Document:

Exhibit
10.26

 

BETWEEN THE UNDERSIGNED

 

The company CALYX,
a Société Civile Immobilière with a
capital stock of ten thousand Euros, having its registered office at 161 rue
Lavoisier in MONTBONNOT SAINT MARTIN (38330), recorded in the Commercial
Register of Grenoble, represented by Alain Tornier, in his capacity as manager,
having full powers for the purpose hereof

 

Hereinafter “the Lessor”

THE PARTY OF THE FIRST PART,

 

AND

 

The company TORNIER,
a Société par Actions Simplifiée with a
capital stock of 311,024 €, having its registered office at Rue Doyen Gosse in
SAINT-ISMIER (38330) recorded in the Commercial Register of Grenoble under No
070 501 275, represented by Douglas Kohrs, Chairman and CEO, having full powers
for the purposes hereof.

 

Hereinafter “the Lessee”

THE PARTY OF THE SECOND
PART,

 

Hereinafter together “the Parties”

 

 

WHEREAS:

 

Pursuant to a private signed document dated 12
June 2008, SAS TORNIER signed with the company named SCI de l’Etoile de la
Vallée, a bilateral sale agreement relating to a building for industrial use
and use as offices (hereinafter “the Building”)
located in Montbonnot Saint Martin Les Eaux (Isère), entered in the land
register under the following references:

 

section: AP, number: 200

 

section: AP, number: 238

 

section: AP, number: 275

 

section: AP, number: 278

 

section: AP, number: 284

 

with a total area of 2 hectares, 48 ares and 14
centiares.

 

This bilateral sale agreement was signed
subject to various conditions precedent, the authentic instrument reiterating
the acquisition of the Building to take place by 3 September 2008 at the
latest.

 

The bilateral sale agreement provides, inter alia, on page 2, the power, for SAS Tornier, to
substitute for itself any person in the benefit of the said purchase option.

 

The Parties are agreed that SCI CALYX, in which
SAS TORNIER has a majority holding, and whose company purpose is the
acquisition, the administration, the management by letting or otherwise, of any
buildings and immovable property assets, would be substituted in the aforesaid
purchase option agreement and would demise the Building on lease to SAS
TORNIER, the effective date of the said lease being that of the signature, by
SCI CALYX, of the authentic instrument reiterating the aforesaid purchase
option agreement.

 

The Parties are also agreed that the Lessor
would proceed to carry out significant structural, renovation and improvement
works on the Building, which are valued as of today at 2.4 million Euros, the
duration of which is estimated at between 1 and 2 years, in order for the
Building to be able to be occupied by the Lessee under its corporate objects.

 

The PARTIES have therefore come together and
are agreed on the following.

 

IT IS AGREED AS FOLLOWS:

 

1.             LEASE

 

The Lessor shall demise on lease for rent, on a
commercial basis, pursuant to the provisions of Articles L 145-1 to L 145-60 of
the French Commercial Code and to Articles 1708 et seq.
of the French Civil Code, to the Lessee, which accepts, the building for
commercial use and use as offices as designated below.

 

 

2.             CLAUSE
2 — DESIGNATION OF THE BUILDING

 

The Building demised on lease shall be located
at 176 rue Lavoisier, MONTBONNOT SAINT MARTIN (Isère) under the following
references:

 

·          section
AP, number: 200, place known as Aux Eaux, with an area of 98 ares 21 centiares

 

·          section:
AP, number: 238, place known as Aux Eaux, with an area of 95 ares 51 centiares

 

·          section:
AP, number: 275, place known as Aux Eaux, with an area of 14 centiares

 

·          section:
AP, number: 278, place known as Aux Eaux, with an area of 02 ares 27 centiares

 

·          section:
AP, number: 284, place known as Aux Eaux, with an area of 52 ares 01 centiares

 

Total area: 2 hectares 48 ares and 14 centiares

 

The Building shall be located partly in the
Concerted Development Zone (Zone d’Aménagement
Concertée — ZAC) named Zone for
Innovation and Scientific and Technical Achievements (Zone pour l’Innovation
et les Réalisations Scientifiques et Techniques (ZIRST)) created on
the Commune of MONTBONNOT SAINT MARTIN pursuant to a resolution of a meeting of
the Municipal Council of the said Commune dated 8 February 1988, and more
particularly in the Concerted Development Zone (ZAC)
known as ZIRST 2 created pursuant to a resolution of a meeting of the Municipal
Council of MONTBONNOT dated 8 February 1988.

