Item 1.01. Entry into a Material Definitive Agreement.
On September 12, 2019, Fibrocell Science, Inc., a Delaware corporation (the "Company"), Castle Creek Pharmaceutical
Holdings, Inc. ("Castle Creek"), and Castle Creek Merger Corp., a Delaware corporation and wholly owned subsidiary of Castle Creek ("Merger Sub"), entered into an Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which, and on the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the "Merger"). The Company will survive
the Merger as a wholly owned subsidiary of Castle Creek.
Subject
to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each share of common stock of the Company issued and
outstanding immediately prior to the Effective Time (other than shares held directly by Castle Creek or Merger Sub and shares owned by Company stockholders who have exercised their appraisal rights
under Delaware law) will be converted into the right to receive $3.00 in cash, without interest (the "Merger Consideration").
In
addition, after the Effective Time, each share of the Company's Series A Convertible Preferred Stock (the "Preferred Stock") will remain outstanding (until converted by the
holders thereof pursuant to the Consent and Termination Agreement, as defined below), and will thereafter only represent the right to receive an amount in cash, without interest, equal to
(i) the number of shares of common stock underlying each share of Preferred Stock multiplied by (ii) the Merger Consideration. After the Effective Time, each outstanding Company warrant
shall be generally entitled to receive (i) upon any subsequent exercise, an amount equal to the Merger Consideration less the exercise price for such warrant, or (ii) if eligible
pursuant to the terms of the warrant, upon notification by the holder of such warrant to the Company within 30 days of the Effective Time, an amount equal to the Black-Scholes
value of the warrant. Each stock option issued under the Company's equity incentive plans outstanding immediately prior to the Effective Time, whether vested or unvested, will accelerate and be
converted into the right to receive in cash an amount equal to the Merger Consideration minus the exercise price of such stock option.
The
Merger Agreement contains customary representations and warranties of the Company, Castle Creek and Merger Sub, and customary pre-closing covenants, including covenants requiring the
Company (i) to conduct its business in the ordinary course, and (ii) to refrain from taking certain actions without Castle Creek's consent.
Castle
Creek has obtained financing commitments for the purpose of financing the Merger.
In
addition, the Merger Agreement requires that the Company refrain from soliciting proposals relating to alternative transactions or, subject to certain exceptions, enter into
discussions concerning, or provide information in connection with, alternative transactions. Prior to the adoption of the Merger Agreement by the Company's stockholders, the Company's Board of
Directors may not, without first complying with certain conditions set forth in the Merger Agreement and solely in response to a Superior Proposal (as defined in the Merger Agreement),
(i) adopt, approve or recommend, or publicly propose to adopt, approve or recommend, any Acquisition Proposal (as defined in the Merger Agreement), (ii) withdraw, change, qualify,
withhold or modify, or publicly propose to withdraw, change, qualify, withhold or modify, its recommendation that the Company's stockholders adopt the Merger Agreement, (iii) fail to include in
the proxy statement to be filed in connection with the Merger the Board of Directors' recommendation that the Company's stockholders adopt the Merger Agreement, (iv) fail to recommend against
any tender offer that constitutes an Acquisition Proposal subject to Regulation 14D under the Securities Exchange Act of 1934, as amended, (v) approve, authorize or cause or permit the
Company or its subsidiaries to enter into any acquisition agreement or similar agreement relating to any Acquisition Proposal, or (vi) fail to publicly affirm the Company's Board of Directors'
recommendation that the Company's stockholders adopt the Merger Agreement within five business days following receipt of a written request to do so from Castle Creek (collectively, a "Change of Board
Recommendation").
Pursuant
to the terms of the Merger Agreement, the consummation of the Merger is subject to certain other customary closing conditions, including, but not limited to, the approval of the
Merger by the Company's stockholders, the receipt of regulatory clearances (to the extent required), the continued effectiveness of certain of the Company's contracts, accuracy of the representations
of the Company and the absence of a material adverse effect with respect to the Company, and that no more than 8% of the holders of the outstanding shares of the Company's common stock have exercised
or purported to exercise statutory appraisal rights under Delaware law with respect to such shares of common stock.
Subject to the satisfaction of the closing conditions, the parties anticipate that the Merger will be consummated during the fourth quarter of 2019.
The
Merger Agreement contains certain termination rights for the Company and Castle Creek. Upon termination of the Merger Agreement under specified circumstances, the Company will be
required to pay Castle Creek a termination fee of $2,000,000.
The
foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is
filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The summary and the copy of the Merger Agreement are intended to provide information
regarding the terms of the Merger Agreement and are not intended to modify or supplement any factual disclosures about the Company in its public reports filed with the U.S. Securities and Exchange
Commission ("SEC"). The assertions embodied in the representations and warranties included in the Merger Agreement were made solely for purposes of the contract among the Company, Castle Creek and
Merger Sub and are subject to important qualifications and limitations agreed to by the Company, Castle Creek and Merger Sub in connection with the negotiated terms, including being qualified by
confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Moreover, some of
those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to the
Company's SEC filings or may have been used for purposes of allocating risk among the Company, Castle Creek and Merger Sub rather than establishing matters as facts. Investors should not rely on the
representations and warranties or any description of them as characterizations of the actual state of facts of the Company, Castle Creek, Merger Sub or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, and this subsequent information may or may not
be fully reflected in the Company's public disclosures. The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether
additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Current Report on Form 8-K not misleading.
Item 1.02. Termination of a Material Definitive Agreement
In connection with the execution of the Merger Agreement, on September 12, 2019 the Company also entered into a Consent and Termination
Agreement with MSD Credit Opportunity Master Fund L.P. ("MSD"), Merger Sub and Castle Creek, and a separate Consent and Termination Agreement with Merger Sub, Castle Creek and the following affiliates
of Randal J. Kirk: Third Security, LLC, NRM VII Holdings I, LLC, Kapital Joe, LLC, Mascara Kaboom, LLC and Intrexon Corporation (the "Kirk Affiliates", and collectively,
the "Termination Agreements"). Pursuant to the terms of the Termination Agreements, that certain Securities Purchase Agreement, dated March 7, 2017, by and among the Company and the purchasers
named on the signature pages therein (the "Securities Purchase Agreement") will be terminated as of immediately prior to the closing of the Merger. As
consideration for entry into the Termination Agreements, the Kirk Affiliates and MSD will each receive a promissory note to be issued by the surviving corporation following the Merger, in each case
for an amount equal to (and in addition to) the consideration such party is entitled to pursuant to the Merger Agreement in connection with such party's ownership of shares of Preferred Stock.
Pursuant to the Termination Agreements and in addition to the foregoing, each of MSD and the Kirk Affiliates also agree to the
treatment
of the Preferred Stock under the Merger Agreement and agree to release all claims related to such party's ownership of equity in the Company. The foregoing description of the Termination
Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Termination Agreements, which are filed as Exhibits 10.1 and 10.2 to this
Current Report on Form 8-K and incorporated herein by reference.