwithstanding any other provision of this Agreement, the Option may not be exercised at any time that the Corporation does not have an effective registration statement under the Securities Act of 1933, as amended, relating to the offer of the Common Stock to the Optionee under the Plan, unless the Administrator agrees to permit such exercise.

China Stock Option Agreement (Performance-Based)

6. Legends; Subject to the Plan . The Optionee agrees that the shares of Common Stock issued upon exercise of the Option may include any legend which the Administrator deems appropriate to reflect the transfer and other restrictions contained in the Plan, this Agreement, or to comply with applicable laws. The Option evidenced by this Agreement and the exercise thereof are subject to the terms and conditions of the Plan, which is incorporated by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any rights or benefits under this Agreement. In addition, the Option is subject to any rules and regulations promulgated by the Administrator.

7. Rights as Stockholder . The Optionee shall have no rights as a stockholder with respect to any shares of Common Stock subject to the Option until and unless such shares are issued to the Optionee pursuant to this Agreement.

8. Service . Neither the grant of the Option evidenced by this Agreement nor any term or provision of this Agreement shall constitute or be evidence of any understanding, express or implied, on the part of the Corporation to employ or retain the Optionee for any period.

9. Governing Law . The validity, construction, interpretation and enforceability of this agreement shall be determined and governed by the laws of the State of Maryland without giving effect to the principles of conflicts of laws.

10. Severability . If any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any material respect, such provision shall be replaced with a provision that is as close as possible in effect to such invalid, illegal or unenforceable provision, and still be valid, legal and enforceable, and the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby.

11. Definitions . In this Agreement, capitalized terms used herein shall have the following meanings:

11.1 “ Cause ” means the Optionee’s (a) failure to substantially perform his or her duties (other than by reason of Disability) with respect to the Corporation or any of its Affiliates, (b) engaging in conduct injurious to the Corporation or any of its Affiliates, (c) breach of an employment or confidentiality or non-disclosure agreement; (d) breach of fiduciary duty to the Corporation or any of its Affiliates, (e) dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of the Corporation or any of its Affiliates, (f) willful violation of the policies of the Corporation or any of its Affiliates after receiving written notice of such violation, (g) conviction of a felony or crime involving moral turpitude, or (h) any other causes defined under the Chinese Labor Law, Labor Contract Law and relevant regulations as well as the employment contract between the Corporation (or an Affiliate) and the Optionee for which the Corporation or an Affiliate has the right to terminate Optionee’s employment or Service unilaterally. All determinations of Cause hereunder shall be made by the Administrator in its sole discretion and shall be binding for all purposes hereunder.

11.2 “ Change of Control ” means, and shall be deemed to have occurred, if:

(a) any Person or Persons acting together, excluding the employee benefit plans of the Corporation, acquire or become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act or any successor provisions thereto), directly or indirectly of securities of the Corporation representing fifty one percent (51%) or more of the combined voting power of the Corporation’s then outstanding securities;

China Stock Option Agreement (Performance-Based)

(b) the Corporation consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Corporation ( a “Fundamental Transaction”) with any other corporation, other than a Fundamental Transaction which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least sixty percent (60%) of the combined voting power immediately after such Fundamental Transaction of (A) the Corporation’s outstanding securities, (B) the surviving entity’s outstanding securities or (C) in the case of a division, the outstanding securities of each entity resulting from the division;

(c) the stockholders of the Corporation approve a plan of complete liquidation or winding-up of the Corporation or the Corporation consummates the sale or disposition (in one transaction or a series of transactions) of all or substantially all of the Corporation’s assets; or

(d) during any period of twenty-four consecutive months, individuals who at the beginning of such period constituted the Board (including for this purpose any new director whose election or nomination for election by the Corporation’s stockholders was approved by a vote of at least two thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

11.3 “ Covered Shares ” means the shares of Common Stock subject to the Option.

11.4 “ Date of Exercise ” means the date on which the Corporation receives notice pursuant to Section 5.1 of the exercise, in whole or in part, of the Option.

11.5 “ Date of Expiration ” means the date on which the Option shall expire, which shall be the earliest of the following times: (a) the expiration of the performance event required for vesting as set forth in Section 3.2; (b) the date of the first notification to the Optionee that the Optionee’s Service is terminated by the Corporation or an Affiliate for Cause (for the avoidance of doubt, the date of first notification that the Optionee’s Service will be terminated by the Corporation or an Affiliate for Cause means that the Corporation or an Affiliate sends a notice to Optionee that the Corporation or an Affiliate intends to terminate Optionee’s Service or employment for Cause, regardless whether the employment contract is eventually terminated in the form of unilateral termination, mutual termination, resignation or non-renewal of the existing employment contract under Chinese Labor Law, Labor Contract Law or relevant regulations);; (c) ninety (90) days after termination of the Optionee’s Service for any reason other than by the Corporation or an Affiliate for Cause, death or Disability; (d) one (1) year after termination of the Optionee’s Service with the Corporation or an Affiliate by reason of death or Disability or (e) ten years after the Date of Grant.

11.6 “ Date of Grant ” means the date set forth at the beginning of this Agreement.

11.7 “ Disability ” means total and permanent disability under Section 22(e)(3) of the Code or the Optionee’s becoming entitled to long-term disability benefits under the long-term disability plan or policy of the Corporation and/or its Affiliates that covers the Optionee.

11.8 “ Exercise Price ” means the dollar amount per share of Common Stock set forth on page 1 of this Agreement, as it may be adjusted from time to time pursuant to Section 4 hereof.

11.9 “ Option ” means the stock option granted to the Optionee in Section 2 of this Agreement.

11.10 “ Optionee ” means the person identified on page 1 of this Agreement.

China Stock Option Agreement (Performance-Based)

11.11 “ Person ” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

11.12 “ Plan ” means the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, as amended from time to time.

11.13 “ Service ” means , if the Optionee is an employee of the Corporation and/or any of its Affiliates (as determined by the Administrator in its discretion), the Optionee’s service as an employee of the Corporation and/or any of its Affiliates.

12. Optionee acknowledges and agrees that the Option granted and any proceeds received under the Plan and this Agreement are part of the Corporation’s employee stock incentive program for which the Corporation retains discretion pursuant to the terms of the Plan and shall not be treated as part of Optionee’s normal salaries or bonuses, nor shall it be treated as part of Optionee’s renumeration base for purposes of calculating statutory severance or mandatory social insurance contributions under Chinese Labor Law, Labor Contract Law and relevant regulations.

13. Optionee hereby agrees that the Corporation and/or an Affiliate shall have the right to disclose his personal data or information related to the performance of this Agreement and the Plan to relevant government agencies (including, without limitation, SAFE and tax authorities) for purposes of completing relevant regulatory filings as required under applicable law.

14. This Agreement may be amended by the Corporation to comply with any applicable national, provincial, or local regulations of the People’s Republic of China.

[Signature Page Follows.]

China Stock Option Agreement (Performance-Based)

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

ATTEST:	CASI PHARMACEUTICALS, INC.

	By:
Sara B. Capitelli		Name: Cynthia W. Hu
		Title: COO & General Counsel

Accepted and agreed to as of the Date of Grant:


Optionee

China Stock Option Agreement (Performance-Based)

EMPLOYEE ACKNOWLEDGEMENT

To:	CASI Pharmaceuticals, Inc.
	CASI Pharmaceuticals (Beijing) Co., Ltd.

Dear Sirs and Madams,

Reference is made to Stock Option Grant Agreement (including any amendments thereto) executed between CASI Pharmaceuticals, Inc. (together with CASI Pharmaceuticals (Beijing) Co., Ltd., “CASI” or “Company”) and me.

I hereby acknowledge and confirm that I will exercise my stock options granted under the Stock Option Grant Agreement in a manner of cashless exercise (i.e., exercise price will be deducted from the sales proceeds after sale of the underlying shares) and the Company or its plan administrator shall have the authority to sell all underlying shares I receive as a result of my exercise of the stock options on the same day of exercise.

Regards,

_______________________________________
Employee Name:
Date:

China Stock Option Agreement (Performance-Based)

“ EXHIBIT A ”

EXERCISE OF OPTION

Board of Directors

CASI Pharmaceuticals, Inc.

Ladies and Gentlemen:

The undersigned, the Optionee under the Stock Option Agreement (“Agreement”) on the grant date of granted pursuant to the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, hereby irrevocably elects to exercise the Option granted in the Agreement to purchase ___ shares of Common Stock of CASI Pharmaceuticals, Inc., par value $.01 per share (the “Option Shares”), and herewith makes payment of $ in the form of (check all that apply and if more than one is checked, indicate the amount to be paid by each payment method):

¨ Cash or Check:

¨ Common Stock:

¨ Brokerage Transaction:

The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):

¨ Cash or Check:

¨ Withholding of Common Stock:

¨ Delivery of Common Stock:

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement.

Date:
			(Signature of Optionee)

Date received by CASI Pharmaceuticals, Inc.:

Received by:

Note: Shares of Common Stock being delivered in payment of all or any part of the Exercise Price must be represented by certificates registered in the name of the Optionee and duly endorsed by the Optionee and by each and every other co-owner in whose name the shares may also be registered.

China Stock Option Agreement (Performance-Based)

Exhibit 4.2

OPTIONEE:

DATE OF GRANT:

EXERCISE PRICE:

COVERED SHARES:

( FOR OPTIONEES IN CHINA )

CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan

Non-Qualified Stock Option Grant Agreement

1. Definitions . Definitions for defined terms used in this Agreement are provided under Section 11 below.

3. Terms of the Option .

3.1 Type of Option; Option Period; Exercisability . The Option is intended to be a nonstatutory stock option. The Option may be exercised in whole shares during the period commencing on the Date of Grant and terminating on the Date of Expiration, as follows: [For new employees] [After 90 days from the Date of Grant] , the Option will vest and become exercisable in annual installments over a four-year vesting period according to the following vesting schedule:

(i) twenty-five percent (25%) (_____) on ________________;

(ii) twenty-five percent (25%) (_____) on ________________;

(iii) twenty-five percent (25%) (_____) on ________________; and

(iv) twenty-five percent (25%) (_____) on ________________;

3.2 Nontransferability . The Option is not transferable by the Optionee other than by will or by the laws of descent and distribution or as otherwise permitted by the Administrator, and is exercisable, during the Optionee’s lifetime, only by the Optionee, or, in the event of the Optionee’s legal disability, by the Optionee’s legal representative.

3.3 Exercised Method, Payment of the Exercise Price . The Optionee, upon exercise, in whole or in part, of the Option, may pay the Exercise Price as follows:

CHINA Stock Option Agreement (Time-Based)

(b) if the Common Stock is not listed for trading on a national securities exchange or automated dealer quotation system, the Optionee may not exercise the Options.

5. Exercise .

5.2 Withholding . The Corporation’s obligation to issue or deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements. The Corporation or an Affiliate shall have the right to withhold individual income tax on any proceeds received by the Optionee under the Plan and this Agreement pursuant to the applicable Chinees tax rules.

CHINA Stock Option Agreement (Time-Based)

9. Governing Law . The validity, construction, interpretation and enforceability of this agreement shall be determined and governed by the laws of the United States and State of Maryland without giving effect to the principles of conflicts of laws.

11. Definitions . In this Agreement, capitalized terms used herein shall have the following meanings:

11.1 “ Cause ” means the Optionee’s (a) failure to substantially perform his or her duties (other than by reason of Disability) with respect to the Corporation or any of its Affiliates, (b) engaging in conduct injurious to the Corporation or any of its Affiliates, (c) breach of an employment or confidentiality or nondisclosure agreement, (d) breach of fiduciary duty to the Corporation or any of its Affiliates, (e) dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of the Corporation or any of its Affiliates, (f) willful violation of the policies of the Corporation or any of its Affiliates after receiving written notice of such violation, (g) conviction of a felony or crime involving moral turpitude; or (h) any other causes defined under the Chinese Labor Law, Labor Contract Law and relevant regulations as well as the employment contract between the Corporation (or an Affiliate) and the Optionee for which the Corporation or an Affiliate has the right to terminate Optionee’s employment or Service unilaterally. All determinations of Cause hereunder shall be made by the Administrator in its sole discretion and shall be binding for all purposes hereunder.

11.2 “ Change of Control ” means, and shall be deemed to have occurred, if:

CHINA Stock Option Agreement (Time-Based)

11.3 “ Covered Shares ” means the shares of Common Stock subject to the Option.

11.4 “ Date of Exercise ” means the date on which the Corporation receives notice pursuant to Section 5.1 of the exercise, in whole or in part, of the Option.

11.5 “ Date of Expiration ” means the date on which the Option shall expire, which shall be the earliest of the following times:

(a) the date of the first notification to the Optionee that the Optionee’s Service is terminated by the Corporation or an Affiliate for Cause (for the avoidance of doubt, the date of first notification that the Optionee’s Service will be terminated by the Corporation or an Affiliate for Cause means that the Corporation or an Affiliate sends a notice to Optionee that the Corporation or an Affiliate intends to terminate Optionee’s Service or employment for Cause, regardless whether the employment contract is eventually terminated in the form of unilateral termination, mutual termination, resignation or non-renewal of the existing employment contract under Chinese Labor Law, Labor Contract Law or relevant regulations);

(b) ninety (90) days after termination of the Optionee’s Service for any reason other than by the Corporation or an Affiliate for Cause, death or Disability;

(c) one (1) year after termination of the Optionee’s Service with the Corporation or an Affiliate by reason of death or Disability or

(d) ten years after the Date of Grant.

11.6 “ Date of Grant ” means the date set forth at the beginning of this Agreement.

11.8 “ Exercise Price ” means the dollar amount per share of Common Stock set forth on page 1 of this Agreement, as it may be adjusted from time to time pursuant to Section 4 hereof.

11.9 “ Option ” means the stock option granted to the Optionee in Section 2 of this Agreement.

11.10 “ Optionee ” means the person identified on page 1 of this Agreement.

11.11 “ Person ” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

11.12 “ Plan ” means the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, as amended from time to time.

CHINA Stock Option Agreement (Time-Based)

11.13 “ Service ” means, if the Optionee is an employee of the Corporation and/or any of its Affiliates (as determined by the Administrator in its discretion), the Optionee’s service as an employee of the Corporation and/or any of its Affiliates.

14. This Agreement may be amended by the Corporation to comply with any applicable national, provincial, or local regulations of the People’s Republic of China.

[Signature Page Follows.]

CHINA Stock Option Agreement (Time-Based)

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

ATTEST:
		CASI PHARMACEUTICALS, INC .

		By:
		Name:
		Title:

Accepted and agreed to as of the Date of Grant:

_______________________________________

Optionee Signature

CHINA Stock Option Agreement (Time-Based)

EMPLOYEE ACKNOWLEDGEMENT

To:	CASI Pharmaceuticals, Inc.
	CASI Pharmaceuticals (Beijing) Co., Ltd.

Dear Sirs and Madams,

Regards,

_______________________________________
Employee Name:
Date:

CHINA Stock Option Agreement (Time-Based)

“ EXHIBIT A ”

EXERCISE OF OPTION

Board of Directors

CASI Pharmaceuticals, Inc.

Ladies and Gentlemen:

¨ Cash or Check:

¨ Common Stock:

¨ Brokerage Transaction:

The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):

¨ Cash or Check:

¨ Withholding of Common Stock:

¨ Delivery of Common Stock:

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement.

Date:
			(Signature of Optionee)

Date received by CASI Pharmaceuticals, Inc.:

Received by:

CHINA Stock Option Agreement (Time-Based)

Exhibit 4.3

OPTIONEE:

DATE OF GRANT:

EXERCISE PRICE:

COVERED SHARES:

PERFORMANCE-CONTINGENT STOCK OPTIONS

( FOR OPTIONEES IN U.S. )

CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan

Non-Qualified Stock Option Grant Agreement

1. Definitions . Definitions for defined terms used in this Agreement are provided under Section 10 below.

3. Terms of the Option .

3.1 Type of Option . The Option is intended to be a nonstatutory stock option.

3.2 Option Period; Exercisability (Vesting) . The Option may be exercised in whole shares during the period commencing on the vesting date of the Option (or portion of the Option, if applicable) and terminating on the Date of Expiration. The Option will vest in accordance with the following performance condition (s) :

[ DESCRIBE VESTING CONDITION , SAMPLE BELOW:]

(i)

fifty percent (50%) upon the first ANDA manufactured at the Corporation’s Wuxi site and approved by China’s NMPA (formerly, the CFDA); and

(ii)

fifty percent (50%) upon the second ANDA manufactured at the Corporation’s Wuxi site and approved by China’s NMPA.

The occurrence of the performance condition is subject to and shall be certified by the Corporation’s Compensation Committee. The Option automatically expires and is cancelled if the vesting date/performance condition does not occur by [ PERFORMANCE DEADLINE, IF ANY .]

U.S. Stock Option Agreement (Performance-Contingent)

3.4 Payment of the Exercise Price . The Optionee, upon exercise, in whole or in part, of the Option, may pay the Exercise Price by any or all of the following means, either alone or in combination:

(a) cash or check payable to the order of the Corporation;

(b) if at the time of exercise, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, delivery (either actual or constructive) of shares of unencumbered Common Stock (provided that such shares, if acquired under the Option or under any other option or award granted under the Plan or any other plan sponsored or mentioned by the Corporation, have been held by the Optionee for at least six months or such other period as determined by the Administrator) that have an aggregate Fair Market Value on the Date of Exercise equal to that portion of the Exercise Price being paid by delivery of such shares; or

(c) if at the time of exercise, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system and in accordance with such rules as may be specified by the Administrator, delivery to the Corporation of a properly executed exercise notice and irrevocable instructions to a registered securities broker promptly to deliver to the Corporation cash equal to the Exercise Price for that portion of the Option being exercised.

5. Exercise .

5.2 Withholding . The Corporation’s obligation to issue or deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements. The Optionee may satisfy any such withholding obligation by any of the following means or by a combination of such means: (a) tendering a cash payment; (b) if at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, authorizing the Corporation to withhold shares of Common Stock (other than Unvested Shares) from the shares otherwise issuable to the Optionee upon exercise of the Option; or (c) if at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, delivering to the Corporation already-owned and unencumbered shares of Common Stock. For purposes of this Section 5.2, shares of Common Stock that are withheld or delivered to satisfy applicable withholding taxes shall be valued at their Fair Market Value on the date the withholding tax obligation arises, and in no event shall the aggregate Fair Market Value of the shares of Common Stock withheld and/or delivered pursuant to this Section 5.2 exceed the minimum amount of taxes required to be withheld in connection with exercise of the Option.

U.S. Stock Option Agreement (Performance-Contingent)

6. Legends; Subject to the Plan . The Optionee agrees that, if applicable, shares of Common Stock issued upon exercise of the Option may include restrictions which the Administrator deems appropriate to reflect the transfer and other restrictions contained in the Plan, this Agreement, or to comply with applicable laws. The Option evidenced by this Agreement and the exercise thereof are subject to the terms and conditions of the Plan, which is incorporated by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any rights or benefits under this Agreement. In addition, the Option is subject to any rules and regulations promulgated by the Administrator.

8. Governing Law . The validity, construction, interpretation and enforceability of this agreement shall be determined and governed by the laws of the State of Maryland without giving effect to the principles of conflicts of laws.

9. Severability . If any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any material respect, such provision shall be replaced with a provision that is as close as possible in effect to such invalid, illegal or unenforceable provision, and still be valid, legal and enforceable, and the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby.

10. Definitions . In this Agreement, capitalized terms used herein shall have the following meanings:

10.1 “ Cause ” means the Optionee’s (a) failure to substantially perform his or her duties (other than by reason of Disability) with respect to the Corporation or any of its Affiliates, (b) engaging in conduct injurious to the Corporation or any of its Affiliates, (c) breach of fiduciary duty to the Corporation or any of its Affiliates, (d) dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of the Corporation or any of its Affiliates, (e) willful violation of the policies of the Corporation or any of its Affiliates after receiving written notice of such violation, or (f) conviction of a felony or crime involving moral turpitude. All determinations of Cause hereunder shall be made by the Administrator in its sole discretion and shall be binding for all purposes hereunder.

10.2 “ Change of Control ” means, and shall be deemed to have occurred, if:

U.S. Stock Option Agreement (Performance-Contingent)

10.3 “ Covered Shares ” means the shares of Common Stock subject to the Option.

10.4 “ Date of Exercise ” means the date on which the Corporation receives notice pursuant to Section 5.1 of the exercise, in whole or in part, of the Option.

10.5 “ Date of Expiration ” means the date on which the Option shall expire, which shall be the earliest of the following times: (a) the expiration of the performance event required for vesting as set forth in Section 3.2; (b) the date of the first notification to the Optionee that the Optionee’s Service is terminated by the Corporation or an Affiliate for Cause; (c) ninety (90) days after termination of the Optionee’s Service for any reason other than by the Corporation or an Affiliate for Cause, death or Disability; (d) one (1) year after termination of the Optionee’s Service with the Corporation or an Affiliate by reason of death or Disability or (e) ten years after the Date of Grant. “ Date of Grant ” means the date set forth at the beginning of this Agreement.

10.6 “ Exercise Price ” means the dollar amount per share of Common Stock set forth on page 1 of this Agreement, as it may be adjusted from time to time pursuant to Section 4 hereof.

10.7 “ Option ” means the stock option granted to the Optionee in Section 2 of this Agreement.

10.8 “ Optionee ” means the person identified on page 1 of this Agreement.

10.9 “ Person ” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

10.10 “ Plan ” means the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, as amended from time to time.

U.S. Stock Option Agreement (Performance-Contingent)

10.11 “ Service ” means the Optionee’s service on the Board of Directors, or his or her employment by the Corporation, as the case may be.

[Signature Page Follows.]

U.S. Stock Option Agreement (Performance-Contingent)

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

ATTEST:
		CASI PHARMACEUTICALS, INC .

		By:
		Name:
		Title:

Accepted and agreed to as of the Date of Grant:

_______________________________________

Optionee

U.S. Stock Option Agreement (Performance-Contingent)

“ EXHIBIT A ”

EXERCISE OF OPTION

Board of Directors

CASI Pharmaceuticals, Inc.

Ladies and Gentlemen:

The undersigned, the Optionee under the Stock Option Agreement (“Agreement”) on the grant date of _______________ granted pursuant to the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, hereby irrevocably elects to exercise the Option granted in the Agreement to purchase ___ shares of Common Stock of CASI Pharmaceuticals, Inc., par value $.01 per share (the “Option Shares”), and herewith makes payment of $ ____________ in the form of (check all that apply and if more than one is checked, indicate the amount to be paid by each payment method):

¨ Cash or Check:

¨ Common Stock:

¨ Brokerage Transaction:

The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):

¨ Cash or Check:

¨ Withholding of Common Stock:

¨ Delivery of Common Stock:

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement.

Date:
			(Signature of Optionee)

Date received by CASI Pharmaceuticals, Inc.:

Received by:

U.S. Stock Option Agreement (Performance-Contingent)

Exhibit 4.4

OPTIONEE:

DATE OF GRANT:

EXERCISE PRICE:

COVERED SHARES:

( FOR OPTIONEES IN U.S. )

CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan

Non-Qualified Stock Option Grant Agreement

1. Definitions . Definitions for defined terms used in this Agreement are provided under Section 11 below.

3. Terms of the Option .

3.1 Type of Option . The Option is intended to be a nonstatutory stock option.

3.2 Option Period; Exercisability (Vesting) . The Option will vest and become exercisable in annual installments over a four-year vesting period according to the following vesting schedule:

(i) twenty-five percent (25%) (_____) on [first anniversary of grant date];

(ii) twenty-five percent (25%) (_____) on [second anniversary of grant date];

(iii) twenty-five percent (25%) (_____) on [third anniversary of grant date]; and

(iv) twenty-five percent (25%) (_____) on [fourth anniversary of grant date];

3.4 Payment of the Exercise Price . The Optionee, upon exercise, in whole or in part, of the Option, may pay the Exercise Price by any or all of the following means, either alone or in combination:

(a) cash or check payable to the order of the Corporation;

U.S. Stock Option Agreement (Time-Based)

5. Exercise .

5.2 Withholding . The Corporation’s obligation to issue or deliver shares of Common Stock upon the exercise of the Option shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements. The Optionee may satisfy any such withholding obligation by any of the following means or by a combination of such means: (a) tendering a cash payment; (b) if at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, authorizing the Corporation to withhold shares of Common Stock (other than Unvested Shares) from the shares otherwise issuable to the Optionee upon exercise of the Option; or (c) if at the time the withholding obligation arises, the Common Stock is listed for trading on a national securities exchange or automated dealer quotation system, delivering to the Corporation already-owned and unencumbered shares of Common Stock. For purposes of this Section 5.2, shares of Common Stock that are withheld or delivered to satisfy applicable withholding taxes shall be valued at their Fair Market Value on the date the withholding tax obligation arises, and in no event shall the aggregate Fair Market Value of the shares of Common Stock withheld and/or delivered pursuant to this Section 5.2 exceed the minimum amount of taxes required to be withheld in connection with exercise of the Option.

U.S. Stock Option Agreement (Time-Based)

11. Definitions . In this Agreement, capitalized terms used herein shall have the following meanings:

11.1 “ Cause ” means the Optionee’s (a) failure to substantially perform his or her duties (other than by reason of Disability) with respect to the Corporation or any of its Affiliates, (b) engaging in conduct injurious to the Corporation or any of its Affiliates, (c) breach of an employment or confidentiality or nondisclosure agreement, (d) breach of fiduciary duty to the Corporation or any of its Affiliates, (e) dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of the Corporation or any of its Affiliates, (f) willful violation of the policies of the Corporation or any of its Affiliates after receiving written notice of such violation, or (g) conviction of a felony or crime involving moral turpitude. All determinations of Cause hereunder shall be made by the Administrator in its sole discretion and shall be binding for all purposes hereunder.

11.2 “ Change of Control ” means, and shall be deemed to have occurred, if:

U.S. Stock Option Agreement (Time-Based)

11.3 “ Covered Shares ” means the shares of Common Stock subject to the Option.

11.4 “ Date of Exercise ” means the date on which the Corporation receives notice pursuant to Section 5.1 of the exercise, in whole or in part, of the Option.

11.5 “ Date of Expiration ” means the date on which the Option shall expire, which shall be the earliest of the following times:

(a) the date of the first notification to the Optionee that the Optionee’s Service is terminated by the Corporation or an Affiliate for Cause;

(b) ninety (90) days after termination of the Optionee’s Service for any reason other than by the Corporation or an Affiliate for Cause, death or Disability;

(c) one (1) year after termination of the Optionee’s Service with the Corporation or an Affiliate by reason of death or Disability or

(d) ten years after the Date of Grant.

11.6 “ Date of Grant ” means the date set forth at the beginning of this Agreement.

11.8 “ Exercise Price ” means the dollar amount per share of Common Stock set forth on page 1 of this Agreement, as it may be adjusted from time to time pursuant to Section 4 hereof.

11.9 “ Option ” means the stock option granted to the Optionee in Section 2 of this Agreement.

11.10 “ Optionee ” means the person identified on page 1 of this Agreement.

11.11 “ Person ” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

U.S. Stock Option Agreement (Time-Based)

11.12 “ Plan ” means the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, as amended from time to time.

11.13 “ Service ” means, the Optionee’s service on the Board of Directors, or if the Optionee is an employee of the Corporation and/or any of its Affiliates (as determined by the Administrator in its discretion), the Optionee’s service as an employee of the Corporation and/or any of its Affiliates.

[Signature Page Follows.]

U.S. Stock Option Agreement (Time-Based)

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

ATTEST:
		CASI PHARMACEUTICALS, INC .

		By:
		Name:
		Title:

Accepted and agreed to as of the Date of Grant:

_______________________________________

Optionee Signature

U.S. Stock Option Agreement (Time-Based)

“ EXHIBIT A ”

EXERCISE OF OPTION

Board of Directors

CASI Pharmaceuticals, Inc.

Ladies and Gentlemen:

The undersigned, the Optionee under the Stock Option Agreement (“Agreement”) on the grant date of _______________ granted pursuant to the CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, hereby irrevocably elects to exercise the Option granted in the Agreement to purchase _______ shares of Common Stock of CASI Pharmaceuticals, Inc., par value $.01 per share (the “Option Shares”), and herewith makes payment of $ ____________ in the form of (check all that apply and if more than one is checked, indicate the amount to be paid by each payment method):

¨ Cash or Check:

¨ Common Stock:

¨ Brokerage Transaction:

The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):

¨ Cash or Check:

¨ Withholding of Common Stock:

¨ Delivery of Common Stock:

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement.

Date:
			(Signature of Optionee)

Date received by CASI Pharmaceuticals, Inc.:

Received by:

U.S. Stock Option Agreement (Time-Based)

Exhibit 10.1

Proprietary and Confidential

Executed Version

EXCLUSIVE DISTRIBUTION AGREEMENT

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

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

9620 Medical Center Drive in Rockville, MD USA.

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

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

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

WHEREAS:

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

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

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

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

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

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

Proprietary and Confidential

Executed Version

Definitions

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

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

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

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

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

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

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

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

Proprietary and Confidential

Executed Version

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

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

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

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

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

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

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

Proprietary and Confidential

Executed Version

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

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

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

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

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

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

Product and Territory

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

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

Proprietary and Confidential

Executed Version

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

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

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

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

Prices and Payment Terms

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

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

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

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

a. Purchase Order Number;

b. Invoice Number;

c. CASI’s Reference Number (if any);

d. The Distributor’s VAT Number;

e. CASI’s VAT Number;

f. Invoice Date;

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

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

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

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

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

Supply of the Product

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

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

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

Importation, Delivery, Acceptance and the Passing of Risk

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

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

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

Invoice;

Packing List;

Certificate of Origin;

Certificate of analysis

Delivery Note

Certificate of Insurance

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

Reserved Rights of CASI

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

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

Obligations of the Distributor

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

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

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

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

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

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

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

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

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Obligations of CASI

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

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

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

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

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

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

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

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

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

Recall, Return and Replacement Policy

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

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

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

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

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

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

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

Pharmacovigilance

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

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

10.

No Representation or Employment

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

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

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

11.

Intellectual Property

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

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

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

12.

Reporting

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

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

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

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

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

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

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

A report on overall market conditions concerning the Product;

Record documents of complaints from Customers;

Other relevant information which CASI requests for.

13.

Inventory

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

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

14.

Publicity

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

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

15.

Product Packaging and Labelling

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

16.

No Assignment

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

17.

Conflict of Interest

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

18.

Limited Warranty

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

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

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

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19.

Limitations of Liability

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

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

20.

Indemnification

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

21.

