Document:

exhibit10_1.htm

Exhibit 10.1

 

AGREEMENT FOR SHARE EXCHANGE

This AGREEMENT FOR SHARE EXCHANGE (this “Agreement”) is entered into on September 2, 2014, by and between Great China Mania Holdings, Inc., a Florida corporation (“GMEC”), and Concept X Limited, a Hong Kong company (“Concept X”) and the owners and Shareholder of Concept X (the “Shareholder”).

RECITALS

Concept X is a Hong Kong registered company that specializes in media production in Hong Kong.  Concept X has reported approximately $1.4 million revenues for year ended March 31, 2014.

GMEC desires to complete a share exchange transaction pursuant to which GMEC shall acquire all of the equity ownership of Concept X in exchange for a certain number of shares of the voting stock of GMEC as set forth below; and

The Board of Directors of GMEC and the Board of Directors of Concept X have each approved the proposed transaction, contingent upon satisfaction prior to closing of all of the terms and conditions of this Agreement; and

THE PARTIES desire to make certain representations, warranties and agreements in connection with completion of the proposed share exchange transaction.

NOW, THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, and the covenants, conditions, representations and warranties hereinafter set forth, the parties hereby agree as follows:

ARTICLE I

THE EXCHANGE

1.1      The Exchange. At the Closing (as hereinafter defined), GMEC shall acquire 100% ownership of Concept X.  Consideration to be paid by GMEC shall be 500,000 newly-issued shares of its common stock (the “Exchange Shares”). The Exchange shall take place upon the terms and conditions provided for in this Agreement and in accordance with applicable law.  Immediately prior to the Exchange, GMEC shall have a total of approximately 25,974,317 shares of its common stock issued and outstanding; the Exchange Shares shall be issued in addition to the existing amount.

ARTICLE II

CLOSING

2.1    Closing and Effective Time. Subject to the provisions of this Agreement, the parties shall hold a closing (the "Closing") at such time and place as the parties hereto may agree, the date thereof shall be referred to as the “Closing Date.” Such date shall also be the date of Exchange (the "Effective Time").

  

  

  

2.2    Conditions to Each Party's Obligation to Effect the Exchange. The respective obligations of each party to effect the Exchange shall be conditional upon the filing, occurring or obtainment of all authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by any governmental entity or by any applicable law, rule, or regulation governing the transactions contemplated hereby.

2.3    Conditions to Obligations of GMEC. The obligation of GMEC to effect the Exchange is subject to the satisfaction of the following conditions on or before the Closing Date unless waived by GMEC:

(a)    Representations and Warranties. The representations and warranties of Concept X set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement, and Concept X shall complete all government and legal process to transfer 100% of the ownerships from the Shareholder to GMEC.

(b)    Performance of Obligations of Concept X. Concept X shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing, and GMEC shall have received a certificate signed on behalf of GMEC by the President to such effect.

(c)    Closing Documents. GMEC shall have received all closing documents as counsel for GMEC shall reasonably request.

(d)    Consents. Concept X shall have obtained the consent or approval of each person whose consent or approval shall be required in connection with the transactions contemplated hereby under any loan or credit agreement, note, mortgage, indenture, lease or other agreement or instrument, except those for which failure to obtain such consents and approvals would not, in the reasonable opinion of GMEC, individually or in the aggregate, have a material adverse effect on Concept X and of its subsidiaries and related entities taken as a whole upon the consummation of the transactions contemplated hereby. Concept X shall also have received the approval of its Shareholder in accordance with applicable law.

(e)         Due Diligence Review. GMEC shall have completed to its reasonable satisfaction a review of the business, operations, finances, assets and liabilities of Concept X and shall not have determined that any of the representations or warranties of Concept X or its Shareholder contained herein are, as of the date hereof or the Closing, inaccurate in any material respect or that Concept X or its Shareholder is otherwise in violation of any of the provisions of this Agreement. The consummation of this Agreement is fully subject to GMEC’s due diligence review and GMEC shall have the right at any time prior to closing to cancel and rescind this transaction based on the due diligence performed by GMEC regarding Concept X.

  

  

  

 

(f)    Pending Litigation. There shall not be any litigation or other proceeding pending or threatened to restrain or invalidate the transactions contemplated by this Agreement, which, in the sole reasonable judgment of GMEC, made in good faith, would make the consummation of the Exchange imprudent. In addition, there shall not be any other litigation or other proceeding pending or threatened against Concept X, the consequences of which, in the judgment of GMEC, could be materially adverse to Concept X.

2.4    Conditions to Obligations of Concept X. The obligations of Concept X to effect the Exchange is subject to the satisfaction of the following conditions unless waived by Concept X:

(a)    Representations and Warranties. The representations and warranties of GMEC set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement, Concept X shall have received a certificate signed on behalf of GMEC by the President to such effect.

(b)    Performance of Obligations of GMEC. GMEC shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and GMEC shall have received a certificate signed on behalf of GMEC by the President to such effect.

 

(c)    Consents. GMEC shall have obtained the consent or approval of each person whose consent or approval shall be required in connection with the transactions contemplated hereby.

(d)    Pending Litigation. There shall not be any litigation or other proceeding pending or threatened to restrain or invalidate the transactions contemplated by this Agreement, which, in the sole reasonable judgment of Concept X, made in good faith, would make the consummation of the Exchange imprudent. In addition, there shall not be any other litigation or other proceeding pending or threatened against GMEC the consequences of which, in the judgment of Concept X, could be materially adverse to GMEC.

(e)         Further Considerations. The Shareholder agrees to the following actions and conditions related to the Agreement for Share Exchange:

	
  

	
i.

	
Transfer the liabilities of existing, unsettled loans and debts of Concept X to Chee Yan Label Weaving & Press Printing Co., Limited prior to Closing;

	
  

	
ii.

	
Cancel all payables and loans owed to Shareholder and Shareholder’s affiliates and controlled entities;

	
  

	
iii.

	
Assume the liabilities of the net trade payables (defined as trade payables minus trade receivables as of the date of Closing.

  

  

  

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1    Representations and Warranties of GMEC. GMEC represents and warrants to Concept X as follows:

(a)     Organization, Standing and Power. GMEC is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary.

 

(b)     Capital Structure. As of the date of execution of this Agreement, the authorized capital stock of GMEC consists of 375,000,000 shares of Common Stock with a par value of $0.01 per share and a class of blank check preferred stock that has not yet been designated or issued. The Exchange Shares to be issued pursuant to this Agreement shall be, when issued pursuant to the terms of the resolution of the Board of Directors of GMEC approving such issuance, validly issued, fully paid and nonassessable and not subject to preemptive rights. GMEC has no other options, warrants, calls, agreements or other rights to purchase or otherwise acquire from GMEC at any time, or upon the happening of any stated event, any shares of the capital stock of GMEC whether or not presently issued or outstanding.

(c)    Certificate of Incorporation, Bylaws, and Minute Books. The copies of the Articles of Incorporation and of the Bylaws of GMEC which have been delivered to Concept X are true, correct and complete copies thereof. The minute book of GMEC, which has been made available for inspection, contains accurate minutes of all meetings and accurate consents in lieu of meetings of the Board of Directors (and any committee thereof) and of the Shareholder of GMEC since the date of incorporation and accurately reflects all transactions referred to in such minutes and consents in lieu of meetings.

(d)    Authority. GMEC has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors of GMEC. No other corporate or shareholder proceedings on the part of GMEC are necessary to authorize the Exchange, or the other transactions contemplated hereby.

