On June 12, 2020, Xenetic Biosciences Inc. and PJSC Pharmsynthez entered into a Master Service Agreement (the "Agreement") to advance the development of the Company's XCART technology for B-cell malignancies. Under the Agreement, Pharmsynthez has agreed to provide services pursuant to work orders agreed upon by the parties from time to time, which services include, but are not limited to, acting as the Company's primary contract research organization to assist in managing collaborations with multiple academic institutions in Russia and Belarus. The Company is required to pay reasonable fees, expenses and pass-through costs incurred by Pharmsynthez in providing the services in accordance with a budget and payment terms set forth in each work order. Additionally, in the event that a work order provides for milestone payments, the Company is required to make such payments to Pharmsynthez, or third party service providers designated by Pharmsynthez, in accordance with the terms set forth in the work order, which milestone payments may be made, at the sole discretion of the Company, in cash or shares of the Company's common stock. The Agreement terminates and supersedes the Sponsored Research Agreement (the "SRA"), dated August 12, 2019, between the Company and Pharmsynthez. Unless earlier terminated, the term of the Agreement continues from the date of the Agreement for five years or until the completion of services under all active work orders, if later. The Agreement or any work order may be terminated by the Company with 30 days advance written notice to Pharmsynthez. The Agreement or any work order may further be terminated by either party in the event of the other party's uncured material breach under the Agreement or the bankruptcy of the other party.