Delaware	001-34375	33-0827593
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

	□	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	□	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	□	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	□	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Exhibit No.		Exhibit Description
2.1		Asset and Equity Purchase Agreement, dated as of March 29, 2019, by and among Cytori Therapeutics, Inc., Lorem Vascular Pte. Ltd., and with respect to Section 6.06 only, Cytori Therapeutics, K.K. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed April 1, 2019)*
2.2		Asset and Share Sale and Purchase Agreement, dated as of April 19, 2019, by and among Cytori Therapeutics, Inc. and Seijirō Shirahama (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed April 23, 2019)*

	CYTORI THERAPEUTICS, INC.
Date:  April 30, 2019	By: /s/ Gary Titus
	Gary Titus
	Chief Financial Officer

 

ARTICLE I DEFINITIONS .........................................................................................................1

 

SECTION 1.01 Certain Defined Terms ...............................................................................1

SECTION 1.02 Interpretation and Rules of Construction .................................................11

 

ARTICLE II PURCHASE AND SALE .....................................................................................12

 

SECTION 2.01 Purchase and Sale of the Equity Interests ................................................12

SECTION 2.02 Purchase and Sale of Purchased Assets ...................................................13

SECTION 2.03 Assumption and Exclusion of Liabilities .................................................15

SECTION 2.04 Closing .....................................................................................................16

SECTION 2.05 Closing Deliveries by Seller ....................................................................16

SECTION 2.06 Closing Deliveries by Buyer ....................................................................18

SECTION 2.07 Tax Withholding ......................................................................................18

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER..........................18

 

SECTION 3.01 Organization, Authority and Qualification of Seller................................18

SECTION 3.02 No Conflict...............................................................................................19

SECTION 3.03 Ownership of the Equity Interests............................................................20

SECTION 3.04 Governmental Consents and Approvals...................................................20

SECTION 3.05 Financial Information...............................................................................20

SECTION 3.06 Books and Records; Controls...................................................................20

SECTION 3.07 Absence of Undisclosed Material Liabilities ...........................................20

SECTION 3.08 Conduct in the Ordinary Course ..............................................................21

SECTION 3.09 Litigation ..................................................................................................22

SECTION 3.10 Compliance with Laws.............................................................................22

SECTION 3.11 Intellectual Property .................................................................................24

SECTION 3.12 Insurance ..................................................................................................27

SECTION 3.13 Real Property............................................................................................27

SECTION 3.14 Purchased Assets ......................................................................................28

SECTION 3.15 Sufficiency of Assets ...............................................................................28

SECTION 3.16 Condition of Assets ..................................................................................28

SECTION 3.17 Inventories................................................................................................28

SECTION 3.18 Employees and Employee Benefit Matters ..............................................29

SECTION 3.19 Environmental Matters.............................................................................32

SECTION 3.20 Taxes ........................................................................................................32

SECTION 3.21 Material Contracts....................................................................................35

SECTION 3.22 Products....................................................................................................35

SECTION 3.23 Relationships with Suppliers, Customers and Distributors......................36

SECTION 3.24 Relationships with Affiliates....................................................................36

SECTION 3.25 Brokers .....................................................................................................37

SECTION 3.26 Capitalization ...........................................................................................37

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER............................38

 

SECTION 4.01 Organization and Authority of Buyer ......................................................38

SECTION 4.02 No Conflict...............................................................................................38

SECTION 4.03 Governmental Consents and Approvals...................................................39

SECTION 4.04 Litigation ..................................................................................................39

SECTION 4.05 Brokers .....................................................................................................39

SECTION 4.06 Financial Capacity; Solvency...................................................................39

 

ARTICLE V ACTIONS PRIOR TO THE CLOSING DATE.................................................39

 

SECTION 5.01 Third-Party Consents ...............................................................................39

SECTION 5.02 Conduct of Business Prior to the Closing ................................................39

SECTION 5.03 Best Efforts ..............................................................................................40

SECTION 5.04 Confidentiality .........................................................................................40

SECTION 5.05 Notification of Certain Events .................................................................40

