EXHIBIT 10.1
 
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
Independent Representative Agreement
 
This Agreement is between Vilex, Inc. (“Vilex”), with offices located at 111
Moffitt Street, McMinnville, TN 37110, and Fuse Medical, Inc., with offices
located at 4770 Bryant Irvin Court, Suite 400, Fort Worth, Texas 76107
(“Representative”) and is effective as of July 17, 2014 (the “Effective Date”).
 
1.
Term of this Agreement is five (5) years from the Effective Date. This Agreement
shall automatically renew for additional one-year periods at the expiration of
the original term and each renewal period thereafter unless terminated pursuant
to Section 6.

 
2.
The Territory is the United States of America and will be non-exclusive except
for the Exclusive Account list, which is attached hereto as Exhibit B. Vilex
specifically reserves the right to sell the Products in the Territory through
alternate arrangements, including National Accounts contracts/organizations.

 
3.
The term “Products” shall mean those products listed in Exhibit A.

 
4.
Vilex agrees:

 
a)
To pay Representative, as its entire compensation for all services provided to
Vilex under this Agreement, commissions at the rate set forth on Exhibit A based
on “net sales” of Products sold to Vilex-approved customers (“Customers”) by the
Representative within the Territory. For purposes of this Agreement, “net sales”
shall mean gross sales, less returns, rebates, discounts, and bad debts. When
bad debts may affect Representative’s entitlement to commissions, Vilex shall
notify Representative and provide a minimum of a thirty (30) day period during
which the Representative will try to collect said bad debts. After such period,
if the bad debts have not been collected, a downward adjustment to the
Representative’s entitlement to Commissions will be made. A bad debt is defined
as any invoice that is ninety (90) days past-due. An adjustment to
Representative’s commission will not occur until 120 days after the date of the
relevant invoice. If the Representative is terminated with a negative commission
balance, such sum shall be repaid to Vilex.
 
Exhibit A may be amended from time to time upon thirty (30) days written notice
and by agreement between the parties. Commission structure is based on
Representative reaching quotas to be established ninety days after the Effective
Date. Commissions will be paid by direct deposit or check and will be
mailed/processed for each calendar month on or before the fifteenth (15th) day
of the month following that calendar month. Commissions will not be paid on:
1) sales to the Representative, 2) orders either not accepted by Vilex or
canceled by Vilex or the customer, 3) orders without purchase order numbers.
 
Vilex will provide a written statement in reasonable detail for each monthly
period, outlining the calculation of commissions paid and/or any amounts
deducted. Any claims by the Representative challenging the basis or calculation
of commissions paid must be made in writing to Vilex within ninety (90) days of
the statement in question.

 
b)
To notify Representative, via email, a minimum of 30 days in advance of any
planned price change to the following email address: courtney@fusemedical.com.

 
c)
To provide literature, price lists, and clinical study reprints as deemed
applicable and available for distribution.

 
d)
To invoice all Customers directly. All payments due from Customers shall be made
directly to Vilex. In the event any Customer makes payment for any Products to
Representative, Representative shall immediately forward such payment to Vilex.
It is further expressly agreed that Representative has no authority to make any
allowance (including rebates, discounts, promotions and consignments) with
respect to the Products without the prior written consent of Vilex.

 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
e)
To defend, indemnify and hold harmless Representative and its affiliates,
officers, directors, members, managers, employees, representatives, and agents
from and against any and all claims, damages, losses, liabilities, costs and
expenses arising out of Vilex’ performance under this Agreement that are caused
in whole or in part by Vilex’ willful misconduct or negligent act or omission or
that are caused by the willful misconduct or negligent act or omission of any
person employed or engaged by Vilex for whose acts Vilex may be liable.

 
f)
To hold as confidential any and all information with respect to Representative,
or the business, products and activities of Representative which is furnished or
disclosed to Vilex by Representative or which otherwise becomes known to Vilex
in connection with or as a result of its performance under this Agreement and
which is not in the public domain shall be treated as confidential information
by Vilex. Vilex will not disclose such information to others, will take all
precautions that are reasonably necessary to prevent the disclosure of such
confidential information, and will use such information only in connection with
the performance of its obligations under this Agreement. In the event Vilex
shall breach any of its obligations with respect to this Paragraph, Vilex agrees
that Representative, in pursuing its remedies at law or in equity, shall be
entitled to seek a temporary restraining order or a preliminary injunction
against Vilex as a remedy for any such breach without posting any type of bond.

 
g)
When there is no consistent Product utilization, Product requested by
Representative shall (at Representative’s request) be delivered directly to
facilities where Vilex is an approved vendor. Product maintenance and return to
Vilex will be the sole responsibility of Representative.

