On July 25, 2018, Vericel Corporation (the "Company," "Vericel" or "we") amended its Distribution Agreement, dated May 15, 2017 (the "Distribution Agreement") by and between Orsini Pharmaceutical Services, Inc. ("Orsini") and the Company, as previously amended (the "Fourth Amendment") (Filing, 8-K, Vericel, 25 25, 2018, View Source [SID1234528399]).

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The Fourth Amendment amends certain payment terms between the parties, including as a result of termination of the Distribution Agreement. Under the Fourth Amendment, the parties agreed to eliminate Orsini’s right to serve as the Company’s exclusive distributor for MACI as the Company is moving to a limited network of distributors. Orsini remains the exclusive pharmacy supplying MACI for only an enumerated list of Payors (as defined in the Distribution Agreement). Notwithstanding the elimination of Orsini’s exclusivity, if the Company (a) does not submit a fixed number of MACI cases to Orsini prior to June 30, 2019 (and accordingly does not pay the dispensing and administrative fees for such fixed number of cases), and (b) terminates the Distribution Agreement pursuant to the terms of the Fourth Amendment, Orsini will be entitled to increased administrative fees based on such fixed number of cases. The Company will generally be required to pay an amount determined by amounts collected by Orsini and the difference between the fixed number and actual number of cases submitted to Orsini.

The revised payment terms in the Fourth Amendment apply only to a list of existing cases at the time of execution of the Fourth Amendment and any claims submitted after June 15, 2018. The Fourth Amendment includes a provision whereby the Company retains the credit and collection risk from the end customer on implants after June 15, 2018, and Orsini performs the collection activities. Pursuant to the Fourth Amendment, the Company will pay Orsini a dispensing fee on a per implant basis and an administrative fee related to Orsini’s collection performance.