Compensation for Contractual Breach and Liquidated Damage

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

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

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

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

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22.

Bankruptcy

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

23.

Change in Control

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

24.

Term and Termination of the Agreement

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

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

Upon termination of this Agreement, consequentially:

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

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

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

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

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

25.

Amendment and Modification of the Agreement

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

26.

Communication and Notice

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

To CASI

Name: Cynthia W. Hu

Title: COO, General Counsel & Secretary to the Board

Phone: 240-864-2718

Email:

cynthiaw@casipharmaceuticals.com

Postal Address:

Rockville, MD 20850

To the Distributor

Name: Yuan Yue

Title:

Phone:15811212382

Email: yuanyue@crguokang.com

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

To CASI China

Name: Cissy (Chunhua) Wang

Title: COO

Phone: 010-65618789-8777

Email: Cissyw@casipharmaceuticals.com.cn

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

Chaoyang District, Beijing City, P.R. China

Postcode: 100021

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27.

No Waiver

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

28.

Entire Agreement

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

29.

Confidentiality

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

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

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30.

Force Majeure

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

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

31.

Authorization

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

32.

Compliance

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

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

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

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

33.

Survival of Rights

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

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34.

Severability

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

35.

Dispute Resolution

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

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

36.

Headings and Appendixes

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

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

37.

Languages and Counterparts

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

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

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

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

(SIGNATURE PAGE)

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/ Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

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LIST OF APPENDIXES

Appendix I “Import Agreement”

Appendix II “Product List”

Appendix III “Purchase Order”

Appendix IV “Quality Agreement”

Appendix V “Pharmacovigilance Agreement”

Appendix VI “FCPA Sales Compliance Policy”

Appendix VII “Payment Terms”

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APPENDIX I

IMPORT AGREEMENT

Importer:

Primary Contact for Import:

Name: Yue Yuan

Phone: 15811212382

Email: yuanyue@crguokang.com

Seller:

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

Primary Contact for Import and Sale:

Name: Albert

Phone: 13911096951

Email: albertg@casipharmaceuticals.com.cn

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

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

Named Place of Delivery: Beijing International Airport

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

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

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

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

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

One original Airway Bill

Invoices, original in duplicate

Packing Lists in duplicate.

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

Certificate of Analysis in duplicate.

Certificate of Insurance with minimum cover.

Quotation:

COMMODITY & OTHER

SPECIFICATIONS

QUANTITY

UNIT

PRICE

AMOUNT

TOTAL:

10.

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

11.

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

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

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

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CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

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APPENDIX II

Product List

Compound name: Melphalan Hydrochloride for Injection

Brand Name: Evomela ^®

Package: 50mg/box

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APPENDIX III

PURCHASE ORDER

PO No:2019CRGK-0**BJ

Date: ******

To: (Seller)

TO: CASI PHARMACEUTICALS INC.

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

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

Tel:

Email:

From: China Resources Guokang Pharmaceutical Co., Ltd .

No.9, Xinghuo Road, Fengtai District,

Beijing (100070), China

Tel: +8610 63626592 / Fax: +8610 63626501

– NOTES 注释 –

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

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

Commodity

Quantity

Unit price /Package (in US$)

Amount (in US$)

*******

***** Boxes

USD******美元

Total:

****** Boxes

CIP BEIJING BY AIR

USD *******

Shipping date

On or Before ******

Terms of payment

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

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Details of Designated Account
Transportation	Air transportation INCOTERM CIP
Port of Shipment	*****, USA
Named Place of Destination	Beijing Airport Please specify the full name of destination
Basis of price	Before or After Tax (Please specify) and marked in US dollars.
Other term and condition(s)	Shipping advice should be sent by e-mail via freight forwarder to : Ms. Yuan Yue (yuanyue@crguokang.com) in advance with details.

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

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APPENDIX IV

QUALITY AGREEMENT

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

Article 1: Parties and Manufacturing Site

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

Manufacturing and Marketing Authorization Holder

Name: Spectum Pharmaceuticals, Inc.

Address: 157 Technology Drive Irvine, CA 92618

Manufacturing Site: PATHEON MANUFACTURING SERVICES, LLC

Address: Greenville, NC 27834

Distributor

Name:China Resources Guokang Pharmaceutical Co., Ltd.

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

Article 2: Scope of the Quality Agreement

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

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Article 3: Definitions

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

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

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

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

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

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

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

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

Article 4 : Packaging, Labeling and Transportation

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

Article 5: Delivery of Products and Acceptance Testing

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

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

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

Article 6: Shipping documents

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

Article 7: Storage Condition and Shelf Life

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

Article 8 Lot Numbering

The lot numbering system is described in Annex 3.

Article 9: Handling of Inferior, Defective and Faulty Products

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

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

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

(1)

Product liability due to Product quality attributed to CASI;

(2)

Inferior Products;

(3)

Defective Product;

(4)

Faulty Product which were proved to be attributed to CASI.

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

Article 10 Product Quality Liability and Indemnification

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

Article 11. Communication and Consultation

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

(1)

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

(2)

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

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

Article 12: Audits

CASI shall conduct audit to verify compliance with this Quality Agreement at t he Distributor’s premise after a 30 days prior written notice.

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Article 13: Documentation and Records

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

Article 1 4 Term and Termination

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

Article 15 Recordation of Revision

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

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

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

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/ Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

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QUALITY AGREEMENT

LIST OF ANNEXES

Annex 1 Product Quality and Specifications

Annex 2 Packaging, Labeling and Transportation

Annex 3 Product Instruction Sample

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

Annex 5 Bottle Labelling (with storage instruction) Sample

Annex 6 Acceptance Criteria for Visual Inspection

Annex 7 Storage Conditions and Expiration Date

Annex 8 Primary Contacts Concerning Product Quality

Annex 9 Request for Complaints Investigation

Annex 10 Quality Information Report

Annex 11 Quality Terms Revision

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Annex 1 Product Quality Specifications

Name of Product	— Melphalan hydrochloride for injection —
Import License Ref. No	— H20180073 ——
Import License Issuance Date	— 11/30/2018 ——
Quality Management System of the International Organization for Standardization for Distributor	ISO9000
Quality Management National Standards of the Administrative Committee of National Standardization, China for Distributor	GB/T 19000

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Annex 2: Packaging, Labeling and Transportation

Transportation Conditions:

Product Name

Transportation route

Temperature

Melphalan hydrochloride for injection

Normal Room Temperature

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Annex 3 Product Instructions Sample

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

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Annex 5 Labelling Bottle (with Storage Instruction) Sample

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Annex 6 Acceptance Criteria for Visual Inspection

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

Test item

Acceptance criteria

Lot Number/Expiration

No typographical errors. Easily legible.

Stain, scratch, wrinkle

No stains, scratches or wrinkles are visually detected.

Label statement, figuration

No printing defectives or figuration defectives

Perforation

Uninterrupted perforation line. Easy to open.

Bar code

No scanning error. Matching the information.

Sealing

Securely sealed.

Package Insert

Securely contained inside.

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Annex 7 Storage Conditions and Expiration Date

Storage

Normal Room Temperature

Expiration

3 Years

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Annex 8 Primary Contacts Concerning Product Quality

CASI:

CRGK :

CASI China:

Primary Contact

Printed Name : Alex Zukiwski

Title: CMO

Phone: 240-864-2888

Email:alexz@casipharmaceuticals.com

Primary Contact

Printed Name: Lili

Title: Quality Manager

Phone: 010-63626524

Email: lili8@crguokang.com

Primary Contact

Printed Name: Helen

Title:

Phone: 13621245934

Email: helenl@casipharmaceuticals.com.cn

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Annex 9

Request for Complaints Investigation

Date:

To:

CASI Pharmaceuticals INC.

Product name		Lot number
Date of complaint		Quantity of complaint
Contact Details	Company Name: Company Address: Name of the Complainant: Phone: Email :
Delivered sample	Delivered:Yes ¨ No ¨
Complaint Details
Response	¨ Letter of Reply to Complaint ¨ Investigation Report Please submit the above document to the Quality Assurance Department of CASI first.
Remarks	Standard Timeline: Reply in 1 week

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Annex 10

Quality Information Report

Reported by (department):

Section

Reported by (person):

Date of report

Date of obtaining the information

Phone

TEL　　　　　　Ext. (　　　　　)

Information obtained by:

Product Name of the Information

Descriptions

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Annex 11

Quality Terms Revision Form

No	Date of revision	Content of revision	Revised by
No	Date of revision	Content of revision	CASI	The Distributor

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APPENDIX V

PHARMACOVIGILANCE AGREEMENT

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

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

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

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

PURPOSE

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

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

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

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DEFINITIONS

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

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

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

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

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

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

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

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SCOPE

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

EFFECTIVE DATE AND REVIEW

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

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

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

RESPONSIBILITIES

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

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

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

5.4

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

5.5

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

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TRAINING

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

URGENT SAFETY ACTIONS

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

INTAKE AND EXCHANGE OF AE AND SPECIAL SITUATION INFORMATION

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

(a)

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

(b)

Name and contact details of the reporter;

(c)

Name of the Product;

(d)

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

(e)

Patient details (if available).

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

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

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SAFETY REGULATORY REPORTS

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

10.

AE REPORT PROCESSING AND FOLLOW-UP

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

11.

LITERATURE REVIEW

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

12.

SAFETY ISSUES/SIGNALS

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

RECONCILIATION AND CONFIRMATION OF RECEIPT

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

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14.

REGULATORY AUTHORITY INTERACTIONS

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

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

15.

RISK EVALUATION AND MITIGATION STRATEGY (REMS)

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

16.

SUMMARY OF RESPONSIBILITIES ON OR AFTER THE TRANSFER DATE

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

Activity	The Distributor	CASI
Receipt of AE Reports	X	X
Email Transfer of AEs, Product Complaints, and Special Situations	X	X
Safety Report Preparation and Submission in the United States		X
Safety Report Preparation and Submission in China	X
Safety Signal Identification		X
Literature Review		X
Regulatory Reporting Related to AEs		X

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Activity	The Distributor	CASI
Interactions with Regulatory Authorities Related to AEs		X
Immediate Confirmation of Receipt	X	X
Reconciliation Listing	X	X
Perform Reconciliation Against Database		X
Risk Management Plans		X

17.

COMPLIANCE WITH PHARMACOVIGILANCE AGREEMENT AUDIT

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

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

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

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

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

(SIGNATURE PAGE)

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: 15 ^th Feb 2019		Date: March 7, 2019


CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/ Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: 15 ^th Feb 2019

Proprietary and Confidential

Executed Version

Annex I

Pharmacovigilance List of Contacts

The Distributor

CASI

AEs; Product complaints, Product and Special Situations Requests:

Email Transfer to

Name:

Title:

Phone: +8610-63626524

E-mail to:

e-mail: Lili8@crguokang.com

AEs; Product complaints, Product and Special Situations Requests:

Email Transfer to:

Name:Dr. Alex Zukiwski

Title: Chief Medical Officer

Phone: (240) 864-2888

E-mail to:

e-mail: alexz@casipharmaceuticals.com

Primary Contact and AE specific Questions:

Name, Title:

Phone: +8610-63626524

Email:

Lili8@crguokang.com

Primary Contacts:

Name, Title:

Dr. Alex Zukiwski Chief Medical Officer

Phone e: (240) 864-2888

e-mail: alexz@casipharmaceuticals.com

Name:Dr. Ken K. Ren

Title:Chief Executive Officer

Phone: (240) 893-0086

Email:kenr@casipharmaceuticals.com

Secondary Contact:

Name, Title

Phone: +8601-63626519

Lirui116@crguokang.com

Secondary Contact:

Name:James Goldschmidt,

Title:PhD SVP, Business Development

Phone (240) 864-2843

Email: jamesg@casipharmac”euticals.com

Name:Cynthia W. Hu

Title:COO & General Counsel

Phone: (240) 864-2781

Email: cynthiaw@casipharmaceuticals.com

Proprietary and Confidential

Executed Version

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

( SIGNATURE)

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/ Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

Proprietary and Confidential

Executed Version

APPENDIX VI

CODE OF CONDUCT AND ETHICAL STANDARDS

ON ANTI-BRIBERY AND ANTI-FOREIGN CORRUPTION PRACTCE ACT

(“FCPA”) OF THE UNITED STATES

In this Appendix specifically:

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

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

Representation

CRGK represents and undertakes to CASI that:

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

Proprietary and Confidential

Executed Version

(f)

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

(g)

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

(h)

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

Liability.

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

Breach and Remedies.

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

Disclosure of (Possible) Violation

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

Right to Audit.

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

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Executed Version

Sub-Distributors Management

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

( SIGNATURE PAGE)

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

CASI (BEIJING) BIOPHARMACEUTICALS TECHNOLOGY CO., LTD

By:	/s/ Larry (Wei) Zhang
Printed Name: Larry (Wei) Zhang
Title: President
Date: March 7, 2019

Proprietary and Confidential

Executed Version

APPENDIX VII

SUPPLEMENTRY PAYMENT TERMS

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

Definition of the “Difference”

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

Compensation for the “Difference”

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

Export CIP Price;

Calculation CIP Price;

The total amount into which “Difference” is converted

Calculation Formula:

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

Proprietary and Confidential

Executed Version

Total of Compensation

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

4. Exchange Rate

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

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

(SIGNATURE PAGE)

CASI Pharmaceuticals, Inc.		CHINA RESOURCES GUOKANG PHARMACEUTICALS CO., LTD

By:	/s/ George Zhi Chi	By:	/s/ GENG Xiao-Le
Printed Name: George Zhi Chi		Printed Name: GENG Xiao-Le
Title: CFO		Title: General Manager
Date: March 7, 2019		Date: March 7, 2019

— End of the Document —

Exhibit 10.2

CASI Pharmaceuticals, Inc.

Beijing Office

9620 Medical Center Drive Suite 300

Rockville, MD 20850

Office (240) 864-2600

Fax (301) 315-2437

NASDAQ: CASI

CASI (Beijing) Pharmaceuticals Co., Ltd.

1701-1702, China Central Office

Tower 1, No. 81 Jianguo Road

Chaoyang District,

Beijing 100025, P.R. China

March 22, 2019

Dr. Wei-Wu He, Ph.D.

VIA EMAIL

Dear Wei-Wu:

On behalf of the Board of Directors of CASI Pharmaceuticals, Inc. (the “ Company”), I am very pleased to confirm the terms of your employment with the Company . Subject to your acceptance of this offer and the conditions set forth below, the Company agrees to employ you as its most senior executive officer in the position of the sole Chief Executive Officer (“CEO”) with the start date of April 2, 2019 . You will report solely to the Company’s Board of Directors (the “Board”).

You have advised the Company that you plan to continue in your role as: (i) chairman of the board of Origene Technologies, Inc.; (ii) managing partner of Emerging Technology Partners LLC, and will continue to directly manage other personal investments. You do not believe that such a role will materially infringe on your responsibilities to the Company as CEO. You further represent that the performance of your duties as CEO will not breach any other agreement as to which you are a party. You agree that you have disclosed to the Company all of your existing employment and/or business relationships, including, but not limited to, any consulting or advising relationships, outside directorships, investments in privately held companies, and any other relationships that may create a conflict of interest.

Your initial annual base salary (the “Base Salary”) will be $568,000 payable in accordance with the Company’s normal payroll practices. Thereafter, your annual base salary may be increased as determined by the Board following the recommendation of the Compensation Committee. Your annual cash compensation will not include a predetermined bonus opportunity. Any bonus or incentive plan opportunities will be in the discretion the Compensation Committee.

In furtherance of the Company’s business strategy, you will be spending a significant portion of your time in China. Accordingly, in addition to your Base Salary, the Company will provide you with an expatriate allowance consisting of tuition for pre-college age children (up to a total of $120,000 per year) and a housing allowance for an apartment in Beijing.

In addition to the foregoing, you will receive a stock option, covering four (4) million shares of common stock, subject to the following conditions:

The Company will cancel, and you will surrender, your current performance-based option covering four (4) million shares of common stock, and

The option will be issued outside of the Company’s current long-term incentive plan and subject to approval by the stockholders at the upcoming annual meeting.

The date of grant will be the date on which the Company cancels your performance-based option. Subject to receiving stockholder approval, your new option will vest, and become exercisable in full, at the earlier of (i) the completion of a transformative event by the Company as determined in the discretion of the Compensation Committee (such as the signing of two significant licensing agreements) and (ii) on the second anniversary of the date of grant. Notwithstanding the foregoing, if the Company terminates you without “Cause” or you resign for “Good Reason” (as such terms will be defined in the stock option agreement) prior to the second anniversary of the date of grant, then your option will vest immediately upon such termination of employment.

You will be entitled to participate in all employee retirement, welfare, insurance, benefit and paid time off programs of the Company as are in effect from time to time and in which other senior executives of the Company are eligible to participate, on the same terms as such other senior executives.

Employment with the Company is for no specific period of time. Your employment with the Company will be “at-will,” meaning that either you or the Company (acting through the Board, excluding you) may terminate your employment at any time and for any reason, with or without cause.

You will be bound by and comply fully with the Company’s standard confidentiality agreement, insider trading policy, code of conduct, related party transactions policy and any other policies and programs adopted by the Company regulating the behavior of its employees, as such policies and programs may be amended.

[The remainder of this page is intentionally left blank. Signature page follows.]

If these terms are acceptable to you, please countersign and return the last page of this letter.

	Sincerely,



	/s/ Quan Zhou
	Quan Zhou
	Chairman, Compensation Committee

Exhibit 10.3

Confidential Materials omitted and filed separately with the Securities and Exchange Commission.

***Triple asterisks denote omissions.

Execution Version

LICENSE AGREEMENT

by and between

CASI PHARMACEUTICALS, INC.

and

BLACK BELT THERAPEUTICS LIMITED

entered into as of

April 16, 2019

Table of Contents

ARTICLE 1 DEFINITIONS		1

ARTICLE 2 LICENSES		17

2.1	License Grants to CASI	17
2.2	Sublicensing	18
2.3	Non-Compete	18
2.4	No Implied Licenses	19
2.5	Joinder Agreement	19

ARTICLE 3 TRANSFERS TO CASI		19

3.1	Know-How Transfer	19
3.2	Assistance and Costs	20
3.3	Assignment and Transfer of Licensed Product Supplies	21
3.4	Assignment of AGC Agreement	21

ARTICLE 4 EXPLOITATION OF LICENSED PRODUCTS		22

4.1	Overview	22
4.2	Diligence Obligations	22
4.3	Right of Reference	22
4.4	Adverse Event Reporting	22
4.5	Reports	22

ARTICLE 5 PAYMENTS		23

5.1	Upfront Payment	23
5.2	Upfront Equity Investment	23
5.3	Milestone Payments	23
5.4	Royalties	28
5.5	Foreign Exchange	32
5.6	Payment Method; Late Payments	32
5.7	No Right to Offset	32
5.8	Records	32
5.9	Audits	33
5.10	Audit Dispute	33
5.11	Taxes	33
5.12	Royalty Buyout.	34

ARTICLE 6 INTELLECTUAL PROPERTY MATTERS		34

6.1	Ownership of Intellectual Property	34
6.2	Patent Prosecution	35
6.3	Defense Against Third Party Patent Claims	37
6.4	Prosecution of Infringers	38
6.5	Patent Listing	40
6.6	Patent Term Extensions	40
6.7	Trademarks	40

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6.8	Ownership and Enforcement of Product Trademarks	40

ARTICLE 7 REPRESENTATIONS, WARRANTIES, AND COVENANTS		41

7.1	Mutual Representations and Warranties	41
7.2	Additional Representations and Warranties of Black Belt	42
7.3	Non Reliance; Disclaimer	45
7.4	Covenants of Black Belt	45

ARTICLE 8 INDEMNIFICATION		46

8.1	Indemnification by Black Belt	46
8.2	Indemnification by CASI	47
8.3	Indemnification Procedures	47
8.4	LIMITATION OF LIABILITY	49

ARTICLE 9 CONFIDENTIALITY		49

9.1	Confidential Information	49
9.2	Confidentiality Obligations	50
9.3	Permitted Disclosure and Use	50
9.4	Notification	51
9.5	Publicity	51
9.6	Use of Names	51
9.7	Survival	51

ARTICLE 10 TERM; TERMINATION		51

10.1	Term	51
10.2	Termination for Breach	51
10.3	Termination for Convenience by CASI	52
10.4	Termination by CASI for Safety Reasons	52
10.5	Termination for Patent Challenge	52

ARTICLE 11 EFFECTS OF TERMINATION		52

11.1	General Effects of Termination	52
11.2	Termination by Black Belt for CASI’s Breach or by CASI for Convenience	54
11.3	Accrued Rights	55
11.4	Termination Sole Remedy	55
11.5	Survival	55

ARTICLE 12 DISPUTE RESOLUTION		55

12.1	Disputes	55
12.2	Binding Arbitration	56
12.3	Tolling	56
12.4	Patent Right Dispute Resolution	56
12.5	Equitable Remedies	56

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ARTICLE 13 MISCELLANEOUS		57

13.1	Entire Agreement; Amendment	57
13.2	Force Majeure	57
13.3	Notices	57
13.4	No Strict Construction; Interpretation	58
13.5	Assignment	58
13.6	Performance by Affiliates	58
13.7	Further Actions	58
13.8	Severability	58
13.9	Binding Effect; No Third Party Beneficiaries	59
13.10	No Implied Waivers; Rights Cumulative	59
13.11	Independent Contractors	59
13.12	English Language; Governing Law	59
13.13	Counterparts	59

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Schedules
Schedule 1.4	Adimab Agreement Key Terms
Schedule 1.31	Black Belt Patent Rights
Schedule 1.42	Cellca Agreement Key Terms
Schedule 1.75	Lyophilization Milestone Specifications
Schedule 1.145	TSK011010 Compound
Schedule 2.5	Joinder Sections
Schedule 3.1	Technology Transfer Plan
Schedule 5.2	Upfront Equity Investment Term Sheet
Schedule 7.2.15	Manufacturing Agreements
Schedule 7.2.18	No Additional Payments
Schedule 12.2	Arbitration Procedures

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LICENSE AGREEMENT

This License Agreement (this “ Agreement ”) is entered into as of April 16, 2019 (the “ Effective Date ”) by and between Black Belt therapeutics Limited , having a place of business at Stevenage Bioscience Catalyst, Gunnels Wood Road, Stevenage, Hertfordshire, United Kingdom SG1 2FX (“ Black Belt ”), and CASI Pharmaceuticals, Inc. , a corporation organized and existing under the laws of Delaware, having its principal place of business at 9620 Medical Center Drive, Suite 300, Rockville, MD 20850 (“ CASI ”) . Black Belt and CASI are sometimes referred to individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

Whereas , Black Belt owns or controls rights to certain intellectual property relating to the Licensed Compounds and Licensed Products;

Whereas , CASI possesses resources and expertise in the development, manufacture, commercialization, and other exploitation of pharmaceutical and biologic products; and

Whereas , CASI desires to obtain from Black Belt, and Black Belt desires to grant to CASI, rights and licenses to Exploit the Licensed Compounds and Licensed Products in the Field in the Territory pursuant to the terms and conditions set forth in this Agreement.

Now, Therefore , the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1

“ Abbreviated Application ” means (a) an application submitted to the FDA under subsection (k) of Section 351 of the PHSA, or (b) any analogous application to an application set forth in clause (a) submitted to a Regulatory Authority.

1.2

“ Acquired Party ” has the meaning set forth in Section 2.3.2 (Acquisitions by Third Parties).

1.3

“ Adimab ” means Adimab LLC, a Delaware limited liability company having an address at 7 Lucent Drive, Lebanon, NH 03766.

1.4

“ Adimab Agreement ” means that certain Collaboration Agreement dated as of February 11, 2019 by and between Adimab and Black Belt and all amendments thereto. Schedule 1.4 (Adimab Agreement Key Terms) sets forth certain key terms in the Adimab Agreement.

1.5

“ Adimab Milestone Event ” has the meaning set forth in Section 5.3.1(d) (Milestone Payments under the Adimab Agreement).

1.6

“ Adimab Milestone Payment ” has the meaning set forth in Section 5.3.1(d) (Milestone Payments under the Adimab Agreement).

1.7

“ Adimab Net Sales ” means “Net Sales,” as such term is defined in the Adimab Agreement.

1.8

“ Adimab Product ” means a “Product,” as such term is defined under the Adimab Agreement.

1.9

“ Adimab Royalty Payments ” means the royalty payments to be made by CASI pursuant to Section 5.4.1(a)(i) (Adimab Royalty Payments).

1.10

“ Adimab Royalty Term ” means, with respect to an Adimab Product, the “Royalty Term” for such Adimab Product, as such term is defined under the Adimab Agreement.

1.11

“ Affiliate ” means, with respect to either Party, any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, for so long as such control exists. For purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly, of more than 50% of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the U.S., the maximum percentage ownership permitted by law for a foreign investor may be less than 50%, and that in such case such lower percentage will be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management or policies of such entity. With respect to Black Belt, the definition of Affiliate shall not include (a) Black Belt NewCo or (b) any portfolio or investee companies of any funds managed or advised by Black Belt’s shareholders, or in which they have an equity interest.

1.12

“ AGC ” means AGC BIOLOGICS, A/S, formerly known as CMC BIOLOGICS A/S , organized and existing under the laws of Denmark whose registered office is at Vaandtaarnsvej 83 DK-2860 Soeborg, Denmark.

1.13

“ AGC Agreement ” means:

1.13.1

the Development and Manufacturing Services Agreement between AGC and Tusk Therapeutics Limited dated February 16, 2017, as novated to Black Belt on January 16, 2019; and

1.13.2

the Quality Agreement between AGC and Tusk Therapeutics Limited dated March 17, 2017, as novated to Black Belt on 18 January 2019.

1.14

“ Arbitral Tribunal ” has the meaning set forth on Schedule 12.1 (Arbitration Procedures).

1.15

“ Arbitration Rules ” has the meaning set forth on Schedule 12.1 (Arbitration Procedures).

1.16

“ Arising Intellectual Property ” means all (a) Inventions related to a Licensed Product developed or invented by or on behalf of CASI, its Affiliates, or its Sublicensees during the period commencing on the Effective Date and ending on the effective date of termination of this Agreement, and (b) any Patent Rights that Cover any such Inventions and have a priority date during the period commencing on the Effective Date and ending on the effective date of termination of this Agreement.

1.17

“ Assigned Regulatory Materials ” has the meaning set forth in Section 3.1 (Know-How Transfer).

1.18

“ Audit Arbitrator ” has the meaning set forth in Section 5.10 (Audit Dispute).

1.19

“ Audit Dispute ” has the meaning set forth in Section 5.10 (Audit Dispute).

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1.20

“ Bayh-Dole Act ” means the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. Part 401.

1.21

“ Biosimilar Competition ” means, on a Licensed Product-by-Licensed Product, country-by-country, and Calendar Year-by-Calendar Year basis, both the following have occurred:

1.21.1

the aggregate Net Sales of a given Licensed Product in a given country in a given Calendar Year fall by ***% or more from the peak aggregate Net Sales in any prior Calendar Year; and

1.21.2

a Biosimilar Product with respect to such Licensed Product is being marketed and sold by a Third Party in such Calendar Year in such country.

1.22

“ Biosimilar Product ” means, with respect to a Licensed Product in a country, a biological product that is sold in such country by a Third Party that (a) has been licensed as a biosimilar or interchangeable biological product by the FDA pursuant to section 351(k) of the PHSA, or any subsequent or superseding law, statute, or regulation, and for which a Licensed Product is the reference product, as defined by section 351(i)(4) of the PHSA, (b) incorporates, cites, cross-references, or relies upon in any way any data or information contained in any Regulatory Submission for a Licensed Compound or Licensed Product in order to obtain or maintain any Regulatory Approval or Reimbursement Approval for such product, (c) has been granted a marketing authorization as a similar biological medicinal product by the European Union pursuant to Directive 2001/83/EC and Parliament and Council Regulation No. (EC) 726/2004, each as may be amended, or any subsequent or superseding law, statute or regulation, and for which a Licensed Product is the reference medicinal product as defined by Article 10(2)(A) of Directive 2001/83/EC, or (d) has achieved analogous regulatory marketing approval from a Regulatory Authority in another jurisdiction in reliance on the fact of, or the data supporting, the prior approval of such Licensed Product by such Regulatory Authority.

1.23

“ Black Belt ” has the meaning set forth in the preamble hereto.

1.24

“ Black Belt Combination Product ” means a Licensed Product that is (a) sold in the form of a combination that contains or comprises one or more additional therapeutically active pharmaceutical agents (whether coformulated, copackaged, coadministered, or otherwise sold for a single price) other than a Licensed Compound, or (b) sold for a single price together with any (i) delivery device or component therefor, (ii) companion diagnostic related to any Licensed Compound, or (iii) product, process, service, or therapy other than the Licensed Compound (such additional therapeutically active pharmaceutical agent and each of (i) – (iii), an “ Other Component ”); or (c) defined as a “combination product” by the FDA pursuant to 21 C.F.R. §3.2(e) or its foreign equivalent, but, in each case ((a)-(c)), excluding any antibody drug conjugate and bispecific products.

1.25

“ Black Belt First Commercial Sale ” means, with respect to a Licensed Product and a country in the Territory for the purposes of determining the Black Belt Royalty Term for such Licensed Product, the first sale of such Licensed Product by CASI or its Affiliate or Sublicensee for monetary value to a Third Party in such country after receipt of Regulatory Approval for such Licensed Product. Sales prior to receipt of Regulatory Approval for a Licensed Product, if any, including so-called “treatment IND sales,” “named patient sales,” and “compassionate use sales,” in each case, will not be construed as a Black Belt First Commercial Sale with respect to such Licensed Product.

- 3 -

1.26

“ Black Belt Know-How ” means all Know-How owned or Controlled by Black Belt before or on the Effective Date or at any time during the Term, in each case, that is necessary to Exploit any Licensed Compound or Licensed Product, but excluding any Know-How included in the Joint Know-How.

1.27

“ Black Belt Milestone Events ” means each of (a) the Development Milestone Events set forth in Section 5.3.1(a) (Milestone Payments for Lyophilized Form), Section 5.3.1(b) (Milestone Payments for Existing Licensed Products), Section 5.3.1(c) (Milestone Payments for Next Generation Licensed Products), and (b) the Sales Milestone Events.

1.28

“ Black Belt Milestone Payments ” means each of (a) the Development Milestone Payments set forth in Section 5.3.1(a) (Milestone Payments for Lyophilized Form), Section 5.3.1(b) (Milestone Payments for Existing Licensed Products), Section 5.3.1(c) (Milestone Payments for Next Generation Licensed Products), and (b) the Sales Milestone Payments.

