UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 14, 2006
Patient Safety Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-124594 13-3419202
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)
1800 Century Park East, Ste. 200, Los Angeles, CA 90067
(Address of principal executive offices) (zip code)
(310) 895-7750
(Registrant's telephone number, including area code)
Copies to:
Marc J. Ross, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
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):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement.
On November 14, 2006, SurgiCount Medical, Inc. ("SurgiCount"), a
California corporation and wholly-owned subsidiary of Patient Safety
Technologies, Inc. (the "Company"), entered into a Supply Agreement with
Cardinal Health 200, Inc., a Delaware corporation ("Cardinal"). Pursuant to the
agreement, Cardinal shall act as the exclusive distributor of SurgiCount's
products in the United States, with the exception that SurgiCount may sell its
products to one other hospital supply company, named in the agreement, solely
for its sale/distribution to its hospital customers. The agreement provides for
pricing of the products, which is deemed confidential. In case of a conflict
between the agreement and Cardinal's standard purchase order forms, the terms of
the agreement shall control. Under the agreement, SurgiCount agrees to maintain
a specified fill rate on all orders for products. The term of the agreement is
36 months, unless earlier terminated as set forth therein. Otherwise, the
agreement automatically renews for successive 12 month periods.
If Cardinal receives an offer from another supplier to purchase any or
all of the products supplied by SurgiCount under the agreement on more favorable
terms and conditions, of better grade or quality, at a more favorable net price
or with new or improved technology, Cardinal must provide SurgiCount with
written notice of such offer. SurgiCount will have 15 days following the date of
the notice to notify Cardinal that it agrees to meet or improve upon such offer.
If SurgiCount fails to so notify Cardinal in writing that it will meet or
improve upon such offer within such 15 day period, Cardinal may terminate the
agreement with respect to the product in question upon written notice to
SurgiCount, without further obligation or liability. SurgiCount's notice to
Cardinal that it agrees to meet or improve upon such offer shall constitute an
amendment to the agreement with respect to those products.
SurgiCount may not assign its interest under the agreement without
Cardinal's prior written consent. Further as part of the agreement, SurgiCount
executed a Continuing Guaranty agreeing, among other things, to indemnify
Cardinal for any loss or claim a) for property damage on account of any
SurgiCount product except as may be caused by gross negligence or reckless
disregard on the part of Cardinal or any of its employees, or b) arising on
account of any infringement by any SurgiCount product of any patent, trademark
or other proprietary right of any other party.
In addition to the foregoing, the agreement provides that if the
Company decides to divest, spin-off or otherwise sell SurgiCount or any material
assets of SurgiCount (such as intellectual property) during the term of the
agreement, Cardinal shall have a right of first refusal to purchase SurgiCount.
The Company cannot reasonably predict or estimate the financial impact
of the agreement with Cardinal but believes it will have a material impact on
the Company's results of operations.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
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10.1 Supply Agreement entered into November 14, 2006 by and between
SurgiCount Medical, Inc. and Cardinal Health 200, Inc. (redacted)
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Patient Safety Technologies, Inc.
Dated: November 20, 2006 By: /s/ Lynne Silverstein
--------------------------------
Name: Lynne Silverstein
Title: President
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