(e)    Conflict with Other Agreements; Approvals. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or the loss of a material benefit under, or the creation of a lien, pledge, security interest or other encumbrance on assets (any such conflict, violation, default, right of termination, cancellation or acceleration, loss or creation, a "violation") pursuant to any provision of

  

  

  

 

the Articles of Incorporation or Bylaws or any organizational document of GMEC or, result in any violation of any loan or credit agreement, note, mortgage, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to GMEC which violation would have a material adverse effect on GMEC taken as a whole. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a "Governmental Entity") is required by or with respect to GMEC in connection with the execution and delivery of this Agreement by GMEC or the consummation by GMEC of the transactions contemplated hereby.

(f)    Books and Records. GMEC has made and will make available for inspection by Concept X upon reasonable request all the books of GMEC relating to the business of GMEC. Such books of GMEC have been maintained in the ordinary course of business. All documents furnished or caused to be furnished to Concept X by GMEC are true and correct copies, and there are no amendments or modifications thereto except as set forth in such documents.

(g)    Compliance with Laws. GMEC is and has been in compliance in all material respects with all laws, regulations, rules, orders, judgments, decrees and other requirements and policies imposed by any Governmental Entity applicable to it, its properties or the operation of its businesses.

(h)    Dilutive Securities. GMEC has no dilutive securities of any kind, including but not limited to warrants, options or employee stock options outstanding.

(i)     Litigation. There is no suit, action or proceeding pending, or, to the knowledge of GMEC, threatened against or affecting GMEC which is reasonably likely to have a material adverse effect on GMEC, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against GMEC having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.

(j)    Tax Returns. GMEC has duly filed or will file prior to Closing any tax reports and returns required to be filed by it and has fully paid all taxes and other charges claimed to be due from it by any federal, state or local taxing authorities. There are not now any pending questions relating to or claims asserted for, taxes or assessments asserted upon GMEC.

3.2    Representations and Warranties of Concept X. Concept X represents and warrants to GMEC as follows:

(a)    Organization, Standing and Power. Concept X is a corporation duly organized, validly existing and in good standing under the laws of Hong Kong. The company has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or

  

  

  

 

leasing of its properties makes such qualification necessary except for any such failure, which when taken together with all other failures, is not likely to have a material adverse effect on the business of the relevant Acquirer taken as a whole. For purpose of this Section 2.2, “material adverse effect” shall mean, with respect to each Acquirer, the result of one or more events, charges or effects which, individually or in the aggregate, would have a material adverse effect or impact on the business, assets, results of operations, intellectual property rights, prospects or financial condition of such party, taken as a whole, or is reasonably likely to delay or prevent the consummation of the transactions contemplated hereby.

(b)    Capital Structure. There are no options, warrants, calls, agreements or other rights to purchase or otherwise acquire from Concept X at any time, or upon the happening of any stated event, any share of the capital stock of Concept X.

(c)    Certificate of Incorporation, Bylaws and Minute Books. Copies of the Certificate of Incorporation and of the other corporate documents of Concept X which will be delivered to GMEC are true, correct and complete copies thereof. The minute books of Concept X which will be made available for inspection contain accurate minutes of all meetings and accurate consents in lieu of meetings of the Board of Directors (and any committee thereof) and of the Shareholder of Concept X since the date of incorporation and accurately reflect all transactions referred to in such minutes and consents in lieu of meetings.

(d)    Authority. Concept X has all requisite power to enter into this Agreement and, subject to approval of the proposed transaction by its Shareholder, has the requisite power and authority to consummate the transactions contemplated hereby. Except as specified herein, no other corporate or shareholder proceedings on the part of Concept X are necessary to authorize the Exchange and the other transactions contemplated hereby.

 

(e)    Conflict with Agreements; Approvals. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of any provision of the Certificate of Incorporation or Bylaws of Concept X or of any loan or credit agreement, note, mortgage, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Concept X or its properties or assets except for any such conflict or violation, which when taken together with all other conflict or violation, is not likely to have a material adverse effect on the business of the relevant Acquirer taken as a whole. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Concept X in connection with the execution and delivery of this Agreement by Concept X, or the consummation by Concept X of the transactions contemplated hereby.

(f)    Books and Records. Concept X has made and will make available for inspection by GMEC upon reasonable request all the books of account, relating to the business of Concept X. Such books of account have been maintained in the ordinary course of

  

  

  

 

business. All documents furnished or caused to be furnished to GMEC by Concept X are true and correct copies, and there are no amendments or modifications thereto except as set forth in such documents.

(g)    Compliance with Laws. Concept X is and has been in compliance in all material respects with all laws, regulations, rules, orders, judgments, decrees and other requirements and policies imposed by any Governmental Entity applicable to it, its properties or the operation of its businesses.

(h)    Liabilities and Obligations. Concept X has no material liabilities or obligations (absolute, accrued, contingent or otherwise) except (i) liabilities that are reflected and reserved against on the Concept X financial statements delivered to GMEC that have not been paid or discharged since the date thereof and (ii) liabilities incurred since the date of such financial statements in the ordinary course of business consistent with past practice and in accordance with this Agreement.

(i)    Litigation. There is no suit, action or proceeding pending, or, to the knowledge of Concept X threatened against or affecting Concept X, which is reasonably likely to have a material adverse effect on Concept X, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against Concept X having, or which, insofar as reasonably can be foreseen, in the future could have, any such effect.

(j)    Taxes. Concept X has filed or will file within the time prescribed by law (including extension of time approved by the appropriate taxing authority) all tax returns and reports required to be filed with all other jurisdictions where such filing is required by law; and Concept X has paid, or made adequate provision for the payment of all taxes, interest, penalties, assessments or deficiencies due and payable on, and with respect to such periods. Concept X knows of (i) no other tax returns or reports which are required to be filed which have not been so filed and (ii) no unpaid assessment for additional taxes for any fiscal period or any basis therefore.

(k)    Licenses, Permits; Intellectual Property. Concept X owns or possesses in the operation of its business all material authorizations which are necessary for it to conduct its business as now conducted. Neither the execution nor delivery of this Agreement nor the consummation of the transactions contemplated hereby will require any notice or consent under or have any material adverse effect upon any such authorizations.

 3.3   Representations and Warranties of Shareholder. By execution of this Agreement, Shareholder represents and warrants to GMEC as follows:

(a)    Shares Free and Clear. The shares of Concept X which Shareholder owns are free and clear of any liens, claims, options, charges or encumbrances of any nature.

(b)    Unqualified Right to Transfer Shares. Shareholder has the unqualified right to sell, assign, and deliver the shares of Concept X and, upon consummation of the

  

  

  

transactions contemplated by this Agreement, GMEC will acquire good and valid title to such shares, free and clear of all liens, claims, options, charges, and encumbrances of whatsoever nature.

(c)    Agreement and Transaction Duly Authorized. Shareholder is authorized to execute and deliver this Agreement and to consummate the share exchange transaction described herein. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of any contract, commitment, indenture, other agreement or restriction of any kind or character to which such Shareholder is a party or by which such Shareholder is bound.

 

ARTICLE IV

ADDITIONAL AGREEMENTS AND RELATED TRANSACTIONS

4.1    Restricted GMEC Shares. The Exchange Shares will not be registered under the Securities Act, but will be issued pursuant to applicable exemptions from such registration requirements for transactions not involving a public offering and/or for transactions which constitute “offshore transactions” as defined in Regulation S under the Securities Act of 1933. Accordingly, the Exchange Shares will constitute "restricted securities" for purposes of the Securities Act and the holders of Exchange Shares will not be able to transfer such shares except upon compliance with the registration requirements of the Securities Act or in reliance upon an available exemption therefrom. The certificates evidencing the Exchange Shares shall contain a legend to the foregoing effect and the holders of such shares shall deliver at Closing an Investment Letter acknowledging the fact that the Exchange Shares are restricted securities and agreeing to the foregoing transfer restrictions. The Shareholder agrees that the Exchange Shares will be subject to a lock up agreement for twelve months from the Closing Date (the “Restriction Period”).