 
5.
REPRESENTATIVE agrees:

 
a)
To provide best efforts to actively promote and sell Vilex’ Products and
follow-up leads provided by Vilex. Any expenses associated with any sales or
attempted sale shall be borne by the Representative.

 
b)
Not to promote or advertise the Products in any way that exceeds the scope of
product clearances or is different in meaning from the statements made by Vilex
in its own marketing or sales literature. Any additional advertising or
promotional materials created by Representative must be approved in writing by
Vilex prior to any use thereof by Representative. All solicitations of orders by
Representative from Customers shall be conducted in accordance with such prices,
quantities, procedures, policies, Instructions for Use and other terms and
conditions as may be agreed from time to time between Representative and Vilex.
Further, Representative shall act in conformity with all laws, federal, state,
and local, affecting the sale of Products, including without limitation, the
antitrust laws, and the Federal Trade Commission’s regulations.

 
c)
To furnish Vilex with reasonable information to Vilex to allow Vilex to evaluate
the current or potential sales of the Products in the Territory, and to inform
Vilex promptly of any factor known to Representative which might materially and
adversely affect current or potential sales of the Products in the Territory.

 
d)
To hold as confidential any and all information with respect to the Products,
Vilex, or the business and activities of Vilex which is furnished or disclosed
to Representative by Vilex or which otherwise becomes known to Representative in
connection with or as a result of its performance under this Agreement and which
is not in the public domain shall be treated as confidential information by
Representative. Representative will not disclose such information to others,
will take all precautions, which are reasonably necessary to prevent the
disclosure of such confidential information, and will use such information only
in connection with the performance of its obligations under this Agreement. In
the event Representative shall breach any of its obligations with respect to
this Paragraph, Representative agrees that Vilex, in pursuing its remedies at
law or in equity, shall be entitled to seek a temporary restraining order or a
preliminary injunction against Representative as a remedy for any such breach
without posting any type of bond.

 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
e)
That during the term of this Agreement (including any renewal term) and for one
year thereafter, Representative agrees not to (i) engage in any act to solicit
any supplier of Vilex or any established Authorized Vilex representative or
agent of the Products, to cease or reduce doing business with Vilex; or (ii)
engage in any act to interfere with the contractual relationship between Vilex
and any such supplier of Vilex or subject to the terms of Exhibit A hereto any
established Authorized Vilex representative or agent of the Products.

 
f)
To forward to Vilex, within 24 hours of the receipt of notice, any customer
complaints with regard to the Products and to assist Vilex with the
identification of any affected customers in the event of product recall.

 
g)
That no restrictive covenants exist which may limit the Representative’s
activities in the Territory or field and/or area of this Agreement, and to
indemnify, defend and hold Vilex, its shareholders, employees and managers
harmless from any suits, actions, or claims arising from the Representative’s
relationship in any fashion with any other business or related entity or party.

 
h)
To remain a Representative in good standing, avoiding insolvency, and agreeing
to pay its just debts as they may be due and owing.

 
i)
That Vilex may, with written agreement from Representative, establish a Product
end-user pricing floor at or below which a sale must be pre- approved by Vilex,
and Vilex may or may not, at its sole discretion, pay commissions according to
paragraph 4a.and Exhibit A.

 
j)
To comply with and cause its shareholders, officers, directors and employees to
be bound by and comply with the provisions of paragraphs 5.c. and 5.e. herein
and any covenants or agreements set forth in Exhibit A attached hereto.