1.29

“ Black Belt Net Sales ” means, with respect to any Licensed Product and a given country or jurisdiction for the purposes of determining royalties payable to Black Belt pursuant to Section 5.4.1(b) (Region-Specific Royalty Rates for Existing Licensed Products) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products), the gross amount invoiced by CASI or its Affiliates or Sublicensees (excluding any Third Party Distributors), including gross amounts invoiced to wholesalers and Third Party Distributors, to each Third Party receiving Licensed Product in arm’s length transactions in such country or jurisdiction, less the following deductions from such total amounts that are actually incurred, allowed, accrued, or specifically allocated:

(a)

credits, price adjustments, or allowances for damaged products, and returns or rejections of such Licensed Product;

(b)

trade, cash, and quantity discounts, allowances and credits (other than price discounts granted at the time of invoicing that have already been included in the gross amount invoiced);

(c)

chargeback payments and rebates (or the equivalent thereof), retroactive or otherwise, granted to group purchasing organizations, managed health care organizations or to federal, state/provincial, local, and other governments, including their agencies, or to trade customers;

(d)

any invoiced freight, postage, shipping, insurance, and other transportation charges, as well as any fees for services provided by wholesalers and warehousing chains related to the distribution of such Licensed Product;

(e)

sales, value-added (to the extent not refundable in accordance with Law), and excise taxes, tariffs and duties, and other taxes directly related to the sale (but not including taxes assessed against the income derived from such sale);

(f)

the portion of administrative fees paid during the relevant time period to group purchasing organizations, pharmaceutical benefit managers, or Medicare Prescription Drug Plans relating to such Licensed Product;

(g)

any consideration actually paid or payable for any Delivery System related to a billed or invoiced sale of such Licensed Product, where for purposes of this Black Belt Net Sales definition, a “Delivery System” means any delivery system designed to assist in the administration of such Licensed Product;

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(h)

any reserves for uncollected amounts, including bad debt;

(i)

that portion of the annual fee on prescription drug manufacturers imposed by the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (as amended) and reasonably allocable to sales of the Licensed Products; and

(j)

any other similar and customary deductions that are consistent with GAAP, but which may not be duplicative of the deductions specified in (a) – (i) above.

Black Belt Net Sales will include the amount or fair market value of all other consideration received by CASI or its Affiliates or Sublicensees in respect of the Licensed Product, whether such consideration is in cash, payment in kind, exchange, or other form. For purposes of calculating Black Belt Net Sales, all Black Belt Net Sales will be converted into Dollars in accordance with Section 5.5 (Foreign Exchange).

For this definition:

(ii)

the transfer of Licensed Product by or among CASI or its Affiliates or Sublicensees is not considered a sale; and

(ii)

Black Belt Net Sales will not include transfers or dispositions for charitable, donation, promotional, compassionate use, pre-clinical, clinical, regulatory or governmental purposes.

(A)

If, with respect to a Black Belt Combination Product, CASI or its Affiliate or Sublicensee separately sells in such country or other jurisdiction, (1) a product containing as its sole active ingredient a Licensed Compound contained in such Black Belt Combination Product (the “ Mono Product ”) and (2) products containing as their sole active ingredients the other active ingredients in such Black Belt Combination Product, then the Black Belt Net Sales attributable to such Black Belt Combination Product will be calculated by multiplying actual Black Belt Net Sales of such Black Belt Combination Product by the fraction A/(A+B) where: “A” is CASI’s (or its Affiliate’s or Sublicensee’s, as applicable) average Black Belt Net Sales price for the Mono Product in such country or other jurisdiction during the period to which the Black Belt Net Sales calculation applies and “B” is CASI’s (or its Affiliate’s or Sublicensee’s, as applicable) average Black Belt Net Sales price for products that contain as their sole active ingredients the Other Components in such Black Belt Combination Product in such country or other jurisdiction during the period to which the Black Belt Net Sales calculation applies.

(B)

If, with respect to a Black Belt Combination Product, CASI or its Affiliate or Sublicensee separately sells in such country or other jurisdiction the Mono Product but does not separately sell in such country or other jurisdiction products containing as their sole active ingredients the other active ingredients in such Black Belt Combination Product, then the Black Belt Net Sales attributable to such Black Belt Combination Product will be calculated by multiplying the Black Belt Net Sales of such Black Belt Combination Product by the fraction A/C where: “C” is CASI’s (or its Affiliate’s or Sublicensee’s, as applicable) average Black Belt Net Sales price for such Black Belt Combination Product in such country or other jurisdiction during the period to which the Black Belt Net Sales calculation applies.

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(C)

If, with respect to a Black Belt Combination Product, CASI and its Affiliates and Sublicensees do not separately sell in such country or other jurisdiction the Mono Product but separately sells products containing as their sole active ingredients the other active ingredients contained in such Black Belt Combination Product, then the Black Belt Net Sales attributable to such Black Belt Combination Product will be calculated by multiplying the Black Belt Net Sales of such Black Belt Combination Product by the fraction (C-B)/C.

(D)

If, with respect to a Black Belt Combination Product, CASI and its Affiliates and Sublicensees do not separately sell in such country or other jurisdiction any of the Mono Product or the Other Components in such Black Belt Combination Product, then the Black Belt Net Sales attributable to such Black Belt Combination Product will be determined by the Parties in good faith based on the relative fair market value of such Mono Product and such Other Components. If the Parties cannot agree on such relative value, then CASI will have final decision-making with respect to such allocation of value.

1.30

“ Black Belt NewCo ” means Black Belt Tx Limited, a limited company governed by the laws of England, having its registered office at Stevenage Bioscience Catalyst, Gunnels Wood Road, Stevenage, Hertfordshire, England, SG1 2FX and registered with Companies House with number 11919558.

1.31

“ Black Belt Patent Right ” means any Patent Right owned or Controlled by Black Belt before or on the Effective Date or at any time during the Term (including pursuant to any Third Party Agreement), in each case, that Covers any Licensed Compounds or Licensed Product, the Exploitation of any Licensed Compound or Licensed Product, or any other invention necessary to Exploit any Licensed Compound or any Licensed Product, but excluding any Joint Patent Right. The Black Belt Patent Rights owned by Black Belt and existing as of the Effective Date are set forth on Schedule 1.31 (Black Belt Patent Rights).

1.32

“ Black Belt Royalty Payments ” means the royalty payments to be made to Black Belt pursuant to Section 5.4.1(b) (Region-Specific Royalty Rates for Existing Licensed Products) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products).

1.33

“ Black Belt Royalty Term ” means, for purposes of determining royalties payable to Black Belt pursuant to pursuant to Section 5.4.1(b) (Region-Specific Royalty Rates for Existing Licensed Products) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products), with respect to each Licensed Product and each country in the Territory, the period commencing on the Black Belt First Commercial Sale of a Licensed Product in such country, and ending upon the latest to occur of: (a) the expiration of the last Valid Claim of a Black Belt Patent Right or Joint Patent Right Covering the composition of matter, formulation, use or manufacture of such Licensed Product in such country ; (b) *** years after the Black Belt First Commercial Sale of such Licensed Product in such country; or (c) expiration of Regulatory Exclusivity for such Licensed Product in such country.

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1.34

“ Black Belt Technology ” means the Black Belt Know-How, Black Belt Patent Rights, and Black Belt’s interest in the Joint Patent Rights.

1.35

“ Business Day ” means any day other than a day on which the commercial banks in New York City, New York, U.S. or London, England, are authorized or required to be closed.

1.36

“ Calendar Quarter ” means each successive period of three calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term commences on the Effective Date and ends on the day immediately before the first to occur of January 1, April 1, July 1, or October 1 after the Effective Date, and the last Calendar Quarter ends on the last day of the Term.

1.37

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

1.38

“ CASI ” has the meaning set forth in the preamble hereto.

1.39

“ CD38 ” means the glycoprotein Cluster of Differentiation 38 also known as ADP-Ribosyl Cyclase/Cyclic ADP-Ribose Hydrolase 1.

1.40

“ CDA ” has the meaning set forth in Section 9.1 (Confidential Information).

1.41

“ Cellca ” means Sartorius Stedim Cellca GmbH.

1.42

“ Cellca Agreement ” means that certain Framework for Services and License Agreement dated as of February 14, 2017, by and between Cellca and Tusk, as modified by that certain Deed of Novation dated as of November 8, 2018, by and among Cellca, Tusk, and Black Belt Therapeutics Limited and the Work Orders relating thereto and all amendments thereof. Schedule 1.42 (Cellca Agreement Key Terms) sets forth certain key terms in the Cellca Agreement.

1.43

“ Cellca Milestone Event ” has the meaning set forth in Section 5.3.1(e) (Milestone Payments Under the Cellca Agreement).

1.44

“ Cellca Milestone Payment ” has the meaning set forth in Section 5.3.1(e) (Milestone Payments Under the Cellca Agreement).

1.45

“ Change of Control ” means, with respect to a Party, that: (a) any Third Party acquires directly or indirectly the beneficial ownership of any voting security of such Party, or if the percentage ownership of such Third Party in the voting securities of such Party is increased through stock redemption, cancellation, or other recapitalization, and immediately after such acquisition or increase such Third Party is, directly or indirectly, the beneficial owner of voting securities representing at least 50% of the total voting power of all of the then outstanding voting securities of such Party; (b) a merger, consolidation, recapitalization, or reorganization of such Party is consummated that would result in shareholders or equity holders of such Party immediately prior to such transaction, owning less than 50% of the outstanding voting securities of the surviving entity (or its parent entity) immediately following such transaction; (c) the shareholders or equity holders of such Party approve a plan of complete liquidation of such Party, or an agreement for the sale or disposition by such Party of all or substantially all of such Party’s assets, other than pursuant to the transaction described above or to an Affiliate; or (d) the sale or transfer to a Third Party of all or substantially all of such Party’s consolidated assets taken as a whole, through one or more related transactions.

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1.46

“ China ” means the People’s Republic of China, as constituted as of the Effective Date, (a) solely for purposes of determining whether a Development Milestone Event has been achieved, excluding the Macao Special Administrative Region, Hong Kong Special Administrative Region, and Taiwan, and (b) for all other purposes under this Agreement, including the Macao Special Administrative Region, Hong Kong Special Administrative Region, and Taiwan.

1.47

“ Clinical Trial ” means any study conducted in humans (healthy volunteers or patients) according to a set protocol and meeting the requirements of GCP.

1.48

“ CMC ” means the chemistry, manufacturing, and controls of Licensed Product.

1.49

“ Commercialize ,” “ Commercializing ,” or “ Commercialization ” means all activities directed to the marketing, pricing, promoting, physician targeting, reimbursing, branding, selling, or offering for sale, of a product, including strategy, planning, market research, advertising, educating, importing, exporting, distributing, and post-marketing safety surveillance and reporting and activities directed to obtaining Reimbursement Approvals, as applicable. For clarity, “Commercialization” will not include any activities related to Manufacturing, performance of Medical Affairs, or Development of a product. “ Commercialize ,” “ Commercializing ” and “ Commercialized ” will be construed accordingly.

1.50

“ Commercially Reasonable Efforts ” means, with respect to CASI’s obligations under this Agreement that relate to any Licensed Compound or Licensed Product, the level of efforts as required to carry out a task in a diligent and sustained manner without undue interruption, pause or delay, which level is at least commensurate with the level of efforts that a similarly situated biopharmaceutical company of similar size and resources would reasonably devote to a product of similar market potential at a similar stage in development or product life cycle and having similar commercial and scientific advantages and disadvantages, when utilizing sound and reasonable scientific, medical, and business practice and judgment in order to Develop such Licensed Compound or Licensed Product, based on conditions then prevailing and taking into account all relevant factors, including (a) issues of safety, tolerability, and efficacy, (b) product profile, (c) difficulty in and costs of Developing or Manufacturing any Licensed Compound or Licensed Product, (d) competitiveness of any Licensed Compound or Licensed Product and alternative therapies in the marketplace, (e) the nature and extent of market exclusivity, (f) the patent or other proprietary position of any Licensed Compound or Licensed Product, (g) Third Party intellectual property rights, (h) the regulatory structure involved, (i) the potential profitability of any Licensed Compound or Licensed Product, taking into account anticipated and actual Development costs and expenses, and (j) anticipated or actual product labeling. It is anticipated that the level of effort will change over time, reflecting changes in the status of such Licensed Product and the market or country involved.

1.51

“ Competing Infringement ” has the meaning set forth in Section 6.4.1 (Notice).

1.52

“ Competitive Activities ” has the meaning set forth in Section 2.3.1 (Covenant).

1.53

“ Competitive Product ” means any therapeutic compound or product (a) the primary mechanism of action of which is the inhibition of CD38, or (b) that is, or is expected to be, described on a label approved by a Regulatory Authority as having the inhibition of CD38 as the primary mechanism of action.

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1.54

“ Confidential Information ” has the meaning set forth in Section 9.1 (Confidential Information).

1.55

“ Control ” or “ Controlled ” means the possession by a Party (whether by ownership, license, or otherwise other than pursuant to this Agreement) of, (a) with respect to any tangible Know-How, the legal authority or right to physical possession of such tangible Know-How, with the right to provide such tangible Know-How to the other Party on the terms set forth herein, or (b) with respect to Patent Rights, Regulatory Approvals, Regulatory Submissions, intangible Know-How, or other intellectual property rights, the legal authority or right to grant a license, sublicense, access, or right to use (as applicable) to the other Party under such Patent Rights, Regulatory Approvals, Regulatory Submissions, intangible Know-How, or other intellectual property rights on the terms set forth herein, in each case ((a) and (b)), (i) in accordance with and without breaching or otherwise violating the terms of any arrangement or agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such access, right to use, license, or sublicense or at any time during the Term, (ii) without requiring the consent of a Third Party, and (iii) at no additional cost (unless the other Party agrees to assume such cost).

1.56

“ Cover ” means, with respect to a particular subject matter at issue and a relevant Patent Right, that the manufacture, use, sale, offer for sale, or importation of such subject matter would fall within the scope of one or more claims in such Patent Right.

1.57

“ Develop ,” “ Developing ” or “ Development ” means all internal and external research, development, and regulatory activities related to pharmaceutical or biologic products, including (a) research, non-clinical testing, toxicology, testing and studies, non-clinical and preclinical activities, and Clinical Trials, and (b) preparation, submission, review, and development of data or information for the purpose of submission to a Regulatory Authority to obtain authorization to conduct Clinical Trials or to obtain, support, or maintain Regulatory Approval of a pharmaceutical or biologic product, but excluding activities directed to Manufacturing, performance of Medical Affairs, or Commercialization. Development will include development and regulatory activities for additional forms, formulations, or indications for a pharmaceutical or biologic product after receipt of Regulatory Approval of such product (including label expansion), including Clinical Trials initiated following the receipt of Regulatory Approval or any Clinical Trial to be conducted after receipt of Regulatory Approval that was mandated by the applicable Regulatory Authority as a condition of such Regulatory Approval with respect to an approved formulation or indication (such as post-marketing studies, observational studies, and implementation and management of registries and analysis thereof, in each case, if required by any Regulatory Authority in any region in the Territory to support or maintain Regulatory Approval for a pharmaceutical or biologic product in such region). “ Develop ,” “ Developing ” and “ Developed ” will be construed accordingly.

1.58

“ Development Milestone Event ” means each of the development milestone events set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments), TABLE 5.3.1(b) (Development Milestones for Existing Licensed Products), TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products), Section 4.4 of the Adimab Agreement, and Section 6 of the Work Order of the Cellca Agreement.

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1.59

“ Development Milestone Payment ” means each of the milestone payments set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments), TABLE 5.3.1(b) (Development Milestones for Existing Licensed Products), TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products), Section 4.4 of the Adimab Agreement, and Section 6 of the Work Order of the Cellca Agreement.

1.60

“ Disclosing Party ” has the meaning set forth in Section 9.1 (Confidential Information).

1.61

“ Dispute ” has the meaning set forth in Section 12.1 (Disputes).

1.62

“ DMF ” means a drug master file.

1.63

“ Dollars ” or “ $ ” means U.S. dollars.

1.64

“ E.U. ” means the European Union, as constituted as of the Effective Date, including, in any case, the United Kingdom.

1.65

“ Effective Date ” has the meaning set forth in the preamble hereto.

1.66

“ EMA ” means the European Medicines Agency or any successor entity.

1.67

“ Enforcing Party ” has the meaning set forth in Section 6.4.2(d)(i) (Cooperation; Damages).

1.68

“ Euros ” or “ € ” means E.U. euros.

1.69

“ Executive Officer ” means an executive officer (or their designee) of the applicable Party.

1.70

“ Existing Licensed Product ” means (a) a Licensed Product comprising or containing TSK011010 alone or in combination with one or more active ingredients, or (b) a Lyophilized Product, alone or in combination with one or more active ingredients, in each case ((a) and (b)), in any and all forms, presentations, formulations, dosages, dosage forms, and strengths, including any line extensions of any of the foregoing, but excluding any Next Generation Licensed Product.

1.71

“ Exploit ” or “ Exploitation ” means to make, have made, import, use, sell, or offer for sale, including to research, Develop, Commercialize, register, modify, enhance, improve, Manufacture, have Manufactured, hold or keep (whether for disposal or otherwise), formulate, optimize, have used, export, transport, distribute, promote, market, have sold or otherwise dispose of, and otherwise exploit.

1.72

“ FD&C Act ” means the U.S. Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. , as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

1.73

“ FDA ” means the U.S. Food and Drug Administration or any successor entity.

1.74

“ Field ” means all diseases and uses.

1.75

“ First Lyophilization Milestone ” means (a) the achievement of the criteria set forth on Schedule 1.75 (Lyophilization Milestone Specifications) as “First Milestone Criteria,” or (b) CASI’s decision to designate and approve a Licensed Product in a lyophilized form as acceptable for use in a clinical bridging study (a Licensed Product meeting such criteria in clause (a) or designated by CASI in clause (b), a “ Lyophilized Product ”).

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1.76

“ FTE” means the equivalent of the work of one duly qualified employee of Black Belt full time for one year (consisting of a total of 1,880 hours per year). The portion of an FTE billable by Black Belt for one individual during a given accounting period will be determined by dividing the number of hours worked directly by such individual on the work to be conducted under this Agreement during such accounting period and the number of FTE hours applicable for such accounting period based on 1,880 working hours per Calendar Year.

1.77

“ FTE Rate ” means £*** per FTE per Calendar Year.

1.78

“ GAAP ” means U.S. generally accepted accounting principles, as then current at the relevant time and as consistently applied by the applicable Party.

1.79

“ Good Clinical Practices ” or “ GCP ” means Good Clinical Practice as promulgated by the FDA under and in accordance with the FD&C Act (Title 21 of the U.S. Code, Section 301 et seq.), Title 21, Parts 312 of the U.S. Code of Federal Regulations, and the guidelines and standards published by the FDA that relate thereto as may be amended from time to time, or any successors thereto. To the extent consistent with U.S. law, “GCP” also includes the practices and standards described in the Guidelines on Principles of Good Clinical Practice in Conduct of EU Clinical Trials as promulgated by the European Commission under European Directive 2001/20/EC and the ICH Harmonised Tripartite Guideline for Good Clinical Practice (ICH E6) and any analogous practices, standards guidelines and regulations promulgated by any applicable Regulatory Authority in any country or jurisdiction in the Territory, as each may be amended from time to time, or any successors thereto.

1.80

“ Good Laboratory Practices ” or “ GLP ” means Good Laboratory Practices as promulgated by the FDA under and in accordance with the FD&C Act (Title 21 of the U.S. Code, Section 342 et seq ), Title 21, Part 58 of the U.S. Code of Federal Regulations, and the guidelines and standards published by the FDA that relate thereto as may be amended from time to time, or any successors thereto. To the extent consistent with U.S. law, “GLP” also includes the principles of good laboratory practice as set out in Directives 2004/9/EC and 2004/10/EC (as supplemented by the OECD Principles of Good Laboratory Practices), all applicable national implementing legislation and guidelines, and all applicable equivalent regulatory requirements of a Regulatory Authority in any country or jurisdiction in the Territory, as each may be amended from time to time, or any successors thereto.

1.81

“ Governmental Authority ” means any multi-national, federal, state, local, municipal, provincial, or other governmental authority of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court, or other tribunal).

1.82

“ Grandfathered Products ” has the meaning set forth in Section 2.3.2 (Acquisitions by Third Parties).

1.83

“ IBA Rules ” has the meaning set forth on Schedule 12.1 (Arbitration Procedures).

1.84

“ ICH ” means the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.

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1.85

“ IND ” means an Investigational New Drug application required pursuant to 21 C.F.R. Part 312 or any comparable filings outside of the U.S. required to commence human clinical trials in such country or region (such as an application for a Clinical Trial Authorization in the E.U.), and all supplements or amendments that may be filed with respect to the foregoing.

1.86

“ Indemnification Claim Notice ” has the meaning set forth in Section 8.3.1 (Notice of Claim).

1.87

“ Indemnified Party ” has the meaning set forth in Section 8.3.1 (Notice of Claim).

1.88

“ Indemnifying Party ” has the meaning set forth in Section 8.3.1 (Notice of Claim).

1.89

“ Indemnitee ” has the meaning set forth in Section 8.3.1 (Notice of Claim).

1.90

“ Infringement Claim ” has the meaning set forth in Section 6.3.1 (Notice of Infringement Claims).

1.91

“ Inventions ” means any new and useful process, manufacture, or composition of matter, know-how, or other invention that is first developed and invented, by either Party or jointly by the Parties in connection with performance of activities under this Agreement.

1.92

“ Joint Know-How ” means all Inventions, technical data, reports, information, procedures, techniques, and other Know-How developed or invented in the course of performance of activities under this Agreement where the inventors of the applicable Invention or other Know-How are employees, agents, or independent contractors of both Black Belt and CASI, or their respective Affiliates or Sublicensees.

1.93

“ Joint Patent Rights ” means any Patent Right that claims priority to a date during the Term and Covers Joint Know-How.

1.94

“ Joint Technology ” means all Joint Know-How and Joint Patent Rights.

1.95

“ Know-How ” means any and all proprietary information (including scientific, technical, or regulatory information), data (including physical data such as laboratory notes and laboratory notebooks, chemical data, toxicology data, animal data, raw data, clinical data, and analytical and quality control data), discoveries, materials, results, records, Inventions, improvements, modifications, protocols, formulas, dosage regimens, control assays, processes, techniques, methods, assays, compositions, chemical or biological materials, designs, articles of manufacture, formulations, discoveries, product specifications, marketing, pricing and distribution costs, Inventions, algorithms, technology, forecasts, profiles, strategies, plans, results in any form whatsoever, know-how, and trade secrets of any kind, including sequence information, vectors and host cells that include DNA, in each case, whether or not copyrightable, patented, or patentable, or in written, electronic or any other form now known or hereafter developed.

1.96

“ Knowledge of Black Belt ” shall mean the actual knowledge of each of ***.

1.97

“ Laws ” means all applicable laws, statutes, rules, regulations, ordinances, and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city, or other political subdivision, domestic or foreign, anywhere in the world.

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1.98

“ Licensed Compound ” means TSK011010 and all other compounds Controlled by Black Belt (including any backup compounds) at any time prior to the Effective Date or during the Term the primary mechanism of which is the inhibition of CD38, together with any derivative, variant, or improvement of any of the foregoing (including the antibody sequence thereof).

1.99

“ Licensed Product ” means any pharmaceutical composition or preparation comprising or containing a Licensed Compound, alone or in combination with one or more other active ingredients, in any and all forms, presentations, formulations, dosages, dosage forms, strengths, and modes of administration, and including any improvements to any of the foregoing. Licensed Products include all Adimab Products, Existing Licensed Products, and Next Generation Licensed Products.

1.100

“ Losses ” means, collectively, liability, damage, tax, costs, loss or expense (including reasonable outside attorneys’ fees and expenses of litigation).

1.101

“ Lyophilized Product ” has the meaning set forth in Section 1.75 (First Lyophilization Milestone).

1.102

“ MAA ” means any new drug application or other marketing authorization application, in each case, filed with the applicable Regulatory Authority in a country or other regulatory jurisdiction (and all supplements and amendments thereto), which application is required to commercially market or sell a pharmaceutical or biologic product in such country or jurisdiction, including (a) all New Drug Applications and Biologics License Applications submitted to the FDA in the U.S. in accordance with the FD&C Act with respect to a biologic or pharmaceutical product, (b) all MAAs submitted to (i) the EMA under the centralized EMA filing procedure in the E.U. or (ii) a Regulatory Authority in any country in the E.U. if the centralized EMA filing procedure is not used to gain Regulatory Approval in such country, (c) Japanese New Drug Application submitted to the PMDA in Japan, (d) application to commercially market or sell a pharmaceutical or biologic product submitted to the National Medical Products Administration in China, or (e) any analogous application or submission to any Regulatory Authority in any other country or regulatory jurisdiction, and in each case ((a) – (e)), all supplements or amendments that may be filed with respect to any of the foregoing.

1.103

“ Major European Country ” means Germany, France, Spain, Italy, and, as constituted as of the Effective Date, the United Kingdom.

1.104

“ Manufacture ” or “ Manufacturing ” means activities directed to manufacturing, processing, packaging, labeling, filling, finishing, assembly, inspection, testing, shipping, storage, supply, handling, or freight of any pharmaceutical or biologic product (or any components or process steps involving any product or any companion diagnostic), placebo, or comparator agent, as the case may be, including cell line development, quality assurance and stability testing, characterization testing, manufacturing, quality control release testing of drug substance and drug product, quality assurance batch record review and release of product, quality control, process development, qualification, and validation, scale-up, pre-clinical, clinical, and commercial manufacture, analytic development and supply, initial manufacturing licenses, approvals and inspections, qualification and validation of Third Party contract manufacturers, stability and release testing, equipment validation, testing and release, packaging development and final packaging and labeling, shipping configurations and shipping studies, and product characterization, and overseeing the conduct of any of the foregoing but excluding activities directed to Development, Commercialization, or Medical Affairs. “ Manufacturing ” and “ Manufactured ” will be construed accordingly.

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1.105

“ Marketing Approval ” means, with respect to a Licensed Product, all approvals (including supplements, amendments, pre- and post-approvals), permits, licenses, registrations and authorizations necessary for the Commercialization of such Licensed Product in the Territory, including receipt of all Regulatory Approvals and Reimbursement Approvals.

1.106

“ Medical Affairs ” means activities conducted by a Party’s medical affairs departments (or, if a Party does not have a medical affairs department, the equivalent function thereof), including communications with key opinion leaders, medical education, symposia, advisory boards (to the extent related to medical affairs or clinical guidance), activities performed in connection with patient registries, and other medical programs and communications, including educational grants, research grants (including conducting investigator-initiated studies), and charitable donations to the extent related to medical affairs and not to other activities that do not involve the promotion, marketing, sale, or other Commercialization of the Licensed Products and are not conducted by a Party’s medical affairs (or equivalent) departments.

1.107

“ New License Agreement ” has the meaning set forth in Section 11.1.6 (Sublicense Continuation Upon Termination).

1.108

“ Next Generation Licensed Product ” means any Licensed Product other than an Existing Licensed Product. “Next Generation Licensed Products” include any (a) antibody drug conjugate, (b) antibody radionuclide conjugate, (c) radioligand, (d) bispecific antibody, in each case ((a)-(d)), that includes a Licensed Compound, or (e) any re-engineered version of any Licensed Compound in existence as of the Effective Date, including to enhance antibody-dependent cellular toxicity.

1.109

“ Patent Challenge ” means, with respect to any Black Belt Patent Rights, to contest the validity or enforceability of any such Black Belt Patent Rights, in whole or in part, in any court, arbitration proceeding or other tribunal, including the United States Patent and Trademark Office, the European Patent Office, and the United States International Trade Commission. As used in this term “Patent Challenge”, the term “contest” includes (a) filing an action under 28 U.S.C. §§ 2201-2202 seeking a declaration of invalidity or unenforceability of any such Black Belt Patent Rights; (b) filing, or joining in, a petition under 35 U.S.C. § 311 to institute inter partes review of any such Black Belt Patent Rights, or any portion thereof; (c) filing, or joining in, a petition under 35 U.S.C. § 321 to institute post-grant review of any such Black Belt Patent Rights, or any portion thereof; (d) any foreign equivalent of clauses (a), (b), or (c) in the Territory outside of the United States; or (e) filing or commencing any opposition, nullity or similar proceedings challenging the validity of any such Black Belt Patent Rights in any country outside the United States; but excluding (i) filing a request under 35 U.S.C. § 302 for re-examination of any such Black Belt Patent Rights, (ii) filing a request under 35 U.S.C. § 251 for a reissue of any such Black Belt Patent Rights, or (iii) any foreign equivalents of the foregoing clauses (i) or (ii) applicable in the Territory outside of the United States.

1.110

“ Patent Rights ” means any and all (a) patent applications (filed or in preparation) and issued patents, including, all national, regional, and international patents and patent applications; provisionals; continuations; divisionals; continuations-in-part; continued prosecution applications; reissues, renewals, substitutions, reexaminations, and revivals thereof; (b) patents that have issued or in the future issue from the foregoing patent applications, including utility models, petty patents and design patents and certificates of invention; and (c) extensions (including pediatric exclusivity, patent term extension and supplementary patent certificate) or restorations of the patents described above by existing or future extension or restoration mechanisms.

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1.111

“ Patent Term Extension ” means any patent term extension under 35 U.S.C. §156 or any non-U.S. counterpart or equivalent of the foregoing, including supplemental protection certificates and any other extensions that are available as of the Effective Date or become available in the future.

1.112

“ Person ” means an individual, a corporation, a partnership, an association, a trust, or other entity or organization, including a government or political subdivision or an agency thereof.

1.113

“ Phase III Clinical Trial ” means a human clinical trial in any country described in 21 C.F.R. §312.21(c), or an equivalent clinical study required by a Regulatory Authority outside the United States.

1.114

“ PHSA ” means the United States Public Health Service Act, 42 U.S.C. §§ 201 et seq., as amended from time to time.

1.115

“ PMDA ” means the Pharmaceuticals and Medical Devices Agency or any successor entity.

1.116

“ President Arbitrator ” has the meaning set forth on Schedule 12.1 (Arbitration Procedures).

1.117

“ Product Trademarks ” means the Trademarks to be used by CASI or its Affiliates or Sublicensees in connection with the Exploitation of Licensed Products in the Territory and any registrations thereof or any pending applications relating thereto in the Territory.

1.118

“ Purple Book ” has the meaning set forth in Section 6.5 (Patent Listing).