4.2    First Right of Refusal.  GMEC shall have the First Right of Refusal to purchase the Exchange Shares from the Shareholder after the Restriction Period for consideration of USD $1.00 per share. The Shareholder agrees to apply the proceeds from the sale of the Exchange Shares according to the First Right of Refusal to settle the USD $193,548 to be transferred to the bank account of Concept X to settle the net trade payables of Concept X as of the date of Closing.

4.3    Access to Information. Upon reasonable notice, GMEC and Concept X shall each afford to the officers, employees, accountants, counsel and other representatives of the other company, and with respect to Concept X, the Acquired Entities, access to all their respective properties, books, contracts, commitments and records and, during such period, each of GMEC and Concept X shall furnish promptly to the other (a) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of Federal or state securities laws and (b) all other information concerning its business, properties and personnel as such other party may reasonably request. Unless otherwise required by law, the parties will hold any such

 

  

  

  

 

information which is nonpublic in confidence until such time as such information otherwise becomes publicly available through no wrongful act of either party, and in the event of termination of this Agreement for any reason each party shall promptly return all nonpublic documents obtained from any other party, and any copies made of such documents, to such other party.

4.4     Legal Conditions to Exchange. Each of GMEC and Concept X shall take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on itself with respect to the Exchange and will promptly cooperate with and furnish information to each other in connection with any such requirements imposed upon any of them or upon any of their related entities or subsidiaries in connection with the Exchange. Each party shall take all reasonable actions necessary to obtain (and will cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party, required to be obtained or made by GMEC or Concept X or any of their related entities or subsidiaries in connection with the Exchange or the taking of any action contemplated thereby or by this Agreement.

4.5      Delivery of Concept X Financials. Concept X agrees to provide complete financial reports to GMEC on a monthly basis. GMEC should receive the financial report from Concept X no more than 10 working days after the end of each month. If Concept X does not provide these financial reports to GMEC according to the timeline set forth herein, GMEC reserves the right to assign to another party access to Concept X’s books and records in its office to complete the financial reports as required herein.

4.6      Board of Directors of Concept X Post-Closing. The Board of Directors of Concept X shall remain unchanged after the Closing; the Shareholder shall remain in his capacity as a director.

4.7      Management of Concept X Post-Closing. The CEO of GMEC shall decide the management of Concept X after Closing.

4.8      Bank Representative. At a later date, GMEC will assign a party to serve as the bank representative for the Concept X, who will jointly operate the bank account with its existing bank representative.

ARTICLE V

TERMINATION AND AMENDMENT

5.1    Termination. GMEC may terminate this Agreement at any time by giving written notice to Concept X, at least one month prior to the intended date of termination.

5.2    Effect of Termination. In the event of termination of this Agreement by either GMEC or Concept X as provided in Section 6.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of any party hereto. In such 

 

  

  

  

 

event, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.

5.3    Amendment. This Agreement may be amended by mutual agreement of GMEC and Concept X.   Any such amendment must be by an instrument in writing signed on behalf of each of the parties hereto.

5.4    Extension; Waiver. At any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Board of Directors, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party.

ARTICLE VI

GENERAL PROVISIONS

6.1    Survival of Representations, Warranties and Agreements. All of the representations, warranties and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time for as long as the applicable status of limitation shall remain open.

6.2    Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a)  If to GMEC:

ROOM 1902, 19/F, KODAK HOUSE 2, JAVA ROAD

NORTH POINT, HONG KONG

(b)  If to Concept X:

 

Flat 1816, Tsuen Wan Industrial Centre

220-248 Texaco Road

Tsuen Wan, New Territories

Hong Kong

6.3    Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to 

 

  

  

  

 

be followed by the words "without limitation". The phrase "made available" in this Agreement shall mean that the information referred to has been made available if requested by the party to whom such information is to be made available.

6.4    Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

6.5    Entire Agreement; No Third Party Beneficiaries; Rights of Ownership. This Agreement (including the documents and the instruments referred to herein) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, and is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

6.6    Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Florida without regard to principles of conflicts of law. Each party hereby irrevocably submits to the jurisdiction of any Florida state court or any federal court in the State of Florida in respect of any suit, action or proceeding arising out of or relating to this Agreement, and irrevocably accept for themselves and in respect of their property, generally and unconditionally, the jurisdiction of the aforesaid courts.

6.7    No Remedy in Certain Circumstances. Each party agrees that, should any court or other competent authority hold any provision of this Agreement or part hereof or thereof to be null, void or unenforceable, or order any party to take any action inconsistent herewith or not to take any action required herein, the other party shall not be entitled to specific performance of such provision or part hereof or thereof or to any other remedy, including but not limited to money damages, for breach hereof or thereof or of any other provision of this Agreement or part hereof or thereof as a result of such holding or order.

 

6.8    Publicity. Except as otherwise required by law or the rules of the SEC, so long as this Agreement is in effect, no party shall issue or cause the publication of any press release or other public announcement with respect to the transactions contemplated by this Agreement without the written consent of the other party, which consent shall not be unreasonably withheld. GMEC may make a press release or other public announcement as well as filing a current report to the United States Securities and Exchange Commission. Concept X acknowledges that GMEC may be obligated under applicable securities laws to file, and hereby consents to GMEC filing, a copy of this Agreement with the United States Securities and Exchange Commission.

6.9    Confidentiality.

Notwithstanding the disclosures required by the SEC as set forth in Section 6.8 herein, GMEC and Concept X acknowledge that each will be providing to the other information

 

  

  

  

 

that is non-public, confidential, and proprietary in nature (the "Confidential Information").  Each, and their respective affiliates, representative, agents and employees, will keep the Confidential Information confidential and will not, except as otherwise provided below, disclose such information or use such information for any purpose other than for negotiation of the Agreement and the evaluation and consummation of the transactions described herein, provided however that this provision will not apply to information that:

	  	
(a)

	
becomes generally available to the public absent any breach of this provision;

  

	  	
(b)

	
was available on a non-confidential basis to a Party prior to its disclosure pursuant to this Agreement; or

 

	  	
(c)

	
becomes available on a non-confidential basis from a third party who is not bound to keep such information confidential

 

Each Party hereto agrees that it will not make any public disclosure of the existence of this Agreement or of any of its terms without first advising the other party of the proposed disclosure, unless such disclosure is required by applicable law or regulation and in any event the Party contemplating disclosure will inform the other Party of and obtain its consent to the form and content of such disclosure, which consent will not be unreasonably withheld or delayed.

 

Each Party hereto agrees that immediately upon any discontinuance of activities by either party such that the Transaction will not be consummated, each Party will return to the other all Confidential Information.

6.10    Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

  

  

  

IN WITNESS WHEREOF, this Agreement has been signed by the parties set forth below as of the date set forth above.

	
 

GREAT CHINA MANIA HOLDINGS, INC.

 

 

 

/s____________________                                                                  

Kwan Yin Roy Kwong, CEO

 

 

 

 

 

CONCEPT X LIMITED

 

 

 

/s/_______________                                                                    

Lee Chi Lun, Director

 

 

 

/s/_____________________                                                               

Lee Chi Lun, Sole Shareholderfzmd_ex101.htm

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.

