Document:

ATEC-2014.09.30.EX-10.3

Exhibit 10.3

SETTLEMENT AND RELEASE AGREEMENT

This settlement and release agreement (“Agreement”) is made as of July 28, 2014 by and among the Alphatec Parties defined below (hereafter, “Alphatec”), the Healthpoint Parties defined below (hereafter, “Healthpoint”), and the OrthoTec Parties as defined below (hereafter, “OrthoTec”).  Alphatec, Healthpoint and OrthoTec will be referred to collectively as the “Parties.”

This Agreement supersedes the Binding Term Sheet executed by the Parties at the mediation with David Rotman on March 15, 2014. 
		
	1.
	RECITALS

		
	1.1.
	The Alphatec Action. OrthoTec filed a lawsuit against various parties in California on or about May 8, 2008, entitled OrthoTec, LLC. v. Surgiview, S.A.S., Scient’x, S.A., Olivier Carli, Alain Tornier, Guy Viart, Healthpoint Capital, LLC, John Foster, Mortimer Berkowitz III, Case No. BC390346, in the Los Angeles Superior Court and added Alphatec Holdings as a party to that case on or about January 20, 2012 (hereafter, the “Alphatec Action”).  

		
	1.2.
	The Healthpoint Action.  OrthoTec filed a lawsuit against various parties in New York on or about May 7, 2008, entitled OrthoTec, LLC, v. Healthpoint Capital, LLC, John Foster and Mortimer Berkowitz, III, Case No. 08601377, in the Supreme Court of New York and filed an amended complaint on or about May 13, 2009, naming as additional parties Healthpoint Capital Partners, LP, HealthpointCapital Partners II, LP and Scient’x, S.A. (hereafter, the “Healthpoint Action”).  

		
	1.3.
	The Carli Action:  OrthoTec filed a lawsuit against Olivier Carli in California on or about January 22, 2014, entitled OrthoTec, LLC v. Olivier Carli, Case No. BC533849, in the Los Angeles Superior Court (hereafter, the “Carli Action.”).  

		
	1.4.
	The Weissberg Action:  OrthoTec filed a lawsuit against Kenneth Weissberg in California on or about June 25, 2013, entitled Patrick Bertranou v. Kenneth Weissberg and SELARL Weissberg, Case No. BC513436, in the Los Angeles Superior Court (hereafter, the “Weissberg Action”).  

		
	1.5.
	Claims asserted: The complaints in the Alphatec, Healthpoint and Carli Actions purport to assert various claims, including allegations of fraudulent conveyance, interference with contract, and negligence, resulting in damage to OrthoTec’s business and a decrease in its value, and seek monetary damages as well as declaratory and injunctive relief relating to the production of plans for certain products.  The complaint in the Weissberg Action purports to assert claims for malicious prosecution in connection with certain proceedings in France.  As further provided below, this Agreement resolves all such claims and any other claims that could have been asserted against the Released Parties (defined below) based on facts or circumstances, known or unknown, occurring up to and including the 

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Exhibit 10.3

date of this Agreement.  Collectively, the Alphatec Action, Healthpoint Action, Carli Action, and Weissberg Action shall be referred to as the “Actions.”
		
	2.
	PARTIES

		
	2.1.
	The parties to this Agreement are Alphatec, Healthpoint and OrthoTec.

		
	(a)
	Alphatec Parties:  The Alphatec Parties shall include Alphatec Holdings, Inc., acting for itself and for the benefit of all of its direct and indirect subsidiaries and affiliates, including Alphatec Spine, Inc. and its direct and indirect subsidiaries and affiliates; and Alphatec Holdings International C.V., and its direct and indirect subsidiaries and affiliates, including Scient’x S.A.S. and Surgiview S.A.S. 

		
	(b)
	Healthpoint Parties:  The Healthpoint Parties shall include HealthpointCapital, LLC, John H. Foster and Mortimer Berkowitz III, acting on their own behalf and for the express benefit of Healthpoint Capital Partners, L.P. and HealthpointCapital Partners II, L.P. 