SECTION 5.06 Exclusivity ...............................................................................................40

SECTION 5.07 Access to Information ..............................................................................40

SECTION 5.08 Crossed Books and Records and Software ..............................................41

SECTION 5.09 Termination of Affiliate Contracts...........................................................41

 

ARTICLE VI ADDITIONAL AGREEMENTS .......................................................................41

 

SECTION 6.01 Confidentiality .........................................................................................41

SECTION 6.02 Business Relationships.............................................................................41

SECTION 6.03 Crossed Payments ....................................................................................42

SECTION 6.04 Further Assurances...................................................................................42

SECTION 6.05 Bulk Transfer Laws..................................................................................42

SECTION 6.06 Non-Competition .....................................................................................42

SECTION 6.07 Cooperation ..............................................................................................44

SECTION 6.08 Termination of Current License Agreement ............................................44

SECTION 6.09 Employees and Employee Benefits..........................................................44

SECTION 6.10 Third Party Consents................................................................................45

SECTION 6.11 Intercompany Indebtedness......................................................................45

 

ARTICLE VII TAX MATTERS ................................................................................................46

 

SECTION 7.01 Conveyance Taxes ...................................................................................46

SECTION 7.02 Tax Allocation..........................................................................................46

SECTION 7.03 Tax Cooperation.......................................................................................46

SECTION 7.04 Tax Returns ..............................................................................................46

SECTION 7.05 Purchase Price Allocation ........................................................................47

 

ARTICLE VIII CONDITIONS TO CLOSING........................................................................48

 

SECTION 8.01 Buyer Closing Conditions ........................................................................48

SECTION 8.02 Seller Closing Conditions ........................................................................49

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ARTICLE IX INDEMNIFICATION.........................................................................................50

 

SECTION 9.01 Survival of Representations and Warranties ............................................50

SECTION 9.02 Indemnification by Seller .........................................................................50

SECTION 9.03 Indemnification by Buyer ........................................................................51

SECTION 9.04 Limits on Indemnification........................................................................51

SECTION 9.05 Notice of Loss; Third Party Claims .........................................................52

SECTION 9.06 Tax Treatment of Indemnification Payments...........................................53

SECTION 9.07 Effect of Investigation; Effect on Indemnity ...........................................53

SECTION 9.08 No Double Recovery................................................................................54

SECTION 9.09 Remedies ..................................................................................................54

 

ARTICLE X TERMINATION ...................................................................................................54

 

SECTION 10.01 Termination ............................................................................................54

SECTION 10.02 Effect of Termination .............................................................................55

 

ARTICLE XI GENERAL PROVISIONS .................................................................................55

 

SECTION 11.01 Expenses.................................................................................................55

SECTION 11.02 Notices ...................................................................................................55

SECTION 11.03 Public Announcements ..........................................................................56

SECTION 11.04 Severability ............................................................................................57

SECTION 11.05 Entire Agreement ...................................................................................57

SECTION 11.06 Assignment.............................................................................................57

SECTION 11.07 Amendment; Remedies Cumulative ......................................................57

SECTION 11.08 Waiver ....................................................................................................58

SECTION 11.09 No Third-Party Beneficiaries .................................................................58

SECTION 11.10 Currency .................................................................................................58

SECTION 11.11 Governing Law ......................................................................................58

SECTION 11.12 Waiver of Jury Trial ...............................................................................58

SECTION 11.13 Attorneys’ Fees ......................................................................................59

SECTION 11.14 Time of Essence .....................................................................................59

SECTION 11.15 Counterparts ...........................................................................................59

SECTION 11.16 Specific Performance .............................................................................59

 

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EXHIBITS

 

Exhibit A       Form of Seller License Agreement Exhibit B       Form of Buyer License Agreement Exhibit C       Supply Agreement Terms

 

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INDEX OF DEFINED TERMS

 

 

 

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This ASSET AND EQUITY PURCHASE AGREEMENT (this “Agreement”), dated as of March 29, 2019, is by and among Cytori Therapeutics, Inc., a Delaware corporation (“Seller”), Lorem Vascular Pte. Ltd., a company incorporated in Singapore (“Buyer”), and with respect to Section 6.06 only, Cytori Therapeutics, K.K., a kabushiki kaisha organized under the laws of Japan.

