Vericel Corporation (NASDAQ:VCEL) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

License Agreement.

On May9, 2017, Vericel Corporation (Vericel or the Company)
entered into a license agreement (the License Agreement) with
(Innovative Cellular Therapeutics CO.,LTD.) (ICT) to which the
Company granted ICT an exclusive license to certain patent
rights, know-how and other intellectual property relating to
Epicel,Ixmyelocel-T, MACI and Carticel (the Licensed Products).

Under the agreement,ICT obtained exclusive rights to research,
develop, use, make, have made, offer to sell, have offered to
sell, sell, have sold, supply, cause to be supplied, import,
export, transfer, and otherwise develop, manufacture and
commercialize the Licensed Products and certain improvements
thereto in greater China (including mainland China, Taiwan, Hong
Kong and Macau), South Korea, Vietnam, Laos, Cambodia, Thailand,
Myanmar, Malaysia,Indonesia, East Timor, Philippines, Brunei and
Singapore (the Territory), including certain rights to grant
sublicenses. The licensed patent rights include any patent right
controlled by Vericel or its affiliates as of the effective date
or during the term of the License Agreement that is necessary or
useful for the Licensed Products or the development, manufacture
or commercialization thereof, but excluding certain improvement
patent rights. Vericel reserves for itself the non-exclusive
right to research, develop, use, make, have made, supply, cause
to be supplied, and import or transfer for the sole purpose of
the foregoing, Licensed Products in the Territory solely for
internal use or to conduct pre-clinical research, including
manufacturing Licensed Products for use in the performance of
such research. The development activities of both Vericel and ICT
with respect to the Licensed Products will be overseen by a joint
steering committee.

Within sixty days after May9, 2017,ICT shall pay Vericel
$6,000,000 (the Upfront Payment), less certain withholding taxes
described below. The initiation of the technology transfer and
the license grants in the License Agreement are contingent upon
Vericels receipt of the Upfront Payment.

Vericel is also eligible to receive from ICT up to an aggregate
of $7,750,00 for milestone payments related to development and
commercialization in the Territory. ICT has also agreed to pay
tiered royalties to Vericel in the low double digits (such
royalty rates to be dependent on the annual aggregate net sales
of the applicable Licensed Product) for the commercial life of
the applicable Licensed Product, with a deduction on a country by
country and Licensed Product by Licensed Product basis, in the
event any competitive product to such Licensed Product is sold in
a country in the Territory.

The foregoing description of the material terms of the License
Agreement does not purport to be complete and is subject to, and
is qualified in its entirety by, reference to the License
Agreement, which will be filed as an exhibit to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2017
or as an amendment to this Form 8-K.

Warrant.

In connection with the entry into the License Agreement and to
the Side Letter, dated May 9, 2017, by and between Vericel and
ICT, upon Vericels receipt of the Upfront Payment, and as
consideration for an amount included in the Upfront Payment equal
to $5,000,000.00 minus the withholding income taxes payable
thereon (such amount, the Warrant Purchase Price), the Company
will issue ICT a warrant (the Warrant) to purchase, at an
exercise price of $0.01 per share, an aggregate number of shares
of the Companys common stock, equal to the Warrant Purchase Price
divided by (y)2.55, rounded down to the nearest whole number. The
Warrant will be exercisable for three months from the day of
issuance.

The foregoing description of the terms of the Warrant is only a
summary and is qualified in its entirety by reference to the
Formof Warrant, a copy of which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.

Item 3.02. Unregistered Sales of Equity
Securities.

The information provided in Item 1.01 of this Current Report on
Form8-K is incorporated by reference into this Item 3.02.

About Vericel Corporation (NASDAQ:VCEL)

Vericel Corporation, formerly Aastrom Biosciences, Inc., is a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. The Company operates through the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases segment. Its autologous cell therapy products include Carticel (autologous cultured chondrocytes), which is an autologous chondrocyte implant for the treatment of cartilage defects in the knee, and Epicel (cultured epidermal autografts), which is a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns. The Company is developing MACI, which is a third-generation autologous chondrocyte implant and ixmyelocel-T, which is a patient-specific multicellular therapy.

Vericel Corporation (NASDAQ:VCEL) Recent Trading Information

Vericel Corporation (NASDAQ:VCEL) closed its last trading session 00.00 at 2.65 with 192,949 shares trading hands.