PATENT PURCHASE AGREEMENT

Exhibit 10.3

This Patent Purchase Agreement (“Agreement”) is effective as of September 26, 2014 (“Effective Date”) and is by and between Cellular Biomedicine Group, Inc. a Delaware corporation having an address at 000 Xxxxxxxxxx Xxxxxx, #00, Xxxx Xxxx, Xxxxxxxxxx 00000 (“CBMG”), and Xx. Xxxxx Xxxx Xxx, a citizen of the People’s Republic of China and permanent resident of the United States of America, having an address at 0000 XX 00xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (“Kou”). (CBMG and Kou may each be referred to as a “party” or together as the “parties” in this Agreement).

RECITALS

WHEREAS, Kou is the sole owner of all right, title, and interest in and the sole named inventor of United States Patent No. 7,375,211, entitled “Method for Detection and Quantification of T-Cell Receptor Vβ Repertoire,” issued by the United States Patent & Trademark Office (“USPTO”) on May 20, 2008, a copy of which is annexed hereto as Exhibit A (the “‘211 Patent”);

WHEREAS, on August 2, 2014, CBMG, CBMG HK (as defined below), Beijing Agreen Biotech Co. Ltd. (“Agreen”), and the shareholders of Agreen (Agreen and its shareholders, each, a “Seller Party”), entered into a Framework Agreement (the “Framework Agreement”) setting forth the terms of the acquisition by CBMG of business and technology of Agreen;

WHEREAS, as contemplated by the Framework Agreement, CBMG wishes to purchase from Kou, and Kou is desirous to sell and convey, the ‘211 Patent and any improvements thereon in exchange for CBMG issuing to Kou certain shares of common stock of CBMG;

WHEREAS, in consideration for receipt of such restricted stock units in and to CBMG, Kou shall execute the Patent Assignment, in the form annexed hereto as Exhibit B (“Patent Assignment”), in order to effect the assignment of the ‘211 Patent to Cellular Biomedicine Group HK Limited, a Hong Kong company limited by shares having an address at Xxxx 000, 0xx Xxxxx, Xxxxxxxx House, Xx.0 Xxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxx Xxxx. (“CBMG HK”);

WHEREAS, pursuant to the Framework Agreement, the parties also intend to enter into a Technology Transfer Agreement pursuant to which CBMG HK will acquire the technology of Agreen for cash consideration of RMB 10million plus 753,522 newly-issued shares of CBMG (the “Master Agreement” and, together with the Framework Agreement, this Agreement, and all other documents contemplated herein and therein, collectively, the “Transaction Documents” and each, a “Transaction Document”);

NOW, THEREFORE, in view of the mutual covenants, representations, warranties and agreements contained herein, and for consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties to this Agreement hereby agree as follows:

1. Sale. In exchange for the sum of seventy-five thousand (75,000) restricted shares of common stock of CBMG (the “Securities”), Kou shall sell and CBMG shall purchase the ‘211

Patent with the right to nominate CBMG HK as its designee to whom Kou shall assign the ‘211 Patent. Upon execution of this Agreement, Kou shall simultaneously execute the Patent

Assignment and provide such executed Patent Assignment to CBMG.

2. Completion of Transaction. The purchase shall be completed simultaneously with the closing date of the Master Agreement (the “Closing”), at which time Kou shall execute all instruments, including but not limited to, the Patent Assignment annexed hereto as Exhibit B that may be necessary to vest in CBMG HK absolute title in and to the ‘211 Patent. Within five (5) working days of the Closing, CBMG shall deliver to Kou a certificate representing the Securities which shall be duly issued, fully paid and non-assessable and free and clear of all Liens.

3. Improvements. If Kou shall at any time hereafter make or discover any improvements relating to the invention covered by the ‘211 Patent, the practice of which improvements would infringe upon, either literally or under the doctrine of equivalents, one or more claims of the ‘211 Patent, Kou shall forthwith disclose to CBMG the full details of such improvements and such improvements shall be the sole and absolute property CBMG. Kou hereby assigns, conveys, and transfers to CBMG any such improvements. Kou shall, if requested, execute any and all further documents at CBMG’s sole expense and do and execute all acts, things and instruments necessary for obtaining any patents on such improvements and for vesting title in and to such patents in CBMG or CBMG’s designee(s), as the case may. Both parties hereby agreed that this article shall be subject to the Labor Agreement and its supplementary agreement, Intellectual Property Agreement, and Agreement on Protection of Commercial Secrets and Intellectual Property Rights which shall all be signed by Kou and CBMG.