 

Seller and Buyer are sometimes referred to herein individually as a “Party” and

collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Seller owns all of the issued and outstanding equity interests of

Cytori Ltd., a private limited company registered in the United Kingdom (“Cytori UK”);

 

WHEREAS, Seller and Cytori UK are engaged in the Business;

 

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Purchased Assets, and in connection therewith, Buyer is willing to assume from Seller the Assumed Liabilities, all upon the terms and subject to the conditions set forth herein;

 

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of the issued and outstanding equity interests of Cytori UK (such equity interests, collectively, the “Equity Interests”) and

 

WHEREAS, concurrently with the Closing, the Parties (or Cytori UK, as applicable) shall enter into the Ancillary Agreements.

 

NOW, THEREFORE, in consideration of the mutual benefits to be derived from this Agreement, the representations, warranties, conditions, agreements and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I DEFINITIONS

SECTION 1.01 Certain Defined Terms. For purposes of this Agreement:

 

“Action”   means   any   claim,   action,   grievance,   suit,   arbitration,   inquiry, proceeding, investigation, audit, hearing or litigation by or before any Governmental Authority or arbitrator.

 

“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person, for so long as such Person controls, is controlled by or is under common control with such first Person.

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“Ancillary Agreements” means the Buyer License Agreement, the Seller License Agreement, the Supply Agreement, the Transition Services Agreement, the Reverse Transition Services Agreement, the Assignment and Assumption Agreement, the Assignment of Lease, the Intellectual Property Assignment, and Securities Transfer Agreement.

 

“Assignment and Assumption Agreement” means the Bill of Sale and Assignment and Assumption Agreement to be executed by Seller and Buyer at the Closing, in form and substance reasonably acceptable to Buyer.

 

“Assignment of Lease” means the Assignment of Lease to be executed by Seller at the Closing with respect to the Leased Real Property (other than such Leased Real Property of Cytori UK, which will be indirectly transferred to Buyer through the sale of Cytori UK), in form and substance reasonably acceptable to Buyer.

 

“Books and Records”) means the books of account, general, financial records, invoices, shipping records, supplier, correspondence and other documents, records and files, sales and promotional literature, customer lists and other sales related materials, electronic mail, electronic records, all other books and records of Seller and any rights thereto, in each case, excluding the Clinical Files, any Contracts and any Plans.

 

“Business” means Seller’s cell therapy business of extracting a unique mixed population of stem, progenitor and regenerative cells from human and/or animal adipose tissue for the treatment of disease and for other purposes utilizing proprietary hardware and software- based devices and single-use reagents and consumable sets, including but not limited to Seller’s cell banking expertise and technology.

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are closed in San Diego, California.

 

“Business Intellectual Property”   means all Intellectual Property owned by, or filed by or on behalf of, Seller or any of its Affiliates that is being or has been used in or created for use in the Business in the Territory.

 

“Buyer License Agreement” means the License Agreement to be executed by Cytori Japan and Buyer at the Closing whereby Buyer will license certain Intellectual Property to Cytori Japan, in form attached hereto as Exhibit A.

 

“Capital Stock” means (a) any shares, interests, participations or other equivalents (however designated) of capital stock of a corporation; (b) any ownership interests in a Person other than a corporation, including membership interests, partnership interests, joint venture interests and beneficial interests; and (c) any warrants, options, convertible or exchangeable securities, subscriptions, rights (including any preemptive or similar rights), calls or other rights to purchase or acquire any of the foregoing.

 

“Clinical Files”  means (a) all clinical and regulatory files, filings, correspondences and reports (including submission information) with any Governmental Authority; (b) all preclinical research, testing, validations and data; and (c) all clinical trial or

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study documents, protocols, reports, trial date (including complete master files, clinical summary reports, data listings, data tables, and all raw data used to generate such tables and listings).

