Item 1.01. Entry into Material Definitive Agreement.
On March 30, 2019, Cytori Therapeutics, Inc. (the “Company”) and its subsidiary, Cytori Therapeutics, K.K., entered into an Asset and Equity Purchase Agreement (the “Purchase Agreement”), dated as of March 29, 2019, with Lorem Vascular Pte. Ltd., (“Lorem”), pursuant to which, among other things, Lorem agreed to purchase the Company’s UK subsidiary and the Company’s Cell Therapy assets, excluding such assets used for Japan or relating to the Company’s contract with the Biomedical Advanced Research Development Authority (“BARDA”). The Company will continue its Cell Therapy business in Japan and its ongoing research under the BARDA contract.
Under the terms of the Purchase Agreement, the Company will receive $4.0 million, consisting of amounts paid for the UK subsidiary and Cell Therapy assets, as well as the repayment of intercompany receivables from the Company’s UK subsidiary. Entry into the Purchase Agreement satisfies the requirement for the Company to enter into an asset sale agreement with minimum unrestricted net cash proceeds to the Company of $4.0 million under the Loan and Security Agreement, dated May 29, 2015, as amended, with Oxford Finance LLC and the lenders party thereto.
Lorem is currently the exclusive licensee for the Company’s Cell Therapy products in all fields of use in China, Hong Kong, Singapore, Malaysia and Australia under the terms of the Amended and Restated License and Supply Agreement dated January 30, 2014, by and between the Company and Lorem. This License and Supply Agreement will be terminated upon the consummation of the transactions under the Purchase Agreement.
Pursuant to the Purchase Agreement, the Company’s Lease Agreement entered into on April 2, 2010, with HCP Callan Rd, LLC will be assigned to Lorem, subject to the consent of HCP Callan Rd, LLC.
Both the Company and Lorem have made customary representations, warranties and covenants in the Purchase Agreement, which is subject to termination by either the Company or Lorem upon the occurrence of specified events. The transaction is expected to close on or before April 30, 2019, subject to the satisfaction or waiver of various conditions.
The Purchase Agreement has been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company or Lorem. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such Purchase Agreement, and may be subject to important limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby is subject to and qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 hereto and the terms of which are incorporated herein by reference.