4. Lockup of Securities. Kou hereby agrees to enter into a Lock-up Agreement covering all securities of CBMG owned directly or indirectly by Kou, including the Securities to be issued pursuant to this Agreement, for a period of twelve (12) months from the date of such agreement. Such Lock-up Agreement will be executed and effective simultaneously with this Agreement and the execution of the Master Agreement.

5. Unwinding in the Event of Breach. The Securities will be subject to repurchase by CBMG pursuant to Sections 6.5(1) or 7.1 of the Framework Agreement in the event of a material breach by Kou, Agreen or any Seller Party of any Transaction Document.

6. Representations and Warranties Relating to the ‘211 Patent. To the best of Kou’s knowledge on and before the effective date of this Agreement, Kou represents and warrants that: (i) the ‘211 Patent is valid and enforceable; (ii) the ‘211 Patent is not the subject of any action, lawsuit, or proceeding, including but not limited to, any action, lawsuit, or proceeding where the validity or enforceability of the ‘211 Patent may be at issue; (iii) there is no third party who may be infringing any claim of the ‘211 Patent; (iv) no third party has alleged or sent any communication to Kou that the ‘211 Patent may be invalid or unenforceable; and (v) there are no other filed or pending applications in the USPTO or other equivalent foreign agency in Kou’s name or that may name Kou as an inventor and that may claim any invention related to the ‘211 Patent, including but not limited to, applications designated as continuations, continuations-in-part, provisionals, or divisionals; and (v) if there are such applications, they are assigned in accordance with the terms of the Patent Assignment.

7. Representations and Warranties Relating to the Securities. Kou hereby represents and warrants to CBMG, as follows:

a. The Securities are being acquired for Kou’s own account, not as nominee or agent, for investment purposes only and not with a view to the resale or distribution of any part thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”) or any other law, rule or regulation, foreign or domestic. Kou has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act or any other law, rule or regulation, foreign or domestic.

x. Xxx did not learn of the investment in the Securities as a result of any public advertising or general solicitation, and is not aware of any public advertisement or general solicitation in respect of CBMG or its securities.

x. Xxx is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks of this investment and to make an informed decision relating thereto. Kou has the financial capability for making the investment and the investment is a suitable one for Kou. Kou can, without impairing his financial condition, hold the Securities for an indefinite period of time and can afford a complete loss of the investment. Kou acknowledges that CBMG has urged Kou to seek independent advice from professional advisors relating to the suitability of an investment in CBMG and in connection with this Agreement, and that Kou has sought and received such independent professional advice with respect to such investment and this Agreement or, after careful consideration, Kou has determined to waive its right to seek and/or receive such independent professional advice.

d. Prior to the execution of this Agreement, Kou has had the opportunity to ask questions of and receive answers from representatives of CBMG concerning an investment in CBMG, as well as the finances, operations, business and prospects of CBMG, and the opportunity to obtain additional information to verify the accuracy of all information so obtained. Kou has read and reviewed CBMG’s latest periodic and current report filings on the Securities and Exchange Commission’s XXXXX webpage at xxx.xxx.xxx, including the audited and unaudited financial statements, description of business operations, risk factors and other disclosures set forth therein.

x. Xxx acknowledges and understands the Securities are being offered in a transaction not involving a public offering within the meaning of the Securities Act. The Securities have not been registered under the Securities Act, and, if in the future, in accordance with the terms of this Agreement, Kou decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only: (i) pursuant to an effective registration statement filed under the Securities Act, (ii) pursuant to an exemption from registration under Rule 144 promulgated thereunder (“Rule 144”), if available, or (iii) pursuant to any available other exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any other jurisdiction. Kou agrees that if any assignment, disposition, transfer, pledge of or similar action with respect to its Securities or any interest therein is proposed to be made by Kou or its affiliates, as a condition precedent to any such action, Kou shall be required to deliver to CBMG an opinion of counsel satisfactory to CBMG that such action does not violate the Securities Act or the rules and regulations thereunder. Absent registration or an available exemption from registration, Kou agrees that it will not take any such action with respect to the Securities. Kou understands the certificates representing the Securities will contain a legend in respect of such restrictions.