		
	(c)
	OrthoTec Parties.  The OrthoTec Parties shall include OrthoTec, LLC and Patrick Bertranou.    

		
	3.
	SETTLEMENT PAYMENT

		
	3.1.
	Alphatec Holdings, Inc. and Healthpoint Capital, LLC will cause the amounts specified in this Settlement and Release Agreement, as specifically set forth in Attachment A hereto, to be paid to OrthoTec, LLC.    

		
	4.
	STIPULATED JUDGMENTS

		
	4.1.
	The payments set forth in Attachment A will be guaranteed by Stipulated Judgments against (i) Alphatec Holdings, Inc., (ii) HealthpointCapital Partners, L.P., HealthpointCapital Partners II, L.P., (iii) HealthpointCapital, LLC, and (iv) John H. Foster and Mortimer Berkowitz, III.  The Stipulated Judgments will reflect the total amounts set forth in Attachment A and be in the form attached as Attachment B.  The Stipulated Judgments will be held and entered only in the event of a default and will be entered and enforced against the judgment debtors in the order specified above.  In the event of a default in the payment terms, OrthoTec’s sole remedy for such default will be to enter and pursue collection on the Stipulated Judgments for the principal and interest as set forth in Attachment A, less the amounts already paid, plus all reasonable attorneys’ fees and costs incurred in pursuing collection.  

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Exhibit 10.3

		
	5.
	DISMISSALS

		
	5.1.
	Upon payment of the lump-sum payment pursuant to Attachment A ($15.75 million), the parties will execute and file dismissals with prejudice of the Alphatec Action, the Healthpoint Action, the Carli Action, and the Weissberg Action.

		
	5.2.
	Such notices of dismissal shall be delivered to counsel for Alphatec and Healthpoint upon execution.

The Parties agree not to oppose and, to the extent required by the courts, to cooperate reasonably in taking such actions and executing such documents as are necessary to dismiss the foregoing Actions with prejudice, including any and all pending proceedings at any trial or appellate court related to such Actions. 
		
	6.
	RELEASED PARTIES

		
	6.1.
	Defendant Released Parties:  The Defendant Released Parties shall mean: 

		
	(a)
	Alphatec Released Parties:  The Alphatec Released Parties shall include: 

		
	(i)
	Alphatec Holdings, Inc., and all of its direct and indirect subsidiaries throughout the world, including, without limitation, Alphatec Spine, Inc., Alphatec Pacific Inc., Alphatec Spine GmbH, Millerton Ltd., Japan Ortho Medical; Alphatec Holdings International CV, Cooperatie Alphatec Holdings Europa U.A., Alphatec International, LLC., Scient’x S.A.S., Cibramed Productos Medicos Ltda., Scient’x UK Ltd., Scient’x Australia, Scient’s USA, Inc., Scientx Asia Pacific, Scient’x Italia, Surgiview S.A.S., and each of their direct and indirect subsidiaries and affiliates.  

		
	(ii)
	All current or former successors, partners, associates, officers, directors, employees, insurers, agents, advisors, attorneys (including, without limitation, Alphatec’s General Counsel Ebun Garner; Munger Tolles & Olson, LLP; Brad Brian; Mike Doyen; Susan Nash; Alissa Branham; Jordan Segall; DLA Piper; Jeff Rosenfeld; and Keara Gordon) and representatives of or for any of the Alphatec Entities.  It is understood that such terms may vary from country to country, and this Agreement releases all claims against entities and individuals whose liability would be predicated on any action or inaction on their part that was in any manner connected to the individual or entity’s  affiliation with one or more of the Alphatec Entities, or whose action or inaction could give rise to any liability (direct or indirect, whether by way of respondeat superior, indemnity, contribution, or any other basis) on the part of the Alphatec Released Parties. 