 

Texas AmBioMed, LLC - Distributor Agreement

 

	

DISTRIBUTOR NAME: Fuse Medical, LLC

 

PRINCIPAL CONTACT: Jonathan Brown

 

ADDRESS:PO Box 101782

 

Ft. Worth TX 76185

 

PHONE: 419.351.0444

 

FAX: 469.519.0549

 

E-MAIL:jbrown@fusemedical.com

 

This Distributor Agreement (“Agreement”), effective as of the 2nd day of August 2012 (the “Effective Date”), is entered into by and between Texas AmBioMed, LLC, a Texas limited liability corporation having offices at 1565 N. Central Expressway, Suite 200, Richardson, TX 75080, U.S.A. (“AMBIOMED”), and Fuse Medical, a Delaware limited liability company having an address of PO Box 101782, Fort Worth, TX 76185 (“Distributor”).

 

BACKGROUND

 

A. Distributor desires to distribute AMBIOMED Products (as defined below and included in Exhibit A) in the Territory on the terms and conditions set forth below.

 

B. AMBIOMED desires to appoint Distributor as a distributor of Products in the Territory on the terms and conditions below.

 

1. DEFINITIONS

 

1.1. “Customers” shall mean end-user customers for the Products solicited by Distributor within the Territory.

 

1.2. “Product” or “Products” shall mean AMBIOMED-labeled products listed on Exhibit A attached hereto. Changes to Exhibit A are subject to mutual agreement between the Parties. AMBIOMED is authorized to include subsequent generations and/or developments of Products without Distributor’s approval, provided that the prices remain unchanged. AMBIOMED will provide written notice to Distributor if any such subsequent generations and/or developments of Products are made.

 

1.3. “Territory” shall mean Global.

	 	

2. APPOINTMENT

 

2.1. Grant. AMBIOMED hereby appoints Distributor, and Distributor hereby accepts the appointment, as AMBIOMED’s non-exclusive party authorized to purchase Products from AMBIOMED for resale and distribution in the Territory and for the indications specified in Exhibit A, provided that Distributor shall not actively market Products elsewhere than in the Territory or for indications other than as specified in Exhibit A. Notwithstanding the foregoing, Distributor shall not market or sell Products to the U.S. Department of Veterans Affairs or U.S. Department of Defense except as a sub-distributor to the distributor designated by AMBIOMED to distribute Product to such government units without reaching mutual agreement between AMBIOMED and Distributor.

 

2.2. No Other Rights. Except as expressly provided herein, no right, title or interest is granted by AMBIOMED to Distributor.

 

2.3. No Conflicts. There shall be no conflicts with any competing products associated with this agreement.

 

3. OBLIGATIONS OF DISTRIBUTOR

 

3.1. Diligence. Distributor shall diligently promote the marketing and sales of the Products in the Territory. Except as expressly set forth herein, Distributor shall be solely responsible for all costs and expenses related to the advertising, marketing, promotion, exhibition at conferences and distribution of the Products and for performing its obligations. Distributor shall also be responsible for proctoring cases to provide necessary procedural guidance to physicians during their first experiences with the Product. Distributor shall refrain from making any representations or warranties in respect of the Products, except; (i) those representations and warranties authorized in writing by AMBIOMED, in the form of brochures, memoranda, press releases, advertisements, specification sheets or correspondence prepared by or approved by AMBIOMED in accordance with the terms hereof, and (ii) verbal technical assistance that Distributor received from AMBIOMED and that was subsequently confirmed in writing by Distributor.

 

3.2. Minimum Purchase Requirement. Distributor agrees to purchase the quantities of Product according to the time schedule detailed in Exhibit C hereto during the term of the Agreement (“Minimum Purchases”). If, at the end of any period, where a period is defined as every six (6) month increment beginning with the Effective Date of this Agreement of August 2nd, 2012 and referred to in Section B and Section C of Exhibit C, Distributor has not, for any reason, purchased the corresponding Minimum Purchases, such failure shall be deemed a material breach of this Agreement under Section 16 below.

 

3.3. Reports. Distributor shall report to AMBIOMED, within thirty (30) days after the end of each calendar quarter, on the Distributor Sales Report Form contained in Exhibit B hereto.

 

3.4. Training. Distributor will attend, at its own expense, all sales meetings, training sessions, seminars, trade shows and the like for which AMBIOMED reasonably request attendance by Distributor.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 1	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	4. OBLIGATIONS OF AMBIOMED 

 

4.1. Information and Support.AMBIOMED shall provide Distributor with technical assistance, through meetings and training programs as may be offered by AMBIOMED from time to time.

 

4.2. Marketing Support.AMBIOMED will assist Distributor with advertising material, sales promotion aids, displays, literature and convention assistance (as requested) and will provide reasonable assistance to Distributor in promotional activities.

 

4.3. Training.AMBIOMED shall provide Distributor with technical assistance through training programs as may be offered by AMBIOMED in its discretion from time to time.

 

5. PRICE/PRICE CHANGE

 

5.1. Price. The prices and fees to be paid by Distributor to AMBIOMED for Products shall be as set forth in Exhibit C - Product Prices, attached hereto for the term of this Agreement (“Price”).

 

5.2. Price Changes Generally. Price changes are subject to an agreement between the Parties, provided that AMBIOMED in the event receives a price increase from their suppliers or manufacturers, AMBIOMED may pass through these prices increases by up to 10% from the prices set forth in Exhibit C - Product Prices for the term of this Agreement. Such price changes by AMBIOMED shall become effective after ninety (90) days’ written notice to Distributor, and AMBIOMED shall reasonably accept orders at the earlier price received during such ninety (90) day period.

 

6. TAXES AND OTHER CHARGES.

 

Prices do not include and are net of any taxes or charges of any kind.

 

7. PAYMENT

 

Unless otherwise specified, Products are priced FOB AMBIOMED shipping point. Payment terms are net thirty (30) days from date of shipment. AMBIOMED holds and retains a security interest in Products until payment in full for such Products has been received by AMBIOMED.

 

	 	

8. ORDERS AND ACCEPTANCE 

 

All orders for Products submitted by Distributor shall be placed by written purchase order, signed by Distributor’s authorized signatory, and requesting a shipment date during the term of this Agreement. Such orders constitute firm orders when received by AMBIOMED. All orders for Products are subject to acceptance by AMBIOMED in writing, and AMBIOMED shall have no liability to Distributor with respect to purchase orders that are not accepted. Purchase orders that are not accepted by AMBIOMED are considered accrued toward Minimum Purchases with respect to the Distributor’s obligation to purchase the Minimum Purchases. No partial acceptance of a purchase order shall constitute the acceptance of an entire order, absent the written acceptance of such entire order. To facilitate AMBIOMED’s production scheduling, Distributor shall submit purchase orders to AMBIOMED in accordance with AMBIOMED’s lead times then in effect, which shall be communicated to Distributor upon Distributor’s request. Notwithstanding the foregoing, Distributor understands a third-party will be providing shipping of Products, however AMBIOMED agrees to ensure to Distributor all orders placed by Distributor will be fulfilled and shipped under the exact shipping terms provided and contained within each written purchase order to AMBIOMED.

 

9. SHIPMENT/RISK OF LOSS

 

Products delivered pursuant to the terms of this Agreement shall be suitably packed for shipment in AMBIOMED’s standard shipping cartons, marked for shipment to the destination specified in Distributor’s purchase order, and loaded onto the carrier FOB AMBIOMED shipping point. Subject to Section 11, 15 and 18.1 below, all sales are final.

 

10. ORDER CHANGES PRIOR TO SHIPMENT

 

Purchase orders for Products may be canceled or rescheduled prior to shipment only with AMBIOMED’s written approval.

