Document:

EX-10.23

 Exhibit 10.23 

Royalty Agreement 

Between 
 K2M, Inc. and
Josef Gorek, M.D. 
 This royalty agreement is made and effective this 1st day of
April, 2007 (the “Effective Date”) between K2M, Inc., having an address at 751 Miller Drive, SE, Suite F-1, Leesburg, Virginia 20175 (“K2M”) and Josef Gorek, M.D., having an address at P.O. Box 365, Ross, CA 94957 (“Dr.
Gorek”). 
 WHEREAS, Dr. Gorek brought to K2M a disposable, flexible screw based percutaneous retractor concept for consideration
by K2M; and 
 WHEREAS, K2M and Dr. Gorek agreed that if K2M commercialized the percutaneous retractor concept then K2M would pay a
royalty to Dr. Gorek of three percent (3%) of Net Sales; and 
 WHEREAS, K2M has developed the percutaneous retractor concept and
intends to commercialize the percutaneous retractor; 
 NOW, THEREFORE, subject to the mutual promises and covenants contained herein, and
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 

1. Assignment. Dr. Gorek hereby sells, assigns, grants, transfers, conveys and delivers to K2M to have and to hold
until the end of time all right, title and interest, free and clear of all liens or claims, in and to the percutaneous retractor, including but not limited to the patent application entitled Minimally Invasive Retractor and Methods of Use, filed
with the United States Patent and Trademark Office on September 26, 2006, which has been assigned serial number 11/528,223 claiming priority to provisional patent application serial number 60/720,670 filed September 26, 2005, together with
all continuations, divisions, continuations-in-part, and foreign corresponding patent applications, together with any and all patents which may issue on or from any of the foregoing throughout the world, and any confirmations, reissues,
reexaminations extensions, patents of addition and the like which may issue or be issued relating to any of them (the “Assigned Intellectual Property”). 

2. Cooperation. Dr. Gorek agrees to provide reasonable cooperation and assistance to K2M in protecting the
percutaneous retractor in the name of K2M, including but not limited to reviewing and executing any documents reasonably deemed necessary or desirable to apply for and receive patent protection for the percutaneous retractor and related or ancillary
concepts, and to cooperate as reasonably necessary to support efforts deemed reasonably necessary by K2M to enforce its rights in and to the percutaneous retractor. 

3. Royalties. K2M agrees to pay to Dr. Gorek, as full and complete payment for the rights transferred to K2M
pursuant to this agreement, a periodic royalty (“Royalties”) of three percent (3%) of Net Sales of percutaneous flexible screw based retractors exemplified by K2M catalog number 1001-90028 (“Products”), but not less than a
minimum of Twenty Five Dollars ($25) per each such retractor sold or used in surgery. Products shall include 

  
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future modifications of the percutaneous retractor or related or new improvements or additions to such percutaneous retractor to the extent such improvements or modifications are or could be
entitled to priority from U.S. patent application serial number 11/528,223. For the purpose of clarity, however, Products shall not include devices designed for use with the flexible screw based retractor, including but not limited to implants and
instruments used or designed for use with the percutaneous retractor. Furthermore, any and all future flexible screw based retractors which are not and could not be entitled to priority to U.S. patent application serial number 11/528,223 shall be
subject to Dr. Gorek’s Consulting Agreement with K2M BSA, LLC unless otherwise agreed in advance by K2M, Inc. and Dr. Gorek. Royalties on Net Sales of Products occurring during the term of this Agreement shall be paid as follows: 

(i) if such sale is in a country where such sale is covered by at least one issued, valid and enforceable claim of a patent naming
Dr. Gorek as inventor and assigned to K2M pursuant to this Agreement, then Royalties shall be paid on such sales for the life of the applicable patent in such country, and after expiration of such applicable patent K2M shall have the right to
continue selling Products in such country without any further obligation to pay Dr. Gorek Royalties on sales of such Products; or 

(ii) if such sale is made in a country where there is no issued, valid and enforceable claim of a patent naming Dr. Gorek as inventor and
assigned to K2M pursuant to this Agreement which covers such sale, then K2M shall pay Royalties on such sales for a period of twelve (12) years from the Effective Date, after which time K2M shall have the right to continue selling Products in
such country without any further obligation to pay Dr. Gorek royalties on sales of such Products. Notwithstanding the foregoing, in the event Licensee commences payment of royalties to Dr. Gorek hereunder and thereafter a patent issues to
K2M covering such Product and naming Dr. Gorek as inventor, the payment of royalties on such Product shall thereafter be for the life of such patent, if longer. 

In the interest of clarity, in the event K2M decides to market a non-disposable reusable Product, K2M shall pay to Dr. Gorek a royalty of
Twenty Five Dollars ($25) for each use of such Product to place a screw implant in surgery, with a minimum royalty of One Hundred Dollars ($100) for each surgery in which such reusable Product is used. 