 

It shall consist in particular of the lots
numbers 6, 8 and 9 of the said ZIRST 2.

 

As this building continues and consists, with
all its amenities, appurtenances and fixtures, easements and co-ownerships of
enclosures (party walls, etc.) and any rights and powers, without exception or
reservation.

 

3.             TERM

 

This lease shall be granted and accepted for a
definite and fixed term of 10 complete and consecutive years, which is
expressly accepted by the Parties, commencing to run on the day of the
reiteration, by SCI CALYX, of the aforesaid bilateral sale agreement referred
to above (hereinafter “the Effective Date”),
which must take place by 3 September 2008 at the latest, and ending 10 years
later (hereinafter “the Expiry Date”).

 

The Lessee consequently expressly waives the
power it has from Article L 145-4 sub-paragraph 2 of the French Commercial Code
to give notice to quit at the end of each three-year period, until the expiry
date.

 

In accordance with the provisions of Article L.
145-9 of the French Commercial Code, the Lessee shall have the power to give
notice to quit, on the Expiry Date, subject to informing the Lessor by
extrajudicial act at least six months before the Expiry Date.

 

 

The Lessee shall also have the power to
terminate this lease, from the second anniversary date, subject to the payment
of all the rents still owed to the Lessor up to the Expiry Date, the amount of
the rent to be taken into account being that of the quarter preceding the
request to terminate.

 

On the expiry of the Expiry Date, in case of
renewal, the latter shall take place for a term of 9 years, with the Lessee
then having the power once more to avail itself of the three-yearly power to
terminate provided for in Article L. 145-4 of the French Commercial Code.

 

4.             INTENDED
PURPOSE

 

The premises that are the subject of this lease
must be used exclusively for the activity of the Lessee, the company purpose of
which consist of the manufacture and the sale of medical equipment.

 

The additions of related or complementary
activities, as well as the carrying-on in the demised premises of one or more
activities different from that provided for above shall be possible only
subject to the conditions fixed in Articles L 145-47 to L 145-55 of the French
Commercial Code.

 

5.             TERMS
AND CONDITIONS

 

This lease shall be executed subject to the
ordinary terms and conditions and to the terms and conditions of law and
subject to the following special terms and conditions which the Lessee
expressly accepts:

 

5.1          Condition
of the premises

 

The Lessee shall take the premises in the
condition in which they are to be found on the day of the Effective Date.

 

5.2          Enjoyment
of the premises

 

The Lessee shall enjoy the demised assets as
would a careful, diligent owner, according to their intended purpose.

 

It shall comply, for its exploitation, with the
safety rules in force at all times in particular as regards fire, which shall
be displayed in the premises, and which it declares that it has acquainted
itself with and that it undertakes to inform its personnel of such, and with
all the statutory and regulatory provisions with respect to the law on
employment, health, safety, salubrity or establishments to which the public
have access and shall execute, at its expense, any works that might be required
in this regard.

 

 

It shall ensure that it does nothing or allows
nothing to be done that may cause any disturbance to the neighbourhood, in
particular as regards noise and, generally, shall not commit any abuse of
enjoyment.

 

It shall maintain the demised premises
constantly in use and provided with furniture and equipment in a quantity and
of a value that is sufficient in order to be answerable for the payment of the
rent and for the performance of the terms hereof.

 

5.3          Maintenance

 

It is recalled that, from the Effective Date,
the Lessor shall carry out significant works in the Building, a summary
description of which appears in Schedule 1, and that the cost of these works
shall be entirely borne by the Lessor.

 

During the term of this lease, the Lessee must
keep the premises in a proper state of maintenance, functioning, safety,
cleanliness and hygiene, and at its expense carry out or cause to be carried
out any works and repairs that might be necessary, except for the major repairs
referred to in Article 606 of the French Civil Code, which shall be the Lessor’s
responsibility and must be taken to mean, in a strictly exhaustive manner,
works of reconstruction of the load-bearing walls and of the roofing, excluding
any other repair.

 

The Lessee must also make good the premises and
discharge the amount of any repairs to be carried out, except for those
necessitated by dilapidations. For this purpose, at the latest by the day of
the expiry of the lease, a premises condition report shall be drawn up
involving both parties, which shall include, where appropriate, a summary of
the repairs to be carried out that are the Lessee’s responsibility. The Lessee
shall pay directly to the Lessor the amount of the repairs on submission of the
contracting firms’ invoices checked by the Lessor’s architect.