 

11. REJECTION

 

11.1. Inspection and Acceptance. Distributor shall inspect all Products promptly upon receipt thereof and may reject any Product that is defective as a result of an act or omission by AMBIOMED, provided that Distributor shall (i) within fifteen (15) days after receipt of such alleged defective Product, notify AMBIOMED of its rejection and request a Return Material Authorization (“RMA”) number, and (ii) within ten (10) days of receipt of the RMA number from AMBIOMED, return such rejected Product to AMBIOMED. Products not rejected within the foregoing time periods shall be deemed accepted by Distributor.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 2	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	11.2. Repair or Replacement. In the event that AMBIOMED determines that the returned Product is defective and properly rejected by Distributor, AMBIOMED shall at its option repair or replace such defective Product, or accept return for credit of such defective Product. AMBIOMED shall return to Distributor, freight prepaid, all repaired or replaced Products properly rejected by Distributor. 

 

11.3. No other return of Products. Except as set forth in this Section 11 and in Section 15.4, Distributor may not return Products to AMBIOMED.

 

12. PRODUCT CHANGES

 

AMBIOMED reserves the right from time to time in its sole discretion, without incurring any liability to Distributor with respect to any previously placed purchase order, to discontinue or to limit its production of any Product; to allocate, terminate or limit deliveries of any Product in time of shortage; to alter the design or construction of any Product; and upon at least ninety (90) days’ notice to Distributor, to change its sales and distribution policies, provided that such changes are not inconsistent with the terms of this Agreement.

 

13. FORECASTS

 

By the end of the first week of each quarter, Distributor shall provide AMBIOMED with a good faith six (6) month rolling forecast showing Distributor’s prospective requirements for the Products and anticipated purchase order submittal dates, including all sales and business prospects, in such format as specified by AMBIOMED (“Forecast”). Each Forecast shall cover the six (6) month period commencing on the first day of the quarter following submission of the Forecast to AMBIOMED. Forecasts are for AMBIOMED’s planning purposes only and shall not constitute a binding obligation on the part of AMBIOMED to supply Products in accordance with such Forecasts, nor shall Forecasts constitute firm purchase orders by Distributor.

 

14. METHOD OF SHIPMENT - RETURNED PRODUCT

 

Any Product returned to AMBIOMED by Distributor as authorized under this Agreement shall be shipped to AMBIOMED’s facility address first set forth above (or such other location as AMBIOMED may designate in writing) FOB Distributor’s shipping point, and shall be packed in its original packing material. AMBIOMED may refuse to accept any Product not packed and shipped as herein provided. AMBIOMED shall return to Distributor, freight prepaid, all repaired or replaced Products properly rejected by Distributor.

 

15. LIMITED WARRANTY

 

15.1. Limited Warranty. Subject to the provisions of this Section 15, AMBIOMED warrants for a period of one (1) year after shipment (i) that each non-amnion based Product is free from material defects in material and workmanship and has a shelf-life of at least six (6) months from the date of shipment to Distributor and (ii) that each amnion based Product has been collected, processed and stored in compliance with all applicable laws and standards, including the AATB Standards and Title 21, Code of Federal Regulations 1271, Human Cells, Tissues, and Cellular and Tissue-Based Products, and has a shelf-life of at least two (2) years from the date of shipment to Distributor.

	 	15.2. DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 15.1 ABOVE, AMBIOMED MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED, OR OTHERWISE, AND AMBIOMED SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING THE FOREGOING, AMBIOMED DOES NOT EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT BE EXCLUDED OR LIMITED BY LAW. 

 

15.3. Distributor Limitations. Except to the extent required by applicable law, Distributor shall not pass on to its Customers a warranty of greater scope or protection than the warranty (including the limited remedy, exclusions, and limitation of liability) set forth in Section 15.1.

 

15.4. Product Returns. In order to return Product that fails to conform to the warranty set forth in Section 15.1, Distributor shall (i) notify AMBIOMED in writing that such Product failed to conform to the warranty set forth in Section 15.1 and furnish a detailed explanation of any alleged nonconformity, as required by AMBIOMED’s then-current policy; (ii) obtain a RMA number for the nonconforming Product from AMBIOMED; and (iii) within ten (10) days of receipt of the RMA number, return such Product to AMBIOMED as specified by AMBIOMED with the RMA number prominently attached. In the event that any rejected Product is determined by AMBIOMED mutual consent between AMBIOMED and Distributor or third-party evaluation laboratory (whichever you prefer) to not be defective or to have been modified or subjected to stress, misuse, abuse or unauthorized repair, Distributor shall reimburse AMBIOMED for all costs and expenses related to the shipping, insurance, inspection, repair, if any, and return of such Product to and from Distributor.

 

15.5. Product Recalls. In the event (a) any government authority issues a request, directive or order that any Product be recalled, (b) a court of competent jurisdiction orders such a recall, or (c) AMBIOMED reasonably determines, after consultation with Distributor, that any Product should be recalled, the parties shall take all appropriate corrective actions for recall. AMBIOMED shall have administrative responsibility for effecting any such recall. Distributor shall provide AMBIOMED with necessary customer lists and other information to enable AMBIOMED to conduct such recall activities, and Distributor shall cooperate with AMBIOMED in contacting Customers. Each party shall bear its own costs incurred in connection with such recall except that AMBIOMED shall, at its option, either refund the price for recalled Products or replace recalled Products held by Distributor or its Customers within a reasonable time at AMBIOMED’s expense, including freight and applicable duties. If Distributor is required to compensate its Customers as a result of Product being recalled, then AMBIOMED shall reimburse Distributor for any such compensation up to the amount received by AMBIOMED for the sale of the affected Products to such Customers. The obligations set forth in this Section 15.5 shall survive any termination of this Agreement.

 

16. TERM AND TERMINATION

 

16.1. Term. This Agreement shall commence upon the Effective Date and continue in full force and effect for a period of one (1) year thereafter. Unless this Agreement is terminated in writing by either party at an anniversary date of this Agreement, this Agreement shall be extended for additional one (1) year terms.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 3	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	16.2. Termination for Cause.AMBIOMED may terminate this Agreement effective upon written notice to Distributor in the event Distributor: 

 

(i) dissolves, ceases to function as a going concern or to conduct operations in the normal course of business or enters into any composition proceedings, or

 

(ii)  has a petition filed by or against it under any bankruptcy or insolvency law, for example and not for limitation a Petition for winding up the party, which petition has not been dismissed or set aside within ten (10) days of its filing, or makes an assignment for the benefit of creditors under a bankruptcy plan or proceeding; or

 

(iii) fails to perform any of its obligations (including, without limitation, non-payment of open invoices or failure to maintain minimum purchase requirements) under this Agreement or breaches any covenant herein and fails to cure such failure or breach within fifteen (15) days after written notice of such default.

 

(iv) acts in a manner of misuse or mistreatment of the Product in accordance with any written information provided from AMBIOMED to Distributor.

 

16.3. Purchase Orders; No Waiver. Distributor shall be obligated to accept deliveries of Products for which purchase orders were accepted by AMBIOMED prior to the effective date of termination. After any notice of termination has been delivered by either party hereunder, orders for Product not yet shipped by AMBIOMED to Distributor are subject to cancellation at AMBIOMED’s sole option and, if not cancelled, unless otherwise agreed by AMBIOMED, shall require prepayment by Distributor to AMBIOMED. AMBIOMED reserves the right to withhold shipment of Product after Distributor suffers an event in Section 16.2(ii), above. The acceptance of any purchase order from, or the sale or license of any Product to, Distributor after the termination or expiration of this Agreement shall not be construed as a renewal or extension of this Agreement nor as a waiver of termination of this Agreement.