  
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 4. Net Sales. The term “Net Sales” for any period means gross
sales of the Products billed and shipped by K2M or its Affiliates, Licensees, or permitted assignees, or other wise used in surgery in connection with sales efforts of K2M or its Affiliates, Licensees or permitted assignees, less allowances and
discounts actually allowed, fees or commissions to a salesman or sales representatives, returns, invoices written off as uncollectible (except if and insofar as such invoices are subsequently collected), billed taxes and customs duties paid by K2M
or its Affiliates, Licensees, or permitted assignees, costs of insurance and transportation, freight and transit insurance and tax, and shall not include samples or demonstration materials or any sale to K2M employees or employees of its Affiliates,
Licensees, independent sales representatives or permitted assignees for any reason other than resale or use in surgery. The term “Net Sales” shall not include 

(i) sales directly or indirectly between the Parties, 

(ii) sales by independent distributors (but shall include sales to such independent distributors), 

(iii) sales between K2M and its Affiliates, Sublicensees or permitted assignees, or 

(iv) sales to any hospital or health care facility at which Dr. Gorek holds medical staff privileges. 

As used herein, the term “Affiliates” means a person or entity that directly or indirectly controls, is controlled by or is under
common control with a party to this Agreement including but not limited to subsidiaries, and or associate companies. As used herein, the terms “Licensee” or “Licensees” means any party to whom K2M grants an arms length license to
make, use or sell Products under the Assigned Intellectual Property. K2M, as the sole owner of the Assigned Intellectual Property, has the right to grant such licenses as it sees fit, provided, however, that K2M agrees not to grant any license which
would result in payments to Dr. Gorek for sales or use in surgery of Products which would be less than had K2M sold or used such product in surgery without first obtaining Dr. Gorek’s consent to such license. 

5. One Royalty Per Product. Under no circumstances shall more than one royalty apply to the sale of a Product,
regardless of whether such Product is covered by more than one patent or patent claim. 
 6. Royalty Accrual.
Royalties payable to Dr. Gorek pursuant to this Agreement shall accrue as and when a Net Sale subject to such royalty is recorded by K2M (or when it should be recorded by K2M under generally accepted accounting principles consistently applied)
or, as the case may be, K2M’s Affiliate, Licensee, or permitted assignee, in accordance with the definition of “Net Sale”, and shall be paid to Dr. Gorek in accordance with the provisions of Section 7 below. 

7. Reports. K2M agrees to deliver quarterly written reports to Dr. Gorek for each quarterly period for which
royalties are payable, within forty-five (45) days after the end of each such period. The report shall set forth the number of Products sold by K2M, its Affiliates, Sublicensees and permitted assignees during such quarterly period, and, based
thereon, the calculation and amount of Royalties payable to Dr. Gorek with respect to such sales. All information contained in such quarterly reports shall be treated as K2M’s confidential information subject to Section 9. 

  
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 8. Payment, Records and Examination. Royalties payable pursuant to
Section 3.1 above, if any, for a reported period shall be due and payable, to the extent calculated and set forth in the corresponding quarterly report delivered to Dr. Gorek pursuant to Section 7, simultaneously with the submission
of such report, by check or bank transfer. In order to enable an independent certified public accounting firm (the “CPA Firm”) of nationally recognized standing, appointed by Dr. Gorek, and reasonably acceptable to K2M, to verify the
proper determination of Royalties which may accrue from time to time pursuant to this Agreement, K2M shall maintain records in sufficient detail to allow for such verification, and, subject to Section 9 below and upon reasonable notice, allow
the CPA Firm to examine K2M’s consolidated books and records, and the books and records of its Licensees and permitted assignees pertaining to Product sales subject to K2M’s Royalty obligations hereunder (such examination, the
“Examination”). Examinations shall occur on a date reasonably convenient to K2M, only during normal business hours, and not more than once a year, and shall be solely for the purpose of verifying the calculation of Royalties due under this
Agreement. The CPA Firm shall furnish a copy of any Examination results to Dr. Gorek and K2M promptly after completion thereof, together with all work papers. Unless written objection is made by Dr. Gorek and delivered to K2M within ninety
(90) days after completion of any such Examination, or, in the absence of any such Examination within twenty-four (24) months following a calendar year, upon expiration of such twenty-four (24) months, the calculation of Royalties for
any period prior to the date of such Examination or, as the case may be, twenty-four (24) month period, shall be final and binding on the parties. It is understood that K2M shall not be required to furnish or permit the examination of the
identities, at any time, of customers or other non-price information as to specific sales or otherwise. Any information provided to Dr. Gorek or the CPA Firm pursuant hereto shall be treated as K2M’s confidential information subject to
Section 9. Dr. Gorek shall be responsible for all costs incurred by him in connection with any Examination. 
 9.
Confidentiality. During the term of this Agreement and for an additional five (5) years, each party agrees to keep and maintain the terms of this Agreement confidential, and to keep confidential and use solely insofar as permitted by the
express terms of this Agreement any other non-public information disclosed to, or obtained from such party by the other parties in connection with this Agreement. Notwithstanding the foregoing, it shall not be a breach of this Agreement (i) in
the event an action by one party is believed by the other party to be in breach of this Agreement, for the other party to file under seal with the court in such action such terms of this Agreement as are reasonably necessary in order to bring or
defend such action, (ii) for each party to share the terms of this Agreement with its counsel, provided such counsel is or has been made aware of the obligations of confidentiality herein, (iii) for any party to disclose such information as may
be required by law or court order, after first having given the other party at least ten (10) days written notice of such legal requirement or order of court and intent to disclose pursuant to said requirement or order and (iv) for each party
to share the terms of this Agreement with any of its Representatives (as defined below), including, without limitation, potential or actual licensees or sublicensees or permitted assignees, as such party reasonably deems necessary based on a need to
know basis, provided that the disclosing party, prior to disclosure, shall obtain a binding agreement of such Representatives requiring them to retain the disclosed terms in confidence according 