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Exhibit 10.3

		
	(b)
	Healthpoint Released Parties: The Healthpoint Released Parties shall include

		
	(i)
	HealthpointCapital, LLC; HealthpointCapital Partners, L.P.; HealthpointCapital Partners II, L.P.; Healthpoint Partners II-A, L.P.; HCM, LLC; HGP, LLC; HGPII, LLC; John H. Foster and Mortimer Berkowitz, III. 

		
	(ii)
	All current or former successors, affiliates, members, subsidiaries, partners, associates, officers, directors, employees, insurers, agents, advisors, attorneys (including, without limitation, Mintz Levin Cohn Ferris Glovsky and Popeo; and Stephen C. Curley) and representatives (and each of their respective predecessors, successors, assigns, and, as applicable, heirs) throughout the world of or for any of the Healthpoint Parties.  It is understood that such terms may vary from country to country, and this Agreement releases all claims against individuals or entities whose liability would be predicated on any action or inaction on their part that was in any manner connected to the individual or entity’s affiliation with one or more of the Healthpoint Parties, or whose action or inaction could give rise to any liability (direct or indirect, whether by way of respondeat superior, indemnity, contribution, or any other basis) of the Healthpoint Released Parties.  

		
	(c)
	The Carli Released Parties:  The Carli Released Parties shall include Olivier Carli, members of his family, heirs, advisors, attorneys (including, without limitation, Berenthal & Associates; James Berenthal; Kendall Brill & Klieger LLP; Bert Deixler; and Jean Charles Bensussan) and representatives of Mr. Carli or his family, and any person or entity with which Mr. Carli has or has had or may in the future have an affiliation of any sort, including without limitation ownership (direct or indirect) or serving as an officer, director, advisor, or employee of any sort.

		
	(d)
	The Weissberg Released Parties.  The Weissberg Released Parties shall include Kenneth Weissberg and SELARL Weissberg and their partners, associates, officers, directors, employees, successors, affiliates, heirs, advisors, attorneys (including, without limitation, Daar & Newman) and representatives, and any other person or entity allegedly involved in any matter with the French proceedings at issue in the Weissberg Action or the Weissberg Action. 

		
	(e)
	The OrthoTec Released Parties:  The OrthoTec Released Parties shall include OrthoTec, LLC, Patrick Bertranou, and all current or former members, successors, partners, associates, officers, directors, employees, insurers, agents, advisors, attorneys (including without limitation Browne George Ross LLP, Peter Ross, Benjamin Scheibe, Gerard Soussan, Michael Perry, and the Law Offices of Michael Perry) and all representatives of or for OrthoTec.  It is understood that such terms may vary from country to country, and this Agreement releases all claims against individuals or entities whose liability would be predicated on any 

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Exhibit 10.3

action or inaction on their part that was in any manner connected to the individual or entity’s affiliation with OrthoTec, or whose action or inaction could give rise to any liability (direct or indirect, whether by way of respondeat superior, indemnity, contribution, or any other basis) of OrthoTec. 
		
	7.
	RELEASES

		
	7.1.
	Release by Alphatec and Healthpoint of OrthoTec Released Parties.  

		
	(a)
	Except as expressly set forth in this Agreement, Alphatec and Healthpoint hereby release, effective as of the date of this Agreement, the OrthoTec Released Parties, and each of them, from any and all claims, demands, and causes of action, whether known or unknown, in contract or tort, arising out of or incurred in connection with any facts or circumstances existing prior to the date of this Agreement.

		
	(b)
	By way of limitation, it is agreed that as to Alphatec’s and Healthpoint’s release of unnamed current or former associates, outside insurers, agents, advisors, attorneys, and representatives, Alphatec’s and Healthpoint’s release shall be of claims, demands, or causes of action that related in any way to the claims or allegations in the Alphatec Action, the Healthpoint Action, the Carli Action, and the Weissberg Action.  For clarity, releases of such unnamed persons or entities shall not include unknown claims.  For the purpose of this Section 7.1(b), “unknown” shall be defined as not known as per the knowledge of the Alphatec Parties or Healthpoint Parties, including their officers and employees; provided that if a reasonable person in the position of the Alphatec Parties or the Healthpoint Parties should know such information, such information shall not be deemed to be unknown.  