 

16.4. No Liability for Termination. Except as expressly required by law, in the event of termination of this Agreement by either party in accordance with any of the provisions of this Agreement, neither party shall be liable to the other because of such termination, including but not limited to compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or goodwill, or on account of any expenditures, inventory, investments, leases or other commitments including hiring of personnel, in connection with the business of AMBIOMED or Distributor. Termination shall not, however, relieve either party of obligations incurred prior to the termination.

	 	16.5. Survival. Distributor may sell Products existing in its inventory as of the effective date of termination of this Agreement for a period of one hundred and eighty (180) days after the effective date of such termination (‘Wind­Down Period”). During the Wind-Down Period, the provisions of Sections 6, 7 and 9 shall survive. In addition to the provisions set forth in this Section 16.5, and by way of example and not of limitation, the following provisions shall survive expiration or any termination of this Agreement: Sections 1, 2.3. 7, 15, 16.4-16.6, 17, 18, 20, 22 and the last sentence of Section 19.2. At AMBIOMED’s sole discretion and upon thirty (30) days’ written notice to Distributor AMBIOMED may repurchase any or all Products from Distributor existing in its inventory for the Price. Costs for shipment shall be borne by Distributor if Distributor terminated this Agreement pursuant to Section 15.1 or if AMBIOMED terminated this Agreement other than pursuant to the last sentence of Section 15.1. In all other cases AMBIOMED shall bear the shipment costs. 

 

16.6. Return of Materials. All Products, trademarks, marks, trade names, patents, copyrights, any Customer information not yet provided to AMBIOMED under Section 3, designs, drawings, formulas or other data, photographs, samples, literature, and sales and promotional aids of every kind shall remain the property of AMBIOMED. Within thirty (30) days after the effective date of termination of this Agreement, Distributor shall at AMBIOMED’s option destroy all tangible items bearing, containing, or contained in, any of the foregoing, in its possession or control and provide written certification of such destruction, or prepare such tangible items for shipment to AMBIOMED or AMBIOMED’s designee, as AMBIOMED may direct, at AMBIOMED’s expense. Distributor shall not make or retain any copies of any Confidential Information (as defined in Section 17 below). which may have been entrusted to it.

 

17. CONFIDENTIALITY AND RIGHTS PROPRIETARY

 

17.1. ABIOMED’s Confidentiality. Distributor acknowledges that by reason of its relationship to AMBIOMED hereunder it will have access to certain information and materials concerning AMBIOMED’s business, plans, Customers, technology, and Products, which are confidential and of substantial value to AMBIOMED, which value would be impaired if such information were disclosed to third parties (“Confidential Information”). Distributor agrees that it will not use in any way for its own account or the account of any third party, nor disclose to any third party, any Confidential Information. Distributor shall take every reasonable precaution to protect the confidentiality of Confidential Information. Distributor shall not publish any technical description of the Products beyond the description published by AMBIOMED. In the event of termination of this Agreement, Distributor shall not use or disclose any Confidential Information of AMBIOMED, and Distributor shall not manufacture or have manufactured any products utilizing any of AMBIOMED’s confidential information. without the express written permission of AMBIOMED.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 4	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	17.2. Distributor’s Confidentiality. AMBIOMED acknowledges that by reason of its relationship to Distributor hereunder it will have access to certain information and materials concerning Distributor’s business, plans, Customers, technology, and Products, which are confidential and of substantial value to Distributor, which value would be impaired if such information were disclosed to third parties (“Confidential Information”). AMBIOMED agrees that it will not use in any way for its own account or the account of any third party, nor disclose to any third party, any Confidential Information. AMBIOMED shall take every reasonable precaution to protect the confidentiality of Confidential Information. AMBIOMED shall not publish any technical description of the Products beyond the description published by Distributor. In the event of termination of this Agreement, AMBIOMED shall not use or disclose any Confidential Information of Distributor, and AMBIOMED shall not manufacture or have manufactured any products utilizing any of Distributor’s confidential information, without the express written permission of Distributor. 

 

17.3. Proprietary Rights. Distributor agrees that AMBIOMED retains all of its right, title and interest in and to all patent rights, trademarks, trade names, inventions, copyrights, know-how and trade secrets relating to the Products or the product lines that include the Products, and the design, processing, manufacture, operation or service of the Products. The use by Distributor of any of these property rights is authorized only for the purposes herein set forth and upon termination of this Agreement for any reason such authorization will cease. Distributor shall not (and shall require that its Customers do not) remove, alter, cover or obfuscate any proprietary rights notices placed or embedded by AMBIOMED on or in any Product. Distributor shall not apply to register any proprietary rights covered by the Products in its own name.

 

18. INDEMNIFICATION AGAINST PATENT, COPYRIGHT, TRADEMARK INFRINGEMENT AND PRODUCT LIABILITY

 

18.1. Indemnity. Distributor agrees that AMBIOMED has the right to defend, or at its option to settle, and AMBIOMED agrees, at its own expense, to defend or at its option to settle, any third party claim, suit or proceeding (collectively, “Action”) brought against Distributor alleging the Products infringe any patent, copyright or trademark in existence as of the Effective Date, subject to the limitations hereinafter set forth. AMBIOMED will have sole control of any such Action or settlement negotiations, and AMBIOMED agrees to pay, subject to the limitations hereinafter set forth, any final judgment entered against Distributor on such issue in any such Action defended by AMBIOMED. Distributor agrees that AMBIOMED will be relieved of the foregoing obligations unless Distributor notifies AMBIOMED promptly in writing of such Action, gives AMBIOMED authority to proceed as contemplated herein, and gives AMBIOMED proper and full information and assistance to settle and/or defend any such Action. If it is adjudicatively determined, or if AMBIOMED believes, that the Products, or any part thereof, infringe any patent, copyright or trademark, or if the sale or use of the Products, or any part thereof, is, as a result, enjoined, then AMBIOMED may, at its election, option, and expense: (i) procure for Distributor the right under such patent, copyright or trademark to sell or use, as appropriate, the Products or such part thereof; or (ii) replace the Products, or part thereof, with other non­infringing suitable Products or parts; or (iii) suitably modify the Products or part thereof; or (iv) remove the Products, or part thereof, terminate distribution or sale thereof and refund the payments paid by Distributor for such Products less a reasonable amount for use and damage. AMBIOMED will not be liable for any costs or expenses incurred without its prior written authorization.

	 	18.1.1 Limitations. Notwithstanding the provisions of Section 18.1, AMBIOMED has no liability to Distributor for (i) any infringement of patent or copyright claims alleging infringement by completed equipment or any assembly, combination, method or process in which any of the Products may be used but not covering the Products standing alone; (ii) any trademark infringements involving any marking or branding not applied by or requested by AMBIOMED , or involving any marking or branding applied by AMBIOMED at the request of Distributor; or (iii) the modification of the Products, or any part thereof, unless such modification was made by AMBIOMED, where such infringement would not have occurred but for such modifications. 

 

18.1.2 Disclaimer. AMBIOMED’S LIABILITY ARISING OUT OF OR RELATING TO SECTIONS 18.1 and 18.1.1 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY DISTRIBUTOR TO AMBIOMED FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE INFRINGEMENT CLAIM. THE FOREGOING PROVISIONS OF THIS SECTION 18 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF AMBIOMED AND THE EXCLUSIVE REMEDY OF DISTRIBUTOR AND ITS CUSTOMERS, WITH RESPECT TO ANY ALLEGED PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT BY THE PRODUCTS OR ANY PART THEREOF.