  
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to confidentiality obligations that are at least as stringent as those imposed herein. The term “Representative” includes a party’s and its Affiliates’ respective directors,
officers, employees, agents, financial advisors, attorneys, insurers, accountants and permitted assignees and sublicensees. The provisions of this Section 9 shall survive expiration or termination of this Agreement. 

10. Regulatory Interaction. Interaction with regulatory agencies in any country, including but not limited to the FDA
and any international regulatory agencies, concerning Products manufactured or sold by K2M or its Affiliates, Licensees or permitted assignees, shall be a matter for the sole discretion of, and shall be conducted by or with authority from, K2M or
its Affiliates, Licensees or permitted assignees. 
 11. Marketing Rights. Notwithstanding any provision of this
Agreement to the contrary, neither K2M, its Affiliate, Licensee, permitted assignee, or successor shall be obligated to, or have any liability to Dr. Gorek for failure to, evaluate, develop, test, conduct clinical trials, make, have made, use,
practice, manufacture or have manufactured any Product or for failure to seek or pursue any regulatory approvals with the FDA or any international regulatory agencies. 

12. Notices. Any notice required or permitted to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered by messenger or air courier (fare prepaid), and all payments shall be delivered, to the party to whom such notice or payment is required or permitted to be given at its address set forth as follows: if
given to Dr. Gorek, to: P.O. Box 365, Ross, CA 94957; or, if given to K2M, to: President, K2M, Inc., 751 Miller Drive, SE, Suite F1, Leesburg, VA 20175. Any such notice shall be considered given when delivered, as indicated by signed receipt or
other written delivery record, and, absent such receipt or record, such delivery shall be deemed to have occurred one business day after sending by next day messenger or courier and five business days after sending by certified mail. A party hereto
may change the address to which notice to it is to be given by notice as provided herein. 
 13. Governing Law and
Forum. This Agreement shall be construed and enforced in accordance with the internal laws of the State of Virginia applicable to contracts made and to be performed entirely within the State of Virginia without reference to its conflict of law
provisions. The parties consent to the exclusive venue and jurisdiction of the State and Federal courts located in the State of Virginia in connection with any controversies or claims between the parties, to the extent arising under or relating to
this Agreement, provided, however, that either party may seek injunctive or other equitable relief before any court of competent jurisdiction, wherever located. 

14. Entire Agreement; Captions; Waivers. This Agreement and the assignment document recorded or to be recorded in the
United States Patent and Trademark Office with respect to the Assigned Intellectual Property constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof, and supersedes all previous agreements
(whether written or oral) related to the subject matter hereof. Notwithstanding the foregoing, nothing contained in the Agreement shall supersede, alter, amend or otherwise affect any agreement between Dr. Gorek and K2M, Inc. or BSM BSA, LLC,
relating to Dr. Gorek’s participation with the K2M BSA, any K2M BSA silo, the K2M, Inc. Board of Directors or the Royalty Pool Agreement between Dr. Gorek and K2M, Inc. This Agreement 

  
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shall not be modified, amended, or supplemented except by a written document executed by both parties. The language of this Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any party. The headings in this Agreement are for convenient reference only and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this
Agreement shall be enforced and construed as if no caption has been used in this Agreement. No waiver of any provision or breach of this Agreement shall constitute a waiver of any other provisions or of any other or further breach, and no such
waiver shall be effective unless made in writing and signed by an authorized representative of the individual party to be charged with such waiver. Each party understands and represents that it or he has been or has had the opportunity to be advised
by counsel. 
 15. Change in Control, Minimums. In the event of a change in control of K2M, meaning that a person or
entity other than a current stockholder of K2M, Inc. acquires a controlling interest in K2M, Inc. (meaning greater than fifty one percent (51%) ownership) other than through a public offering of K2M, Inc. stock, then: 