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Contract” means any agreement, contract, Lease, obligation, promise or undertaking (whether written or oral and whether express or implied).

 

“Control” (including  the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by Contract, credit arrangement or otherwise.

 

“Conveyance Taxes” means any and all sales, use, value added, goods and services, transfer, documentary, stamp, recording and similar taxes, fees and charges, together with any interest, penalties, or additions to tax with respect thereto.

 

“Current Good Manufacturing Practice” means current good manufacturing practice for the methods used in, and the facilities and controls used for, the manufacture of Seller’s products, all as set forth from time to time by the FDA pursuant to the FDCA (including regulations, rules, guidance, and policies), and similar regulations, rules, standards, and policies as prescribed by Governmental Authorities in other jurisdictions.

 

“Cytori Japan” means Cytori Therapeutics, K.K., a kabushiki kaisha organized under the laws of Japan.

 

“Disclosure Schedule” means the Disclosure Schedule attached hereto, dated as of the date hereof, delivered by Seller to Buyer in connection with this Agreement.

 

“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien, encumbrance, charge, claim, community or other marital property interest, condition, equitable interest, option, right of way, easement, encroachment, servitude, right of first option, right of first refusal or similar restriction, including any restriction on use, voting (in the case of any security or equity interest), transfer, right to receipt of income or right to exercise of any other attribute of ownership.

 

“Environment” means soil, land surface or subsurface strata, surface waters (including navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or natural resource.

 

“Environmental Laws”   shall mean any Law relating to pollution, protection or cleanup of the Environment, including, CERCLA, the Resources Conservation and Recovery Act of 1976, as amended (“RCRA”), and any other federal, state, and local legal requirements relating to:   (a) a Release or the Cleanup of a Hazardous Material; (b) the manufacture, generation, formulation, processing, labeling, distribution, introduction into commerce, use,

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treatment, handling, storage, or transportation of a Hazardous Material; and (c) exposure of Persons, including employees, to a Hazardous Material, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of asbestos, asbestos- containing materials, polychlorinated biphenyls or any other Hazardous Material.

 

“Environmental Liabilities” means any Liabilities or losses arising from or under any Environmental Law, including, without limitation, those consisting of or relating to: (a) any fine, penalty, judgment, award, settlement, legal or administrative proceeding, Loss, claim, demand or response, remedial or inspection cost or expense arising under any Environmental Law; (b) financial responsibility under any Environmental Law for cleanup costs or corrective action, including any cleanup, removal, abatement, containment or other remediation or response actions (“Cleanup”) required by any Environmental Law (whether or not such Cleanup has been required or requested by any Governmental Authority or any other Person); or (c) any other compliance, corrective or remedial measure required under any Environmental Law. The terms “removal,” “remedial” and “response action” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”).

 

“FDCA” means the Federal Food, Drug, and Cosmetic Act and FDA regulations promulgated pursuant thereto.

 

“Fundamental Representations” means the representations and warranties set forth in Section 3.01 (Organization, Authority and Qualification of Seller), Section 3.03 (Ownership of the Equity Interests), Section 3.14 (Purchased Assets), Section 3.19 (Environmental Matters), Section 3.20   (Taxes),   Section 3.25   (Brokers),   Section 3.26   (Capitalization),   Section 4.01 (Organization and Authority  of Buyer), Section 4.05 (Brokers), and Section 4.06 (Financial Capacity; Solvency).

 

“GAAP” means United States generally  accepted accounting  principles as in effect from time to time and applied consistently throughout the periods involved.

 

“Governmental Authority” means any foreign, domestic, federal, territorial, national, supranational, state, provincial, local or other government, governmental, regulatory, self-regulatory or administrative authority, notified body, agency or commission or any court, tribunal, board, bureau or judicial or arbitral body.

 

“Governmental Order” means any order, writ, judgment, injunction, decree, assessment, stipulation, determination or award entered by or with any Governmental Authority or arbitrator.