1.119

“ Qualifications ” has the meaning set forth on Schedule 12.1 (Arbitration Procedures).

1.120

“ Receiving Party ” has the meaning set forth in Section 9.1 (Confidential Information).

1.121

“ Recovery ” has the meaning set forth in Section 6.4.2(d)(v) (Cooperation; Damages).

1.122

“ Regulatory Approval ” means, with in any given jurisdiction, approval to market a Licensed Product legally as a drug or biologic, including approval of a Biologic License Application (as defined in the U.S. FD&C Act) and the regulations promulgated thereunder (21 C.F.R. §§ 600-680) in the United States, or approval of a comparable filing in the United States or any other jurisdiction. Reimbursement Approval need not be obtained in order for Regulatory Approval to be achieved.

1.123

“ Regulatory Authority ” means, with respect to a particular country, extra-national territory, province, state, or other regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval or, to the extent required for such country, extra-national territory, province, state, or other or regulatory jurisdiction, Reimbursement Approval of a Licensed Compound or Licensed Product in such country, state, province, or some or all of such extra-national territory or regulatory jurisdiction, including the FDA, the EMA, the European Commission, the PMDA, and in each case, including any successor thereto.

1.124

“ Regulatory Data ” means any and all research data, pharmacology data, chemistry, manufacturing and control data, preclinical data, clinical data, and all other documentation submitted, or recommended or required to be submitted, to Regulatory Authorities in connection with any Regulatory Submission for a Licensed Compound or Licensed Product (including any applicable DMFs, CMC data, or similar documentation).

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1.125

“ Regulatory Exclusivity ” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a Licensed Product in a country or jurisdiction in the Territory, other than a Patent Right, that prohibits a Person from (a) relying on safety or efficacy data generated by or on behalf of a Party with respect to such Licensed Product in an application for Regulatory Approval of a Biosimilar Product, or (b) Commercializing a Licensed Product or a Biosimilar Product, including orphan drug exclusivity, or rights similar thereto in other countries or regulatory jurisdictions.

1.126

“ Regulatory Submissions ” means INDs, MAAs, clinical trial applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals, or other filings made to, received from or otherwise conducted with a Regulatory Authority to Exploit a Licensed Product in a particular country or jurisdiction.

1.127

“ Reimbursement Approval ” means, with respect to a country, if applicable, the approval, agreement, determination, or decision establishing the pricing or reimbursement for a pharmaceutical or biologic product that can be charged or reimbursed in regulatory jurisdictions where the applicable Governmental Authorities negotiate, approve, or determine the price or reimbursement of pharmaceutical or biologic products.

1.128

“ Royalty Payments ” means the Adimab Royalty Payments and Black Belt Royalty Payments.

1.129

“ Royalty Report ” has the meaning set forth in Section 5.4.3(a) (Royalty Reports).

1.130

“ Royalty Term ” means the Adimab Royalty Term or the Black Belt Royalty Term, as applicable.

1.131

“ Sales Milestone Event ” means each of the sales milestone events set forth in TABLE 5.3.2(a) (Existing Licensed Product Sales Milestones) and TABLE 5.3.2(b) (Next Generation Licensed Product Sales Milestones).

1.132

“ Sales Milestone Payment ” means each of the one-time milestone payments set forth in TABLE 5.3.2(a) (Existing Licensed Product Sales Milestones) and TABLE 5.3.2(b) (Next Generation Licensed Product Sales Milestones).

1.133

“ Second Lyophilization Milestone ” means the achievement of the criteria set forth on Schedule 1.75 (Lyophilization Milestone Specifications) as “Second Milestone Criteria.”

1.134

“ Sublicensee ” means any Person to which a sublicense is granted pursuant to this Agreement. For clarity, wholesalers, or resellers of Licensed Product that perform their activities on behalf of CASI or Third Party Distributors will not be considered Sublicensees.

1.135

“ Technology Transfer Period ” means the period commencing on the receipt by Black Belt of the €5,000,000 upfront payment referred to in Section 5.1 and ending *** thereafter.

1.136

“ Technology Transfer Plan ” has the meaning set forth in Section 3.1 (Know-How Transfer).

1.137

“ Term ” has the meaning set forth in Section 10.1 (Term).

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1.138

“ Territory ” means all countries worldwide.

1.139

“ Third Party ” means any individual, corporation, partnership, limited liability company, trust, unincorporated association, Governmental Authority, or other entity or body other than Black Belt or CASI or an Affiliate of either of them.

1.140

“ Third Party Agreements ” means (a) the Adimab Agreement and (b) the Cellca Agreement.

1.141

“ Third Party Claim ” means collectively, any and all Third Party demands, claims, actions, suits, and proceedings (whether criminal or civil, in contract, tort, or otherwise) that are brought by a Third Party not affiliated with or employed by a Party or an Affiliate of such Party.

1.142

“ Third Party Distributor ” means, with respect to any country, any Third Party that purchases all its requirements for Licensed Products in such country from CASI or its Affiliates or Sublicensees and is appointed as a distributor to distribute, market and resell such Licensed Product in such country, even if such Third Party is granted ancillary rights to Develop, package, or obtain Regulatory Approval of such Licensed Product in order to distribute, market, or sell such Licensed Product in such country.

1.143

“ Third Party Milestone Payment ” has the meaning set forth in Section 5.3.1(e) (Milestone Payments Under the Cellca Agreement).

1.144

“ Trademark ” means any word, name, symbol, color, designation, or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo, business symbol, or domain names, whether or not registered.

1.145

“ TSK011010 ” means the CD38 inhibitor that is further described on Schedule 1.145 (TSK011010 Compound).

1.146

“ Tusk ” means Tusk Therapeutics, Ltd., Tusk Therapeutics N.V., and Tusk Therapeutics SA.

1.147

“ U.S. ” means the United States of America, including all possessions and territories thereof.

1.148

“ Valid Claim ” means a claim of (a) any issued and unexpired patent whose validity, enforceability, or patentability has not been affected by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability; or (b) a pending patent application that is filed and prosecuted in good faith that has not been pending for more than eight years from its earliest priority date.

ARTICLE 2

LICENSES

2.1

License Grants to CASI . Black Belt hereby grants to CASI an exclusive (even as to Black Belt and its Affiliates), perpetual (subject to ARTICLE 10 (Term; Termination) and ARTICLE 11 (Effects of Termination)), worldwide license, with the right to freely grant sublicenses (subject to Section 2.2 (Sublicensing)), under the Black Belt Technology to Exploit the Licensed Compounds and Licensed Products in the Field in the Territory.

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2.2

Sublicensing .

2.2.1

Sublicense Rights . CASI may sublicense the rights and obligations granted to it under Section 2.1 (License Grants to CASI) through multiple tiers to one or more Affiliates or Third Parties; provided that in each such case:

(a)

any Sublicensee will carry out the applicable responsibilities of CASI under this Agreement in connection with such sublicensed rights, and CASI shall be fully responsible to Black Belt under this Agreement for all acts and omissions of any Sublicensee as if CASI were itself exercising such sublicensed rights and performing such sublicensed obligations under this Agreement;

(b)

any sublicense of the rights shall impose like obligations on the Sublicensee as are imposed on CASI under this Agreement, including under this Section 2.2 (Sublicensing), ARTICLE 4 (Exploitation of Licensed Products), Section 5.3 (Milestone Payments), Section 5.4 (Royalties), Section 5.8 (Records), Section 5.9 (Audits), ARTICLE 6 (Intellectual Property Matters), Section 8.2 (Indemnification by CASI), ARTICLE 9 (Confidentiality), ARTICLE 10 (Term; Termination), and ARTICLE 11 (Effects of Termination). CASI must ensure that all the terms of each sublicense are consistent with the terms of this Agreement and shall further ensure that all Sublicensees duly comply with the applicable sublicense or promptly terminate any Sublicensee not in compliance therewith; and

(c)

within 10 Business Days of the grant of any sublicense of the rights and obligations granted to CASI under Section 2.1 (License Grants to CASI), CASI will provide Black Belt with a copy of such sublicense; provided that CASI may redact from such sublicense any information that is not necessary to verify the compliance of such sublicense agreement with the terms of this Section 2.2 (Sublicensing).

2.2.2

Subcontracting . In addition to CASI’s right to grant sublicenses pursuant to Section 2.2.1 (Sublicense Rights), CASI may Develop, Manufacture, perform Medical Affairs with respect to, Commercialize, and otherwise Exploit the Licensed Compounds and Licensed Products through one or more Affiliates or Third Party subcontractors ( provided that no sublicense is granted, in which case the terms of Section 2.2.1 (Sublicense Rights) shall apply), and CASI shall be fully responsible to Black Belt under this Agreement for all acts and omissions of any Affiliate or Third Party subcontractor as if CASI were itself performing such subcontracted acts under this Agreement.

2.3

Non-Compete .

2.3.1

Covenant . Subject to Section 2.3.2 (Acquisitions by Third Parties), except as expressly permitted under this Agreement, during the Term Black Belt will not, and will ensure that its Affiliates do not, independently or for or with any Third Party (including through the grant of any license or option to any Affiliate or Third Party), (a) Exploit any Competitive Product, Licensed Compound, or Licensed Product in the Territory, or (b) license, sell, assign, or otherwise grant rights to any Third Party under any Know-How, Patent Rights, or other intellectual property rights Controlled by Black Belt or any of its Affiliates to Exploit any Competitive Product, Licensed Compound, or Licensed Product in the Territory, (c) provide or otherwise make available to any Third Party any Competitive Product, Licensed Compound, or Licensed Product, or (d) engage in any Development activities that are primarily directed to CD38 (the “ Competitive Activities ”).

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2.3.2

Acquisitions by Third Parties . Neither Black Belt nor any of its Affiliates will be in breach of the restrictions set forth in Section 2.3.1 (Covenant) if such Person undergoes a Change of Control with a Third Party (together with such Third Party and its Affiliates following the closing of such Change of Control, the “ Acquired Party ”) that is (either directly or through an Affiliate, or in collaboration with such Third Party) actively performing Competitive Activities with respect to one or more Competitive Products immediately prior to the consummation of such Change of Control transaction (such Competitive Products being Exploited by the Acquired Party immediately prior to the consummation of such Change of Control, “ Grandfathered Products ”); provided that Black Belt will (subject to any applicable confidentiality obligations) as soon as reasonably possible provide written notice to CASI of each such Change of Control and all Grandfathered Products. In such case, such Acquired Party may continue to perform the applicable Competitive Activities with respect to such Grandfathered Products after such Change of Control only if and for so long as no Black Belt Technology is used by or on behalf of such Acquired Party or its Affiliates in connection with any subsequent performance of any such Competitive Activities with respect to any such Grandfathered Products.

2.4

No Implied Licenses . Except as explicitly set forth in this Agreement, neither Party will be deemed to have granted the other Party any license or other right to any intellectual property of such Party, whether by estoppel, implication, or otherwise.

2.5

Joinder Agreement . Concurrent with the execution of this Agreement and prior to the issuance of the equity pursuant to Section 5.1 (Upfront Payment), Black Belt will cause Black Belt NewCo to enter into a joinder agreement, pursuant to which Black Belt NewCo (a) agrees to be bound by the obligations of those sections of this Agreement set forth on Schedule 2.5 (Joinder Sections) as though Black Belt NewCo were a party hereto for purposes of such sections and acknowledges that CASI may directly enforce such sections of this Agreement against Black Belt NewCo, and (b) during the Term covenants not to sue CASI for the infringement of any Patent Right (i) Controlled by Black Belt NewCo or its affiliates prior to the Effective Date or (ii) Covering any Invention made, conceived, discovered or otherwise generated by Black Belt NewCo or its affiliates in the performance of activities under this Agreement, to the extent such infringement arises from CASI’s, its Affiliates’, or its Sublicensees’ Exploitation of a Licensed Compound or Licensed Product in accordance with the terms and conditions of this Agreement. For purposes of this Section 2.5 (Joinder Agreement), “affiliates” of Black Belt NewCo shall only include any successor(s) to all or substantially of the business of Black Belt to which this Agreement relates.

ARTICLE 3

TRANSFERS TO CASI

3.1

Know-How Transfer . During the Technology Transfer Period pursuant to the technology transfer plan set forth on Schedule 3.1 (Technology Transfer Plan) (as such plan may be updated by written agreement of the Parties from time to time, the “ Technology Transfer Plan ”), Black Belt will cooperate and provide reasonable assistance to transfer to CASI all the Know-How and other information and related documentation that is set out in Schedule 3.1 (Technology Transfer Plan). Without limiting the foregoing, during the Technology Transfer Period, Black Belt will disclose and make available to CASI all INDs related to any Licensed Compound or Licensed Product and all other Regulatory Data and Regulatory Submissions (including all CMC, toxicology, and pharmacology data and other information), in each case, related to any Licensed Compound or Licensed Product as set forth on Schedule 3.1 (Technology Transfer Plan) (the “ Assigned Regulatory Materials ”).

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3.2

Assistance and Costs . During the Technology Transfer Period, Black Belt will cause employees of Black Belt or Black Belt NewCo who are familiar with the Licensed Compounds and Licensed Products to use reasonable efforts to effect the transfer of Know-How in accordance with the Technology Transfer Plan and the other terms of Section 3.1 (Know-How Transfer). During the Technology Transfer Period, in addition to the activities set forth under the Technology Transfer Plan, if CASI reasonably requests that Black Belt’s representatives visit CASI’s facilities for the purposes of (a) transferring to CASI or its designee any Black Belt Know-How or any other Know-How described in Section 3.1 (Know-How Transfer), (b) CASI or its designee acquiring expertise on the practical application of any Black Belt Know-How or any other Know-How described in Section 3.1 (Know-How Transfer), or (c) otherwise assisting CASI or its designee with issues arising during Exploitation of the Licensed Compounds or Licensed Products or the use of any Black Belt Know-How or any other Know-How described in Section 3.1 (Know-How Transfer), then, in each case ((a) – (c)), Black Belt will send appropriate representatives to CASI’s facilities. Black Belt or Black Belt NewCo will complete all activities expressly set forth in the Technology Transfer Plan within *** following the Effective Date, at ***. At any time during the Technology Transfer Period, CASI may request that Black Belt or Black Belt NewCo provide additional assistance to CASI in accordance with this Section 3.2 (Assistance and Costs) (including all subsections herein), ***. Following the expiration of the Technology Transfer Period, CASI may also request that Black Belt or Black Belt NewCo provide additional assistance to CASI in accordance with this Section 3.2 (Assistance and Costs) (including all subsections herein), and CASI will reimburse Black Belt for any reasonable costs and expenses incurred by Black Belt or Black Belt NewCo in connection with providing such additional assistance at the FTE Rate. Notwithstanding any provision in this Agreement to the contrary, unless otherwise agreed in writing by each Party, assistance provided by Black Belt under this Section 3.2 (Assistance and Costs), Section 3.2.1 (Regulatory Assistance) and Section 3.2.2 (Manufacturing Assistance) will not in aggregate exceed *** hours in any calendar month, whether during or after the Technology Transfer Period.

3.2.1

Regulatory Assistance . Without limiting the generality of Section 3.2 (Assistance and Costs), during the Technology Transfer Period, but in any event no later than *** days after the Effective Date (unless otherwise specified in the Technology Transfer Plan), Black Belt will and hereby does assign to CASI all rights, title, and interests in and to all Assigned Regulatory Materials. In particular, upon CASI’s reasonable request, Black Belt will execute and deliver, or will cause to be executed and delivered, to CASI or its designee such endorsements, assignments, and other documents as may be necessary to assign, convey, transfer, and deliver to CASI all of Black Belt’s rights, title, and interests in and to the applicable Assigned Regulatory Materials, including submitting to each applicable Regulatory Authority a letter or other necessary documentation (with a copy to CASI) notifying such Regulatory Authority of the transfer of ownership of Assigned Regulatory Materials.

3.2.2

Manufacturing Assistance . Without limiting the generality of Section 3.2 (Assistance and Costs), during the Technology Transfer Period upon CASI’s reasonable request, Black Belt will provide CASI with introductions to all Third Party contract manufacturers and other vendors that as of the Effective Date have provided Black Belt or its Affiliates with products or services relating to the Licensed Compounds or Licensed Products, and will make available to CASI such appropriate employees and representatives of Black Belt that are most familiar with the Licensed Compounds and Licensed Products, and cause such employees and representatives of Black Belt, to meet with employees or representatives of CASI (or its Affiliate or designated Third Party contract manufacturers, as applicable) at the applicable manufacturing facility at mutually convenient times to provide reasonable technical advice and assistance to facilitate the transfer of all Black Belt Know-How related to the Manufacture of the Licensed Compounds and Licensed Products, to the extent reasonably necessary to enable CASI (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice such Black Belt Know-How. Notwithstanding any provision in this Agreement to the contrary, CASI will reimburse Black Belt for all out-of-pocket expenses (including travel expenses) incurred by Black Belt in connection with any assistance provided by Black Belt under this Section 3.2.2 (Manufacturing Assistance).

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3.2.3

Additional Assistance . Following the conclusion of the Technology Transfer Period, in addition to the assistance to be provided by Black Belt pursuant to Section 3.2 (Assistance and Costs), Black Belt will use its reasonable efforts to provide additional support to CASI at CASI’s sole cost and expense, to the extent agreed by the Parties and reasonably necessary for CASI to obtain any Regulatory Approval for any Licensed Product, including clearance of all INDs and approval of all MAAs.

3.3

Assignment and Transfer of Licensed Product Supplies . Promptly after the Effective Date or at any time during the Technology Transfer Period upon CASI’s written request, Black Belt will and hereby does transfer and assign to CASI or its designee all physical quantities of Licensed Compound and Licensed Product in Black Belt’s possession or Control (whether in the form of drug substance or drug product) in accordance with written instructions as provided by CASI. All such quantities of Licensed Compound and Licensed Product will be delivered Ex Works (Incoterms 2010) at PCI Pharma Services’ facilities at Biotec House, Central Park, Western Avenue, Bridgend, CF31 3RT, U.K.

3.4

Assignment of AGC Agreement . It is the intention of the Parties that the AGC Agreement is novated to CASI once agreed upon by AGC. This Agreement shall not constitute an assignment or an attempted assignment or novation of the AGC Agreement. In furtherance thereof:

3.4.1

Black Belt shall use its commercially reasonable efforts to procure AGC’s consent to such novation, and CASI shall use all commercially reasonable efforts to cooperate with Black Belt for such purpose (including the entering into of such assignment or novation on terms reasonably satisfactory to the Parties as may be necessary which as far as possible should be the same as the terms on which the AGC Agreement was novated from Tusk to Black Belt);

3.4.2

Unless and until the AGC Agreement is novated, Black Belt shall from the Effective Date hold such agreement on trust for CASI and its successors in title and shall from the Effective Date operate under the AGC Agreement in accordance with the requests of CASI provided that CASI shall indemnify Black Belt against any Losses relating to the performance of the AGC Agreement arising as a result of any requests made by or on behalf of CASI and CASI shall promptly reimburse Black Belt for any payments made to AGC under the AGC Agreement incurred after the Effective Date ;

3.4.3

Unless and until the AGC Agreement is novated, Black Belt shall (so far as it lawfully may do so and taking into account its obligations under this Agreement) give such assistance to CASI that CASI may reasonably require; and

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3.4.4

If the AGC Agreement is not novated within three months after the Effective Date or AGC refuses to enter into a novation, then CASI and Black Belt shall use reasonable efforts to achieve an alternative solution by which CASI shall receive the benefit of the AGC Agreement and assume the associated obligations, provided that Black Belt and its Affiliates shall not be obliged to make any commitment, incur any liability or make any payment for that purpose, and further provided that if no alternative solution can be found, then the AGC Agreement will not transfer to CASI pursuant to this Agreement, and Black Belt shall have no further obligations or liabilities to CASI or its Affiliates in respect of it.

ARTICLE 4

EXPLOITATION OF LICENSED PRODUCTS

4.1

Overview . CASI will have sole control over, and decision-making authority with respect to, the Exploitation of the Licensed Compounds and Licensed Products in the Field in the Territory, at CASI’s cost and expense, including the preparation, filing, submission, and maintenance of all MAAs and other Regulatory Submissions and Regulatory Approvals in its own name (or the name of any designee of CASI).

4.2

Diligence Obligations . CASI will, itself or through its Affiliates or Sublicensees, use Commercially Reasonable Efforts to Develop and seek Regulatory Approval for a Licensed Product in the Field in each of the U.S., China, Japan, and the E.U. Following Regulatory Approval for a Licensed Product in the Field in each of the U.S., China, Japan, or the E.U., CASI will use Commercially Reasonable Efforts to Commercialize such Licensed Product in each such country or jurisdiction (as applicable) where such Regulatory Approval has been granted. Nothing in this Section 4.2 (Diligence Obligations) shall derogate from CASI’s obligation to comply with the diligence obligations under the Adimab Agreement, in particular Section 3.3 of such agreement. Schedule 1.4 (Adimab Agreement Key Terms) sets forth certain key terms in the Adimab Agreement with which CASI agrees to comply (replacing “Black Belt” with CASI).

4.3

Right of Reference . As of the Effective Date, Black Belt hereby grants to CASI a “Right of Reference,” as that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous Law recognized outside of the U.S.), to, and a right to copy, access, and otherwise use, all information and data for each Licensed Compound or Licensed Product included in any Regulatory Submissions Controlled by Black Belt or its (sub)licensees, or otherwise filed by or on behalf of Black Belt with any Regulatory Authority in any country in the Territory that relates to any Licensed Compound or Licensed Product, and Black Belt will provide a signed statement to this effect if requested by CASI, in accordance with 21 C.F.R. § 314.50(g)(3) (or any successor rule or analogous Law outside of the U.S.).

4.4

Adverse Event Reporting . CASI will have sole control over, and decision-making with respect to, all processing of information related to any adverse events for the Licensed Products, including any information regarding such adverse events that is received from a Third Party. CASI will own the global safety database for the Licensed Products.

4.5

Reports . No later than *** days after the end of every Calendar Year, CASI will furnish Black Belt with high level written reports summarizing CASI’s and its Affiliates’ and Sublicensees’ efforts to Develop and Commercialize the Licensed Compounds and Licensed Products in the Field in the Territory. From time to time, CASI will notify Black Belt of any significant changes to CASI’s or its Affiliates’ or its Sublicensees’ Development and Commercialization of the Licensed Compounds and Licensed Products in the Field in the Territory. In addition, upon reasonable written request of Black Belt, CASI will provide updates to Black Belt by telephone of CASI’s Development and Commercialization activities. Each such update will summarize CASI’s significant Development and Commercialization activities with respect to the Licensed Compounds and Licensed Products in the Field in the Territory to the extent that CASI has the right to disclose such information to Black Belt without violating any confidentiality or other obligations to any Third Party. If Adimab requires a face to face meeting with CASI (in accordance with Section 3.3 of the Adimab Agreement) then CASI will comply with such a request.

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ARTICLE 5

PAYMENTS

5.1

Upfront Payment . No later than seven Business Days following the Effective Date, in partial consideration of the rights granted to CASI hereunder, CASI will pay to Black Belt a one-time upfront payment in the amount of €5,000,000.

5.2

Upfront Equity Investment . Black Belt NewCo . Subject to execution by Black Belt NewCo of a joinder agreement in accordance with Section 2.5 (Joinder Agreement), no later than 30 days after the date that Black Belt has taken all actions reasonably necessary to allow a Person to make an arm’s length equity investment into Black Belt NewCo (including, as applicable, the organization thereof, registration of any securities and security offerings relating thereto, establishment of a board of directors thereof, and implementation of any customary agreements relating to such investments, including stock purchase agreements and shareholder agreements), in further consideration of the rights granted to CASI hereunder, CASI will make an equity investment in the amount of €2,000,000 in accordance with the terms set forth on Schedule 5.3 (Upfront Equity Investment Term Sheet).

5.3

Milestone Payments .

5.3.1

Development Milestones . In further consideration of the rights granted to CASI hereunder:

(a)

Milestone Payments for Lyophilized Form . CASI will make the Development Milestone Payments to Black Belt set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments) upon the achievement by CASI or its Affiliates or Sublicensees of each of the Development Milestone Events set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments) below. The Development Milestone Payments set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments) will each be payable one time in accordance with Section 5.3.1(f) (Notice and Payment) upon the first achievement of the applicable Development Milestone Event. If CASI or its Affiliates or Sublicensees achieve all Development Milestone Events set forth in TABLE 5.3.1(a) (Lyophilization Milestone Payments) (regardless of the number of times such events occur or the number of Licensed Products that trigger such event), then the maximum amount payable by CASI under this Section 5.3.1(a) (Milestone Payments for Lyophilized Form) is €***.

Table 5.3.1(a) – Lyophilization Milestone Events
Development Milestone Event	Development Milestone Payments
1. First Lyophilization Milestone	€	***
2. Second Lyophilization Milestone	€	***

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(b)

Milestone Payments for Existing Licensed Products . CASI will make the Development Milestone Payments to Black Belt set forth in TABLE 5.3.1(b) (Development Milestones for Existing Licensed Products) upon the achievement by CASI or its Affiliates or Sublicensees of each of the Development Milestone Events set forth in TABLE 5.3.1(b) (Development Milestones for Existing Products) below. The Development Milestone Payments set forth in TABLE 5.3.1(b) (Development Milestones for Existing Licensed Products) will be payable one-time in accordance with Section 5.3.1(f) (Notice and Payment) upon the achievement of the applicable Development Milestone Event by the first Existing Licensed Product. If CASI or its Affiliates or Sublicensees achieve all Development Milestone Events set forth in TABLE 5.3.1(b) (Development Milestones for Existing Licensed Products) (regardless of the number of times such events occur or the number of Existing Licensed Products that trigger such event), then the maximum amount payable by CASI under this Section 5.3.1(b) (Milestone Payments for Existing Licensed Products) is $***.

Table 5.3.1(b) – Development Milestones for Existing Licensed Products
Development Milestone Event	*Development* *Milestone Payments*
1. ***	$	***
2. ***	$	***
3. ***	$	***
4. ***	$	***

(c)

Milestone Payments for Next Generation Licensed Products . CASI will make the Development Milestone Payments to Black Belt set forth in TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products) upon the achievement by CASI or its Affiliates or Sublicensees of each of the Development Milestone Events set forth in TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products) below. The Development Milestone Payments set forth in TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products) will be payable in accordance with Section 5.3.1(f) (Notice and Payment) upon the achievement of the applicable Development Milestone Event by the first three Next Generation Licensed Products to achieve the applicable Development Milestone Event. No Development Milestone Payments will be payable in respect of the achievement of any Development Milestone Event set forth in TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products) by any subsequent Next Generation Licensed Product. If CASI or its Affiliates or Sublicensees achieve all Development Milestone Events set forth in TABLE 5.3.1(c) (Development Milestones for Next Generation Licensed Products) (regardless of the number of times such events occur or the number of Next Generation Licensed Products that trigger such event), then the maximum amount payable by CASI under this Section 5.3.1(c) (Milestone Payments for Next Generation Licensed Products) is $***.

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Table 5.3.1(c) – Development Milestones for Next Generation Licensed Products
Development Milestone Event	*Development* *Milestone Payments*
1. ***	$	***
2. ***	$	***
3. ***	$	***
4. ***	$	***

(d)

Milestone Payments Under the Adimab Agreement. CASI will make the milestone payments set forth in Section 4.4 of the Adimab Agreement (each, an “ Adimab Milestone Payment ”) upon the achievement by CASI or its Affiliates or Sublicensees of each of the milestone events set forth in Section 4.4 of the Adimab Agreement (each, an “ Adimab Milestone Event ”), in accordance with Section 5.3.1(f) (Notice and Payment) all applicable terms and conditions set forth in the Adimab Agreement.

(e)

Milestone Payments Under the Cellca Agreement. CASI will make the milestone payments set forth in Section 6 of the Work Order of the Cellca Agreement (each, a “ Cellca Milestone Payment ” and together with the Adimab Milestone Payments, the “ Third Party Milestone Payments ”) upon the achievement by CASI or its Affiliates or Sublicensees of each of the milestone events set forth in set forth in Section 6 of the Work Order of the Cellca Agreement (each, a “ Cellca Milestone Event ”) in accordance with Section 5.3.1(f) (Notice and Payment) and all applicable terms and conditions set forth in the Adimab Agreement.

(f)

Notice and Payment . CASI will notify Black Belt in writing of the achievement of each Development Milestone Event by CASI or its Affiliates or Sublicensees no later than *** days after CASI becomes aware of the achievement thereof. Thereafter, Black Belt, Adimab, or Cellca (as applicable) will provide CASI with an invoice for the corresponding Development Milestone Payment.

(i)

Third Party Milestone Payments to Adimab and Cellca . If CASI desires to pay any Third Party Milestone Payment directly to Adimab or Cellca, as applicable, then (A) CASI will promptly notify Black Belt of its desire to pay such Third Party Milestone Payment directly to Adimab or Cellca (as applicable), and (B) upon receipt of such notice, Black Belt will use reasonable efforts to obtain any approval necessary from Adimab or Cellca (as applicable) in order for CASI to make such payment directly to Adimab or Cellca (as applicable) and such approval to include a release from Adimab or Cellca (as applicable) of Black Belt's liability to make such payments. Upon receipt of any such approval from Adimab or Cellca (as applicable), Black Belt will notify CASI of such approval, and CASI may pay directly to (1) Adimab the applicable Adimab Milestone Payments due to Adimab no later than *** days after the achievement of the applicable Adimab Milestone Event and in accordance with the terms of the Adimab Agreement, and (2) Cellca the applicable Cellca Milestone Payments due to Cellca no later than *** days after the achievement of the applicable Cellca Milestone Event. In addition, in the case of each of the foregoing clauses (1) and (2), CASI will promptly notify Black Belt after making such payment to Adimab or Cellca, as applicable.

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(ii)

Third Party Milestone Payments to Black Belt . Unless CASI has obtained approval from Adimab or Cellca pursuant to Section 5.3.1(f)(i) (Third Party Milestone Payments to Adimab and Cellca) to make payments directly to Adimab or Cellca (as applicable), CASI shall pay any Third Party Milestone Payment directly to Black Belt (rather than making any such payments directly to Adimab or Cellca pursuant to Section 5.3.1(f)(i) (Third Party Milestone Payments to Adimab and Cellca)). If CASI has obtained approval from Adimab or Cellca pursuant to Section 5.3.1(f)(i) (Third Party Milestone Payments to Adimab and Cellca) to make payments directly to Adimab or Cellca (as applicable), then on Third Party Milestone Payment by Third Party Milestone Payment basis CASI may elect to make Third Party Milestone Payments to Adimab or Cellca (as applicable) or Black Belt. In the event of the payment of a Third Party Milestone Payment to Black Belt, CASI will pay to Black Belt (A) the applicable Adimab Milestone Payments ultimately due to Adimab no later than *** days after the achievement of the applicable Adimab Milestone Event (subject to Black Belt’s timely delivery to CASI of an invoice for such payment), and (B) the applicable Cellca Milestone Payments ultimately due to Cellca no later than *** days after the achievement of the applicable Cellca Milestone Event (subject to Black Belt’s timely delivery to CASI of an invoice for such payment).