 

18.2. Product Liability Indemnification - AMBIOMED. AMBIOMED shall at its own expense indemnify and hold harmless Distributor, and its directors, officers, employees, managers, members, owners, shareholders. and agents, from and against third party claims for actual losses or damages, liabilities, penalties, demands, suits or actions, and related costs and expenses (including, without limitation, Distributor’s reasonable out-of-pocket expenses of investigation and recall, counsel fees, judgments and settlements) for injury to or death of any person or property damage or any other loss suffered or allegedly suffered by any person or entity and arising out of or otherwise in connection with any defect or alleged defect of the Products as sold by AMBIOMED to Distributor under this Agreement (the “Claim”). AMBIOMED will have sole control of any such Claim or settlement negotiations. Distributor agrees that AMBIOMED will be relieved of the foregoing obligations unless Distributor notifies AMBIOMED promptly in writing of such Claim, gives AMBIOMED authority to proceed as contemplated herein, and gives AMBIOMED proper and full information and assistance to settle and/or defend any such Claim.

 

18.3. AMBIOMED will list and add Distributor as an additional insured entity on all of AMBIOMED’s Product coverage, liability and insurance related policies. AMBIOMED will provide Distributor with an original written copy of Distributor being added and listed on those policies.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 5	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	19. USE OF AMBIOMED / MIMEDX TRADEMARKS / TRADE NAMES 

 

19.1. Trademarks. AMBIOMED is a licensed distributor of Mimedx. During the term of this Agreement, Distributor shall have the right to indicate to the public that it is an authorized distributor of the Products and to advertise such Products under the applicable trademarks, marks, and trade names of AMBIOMED and Mimedx as set forth in Exhibit D (“Trademarks”) and in the promotion and distribution of the Products; provided, however, that upon ninety (90) days’ prior written notice to Distributor, AMBIOMED or Mimedx may substitute alternative marks for any or all of the AMBIOMED/Mimedx Trademarks. All representations of AMBIOMED/Mimedx Trademarks that Distributor intends to use shall first be submitted to AMBIOMED/Mimedx for approval (which shall not be unreasonably withheld) of design, color and other details or shall be exact copies of those AmBioMed\Mimedx used by AMBIOMED/Mimedx. In addition, Distributor shall fully comply with all reasonable guidelines, if any, communicated by AMBIOMED/Mimedx concerning the use of AMBIOMED or Mimedx’s Trademarks.

 

19.2. Use. Distributor shall not alter or remove any of AMBIOMED or Mimedx’s Trademarks affixed to the Products by Mimedx. Except as set forth in this Section 19, nothing contained in this Agreement shall grant or shall be deemed to grant to Distributor any right, title or interest in or to AMBIOMED or Mimedx’s Trademarks. All uses of AMBIOMED or Mimedx’s Trademarks will inure solely to AMBIOMED, Mimedx and Distributor shall obtain no rights with respect to any of AMBIOMED or Mimedx’s Trademarks, other than the right to distribute Products as set forth herein, and Distributor irrevocably assigns to AMBIOMED and Mimedx all such right, title and interest, if any, in any of AMBIOMED or Mimedx’s Trademarks. At no time during or after the term of this Agreement (except to the extent expressly disallowed by applicable law) shall Distributor challenge or assist others to challenge AMBIOMED or Mimedx’s Trademarks or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to those of AMBIOMED or Mimedx, nor use any AMBIOMED or Mimedx Trademark as a business name, nor form a company whose name incorporates any AMBIOMED or Mimedx Trademark. Upon termination of this Agreement, Distributor shall immediately cease to use all AMBIOMED and Mimedx’s Trademarks and any listing by Distributor of AMBIOMED or Mimedx’s name in any telephone book, directory, public record or elsewhere, shall be removed by Distributor as soon as possible, but in any event not later than the subsequent issue of such publication.

	 	20. LIMITATION OF LIABILITY AND DISTRIBUTOR INDEMNITY 

 

20.1. No Consequential Damages. Notwithstanding any terms of this Agreement, in no event shall either party be liable for lost profits, cost of procurement of substitute goods, or any other special, reliance, incidental, or consequential damages incurred by the other party, however caused and under any theory of liability whether based in contract, tort (including negligence), or otherwise. The foregoing limitations shall apply regardless of whether such party has been advised of the possibility of such damages and notwithstanding the failure of essential purpose of any limited remedy stated herein.

 

20.2. Distributor Indemnity. Distributor shall at its own expense indemnify and hold harmless AMBIOMED and its directors, officers, employees and agents, from and against any and all third party claims, other than product liability claims referred to in Section 18.2, for losses, actual damages liabilities, penalties, suits or actions, and related reasonable costs and expenses (including, without limitation, AMBIOMED’s expenses of investigation and recall, counsel fees, judgments and settlements) for any injury to or death of any person or property damage or other actual loss suffered by any person or entity and arising out of or resulting from the negligence, misconduct, bad faith, misrepresentation, false claim, failure to act or to refrain from acting where required to act, unauthorized repair or alteration of any Product, errors and omissions in advertising and promotional materials and the like of or by Distributor and/or its agents, employees, officers, directors, shareholders, partners (collectively, such claims, etc., referred to herein as “Damages Claim”), it being clearly acknowledged, understood and agreed that Distributor shall be held strictly liable for its conduct and shall fully indemnify AMBIOMED from any Damages Claim as stated herein.

 

21. COMPLIANCE WITH LAWS

 

Nothing in this Agreement shall require either party to take any action that would violate any governmental regulation or law to which either of them is subject. Distributor shall, at its sole cost and expense, obtain in the Territory such governmental approvals, licenses or permits as may be necessary to effectuate the purposes of this Agreement, and shall comply with all federal, state and local laws, regulations and rulings of governmental bodies having jurisdiction over Distributor’s business, in respect of the sale of the Products.

 

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                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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.

 

	

22. MISCELLANEOUS PROVISIONS

 

22.1. Independent Contractors. The relationship of AMBIOMED and Distributor established by this Agreement is that of independent contractors, and neither party is an employee, agent, partner or joint venturer of the other. No agency relationship between the parties, whether expressed or implied, is created by this Agreement.

 

22.2. Assignment. Distributor may not transfer or assign its rights or obligations under this Agreement without the prior written consent of AMBIOMED. Subject to the foregoing sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto, their successors and assigns. Successors of AMBIOMED shall include any party which acquires all or part of the business or assets of AMBIOMED or into which AMBIOMED merges.

 

22.3. No Implied Waivers. The failure of either party at any time to require performance by the other of any provision hereof shall not affect the right of such party to require performance at any time thereafter, nor shall the waiver of either party of a breach of any provision hereof be taken or held to be a waiver of a provision itself.

 

22.4. Severability. If any provision of this Agreement is held to be invalid by a court of competent jurisdiction, then the remaining provisions will nevertheless remain in full force and effect. The parties agree to renegotiate in good faith those provisions so held to be invalid to be valid, enforceable provisions which provisions shall reflect as closely as possible the original intent of the parties, and further agree to be bound by the mutually agreed substitute provision.

 

22.5. Force Majeure. Except for payment of monies, neither party shall be liable for failure to fulfill its obligations under this Agreement or any purchase order issued hereunder or for delays in delivery due to causes beyond its reasonable control, including, but not limited to, acts of God, man-made or natural disasters, earthquakes, fire, riots, flood, material shortages, strikes, delays in transportation or inability to obtain labor or materials through its regular sources. The time for performance of any such obligation shall be extended for the time period lost by reason of the delay.

 

22.6. Conflicting Terms. The parties agree that the terms and conditions of this Agreement shall prevail, notwithstanding contrary or additional terms, in any purchase order, sales acknowledgment, confirmation or any other document issued by either party effecting the purchase and/or sale of Products, unless the parties agree otherwise in writing.