 

The Lessee shall not carry out in the Premises
works other than those necessary for the normal maintenance of the Building
without the Lessor’s prior written permission. Where permission is given, the
works of whatever nature must be executed at the Lessee’s sole expense and risk
and under the supervision of an architect or a technical design office approved
by the Lessor and whose fees shall be borne by the Lessee. Failing the
execution by the Lessee of these works, the Lessor may substitute itself for
the Lessee and have them carried out by a contracting firm of its choice, at
the Lessee’s sole expense, without prejudice to any costs of making-good
consequent upon damage caused by a failure to observe the provisions of this
Clause.

 

The Lessee must suffer without any compensation
or reduction in the price of the rent any urgent works of maintenance, repair
or reconstruction, etc. that the Lessor deems to be reasonably necessary to
cause to be executed in the premises, during the term of this lease, whatever
the nature and the duration thereof, even if the latter exceeds forty days, by
derogation from Article 1724 of the French Civil Code.

 

 

5.4          Improvements
and constructions

 

The Lessee may alter the internal layout of the
premises at its sole expense but it shall not do any demolition or make any
change in the separation into rooms or opening through a wall without the
Lessor’s prior permission. Where permission is given, the works of whatever
nature must be executed at the Lessee’s sole expense and under the supervision
of an architect or of a technical design office approved by the Lessor and
whose fees shall be borne by the Lessee.

 

All works, refurbishments, improvements,
installations and constructions of whatever nature, including, where
appropriate, those that might be carried out by the Lessee, shall become, on
the expiry of this lease, the property of the Lessor without compensation (by
derogation from Article 555 of the French Civil Code) and without prejudice to
the Lessor’s right to require the restoration of the premises, wholly or in
part, to their original condition, at the Lessee’s expense, even for the works
that it has expressly permitted.

 

5.5          Visits
to the premises

 

Throughout the term of the lease, the Lessee must,
subject to reasonable notice, except in an emergency affecting safety, allow
the Lessor and its agents, architects, contractors and workmen to enter the
demised premises in order to visit, check the condition of the building, repair
it and maintain it.

 

In the event of termination of the lease, the
Lessee must allow the Lessor or its representatives to visit the premises
during a period of six months prior to the actual date of its quitting, and
allow the affixing of signs or posters to such locations as suit the Lessor’s
convenience during the same period.

 

5.6          Contributions,
charges, taxes and dues

 

The Lessee shall pay its personal and movable
property taxes, the business tax (taxe professionnelle),
and any new tax or due relating to the demised premises and shall bear any
increase therein so that the Lessor is never troubled on this issue and shall
evidence payment of such when required.

 

It shall reimburse to the Lessor the share of
the taxes and dues relating to the demised assets, and in particular the land
tax (impôt foncier) relating thereto.

 

The Lessee must pay furthermore any bills for
water, gas and electricity so that the Lessor can never be pursued in this
regard, as well as the dues of any nature concerning it personally or relating
to its business and shall reimburse to the Lessor all the dues that the latter
has to pay relating to the demised premises.

 

It must show evidence of payment of such on
first demand, and in particular before any moving out.

 

 

The Lessee shall reimburse to the Lessor, with
the addition of V.A.T., all the charges, services and expenses of any nature
relating directly to the Building.

 

6.             LESSEE’S
INSURANCES AND OBLIGATIONS

 

The Lessee shall be obliged to take out, with
one or more insurance companies represented in France, one or more insurance
policies covering the risks of fire, explosion or water damage, covering the
movables and equipment with which the demised premises are fitted, Lessee’s
risks and proceedings by neighbours and third parties.

 

The Lessee shall also cover the civil liability
risks inherent in its business activity and its occupation of the premises.

 

It must pay the premiums and contributions and
show evidence of on first demand, bear or reimburse any additional premiums
that are requested because of it from the Lessor.

 

The Lessee shall in no case hold the Lessor
responsible for any thefts that might be committed in the demised premises. It
shall not claim any compensation or damages from the Lessor on this account.

 

It shall not claim any rent reduction or
compensation in the event of temporary removal or reduction of public
utilities, in particular as regards water, gas, electricity and telephone.

 

It is stipulated that the Lessor and its
insurers shall waive their rights to any proceedings against the Lessee, such
waiver of proceedings being mutual, and the Lessee and its insurers shall also
waive their rights toany proceedings against the Lessor.