		
	7.2.
	Release by OrthoTec of the Alphatec Released Parties, the Healthpoint Released Parties, the Carli Released Parties and the Weissberg Released Parties. 

		
	(a)
	Except as expressly set forth in this Agreement, OrthoTec hereby releases, effective as of the time of this Agreement, the Alphatec Released Parties, the Healthpoint Released Parties, the Carli Released Parties and the Weissberg Released Parties and each of them, from any and all claims, demands, and causes of action, whether known or unknown, in contract or in tort, arising out of or incurred in connection with any action, conduct, or omission or other facts or circumstance existing or occurring from the beginning of time up to the date of this Agreement, including, without limitation, the allegations made or that could have been made in the Alphatec Action, the Healthpoint Action, the Carli Action, and the Weissberg action. 

		
	(b)
	By way of limitation, it is agreed that as to OrthoTec’s release of unnamed affiliates, associates, outside insurers, agents, advisors, attorneys, and representatives, OrthoTec’s release shall be of claims, demands, or causes of 

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Exhibit 10.3

action that related in any way to the claims or allegations in the Alphatec Action, the Healthpoint Action, the Carli Action, and the Weissberg Action.  For clarity, releases of such unnamed persons or entities shall not include unknown claims.  For the purpose of this Section 7.2(b), “unknown” shall be defined as not known as per the knowledge of the OrthoTec Parties,  including their officers and employees, provided that if a reasonable person in the position of the OrthoTec parties should know such information, such information shall not be deemed to be unknown.
		
	7.3.
	Waiver of Civil Code Section 1542.  

		
	(a)
	Alphatec, Healthpoint and OrthoTec, and each of them, expressly understand that there may be unknown or unanticipated damages, injuries, or losses resulting from conduct, acts, omissions or other circumstances occurring prior to the date of this Agreement, including matters alleged in (or related to) the Alphatec Action, the Healthpoint Action, the Carli Action, and the Weissberg action, and that such damages, injuries, and losses may not be discovered until after execution of this Agreement or after the time of this Agreement.  Except as expressly set forth in this Agreement, Alphatec, Healthpoint and OrthoTec, and each of them, hereby expressly agree that the releases contained herein nevertheless shall apply to all such unknown or unanticipated damages, injuries or losses.  Alphatec, Healthpoint and OrthoTec, and each of them, further expressly understand that a damage, injury or loss of which they are now aware may be more serious than now known or understood, or may have future consequences that are not now anticipated or suspected.  Except as expressly set forth in this Agreement, Alphatec, Healthpoint and OrthoTec, hereby expressly agree that the releases contained herein nevertheless shall apply to such unknown or unanticipated consequences.  

		
	(b)
	Alphatec, Healthpoint and OrthoTec, and each of them, have read California Civil Code section 1542, which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the Release, which if known by him or her must have materially affected his or her settlement with the debtor.
		
	(c)
	Except as expressly limited in this Agreement, Alphatec, Healthpoint and OrthoTec, and each of them, acknowledge that they understand this statute, and expressly waive any and all rights and benefits of California Civil Code section 1542, as well as all rights and benefits of any similar law of any other jurisdiction for unknown or unanticipated damages, injuries, or losses arising out of conduct, acts, omissions or other circumstances occurring prior to the date of this Agreement, including matters alleged in or related to the Alphatec Action, the Healthpoint Action, the Carli Action and/or the Weissberg Action. 

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Exhibit 10.3

		
	8.
	NO ADMISSION OF LIABILITY

		
	8.1.
	Alphatec Holdings, Healthpoint Capital, Healthpoint Capital Partners, LP, Healthpoint Capital Partners II, LP, John H. Foster, and Mortimer Berkowitz, III deny any and all allegations made by OrthoTec in the above-referenced actions.   This Agreement contains no admission of liability.  