(iii)

Development Milestone Payments for Lyophilized Form, Existing Licensed Products, and Next Generation Licensed Products . CASI will pay to Black Belt the Development Milestone Payments set forth in Section 5.3.1(a) (Milestone Payments for Lyophilized Form), Section 5.3.1(b) (Milestone Payments for Existing Licensed Products), and Section 5.3.1(c) (Milestone Payments for Next Generation Licensed Products) (as applicable) no later than *** days after CASI’s receipt of an invoice for such Development Milestone Payments.

5.3.2

Sales Milestones.

(a)

Existing Licensed Products . On a region-by-region basis, CASI will make the Sales Milestone Payments to Black Belt upon the achievement by CASI or its Affiliates or Sublicensees of each of the Sales Milestone Events for the applicable region set forth in TABLE 5.3.2(a) (Existing Licensed Product Sales Milestones) below with respect to the aggregate annual Black Belt Net Sales of Existing Licensed Products in each applicable region. Each of the Sales Milestone Payments set forth below in TABLE 5.3.2(a) (Existing Licensed Product Sales Milestones) will be payable ***. If CASI or its Affiliates or Sublicensees achieve all Sales Milestone Events set forth in TABLE 5.3.2(a) (Existing Licensed Product Sales Milestones) (regardless of the number of times such events occur), then the maximum amount payable by CASI under this Section 5.3.2(a) (Existing Licensed Products) is $***.

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Table 5.3.2(a) –Existing Licensed Product Sales Milestones

Sales Milestone Event

Sales Milestone Payment

***

1. ***

***

2. ***

***

3. ***

***

(b)

Next Generation Licensed Products . On a region-by-region basis, CASI will make the Sales Milestone Payments to Black Belt upon the achievement by CASI or its Affiliates or Sublicensees of each of the Sales Milestone Events for the applicable region set forth in TABLE 5.3.2(b) (Next Generation Licensed Product Sales Milestones) below with respect to the aggregate annual Black Belt Net Sales of Next Generation Licensed Products in each applicable region. Each of the Sales Milestone Payments set forth below in TABLE 5.3.2(b) (Next Generation Licensed Product Sales Milestones) will be payable ***. If CASI or its Affiliates or Sublicensees achieve all Sales Milestone Events set forth in TABLE 5.3.2(b) (Next Generation Licensed Product Sales Milestones) (regardless of the number of times such events occur), then the maximum amount payable by CASI under this Section 5.3.2(b) (Next Generation Licensed Products) is $***.

Table 5.3.2(b) –Next Generation Licensed Product Sales Milestones

Sales Milestone Event

Sales Milestone Payment

***

1. ***

***

2. ***

***

3. ***

***

(c)

Notice and Payment . CASI will notify Black Belt in writing of the achievement of each Sales Milestone Event by CASI or its Affiliates or Sublicensees no later than *** days after the end of the Calendar Year in which such Sales Milestone Payment is achieved. Thereafter, Black Belt will provide CASI with an invoice for the corresponding Sales Milestone Payment, and, subject to the terms of this Section 5.3.2(c) (Notice and Payment), CASI will pay to Black Belt such Sales Milestone Payment no later than *** days after CASI’s receipt of invoice for such Sales Milestone Payment.

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5.4

Royalties .

5.4.1

Royalty Payments .

(a)

Royalty Payments under the Adimab Agreement .

(i)

Adimab Royalty Payments . On an Adimab Product-by-Adimab Product and country-by-country basis, CASI will pay to Black Belt all royalties payable pursuant to Section 4.5 of the Adimab Agreement, in accordance with the applicable terms and conditions of the Adimab Agreement and in accordance with this Section 5.4 (Royalties).

(ii)

Royalty Buy-Down . Pursuant to Section 4.5(b) of the Adimab Agreement, on an Adimab Product-by-Adimab Product basis, at any time prior to the first dosing of a patient in a Phase III Clinical Trial with a particular Adimab Product, CASI may, at its sole discretion, make a one-time payment of *** dollars ($ *** ) to Black Belt, and thereafter, notwithstanding the royalty rates set forth in Section 4.5 of the Adimab Agreement, with respect to such Adimab Product, the royalty rate will be *** % instead of the royalty rates set forth in Section 4.5(a) of the Adimab Agreement , subject to further adjustment as set forth in Section 4.5(c) of the Adimab Agreement, as applicable.

(b)

Region-Specific Royalty Rates for Existing Licensed Products . Subject to the provisions of Section 5.4.4 (Royalty Adjustments), and in addition to the royalty payments to be made pursuant to Section 5.4.1(a) (Adimab Royalty Payments), on an Existing Licensed Product-by-Existing Licensed Product and region-by-region basis, CASI will pay to Black Belt royalties in the amount of the marginal royalty rates set forth in TABLE 5.4.1(b) (Existing Licensed Product Region-Specific Royalty Rates) below based on the aggregate Black Belt Net Sales of each Existing Licensed Product in the applicable region during each Calendar Year. CASI will pay such royalty payments on an Existing Licensed Product-by-Existing Licensed Product and country-by-country basis during the applicable Black Belt Royalty Term.

TABLE 5.4.1(b) – Existing Licensed Product Region-Specific Royalty Rates
Annual Black Belt Net Sales by Region	Marginal Royalty Rate (% of annual Black Belt Net Sales of each Existing Licensed Product in *** )			Marginal Royalty Rate (% of annual Black Belt Net Sales of each Existing Licensed Product in *** )
***		***	%		***	%
***		***	%		***	%
***		***	%		***	%

(c)

Region-Specific Royalty Rates for Next Generation Licensed Products . Subject to the provisions of Section 5.4.4 (Royalty Adjustments), and in addition to the royalty payments to be made pursuant to Section 5.4.1(a) (Adimab Royalty Payments), on a Next Generation Licensed Product-by-Next Generation Licensed Product and region-by-region basis, CASI will pay to Black Belt royalties in the amount of the marginal royalty rates set forth in TABLE 5.4.1(c) (Next Generation Licensed Product Region-Specific Royalty Rates) below based on the aggregate Black Belt Net Sales of each Next Generation Licensed Product in the applicable region during each Calendar Year of the applicable Black Belt Royalty Term.

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TABLE 5.4.1(c) –Next Generation Licensed Product Region-Specific Royalty Rates
Annual Black Belt Net Sales by Region	Marginal Royalty Rate (% of annual Black Belt Net Sales of each Next Generation Licensed Product in *** )			Marginal Royalty Rate (% of annual Black Belt Net Sales of each Next Generation Licensed Product in *** )
***		***	%		***	%
***		***	%		***	%
***		***	%		***	%

Each marginal royalty rate set forth in TABLE 5.4.1(b) (Existing Licensed Product Region-Specific Royalty Rates) and TABLE 5.4.1(c) (Next Generation Licensed Product Region-Specific Royalty Rates) above will apply only to that portion of annual Black Belt Net Sales of the applicable Existing Licensed Product or Next Generation Licensed Product, as applicable, in the applicable region that falls within the indicated range. For example, if there is $*** in annual Black Belt Net Sales of a given Existing Licensed Product in the E.U. (after conversion to U.S. Dollars of the Black Belt Net Sales), then, subject to the provisions of Section 5.4.4 (Royalty Adjustments), in addition to the Royalties owing to Adimab, CASI would owe a royalty payment of ($*** x ***%) + ($*** x ***%) + ($*** x ***%) = $***.

5.4.2

Royalty Term .

(a)

Adimab Royalty Payments . On an Adimab Product-by-Adimab Product and country-by-country basis, CASI’s obligation to pay Adimab Royalty Payments will be subject to the applicable terms and conditions of the Adimab Agreement, including Section 4.5 of the Adimab Agreement. Upon expiration of the Adimab Royalty Term for a given Adimab Product in a given country, no further Adimab Royalty Payments will be payable in respect of sales of such Adimab Product in such country.

(b)

Black Belt Royalty Payments . On a Licensed Product-by-Licensed Product basis and country-by-country basis, CASI’s obligation to pay Black Belt Royalty Payments will begin upon the Black Belt First Commercial Sale of a Licensed Product in a country and will expire upon the expiration of the Black Belt Royalty Term for such Licensed Product in such country. Upon expiration of the Black Belt Royalty Term for a given Licensed Product in a given country, no further Black Belt Royalty Payments will be payable in respect of sales of such Licensed Product in such country.

(c)

Expiration of Adimab Royalty Term and Black Belt Royalty Term . If a Licensed Product is also an Adimab Product, then upon the later of (i) the expiration of the Adimab Royalty Term for such product in a given country and (ii) the expiration of the Black Belt Royalty Term for such product in a given country, the licenses granted to CASI under Section 2.1 (License Grants to CASI) with respect to such product in such country will automatically become fully paid-up, perpetual, irrevocable, and royalty-free. If a Licensed Product is not an Adimab Product, then upon expiration of the Black Belt Royalty Term for such Licensed Product in a given country, the licenses granted to CASI under Section 2.1 (License Grants to CASI) with respect to such Licensed Product in such country will automatically become fully paid-up, perpetual, irrevocable, and royalty-free.

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5.4.3

Royalty Reports; Payments .

(a)

Royalty Reports . No later than *** days after the end of each Calendar Quarter during which any Black Belt Royalty Payments or Adimab Royalty Payments are owed, CASI will submit to Black Belt a written report stating the number and description of all Licensed Products sold by or on behalf of CASI and its Affiliates and Sublicensees during the relevant Calendar Quarter; the gross sales associated with such sales; and (i) with respect to any Licensed Products sold during such Calendar Quarter, the calculation of Black Belt Net Sales on such sales and (ii) with respect to any Adimab Products sold during such calendar quarter, the calculation of Adimab Net Sales on such sales, including the amount of any deduction provided for in the definition of Adimab Net Sales and the Black Belt Royalty Payments or Adimab Royalty Payments (as applicable) payable on such Black Belt Net Sales or Adimab Net Sales (as applicable) (the “ Royalty Report ”).

(b)

Royalty Payments .

(i)

Adimab Royalty Payments . All Adimab Royalty Payments will be payable in accordance with the time frames set forth in Section 4.6 of the Adimab Agreement.

(ii)

Black Belt Royalty Payments . All Black Belt Royalty Payments will be payable on a Calendar Quarter basis and CASI will make any such payments within *** days after the end of the Calendar Quarter, during which the applicable Black Belt Net Sales or Licensed Products occurred.

5.4.4

Payment Adjustments .

(a)

Expiration of Valid Claims .

(i)

Adimab Royalty Payments . On an Adimab Product-by-Adimab Product and country-by-country basis, the applicable royalty rates set forth in Section 5.4.1(a)(i) (Adimab Royalty Payments) with respect to Adimab Royalty Payments for a particular Adimab Product in a particular country shall be reduced in accordance with the terms set forth in Section 4.5(d) of the Adimab Agreement.

(ii)

Black Belt Royalty Payments . In the U.S. or any other country in the Territory in which applicable Law prohibits a patent holder from receiving an unreduced royalty payment for sales of a product made in a country after expiration of all valid claims within the licensed patents Covering such product in such country, on a Licensed Product-by-Licensed Product and country-by-country basis, the applicable royalty rates set forth in Section 5.4.1(b) (Region-Specific Royalty Rates for Existing Licensed Products) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products) with respect to the Black Belt Royalty Payments for a particular Licensed Product in a particular country will be reduced by *** during the Black Belt Royalty Term after the expiration of the last-to-expire Valid Claim of a Black Belt Patent Right or Joint Patent Right Covering the composition of matter formulation, use or manufacture of such Licensed Product in such country .

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(b)

Biosimilar Competition . If, in a particular country, Biosimilar Competition occurs in such country with respect to a Licensed Product in such country, then the Black Belt Net Sales of such Licensed Product in such country otherwise payable under Section 5.4.1(b) (Region-Specific Royalty Rates) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products) will be reduced by ***% for the purposes of determining the Black Belt Royalty Payments payable under Section 5.4.1(b) (Region-Specific Royalty Rates) and Section 5.4.1(c) (Region-Specific Royalty Rates for Next Generation Licensed Products), for the remainder of the Black Belt Royalty Term for such Licensed Product in such country but only while such Biosimilar Competition is in effect in such country, subject to Section 5.4.4(d) (Maximum Payment Adjustments).

(c)

Third Party Payments .

(i)

Adimab Royalty Payments . If CASI enters into any Third Party Patent License (as such term is defined in the Adimab Agreement) with a Third Party, then CASI may offset ***% of the royalties actually paid to such Third Party under such Third Party Patent License with respect to an Adimab Product in a given Calendar Quarter in a given country against the Adimab Royalty Payments otherwise due with respect to such Adimab Product in such Calendar Quarter in such country under Section 5.4.1(a)(i) (Adimab Royalty Payments), in accordance with Section 4.5(c) of the Adimab Agreement.

(ii)

Black Belt Royalty Payments . If CASI makes a payment under any agreement with a Third Party pursuant to which CASI obtains rights (whether by acquisition or license) under any Patent Rights or other intellectual property rights owned or Controlled by such Third Party in a given county that Cover the composition of matter of a Licensed Product in that country and that is necessary for CASI to Exploit such Licensed Product in that country, then CASI may reduce the Black Belt Royalty Payments due to Black Belt by ***% of the amounts paid to such Third Party in respect of royalties under such agreement, subject to Section 5.4.4(d) (Maximum Payment Adjustments).

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(d)

Maximum Payment Adjustments .

(i)

Black Belt Royalty Payments . In no event will the Black Belt Royalty Payments payable by CASI in a given Calendar Quarter in a given country be reduced by more than ***% of the aggregate amount that would otherwise be payable by CASI in respect to such Black Belt Royalty Payments in such Calendar Quarter in such country as a result of the reductions permitted under Section 5.4.4(a)(ii) (Black Belt Royalty Payments), Section 5.4.4(b) (Biosimilar Competition), and Section 5.4.4(c)(ii) (Black Belt Royalty Payments). CASI may carry forward any such reductions permitted under Section 5.4.4(a)(ii) (Black Belt Royalty Payments), Section 5.4.4(b) (Biosimilar Competition), or Section 5.4.4(c)(ii) (Black Belt Royalty Payments) that are incurred or accrued in a Calendar Quarter but are not applied against Black Belt Royalty Payments due in such Calendar Quarter in such country as a result of the foregoing maximum payment adjustment and apply such amounts against Black Belt Royalty Payments due in subsequent Calendar Quarters (subject in all cases to the maximum payment adjustment set forth in this Section 5.4.4(d) (Maximum Payment Adjustments)) until the amount of such reduction has been fully applied against Black Belt Royalty Payments due.

(ii)

Adimab Royalty Payments . Pursuant to Section 4.5(c) and Section 4.5(d) of the Adimab Agreement, in no event will the Adimab Royalty Payments payable by CASI in a given Calendar Quarter in a given country be reduced by more than ***% of the aggregate amount that would otherwise be payable by CASI in respect to such Adimab Royalty Payments in such Calendar Quarter in such country as a result of the reductions permitted under Section 5.4.4(a)(i) (Adimab Royalty Payments) and Section 5.4.4(c)(i) (Adimab Royalty Payments).

5.5

Foreign Exchange . If any currency conversion shall be required in connection with the calculation of amounts payable hereunder, then such conversion shall be made using the exchange rates reported on the fifth Business Day prior the payment due date for the purchase and sale of U.S. dollars, as reported by the Wall Street Journal . With any payment in relation to which a currency conversion is performed to calculate the amount of payment due, CASI shall provide to Black Belt a true, accurate, and complete copy of the exchange rates used in such calculation.

5.6

Payment Method; Late Payments . Except for payments due hereunder that are expressed specifically in Euros, CASI will make all payments due to Black Belt hereunder in Dollars by check or wire transfer of immediately available funds into an account designated by Black Belt. Any amount owed by CASI to Black Belt, Adimab, or Cellca under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the rate of ***% above the then-applicable short-term three-month London Interbank Offered Rate (LIBOR) as quoted in the Wall Street Journal (or if it no longer exists, a similarly authoritative source) calculated on a daily basis, or, if lower, the highest rate permitted under applicable Law.

5.7

No Right to Offset . CASI will have no right to offset any amount owed to Black Belt (or, as the case may be, Cellca or Adimab) under or in connection with this Agreement, against any payments owed to CASI by Black Belt under this Agreement.

5.8

Records . CASI will keep (and will ensure that its Affiliates and Sublicensees keep) such records as are required to determine, in accordance with GAAP and this Agreement, the sums or credits due under this Agreement, including Development Milestone Payments, Sales Milestone Payments, and Black Belt Net Sales (and including use of Licensed Products in clinical trials, or provision on a compassionate use basis or as marketing samples). With respect to any records that are required to determine Black Belt Net Sales, Development Milestone Payments other than Adimab Milestone Payments, or Sales Milestone Payments due under this Agreement, CASI will retain all such records until the later of (a) *** years after the end of the period to which such books, records and accounts pertain and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Law. With respect to any records that are required to determine Adimab Royalty Payments or Adimab Milestone Payments due under this Agreement, CASI will retain all such records indefinitely in accordance with Section 5.8 of the Adimab Agreement.

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5.9

Audits . Black Belt may have an independent certified public accountant, reasonably acceptable to CASI, access and examine during normal business hours and upon reasonable prior written notice, only those records of CASI (and its Affiliates and Sublicensees, as applicable) retained pursuant to Section 5.8 (Records) as may be reasonably necessary to determine, the correctness or completeness of any Royalty Payment made under this Agreement, provided , however , that with respect to any Black Belt Royalty Payment, such independent certified public accountant may only inspect records of CASI (and its Affiliates and Sublicensees, as applicable) retained pursuant to Section 5.8 (Records) in any Calendar Year ending not more than *** years before such request. Prior to commencing any such audit under this Agreement, each such independent certified public accountant conducting an audit must enter into an appropriate and reasonable confidentiality agreement with CASI pursuant to this Section 5.9 (Audits). The foregoing right of review may be exercised only once in any 12-month period and only once with respect to each such payment unless an issue is revealed by a subsequent audit. Such accountant will disclose only whether the Royalty Payments are correct or not, and the specific details concerning any discrepancies. No other information will be shared and such results will be subject to ARTICLE 9 (Confidentiality). If the audit report concludes that (a) additional amounts were owed by CASI, then CASI will pay the additional amounts or (b) excess payments were made by CASI, then such amounts will be deducted from future payments to Black Belt under this Agreement, in either case ((a) or (b)), within 30 days after the date on which such audit report is delivered to both Parties, unless disputed pursuant to Section 5.10 (Audit Dispute) below. Black Belt will bear the full cost of the performance of any such audit, unless such audit reveals that the undisputed monies owed by CASI to Black Belt has been understated by more than ***%) for the period audited, CASI shall, in addition, pay the costs of such audit.

5.10

Audit Dispute . In the event of a dispute with respect to any audit under Section 5.9 (an “ Audit Dispute ”), Black Belt and CASI will work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such Audit Dispute within 30 days after the initial discussion of such Audit Dispute, then the Audit Dispute will be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties will agree (the “ Audit Arbitrator ”). The decision of the Audit Arbitrator will be final and the costs of such arbitration as well as the initial audit will be borne between the Parties in such manner as the Audit Arbitrator will determine. Not later than 30 days after such decision and in accordance with such decision, the audited Party will pay the additional amounts, with interest from the date originally due as provided in Section 5.6 (Payment Method; Late Payments), or the amounts will be deducted from future payments made to the auditing Party, as applicable. This Audit Dispute procedure shall not apply to sums owed under the Third Party Agreements.

5.11

Taxes .

5.11.1

All sums payable by CASI to Black Belt under this Agreement will be paid directly by CASI or an Affiliate of CASI that is incorporated or organized in the U.S., and not by or through any other Affiliate or Sublicensee of CASI or any other Person.

5.11.2

All sums are expressed to be exclusive of sales taxes (including value added tax) howsoever arising, and CASI shall pay to Black Belt in addition to those payments or, if earlier, on receipt of a tax invoice or invoices from Black Belt, all such sales taxes for which Black Belt is liable to account in relation to any supply made or deemed to be made for sales tax purposes pursuant to this Agreement.

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5.11.3

Tax Withholding . All payments to Black Belt under this Agreement shall be made in cleared funds, without any deduction or set-off and free and clear of and without deduction for or on account of any taxes, levies, imports, duties, charges, fees and withholdings of any nature now or hereafter imposed by any governmental, fiscal or other authority save as required by law If CASI is compelled to make any such deduction, it will pay Black Belt such additional amounts as are necessary to ensure receipt by Black Belt of the full amount which it would have received but for the deduction.

5.11.4

Taxes on Income . Each Party will pay all taxes imposed on its share of income arising directly or indirectly from the efforts of, or the receipt of any payment by, such Party under this Agreement.

5.11.5

Tax Cooperation. The Parties will cooperate and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of the upfront payments, Royalty Payments, Milestone Payments, and other payments made by CASI to Black Belt under this Agreement. Black Belt will provide CASI with any tax forms that may be reasonably necessary in order for CASI not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty a reasonable time prior to the date the applicable payment is due.

5.12

Royalty Buyout . ***

ARTICLE 6

INTELLECTUAL PROPERTY MATTERS

6.1

Ownership of Intellectual Property .

6.1.1

General . Except as otherwise expressly set forth in this Agreement, Black Belt retains all rights, title, and interests in and to the Black Belt Technology. Each Party will own the entire right, title, and interest in and to any Invention or other Know-How (and Patent Rights claiming such Inventions) first developed or invented solely by or on behalf of such Party in the course of performing of activities under this Agreement. The Parties will jointly own an equal, undivided interest in any and all Joint Technology. Inventorship of patentable inventions conceived or reduced to practice in the course of performing activities under this Agreement will be determined in accordance with U.S. patent laws, including Title 35, United States Code.

6.1.2

Employees . Each Party will require all of its and its Affiliates’ employees to assign all Inventions that are developed or invented by such employees according to the ownership rules described in Section 6.1.1 (General). Each Party will use reasonable efforts to require any agents or independent contractors performing any activity pursuant to this Agreement to assign all Inventions that are developed or invented by such agents or independent contractors to CASI or Black Belt, as applicable, according to the ownership rules described in Section 6.1.1 (General) provided that Black Belt is not required to amend any agreements that are already in place with its agents or independent contractors before the Effective Date.

6.1.3

Disclosure of Inventions . Each Party will promptly disclose to the other Party all Inventions within the Joint Know-How that such Party develops or invents, whether solely or jointly with others (in any event, prior to the filing of any patent application with respect to such Inventions), including all invention disclosures or other similar documents submitted to such Party by its or its Affiliates’ employees, agents, or independent contractors relating thereto. Each Party will also promptly respond to reasonable requests from the other Party for additional information relating thereto.

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6.1.4

Right to Practice Joint Technology . Subject to the rights and licenses granted to, and the obligations of, each Party pursuant to this Agreement, the Parties will jointly own all Joint Technology, with each Party entitled to the free use and enjoyment of all such Joint Technology. Each Party will take (and cause its Affiliates and Sublicensees, and their respective employees, agents, and contractors, to take) such further actions reasonably requested by the other Party to evidence and assist the Parties in obtaining jointly-owned patent and other intellectual property rights protection for Joint Technology, including executing assignments, consents, releases, and other commercially reasonable documentation and providing good faith testimony by affidavit, declaration, in-person, or other proper means in support of any effort by the Parties to establish, perfect, defend, or enforce their rights in any Joint Technology through prosecution of governmental filings, regulatory proceedings, litigation, and other means, including through the filing, prosecution, maintenance, and enforcement of any Joint Patent Rights. Without limitation, each Party will cooperate with the other Party if the Parties determine to apply for U.S. or foreign patent protection for Joint Technology and will obtain the cooperation of the individual inventors of any such Joint Technology. Neither Party will have a duty to account to the other or seek any consent with respect to the licensing or exploitation of Joint Technology. To the extent any further consent is required to enable a Party to so license or exploit its interest in the Joint Technology, the other Party hereby grants and will grant such consent promptly upon request.

6.2

Patent Prosecution .

6.2.1

CASI Inventions . CASI will have the exclusive right (but not the obligation) to prepare, file, prosecute, maintain, and defend (including against any Third Party challenge to the validity, scope, or enforceability of any such Patent Right) any Patent Rights Covering any Invention invented or developed solely by or on behalf of CASI in the course of performing activities under this Agreement.

6.2.2

Notice of Challenge . Each Party will promptly report in writing to the other Party any Third Party’s challenge to the validity, scope or enforceability of a Black Belt Patent Right or Joint Patent Right, or initiation by a Third Party of any opposition or inter partes review proceeding against any Black Belt Patent Right or Joint Patent Right, and will provide the other Party with all available evidence and information regarding any such challenge, opposition, or proceeding.

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6.2.3

Black Belt Patent Rights and Joint Patent Rights .

(a)

CASI’s Rights . As between the Parties, CASI will have the sole first, but not the obligation, to prepare, file, prosecute, maintain, and defend, using counsel of CASI’s choice, the Black Belt Patent Rights and the Joint Patent Rights. CASI shall use diligent and reasonable efforts to prosecute and maintain the Black Belt Patent Rights in at least the US, all the Major European Countries, Japan, and China provided that it shall at least prosecute one Optioned Program Antibody Patent (as defined in the Adimab Agreement) in the United States, Japan and Europe and such other countries as are required to be consistent with the Commercially Reasonable Efforts standard (as defined in the Adimab Agreement). CASI will keep Black Belt informed of the status of each Black Belt Patent Right and Joint Patent Right and will provide to Black Belt, reasonably in advance of submission thereof, copies of all substantive filings and other documents to be submitted to any patent office in the Territory in connection with the filing, prosecution, maintenance, and defense of the Black Belt Patent Rights and Joint Patent Rights. CASI shall notify Black Belt at least one (1) month (or such other shorter period as is required by the relevant patent office deadline) prior to any proposal by CASI to restrict the scope of the claims of any of the Black Belt Patent Rights and the Joint Patent Rights. Black Belt will have the right to review and comment on any such substantive draft filings and claim restrictions to be made to any such patent office and CASI will consider in good faith and incorporate where appropriate any comments offered by Black Belt concerning the preparation, filing, prosecution, maintenance, and defense of the Black Belt Patent Rights and the Joint Patent Rights in the Territory. CASI shall not without the prior written consent of Black Belt (which shall not be unreasonably withheld or delayed) (i) file a request under 35 U.S.C. § 302 for re-examination of any Black Belt Patent Rights, (ii) file a request under 35 U.S.C. § 251 for a reissue of any Black Belt Patent Rights, or (iii) apply for any foreign equivalents of the foregoing clauses (i) or (ii) applicable in the Territory outside of the United States.

(b)

Black Belt’s Rights . If, during the Term, CASI decides it is no longer interested in the preparation, filing, prosecution, or maintenance of a particular Black Belt Patent Right or Joint Patent Right (other than those Black Belt Patent Rights which CASI is obliged to continue to file, prosecute and maintain in accordance with Section 6.2.3(a) above), then CASI will promptly provide written notice to Black Belt of such decision and in any event at least 45 days prior to the expiration of any applicable time bars. During the aforementioned 45 day notice period, CASI shall retain the responsibility for the prosecution and maintenance of the Black Belt Patent Rights or the Joint Patent Rights in question. On the expiry of such notice period:

(i)

CASI shall, at Black Belt’s request, promptly assign its right, title and interest in such Joint Patent Right to Black Belt’s (or any Person nominated by Black Belt) sole ownership;

(ii)

CASI shall, at Black Belt’s request, promptly transfer to Black Belt (or any Person nominated by Black Belt) any and all documents and information in CASI’s possession and Control relating to such Black Belt Patent Right or Joint Patent Right;

(iii)

Black Belt (or any Person nominated by Black Belt) shall be free to prosecute or abandon such Black Belt Patent Right or Joint Patent Right at its sole discretion and to grant rights thereunder to any person without further reference to CASI; and

(iv)

the license granted pursuant to Section 2.1 (License Grants to CASI) shall continue in respect of such Black Belt Patent Right or Joint Patent Right.

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6.2.4

Cooperation . The Parties will cooperate in the preparation, filing, prosecution, maintenance, and defense of all Black Belt Patent Rights and Joint Patent Rights in accordance with this Section 6.2.4 (Cooperation) and will share all material information relating thereto promptly after receipt of such information, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Inventions disclosed in such Patent Rights, obtaining execution of such other documents that are needed in the preparation, filing, prosecution, maintenance, and defense of such Patent Rights, and, as requested by a Party, updating each other regarding the status of such Patent Rights, and will cooperate with the other Party so far as necessary with respect to furnishing all information and data in its possession necessary to obtain, maintain, or defend such Patent Rights.

6.2.5

Patent Prosecution Expenses . Any expenses incurred by a Party in connection with the preparation, filing, prosecution, maintenance, or defense of any Black Belt Patent Rights or Joint Patent Rights will be borne by the Party incurring such costs and expenses.

6.3

Defense Against Third Party Patent Claims .

6.3.1

Notice of Infringement Claims . Black Belt and CASI will each promptly, but in any event no later than 10 days after receipt of notice of such action, notify the other in writing if either Party, or any of their respective Affiliates or a Sublicensee, will be individually named as a defendant in a legal proceeding by a Third Party alleging infringement of a Patent Right or infringement, misappropriation, or other violation of any other intellectual property right of such Third Party, in each case, as a result of the Exploitation of a Licensed Compound or Licensed Product hereunder in the Field in the Territory (each, an “ Infringement Claim ”).