 

The Lessee must show evidence, on the first
demand of the Lessor or of its representative, of the taking-out of the said
insurance policies and of the payment of the relevant premiums.

 

The Lessee shall reimburse to the Lessor, on
production by the latter of supporting documentation, the insurance premiums
paid by the latter for the insurances of any nature relating to the Building
and in particular the insurances against fire, explosion, water damage and
civil liability, etc.

 

In the event of loss, the Lessee undertakes to
restore the premises to their original condition.

 

Furthermore, in the event that the demised
premises are wholly or partly destroyed for any reason whatsoever, for which
the Lessor is or not held responsible, the Lessee shall not, by express
agreement, claim any compensation other than that awarded to the Lessor by its
insurance company for the damage caused to the Lessee. The Lessee shall
expressly waive its rights to any proceedings and actions against the Lessor by
reason of the total or partial destruction of its equipment, furniture,
objects, movables and merchandise, either because of their deterioration, or
because of the deprival of 

 

 

enjoyment of the premises, and even in the
event of a total or partial loss of its business including the intangible items
attached to the said business.

 

In the event that, by unforeseen accident,
force majeure or any other cause outside the Lessor’s control, the demised
assets were to be demolished or destroyed, totally or partially, or declared
insanitary, this lease would be terminated outright, without compensation to be
borne by the Lessor.

 

In the event of compulsory acquisition by
reason of the public interest, nothing may be claimed from the Lessor, all the
Lessee’s rights being reserved against the compulsorily acquiring party.

 

The Lessee must inform the Lessor within five
days, by recorded delivery letter with request for advice of receipt, of any
loss, otherwise it shall remain personally liable for the damage the amount of
which has been unable, as a result of the omission of or of a delay in this
report, to be effectively claimed from the company that insures the building.

 

7.             LIABILITY

 

The Lessee shall be personally liable,
vis-à-vis the Lessor and third parties, for the harmful consequences brought
about by breaches of the terms and conditions of this lease by its action, or
that of its personnel or of its servants.

 

It shall in particular be liable as a matter of
law for the damage caused in the course of moving in or of delivery, as well as
by the persons carrying out works on its behalf.

 

8.             SUB-LETTING
- ASSIGNMENT

 

8.1          Sub-letting

 

The Lessee shall be prohibited from granting
the enjoyment of the demised premises to anybody, in any form whatsoever, even
temporarily and on a gratuitous or precarious basis, or from sub-letting wholly
or in part, except for the benefit of any company, having its registered office
in France, having the status of parent company or of subsidiary of the Lessee
or for the benefit of any company, having its registered office in France,
controlling the Lessee or controlled by the Lessee, within the meaning of
Article L 233-3 of the French Commercial Code.

 

8.2          Assignment

 

The Lessee shall not assign its right to this
lease, except to the person acquiring its business.

 

Where there is an assignment, the Lessee must
inform the Lessor in writing of its plan, as well as the assignee’s name and
references, and of the price fixed for the assignment, forty days before the
execution of the assignment.

 

Where there is an assignment, the Lessee shall
remain in any event the joint and several guarantor and surety of its assignee
for the payment of the rents and the 

 

 

performance of the terms of the lease. An
original of the instrument of assignment of a business must be served on the
Lessor pursuant to the provisions of Article 1690 of the French Civil Code,
except where the assignment has been carried out by authentic instrument with
the LESSOR’s involvement and acceptance.

 

9.             RENT

 

The lease that is the subject hereof shall be
granted and accepted in consideration for the following rent:

 

9.1 From the Effective Date until 31 March 2009, this
lease shall be subject to an annual rent excluding tax and excluding charges of
an amount of FOUR HUNDRED AND FORTY THOUSAND EUROS
(440,000 €). This amount corresponds to 10% of the amount of the
acquisition price of the Building, with the addition of the costs.

 

This rent shall be subject to value added tax
at the rate in force and shall be increased by the charges relating to the
Building.

 

It shall be payable quarterly and in advance,
in equal instalments excluding taxes, and for the first time from the Effective
Date until the end of the current quarter, pro rata temporis.
It shall then be payable on the 1st day of each calendar quarter.

 

9.2 From 1 April 2009 until the Expiry Date, the rent of
this lease shall be equal to 10% of the amount of the gross tangible fixed
assets (sums of the lines AN, AP, AR, AT and AV of the CERFA balance sheet) shown
under the assets in the Lessor’s balance sheet as at 31 December of each year.
It being specified that the amount of such fixed assets shall be exclusively
intended for the Building, excluding any other building held by the Lessor.