 

“Hazardous Material” shall mean any toxic substance or hazardous waste, pollutant, or substance, contaminant, or any toxic or hazardous constituent of any such substance or waste, including any substance regulated under or defined by Environmental Laws.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by, or which customarily would be evidenced by, bonds, debentures, notes or similar instruments, (c) all reimbursement obligations of such Person with respect to letters of credit and similar

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instruments, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person incurred, issued or assumed as the deferred purchase price of property  other than accounts payable incurred and paid on terms customary in the business of such Person (it being understood that the “deferred purchase price” in connection with any purchase of property or assets shall include only that portion of the purchase price which is deferred beyond the date on which the purchase is actually consummated), (f) all obligations secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all obligations of such Person under forward sales, futures, options and other similar hedging arrangements (including interest rate hedging or protection agreements), (h) all obligations of such Person to purchase or otherwise pay for merchandise, materials, supplies, services or other property under an arrangement which provides that payment for such merchandise, materials, supplies, services or other property shall be made regardless of whether delivery of such merchandise, materials, supplies, services or other property is ever made or tendered, (i) all capitalized lease obligations of such Person, (j) accrued but unpaid Taxes, and (k) all guaranties by such Person of any obligation mentioned in the foregoing clauses (a) through (j).

 

“Indemnified Party” means a Buyer Indemnified Party or a Seller Indemnified

Party, as the case may be.

 

“Indemnified Taxes” means (a) all Taxes (or the non-payment thereof) imposed on or with respect to the Seller, (b) all Taxes (or the non-payment thereof) imposed on or with respect to Cytori UK with respect to any Pre-Closing Tax Period (as determined, with respect to any Straddle Period, in accordance with the provisions of Section 7.02); (c) all Taxes of any affiliated, consolidated, combined or unitary group of which the Seller or Cytori UK is or was a member on or prior to the Closing Date, including pursuant to Treasury  Regulations Section 1.1502-6 or any analogous or similar state, local, or non-U.S. Law; (d) all Taxes imposed upon the Seller or Cytori UK as a transferee or successor, or by contract, Law or otherwise which Taxes relate to an event or transaction occurring before the Closing; (e) the cost of preparing, filing, amending and defending any Tax Return for a Pre-Closing Tax Period or Straddle Period; (f) all Taxes attributable to any inclusion under Section 951 or Section 951A of the Code by Buyer or its Affiliates at the end of the taxable year of Cytori UK that includes, but does not end on the Closing Date, arising out of income accrued or transactions undertaken by Cytori UK on or prior to the Closing Date, (g) any Tax imposed on the Seller or Cytori UK as a result of an election made by such Seller or Cytori UK on or before the Closing Date under Section 108(i) of the Code; and (h) any Taxes for a Post-Closing Tax Period with respect to any adjustment to income under Code Section 481 of the Code (or any similar provision of Law) or otherwise as a result of any change in method of accounting of Cytori UK to the accrual method of accounting from the cash receipts and disbursements method of accounting.

 

“Indemnifying Party” means Seller pursuant to Section 9.02 and Buyer pursuant to Section 9.03, as the case may be.

 

“Intellectual Property” means all worldwide intellectual property and all right, title and interest therein, including, without limitation, (a) all patents and patent applications,

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utility models, design registrations and certificates of invention and other governmental grants for the protection of inventions or industrial designs (including all related continuations, continuations-in-part, divisionals, reissues and reexaminations), invention disclosures, utility models, invention disclosures, inventions and discoveries, whether or not patented or patentable and whether or not reduced to practice, improvements thereto, and other rights of invention (the items in clause (a), collectively, “Patents”); (b) registered and unregistered trademarks, service marks, trade names, trade dress, brand marks, brand names, logos, product names and slogans, including any common law rights, registrations and applications for the foregoing (the items in clause (b), collectively, “Trademarks”); (c) all registered and unregistered copyrights, in both published and unpublished works including copyrights in computer software, copyrightable works, website content, other rights of authorship and exploitation, and any applications, registrations and renewals in connection therewith (the items in clause (c), collectively, “Copyrights”); (d) all rights in mask works; (e) all know-how, trade secrets, confidential or proprietary information, customer lists, technical information, data, confidential or proprietary process technology, plans, drawings and blue prints (the items in clause (e), collectively, “Trade Secrets”); (f) all Software; (g) all rights in internet web sites and internet domain names (such web sites and internet domain names collectively referred to as “Domain Names”) ; and (h) rights to exclude others from appropriating any of such Intellectual Property, including the right to  sue for an  remedies against past,  present and future infringements of any or all  of the foregoing and rights of priority and protection of interests therein, and any other proprietary, intellectual property and other rights relating to any or all of the foregoing anywhere in the world.