 
k)
That all trademarks, trade names, logos, copyrights and other intellectual
property rights used or adopted by Vilex in connection with the Products or any
other business of Vilex (“Trademarks”) shall at all times be and remain the
exclusive property of Vilex or its licensors. Representative will not in any way
dispute or contest the validity of the Trademarks, Vilex’ (or such licensors’)
ownership of or right to license the Trademarks or Vilex’ right to use and
control the use of the Trademarks, nor will Representative do or permit to be
done any action or thing which will in any way impair the rights of Vilex or
such licensors in and to the Trademarks. Representative acknowledges and agrees
that any use of the Trademarks will not create in it any right, title, or
interest in and to the Trademarks and agrees that all use of the Trademarks and
any goodwill associated therewith will inure to the benefit of Vilex or such
licensors. Representative will not adopt or use in any way (including as a part
of its trade name) any trademark, trade name, mark, logo, or symbol which, in
the opinion of Vilex, is similar to or likely to be confused with any of the
Trademarks. Representative will immediately notify Vilex of any activity or
trademark usage that appears to conflict with Vilex’ right, title or interest in
and to any of the Trademarks.

 
l)
To indemnify Vilex and Vilex’ directors, officers, shareholders, employees, and
representatives against all claims, damages, losses, and expenses, including
reasonable attorney’s fees and expenses, arising out of Representatives
performance under this Agreement that are caused directly by Representative’s
intentional and willful misconduct or negligent act or omission or of any person
employed or engaged by Representative for whose acts Representative may be
liable under this paragraph.

 
 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
6.
Either party may terminate this Agreement for cause if, after giving thirty (30)
days written notice to the other of the cause for termination of this Agreement,
such cause shall, at the expiration of said thirty (30) day period, remain
uncured. Cause shall be defined as:

 
a)
Breach or failure by either party to perform any material term or condition of
this Agreement;

 
b)
Representative becomes insolvent or unable to pay debts as they mature or makes
assignment for the benefit of creditors, or any proceeding is instituted by or
against the Representative alleging that the Representative is insolvent or
unable to pay its debts as they mature or under any Federal bankruptcy laws or
State insolvency laws or a trustee or receiver or other court officer is
appointed for any property or business of the Representative or any property of
the Representative is attached.

 
If Agreement terminates under this Section 6, Representative will promptly
return to Vilex, via FedEx (unless otherwise agreed to by both parties), all
consigned and unused sample Products, and literature in undamaged condition. If
terminated for breach, the party that breached shall pay shipping costs. If
termination is for cause, non-terminating party shall pay shipping costs. If any
consigned or sample Product is lost, stolen, damaged, or destroyed,
Representative will pay to Vilex the “Wholesale Value” of said Product.
Furthermore Representative agrees not to sell, trade, offer in any way or
promote, sell or trade Product in any manner after termination of this
Agreement. For purposes of the foregoing sentence, “Wholesale Value” shall mean
[*****] percent ([**]%) of the retail price of the Product at the time of the
termination of this Agreement.
 
Following any such termination, Vilex agrees to remit to the Representative any
commissions owed, as defined and adjusted by the terms of this Agreement,
including the language and terms within the rights of termination, no later than
30 days after the effective termination date of this Agreement.
 
The obligations of paragraphs 5.e. shall survive any termination of this
Agreement for the term stated in 5.e.
 
This Agreement may be terminated prior to the end of the Term or any extension
thereof subject to the following:
 
A. By Vilex, upon written notice to Representative if Representative does not
during the first two (2) years of Agreement increase its Contract Revenue (as
defined below), on a quarterly basis (i.e., quarter over quarter), by at least
an annualized average of [*****] percent ([**]%) per quarter. The term “Contract
Revenue” shall mean, for any period, the amount of revenue collected by
Representative from customers during such period for sales of Product by
Representative to such customers during such period, minus any applicable sales
taxes, rebates, discounts and returns.
 
B. By Representative, upon written notice to Vilex if Representative cannot
during the first two (2) years of Agreement increase its Contract Revenue (as
defined below), on a quarterly basis (i.e., quarter over quarter), by at least
an annualized average of [*****] percent ([**]%) per quarter.
 
C. In the event that Vilex undergoes a Change of Control, Vilex or its successor
in interest resulting from such Change of Control (the “Company Successor”)
shall have the right to terminate this Agreement and acquire Representative’s
book of business related to the Products (the “Book of Business”) upon ninety
(90) days notice to Representative (the “Change of Control Termination Notice”).
In the event of such termination under this Section 6 (a “Change of Control
Termination”), the Company Successor shall be obligated to pay Representative a
fee in consideration of Distributor’s selling and transferring its Book of
Business to the Company Successor (the “Termination Payment”). Such Termination
Payment shall be mutually agreed between Company Successor and Representative.
 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
7.
This Agreement constitutes the entire understanding of the parties with respect
to the subject matter hereof and supersedes all previous proposals, oral or
written and all negotiations, conversations, or discussions had between the
parties related to the subject matter of this Agreement.