 

By 30 April of each year at the latest, and for
the first time on 30 April 2009, the new rent excluding taxes and excluding
charges shall be notified to the Lessee, on the basis of the balance sheet for
the previous financial year.

 

It shall be subject to value added tax at the
rate in force and shall be paid quarterly and in advance in equal instalments
excluding taxes and for the first time on 1 April 2009.

 

 

10.                               INDEXATION OF THE RENT

 

As an essential term of this lease, the Parties
expressly agree that, at the end of the period of renovation of the Building as
referred to in the recitals, the rent provided for in Clause 9 above shall be
reviewed each year with effect on the anniversary date of the Effective Date,
based on the annual variation upwards or downwards of the French National Index
of Building Costs (l’Indice National du Coût de la Construction) as drawn up by
INSEE.

 

The French National Index of Building Costs
used as a reference shall be that of the 4th quarter of 2007
(1.474). The index to be compared with it shall be that of the same quarter
preceding the anniversary date of the Effective Date.

 

The indexation shall take effect without the
parties being bound by any prior amendment. In the event of a delay in the
publication of the index, the Lessee shall be obliged to pay on a provisional
basis a rent equal to that of the quarter preceding the Effective Date, and an
adjustment shall be made once the index has been published.

 

This annual indexation of the rent shall not
prevent requests for statutory reviews that may be made by either of the
parties pursuant to Article L 145-38 of the French Commercial Code.

 

11.                               GUARANTEE DEPOSIT

 

At the Effective Date, the Lessee shall pay to
the Lessor a guarantee deposit equal to one quarter’s rent determined in
respect of the first year, namely one hundred and ten thousand Euros (110,000 €),
excluding V.A.T.

 

This deposit shall neither produce interest nor
be able to be set off against the final instalment of rent and shall be
repayable after the Lessee has quit, subject to the performance by it of all
the clauses and conditions of the lease, and drawing-up of a premises condition
report with the involvement of both parties and provided it has discharged the
sums it owes to the Lessor when the lease ends for any reason whatsoever and it
has discharged any dues and taxes it owes under the terms hereof.

 

This sum shall furthermore be increased or
reduced on the occasion of any change in the rate of the rent, so as to be
equal at any time to three months’ rent excluding taxes.

 

12.                               RESOLUTORY CLAUSE

 

It is expressly agreed, as an essential term
hereof, that failing payment of a single instalment of rent or of charges or
non-performance of a single clause of the lease and one month after an order to
pay or a formal notice to perform, containing a statement by the Lessor of its
intention to avail itself of the benefit of this provision, issued by
extrajudicial act and that has continued to be fruitless, this lease shall be
terminated as

 

 

of right if the Lessor sees fit, without the
latter having to complete any formality.

 

If in this event the Lessee was to refuse to
quit the premises, it would suffice, in order to force it to do so, for there
to be an order issued by the President of the Tribunal de Grande Instance in
the judicial district of which are located the premises that are the subject of
the lease, ruling in the form of urgent summary proceedings, which shall
expressly receive jurisdiction under the terms hereof.

 

13.                               RISKS PREVENTION PLAN

 

The Lessor and the Lessee acknowledge that they
have been informed of the provisions of Article L. 125-5 of the French
Environment Code, which imposes two distinct obligations to provide information
to purchasers and Lessees of immovable property assets:

 

·                  an obligation to provide information on the
technological and natural risks: any immovable property transaction, sale or
letting affecting assets located in zones covered by a technological risks
prevention plan (plan de prévention des risques  technologiques (PPRT)), or by a
foreseeable natural risks prevention plan (plan de prevention des
risques naturels prévisibles (PPRN)), prescribed or approved, must
be accompanied by information on the existence of these risks for the attention
of the purchaser or Lessee;

 

·                  an obligation to provide information on the losses
resulting from technological or natural disasters: the vendor or the Lessor of
a building that has suffered loss as a consequence of a technological or
natural disaster, recognised by interministerial order, must inform the
purchaser or Lessee of the losses that have affected the asset.

 

The Lessor declares, pursuant to the provisions
of Article L. 125-5 of the French Environment Code, that the BUILDING that
is the subject hereof is located in a zone covered by a technological risks
prevention plan or by a foreseeable natural risks prevention plan, which
appears in a schedule hereto.

