Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CRYOLIFE INC | cryolife8k310.htm |
| EX-99.3 - FREQUENTLY ASKED QUESTIONS - CRYOLIFE INC | cryolife8k310ex993.htm |
| EX-99.1 - LETTER - CRYOLIFE INC | cryolife8k310ex991.htm |
| EX-99.2 - PRESS RELEASE - CRYOLIFE INC | cryolife8k310ex992.htm |
EXHIBIT 99.4
ADDITIONAL
IMPORTANT INFORMATION
This
document is provided for informational purposes only and is not an offer to
purchase nor a solicitation of an offer to sell shares of Medafor or CryoLife.
Subject to future developments, CryoLife may file a registration statement
and/or tender offer documents and/or proxy statement with the SEC in connection
with the proposed combination. Shareholders should read those filings, and any
other filings made by CryoLife with the SEC in connection with the combination,
as they will contain important information. Those documents, if and when filed,
as well as CryoLife’s other public filings with the SEC, may be obtained without
charge at the SEC’s website at www.sec.gov and at CryoLife’s website at www.cryolife.com.
Protecting
CryoLife’s Rights – An Overview of the Litigation Against Medafor
The truth about
CryoLife’s lawsuit against Medafor: CryoLife filed a lawsuit
against Medafor to protect its rights and the rights of its shareholders after
repeated failures on the part of Medafor management to honor Medafor’s
commitments under the exclusive distribution agreement (“EDA”) it entered into
with CryoLife. After considering the chronology of events leading up
to the lawsuit, it is clear that Medafor’s claim that CryoLife filed its lawsuit
to pressure Medafor into selling the company is simply not true. To
the contrary, CryoLife’s offers to purchase Medafor were part of its efforts to
address Medafor’s transgressions by finding a business solution that both
protected CryoLife’s rights and created value for CryoLife and Medafor
shareholders without
forcing CryoLife to engage in costly litigation. A review of
CryoLife’s actions makes it clear that suing Medafor was the last
resort.
Medafor’s History
of Misrepresentations and Contractual Breaches of the
EDA: CryoLife’s problems with Medafor started almost
immediately after the execution of the EDA for HemoStase in April
2008. Within a month after the EDA was signed, it became apparent to
CryoLife that Medafor was either unwilling or unable to follow through on the
promises it made and contractual obligations it undertook in the
EDA. Specifically, CryoLife discovered various misrepresentations and
contractual breaches by Medafor, including the following:
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Medafor was selling directly
and indirectly into CryoLife’s exclusive fields and
territories. As a result, CryoLife has reduced sales and
profits. At the same time, these sales in violation of the EDA
have artificially increased Medafor’s reported
sales. These inappropriate sales into CryoLife’s
exclusive fields and territories continue to this
date.
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Medafor contracted to make
certain territories exclusive to CryoLife that were in fact subject to
pre-existing agreements between Medafor and other
distributors. As a result, CryoLife received letters
from these distributors claiming that they have the rights to territories
that Medafor committed to CryoLife in the EDA and threatening to sue
CryoLife for violating those
rights.
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Medafor is failing to protect
the intellectual property that supports HemoStase. The
EDA requires Medafor to protect the intellectual property that supports
HemoStase. Early in the relationship, however, CryoLife became
aware of several potential infringements of this intellectual property
which it believed could potentially deprive Medafor and CryoLife of
product sales and related profits, as well as diminish Medafor and
CryoLife shareholder value. Indeed, earlier this year, CryoLife
alerted Medafor to yet another potential infringement. In each
instance, CryoLife implored Medafor to take action against these IP
infringements. In breach of the EDA, Medafor has refused to
take appropriate action.
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Medafor is failing to help
CryoLife obtain regulatory approval for HemoStase in other markets around
the world. CryoLife’s sales of HemoStase have been
hindered by Medafor’s failure to abide by its obligation in the EDA to
appropriately assist CryoLife in obtaining necessary regulatory approvals
for HemoStase. This failure has reduced the value of the
distribution agreement to CryoLife and will ultimately reduce the sales
that Medafor can realize under the
EDA.
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CryoLife
diligently attempted to resolve the issues outside of
Court. Before filing its lawsuit in April 2009, CryoLife spent
many months diligently attempting to constructively resolve the issues
concerning Medafor’s misrepresentations and contractual
breaches. During this time, CryoLife reached out to Medafor
management—through numerous conversations, in-person meetings, emails, and
letters—to bring these issues to its attention, in the hopes of finding a
solution. Unfortunately, all of CryoLife’s attempts to resolve its
differences with Medafor management were unsuccessful. Medafor
persisted in making misrepresentations to CryoLife and in breaching the EDA,
including in the ways outlined above.
CryoLife proposed
an acquisition of Medafor in order to resolve the dispute and unlock the full
potential of HemoStase. In order to try and resolve the
companies’ differences related to the EDA, unlock the true and full potential of
HemoStase, and create value for both Medafor and CryoLife shareholders, CryoLife
offered to enter into negotiations to purchase Medafor and combine the two
companies in November 2008 and again in February 2009. Medafor
rejected both of these offers.
No alternative to
litigation. CryoLife tried repeatedly to resolve the issues
related to the EDA through negotiations. After these attempts failed,
CryoLife had no alternative but to file suit in order to rectify Medafor’s past
transgressions and ensure Medafor’s future compliance with the
EDA. After almost a year of effort in trying to resolve the problems
amicably, CryoLife filed its lawsuit against Medafor, asserting claims based on
Medafor’s contractual breaches and misrepresentations relating to the
EDA. Ultimately, CryoLife decided to file the lawsuit because it felt
that it could not, in good conscience and given its fiduciary duty to its
shareholders, stand by and watch Medafor continue to violate its rights under
the EDA. Since the lawsuit has been filed, Medafor’s breaches have
persisted.
CryoLife remains
committed to finding a business solution. CryoLife will
continue to act vigorously to protect its rights through the legal system, but
remains committed to finding a business solution to its problems with
Medafor. In January 2010, CryoLife once again proposed to acquire
Medafor, this time for $2.00 per share, to be paid in cash and CryoLife
stock. Medafor has rejected all attempts by CryoLife to engage in
negotiations about its offer. Nevertheless, CryoLife remains committed to
resolving its problems with Medafor while vigorously protecting its rights
through the legal system.
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