(i) K2M shall notify Dr. Gorek prior to the earlier of six (6) months after the change in control or the first day of
the next calendar year following the change in control, that K2M will pay Dr. Gorek minimum annual Royalties every year commencing with the first full calendar year subsequent to the change in control, payable in arrears in quarterly
installments within forty five (45) days of the end of each calendar quarter for the remainder of the payment term pursuant to Section 3, above, as follows: 

(a) if the change in control occurs prior to April 1, 2008, the amount of the minimum annual royalties shall be equal to four
(4) times the Royalties paid or payable to Dr. Gorek for sales or use during the twelve (12) calendar months immediately preceding the date of the change of control; 

(b) if the change in control occurs on or after April 1, 2008 and before April 1, 2009, the amount of the minimum annual royalties
shall be equal to two and one half (2.5) times the Royalties paid or payable to Dr. Gorek for sales or use during the twelve (12) calendar months immediately preceding the date of the change of control, provided however, that the
amount paid to Dr. Gorek under this section 15(i)(b) shall not be less than the amount which would have been paid to Dr. Gorek under section 15(i)(a) had the transaction occurred on March 31, 2008; 

(c) if the change in control occurs on or after April 1, 2009, the amount of minimum annual royalties shall be equal to the amount of
Royalties paid or payable by K2M to Dr. Gorek for sales or use during the twelve (12) calendar months immediately preceding the date of the change of control, provided however, that the amount paid to Dr. Gorek under this section
15(i)(c) shall not be less than the amount which would have been paid to Dr. Gorek under section 15(i)(b) had the transaction occurred on March 31, 2009, or 

(ii) if K2M fails to give notice to Dr. Gorek as provided for in section 15(i) above or fails in any year for which
minimum annual Royalties would be payable to make any quarterly payment thereof, then upon notice from Dr. Gorek of such failure to pay and K2M’s failure to cure such nonpayment within thirty (30) days of such notice, Dr. Gorek
shall thereafter have a co-exclusive right and license under the Assigned Intellectual Property permitting Dr. Gorek to have one partner in addition to K2M for the Assigned Intellectual Property. 

  
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 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year
first above written. 
  

									
	K2M, INC.	 		 	DR. JOSEF GOREK, M.D.
			
	 /s/ Eric Major
	 		 	 /s/ Dr. Josef Gorek

	Name:	 	Eric Major	 		 		 	
	Title:	 	President and CEO, K2M, Inc.	 		 		 	

  
 7EX-10.24

 Exhibit 10.24 

ASSIGNMENT AND EARN-OUT AGREEMENT 
 This
Assignment and Earn-Out Agreement (“Agreement”) is made and entered with effect as of this 8th day of March, 2004 by and between K2 Medical, LLC, a Delaware limited liability company (“K2” or the “Company”), and the
persons listed on the signature page hereto under the heading Assignors (each an “Assignor” and collectively the “Assignors”). 

WITNESSETH: 

WHEREAS, the Assignors desire to transfer and assign to K2 all of the Assignors’ worldwide right, title and interest in and to the
U.S. and foreign pending and issued patents and invention disclosures listed on Exhibit A hereto (together with any United States and foreign patent application and all divisions, renewals and continuations (including continuations-in-part)
based thereon, and all reissues and extensions thereof with full control of all patent prosecution, and all rights to make applications for and receive patent registrations therefor; and including, without limitation, the right to sue, assert claims
or demands, settle and/or release, and recover damages and all other remedies, for any past or future infringement thereof, collectively, the “Assigned Intellectual Property”); and 

WHEREAS, K2 and the Assignors desire to set forth the terms and conditions according to which K2 will pay the Assignors for such sale
and assignment. 
 NOW, THEREFORE, the parties hereby agree as follows: 

1. Recitals. The parties acknowledge and agree that the matters set forth in the Recitals above are true and complete in all material respects and
constitute an integral part of this Agreement as if set forth at length in this paragraph 1. 
 2. Definitions. The following capitalized terms shall
have the following meanings: 
 “Net Revenues” during a specified period and with respect to a given Product shall mean K2’s gross
revenues, less returns and allowances and net of applicable commissions (provided such commissions shall not exceed 25% for purposes of this calculation), as determined in accordance with U.S. generally accepted accounting principles by K2’s
independent certified public accounting firm, which firm shall be a firm of national or regional standing and reasonably acceptable to the Assignors. 