 
8.
Should any part or portion of the Agreement, for any reason, be declared
invalid, such decision shall not affect the validity of the remaining portions
hereof, and such remaining portions shall continue in full force and effect as
if this Agreement had been executed with the invalid portion eliminated.

 
9.
This Agreement is not assignable without the prior written consent of Vilex,
such consent not to be unreasonably withheld, conditioned, or delayed.

 
10.
Terms and conditions of this Agreement may be modified only by mutual written
agreement.

 
11.
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the state of Tennessee, without reference to conflict of laws
principles or statutory rules of arbitration. Any action, litigation, claim,
dispute, or proceeding relating in any way, either directly or indirectly, to
this Agreement or the subject matter hereof shall be brought exclusively in the
courts located in the State of Tennessee, County of Warren, USA, and further,
the parties hereto specifically consent and agree that the jurisdiction and
venue of the courts located in the State of Tennessee, County of Warren, USA are
appropriate and proper. The prevailing party shall be entitled to collect from
the other parties, the prevailing party’s reasonable attorneys’ fees and costs
in connection with any action or proceeding (including arbitration) against such
other parties seeking to enforce any provision of, or based on any right arising
out of, this Agreement.

 
12.
Either party may, at its own expense, audit the other to the extent necessary to
confirm the amounts payable or receivable hereunder. Such audit shall be
conducted by an independent certified accounting firm.

 
13.
The parties recognize that this Agreement does not create any actual or apparent
agency, partnership, joint venture, or franchise between the parties. Neither
party is authorized to enter into or commit the other to any agreements, and
neither party shall represent itself as the agent or legal representative of the
other party.

 
Agreed to as of the Effective Date:
 
Representative:
 

FUSE MEDICAL, INC.     VILEX, INC.            
D. Alan Meeker
   
Sylvia J. Southard
 
Name
   
Name
            /s/ D. Alan Meeker     /s/ Sylvia J. Southard   Signature    
Signature             CEO     President  
Title
   
Title
            07/17/14     07/17/14   Date     Date  

 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
EXHIBIT A
 
Pricing and Commission Structure
And Products
 
Current Vilex pricing is appended to this Exhibit A.
 
Commission Structure:
 
Cannulated Screws manufactured by Vilex (not plate screws)
[**]%
Sxx, Fxx Screws
 
All additional charges added to the invoice including
 
Handling fees, tool usage, etc.
[**]%
All other Vilex products including but not limited to:
[**]%
Internal Fixation:
1st MPJ and Lesser Hemi
1st MPJ and Lesser Met Heads
TOV (Subtalar Arthroreresis)
Plates and plate screws
Power Equipment and accessories
FUZE
Nitinol Memory Staples
External fixation including rings and rails
 

If the Customer (i.e., hospital, surgical center, doctor or health professional
etc.) has a relationship with an existing Vilex representative other than the
Representative (the “Other Rep”), such Other Rep shall manage and support the
Vilex relationship with such customer and receive a commission equal to [**]%
from Representative. If the Other Rep fails to provide such management and
support, then Vilex shall provide such management and support for such customer
as a house account.
 
In the event Representative has any relationship with a Customer that would
conflict with or confuse the relationship between the Customer and an Other Rep
regarding any aspect of the sale or service of the Products, then Vilex shall
serve notice to the Other Rep that from the date of notice from Representative
that Representative will be servicing the Customer. Other Rep may then choose to
receive a [**]% fee from Representative and service such account, or Vilex will
take appropriate actions to assure that Representative is the sole
representative servicing such account on behalf of Vilex.
 
All Products are deemed to be manufactured by Vilex.
 
 
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH * AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
EXHIBIT B
 
Exclusive Account List
 
[TO BE PROVIDED WITHIN FIVE BUSINESS DAYS FOLLOWING THE EFFECTIVE DATE]
 
Representative to provide names of physicians within its network and affiliated
network
 
 
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