 

“Intellectual Property Assignment” means the assignment(s) transferring all of Seller’s right, title and interest in and to the Business Intellectual Property of Seller, in form and substance reasonably acceptable to Buyer.

 

“Inventories” means any and all product inventories of the Business, wherever located, including all finished goods, work-in-process, raw materials, spare parts and all other materials and supplies to be used or consumed by Seller or its Affiliates in the production of finished goods for the Business.

 

“IRS” means the Internal Revenue Service of the United States.

 

“Law” means any  applicable foreign, international, federal, national, supranational, state, provincial, local, municipal or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law), in each of the foregoing cases, as amended or may be amended.

 

“Lease” means any lease of Real Property or other lease or rental agreement, or license, right to use or installment and conditional sale agreement to which Seller is a party and any other Contract pertaining to the leasing or use of any Tangible Personal Property.

 

“Leased Real Property” means (i) the Real Property leased by Seller or Cytori UK, as tenant, described on Section 3.13(a) of the Disclosure Schedule, and (ii) all easements, licenses, rights and appurtenances relating to the foregoing.

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“Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown, disputed or undisputed, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.

 

“Licensed  Intellectual Property” means all Intellectual Property licensed by a Person to Seller or any its Affiliates that is being or has been used by Seller or any of its Affiliates in the Business in the Territory.

 

“Material Adverse Effect” means (a) with respect to Seller, any circumstance, change in or effect on the Business in the Territory that is materially adverse to the results of operations, assets, Liabilities or the financial condition of the Business in the Territory; provided, however, that “Material Adverse Effect” shall not include the following, and none of the following, either alone or in combination, shall be considered in determining whether there has been a “Material Adverse Effect”: (i) events, circumstances, changes or effects that generally affect the industries in which the Business operates in the Territory (including  legal and regulatory changes) to the extent such conditions do not disproportionately impact the Business in the Territory compared to other businesses that operate in the same industry or industries as the Business in the Territory and as compared to the industry as a whole; (ii) general economic or political conditions or events, circumstances, changes or effects affecting  the securities markets or credit markets generally; (iii) changes arising from the consummation of the transactions contemplated by, or the announcement of the execution of, this Agreement; (iv) any circumstance, change or effect that results from any action taken pursuant to or in accordance with this Agreement or at request of Buyer; (v) changes caused by a material worsening of current conditions caused by acts of terrorism or war (whether or not declared) occurring after the date hereof or any natural or man-made disaster or acts of God; and (vi) any matter of which Buyer is aware on the date hereof solely to the extent set forth on the Disclosure Schedule and (b) with respect to Buyer, any circumstance, change or effect that is materially adverse to the ability of Buyer to consummate timely the transactions contemplated by this Agreement.

 

“Neutral Accounting Firm” means an independent accounting firm of nationally recognized standing that is not at the time it is to be engaged hereunder rendering services to any Party, or any Affiliate of either, and has not done so within the two year period prior thereto.

 

“Occupational Safety and Health Law” means any Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, including the Occupational Safety and Health Act, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

 

“Open Source Software” means any Software that is subject to, distributed, transmitted, licensed or otherwise made available under any so-called “public license,” “open source license,” “free license,” “industry standard license,” “intellectual property pool license” or similar license that requires, as a condition of use, modification and/or distribution of such Software that other Software incorporated into, derived from or distributed with such Software be (a) disclosed or distributed in source code form, (b) licensed for the purpose of making

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derivative works, or (c) be redistributable at no charge, including any version of any of the following licenses: GNU General Public License, GNU Library or “Lesser” Public License, or any substantially similar license.