 

The Lessor declares that, to its knowledge, the
Building that is the subject of this lease has not suffered any loss that has
given rise to the payment of compensation from insurance covering the risks of
natural disasters (Art. L. 125-2 of the French Insurance Code) or technological
disasters (Art. L. 128-2 of the French Insurance Code).

 

14.                               PROTECTION OF THE ENVIRONMENT

 

The Lessor declares that to its knowledge:

 

·                  the Building or the land on which it is built is not
affected by any pollution that may result in particular from past or current
exploitation or from the proximity of an installation subject to permission;

 

 

·                  there has never been dumped, buried or used in the
land on which the demised building is built any waste or substances, such as
for example, asbestos, PCBs (polychlorinated biphenyls or PCTs (polychlorinated
terphenyls) directly or in apparatus or installations that may involve dangers
or risks to health and the environment: the previous owner never informed the
new owner that it dumped, buried or used in the land on which the demised
building is built such waste or substances;

 

·                  the demised Building has never been used for the
purposes of activities that are harmful to health and the environment or
regulated in this context, and in particular it has not received any classified
installation that is authorised or merely declared; the previous owner never
informed the present owner that it carried on such harmful activities there.

 

15.                               LITIGATION

 

Any dispute that might arise relating to the
existence, to the performance, or to the termination of these agreements shall
fall within the exclusive jurisdiction of the Tribunal de Grande Instance in
the judicial district in which the Building is located.

 

16.                               COSTS

 

All the costs and fees hereof and of its
consequences shall be borne by the Lessee, which undertakes to be responsible
for such.

 

17.                               ELECTION FOR ADDRESS FOR SERVICE

 

For the performance hereof and in particular
the receipt of any extrajudicial acts or proceedings, the Parties elect for
their address for service to be their respective company registered offices.

 

Done in MONTBONNOT in two original copies

 

On September 3, 2008

 

	
   

  	
  For the LESSOR

  	
   

  	
  For the LESSEE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Alain Tornier

  	
   

  	
  /s/ Douglas Kohrs

  

 

 

	
   

  	
  /s/ Alain Tornier

  	
   

  	
  /s/ Douglas Kohrs

  
	
   

  	
  Mr Alain TORNIER

  	
   

  	
  Mr Douglas KOHRS

  

 

 

SCI CALYX

 

SAS TORNIER

 

 

AMENDMENT TO COMMERCIAL
LEASE N° 2

 

 

 

BETWEEN THE UNDERSIGNED

 

The company CALYX,
a société civile immobilière with a
capital of ten thousand Euros, having its registered office at 161 rue
Lavoisier in MONTBONNOT SAINT MARTIN (38330), recorded in the Commercial
Register of Grenoble under No. 507 453 728, represented by Mr Alain
TORNIER in his capacity as manager, having full powers for the purposes hereof

 

Hereinafter termed “the Lessor”

 

THE PARTY OF THE FIRST PART,

 

AND

 

The company TORNIER, a société par
actions simplifiée with a capital stock of 311,024 €, having its
registered office at Rue Doyen Gosse in SAINT ISMIER (38330), recorded in the
Commercial Register of Grenoble under No. 070 501 275, represented by Mr
Douglas KOHRS acting in the capacity of Chairman, having full powers for the
purposes hereof

 

Hereinafter termed “the Lessee”

 

THE PARTY OF THE SECOND
PART,

 

Hereinafter together termed “the
Parties”

 

WHEREAS

 

Under the terms of a commercial lease executed
between the Parties in July 2008, SCI CALYX demised on lease to the
company TORNIER SAS a building for industrial use and use as offices
(hereinafter termed “the building”) to be located in Montbonnot Saint Martin
(Isère) for a term of 10 complete consecutive years beginning on September 3,
2008, the date of reiteration of the bilateral sale agreement by the Lessor.

 

The parties have agreed under the terms of the
commercial lease that the Lessor would proceed and would assume responsibility
for the carrying-out of significant structural, renovation and improvement
works on the Building.

 

 

On April 29, 2009, the Parties executed an
Amendment N° 1 to the commercial lease (hereinafter the “Amendment”) amending
the wording of Clause 9 under “PRE-RENT — RENT” under the terms of which
provision is made for an annual review of the pre-rent and rent equal to 10% of
the amount of the gross tangible fixed assets (sum of the lines AN, AP, AR, AT
and AV of the CERFA balance sheet) shown under the Lessor’s assets at December 31
of each year.