		
	9.
	CONTINUING JURISDICTION OVER SETTLEMENT

		
	9.1.
	The Superior Court of Los Angeles and the Supreme Court of New York retain such jurisdiction as they have previously determined they have over the respective parties to California and New York Courts, in order to enforce the settlement in this Agreement, pursuant to California Code of Civil Procedure Section 664.6 and any New York laws of similar effect.

		
	10.
	ENTIRE AGREEMENT AND MODIFICATION

		
	10.1.
	This Agreement, together with the provisions in Attachments A and B hereto, constitutes the full and complete agreement between the Parties regarding the matters set forth herein.  Except for the “Agreement Regarding the Production of Certain Plans,” dated March 15, 2014, which shall remain in full force and effect, this Agreement supersedes all prior or contemporaneous oral or written agreements and understandings, including the Binding Term Sheet.  There are no representations, warranties, agreements or undertakings, oral or written, between the Parties relating to the subject matter of this Agreement, which are not fully expressed herein.  This Agreement may only be amended in writing, signed by all Parties.

		
	10.2.
	Any waiver of any part of this Agreement must be in writing and duly executed by the Party against whom such waiver is asserted. 

		
	10.3.
	Neither OrthoTec, Alphatec, nor Healthpoint are entering into this Agreement in reliance, in whole or in part, based on any representation, warranty, statement or promise of any kind outside the express terms of this Agreement. 

		
	11.
	NO ASSIGNMENT OR TRANSFER OF CLAIMS

		
	11.1.
	Each Party hereby represents and warrants to each other Party that it is the sole and lawful owner of all right, title, and interest in and to every claim which is being released by such Party in this Agreement, and each further represents and warrants that it has not assigned or transferred, or purported to assign or transfer, and will not assign or transfer to any person or entity, any claim which is being released by such Party in this Agreement.  OrthoTec represents and warrants that neither it, nor any OrthoTec Released Party, has asserted claims relating to the subject matter of the Alphatec Action, the Healthpoint Action, the Carli Action or the Weissberg Action.

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Exhibit 10.3

		
	12.
	AUTHORITY TO ENTER AGREEMENT

		
	12.1.
	Each of the signatories to this Agreement warrants and represents that he or she is authorized to execute and deliver this Agreement on behalf of the party for whom he or she purports to sign.

		
	13.
	JOINT PARTICIPATION IN PREPARATION OF AGREEMENT

		
	13.1.
	This Agreement is the product of arms-length negotiations between and among the Parties, and no Party shall be deemed to be the drafter of this Agreement, nor shall any part of this Agreement be construed against any Party on the basis of that Party’s identity as a drafter of any portion of this Agreement.

		
	14.
	SECTION HEADINGS

		
	14.1.
	Section headings in this Agreement are included for convenience of reference only and shall not be a part of this Agreement or its interpretation for any other purpose.

		
	15.
	GOVERNING LAW

		
	15.1.
	This Agreement is entered into in the State of California and will be governed and interpreted under the laws of California.  Any action to enforce this Agreement will be brought in the Los Angeles County Superior Court (if the dispute is between OrthoTec, on the one hand, and Alphatec Holdings, on the other) or in the Supreme Court of New York (if the dispute is between OrthoTec, on the one hand, and Healthpoint Capital LLC, John H. Foster, and/or Mortimer Berkowitz III on the other). 

		
	16.
	SEVERABILITY

		
	16.1.
	If any provision or term of this Agreement is declared or determined by a court of competent jurisdiction to be invalid or unenforceable, then in all other respects this Agreement shall nonetheless remain binding and in effect. 

		
	17.
	COUNTERPARTS

		
	17.1.
	This Agreement may be executed in counterparts, and so executed, shall constitute a single agreement binding on all Parties, notwithstanding that the signatures of all Parties’ designated representatives do not necessarily appear on the same page.

In witness whereof, the Parties hereto have executed this Agreement as of the date first written above.