6.3.2

Defense of Infringement Claims . Except as otherwise provided in ARTICLE 8 (Indemnification), if Black Belt wishes to assume sole control of the defense of any Infringement Claim brought against Black Belt, then Black Belt may do so. In such event (a) Black Belt will at its own cost have the exclusive right (but not the obligation), at its cost, to hire, fire, and direct an attorney to represent itself with respect to such Infringement Claim, and (b) Black Belt will have the exclusive right (but not the obligation) to settle any Infringement Claim at the sole cost of Black Belt without the consent of CASI, unless such settlement will have a material adverse impact upon any Black Belt Patent Right or relates to any remedy other than the payment of money, in which case, CASI will not unreasonably withhold such consent. If Black Belt notifies CASI that it does not wish to conduct the defense of any Infringement Claim brought against Black Belt, then Black Belt may notify CASI. Upon receipt of such notice, if CASI wishes to assume sole control of the defense of such Infringement Claim brought against Black Belt, then CASI may do so upon written notice to Black Belt. In such event (i) CASI will, at its own cost, have the exclusive right (but not the obligation), at its cost, to hire, fire, and direct an attorney to represent both it and Black Belt with respect to such Infringement Claim, and (ii) CASI will have the exclusive right (but not the obligation) to settle any Infringement Claim, at the sole cost of CASI, without the consent of Black Belt, unless such settlement will have a material adverse impact upon any Black Belt Patent Right, or relates to any remedy other than the payment of money, in which case, Black Belt will not unreasonably withhold such consent.

6.3.3

Cooperation . Except as otherwise provided in ARTICLE 8 (Indemnification), each Party will cooperate, and will cause its and its Affiliates’ employees to cooperate, with the other Party in all reasonable respects in connection with any Infringement Claim, including giving testimony and producing documents lawfully requested, and using its reasonable efforts to make available to CASI, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim, interference or other proceeding.

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6.4

Prosecution of Infringers .

6.4.1

Notice . If either Party receives notice of or otherwise becomes aware of any alleged or threatened infringement or misappropriation of Black Belt Technology or Joint Technology (including any action, suit or proceeding under the Biologics Price Competition and Innovation Act in the U.S., or similar foreign Law related to the approval of biosimilars outside of the U.S.), in each case, with respect to the making, using, offering to sell, selling, or importing of a product in the Field in the Territory that would be competitive with a Licensed Product (a “ Competing Infringement ”), then it will promptly notify the other Party of such Competing Infringement, including providing evidence of infringement or the claim of invalidity or unenforceability reasonably available to such Party.

6.4.2

Enforcement Actions .

(a)

CASI First Enforcement Right . As between the Parties, CASI will have the first right (but not the obligation) to take the appropriate steps to enforce any Black Belt Patent Right or Joint Patent Right against any Competing Infringement. CASI may take steps including the initiation, prosecution, and control of any suit, proceeding or other legal action by counsel of its own choice. CASI will bear the costs of any such enforcement. Notwithstanding the foregoing, Black Belt will have the right, at its own expense, to be represented in any such action with respect to any Black Belt Patent Right or Joint Patent Right by counsel of its own choice.

(b)

Black Belt Second Enforcement Right . If CASI fails to take the appropriate steps to enforce any Black Belt Patent Right or Joint Patent Right pursuant to Section 6.4.2(a) (CASI First Enforcement Right) against a Competing Infringement in the Territory within 90 days (or such shorter period as is necessary to preserve the rights of action, for example in respect of an interim injunction) after the date one Party has provided notice to the other Party pursuant to Section 6.4.1 (Notice) of such Competing Infringement, then Black Belt will have the second right (but not the obligation), at its own expense, to bring any such suit, action, or proceeding by counsel of its own choice and CASI will have the right, at its own expense, to be represented in any such action by counsel of its own choice.

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(c)

Biosimilar Competition . Notwithstanding any provision to the contrary set forth in this Agreement, if either Party receives a copy of an Abbreviated Application submitted to the FDA under subsection (k) of Section 351 of the PHSA naming a Licensed Compound or Licensed Product as a reference product or otherwise becomes aware that such an Abbreviated Application has been filed (such as in an instance described in Section 351(l)(9)(C) of the PHSA), then either Party will, within 10 Business Days, notify the other Party so that the other Party may seek permission to view the application and related confidential information from the filer of the Abbreviated Application under Section 351(l)(1)(B)(iii) of the PHSA. If either Party receives a copy of any equivalent or similar Abbreviated Application or notice in any other jurisdiction in the Territory, then either Party will, within 10 Business Days, notify and provide the other Party with copies of such communication. Regardless of the Party that is the “reference product sponsor” for purposes of such Abbreviated Application, (i) CASI will have the sole right to designate pursuant to Section 351(l)(1)(B)(ii) of the PHSA the outside counsel and in-house counsel who will receive confidential access to the Abbreviated Application; (ii) CASI will have the sole right to list any Patent Rights, including Black Belt Patent Rights and Joint Patent Rights, insofar as they Cover the applicable Licensed Compound or Licensed Product as required pursuant to Section 351(l)(3)(A), Section 351(l)(5)(b)(i)(II), or Section 351(l)(7) of the PHSA, to respond to any communications with respect to such lists from the filer of the Abbreviated Application, and to negotiate with the filer of the Abbreviated Application as to whether to utilize a different mechanism for information exchange than that specified in Section 351(l) of the PHSA; and (iii) CASI will have the sole right to identify Patent Rights or respond to communications under any equivalent or similar listing in any other jurisdiction in the Territory. If required by Law, Black Belt will prepare such lists and make such responses at CASI’s direction. Black Belt will (A) provide to CASI, no later than 15 days after CASI’s request, all information, including a correct and complete list of Black Belt Patent Rights Covering any Licensed Compound or Licensed Product, that is necessary or reasonably useful to enable CASI to make such lists and communications with respect to the Black Belt Patent Rights, and (B) cooperate with CASI’s reasonable requests in connection therewith, including meeting any submission deadlines, in each case, to the extent required or permitted by Laws. CASI will (1) reasonably consult with Black Belt prior to identifying any Black Belt Patent Rights to a Third Party as contemplated by this Section 6.4.2(c) (Biosimilar Competition) and will consider in good faith Black Belt’s advice and suggestions with respect thereto, and (2) notify Black Belt of any such lists or communications promptly after they are made.

(d)

Cooperation; Damages .

(i)

If one Party brings any suit, action, or proceeding under Section 6.4.2 (Enforcement Actions) (the “ Enforcing Party ”), then the other Party agrees to be joined as party plaintiff or defendant (as appropriate to the relevant jurisdiction) if necessary to prosecute the suit, action, or proceeding and to give the Enforcing Party reasonable authority to file and prosecute the suit, action or proceeding; provided , however , that neither Party will be required to transfer any rights, title, or interests in or to any property to the other Party or any other party to confer standing on a Party and that the Enforcing Party shall indemnify the non-Enforcing Party against all Losses that arise out of the non-Enforcing Party being a party to the suit, action, or proceeding.

(ii)

The Enforcing Party will keep the non-Enforcing Party informed of the status of each suit, action, or proceeding hereunder and will provide to the non-Enforcing Party reasonably in advance of submission thereof, copies of all substantive filings to be made in connection with each suit, action, or proceeding hereunder. The non-Enforcing Party will have the right to review and comment on any such substantive draft filings and the Enforcing Party will consider in good faith any comments offered by the non-Enforcing Party concerning any such suit, action, or proceeding hereunder.

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(iii)

The non-Enforcing Party will provide reasonable assistance to the Enforcing Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the Enforcing Party’s reimbursement of any documented, reasonable external expenses incurred by the non-Enforcing Party in providing such assistance.

(iv)

Black Belt, if it is the Enforcing Party, will not settle any claim, suit, or action that it brought under Section 6.4 (Prosecution of Infringers) involving any Black Belt Patent Rights without the prior written consent of CASI, not to be unreasonably withheld.

(v)

Any settlements, damages, or other monetary awards (a “ Recovery ”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 6.4.2 (Enforcement of Black Belt Patent Rights and Joint Patent Rights) will be allocated first ***, and second, ***, with any remaining amounts (if any) (A) if CASI is the Enforcing Party, ***, and (B) if Black Belt is the Enforcing Party, ***.

6.5

Patent Listing . As between the Parties, CASI will have the full and exclusive right, in its sole discretion, to determine and control the listing of any Patent Right (including any Black Belt Patent Right or Joint Patent Right) in the then-current edition of the United States Food and Drug Administration publication “Lists of Licensed Biological Products” (the “ Purple Book ”) in connection with the Regulatory Approval of any Licensed Product, or in equivalent patent listings in any other country within the Territory.

6.6

Patent Term Extensions . Black Belt and CASI will cooperate in good faith, including by providing necessary information and assistance as the other Party reasonably requests, in gaining Patent Term Extensions wherever applicable to the Black Belt Patent Rights and Joint Patent Rights in the Territory. However, CASI will have the sole discretion in determining for which Black Belt Patent Rights and Joint Patent Rights to seek Patent Term Extensions for any particular compound, protein, composition, article, product, process, or use.

6.7

Trademarks . CASI grants Black Belt no rights to any Trademarks in this Agreement. CASI will have the sole right to determine and own the Product Trademarks to be used with respect to the Exploitation of the Licensed Products in the Territory. CASI will own all rights, title and interests in and to all Product Trademarks. Black Belt will not, and will not permit its Affiliates to use in their respective businesses, any Trademark that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of any Product Trademarks. Black Belt will not, and will not permit its Affiliates to, attack, dispute, or contest the validity of or ownership of any Product Trademark anywhere in the Territory or any registrations issued or issuing with respect thereto; provided that such Product Trademark is not identical or confusingly similar to any prior registered trademark of Black Belt or its Affiliates.

6.8

Ownership and Enforcement of Product Trademarks .

6.8.1

Ownership and Prosecution of Product Trademarks . CASI will own all rights, title and interests in and to the Product Trademarks in the Territory, and will be responsible for the registration, prosecution, and maintenance thereof. All costs and expenses of registering, prosecuting and maintaining the Product Trademarks will be borne solely by CASI.

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6.8.2

Enforcement of Product Trademarks . CASI will have the sole right and responsibility for taking such action as CASI deems necessary against a Third Party based on any alleged, threatened, or actual infringement, dilution, misappropriation, or other violation of, or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party in the Territory. CASI will bear the costs and expenses relating to any enforcement action commenced pursuant to this Section 6.8.2 (Enforcement of Product Trademarks) and any settlements and judgments with respect thereto and will retain any damages or other amounts collected in connection therewith.

6.8.3

Third Party Claims . CASI will have the sole right and responsibility for defending against any alleged, threatened, or actual claim by a Third Party that the use or registration of the Product Trademarks in the Territory infringes, dilutes, misappropriates, or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices or any other like offense, or any other claims as may be brought by a Third Party against a Party in connection with the use of the Product Trademarks with respect to a Licensed Product in the Territory. CASI will bear the costs and expenses relating to any defense commenced pursuant to this Section 6.8.3 (Third Party Claims) and any settlements and judgments with respect thereto and will retain any damages or other amounts collected in connection therewith.

6.8.4

Notice and Cooperation . Black Belt will provide to CASI prompt written notice if it becomes aware of any actual or threatened infringement, dilution, misappropriation, or other violation of the Product Trademarks in the Territory and of any actual or threatened claim that the use of the Product Trademarks in the Territory infringes, dilutes, misappropriates, or otherwise violates the rights of any Third Party.

6.8.5

Domain Names . CASI may, at its cost, register as domain names the Product Trademarks in any country in the Territory using any available top-level domain or country-code top-level domain.

ARTICLE 7
REPRESENTATIONS, WARRANTIES, AND COVENANTS

7.1

Mutual Representations and Warranties . Each Party hereby represents and warrants (as applicable) to the other Party, as of the Effective Date, that:

7.1.1

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 the right to grant the licenses granted by it hereunder.

7.1.2

Authority . It has (a) the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, and (b) taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder.

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7.1.3

Binding Agreement . 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, except as enforcement may be affected by bankruptcy, insolvency or other similar laws and by general principles of equity.

7.1.4

No Conflicts . The execution, delivery, and performance of this Agreement by it does not (a) conflict with any agreement, instrument or understanding, oral or written, to which it is a party and by which it may be bound, or (b) violate any Laws.

7.1.5

No Debarments . Neither Party nor any of its Affiliates has been debarred or is subject to debarment pursuant to Section 306 of the FD&C Act, as amended, or that is the subject of a conviction described in such section.

7.1.6

All Consents and Approvals Obtained . Except with respect to Regulatory Approvals for the Exploitation of any Licensed Compound or Licensed Product or as otherwise described in this Agreement, (a) all necessary consents, approvals, and authorizations of, and (b) all notices to, and filings by such Party with, all Governmental Authorities required to be obtained or provided by such Party as of the Effective Date in connection with the execution, delivery, and performance of this Agreement have been obtained and provided, except for those approvals, if any, not required at the time of execution of this Agreement.

7.2

Additional Representations and Warranties of Black Belt . Black Belt hereby represents and warrants to CASI as of the Effective Date that:

7.2.1

No MAAs . Neither Black Belt nor to the Knowledge of Black Belt, Tusk, nor any of their respective Affiliates, have filed any MAAs with a Governmental Authority in the Field in the Territory for any Licensed Compound or Licensed Product.

7.2.2

Absence of Claims and Proceedings . Neither Black Belt nor to the Knowledge of Black Belt, Tusk, nor any of their respective Affiliates have received written notice of any claim, demand, proceedings, investigation, or other legal action of any nature pending or threatened by any Regulatory Authority or Third Party with respect to any Licensed Compound or Licensed Product, the Black Belt Technology, or any facility where a Licensed Compound or Licensed Product is Manufactured, and to the Knowledge of Black Belt, there is no judgement or settlement against or owed by Black Belt or its Affiliate related to any Licensed Compound or Licensed Product or to the Black Belt Technology. There are no claims, judgments, or settlements against or owed by Black Belt or to the Knowledge of Black Belt, Tusk or their respective Affiliates, nor any pending reissue, reexamination, inter partes review, interference, opposition, or similar proceedings, with respect to the Black Belt Patent Rights, and neither Black Belt nor to the Knowledge of Black Belt, Tusk, nor any of their respective Affiliates have received written notice as of the applicable date of any threatened claims or litigation or any reissue, reexamination, inter partes review, interference, opposition, or similar proceedings seeking to invalidate or otherwise challenge the Black Belt Patent Rights.

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7.2.3

Infringement of Third Party Intellectual Property . To the Knowledge of Black Belt, including after due inquiry of external intellectual property counsel to Black Belt within the scope of the written IP report dated 21 January 2019 and provided by Black Belt to CASI on or around 23 January 2019 (the “FTO Report”) and except as otherwise disclosed to CASI in the FTO Report the Exploitation of the Licensed Compounds and Licensed Products, in the form that such Licensed Compounds and Licensed Products exist as of the Effective Date, in the Field in the Territory will not infringe, misappropriate, or otherwise violate the intellectual property rights of any Third Party. There has been no claim or demand of any Person asserted to Black Belt or to the Knowledge of Black Belt, Tusk or any of their respective Affiliates that challenges the rights of Black Belt or to the Knowledge of Black Belt, Tusk or any of their respective Affiliates to use, practice under, or license any of the Black Belt Technology.

7.2.4

Infringement by Third Party . To the Knowledge of Black Belt, no Third Party is infringing, misappropriating, or otherwise violating any Black Belt Technology in derogation of the rights granted to CASI under this Agreement.

7.2.5

No Unlicensed Intellectual Property . Black Belt has not been granted rights from any Third Party under any Know-How or Patent Rights that (a) are necessary to Exploit any Licensed Compound or Licensed Product in the Territory, and (b) are not included within the Black Belt Know-How or Black Belt Patent Rights, as applicable. In addition, Black Belt does not Control any Black Belt Know-How or any Black Belt Patent Rights pursuant to exclusive licenses granted by any Third Party.

7.2.6

Title to Black Belt Technology . (a) Schedule 1.31 (Black Belt Patent Rights) sets forth a complete and accurate list of all Patent Rights existing as of the Effective Date that Black Belt owns and that are necessary to Exploit any Licensed Compound or Licensed Product in the Field in the Territory and (b), Black Belt exclusively owns all rights, title, and interests in and to such Black Belt Patent Rights.

7.2.7

Licensed Product Supplies . Black Belt Controls all physical quantities of Licensed Compound and Licensed Product, and Black Belt NewCo does not Control any such physical quantities.

7.2.8

Assignment Agreements . Black Belt has entered into binding and enforceable agreements with all of their and their respective Affiliates’ employees, agents, and independent contractors performing any activity pursuant to this Agreement pursuant to which such employees, agents, and independent contractors assign all rights, title, and interests in and to all Inventions developed or invented in the performance of any activity pursuant to this Agreement by such employees, agents, and independent contractors according to the ownership rules described in Section 6.1.1 (General).

7.2.9

Status of Black Belt Patent Rights . To the Knowledge of Black Belt, each issued Black Belt Patent Right listed on Schedule 1.31 (Black Belt Patent Rights) is in full force and effect, and Black Belt or its Affiliates have paid all filing and renewal fees required to be paid on or before the Effective Date with respect to such Patent Rights.

7.2.10

Title under Bayh-Dole Act . Any academic institution or other licensor that owns any Black Belt Technology that is subject to the requirements of the Bayh-Dole Act or any similar provision of any Law, has, to the extent applicable, (a) disclosed all relevant inventions to the applicable government funding authority and (b) elected to retain title to such Black Belt Technology, in each case, in accordance with the Bayh-Dole Act and such similar provision, as applicable.

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7.2.11

Prosecution and Maintenance . To the Knowledge of Black Belt, Black Belt, Tusk and their respective Affiliates have complied with all Laws, including any duties of candor to applicable patent offices, in connection with the filing, prosecution, and maintenance of the Black Belt Patent Rights existing as of the Effective Date. All Black Belt Patent Rights existing as of the Effective Date have been duly filed and maintained in the Territory and are being diligently prosecuted in the Territory.

7.2.12

Third Party Agreements . With respect to the Adimab Agreement and Cellca Agreement: (a) each such Third Party Agreement are valid and enforceable; (b) neither of such Third Party Agreements contains provisions that conflict with the exclusive rights and licenses granted to CASI hereunder; and (c) no written notice of default or termination has been received or given under either such Third Party Agreement save in respect of work orders under them. To the Knowledge of Black Belt, there is no act or omission by Black Belt or Tusk or their respective Affiliates, licensees, or sublicensees, or the applicable counterparty to such Third Party Agreements, in each case, that would provide a Person the right to terminate any Third Party Agreement.

7.2.13

Protection of Black Belt Know-How . To the Knowledge of Black Belt, Black Belt and Tusk and their respective Affiliates have taken commercially reasonable measures consistent with industry practices to protect the secrecy, confidentiality, and value of all Black Belt Know-How that constitutes trade secrets under Law (including requiring all employees, agents, and independent contractors to execute binding and enforceable agreements requiring all such employees, agents, and independent contractors to maintain the confidentiality of such Black Belt Know-How) and to the Knowledge of Black Belt such Black Belt Know-How has not been used, disclosed to, or discovered by any Third Party except pursuant to such confidentiality agreements and there has been no breach by any party to such confidentiality agreements.

7.2.14

No Investigations . To the Knowledge of Black Belt, there are no investigations, inquiries, actions, or other proceedings pending before or threatened by any Regulatory Authority or other Governmental Authority in the Territory with respect to any Licensed Compound or Licensed Product arising from any violation of Law by Black Belt or to the Knowledge of Black Belt, Tusk or their respective Affiliates, licensees, or sublicensees, or a Third Party acting on its or their behalf, and neither Black Belt nor to the Knowledge of Black Belt, Tusk, nor their respective Affiliates has received notice threatening any such investigation, inquiry, action, or other proceeding.

7.2.15

Manufacturing Agreements . Black Belt has provided to CASI true, complete, and correct copies of all agreements relating to the Manufacture or supply of any Licensed Compounds or Licensed Products, including quality agreements, that are in effect as of the Effective Date, a complete list of which appears on Schedule 7.2.15 (Manufacturing Agreements).

7.2.16

Conduct of Development . To the Knowledge of Black Belt, Black Belt, Tusk and their respective Affiliates have conducted all Development of all Licensed Compounds and Licensed Products in accordance with all Laws, including GLP, as applicable and appropriate to the phase or stage of the relevant Development. To the Knowledge of Black Belt, Black Belt, Tusk, and their respective Affiliates have conducted any and all pre-clinical trials related to all Licensed Compounds or Licensed Products in accordance with all Laws, including GLP as applicable and appropriate to the phase or stage of the relevant trial.

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7.2.17

Review of Data . Black Belt has provided CASI with the opportunity to review all written material (such materiality being in the sole discretion of Black Belt) data in Black Belt’s Control relating to the subject matter of this Agreement, and has not intentionally concealed from CASI any such material data.

7.2.18

No Additional Payments . Except as listed on Schedule 7.2.18 (No Additional Payments), there are no amounts that will be required to be paid to any Third Party, other than AGC, as a result of the Exploitation of the Licensed Products that arise out of any agreements with such Third Parties to which Black Belt, its Affiliates, or Tusk is a party.

7.2.19

Tusk . Any representation or warranty given by Black Belt in respect of Tusk is given in respect of the time period ending on the sale of Tusk Therapeutics Limited to Roche on September 27, 2018.

7.2.20

No Subsidiaries . No subsidiaries of Black Belt NewCo have been incorporated, chartered, organized, formed, or otherwise exist.

7.3

Non Reliance; Disclaimer

7.3.1

The warranties and representations of each Party set forth in this Agreement are intended for the sole and exclusive benefit of the other Party, and may not be relied upon by any Third Party.

7.3.2

EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE LICENSED PRODUCTS OR ANY PATENTS, KNOW-HOW OR OTHER INTELLECTUAL PROPERTY DISCLOSED, DEVELOPED, OR LICENSED UNDER THIS AGREEMENT. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE LICENSED PRODUCTS OR ANY PATENT RIGHTS, KNOW-HOW OR OTHER INTELLECTUAL PROPERTY DISCLOSED, DEVELOPED, OR LICENSED UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY WARRANTY OR REPRESENTATION OF NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.

7.4

Covenants of Black Belt .

7.4.1

Title to Black Belt Technology . Subject to the rights granted to CASI under this Agreement, during the Term, Black Belt will maintain exclusive ownership and Control of all Black Belt Technology that is prior to the Effective Date exclusively owned or Controlled by Black Belt and will not assign, transfer, encumber, or otherwise grant any Third Party any rights with respect thereto that would adversely affect the rights granted to CASI under this Agreement.

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7.4.2

Third Party Agreements . During the Term Black Belt will (a) not breach or be in default of the Third Party Agreements, nor take any acts that would result in a breach of such agreements, except to the extent that (i) any acts of Black Belt are carried out at the written request of CASI or (ii) any breach arises as a result of any act or omission of CASI, its Affiliates or Sublicensees, (b) maintain each of the Third Party Agreements in full force and effect, and (c) not terminate, amend, waive, or otherwise modify (or consent to any of the foregoing) any of the Third Party Agreements or any of its rights under any such agreements without the consent of CASI. If Black Belt receives notice of any alleged material breach by Black Belt or its Affiliates under any of the Third Party Agreements, then Black Belt will promptly, but in no event more than five days thereafter, provide written notice thereof to CASI and grant CASI the right (but not the obligation) to cure any such alleged breach. If CASI receives notice of any alleged material breach under any of the Third Party Agreements, then CASI will promptly, but in no event more than five days thereafter, provide written notice thereof to Black Belt.

7.4.3

Additional In-Licenses . During the Term, Black Belt will not, and will cause its Affiliates to not, enter into any agreement or arrangement pursuant to which Black Belt would Control any Black Belt Technology, without CASI’s prior written consent.

7.4.4

Black Belt Know-How . If at any time during the Term, Black Belt discovers any Black Belt Know-How that was not included on Schedule 3.1 (Technology Transfer Plan) as of the Effective Date, then Black Belt will transfer such Know-How to CASI at no additional cost to CASI.

7.4.5

Licensed Product Supplies . If at any time during the Term, Black Belt or Black Belt NewCo discovers any physical quantities of Licensed Compound or Licensed Product that were Controlled by Black Belt NewCo as of the Effective Date, then Black Belt or Black Belt NewCo will transfer such physical quantities to CASI at no additional cost to CASI.

7.5

Covenants of CASI. During the Term, CASI will act, and shall procure that its Affiliates and Sublicensees shall act, in accordance with and comply with all of the terms of:

7.5.1

each of the Third Party Agreements that relates to its and their activities under this Agreement, including but not limited to milestone and royalty payments, diligence and patent prosecution and in respect of the Adimab Agreement, Section 9.4 and the limitations on the license in Section 3.2(b); and

7.5.2

the AGC Agreement.

ARTICLE 8
INDEMNIFICATION

8.1

Indemnification by Black Belt . Black Belt hereby agrees to indemnify, defend, and hold CASI, its Affiliates, and their respective directors, officers and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims arising from or relating to (a) any breach by Black Belt or its Affiliates of any of its representations, warranties, covenants, or obligations under this Agreement, (b) any violation of Law, gross negligence, or willful misconduct by or on behalf of Black Belt or its Affiliates or their respective officers, directors or employees in performing any obligations or exercising any rights under this Agreement, in each case ((a)-(b)), except to the extent that such Losses arise from (i) a breach by CASI of any terms of this Agreement (including its obligations to comply with the terms of the Third Party Agreements), or (ii) the gross negligence or willful misconduct of CASI or its Affiliates or (iii) claims for which CASI is required to indemnify Black Belt pursuant to Section 8.1 (Indemnification by CASI).

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8.2

Indemnification by CASI . CASI hereby agrees to indemnify, defend, and hold Black Belt, its Affiliates, and their respective directors, agents, and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims arising from or relating to (a) any breach by CASI or its Affiliates or Sublicensees of any of its representations, warranties, covenants, or obligations under to this Agreement including any failure to comply with any obligations under or terms of the Adimab Agreement, Cellca Agreement and/or the AGC Agreement, (b) any violation of Law, gross negligence, or willful misconduct by CASI or its Affiliates or Sublicensees or their respective officers, directors, employees, agents, or consultants in performing any obligations or exercising any rights under this Agreement, and (c) the Exploitation of the Licensed Compounds or Licensed Products by CASI or its Affiliates or Sublicensees (including any product liability Losses resulting therefrom), in each case ((a)-(c)), except to the extent that such Losses arise from (i) a breach by Black Belt of any terms of this Agreement, or (ii) the gross negligence or willful misconduct of Black Belt or its Affiliate or (iii) claims for which Black Belt is required to indemnify CASI pursuant to Section 8.1 (Indemnification by Black Belt).

8.3

Indemnification Procedures .

8.3.1

Notice of Claim . All indemnification claims in respect of any indemnitee seeking indemnity under Section 8.1 (Indemnification by Black Belt) or Section 8.2 (Indemnification by CASI), as applicable (collectively, the “ Indemnitees ” and each, an “ Indemnitee ”) will be made solely by the corresponding Party (the “ Indemnified Party ”). The Indemnified Party will give the indemnifying Party (the “ Indemnifying Party ”) prompt written notice (an “ Indemnification Claim Notice ”) of any Losses and any legal proceeding initiated by a Third Party against the Indemnified Party as to which the Indemnified Party intends to make a request for indemnification under Section 8.1 (Indemnification by Black Belt) or Section 8.2 (Indemnification by CASI), as applicable, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice that materially prejudices the defense of such proceeding. Each Indemnification Claim Notice will contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim.

8.3.2

Control of Defense . At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Section 8.1 (Indemnification by Black Belt) or Section 8.2 (Indemnification by CASI), as applicable, by giving written notice to the Indemnified Party within 30 days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects, and such Indemnifying Party will thereafter continue to defend such Third Party Claim in good faith. Should the Indemnifying Party assume the defense of a Third Party Claim (and continue to defend such Third Party Claim in good faith), the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense, or settlement of the Third Party Claim, unless the Indemnifying Party has failed to assume the defense and employ counsel in accordance with this Section 8.3 (Indemnification Procedures).

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8.3.3

Right to Participate in Defense . Without limiting Section 8.3.2 (Control of Defense), any Indemnitee will be entitled to participate in the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided , however , that such employment will be at the Indemnitee’s own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense (or continue to defend such Third Party Claim in good faith) and employ counsel in accordance with this Section 8.3 (Indemnification Procedures), in which case, the Indemnified Party will be allowed to control the defense.

8.3.4

Settlement . With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, will deem appropriate ( provided , however , that such terms will include a complete and unconditional release of the Indemnified Party from all liability with respect thereto), and will transfer to the Indemnified Party all amounts that said Indemnified Party will be liable to pay prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, if the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 8.3.2 (Control of Defense), then the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, provided that it obtains the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld). The Indemnifying Party that has assumed the defense of (and continues to defend) the Third Party Claim in accordance with Section 8.3.2 (Control of Defense) will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise, or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 8.3.2 (Control of Defense).

8.3.5

Cooperation . If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, then the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense or prosecution thereof and will furnish such records, information, and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials, and appeals as may be reasonably requested in connection with such Third Party Claim. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its documented, reasonable external expenses incurred in connection with such cooperation.

8.3.6

Expenses of the Indemnified Party . Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim will be reimbursed on a Calendar Quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

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8.4

LIMITATION OF LIABILITY . NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, OR INDIRECT LOST PROFITS OR INDIRECT LOST REVENUES, ARISING FROM OR RELATING TO THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, NOTHING IN THIS SECTION 8.4 (LIMITATION OF LIABILITY) IS INTENDED TO OR WILL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 8.1 (INDEMNIFICATION BY BLACK BELT) OR SECTION 8.2 (INDEMNIFICATION BY CASI), OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 9 (CONFIDENTIALITY) OR FOR BLACK BELT’S BREACH OF SECTION 2.3 (NON-COMPETE); PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL LIMIT CASI’s LIABILITY TO BLACK BELT TO THE EXTENT THAT BLACK BELT INCURS LIABILTY UNDER EITHER OF THE THIRD PARTY AGREEMENTS OR THE AGC AGREEMENT AS A RESULT OF ANY ACT OR OMISSION OF CASI, ITS AFFILIATES OR SUBLICENSEES AND BLACK BELT CANNOT LIMIT ITS LIABILITY UNDER SUCH THIRD PARTY AGREEMENT OR AGC AGREEMENT.

ARTICLE 9

CONFIDENTIALITY

9.1

Confidential Information . As used in this Agreement, the term “ Confidential Information ” means the terms of this Agreement and all information, whether it be written or oral, including all production schedules, lines of products, volumes of business, processes, new product developments, product designs, formulae, technical information, laboratory data, clinical data, patent information, know-how, trade secrets, financial and strategic information, marketing and promotional information and data, and other material relating to any products, projects, or processes of one Party (the “ Disclosing Party ”) that is provided to the other Party (the “ Receiving Party ”) in connection with this Agreement (including information exchanged prior to the date hereof in connection with the transactions set forth in this Agreement, including any information disclosed by either Party pursuant to the Mutual Confidentiality Agreement, dated as of January 1, 2019, by and between CASI and Black Belt (the “ CDA ”)). Notwithstanding the foregoing sentence, Confidential Information will not include any information or materials that:

9.1.1

were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;

9.1.2

were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;

9.1.3

became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

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9.1.4

were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

9.1.5

were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.