“Products” shall mean the Company’s existing or future products covered by the claims of any issued patent or described in any pending
patent application included in the Assigned Intellectual Property. 
 3. Sale and Transfer. Effective as of the date of this Agreement, each Assignor
hereby absolutely and unconditionally sells, transfers and assigns to K2 all of such Assignor’s worldwide rights, title and interest in and to the Assigned Intellectual Property. 

 4. Representations and Warranties. 

4.1 By Assignors. Each Assignor, severally and not jointly, hereby represents and warrants to K2 that: 

 

	 	(a)	Such Assignor has full power, authority and legal right to execute, deliver and perform this Agreement. The execution and delivery of this Agreement by such Assignor and the performance or observance of each of the
obligations of such Assignor hereunder have been duly authorized by all necessary action on the part of such Assignor. 

  

	 	(b)	This Agreement has been duly executed and delivered by such Assignor and constitutes a legal, valid and binding obligation of such Assignor, enforceable against such Assignor in accordance with the terms of this
Agreement. 

  

	 	(c)	No consent, approval, order or authorization of or registration, declaration or filing with any governmental authority or any other person is required in connection with the valid execution and delivery by such Assignor
of this Agreement or the carrying out or performance by such Assignor of any of the transactions required or contemplated hereby. 

  

	 	(d)	Such Assignor owns the Assigned Intellectual Property identified on Exhibit A hereto as being owned by such Assignor free and clear of any encumbrances. 

4.2 By K2. K2 hereby represents and warrants to each assignor that: 

 

	 	(a)	Power and Authority. K2 has full power, authority and legal right to execute, deliver and perform this Agreement. The execution and delivery of this Agreement by K2 and the performance or observance of each of
the obligations of K2 hereunder have been duly authorized by all necessary action on the part of K2. 

  

	 	(b)	Enforceable Obligations. This Agreement has been duly executed and delivered by K2 and constitutes a legal, valid and binding obligation of K2, enforceable against it in accordance with the terms of
this Agreement. 

  

	 	(c)	Consents, Approvals, Authorizations, etc. No consent, approval, order or authorization or registration, declaration or filing with any governmental authority or any other person is required in connection with the
valid execution and delivery by K2 of this Agreement or the carrying out or performance by K2 of any of the transactions required or contemplated hereby. 

  
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 5. Earn-Out. 

5.1 As full compensation for the sale and assignment of the Assigned Intellectual Property, K2 shall pay to the Assignors, in accordance with
the next sentence, annually a cash earn-out (the “Earn-Out”) with respect to each Product equal to the product of (x) the Earn-Out Percentage for such Product and (y) the Net Revenues of K2 attributable to sales of such Product
during the applicable year. The Earn-Out in respect of a Product shall be paid directly to the Assignor who contributed the Assigned Intellectual Property upon which such product is based; provided, that, if a Product is based upon Assigned
Intellectual Property assigned by more than one Assignor, then such Earn-Out shall be apportioned among the Assignors who assigned such intellectual property in such proportion as they shall agree or, absent such an agreement, in such proportions as
K2 shall reasonably determine taking into account the items assigned and the extent to which they were incorporated into the applicable Product. The Earn-Out shall be paid quarterly within thirty days of the end of the applicable quarter. Each year
following the completion of the Company’s independent audit of its books and records, the Company shall reconcile the actual Earn-Out payments made in respect of such year and any deficiency shall be promptly paid by K2 to the applicable
Assignor(s) or, in the case of an overpayment by K2, such amount shall be credited toward future Earn-Out payments due hereunder. All Earn-Out payments to be made hereunder shall be made in U.S. Dollars. Earn-Out payments for foreign sales of
Products shall be separately and distinctly accounted and determined based on the applicable currency conversion rate as of the 1st calendar day of the quarter when payment is due. 

5.2 For purposes of this Agreement, the term “Earn-Out Percentage” with respect to any Product shall mean: 

(a) For each Product, the Earn-Out Percentage from and after the date hereof, shall be six percent (6%) until the later of
(i) expiration of the last to expire of any issued patents having one or more claims covering such Product, or (ii) the date of abandonment of any patent application describing such Product, at which time the Earn-Out Percentage for such
Product shall be reduced to three percent (3%) where one or more claims of an issued patent covered the Product, or two percent (2%) where no claims of an issued patent covered the Product; and 

(b) For each Product that is not described in clause (a) above and is based in whole or in part on any item of Assigned
Intellectual Property that as of the date hereof was not the subject of an issued patent or patent application (“Unfiled Assigned IP”), from and after the date hereof the Earn-Out Percentage for such Product shall be four percent (4%);
provided that, (i) if any such item of Unfiled Assigned IP results in an issued patent, then the Earn-Out Percentage for such Product shall remain at four percent (4%) until the last to expire of any issued patents relating to Unfiled
Assigned IP upon which such Product is based, at which time the Earn-Out Percentage for such Product shall be reduced to three percent (3%), and (ii) if all of the Unfiled Assigned IP upon which such Product is based does not result in an
issued patent (i.e., all the patent applications go 