 

The pre-rent was not subject to an annual
review on the basis of the Lessor’s balance sheet as at 12/31/2008. On the
other hand, as the carrying-out of the works commenced in 2009, the rent should
be reviewed on the basis of the balance sheet as at 12/31/2009.

 

IT HAS BEEN AGREED AS FOLLOWS

 

9. PRE-RENT— RENT

 

9.2. This lease shall be subject to an annual
rent excluding taxes and charges of an amount of EUR 675,123 (SIX HUNDRED AND
SEVENTY-FIVE THOUSAND, ONE HUNDRED AND TWENTY-THREE EUROS) from April 1,
2010, after annual review on the basis of the balance sheet as at 12/31/2009
attached hereto and in accordance with the terms of Clause 9 of the Amendment.

 

Done in Montbonnot,

On 1/06/2010

 

	
  For SCI CALYX

  	
   

  	
  For TORNIER SAS

  
	
  A.TORNIER

  	
   

  	
  D. KOHRS

  
	
   

  	
   

  	
   

  
	
  /s/ A. Tornier

  	
   

  	
  /s/ D. KohrsExhibit 10.35

 

QUALITY ASSURANCE AGREEMENT

 

entered
into between

 

CeramTec
AG, Innovative Ceramic Engineering,

Fabrikstrasse 23-29

73207 Plochingen

Germany

 

-
hereinafter referred to as “CeramTec” -

 

and

 

Tornier
SA

Chemin Doyen Gosse

F-38330 St. Ismier

France

 

-
hereinafter referred to as “TORNIER” -

 

Preamble

 

WHEREAS,
CERAMTEC owns proprietary technology regarding the reliable connection between
the ceramic Ball Head and the metal stem of an artificial hip joint prosthesis
which was developed from various CERAMTEC-patents.  In addition, CERAMTEC is the manufacturer of
BIOLOX, BIOLOX forte and ZIOLOX forte ceramic Ball Heads and BIOLOX Wear
Couples (hereinafter referred to as “CERAMIC PRODUCTS”).

 

WHEREAS,
TORNIER is engaged in the field of developing, manufacturing, and marketing of
artificial hip joint prostheses.  TORNIER
declares that it manufactures these hip joint prostheses according to the
respective state of technology.  For over
10 years, TORNIER has already been selling hip prostheses with zirconium heads.

 

WHEREAS,
the parties desire to enter into a business relation, in which CERAMTEC
supplies TORNIER with CERAMIC PRODUCTS for the use with hip joint prostheses
manufactured by TORNIER.

 

WHEREAS,
the parties intend to make all efforts to achieve a maximum of product safety
of said hip joint prostheses.

 

NOW
THEREFORE, the parties agree to as follows:

 

Article 1

Documentation of quality requirements

 

(1)           CERAMTEC will make available to TORNIER
confidential information regarding the reliable connection between a CERAMIC
HEAD and the metal stem of a hip joint 

 

1

 

prosthesis
in order to enable TORNIER to manufacture metal stems having proper designs and
dimensions.  These information include:

 

a)                                      confidential drawings of the CERAMTEC taper designs,

 

b)                                     confidential drawings of the CERAMIC PRODUCTS (either BIOLOX, BIOLOX
forte or ZIOLOX forte as agreed),

 

c)                                      confidential proprietary technology concerning methods for the
measurement of the critical taper dimensions such as angle, roughness,
straightness, and roundness of the tapers as described in the CERAMTEC
instruction “Q.A. - Testing Procedures”.

 

-
hereinafter referred to as “DOCUMENTS” -

 

(2)           CERAMTEC shall make available the DOCUMENTS to
TORNIER after receipt of duly signed copies of this agreement and of the “SECRECY
AGREEMENT” attached hereto as (Annex 1).

 

(3)           During the term of this agreement TORNIER is
authorised to make full and royalty free use of DOCUMENTS for the purposes
stated in this agreement.

 

Article 2

Measures of continuing quality assurance

 

(1)           Prior to the beginning of the supply with CERAMIC
PRODUCTS TORNIER shall submit to CERAMTEC the first ten stems of each type of
hip joint prosthesis to be used with CERAMIC PRODUCTS in order to enable
CERAMTEC the verification of the compliance of the taper of the stem with the
requirements and specifications as contained in the DOCUMENTS.

