Item 1.01. Entry into a Material Definitive Agreement



On October 06, 2022, Tenon Medical, Inc. (the "Company") entered into the
Terminating Amended and Restated Exclusive Sales Representative Agreement (the "
Termination Agreement
") with SpineSource, Inc.  ("
SpineSource
"), which terminated the existing Amended and Restated Exclusive Sales
Representative Agreement, effective May 20, 2021 between the Company and
SpineSource (the
"
Restated Sales Agreement
").  Under the Restated Sales Agreement, SpineSource received, among other
things, exclusive rights to market, promote and distribute Company's "Catamaran"
product - known as the Catamaran Sacroiliac Joint Fusion System (the "
Product
") - in the United States and Puerto Rico.  Pursuant to the terms of the
Termination Agreement the parties agreed that they shall have no further rights
or obligations under the Restated Sales Agreement except for those expressly
provided to survive termination, including (i) indemnification obligation; (ii)
commissions payable under the Restated Sales Agreement that were due prior to
the effective date of the Termination Agreement.  However in lieu of rights to
any amounts that may have come due to SpineSource under the Restated Sales
Agreement had it not been terminated, and pursuant to the Termination Agreement,
(i) the Company paid SpineSource $1,000,000 in cash; and (ii) the Company agreed
to pay SpineSource (a) $85,000 per month during the six months after the date of
the Termination Agreement (the "
Transition Period
") and (b) 20% of net sales of the Product sold in the United States and Puerto
Rico until December 31, 2023 and (c) after December 31, 2023, a commission in an
amount equal to 10% of net sales until such time as the aggregate amount paid to
SpineSource under this clause (c) and clause (b) above equal $3,600,000.  In the
event of an acquisition of the Company, the Company will pay SpineSource
$3,600,000 less previous amounts paid to SpineSource pursuant to this clause (c)
and clause (b) above.  For payments received during the Transition Period
SpineSource agreed to (i) use its best efforts and devote as much time as
necessary to transfer to Company all work product it developed on its own or in
collaboration with the Company in connection with the Product; (ii) assist
Company in obtaining assignments of all agreements in effect as of the Effective
Date of this Agreement and all open negotiations, in each case, relating to the
Product; (iii) provide certain summaries and (iv) train Company personnel at
mutually agreed upon dates and time, and transfer related training materials to
Company.

Simultaneously with the execution of the Termination Agreement, the Company
entered into a Consulting Agreement dated October 6, 2022, with SpineSource (the
"
Consulting Agreement
"). Under the terms and conditions of the Consulting Agreement, SpineSource
shall be tasked with organizing, recruiting, training, and coordinating the
Company's Clinical Specialist program, Physician Education program and Sales
Education program as more specifically described in the Consulting Agreement.

The term of the Consulting Agreement is from October 6, 2022, until October 05, 2023, unless extended by mutual agreement of the parties in writing for additional one-year terms, or terminated in accordance with the terms of the Consulting Agreement. In consideration for the services to be provided by SpineSource, the Company shall provide SpineSource a base consulting fee of $700,000 per year, payable in monthly instalments, along with additional compensation of $62,500 per quarter, if certain sales target are met, for four quarters; along with any travel and related out-of-pocket expenses incurred by SpineSource in connection with the performance of the services.

The Consulting Agreement contains non-solicitation and non-competition provisions.

The foregoing summary of the material terms of the Consulting Agreement and the Termination Agreement are not complete and are qualified in its entirety by reference to the text of the Consulting Agreement and the Termination Agreement, as applicable, copies of which is filed herewith as Exhibit 10.1 and 10.2, respectively, the terms of which are incorporated herein by reference.

Item 1.02. Termination of a Material Definitive Agreement

The applicable disclose set forth in Item 1.01 of the Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The applicable disclose set forth in Item 1.01 of the Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.

Item 8.01. Other Events.

The Company has issued a press release with regard to the execution of the Termination Agreement and the Consulting Agreement. The Company believes that as a result of the accrual of the payments owed to SpineSource under the Termination Agreement, the Company will incur a charge of approximately $4.6 million in the fourth quarter of the current fiscal year in addition to the fees for the consulting and transition services to be provided during the quarter.

Item 9.01. Financial Statement and Exhibits.



(d) Exhibits.

Exhibit No.       Description

  10.1*             Consulting Agreement, by and between Tenon Medical, Inc., and
                  SpineSource, Inc.; dated October 06, 2022.
  10.2              Agreement Terminating Amended and Restated Exclusive Sales
                  Representative Agreement, by and between Tenon Medical, Inc., and
                  SpineSource, Inc.; dated October 06, 2022.
  99.1              Press Release

*Portions of this exhibit have been omitted.

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