  
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abandoned), then from and after the date of abandonment of the last patent application with respect to Unfiled Assigned IP upon which such Product is based, the Earn-Out Percentage for such
Product shall be reduced to two percent (2%). 
 (c) Notwithstanding the foregoing, in the event that a Product based in
whole or in part on the Assigned Intellectual Property is covered by the claims of one or more patents issued to a 3rd party not affiliated with K2 (the “Other Patents”) and K2 is
obligated to make royalty or similar payments to such 3rd party in respect of such Products, then the Earn-Out Percentage for such Product shall be reduced, as reasonably determined by the Board
of K2 (which determination shall include the affirmative consent of at least one member of the Board designated by the Errico Group (as such term is defined in the K2 Operating Agreement), based on the claims of the Other Patents which cover such
Product as such claims relate to the total claims of the Product. 
 6. Earn-Out Report, etc. Each Earn-Out payment shall be accompanied by a
statement signed and certified by the Chief Financial Officer or equivalent officer of K2 that the accompanying payment is the full amount due hereunder. Each such statement shall show the Net Revenues by Product made during the preceding quarter,
and a computation of the amount of the Earn-Out payable hereunder in respect of such sales for such period (the “Earn-Out Report”). Upon request by any Assignor, K2 shall submit documentation reasonably substantiating the reported
information. K2 agrees to keep accurate books of account and records covering all transactions relating to this Agreement and each Assignor and its duly authorized representatives shall have the right, during regular business hours upon reasonable
prior notice to K2 to examine such books of account and records in order to verify the Earn-Out Report. Receipt or acceptance by the Assignors of any Earn-Out Report furnished, or of any sums paid by K2, shall not preclude Assignors from questioning
their correctness at any time. All Earn-Out payments shall accrue upon the sale of the Products regardless of the time of collection by K2. For purposes of this Agreement, Products shall be considered “sold” upon the date of invoicing.

 7. No Sale or Assignment. Without the prior written consent of the Assignors, K2 shall have no right to sell, assign (by operation of law or
otherwise), delegate, license or otherwise transfer any interest in the Assigned Intellectual Property, unless the transferee expressly assumes the entirety of K2’s obligations to Assignors under this Agreement. The rights and obligations of
the parties under this Agreement shall inure to the benefit of and be binding upon any successors and permitted assigns of the parties hereto, including a purchaser or an acquirer of all or substantially all the assets of the Company. 

8. Repurchase Right. In the event (i) the Company’s Board of Managers determines that it is in the best long-term interests of the
members of the Company that the Company ceases its operations, other than in the event of a sale or merger, (ii) the Company enters into bankruptcy, insolvency or similar proceedings, voluntarily or involuntarily, (iii) the Company tails
to secure $5 million in equity funding prior to September 30, 2004, or (iv) is compelled by any unforeseen reason prior to December 31, 2005 to close all or substantially all of its material business operations, then the Assignors
collectively (or such number of 

  
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 them as shall desire to make such purchase) shall have the right to repurchase from the Company the Contributed
Intellectual Property at the lesser of the fair market value of such property (as determined by agreement of the parties or, absent such an agreement, by an independent appraiser) or $100,000. Such repurchase shall be effected as soon as is
practicable following delivery of written notice by the Assignor(s) to the Company and referencing their repurchase right hereunder. 
 9. Notices;
Payments. All notices, payments, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the
recipient or when sent to the recipient by telecopy (receipt confirmed), one (1) business day after the date when sent to the recipient by hand or by reputable express courier service (charges prepaid) or three (3) business days after the
date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the respective parties at the addresses indicated below: 

 

			
	If to the Company:	  	 K2 Medical, LLC
 P.O. Box 1540

Leesburg, VA 20177
 Attention: Chief Executive Officer

Telecopy No.: (703) 777-4338

	If to an Assignor:	  	To the address for such Assignor set forth on the signature page hereto

 or to such other address or to the attention of such other party as the recipient party has specified by prior written notice
to the sending party. 
 10. Further Assurances. Each party hereto will use its reasonable commercial efforts to execute and deliver such other
documents and take such other actions as reasonably requested by any other party hereto to carry out the purposes of this Agreement and the transactions contemplated hereby, including the assignment of the Assigned Intellectual Property to the
Company. In furtherance thereof, each Assignor hereby authorizes the United States Patent and Trademark Office to issue all patent registrations which may issue on an application with respect to the Assigned Intellectual Property the Company, its
successors and assigns, in accordance with this Agreement, and agrees to cooperate with the Company as reasonably requested with respect to the prosecution of any pending patent applications forming a part of the Assigned Intellectual Property. 

11. Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New Jersey. Any dispute
relating to this Agreement or the termination thereof shall be brought before the competent courts in such state. 
 12. Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute a single instrument. 

  
 5 

 13. Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid or
unenforceable, that provision shall be deemed amended to achieve as nearly as possible the same economic effect as the original provision, and the legality, validity and enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby. 
 14. Amendments. This Agreement may be amended or modified only with the written consent of all parties to the
Agreement. No oral waiver, amendment or modification shall be effective under any circumstances whatsoever. 
 IN WITNESS WHEREOF the
parties have signed this Agreement this day as set forth in the preamble: 
  

					
		 	THE COMPANY:
		
		 	 K2 MEDICAL, LLC

			
		 	By:	 	/s/ Eric Major
		 		 	 Name: Eric Major
 Title: Chief Executive
Officer

 
			
	
	ASSIGNORS:
	
	 FASTENETIX, LLC
 475 Springfield
Avenue, 4th Floor
 Summit, NJ 07901

		
	By:	 	/s/ Joseph P. Errico
		 	 Name: Joseph P. Errico
 Title:
Member

	
	 THIRD MILLENIUM ENGINEERING, LLC

475 Springfield Avenue, 4th Floor

Summit, NJ 07901

		
	By:	 	/s/ Joseph P. Errico
		 	 Name: Joseph P. Errico
 Title:
Member

	
	 J7 SUMMIT MEDICAL GROUP, LLC
 475
Springfield Avenue, 4th Floor
 Summit, NJ 07901

		
	By:	 	/s/ Joseph P. Errico
		 	 Name: Joseph P. Errico
 Title:
Member

  
 6 

			
	 TECHSYS MEDICAL, LLC
 475
Springfield Avenue, 4th Floor
 Summit, NJ 07901

		
	By:	 	/s/ Joseph P. Errico
		 	 Name: Joseph P. Errico
 Title:
Member

	
	 BONES CONSULTING, LLC
 475
Springfield Avenue, 4th Floor
 Summit, NJ 07901

		
	By:	 	/s/ Joseph P. Errico
		 	 Name: Joseph P. Errico
 Title:
Member

 
			
	
	JOSEF GOREK
	Address:	 	 P.O. BOX 365
 ROSS CA 94957

  
 7 

 EXHIBIT A 

“Contributed Intellectual Property” 
  

													
	 Assignor
	  	Status	  	 Title
	  	 Application

Number
	  	 Filing Date
	  	 Patent

Number
	  	 Issue Date

		  	Issued	  	Spinal Implant Device Having a Single Central Rod and Claw Hooks	  	08/547,106	  	23-Oct-1995	  	5,688,274	  	18-Nov-1997
							
		  	Issued	  	Spinal Implant Apparatus Having a Single Central Rod and Plow Hooks	  	08/547,105	  	23-Oct-1995	  	5,688,273	  	18-Nov-1997
							
		  	Issued	  	A unitary locking cap for use with a pedicle screw	  	08/641,504	  	1-May-1996	  	5,667,508	  	16-Sept-1997
							
		  	Pending	  	A unitary locking cap for use with a pedicle screw	  	PCT/US97/07328	  	30-Apr.-1997	  	—	  	—
							
		  	Issued	  	Multiple node variable length cross-link device	  	08/772,408	  	23-Dec-1996	  	5,707,372	  	13-Jan-1998
							
		  	Issued	  	Modular polyaxial locking pedicle screw	  	08/799,720	  	12-Feb-1997	  	5,725,528	  	10-Mar-1998
							
		  		  	Modular polyaxial locking pedicle screw	  	PCT/US97/18155	  	7-Oct-1997	  	—	  	—
							
		  	Issued	  	Modular polyaxial locking pedicle screw	  	08/728,017	  	9-Oct-1996	  	5,735,851	  	7-Apr-1998
							
		  	No
 National

Phase
	  	Spinal Implant Device Having a Single Central Rod and Plow and or Claw Hooks	  	PCT/US96/11391	  	7-Jul-1996	  	—	  	—
							
		  	Issued	  	Modular Spinal Plate for use with modular polyaxial locking pedicle screws	  	08846473	  	May 1, 1997	  	5,800,435	  	Sept 1, 1998
							
		  	Pending	  	Modular Spinal Plate for use with modular polyaxial locking pedicle screws	  	PCT/US98/08707	  	Apr. 30, 1998	  	—	  	—
							
		  	Issued	  	Hinged Variable Length Cross-Link Device	  	08/677,812	  	11-Jul-1996	  	5,885,284	  	23-Mar-1999
							
		  	Issued	  	Surgical Curette Having a Variably Angled Handle	  	08/741,573	  	30-Oct-1996	  	5,836,958	  	17-Nov-1998
							