Notwithstanding the foregoing or any provision to the contrary in this Agreement, (a) all reports provided by CASI or its Affiliates or Sublicensees regarding the Exploitation of any Licensed Compounds or Licensed Products, Royalty Reports, Assigned Regulatory Materials, Clinical Trial data, and other Know-How that exclusively pertains to Licensed Compounds and is transferred or made available to CASI pursuant to this Agreement will be deemed to be CASI’s Confidential Information under this Agreement, and (b) this Agreement and the terms hereof will be deemed to be both Parties’ Confidential Information under this Agreement.

9.2

Confidentiality Obligations . Each of CASI and Black Belt will keep all Confidential Information received from or on behalf of the other Party with the same degree of care with which it maintains the confidentiality of its own Confidential Information, but in all cases no less than a reasonable degree of care. Neither Party will use such Confidential Information for any purpose other than in the exercise of its rights or performance of its obligations under this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ and Sublicensee’s directors, managers, employees, independent contractors, agents, or consultants who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement; provided , however , that a Receiving Party will advise any of its Affiliates’ and Sublicensee’s directors, managers, employees, independent contractors, agents, or consultants who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party will ensure (including, in the case of a Third Party, by means of a written agreement with such Third Party having terms at least as protective as those contained in this ARTICLE 9 (Confidentiality)) that all such directors, managers, employees, independent contractors, agents, or consultants comply with such obligations. It is understood that receipt of Confidential Information under this Agreement will not limit the Receiving Party from assigning its employees to any particular job or task in any way it may choose, subject to the terms and conditions of this Agreement.

9.3

Permitted Disclosure and Use . Notwithstanding Section 9.2 (Confidentiality Obligations), (a) either Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is necessary to: (i) comply with or enforce any of the provisions of this Agreement; and (ii) comply with Laws or any listing agreement with a national securities exchange; and (b) each Party may disclose Confidential Information belonging to the other Party (including the applicable terms of this Agreement) to its lenders, prospective lenders, financing sources, prospective financing sources, actual or prospective investors and acquirers, Sublicensees, prospective Sublicensees, employees, consultants, financial or legal advisors, agents, or (Sub)contractors, in each case, pursuant to confidentiality and non-use obligations at least as protective as those contained in ARTICLE 9 (Confidentiality). If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to clause (a)(ii) of this Section 9.3 (Permitted Disclosure and Use), then such Party will give reasonable advance written notice of such disclosure (to the extent practicable) to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information, including seeking a protective order or other appropriate remedy. In addition, Black Belt may, upon reasonable request, disclose any milestone reports or Royalty Reports to Cellca or Adimab, provided , however , that Black Belt will advise Cellca or Adimab of the confidential nature thereof and of the obligations contained in this Agreement relating thereto.

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9.4

Notification . The Receiving Party will notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information and will cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure.

9.5

Publicity . Except as otherwise provided in ARTICLE 9 (Confidentiality), Black Belt will not make any other public statement or disclosure of, or concerning, the terms of this Agreement, either directly or indirectly, without first obtaining the written approval of CASI. Notwithstanding any provision in this Agreement to the contrary, CASI may issue a press release regarding the signing of this Agreement, provided that Black Belt will have the right to review such press release prior to its release. Once any public statement or disclosure has been approved or reviewed in accordance with Section 9.3 (Disclosure and Use), then either Party may appropriately communicate information contained in such permitted statement or disclosure.

9.6

Use of Names . Except as otherwise set forth in this Agreement, neither Party will use the name of the other Party in relation to this transaction in any public announcement, press release, or other public document without the written consent of such other Party, which consent will not be unreasonably withheld; provided , however , that subject to Section 9.5 (Publicity), either Party may use the name of the other Party in any document filed with any Governmental Authority, including the U.S. Securities and Exchange Commission.

9.7

Survival . The obligations and prohibitions contained in this ARTICLE 9 (Confidentiality) as they apply to Confidential Information will survive the expiration or termination of this Agreement for a period of 10 years.

ARTICLE 10
TERM; TERMINATION

10.1

Term . This Agreement will become effective on the Effective Date and, unless earlier terminated pursuant to this ARTICLE 10 (Term; Termination), will continue, on a Licensed Product-by-Licensed Product and country-by-country basis, until the expiration of the Royalty Term with respect to such Licensed Product in such country, and will expire in its entirety upon the expiration of the last to expire Royalty Term (the “ Term ”). Upon expiration of the Royalty Term for a Licensed Product in a country in the Territory, all licenses granted to CASI under this Agreement will become fully-paid, irrevocable, and perpetual for such Licensed Product in such country.

10.2

Termination for Breach .

10.2.1

Breach by CASI . Subject to Section 12.3 (Tolling), Black Belt may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement in its entirety by providing written notice of termination to CASI in the event that CASI has materially breached this Agreement and failed to cure such breach within *** days after written notice thereof was provided to CASI by Black Belt; provided that if such breach cannot be cured within such ***-day period, then such termination will not be effective if such breach has been cured within *** days after such notice if CASI commences actions to cure such default within such ***-day period and thereafter diligently continues such action.

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10.2.2

Breach by Black Belt . Subject to Section 12.3 (Tolling), CASI may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement in its entirety by providing written notice of termination to Black Belt in the event that Black Belt has materially breached this Agreement and failed to cure such breach within *** days after written notice thereof was provided to Black Belt by CASI; provided that if such breach cannot be cured within such ***-day period, then such termination will not be effective if such breach has been cure within *** days after such notice if Black Belt commences actions to cure such default within such ***-day period and thereafter diligently continues such action.

10.3

Termination for Convenience by CASI . CASI may elect, upon *** days’ prior written notice to Black Belt, to terminate this Agreement for any reason or no reason in its entirety.

10.4

Termination by CASI for Safety Reasons . CASI may terminate this Agreement immediately upon written notice to Black Belt in its entirety, or on a country-by-country basis with respect to any country to which the applicable event set forth under the following clause (b) relates, if (a) CASI reasonably determines based upon its review of clinical data or upon a determination by an applicable drug safety monitoring board or Governmental Authority that a Licensed Compound or Licensed Product caused or is likely to cause a fatal, life-threatening, or other serious adverse event that is reasonably expected, based upon then-available data, to materially impair continued Development or Commercialization of such Licensed Compound or Licensed Product, or (b) a Regulatory Authority has placed a clinical hold on the conduct of a Clinical Trial for such Licensed Compound or Licensed Product.

10.5

Termination for Patent Challenge . Without prejudice to any other rights of Black Belt, if CASI or any of its Affiliates institutes a Patent Challenges of any Black Belt Patent Right in any country in the Territory, then Black Belt may, following written notice to CASI and provided that CASI or its Affiliate does not withdraw such Patent Challenge within *** days after receipt of such notice, terminate this Agreement with respect to such country by providing written notice of termination to CASI. Notwithstanding anything to the contrary set forth in this Agreement, this Section 10.5 (Termination for Patent Challenge) will not apply to, and Black Belt may not terminate this Agreement with respect to (a) any claim or proceeding that would otherwise be a Patent Challenge hereunder to the extent commenced by a Third Party that after the Effective Date acquires or is acquired by CASI or its Affiliates or its or their business or assets, whether by stock purchase, merger, asset purchase, or otherwise; provided that such proceeding commenced prior to the closing of such acquisition, (b) any Patent Challenge instituted as a defense to an allegation of infringement by Black Belt or Black Belt NewCo; or (c) any Patent Challenge that is commenced by a Sublicensee; provided that CASI demands that such Sublicensee withdraw such Patent Challenge promptly after CASI becomes aware of such Patent Challenge and terminates the sublicense agreement with the applicable Sublicensee if such Sublicensee does not withdraw such Patent Challenge within *** days after receipt of notice from CASI.

ARTICLE 11
EFFECTS OF TERMINATION

11.1

General Effects of Termination . Upon termination of this Agreement for any reason, without limiting any other legal or equitable remedies that a Party may have, the following provisions will apply:

11.1.1

Termination of Rights and Licenses. All rights and licenses granted by one Party to the other Party hereunder will immediately terminate and be of no further force and effect.

11.1.1

Accrued Payments . Any Royalty Payments, Development Milestone Payments, Sales Milestone Payments, and other sums that accrued to the benefit of Black Belt prior to the effective date of such termination shall become payable to Black Belt immediately upon notice of termination of this Agreement and CASI shall also pay all sums that become payable during the applicable termination notice period (including during any sell off period in accordance with Section 11.2.5 (Disposition of Inventory)).

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11.1.2

Licenses . CASI shall consent to the revocation of any confirmatory patent license relating to the Black Belt Patent Rights and the cancellation of the registration of any such license in any register.

11.1.3

Prosecution and Maintenance . CASI shall promptly transfer to Black Belt (or any person nominated by Black Belt) any and all documents and information in CASI’s control or possession relating to the Black Belt Patent Rights and Black Belt may assume responsibility for the prosecution and maintenance of the same;

11.1.4

Destruction of Know-How . CASI shall, at the request and option of Black Belt, return or destroy the Black Belt Know-How in its possession or control.

11.1.5

Assigned Regulatory Materials . If requested by Black Belt in writing within 30 days after the effective date of such termination, CASI will promptly assign and transfer to Black Belt CASI’s rights, title, and interests in and to the Assigned Regulatory Materials.

11.1.6

Sublicense Continuation Upon Termination . Upon the request of a Sublicensee not then in breach of the applicable sublicense agreement, Black Belt will enter into a direct license from Black Belt to such Sublicensee on the same terms as this Agreement, taking into account any difference in license scope, territory, and duration of sublicense grant (each a “ New License Agreement ”). Under any New License Agreement between Black Belt and a former Sublicensee, such Sublicensee will be required to pay to Black Belt the same amounts in consideration for such direct grant as Black Belt would have received from CASI pursuant to this Agreement on account of such Sublicensee’s Exploitation of the Licensed Products had this Agreement not been terminated. Under such New License Agreement, Black Belt will not be bound by any grant of rights broader than, and will not be required to perform any obligation other than those rights and obligations contained in this Agreement and all applicable rights of Black Belt and obligations of CASI (including under the Third Party Agreements) set forth in this Agreement will be included in such New License Agreement. At the request of CASI, Black Belt will issue a comfort letter directly to any potential Sublicensee confirming the terms of this Section 11.1.6 (Sublicense Continuation upon Termination).

11.1.7

Return or Destruction of Confidential Information . Upon termination of this Agreement, the Receiving Party will return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party or its directors, managers, employees, independent contractors, agents, or consultants, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy will be deemed to be the property of the Disclosing Party, and will continue to be subject to the provisions of ARTICLE 9 (Confidentiality).

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11.2 Termination by Black Belt for CASI’s Breach or by CASI for Convenience . In addition to the general effects of termination set forth in Section 11.1 (General Effects of Termination), and without limiting any other legal or equitable remedies that a Party may have, if (i) this Agreement is terminated (A) by Black Belt pursuant to Section 10.2.1 (Breach by CASI) or Section 10.5 (Termination for Patent Challenge), or (B) by CASI pursuant to Section 10.3 (Termination for Convenience by CASI) or Section 10.4 (Termination by CASI for Safety Reasons), and (ii) Black Belt notifies CASI that Black Belt desires to proceed with the Development or other Exploitation of any Licensed Products and the Sublicensee is not continuing in accordance with Section 11.1.6 (Sublicense Continuation Upon Termination), then the following provisions will apply:

11.2.1

Exclusive License Under Arising Intellectual Property . Effective as of the effective date of such termination, CASI hereby grants to Black Belt an exclusive, worldwide, sublicensable license under all Arising Intellectual Property to the extent necessary for, or to the extent it has been used by its Affiliates or any Sublicensee in, the Exploitation of the Licensed Products to Exploit such Licensed Products in the form that such Licensed Products exists as of the applicable effective date of termination of this Agreement.

11.2.2

Regulatory Materials . CASI shall, ***, transfer to Black Belt (or its nominee) as soon as practicable any Regulatory Approvals, Reimbursement Approvals for the relevant Licensed Products.

11.2.3

Technology Transfer . Solely within the scope of the license granted in Section 11.2.1 (Exclusive License Under Arising Intellectual Property), CASI shall, within one month following the effective date of termination of this Agreement, transfer to Black Belt (or Black Belt’s designee) copies of all Know-How included in the in Arising Intellectual Property licensed to Black Belt under Section 11.2.1 (Exclusive License Under Arising Intellectual Property) and all documents and information within CASI’s control relating to the filing and prosecution of any Patent Rights comprised in Arising Intellectual Property.

11.2.4

Milestones and Royalty Payments Following Termination . Black Belt will pay CASI (a) milestone payments equal to the Black Belt Milestone Payments upon the achievement of milestone events equivalent to each applicable Black Belt Milestone Event, and (b) royalty payments equal to the Black Belt Royalty Payments resulting from the sale of each Licensed Product during each Calendar Year in each country. For the purposes of this Section 11.2.4 (Milestones and Royalty Payments Following Termination), the definitions of “Black Belt Milestone Events,” “Black Belt Milestone Payments,” “Black Belt Net Sales,” and “Black Belt Net Sales,” and Section 5.3.1(a) (Milestone Payments for Lyophilized Form), Section 5.3.1(b) (Milestone Payments for Existing Licensed Products), Section 5.3.1(c) (Milestone Payments for Next Generation Licensed Products), Section 5.3.1(f) (Notice and Payment), Section 5.3.2 (Sales Milestones), Section 5.4.1(b) (Region-Specific Royalty Rates for Existing Licensed Products), Section 5.4.1(c) (Region-Specific Royalty Rates for Next-Generation Licensed Products), Section 5.4.2(b) (Black Belt Royalty Payments), Section 5.4.3 (Royalty Reports; Payments), Section 5.5 (Foreign Exchange), Section 5.6 (Payment Method; Late Payments), Section 5.7 (No Right to Offset), Section 5.8 (Records), Section 5.9 (Audits), Section 5.10 (Audit Dispute), and Section 5.11 (Taxes) will apply mutatis mutandis to the calculation, payment, recording, and auditing of Black Belt’s obligation to pay any royalties and milestone payments under this Section 11.2.4 (Milestones and Royalty Payments for Following Termination) as they apply to CASI, and, solely for such purpose, each reference in each Section (and any related definitions) to (i) CASI will be deemed to be a reference of Black Belt, and (ii) Black Belt will be deemed to be a reference of CASI.

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11.2.5

Disposition of Inventory . For *** full months following the effective date of the applicable termination, CASI and its Affiliates will have the right to sell any inventory of any Licensed Product that remains on hand as of the applicable effective date of the termination, so long as CASI pays to Black Belt, Adimab, and Cellca the Milestone Payment, Royalty Payments, and other amounts payable hereunder that are applicable to such subsequent sales of such Licensed Product in accordance with the terms of this Agreement including under the applicable Third Party Agreements. If CASI provides Black Belt with written notice that it does not wish to exercise such right, then Black Belt will have the option, exercisable within *** days following the date on which CASI notifies Black Belt of CASI’s intention not to exercise such right, to purchase any inventory of any Licensed Product that remains on hand as of the date of such option exercise at CASI’s fully-burdened manufacturing cost for such Licensed Product. Black Belt may exercise such option by written notice to CASI during such ***-day period.

11.3

Accrued Rights . Termination or expiration of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such termination, including any rights accrued to the benefit of a Party during the applicable termination notice period and any payment obligation that accrued prior to the effective date of such termination or expiration. Such termination will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.

11.4

Termination Sole Remedy . Termination of this Agreement pursuant to Section 10.2.1 (Breach by CASI) will be Black Belt’s sole remedy under this Agreement with respect to CASI’s breach of its obligations under Section 4.2 (Diligence Obligations).

11.5

Survival . Notwithstanding any provision to the contrary contained herein, the following provisions will survive any expiration or termination of this Agreement: ARTICLE 1 (Definitions), ARTICLE 8 (Indemnification), ARTICLE 9 (Confidentiality), ARTICLE 11 (Effects of Termination), ARTICLE 12 (Dispute Resolution) and ARTICLE 13 (Miscellaneous), and Sections 5.4.3 (Royalty Reports), 5.5 (Foreign Exchange), 5.6 (Payment Method) 5.7 (No Right to Offset) 5.8 (Records) 5.9 (Audits) 5.10 (Audit Dispute) 5.11 (Taxes), 6.1.1 (General) 6.1.4(Right to Practice Joint Technology), 6.8 (Ownership and Enforcement of Product Trademarks). Except as set forth in this Section 11.5 (Survival) or otherwise expressly set forth herein, upon termination or expiration of this Agreement all other rights and obligations of the Parties will cease.

ARTICLE 12
DISPUTE RESOLUTION

12.1

Disputes . In the event of any disputes, controversies, or differences between the Parties, arising out of, in relation to, or in connection with this Agreement, including any alleged failure to perform, or breach, of this Agreement, or any issue relating to the validity, construction, interpretation, enforceability, breach, performance, application, or termination of this Agreement a (“ Dispute ”), then upon the written request of either Party, other than disputes to be resolved in accordance with Section 5.10 (Audit Dispute), the Dispute will be first submitted to the Executive Officers of each Party for attempted resolution by good faith negotiations within *** days of the Dispute being so submitted.

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12.2

Binding Arbitration . If the Dispute is not resolved within *** days following the written request for amicable resolution, then, except for Audit Disputes, which will be resolved in accordance with Section 5.10 (Audit Dispute) and patent validity disputes that are the subject of Section 12.4 (Patent Right Dispute Resolution) and will be resolved in accordance with Section 12.4 (Patent Right Dispute Resolution), any Dispute shall be determined by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules as supplemented by the matters set out in Schedule 12.2 (Arbitration Procedures) hereto. The number of arbitrators shall be three. The place of arbitration shall be Delaware and the language of the arbitration shall be English. Notwithstanding anything herein to the contrary, nothing in Section 12.1 (Disputes) or this Section 12.2 (Binding Arbitration) will preclude either Party from seeking from any court of competent jurisdiction interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute in accordance with Section 12.5 (Equitable Remedies), if necessary to protect the interests of such Party. This Section 12.2 (Binding Arbitration) will be specifically enforceable.

12.3

Tolling . The Parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches), as well as all time periods in which a Party must exercise rights or perform obligation hereunder, will be tolled once the dispute resolution procedures set forth in this ARTICLE 12 (Dispute Resolution) have been initiated and for so long as they are pending, and the Parties will cooperate in taking all actions reasonably necessary to achieve such a result. In addition, during the pendency of any Dispute under this Agreement initiated before the end of any applicable cure period (a) this Agreement will remain in full force and effect, (b) the provisions of this Agreement relating to termination for material breach with respect to such Dispute will not be effective, (c) the time periods for cure under Section 10.2 (Termination for Breach) as to any termination notice given prior to the initiation of the dispute resolution process set forth in this ARTICLE 12 (Dispute Resolution) will be tolled, (d) any time periods to exercise rights or perform obligations will be tolled, and (e) neither Party will issue a notice of termination pursuant to this Agreement based on the subject matter of the Dispute, until the arbitrators have confirmed the material breach and the existence of the facts claimed by a Party to be the basis for the asserted material breach in a final, unappealable decision; provided that if such breach can be cured by (i) the payment of money, then the defaulting Party will have an additional 10 days within its receipt of the arbitrator’s decision to pay such amount, or (ii) the taking of specific remedial actions, then the defaulting Party will have a reasonably necessary period to diligently undertake and complete such remedial actions within such reasonably necessary period or any specific timeframe established by such arbitrator’s decision before any such notice of termination can be issued. Further, with respect to any time periods that have run during the pendency of the Dispute, the applicable Party will have a reasonable period of time or any specific timeframe established by such arbitrator’s decision to exercise any rights or perform any obligations affected by the running of such time periods.

12.4

Patent Right Dispute Resolution . Notwithstanding any provision to the contrary set forth in this Agreement, any Dispute or claim relating to the scope, validity, enforceability, or infringement of any Patent Rights Covering the Exploitation of any Licensed Compound or Licensed Product will be submitted to a court of competent jurisdiction in the Territory in which such Patent Rights were granted or arose.

12.5

Equitable Remedies . Notwithstanding any provision to the contrary set forth in this Agreement, the Parties each stipulate and agree that a breach of Section 2.3 (Non-Compete) or ARTICLE 9 (Confidentiality) by a Party will cause irrevocable harm for which monetary damages would not provide a sufficient remedy, and in such case, the non-breaching Party will be entitled to equitable relief, including a specific performance, temporary or permanent restraining orders, preliminary injunction, or permanent injunction, or other equitable relief without the posting of any bond or other security, from any court of competent jurisdiction. In addition, and notwithstanding any provision to the contrary set forth in this Agreement, in the event of any other actual or threatened breach hereunder, the aggrieved Party may seek equitable relief (including specific performance, temporary or permanent restraining orders, or other equitable relief) from any court of competent jurisdiction without first submitting to the dispute resolution procedures set forth in ARTICLE 12 (Dispute Resolution).

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ARTICLE 13
MISCELLANEOUS

13.1

Entire Agreement; Amendment . This Agreement, including the Schedules hereto, sets forth the complete, final, and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions, and understandings between the Parties with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior term sheets, agreements and understandings between the Parties with respect to the subject matter hereof, including the CDA (which will remain effective prior to the Effective Date). No subsequent alteration, amendment, change, or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by an authorized representative of each Party.

13.2

Force Majeure . Neither Party will be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performance of its obligations under this Agreement to the extent that such performance is caused by or results from causes beyond reasonable control of the affected Party and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse will be continued so long as the condition constituting force majeure continues and the nonperforming Party makes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure will include conditions beyond the control of the Parties, including an act of God, war (whether war be declared or not), civil commotion, terrorist act, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm, or like catastrophe.

13.3

Notices . Any notice required or permitted to be given under this Agreement will be in writing, will specifically refer to this Agreement, and will be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 13.3 (Notices), and will be deemed to have been given for all purposes (a) when delivered, if hand-delivered, or sent by email on a Business Day, (b) on the next Business Day if sent by a reputable international overnight courier service, or (c) five Business Days after mailing, if mailed by first-class certified or registered airmail, postage prepaid, return receipt requested. Unless otherwise specified in writing, the mailing addresses of the Parties will be as described below:

If to Black Belt:	Stevenage Bioscience Catalyst
	Gunnels Wood Road
	Stevenage, Hertfordshire
	United Kingdom SG1 2FX
	Email: ***

If to CASI:	CASI Pharmaceuticals, Inc.
	9620 Medical Center Drive
	Suite 300
	Rockville, MD 20850
	Attention: ***
	Email: ***

With a copy to:	Ropes & Gray LLP
	Prudential Tower
	800 Boylston Street
	Boston, MA 02199-3600
	Attention: ***
	Email: ***

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13.4

No Strict Construction; Interpretation . This Agreement has been prepared jointly and will not be strictly construed against either Party. Any ambiguities in this Agreement will not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) “include,” “includes,” and “including” are not limiting; (b) “hereof,” “hereto,” “herein,” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) words of one gender include the other gender; (d) references to a contract or other agreement mean such contract or other agreement as from time to time amended, modified or supplemented; (e) references to a Person are also to its permitted successors and assigns; (f) references to an “Article,” “Section,” or “Schedule” refer to an Article or Section of, or Schedule to, this Agreement, unless expressly stated otherwise; (g) the word “or” will not be exclusive; (h) references to “written” or “in writing” include in electronic form; (i) the word “will” will be construed to have the same meaning and effect as the word “shall”; (j) references to a law include any amendment or modification to such law and any rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the date of this Agreement; and (l) headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.

13.5

Assignment . Black Belt may not assign or transfer this Agreement (in whole or in part) or any rights or obligations hereunder without the prior written consent of CASI, except that Black Belt may make such an assignment (in whole or in part) without CASI’s consent to (a) Affiliates or (b) a successor to all or substantially all of the business of Black Belt to which this Agreement relates, whether by merger, sale of stock, sale of assets, license, or other transaction or series of transactions; provided that any permitted assignee undertakes to CASI to be bound by the terms of this Agreement and perform all the obligations of Black Belt hereunder. CASI may not assign or transfer this Agreement (in whole or in part) or any rights or obligations hereunder without the prior written consent of Black Belt, except that CASI may make such an assignment (in whole or in part) without Black Belt’s consent to (a) its Affiliates or (b) a successor to all or substantially all of the business of CASI to which this Agreement relates, whether by merger, sale of stock, sale of assets, license, or other transaction or series of transactions but only if such assignee undertakes to Black Belt in writing to be bound by the terms of this Agreement and perform all the obligations of CASI hereunder. Any assignment or attempted assignment by either Party in violation of the terms of this Section 13.5 (Assignment) will be null, void, and of no legal effect.

13.6

Performance by Affiliates . CASI may discharge any obligations and exercise any right hereunder through any of its Affiliates. CASI hereby guarantees the performance by its Affiliates of CASI’s obligations under this Agreement, and will cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by CASI’s Affiliates of any of CASI’s obligations under this Agreement is a breach by CASI, and Black Belt may proceed directly against CASI without any obligation to first proceed against CASI’s Affiliates.

13.7

Further Actions . Each Party agrees to execute, acknowledge, and deliver such further instruments, and to perform all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

13.8

Severability . If any one or more of the provisions of this Agreement are held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, then such provision or provisions will be considered severed from this Agreement and will not serve to invalidate any remaining provisions hereof. The Parties will make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

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13.9

Binding Effect; No Third Party Beneficiaries . As of the Effective Date, this Agreement will be binding upon and inure to the benefit of the Parties and their respective permitted successors and permitted assigns. Except as expressly set forth in this Agreement, no Person other than the Parties and their respective Affiliates and permitted assignees hereunder will be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement.

13.10

No Implied Waivers; Rights Cumulative . No failure on the part of Black Belt or CASI to exercise, and no delay in exercising any Party’s rights, powers, remedies, or privileges under this Agreement, or provided by Law (whether at law, in equity, or otherwise), will impair, prejudice or constitute a waiver as to a particular default or breach of this Agreement, nor will any single or partial exercise of any such right, power remedy or privilege preclude any other or further exercise thereof such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time. The rights and remedies of the Parties under this Agreement are cumulative and not exclusive and, accordingly, are in addition to and not in lieu of any other rights and remedies of the Parties at law or in equity.

13.11

Independent Contractors . Each Party will act solely as an independent contractor, and nothing in this Agreement will be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way. Nothing herein will be construed to create the relationship of partners, principal and agent, or joint venture partners between the Parties.

13.12

English Language; Governing Law . This Agreement was prepared in the English language, which language will govern the interpretation of, and any dispute regarding, the terms of this Agreement. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof will be governed by and construed under the laws of the State of Delaware, without giving effect to any choice of law principles that would require the application of the laws of a different state or country. Subject to Article 12 (Dispute Resolution), the Parties hereby submit to the sole and exclusive jurisdiction of the federal and state courts in Wilmington, Delaware, for any action, suit, or other proceeding arising under or relating to this Agreement, and the Parties hereby irrevocably waive any right to object to the personal jurisdiction of such courts over the Parties, venue in such courts, or service of process issued or authorized by such courts.

13.13

Counterparts . This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Agreement may be executed by facsimile or electronically transmitted signatures and such signatures will be deemed to bind each Party as if they were original signatures.

[Remainder of Page Intentionally Left Blank]

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In Witness Whereof , the Parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.

CASI Pharmaceuticals, Inc.

By:	/s/ Wei-Wu He
Name:	Wei-Wu He
Title:	Chairman & Chief Executive Officer

Black Belt Therapeutics Limited

By:	/s/ Robert de Jonge
Name:	Robert de Jonge
Title:	Chief Executive Officer

SCHEDULE 1.4

ADIMAB AGREEMENT KEY TERMS

ARTICLE 1

DEFINITIONS

Capitalized terms not defined in this Schedule 1.4 (Adimab Agreement Key Terms) will have the meaning set forth in the Adimab Agreement.

1.4 “Adimab Materials” means any tangible biological or chemical materials (including all vectors, antibodies and other Know-How in the form of tangible biological or chemical materials) provided by Adimab to (a) Tusk under the Original Tusk Agreement or (b) Black Belt under a Research Program (other than commercially or publicly available materials), including quantities of Program Antibodies (and DNA encoding these Program Antibodies), but excluding from and after the time of Option exercise for the relevant Target any quantities of Optioned Antibodies (and DNA encoding these Optioned Antibodies) provided to (a) Tusk under the Original Tusk Agreement or (b) Black Belt for such Target.

1.5 “Adimab Platform Patents” means all Patents Adimab or any of its Affiliates Controls during the term of this Agreement that claim or Cover Adimab Platform Technology. For clarity, Adimab Platform Patents exclude Program Antibody Patents.

1.6 “Adimab Platform Technology” means (a) the discovery and optimization of antibodies via methods proprietary to Adimab that include the use of synthetic DNA antibody libraries and engineered strains of yeast, (b) all methods, materials and other Know-How proprietary to Adimab used in the foregoing and (c) platforms embodying, components, component steps and other portions of any of the foregoing in (a) or (b). For clarity, Adimab Platform Technology includes Adimab proprietary technology used in the discovery and optimization of any Program Antibody, but does not include the specific composition of such Program Antibody (or product containing a Program Antibody). For further clarity, Adimab’s proprietary Bispecific constructs are not considered Adimab Platform Technology.

1.7 “Adimab Platform Technology Improvement” means all Know-How developed or discovered in the course of a Research Program, and all Program Inventions (and Patents claiming them), in each case that constitute. Cover, claim or are directed to Adimab Platform Technology, including any and all improvements, enhancements, modifications, substitutions, alternatives or alterations to Adimab Platform Technology.

1.9 “Affiliate” means an entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with a Party. For this purpose, “control” means the ownership of fifty percent (50%) or more of the voting securities entitled to elect the directors or management of the entity, or the actual power to elect or direct the management of the entity. For clarity, neither DROIA Invest nor any of its portfolio companies shall be deemed an Affiliate of Black Belt solely by reason of DROIA Invest’s equity ownership in Black Belt and/or such other portfolio companies.

1.12 “ Back-Up Candidate ” has the meaning set forth in Section 4.4 ( Milestone Payments ).

1.13 “ Bispecific ” means an antibody with at least two binding regions which are distinct from one another. For example, the format commonly known as a “Morrison Construct” is a Bispecific. It expected that Bispecifics created under this Agreement and/or the Original Tusk Agreement will have ***.