 

22.7. Headings. Headings of paragraphs herein are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

 

22.8. Applicability of Terms. The provisions of this Agreement under which the liability of AMBIOMED is excluded or limited shall not apply to the extent that such exclusions or limitations are declared illegal or void under the laws applicable in the Territory in which Products are sold, unless the illegality or invalidity is cured under the laws of the Territory by the fact that the law of the State of Georgia governs this Agreement.

	 	22.9. Notice. Any notice required or permitted to be given under this Agreement shall be delivered (i) by hand with proper receipt acknowledged by the recipient, (ii) by registered or certified mail, postage prepaid, return receipt requested, to the address of the other party first set forth above, or to such other address as a party may designate by written notice in accordance with this Section 22.9, (iii) by overnight courier, or (iv) by fax with confirming letter mailed under the conditions described in (ii) above. Notice so given shall be deemed effective when received, or if not received by reason of fault of addressee, when delivered. Notice to Distributor shall be sent to the attention of General Counsel. 

 

22.10. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements relating thereto, written or oral, between the parties. Amendments to this Agreement must be in writing, signed by the duly authorized officers of the parties.

 

22.11. Governing Law. This Agreement shall be governed by and construed under the law of the State of Texas, without regard to conflict of laws principles and venue for any action brought shall be in Dallas County, Texas.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the Effective Date.

 

 

FUSE MEDICAL, LLC 

 

by: /s/ Jonathan Brown

Jonathan Brown, COO

 

Texas AmBioMed, LLC. 

 

by: /s/ Mark Brooks          

Mark Brooks, President & COO

 

Attached Exhibits 

Exhibit A:     Product List

Exhibit B:      Distributor Sales Report Form - BLANK 

Exhibit C:      Product Prices; Minimum Purchase Requirements; Initial Purchase Requirement 

Exhibit D:      Trademarks

	 	 	 

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 7	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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

 

Product List

 

	
Product Name

	 	
Indications

	 	
P/N/Size

	  	 	  	 	  
	
AmnioFix® Spine Products

	 	
Spine

	 	
All Product Sizes

	 	 	 	 	 
	
AmnioFix® Nerve Wrap

	 	
Nerve Wrap

	 	
All Product Sizes

	 	 	 	 	 
	
EpiFix®

	 	
Wound Care

	 	
All Product Sizes

	 	 	 	 	 
	
AmBioChoice

	 	
All

	 	
All Product Sizes

	 	 	 	 	 
	
AmBioChoice Plus

	 	
All

	 	
All Product Sizes

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 8	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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

 

Distributor Sales Report Form

 

	
Sales during quarter

ended day/month/year

	  	  	  
	
Account

	
Product Code

	
Date of Sale

	
Number of Units

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

	
Rolling Forecast for next 6 months from day/month/year

	  	  	  	  	  	  	  
	
Product Code

	
Jan

	
Feb

	
Mar

	
April

	
May

	
June

	
Total

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  

 

	
Product Code

	
July

	
Aug

	
Sept

	
Oct

	
Nov

	
Dec

	
Total

	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 9	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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 C

 

Product Prices; Minimum Purchase Requirements; Initial Purchase

 

A) DISTRIBUTOR PRICE LIST FOR PRODUCTS AS PER EXHIBIT A:

 

	  	
Human Amniotic Membrane Tissue

	
Stocking Distributor Pricing 2012

	
Part

Number

	
Part Description

	
Tier A

10-24

	
Tier B

25-124

	
Tier C

125-250

	
ABC-5160

	
AmBioChoice Amniotic Membrane Allograft 16mm Disc

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABC-5230

	
AmBloChoice Amniotic Membrane Allograft 2cm x 3cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABC-5440

	
AmBioChoice Amniotic Membrane Allograft 4cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABC-5460

	
AmBioChoice Amniotic Membrane Allograft 4cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABP-5230

	
AmBioChoice Plus Amniotic Membrane Allograft 2cm x 3cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABP-5440

	
AmBioChoice Plus Amniotic Membrane Allograft 4cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
ABP-5460

	
AmBioChoice Plus Amniotic Membrane Allograft 4cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
GS-5160

	
EpiFIx® Amniotic Membrane Allograft 16mm Disc

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
GS-5230

	
EpiFix® Amniotic Membrane Allograft 2cm x 3cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
GS-5440

	
EpiFix® Amniotic Membrane Allograft 4cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
BC-5770

	
EpiFix® Amniotic Membrane Allograft 7cm x 7cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
APS-5160

	
AmnioFix Amniotic Membrane Allograft 16mm Disk

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
APS-5230

	
AmnioFix Amniotic Membrane Allograft 2cm x 3cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
APS-5440

	
AmnioFix Amniotic Membrane Allograft 4cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AAS-5330

	
AmnioFix Amniotic Membrane Allograft 3cm x 3cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AAS-5440

	
AmnioFix Amniotic Membrane Allograft 4cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AAS-5460

	
AmnioFix Amniotic Membrane Allograft 4cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AAS-5660

	
AmnioFix Amniotic Membrane Allograft 6cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
TN-5220

	
AmnioFix Nerve Wrap Amniotic Membrane Allograft 2cm x 2cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
TN-5240

	
AmnioFix Nerve Wrap Amniotic Membrane Allograft 2cm x 4cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
TN-5360

	
AmnioFix Nerve Wrap Amniotic Membrane Allograft 3cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
TN-5460

	
AmnioFix Nerve Wrap Amniotic Membrane Allograft 4cm x 6cm

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AI-5050

	
Amniotic Membrane Tissue, Micronized 0.5ml

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
Al-5125

	
Amniotic Membrane Tissue, Micronized 1.25ml

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

	
AI-5200

	
Amniotic Membrane Tissue, Micronized 2.0ml

	
$

	
[*******]

	
$

	
[*******]

	
$

	
[*******]

B) INITIAL PURCHASE AND TIER LEVEL PURCHASE REQUIREMENT:

 

The initial purchase order will be defined and determined as the total purchase order quantity as a combination of the products listed from the table above which are purchased by Distributor from AMBIOMED within the first thirty (30) days from Effective Date of this Agreement. This initial purchase order will set the Tier Level Pricing for Dislributor, for all products listed from the table above, for a period of six (6) months from Effective Date of this Agreement. All purchase orders placed within that six (6) month period will remain at the initial tier level. After the initial period of six (6) months, from the Effective Date of this Agreement, Distributor will establish a new Tier Level Price for the next six (6) month period with the same thirty (30) day purchase period principles in affect. In the event, the order quantity of a single order exceed that of the specified tier, that single order may extend into the next tier level pricing. Order quantities are not cumulative over the six (6) month period.

 

Note: Products must be purchased in the Order Increments as stated. If payment is not received within the payment terms or the minimum purchase requirement is not met for six (6) month period as described above, pricing will be increased to Tier A for all open invoices at the time of default.

 

C) MINIMUM PURCHASE REQUIREMENT:

 

Distributor agrees to a minimum purchase requirement of ten (10) units of Human Amniolic Membrane Tissue from the Price List for Products table above hereunto Exhibit C during each corresponding six (6) month period of this Agreement described in Section B above.

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 10	
                                                              AmBioMed (___)

                                                               Distributor (___)

 

  

 

  

 

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 D

 

Trademarks

 

Registered for Mimedx

MiMedx®

HydroFix®

EpiFix®

AmnioFix®

Purion®

 

*

 

	AmBioMed Distribution Agreement-(non-exclusive) 01.04.2012	Page 11	
                                                              AmBioMed (___)

                                                               Distributor (___)

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