ALPHATEC HOLDINGS, INC.

/s/ Siri Marshall
By:  Siri Marshall, for the Alphatec Special Committee

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Exhibit 10.3

HEALTHPOINTCAPITAL, LLC. 

/s/ Mortimer Berkowitz III
By:  
Name: Mortimer Berkowitz III
Title:  President and Managing Director

HEALTHPOINTCAPITAL PARTNERS, LP 
By: HGP, LLC, its general partner

/s/ Mortimer Berkowitz III
By:  
Name: Mortimer Berkowitz III
Title:  Managing Partner

HEALTHPOINTCAPITAL PARTNERS II, LP
By: HGPII, LLC, its general partner

/s/ Mortimer Berkowitz III
By:  
Name: Mortimer Berkowitz III
Title:  Managing Partner

/s/ John Foster
John Foster

/s/ Mortimer Berkowitz III 
Mortimer Berkowitz, III

ORTHOTEC, LLC

/s/ Patrick Bertranou
By:  Patrick Bertranou 

/s/ Patrick Bertranou
Patrick Bertranou

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Exhibit 10.3

Approved as to form:
	
		
	Dated: _________________________

	MUNGER, TOLLES & OLSON LLP, 
Counsel for Alphatec

/s/ Susan Nash
By:  Susan Nash

Approved as to form:
	
		
	Dated: _________________________

	MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO PC, 
Counsel for Healthpoint

/s/ Stephen Curley 
By:  Stephen Curley

Approved as to form:
	
		
	Dated: _________________________

	BROWNE GEORGE ROSS LLP
Counsel for OrthoTec

/s/ Peter Ross
By:  Peter W. Ross

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Exhibit 10.3

ATTACHMENT A
AUGUST 13, 2014

		
	1.
	ATTACHMENT  PART OF BINDING TERM SHEET 

		
	1.1.
	Reference is herein made to that certain Binding Term Sheet (the “Agreement”) by and among the Alphatec Holdings, Inc., the Healthpoint Parties, and the OrthoTec Parties (each as defined in the Agreement).  

		
	2.
	PAYMENT TERMS 

		
	2.1.
	Alphatec shall pay to OrthoTec the following sums:

		
	2.2.
	Lump sum payment: By March 24, 2014, Alphatec shall make a payment of $1 million ($1,000,000.00) and by March 31 will pay an additional $750,000.00.  Within 25 days of Alphatec closing a suitable credit facility, but in no event later than June 15, 2014, Alphatec shall pay $15.75 million ($15,750,000.00).

		
	2.3.
	Quarterly payments:  $31.5 million ($31,500,000.00) payable in 29 quarterly installments of $1.1 million and then one additional quarterly payment of $600,000.00.  Each such quarterly payment shall be due on the first day of the quarter, commencing October 1, 2014.

		
	2.4.
	Interest: Simple Interest of 7% will accrue beginning May 15, 2014, on the unpaid balance of the $31.5 million ($31,500,000.00)  until such amount has been paid in full.  Following the full payment of the $31.5 million ($31,500.000.00), the accrued interest will be paid in quarterly installments of $1.1 million ($1,100,000.00)  until the accrued interest amount is paid (for clarity, it is understood that the final quarterly payment of interest may be less than $1.1 million ($1,100,00.00), but shall be sufficient to pay the accrued interest in full).  No interest shall accrue on the accrued interest.  In the event that $31.5 million ($31,500,000.00) is prepaid, interest shall not accrue on such prepaid amount. 

