Item 1.01. Entry into a Material Definitive Agreement.
Orsini Distribution Agreement
On May 15, 2017, Vericel Corporation (the “Company”) entered into a distribution agreement (the “Distribution Agreement”) with Orsini Pharmaceutical Services, Inc. (“Orsini”) to appoint Orsini as a specialty pharmacy distributor of Carticel® (autologous cultured chondrocytes), the Company’s autologous chondrocyte implant for the treatment of cartilage defects in the knee in patients who have had an inadequate response to a prior arthroscopic or other surgical repair procedure, and MACI® (autologous cultured chondrocytes on porcine collagen membrane), the Company’s autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults (collectively, the “Products”), to patient’s physicians and other healthcare providers performing surgical procedures that require the use of the Products in the United States and Puerto Rico, as further specified in the Distribution Agreement. Orsini will work with Vericel’s service provider, Pro-Spectus, Inc., for the management of patient cases related to the Products.
The initial term of the Distribution Agreement shall end on May 15, 2019. Thereafter, the parties may renew the Distribution Agreement, upon mutual agreement, for two additional two-year terms. Either the Company or Orsini may terminate the Distribution Agreement for any reason upon 90 days’ written notice to the other party.
Either the Company or Orsini may immediately terminate the Distribution Agreement by written notice for cause if the other party is or becomes insolvent, appoints or has appointed a receiver for all or substantially all of its assets, or makes an assignment for the benefit of its creditors. In addition, either party may terminate the Distribution Agreement by written notice if the other party has a trustee, receiver, or custodian of its assets appointed, and such proceeding or person is not dismissed within 30 days.
Either the Company or Orsini may terminate the Distribution Agreement if it believes that the other party has breached any provision of the Distribution Agreement and, should any such default occur, then the non-defaulting party may give written notice to the defaulting party that if the default is not cured within 60 days, the Distribution Agreement may be terminated by the non-defaulting party upon notice of such; provided, however, if the defaulting party has commenced to cure such breach within such 60 days, but such cure is not completed within such 60 days, it will have a reasonable time to complete its cure if it diligently pursues the cure until completion.
The foregoing is a summary description of the terms and conditions of the Distribution Agreement that are material to the Company. The foregoing description of the material terms of the Distribution Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, reference to the Distribution Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 or as an amendment to this Form 8-K. In addition to the foregoing, the Distribution Agreement contains customary terms and conditions, including, but not limited to, certain representations and warranties, provisions related to indemnification, confidentiality and assignment. There are no material relationships between the Company and Orsini other than in respect of the Distribution Agreement.
Item 1.02. Termination of a Material Definitive Agreement.
On May 15, 2017, the Company entered into a Fifth Amendment to the Services Agreement (the “Fifth Amendment”) by and between the Company and Dohmen Life Science Services, LLC (“DLSS”), dated April 5, 2016, as amended (the “Services Agreement”), mutually terminating the Services Agreement effective as of June 30, 2017. There are no material relationships between the Company and DLSS other than in respect of the Services Agreement. There were no early termination penalties incurred by the Company. On April 5, 2016, the Company entered into the Services Agreement with DLSS for the provision of certain administrative and clinical support services for Carticel® and MACI® initially on an exclusive basis, as further specified in the Services Agreement.
The foregoing description of the Services Agreement is qualified by reference to the full text of the Services Agreement, a copy of which was filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2016, as amended by the First Amendment thereto, a copy of which was filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q on August 8, 2016, the Second Amendment thereto, a copy of which was filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 8, 2016, the Third
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