 

If
CERAMTEC ascertains the compliance of these tapers with the requirements and
specifications it will execute TORNIER orders for CERAMIC PRODUCTS (either
BIOLOX or ZIOLOX as agreed).

 

(2)           Additionally CERAMTEC will on occasion monitor the
compliance of the tapers with the requirements and specifications by requesting
and evaluating samples.  After conclusion
of these examinations the samples will be returned to TORNIER undamaged.

 

(3)           TORNIER agrees to inform CERAMTEC of its intention
to introduce additional types of hip stems that will use CERAMIC PRODUCTS.  The use of CERAMIC PRODUCTS with these new
stems shall require TORNIER to follow the procedure outlined in subsection (1) and
(2) above.

 

2

 

Article 3

Instruction or customers; reports

 

(1)           TORNIER undertakes to instruct its customers in the
proper use of CERAMIC PRODUCTS before or during implantation.

 

(2)           In addition, TORNIER shall inform CERAMTEC of any
incident or event caused by or in connection with the use of CERAMIC PRODUCTS.

 

Article 4

Guarantee of maximum product safety

 

To
guarantee a maximum of product safety and to avoid product liability claims of
third parties TORNIER agrees to use CERAMIC PRODUCTS only in connection with
those types of prostheses which meet the quality requirements as described in
the DOCUMENTS and which are approved by CERAMTEC for such use, and to purchase
alumine-alumine hip articulations solely from CERAMTEC.

 

Article 5

Meeting of laws and government regulations; obtaining of approvals

 

TORNIER
shall be responsible for meeting all applicable laws and government regulations
regarding to and shall obtain all approvals necessary for manufacturing and
marketing of artificial hip joint prostheses with CERAMIC PRODUCTS.  CERAMTEC agrees to supply to TORNIER such
technical information as it is necessary to obtain such approval, to the extent
that CERAMTEC is able to do so.

 

Article 6

Product liability

 

(1)           Each party shall be responsible for its own product
liability as stated in the applicable product liability acts or any other laws
regulating product liability.

 

(2)           Quality examinations and monitoring of tapers as
agreed in Article 2 subsections (1) and (2) above shall not
release TORNIER of any of its obligations regarding product safety and product
liability.

 

Article 7

Term and termination

 

(1)           This agreement has been made in writing and shall
become effective after execution by each of the parties.  The term of this Agreement shall be for two (2) years
and shall renew automatically on a yearly basis thereafter, unless terminated
by either party six (6) months prior to the end of the two (2) year
period or any subsequent contract year. 
The notice of termination must be per registered mail.  The date of the post stamp decides whether
the notice arrived in time.

 

3

 

Each
parties’ right to terminate this agreement for important reason without notice
shall be unaffected.  Important reason
shall mean any material breach of the obligations under this agreement
including an infringement of the SECRECY AGREEMENT (Annex 1).

 

(2)           After ending of this agreement TORNIER is not
longer authorised to make use of the DOCUMENTS and the information contained
herein and shall return all DOCUMENTS to CERAMTEC without delay.

 

Article 8

Other Products

 

The
parties agree to handle the supply of other CERAMTEC products, TORNIER desires
to be delivered with in future, under the terms of this Agreement as well.  In particular, these products shall follow a
quality-assurance procedure according to Article 2.  Details shall be mutually agreed upon by the
parties in annexes to this Agreement.

 

Article 9

Miscellaneous

 

(1)           If any provisions of this Agreement are legally
invalid or unperformable either in part or in their entirety, or later become
legally invalid or unperformable, the legal validity of the remaining terms of
the Agreement shall remain unaffected. 
In such a case, each party has the right to demand that a legally valid,
performable provision shall be agreed upon that best suits the purposes pursued
with the invalid or unperformable provision.

 

(2)           In the event of any dispute between the parties
relative to this agreement, or any transactions concluded hereunder, the
parties shall attempt to arrive a settlement acceptable to both parties.  If, however, a settlement cannot be reached,
the parties agree that any legal action based upon such a dispute or any claims
arising out of this agreement shall be exclusively brought before and decided
by the courts competent for the principal place of the defending party in
application of the laws of such place of jurisdiction.

 

	
  Plochingen,
  31.3.1998

  	
   

  	
  Montbonnot,
  01.04.1998

  
	
  CeramTec
  AG

  	
   

  	
  TORNIER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  by:

  	
  /s/
  Dr. Manek Buttermilch

  	
   

  	
  by:

  	
  /s/
  Alain Tornier

  
					

 

4

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