 

“Ordinary Course of Business”   means, with respect to an action taken by a Person, that such action (a) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person; (b) does not require authorization by the board of directors or shareholders of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature; and (c) is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person. No violation of law or contractual obligations shall be deemed in the Ordinary Course of Business.

 

“Organizational Documents” of a Person means its articles of incorporation,

articles of organization, bylaws and/or other organizational documents, as applicable.

 

“Owned Real Property” means the Real Property in which Seller or its Affiliates (to the extent related to the Business in the Territory) has fee title (or equivalent) interest, together with all buildings and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property of Seller (to the extent related to the Business in the Territory) attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing.

 

“Permit” means all approvals, authorizations, clearances, notifications, consents, licenses, registrations, permits, permit applications, and other rights issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law.

 

“Permitted Encumbrances” means (a) statutory liens for current Taxes not yet due and payable or the validity or amount of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP, (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the Ordinary Course of Business relating to obligations as to which there is no default on the part of Seller, as the case may be, or the validity or amount of which is being contested in good faith by appropriate proceedings, or workers’ or unemployment compensation liens arising  in the Ordinary Course of Business, (c) zoning, entitlement, conservation restriction and other land use and environmental regulations by Governmental Authorities which do not materially interfere with the present use of the Purchased Assets, (d) all covenants, conditions, restrictions, easements, charges, rights-of-way, other Encumbrances and similar matters of record set forth in any state, provincial, local or municipal franchise of Seller, which do not materially interfere with the present use of the Purchased Assets, and (e) matters which would be disclosed by an accurate survey or inspection of the Real Property which do not materially impair the occupancy or current use of such Real Property which they encumber.

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“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date, and, with respect to any Straddle Period, the portion of such Straddle Period beginning after the Closing Date.

 

“Pre-Closing Tax  Period” means any taxable period ending on or before the Closing Date, and, with respect to any Straddle Period, the portion of such Straddle Period ending on the Closing Date.

 

“Purchased Permits” means all Permits used in, or necessary to, the operation of the Business in the Territory, including, to test, manufacture, market, supply or distribute the products of the Business in the Territory, including, but not limited to, all Premarket Approval Applications, 510(k) notifications, Investigational Device Exemptions, quality and other certificates issued by notified bodies and all other marketing authorizations issued by Governmental Authorities which are used by Seller or its Affiliates to test, sell, manufacture and distribute the products of the Business in the Territory.

 

“Purchase Price” means $3,000,000.

 

“Real Property” means all land, buildings, improvements and fixtures erected thereon and all appurtenances related thereto.

 

“Reference Date” means December 31, 2018.

 

“Registered Intellectual Property”   means all Intellectual Property consisting of federal, state, international, and other: (a) Patents; (b) Trademarks; (c) Copyrights; (d) mask work registrations and applications to register mask works; (e) Domain Names; and (f) other Intellectual Property assets that are the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any Governmental Authority owned, or filed by or on behalf of, or purported to be owned by Seller or its Affiliates and used in the conduct of the Business in the Territory.

 

“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, escaping, leaching, dumping or disposing of a Hazardous Material into the Environment of any kind whatsoever, including the abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing Hazardous Material.

 

“Reverse Transition Services Agreement” means the Reverse Transition Services Agreement to be executed by  Seller and Buyer at the Closing, in a form and substance reasonably acceptable to Buyer.

 

“SEC” means the United States Securities and Exchange Commission.

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“Securities Transfer Agreement” means the instrument of transfer transferring all of Seller’s right, title and interest in and to Equity Interests to Buyer, in form and substance reasonably acceptable to Buyer.

 

“Seller’s Knowledge” “Knowledge of Seller” or similar terms used in this Agreement means the actual or constructive knowledge of each of Marc Hedrick, Tiago Girao, John Fraser, and Cheri Rice, after due inquiry.

 

“Seller License Agreement” means the License Agreement to be executed by Cytori Japan and Buyer at the Closing whereby Cytori Japan will license certain Intellectual Property to Buyer, in form attached hereto as Exhibit B.