		  	Issued	  	Selectively Expandible Sacral Fixation Screw-Sleeve Device	  	08/799,719	  	12-Feb-1997	  	5,713,904	  	3-Feb-1998
							
		  	Issued	  	Polyaxial Mechanism for use with Orthopedic Implant Devices	  	08/799,721	  	12-Feb-1997	  	5,752,957	  	19-May-1998
							
		  	Issued	  	Rod Securing Polyaxial Locking Screw and Coupling Element Assembly	  	08/799,722	  	12-Feb-1997	  	5,733,286	  	31-Mar-1998
							
		  	Issued	  	Spinal Hook Implant Having a Low Blade and Swivel Hook	  	08/880,809	  	23-Jul-1997	  	5,810,818	  	22-Sep-1998
							
		  	Issued	  	Interbody Fusion Device Having Partial Circular Section Cross-Sectional Segments	  	08/899,851	  	24-Jul-1997	  	5,904,719	  	18-May-1999

													
	 Assignor
	  	Status	  	 Title
	  	 Application Number
	  	 Filing Date
	  	 Patent

Number
	  	 Issue Date

		  	Issued	  	 Coupling Member for Cross-Linking

Intervertebral Cage Devices
	  	09/002,536	  	2-Jan-1998	  	5,941,880	  	24-Aug-l999
							
		  	Pending	  	 Interbody Fusion Device

Having Partial Circular
 Section Cross-Sectional
 Segments
	  	PCT/US98/14744	  	23-Jul-1998	  	—	  	—
							
		  	Issued	  	 Polyaxial Pedicle Screw

Having a Rod Clamping

Split Ferrule Coupling

Element
	  	09/174,962	  	19-Oct-l998	  	5,910,142	  	8-Jun-1999
							
		  	Issued	  	Coupled Rod, Anterior Vertebral Body Screw, and Staple Assembly	  	09/174,960	  	19-Oct-1998	  	5,925,047	  	20-Jul-1999
							
		  	Issued	  	 Compression Locking Vertebral Body Screw,

Staple, and Rod
 Assembly
	  	09/174,959	  	19-Oct-1998	  	5,899,904	  	4-May-1999
							
		  	Issued	  	 Expansion Locking Vertebral Body Screw, Staple, and Rod

Assembly
	  	09/174,961	  	19-Oct-1998	  	5,899,905	  	4-May-1999
							
		  	Issued	  	Rotateable Locking Vertebral Body Screw, Staple, and Rod Assembly	  	09/174,958	  	19-Oct-l998	  	5,947,969	  	7-Sep-1999
							
		  	Issued	  	 Efficient Assembling Modular Locking

Pedicle Screw
	  	09/615,381	  	13-Jul-2000	  	6,482,207	  	19-Nov-2002
							
		  	Issued	  	 Polyaxial Locking Pedicle Screw Having a Rotating Locking

Element
	  	09/789,935	  	15-Feb-2001	  	6,451,021	  	17-Sep-2002
							
		  	Issued	  	Rod Bender	  	10/205,873	  	26-Jul-2002	  	6,644,087	  	11-Nov-2003
							
		  	Pending
	  	Polyaxial Drill Guide	  	10/001,078	  	31-Oct-2001	  	—  	  	—  
							
		  	Pending	  	 Polyaxial Locking

Pedicle Screw Having A Rotating Locking Element
	  	10/115,747	  	3-Apr-2002	  	—  	  	—  
							
		  	Pending	  	Polyaxial Locking Pedicle Screw Having A Rotating Locking Element	  	10/154,744	  	24-May-2002	  	—  	  	—  
							
	Gorek	  	Pending	  	System and Method for Reinforcing Bone in Preparation for Screw Implantation	  	10/004,043	  	4-Dec-2001	  	—  	  	—  
							
	Gorek	  	Pending	  	 Crossed Rod

Reinforcement Device
	  	10/200,820	  	22-Jul-2002	  	—  	  	—  
							
	Gorek	  	Unfiled	  	Polyaxial Pedicle Screw with Offset	  	—  	  	—  	  	—  	  	—  
							
	Gorek	  	Unfiled	  	Flexible Portal for Minimally Invasive Posterior Spinal Surgery	  	—  	  	—  	  	—  	  	—  
							
	Gorek	  	Unfiled	  	 Retractor Cannula

Combination
	  	—  	  	—  	  	—  	  	—  
							
	Gorek	  	Unfiled	  	Crossed Rod Reinforcement Device (G-102 CON)	  	—  	  	—  	  	—  	  	—  
							
	Gorek	  	Unfiled	  	 Vertebroplasty

Expansion Void
 Preparation
Cannula
	  	—  	  	—  	  	—  	  	—  

  
 2

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