f. The execution, delivery and performance by Kou of this Agreement is within Kou’s legal right, power and capacity, requires no action by or in respect of or filing with, any governmental body, agency or official and does not and will not contravene, or constitute a default under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order decree or other instrument to which Kou is a party or by which the undersigned or any of its properties are bound. This Agreement constitutes the legal, valid and binding obligation of Kou and is enforceable against Kou in accordance with its respective terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

8. Governing Law. This Agreement shall be governed by the law of the State of New York.

[Signature page follows]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective the date first written above.

XX. XXXXX XXXX XXX

By: /s/ Xxxxx Xxxx Kou

Date: 9/28/14

CELLULAR BIOMEDICINE GROUP, INC.

By: /s/ Xxxxxxx Xxx

Title: CEO

Date: 9/26/14

EXHIBIT A

EXHIBIT B

PATENT ASSIGNMENT

THIS PATENT ASSIGNMENT (the “Assignment”) is made and entered into as of September 26, 2014, by and between, Xx. Xxxxx Xxxx Xxx, a citizen of the People’s Republic of China and permanent resident of the United States of America, having an address at 0000 XX

00xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (“Assignor”), and Cellular Biomedicine Group HK Limited, a Hong Kong company limited by shares having an address at Xxxx 000, 0xx Xxxxx, Xxxxxxxx House, Xx.0 Xxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxx Xxxx (“Assignee”).

WHEREAS, Assignor has agreed to assign and transfer to Assignee certain patent rights, including, without limitation, the patents and patent applications set forth on Schedule A hereto (hereafter, the “Patents”); and

WHEREAS, Assignee is desirous of acquiring all of Assignor’s right, title, and interest in and to the Patents along with all worldwide causes of action for past, present, and future infringements or unauthorized uses of the same along with the right to collect and retain any proceeds therefrom.

NOW THERFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby sell, assign, transfer and set over to Assignee, all of Assignor’s right, title, and interest in and to said Patents including, without limitation, any patents, patent applications whether provisional, utility, or design, as well as any divisional, continuation, continuation-in-part, substitution, reissue, renewal, reexam, continued prosecution applications (“CPA”), or request for continued examination (“RCE”) thereof, and in and to all inventions thereon, preparatory to obtaining any patents, to be held and enjoyed by Assignee, its successors, assigns, or other legal representatives, to the full end of the term thereof, as may be extended by law as fully and entirely as the same would have been held and enjoyed by Assignor if this Assignment had not been made along with all worldwide causes of action for past, present, and future infringements or other unauthorized use of the Patents including, without limitation, the right to collect and retain any proceeds therefrom.

For the same consideration, Assignor does hereby sell, assign, transfer and set over to Assignee all of Assignor’s right, title, and interest in and to any foreign and international applications related to and/or seeking benefit of said Patents or applications for said Patents, and in and to all inventions and improvements thereon (herein referred to as “Related Foreign Applications”), in and to any protective rights granted on said Related Foreign Applications, and in and to the right to claim any applicable priority rights arising from or required for said Related Foreign Applications under the terms of any applicable conventions, treaties, statutes, or regulations, said Related Foreign Applications to be filed and issued in the name of Assignee or its designee, insofar as permitted by applicable law.

Assignor expressly agrees to execute, acknowledge, and deliver, such documents and other instruments as may be requested by Assignee to evidence or effectuate the sale, assignment, transfer, conveyance, and delivery of the Patents to Assignee from Assignor.

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be executed by a duly authorized representative to be effective as of the date set forth above.

	XX. XXXXX XXXX XXX

	By:	/s/ Xxxxx Xxxx Kou
		Name
		Date: 9/28/14

ACCEPTED AND AGREED:

CELLULAR BIOMEDICINE GROUP HK LIMITED

By: /s/ Xxxxxxx Xxx

Name: Xxxxxxx Xxx

Title:

Date: 9/26/14

SCHEDULE A

United States Patent No. 7,375,211 entitled "Method for Detection and Quantification of T-Cell Receptor VβRepertoire" issued by the United States Patent & Trademark Office ("USPTO") on May 20, 2008

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PATENT PURCHASE AGREEMENT

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