 

“Software” means any and all computer programs, whether in source code or object code; databases and compilations, whether machine readable or otherwise; descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and all documentation including  user manuals and other training  documentation related to any of the foregoing. For clarity, Software does not include emails.

 

“Straddle Period” means any taxable period beginning on or before the Closing

Date and ending after the Closing Date.

 

“Supply Agreement” means the Supply Agreement to be executed by Seller and Buyer at the Closing, in form and substance reasonably acceptable to Buyer and consistent with the terms summarized in Exhibit C.

 

“Tangible   Personal   Property”     means   all   furniture,   fixtures,   machinery, equipment, tools, computer hardware, supplies, materials, lab equipment, manufacturing, testing, storage and shipping related equipment, and other items of tangible personal property of every kind (in each case other than Inventory, Books and Records, Software and Clinical Files) owned or leased by Seller or any of its Affiliates and used in, or necessary to, the Business in the Territory (wherever located and whether or not carried on Seller’s books), together with any express or implied warranty by the manufacturers, sellers or lessors of any item or component part of Tangible Personal Property (as otherwise defined) and all maintenance records and other documents relating thereto.

 

“Tax” or “Taxes” means any  and all income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, escheat, abandoned or unclaimed property, environmental, stamp, occupation, premium, property (real or personal), Real Property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, imposed, assessed or collected by or under the authority of any Taxing Authority or payable pursuant to any Tax-sharing agreement or other agreement relating to the payment of any such tax, fee, assessment or charge, whether imposed directly, under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a result of being a transferee, successor or member of an affiliated, consolidated, unitary or combined group, by Contract (other than commercial

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Contracts entered into in the Ordinary Course of Business that do not primarily relate to Taxes), pursuant to Law or otherwise.

 

“Tax Return” means any return, report, form, statement or claim for refund (including elections, declarations, schedules, information returns or attachments thereto) filed or required to be filed with a Taxing Authority with respect to Taxes, including any amendment thereof.

 

“Taxing Authority” means, with respect to any Tax, the Governmental Authority that imposes such Tax or is charged with the collection of such Tax.

 

“Territory” means the entire world, other than Japan.

 

“Transaction Expenses” means the aggregate (i) amount of fees and expenses incurred by Seller, Cytori UK and their Affiliates incident to the negotiation, preparation and execution of this Agreement, the Ancillary  Agreements and the consummation of the transactions contemplated hereby and thereby (other than Conveyance Taxes, which are separately allocated in accordance with Section 7.01), and (ii) amount payable under any employment agreement, severance plan or any other arrangement, in effect at any time prior to the Closing, under which certain rights are triggered solely by a change in control or as a result of the transactions contemplated herein.

 

“Transition Services Agreement” means the Transition Services Agreement to be executed by Seller and Buyer at the Closing, in form and substance reasonably acceptable to Buyer.

 

“Treasury Regulations” means the regulations (including temporary regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal Tax statutes.

 

SECTION 1.02 Interpretation and Rules of Construction. In this Agreement:

 

(a)       except to the extent otherwise  provided or  that the context otherwise requires, wherever used, the singular includes the plural, the plural includes the singular, the use of any gender shall be applicable to all genders;

 

(b)       the word “or” is used in the inclusive sense (and/or);

 

(c)       the table of contents and captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement;

 

(d)       the term “including” or its variations as used herein does not limit the generality of any description preceding such term and shall be construed as “including, without limitation”;

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(e)       the language  of this Agreement shall be  deemed to be  the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party;

 

(f)       unless otherwise specified or where the context otherwise requires,

 

(i)        references in this Agreement to any Article, Section, Schedule or Exhibit are references to such Article, Section, Schedule or Exhibit of this Agreement, and references to this “Agreement” are references to this Agreement and all exhibits and schedules hereto;

 

(ii)       references  in  any Section to  any clause are references  to  such clause of such Section;

 

(iii)      “hereof,” “hereto,” “hereby,” “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;