1.17 “Black Belt Materials” means (a) any tangible biological or chemical materials (including antigen samples, antibodies and other Know-How in the form of tangible biological or chemical materials, including related sequences, clinical, biological or structural information) provided by (a) Tusk under the Original Tusk Agreement or (b) Black Belt, in each case to Adimab under a Research Program (other than commercial material purchased by Black Belt or Tusk and delivered to Adimab), and (b) from and after the time of the Option exercise for a Target, the quantities of Optioned Antibody to such Target provided to (a) Tusk under the Original Tusk Agreement or (b) Black Belt by Adimab under this Agreement. For clarity, any physical quantities of, and the sequence of, any antibodies against the Black Belt Target shall constitute Black Belt Materials.

1.19 “Black Belt Target” means a Target selected by Black Belt as the second Target for Bispecifics to be generated under the Research Program (in addition to the first Target, CD38). As of the Original Tusk Agreement Date, the Parties expect that the Black Belt Target shall be *** . During the Research Term, Black Belt may substitute the Black Belt Target by written notification to Adimab; provided, however , that, if such substitution substantially changes the scope or complexity of any of the Research Programs, the Parties will discuss and agree on an amendment of a Research Plan (including the budget contained therein) to reflect such substitution.

1.25 “Combination Product” means a product containing an Optioned Antibody as well as one or more other active therapeutic ingredient or a device or other component sold as a single product. Notwithstanding the foregoing, antibody-drug conjugates and Bispecifics shall be deemed not to be Combination Products.

1.26 “Confidential Information” has the meaning set forth in Section 6.1(a) (General Confidentiality Obligations ).

1.27 “Control” means, with respect to any Know-How or Patent, possession by a Party, whether by ownership or license (other than pursuant to this Agreement) of the ability to grant a license or sublicense as provided for in this Agreement without violating the terms of any written agreement with any Third Party.

1.28 “Cover” means, with respect to a particular item and a particular Patent, that such Patent claims, in any of the countries of manufacture, use, and/or sale, (a) the composition of such item; and/or (b) a method of making or using such item.

1.33 “Excluded Technology” means technology (and the Patents that Cover such technology) related to anything other than the manner in which Adimab constructed its antibody libraries, the manner in which Adimab discovers and/or optimizes the antibody, the Adimab Platform Technology, or its operation generally. Excluded Technology includes:

(a)

product formulation;

(b)

manufacturing or production;

(c)

the sequence of the CDRs of, or any modification to, a Program Antibody *** ;

(d)

technology used in activities performed by or on behalf of Black Belt or its Licensees, including assays, in vivo testing, and modifications to Program Antibodies;

(e)

any Target (including the Black Belt Target and CD38) or any mechanism of action via interaction with a Target or claiming antibodies based on their interaction with a Target or their having been tested for their activity against a Target in a biological assay; and

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(f)

any particular Bispecific construct, but excluding any antibody framework common in Adimab’s antibody library(ies).

1.34 “Field” means all diagnostic, therapeutic or prophylactic uses for human and/or animals.

1.42 “Know-How” means all technical information and know-how, including (i) inventions, discoveries, trade secrets, data, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and any other technology, including the applicability of any of the foregoing to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and (ii) all data, instructions, processes, formula, strategies, and expertise, whether biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical, analytical, clinical or otherwise and whether related to safety, quality control, manufacturing or other disciplines.

1.43 “Lead Product” has the meaning set forth in Section 4.4 (Milestone Payments).

1.44 “Licensee” means a Third Party to whom Black Belt has granted, directly or indirectly, rights to research, develop, manufacture, and/or commercialize Program-Benefited Antibodies; provided however, that Licensees shall exclude fee-for-service contract research organizations or contract manufacturing organizations acting in such capacity. For clarity, sublicensees of the license granted by Adimab to Black Belt pursuant to Section 3.2 (Commercial Rights) shall be Licensees.

1.46 “Marketing Approval” each means, with in any given country, approval to market a Product legally as a drug or biologic, including approval of a Biologic License Application (as defined in the U.S. Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder (21 C.F.R. §§ 600-680)) in the United States, or approval of a comparable filing in the United States or any other jurisdiction. Pricing approval need not be obtained in order for Marketing Approval to be achieved.

1.47 “Milestone Event” has the meaning set forth in Section 4.4 ( Milestone Payments) .

1.48 “Milestone Payment” has the meaning set forth in Section 4.4 (Milestone Payments).

1.50 “Net Sales” means the gross amounts invoiced for a Program Antibody or Product by Black Belt, its Affiliates and Licensees for sales or other commercial disposition of such Program Antibody or Product to a Third Party purchaser, less the following:

(a)

trade and quantity discounts (other than early pay cash discounts) actually allowed with respect to such sales which effectively reduce the selling price and are appropriately deducted from sales under appropriate accounting principles, consistently applied;

(b)

returns, rebates, chargebacks and other allowances actually allowed with respect to such sales;

(c)

retroactive price reductions that are actually allowed or granted;

(d)

deductions to the gross invoice price of Program Antibody or Product imposed by regulatory authorities or other governmental entities;

(e)

sales (such as VAT or its equivalent) and excise taxes, other consumption taxes, and customs duties (excluding any taxes paid on the income from such sales) to the extent the selling person is not otherwise entitled to a credit or a refund for such taxes or duties; and

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(f)

a fixed amount equal to two percent (2%) of the amount invoiced to cover bad debt, early payment cash discounts, transportation and insurance.

If any Optioned Antibody is sold as part of a Combination Product, the Net Sales for such Optioned Antibody shall be determined by multiplying the applicable Net Sales of the Optioned Antibody (as determined without the application of this paragraph) by the fraction, A/(A+B), where A is the average per unit sale price of the Optioned Antibody component of the Combination Product when sold separately as a stand-alone product in finished form in the country in which the Combination Product is sold and B is the average per unit sale of the other active ingredients, device and/or component contained in the Combination Product when sold separately as stand-alone products in finished form in the country in which the Combination Product is sold, in each case during the applicable royalty reporting period or if sales of such stand-alone products did not occur in such country in the applicable period, then in the most recent royalty reporting period in which such sales of such stand-alone products occurred in such country. If such average sale prices cannot be determined. Net Sales shall be mutually agreed upon by the Parties based on the relative value contributed by each component, such agreement not to be unreasonably withheld.

1.51 “Option” has the meaning set forth in Section 3.2(a) (Option) .

1.54 “Optioned Antibody” means any Program Antibody (a) selected by Black Belt pursuant to Section 3.2(a) (Option) or (b) have been selected by Tusk pursuant to Section 3.2(a) (Option) of the Original Tusk Agreement, and any Program-Benefited Antibody generated from such Program Antibody. For clarity, the Optioned Antibodies for the CD38 Research Program include the *** Program Antibodies listed in Exhibit A. Black Belt may option an additional *** Program Antibodies.

1.56 “Original Tusk Agreement” has the meaning set forth in the recitals.

1.58 “Party” means Adimab or Black Belt.

1.59 “Patent” means any patent application or patent anywhere in the world, including all of the following categories of patents and patent applications, and their foreign equivalents: provisional, utility, divisional, continuation, continuation-in-part, and substitution applications; and utility, re-issue, re-examination, renewal and extended patents, and patents of addition, and any Supplementary Protection Certificates, restoration of patent terms and other similar rights.

1.63 “ Product ” means any actual or potential product (including formulation) that comprises or contains one or more Optioned Antibodies (whether or not such product is currently under evaluation for safety, efficacy, or other factors). For clarity, it is possible that there will be multiple Products against a single Target and for further clarity, a Bispecific is a distinct Product from Products comprised of IgGs against one of the Targets engaged by the Bispecific.

1.64 “Program Antibody ” means (a) each antibody that has the same sequence of any antibody generated from use of the Adimab Platform Technology and delivered by Adimab to Tusk and/or Black Belt under the CD38 Research Program or *** (including Bispecifics) and (b) each antibody that has the same sequence of any antibody generated from use of the Adimab Platform Technology and delivered by Adimab to Black Belt under a Research Program (including Bispecifics). It is understood and agreed that (i) it is the intention of the Parties that Adimab will send samples as well as sequence information with respect to each Program Antibody as agreed upon by the Parties; and (ii) even if Adimab sends only nucleic acid sequences to Black Belt (or has sent such nucleic acid sequences to Tusk under the Original Tusk Agreement), antibodies encoded by such nucleic acid sequences are Program Antibodies in addition to antibodies samples of which are physically delivered to Black Belt under this Agreement (or to Tusk under the Original Tusk Agreement) so long as: (a) Adimab first coordinates with Black Belt prior to sending such sequences to confirm that Black Belt wishes to receive such sequences; and (b) if Black Belt identifies any sequences with respect to which Adimab did not deliver protein, then Adimab delivers to Black Belt the protein samples of such antibodies within thirty (30) days after Black Belt’s identification.

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1.65 “Program Antibody Patents” means, for each Target, Patents that (a) Cover a Program-Benefited Antibody or any Product and (b) do not Cover Adimab Platform Technology or Adimab Platform Technology Improvements. For clarity, Patents Covering the composition or sequence of a Program-Benefited Antibody, the nucleic acid sequence encoding such Program- Benefited Antibody, and/or any use of such Program-Benefited Antibody in the Field shall be deemed a Program Antibody Patent.

1.66 “Program-Benefited Antibody” means any Program Antibody and any modified or derivative form (including chemically modified versions) of any such Program Antibody created by or on behalf of Black Belt (or Tusk under the Original Tusk Agreement) or its Licensees using the materials and/or sequence of such Program Antibody, including (a) any fragment of, pegylated version of (whether or not including amino acid changes) of a Program Antibody, (b) any chemically-modified versions (including associated amino acid substitutions) of any Program Antibody or the nucleic acid coding for it designed or derived using the materials and/or sequence of any Program Antibody, and (c) an antibody designed or derived using the sequence of any Program Antibody or the nucleic acid coding for it.

1.68 “Program Inventions” means, for each Target, any invention, whether or not patentable, that is conceived and/or first reduced to practice in the course of or as a result of the activities conducted by the Parties in the course of the Research Program under this Agreement pursuant to a Research Plan.

1.72 “Research Program” means a program of research conducted under this Agreement (or under the Original Tusk Agreement) in accordance with a Research Plan. For clarity, the Research Programs completed under the Original Tusk Agreement discovered antibodies against CD38 ***. This Agreement contemplates *** additional Research Programs, each of which may include one (1) or more Discovery Campaign(s) and one (1) or more Bispecific Campaign(s), as agreed to by the Parties and set forth in a Research Plan.

1.74 “Research Term” means the period beginning on the Original Tusk Agreement Date and ending, on a Research Program-by-Research Program basis, when Adimab delivers final antibodies (including Bispecifics) against the applicable Target under a Research Plan; provided, however , that in no event will a Research Term exceed *** without the Parties’ mutual written agreement. *** .

1.73 “Royalty Payment” has the meaning set forth in Section 4.5(a) ( Royalties ).

1.77 “Target” means a target selected by (a) Black Belt pursuant to Section 2.1 (Research Programs) or (b) Tusk under the Original Tusk Agreement. For clarity, CD38 *** are Targets.

1.78 “Third Party” means an entity other than a Party or a Party’s Affiliates.

1.80 “Third Party Patent Licenses” means Patent licenses obtained by Black Belt after Black Belt determines in good faith that one or more such Patent licenses from Third Parties are reasonably required by Black Belt because such Patents Cover the way in which Program Antibodies were discovered or optimized using Adimab Platform Technology under a Third Party Patent Covering the Adimab Platform Technology (including the construction of Adimab’s proprietary libraries), in order to avoid Third Party claims of patent infringement relating to the discovery or optimization of a Optioned Antibody. For clarity, Third Party Patent Licenses explicitly excludes licenses to any Excluded Technology.

1.81 “Tusk” means TUSK Therapeutics n.v., a Belgian corporation with a principal office at Brusselsesteenweg 11, 1860 Meise, Belgium.

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1.82 “Valid Claim” means a claim of an Option Antibody Program Patent, which claim (i) is issued and unexpired and has not been found to be unpatentable, invalid or unenforceable by a court or other authority having jurisdiction, from which decision no appeal is taken, will be taken or can be taken; or (ii) is pending and has not been finally abandoned or finally rejected and has been pending for no more than eight (8) years.

ARTICLE 2

RESEARCH PROGRAMS

2.6 Certain Restrictions on the Use of Antibodies

(b)

Black Belt Restrictions. Black Belt hereby covenants that it will not, and it will not grant any right to its Affiliates and its Licensees to, develop or commercialize any Program-Benefited Antibody, or product containing any Program-Benefited Antibody (other than the activities permitted hereunder during the Research Term and the Evaluation Term for the purpose of determining whether or not to exercise the Option for such Target) except as Optioned Antibodies and Products under this Agreement .

ARTICLE 3

LICENSES; OPTION; DEVELOPMENT & COMMERCIALIZATION

3.1 Commercial Rights

(b)

Development and Commercialization License and Assignment

(ii)

License. Adimab hereby, effective on (a) Black Belt’s exercise of the Option and (b) Tusk's exercise of the Option under the Original Tusk Agreement in respect of the Optioned Antibodies against CD38 listed in Exhibit A (together with all of those further up to *** CD38 Antibody sequences that are specified by Black Belt to be Optioned Antibodies), grants to Black Belt a worldwide, royalty-bearing during the Royalty Term, non-exclusive, sublicenseable (solely as provided in Section 3.2(b)(iii) (Licensees) ) license under the Adimab Platform Patents, if any, which are not assigned to Black Belt pursuant to Section 3.2(b)(i) (Assignment), in the Field, to research, develop, have developed, make, have made, use, sell, offer to sell, import and export the Optioned Antibodies and Products during the term of this Agreement . For clarity, the license to Black Belt excludes the right to *** .

(c)

Licensees. Any license of any Optioned Antibody and any sublicense of the rights granted under Section 3.2(b)(ii) (License) shall be made solely pursuant to agreements that are consistent with all relevant terms and conditions of this Agreement and to Licensees who explicitly agree in writing to comply with all applicable terms, including Section 9.3 (Commitments Regarding Program-Benefited Antibodies) of this Agreement hereof. Black Belt shall remain responsible for all payments and other performance obligations due under this Agreement, notwithstanding any license or sublicense that it may grant.

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3.3 Diligent Development and Commercialization. Black Belt shall devote Commercially Reasonable Efforts to preclinically and if it exercises the Option, clinically develop, seek Marketing Approval for, and launch and actively commercialize at least one (1) Optioned Antibody discovered in each Research Program. Annually, Black Belt will provide Adimab with a written report of Product progress in development and commercialization, Black Belt’s activities in that regard. If requested by Adimab, Black Belt shall meet with Adimab to discuss such report at least annually.

ARTICLE 4

FINANCIAL TERMS

4.4 Milestone Payments. Black Belt shall report in writing to Adimab the achievement of each event (each, a “Milestone Event” ) and pay the corresponding milestone payment (each, a “Milestone Payment” ) to Adimab, each within *** days after the achievement of the corresponding Milestone Event in the following table:

Milestone Event		Milestone Payment
***		***
***		***
***		***
***		***
***		***
***		***

Milestones Payments are payable *** per Product, the first time each is achieved for such Product. If a subsequent Milestones Event is achieved for any Product without a prior Milestone Event having been achieved for that Product, then Black Belt shall pay the Milestone Payment for such previous Milestone Event along with the payment for the most recently achieved Milestone Event.

In the event that a milestone event that was already achieved with respect to a Lead Product is also achieved with respect to a Back-Up Candidate to such Lead Product prior to receipt of Marketing Approval for the Lead Product, then Black Belt’s obligation to pay the corresponding Milestone Payment with respect to the achievement of the applicable milestone event with respect to such Back-Up Candidate shall be *** . If Black Belt continues to develop such Back-Up Candidate after receipt of Marketing Approval for the Lead Product, *** . If Black Belt promptly discontinues all development activities with respect to a Back-Up Candidate upon Marketing Approval of the Lead Product and provides Adimab with written notice thereof within *** days after such Marketing Approval, *** . “Back-Up Candidate” means a Product that (a) is directed to the same Target (or, with respect to a Bispecific, the same set of targets) as another Product (the “Lead Product”), and (b) has been selected by Black Belt as a back-up to the Lead Product for development and commercialization.

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4.5 Royalties.

(a)

Royalty Payments. As to each Product sold during the applicable Royalty Term, on a Product-by-Product basis, Black Belt shall pay Adimab the following royalties, based on the royalty rate applicable to the relevant portion of annual worldwide Net Sales for such Product ( “Royalty Payments” ):

Portion of Worldwide Calendar Year Net Sales		Royalty Rate
***		***
*******		*******

(b)

Royalty Buy-Down. *** , and then, with respect to such Product, the royalty rate shall be *** instead of the royalty rates described in Section 4.5(a) (Royalty Payments) , subject to further adjustment as set forth in Section 4.5(c) (Adjustment for Third Party IP), as applicable.

(c)

Adjustment for Third Party IP. If Black Belt enters into any Third Party Patent Licenses, then *** of the net sales royalties actually paid to the Third Party under the Third Party Patent License with respect to Net Sales of any given Product in any given calendar quarter in any given country may be offset against the Royalty Payment, if any, that would otherwise have been payable to Adimab with respect to such same Net Sales; provided, however, that in no event shall the royalty owed to Adimab be reduced by more than *** than the payment which would otherwise be due hereunder.

*** .

(d)

Adjustment for Lack of Patent Protection. *** .

4.6 Quarterly Payment Timings. All royalties due under Section 4.5 ( Royalties ) shall be paid quarterly within *** days after the end of the relevant calendar quarter for which royalties are due.

4.8 Payment Method. All payments due under this Agreement to Adimab shall be made by bank wire transfer in immediately available funds to an account designated by Adimab. All payments hereunder shall be made in the legal currency of the United States of America, and all references to or “ dollars ” shall refer to United States dollars (i.e., the legal currency of the United States).

4.9 Taxes. ***.

4.10 Records; Inspection.

(a)

Black Belt shall keep complete and accurate records of its sales and other dispositions (including use in clinical trials, or provision on a compassionate use basis or as marketing samples) of Program Antibody and Product including all records that may be necessary for the purposes of calculating all payments due under this Agreement . Black Belt shall make such records available for inspection by an accounting firm selected by Adimab at Black Belt’s premises on reasonable notice during regular business hours no more frequently than once per calendar year. Adimab shall keep complete and accurate records of its FTEs expended on each Research Program. Adimab shall make such records available for inspection by an accounting firm selected by Black Belt at Adimab’s premises on reasonable notice during regular business hours no more frequently than once per calendar year.

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(b)

At Adimab’s expense no more than *** , Adimab has the right to retain an independent certified public accountant from a nationally recognized (in the U.S.) accounting firm to perform on behalf of Adimab an audit, conducted in accordance with U.S. generally accepted accounting principles (GAAP), of such books and records of Black Belt as are deemed necessary by the independent public accountant to report on Net Sales for the period or periods requested by Adimab and the correctness of any report or payments made under this Agreement .

(c)

If the audit reveals an underpayment, Black Belt shall promptly pay to Adimab the amount of such undisputed underpayment plus interest in accordance with Section 4.14 (Late Payments). If the audit reveals that the undisputed monies owed by Black Belt to Adimab has been understated by more than *** for the period audited, Black Belt shall, in addition, pay *** . If the audit reveals an overpayment, Adimab shall promptly refund Black Belt the amount of such undisputed overpayment.

4.12 Foreign Exchange. If any currency conversion shall be required in connection with the calculation of amounts payable hereunder, such conversion shall be made using the exchange rates reported on the *** business day prior the payment due date for the purchase and sale of U.S. dollars, as reported by the Wall Street Journal. With any payment in relation to which a currency conversion is performed to calculate the amount of payment due, Black Belt shall provide to Adimab a true, accurate and complete copy of the exchange rates used in such calculation.

4.13 Non-refundable, non-creditable payments. Each payment that is required under this Agreement is non-refundable (except as set forth in Section 4.10(c)) and non-creditable except to the extent set forth in Section 4.5(c) (Adjustment for Third Party IP).

4.14 Late Payments. Any amount owed by Black Belt to Adimab under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the rate of *** .

ARTICLE 6

CONFIDENTIALITY; PUBLICITY

6.1 General Confidentiality Obligations.

(a)

Any and all information disclosed or submitted in writing or in other tangible form (or if disclosed orally, that is indicated to be confidential at the time of disclosure) to one Party by or on behalf of the other Party under this Agreement or by Tusk under the Original Tusk Agreement or that certain Confidentiality Agreement between Tusk and Adimab dated September 22, 2014 is the “Confidential Information” of the disclosing Party and any such Confidential information of Tusk shall be the Confidential Information of Black Belt. In addition, information embodied in Adimab Materials is Adimab’s Confidential Information, and information embodied in the Black Belt Materials is Black Belt's Confidential Information. For clarity. *** .

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(b)

To avoid doubt, sequence information *** with respect to Program Antibodies shall be deemed the Confidential Information of both Black Belt and Adimab with the confidentiality and non-use obligations set forth in this Article 6 being applicable to both Parties, except that *** .

(c)

Each Party shall receive and maintain the other Party’s Confidential Information in strict confidence. Neither Party shall disclose any Confidential Information of the other Party to any Third Party. Neither Party shall use the Confidential Information of the other Party for any purpose other than as required to perform its obligations or exercise its rights hereunder. Each Party may disclose the other Party’s Confidential Information to the receiving Party’s employees and Third Party contractors (including collaborators, consultants and advisors, and in the case of Black Belt, including DROIA n.v.) requiring access thereto for the purposes of this Agreement , provided, however, that prior to making any such disclosures, each such person shall be bound by written agreement to maintain Confidential Information in confidence and not to use such information for any purpose other than in accordance with the terms and conditions of this Agreement . Each Party agrees to take all steps necessary to ensure that the other Party’s Confidential Information shall be maintained in confidence including such steps as it takes to prevent the disclosure of its own proprietary and confidential information of like character. Each Party agrees that this Agreement shall be binding upon its employees and contractors involved in the Research Program. Each Party shall take all steps necessary to ensure that its employees and contractors shall comply with the terms and conditions of this Agreement . The foregoing obligations of confidentiality and non-use shall survive, and remain in effect for a period of *** years from, the termination or expiration of this Agreement in accordance with Article 9 (Term).

6.2 Exclusions from Nondisclosure Obligation. The nondisclosure and nonuse obligations in Section 6.1 (General Confidentiality Obligations) shall not apply to any Confidential Information to the extent that the receiving Party can establish by competent written proof that it:

(a)

at the time of disclosure is publicly known;

(b)

after disclosure, becomes publicly known by publication or otherwise, except by breach of this Agreement by such Party;

(c)

was in such Party’s possession in documentary form at the time of the earlier of disclosure hereunder and disclosure under the agreement referred to in Section 6.1 (General Confidentiality Obligations) ;

(d)

is received by such Party from a Third Party who has the lawful right to disclose the Confidential Information and who shall not have obtained the Confidential Information either directly or indirectly from the disclosing Party; or

(e)

is independently developed by such Party (i.e., without reference to Confidential Information of the disclosing Party).

6.3 Required Disclosures . If either Party is required, pursuant to a governmental law, regulation or order, to disclose any Confidential Information of the other Party, the receiving Party (i) shall give advance written notice to the disclosing Party, (ii) shall make a reasonable effort to assist the other Party to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the law or regulation required and (iii) shall use and disclose the Confidential Information solely to the extent required by the law or regulation.

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6.4 Terms of Agreement. The terms of this Agreement are the Confidential Information of both Parties. However, each Party shall be entitled to disclose the terms of this Agreement under legally binding obligations of confidence and limited use to: legal, financial and investment banking advisors; and potential and actual investors, acquirers and licensees or sublicensees doing diligence and counsel for the foregoing. In addition, if legally required, a copy of this Agreement may be filed by either Party with the SEC (or relevant ex-U.S. counterpart). In that case, the filing Party will if requested by the other Party diligently seek confidential treatment for terms of this Agreement for which confidential treatment is reasonably available, and shall provide the non-filing Party reasonable advance notice of the terms proposed for redactions and a reasonable opportunity to request that the filing Party make additional redactions to the extent confidential treatment is reasonably available under the law. The filing Party shall seek and diligently pursue such confidential treatment requested by the non-filing Party.

6.5 Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party shall return to the other Party all tangible manifestations of such other Party's Confidential Information at that time in the possession of the receiving Party.

6.6 Publicity. Adimab may publish a press release, the text of which will be agreed by the Parties after the Effective Date. Other than repeating information in such press release (or any subsequent mutually agreed press release), neither Party will generate or allow any further publicity regarding this Agreement or the transaction or research contemplated hereunder in which the other Party is identified, without giving the other Party the opportunity to review and comment on the press release. The Parties recognize the importance of announcing Option and the achievement of Milestones, and that Adimab is entitled to disclose these occurrences. Accordingly, the Parties hereby agree that each such event shall be publicly announced by the Parties if requested by Adimab, and the Parties shall mutually agree upon the text of a press release to announce each such event. Black Belt shall not unreasonably withhold its consent to the manner in which Adimab proposes to make such disclosure. *** .

6.7 Certain Data. *** .

ARTICLE 8

INDEMNIFICATION

8.2 Indemnification by Black Belt. Black Belt hereby agrees that it and its Licensees shall Indemnify Adimab, its Affiliates and its and their directors, officers, agents and employees (collectively, “Adimab Indemnitees”) from and against any and all Losses they may suffer as the result of Third-Party Claims arising out of or relating to (a) any breach of a representation or warranty made by Black Belt under Article 7 ( Representations and Warranties ), (b) Black Belt’s research, testing, development, manufacture, use, sale, distribution, licensing and/or commercialization of Program Antibodies and/or Products (or Program-Benefited Antibodies or products incorporating them), (c) the use by Black Belt or its Licensees of any Excluded Technology, and (d) contractual obligations of Black Belt and its Affiliates, except in each case to the extent of any Losses (i) attributable to the negligence or intentional misconduct of any Adimab Indemnitee, or (ii) arising out of any breach of a representation or warranty made by Adimab in Article 7 ( Representations and Warranties).

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SCHEDULE 1.31
BLACK BELT PATENTS

Filing date	Application no.	Status	Subject matter
08 June 2017	***	***	***
08 June 2017	***	***	***
09 June 2017	***	***	***
09 June 2017	***	***	***
09 June 2017	***	***	***
09 June 2017	***	***	***
09 June 2017	***	***	***
09 June 2017	***	***	***
16 August 2017	***	***	***
16 August 2017	***	***	***
16 August 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
07 November 2017	***	***	***
8 June 2018	***	***	***
8 June 2018	***	***	***
8 June 2018	***	***	***
16 August 2018	***	***	***
16 August 2018	***	***	***

SCHEDULE 1.42

CELLCA AGREEMENT KEY TERMS

[6.

License Fee, Down-Payment

(1)

In consideration of the License granted by CELLCA to TUSK under the FSLA in relation to this Work Order TUSK agrees to pay CELLCA a license fee and therefore agrees to pay to CELLCA a Down-Payment in an overall amount of:

***

(2)

The Down-Payment shall become due and payable by TUSK to CELLCA

(a)

in the amount of *** , and

(b)

in the amount of *** .

(3)

The Down-Payment is payable *** .

SCHEDULE 1.75

LYOPHILIZATION MILESTONE SPECIFICATIONS

First Milestone Criteria :

***

Second Milestone Criteria :

***

SCHEDULE 1.145
TSK011010 COMPOUND (ADI-19348)

***

SCHEDULE 2.5

JOINDER SECTIONS

Section 2.3 (Non-Compete)

ARTICLE 3 (Transfers to CASI)

ARTICLE 9 (Confidentiality)

SCHEDULE 3.1

TECHNOLOGY TRANSFER PLAN

***

[ 2 pages omitted ]

SCHEDULE 5.2

UPFRONT EQUITY INVESTMENT TERM SHEET

***

SCHEDULE 7.2.15

MANUFACTURING AGREEMENTS

***

[ 2 pages omitted ]

SCHEDULE 7.2.18

NO ADDITIONAL PAYMENTS

Adimab Agreement

The Adimab Milestone Payments.

The Adimab Royalty Payments.

Cellca Agreement

The Cellca Milestone Payments.

***

SCHEDULE 12.2

ARBITRATION PROCEDURES

The Parties have agreed the following matters in respect of any Dispute referred to arbitration under this Agreement:

Number and Selection of Arbitrators . The number of arbitrators will be three, who will be selected as follows: each of CASI and Black Belt will nominate one arbitrator, in the case of the claimant at the same time as serving the Notice of Arbitration and, in the case of the respondent, at the same time as serving the Answer, and those Party-nominated arbitrators will unanimously nominate the third arbitrator (who will act as president of the Arbitral Tribunal, referred to in this clause 1 as the “ President Arbitrator ”), within 10 Business Days after the appointment of the last Party-nominated arbitrator. Each of the three arbitrators will have the following qualifications (as applicable, the “ Qualifications ”): for any other dispute, the Qualifications must be an attorney who has been admitted to practice law for at least 10 years and who has significant experience in the pharmaceutical or biologics industry; provided that if a Party is unable to find an arbitrator with the applicable Qualifications to nominate with respect to a particular Dispute, then it may request the Administrator of the ICDR to find and appoint such an arbitrator on its behalf. If the Party-nominated arbitrators are unable to agree upon the nomination of the President Arbitrator within 10 Business Days after the nomination of the last Party-nominated arbitrator, then the Administrator of the ICDR will appoint such President Arbitrator (with the applicable Qualifications) within 10 Business Days thereafter.

Limitation of Damages . The Arbitral Tribunal will be empowered to award damages only to the extent of actual damages suffered, and only to the extent consistent with Section 8.4 (Limitation of Liability) of this Agreement, in each case, regardless of whether any such damages are contained in a proposal submitted by a Party. The Arbitral Tribunal will not be authorized to reform, modify, or materially change this Agreement. Each Party will bear an equal share of the arbitrators’ fees and any administrative fees of arbitration.

Evidence . Notwithstanding any provision of the Arbitration Rules each Party will be permitted to obtain production of documents pursuant to Article 3 of the International Bar Association Rules on the Taking of Evidence in International Arbitration as current on the date of this Agreement (the “ IBA Rules ”).

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Wei-Wu He, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CASI Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2019

/s/ Wei-Wu He
Wei-Wu He
Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, George Chi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CASI Pharmaceuticals, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 15, 2019

/s/ George Chi
George Chi
Chief Financial Officer

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wei-Wu He, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Date: May 15, 2019		/s/ Wei-Wu He
		Wei-Wu He
		Chief Executive Officer

Exhibit 32.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George Chi, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Date: May 15, 2019		/s/ George Chi
		George Chi
		Chief Financial Officer