cryolife8k120809.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
washington,
d.c. 20549
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): December 2,
2009
_______________________
CRYOLIFE,
INC.
(Exact
name of registrant as specified in its charter)
_________________________
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Florida
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1-13165
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59-2417093
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1655
Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address
of principal executive office) (zip code)
Registrant's
telephone number, including area code: (770) 419-3355
_____________________________________________________________
(Former
name or former address, if changed since last report)
_________________________
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section 1Registrant’s Business and
Operations
Item 1.02Termination of a Material Definitive
Agreement.
CryoLife, Inc. (“CryoLife” or the
“Company”) and Medafor, Inc. (“Medafor”) are parties to an exclusive
distribution agreement (the “Agreement”) whereby CryoLife distributes Hemostase,
an absorbable blood clotting agent manufactured and developed by
Medafor. On December 2, 2009, Medafor informed CryoLife of its belief
that CryoLife has materially breached its duties and obligations under the
Agreement and gave CryoLife notice of its intent to terminate the Agreement if
the breach is not cured by January 8, 2010. While Medafor contends
that a material breach has occurred because CryoLife has pursued sales in Spain
with respect to certain uses that are excluded from the Agreement, CryoLife
believes a court would find that a material breach of the Agreement has not
occurred, and that, in the event a material breach has occurred, that CryoLife
would be able to cure it by January 8, 2010. As such, CryoLife does
not believe the Agreement will terminate on January 8, 2010.
Medafor and CryoLife have agreed that
if Medafor decides after January 8, 2010 that a material breach has occurred and
that CryoLife has failed to cure the breach, Medafor will not terminate the
Agreement for at least three weeks from the date on which Medafor informs
CryoLife of its decision. In exchange, CryoLife has agreed that it
will not, prior to being informed of Medafor’s decision, petition a court to
enjoin termination of the Agreement.
The Agreement has a three-year term
from its effective date of May 1, 2008 and will automatically renew for an
additional three-year period if CryoLife makes minimum purchases as designated
under the Agreement; however, there is no contractual obligation for CryoLife to
make minimum purchases. Per the terms of the Agreement, CryoLife is a
distributor of Hemostase, and is the exclusive distributor of the product in the
U.S. for cardiac and vascular surgery (excluding Department of Defense
hospitals) and the exclusive distributor internationally (excluding China and
Japan) for cardiac, vascular, and general surgery, other than orthopaedic and
ear, nose and throat surgery.
As previously discussed in the
Company’s Forms 10-Q for the quarters ended March 31, 2009, June 30, 2009 and
September 30, 2009, CryoLife has filed a lawsuit against Medafor alleging that
Medafor has violated the Agreement by, among other things, allowing other
companies to distribute the product in territories and medical fields reserved
exclusively for CryoLife per the terms of the Agreement.
The Agreement is filed as Exhibit 10.1
to the Company’s Form 10-Q for the quarter ended June 30, 2008 and is
incorporated herein by reference.
Except for the historical information
contained in this report, the statements made by CryoLife are forward-looking
statements that involve risks and uncertainties. All such statements are subject
to the safe harbor created by the Private Securities Litigation Reform Act of
1995. These statements include CryoLife’s belief that a court would find that a
material breach of the Agreement has not occurred, and that CryoLife would be
able to cure any alleged breach of the Agreement, and CryoLife’s belief that the
Agreement will not terminate on January 8, 2010. These statements are
subject to a number of risks that are outside CryoLife’s control, including the
risk that Medafor will not act reasonably in this matter or that a court could
disagree with CryoLife’s interpretation of the Agreement and its rights
thereunder. For further information on additional risk factors
impacting CryoLife’s relationship with Medafor and CryoLife’s business, please
refer to “Risk Factors” contained in CryoLife’s Form 10-K for the year ended
December 31, 2008, as filed with the SEC, and any subsequent SEC filings.
CryoLife disclaims any obligation or duty to update or modify these
forward-looking statements.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, CryoLife, Inc. has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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CRYOLIFE,
INC.
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Date: December
8, 2009
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By:
/s/ D.A.
Lee______________
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Name: D.
Ashley Lee
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Title: Executive
Vice President, Chief
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Operating
Officer and Chief
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Financial
Officer
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