11ATEC-2014.09.30.EX-10.4

Exhibit 10.4

THIRD AMENDMENT TO THE EXCLUSIVE LICENSE AGREEMENT
This Third Amendment to the Exclusive License Agreement (this “Amendment”) is made effective as of August 1, 2014 (the “Amendment No. 3 Effective Date”) between Alphatec Spine, Inc., a Delaware corporation with a principal place of business at 5818 El Camino Real, Carlsbad, California 92008 (“Licensee”) and Stout Medical Group LP, a limited partnership company organized under the laws of the state of Delaware, and having a place of business at 101 E. Mill Street, Unit P, Quakertown, Pennsylvania 18951 (“Licensor”).  Licensee and Licensor are each hereafter referred to individually as a “Party” and together as the “Parties”.
WHEREAS, reference is made to that certain Exclusive License Agreement dated September 11, 2007, between the Parties (the “Agreement”).
WHEREAS, the Parties desire to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties hereto, the Parties hereto agree as follows:
1.AMENDMENTS
1.1    First and Second Amendments.  The First Amendment to Exclusive License Agreement, dated as of March 31, 2009 and the Second Amendment to the Exclusive License Agreement, dated as of August 5, 2009 are hereby terminated in their entirety and replaced by the terms and conditions of this Amendment.
1.2    Definitions.  Sections 1.7 and 1.16 are hereby deleted and replaced in their entirety with the following language:
1.7    “Licensed Field” shall mean the treatment of spinal vertebral body compression fractures in the Territory. 
1.16    “Territory” shall mean all countries and jurisdictions of the world except the United States and its territories and possessions; provided that the exclusion of the United States from the Territory shall only apply with respect to the sale of Licensed Products in the Territory.  
1.3    Amendment and Restatement of Sections 4.1.2, 4.1.3 and 4.1.4.  Sections 4.1.2, 4.1.3 and 4.1.4 of the Agreement are hereby deleted and replaced in their entirety with the following language:
4.1.2    Intentionally Deleted.
4.1.3    Royalty Payments.  Beginning with the quarter ending September 30, 2014, the following flat royalty payments shall be due within forty-five (45) days of the end of each quarter, plus two license modification payments of $[***] each with such modification 

Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.4

payments being due and payable at the same time as the payment for the quarters ending September 30, 2014 and December 31, 2014 are due and payable:
	
		
	Calendar Quarter Ending
	Royalty Payments

	September 30, 2014
	[***]

	December 31, 2014
	[***]

	March 31, 2015
	[***]

	June 30, 2015
	[***]

	September 30, 2015
	[***]

	December 31, 2015
	[***]

	March 31, 2016
	[***]

	June 30, 2016
	[***]

	September 30, 2016
	[***]

	December 31, 2016
	[***]

Beginning January 1, 2017, Licensee shall pay to Licensor, within forty-five (45) days of the end of each calendar quarter, earned royalties of eight and one-half percent (8.5%) of Net Sales during such three-month period.  Each royalty payment shall (i) be accompanied by a report specifying:  the Net Sales (including an accounting of deductions taken in the calculation of Net Sales), and (ii) state the applicable exchange rate used in conversion from any foreign country’s currency to United States Dollars (which conversion shall be determined in accordance with Subsection 4.2.2).  Earned royalties beginning January 1, 2017, as described in this Subsection 4.1.3, shall only be credited against minimum royalties which would otherwise be due as required by Subsection 4.1.4 and shall not be credited against or otherwise reduce any other amounts payable hereunder.  
4.1.4    Minimum Royalties.  Beginning for the calendar year 2017, Licensee shall pay Licensor the following minimum royalty amounts in each six-month period listed next to such amount.  No minimum royalty described in this Subsection 4.1.4 shall be credited against or otherwise reduce any other amounts payable hereunder.  For a particular six month period, in the event that the sum of the earned royalties on Net Sales timely paid in accordance with Subsection 4.1.3 above with respect to the applicable six-month period is less than the Minimum Six Month Royalty set forth below, the obligation to pay the difference to Licensor shall accrue on the last day of such six month period and be payable by Licensee no later than forty-five (45) days following June 30 or December 31, as applicable:

Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.4

	
		
	Period Ending
	Minimum Six-Month Royalty

	June 30, 2017
	[***]

	December 31, 2017
	[***]

	June 30, 2018
	[***]

	December 31, 2018
	[***]

	June 30, 2019
	[***]

	December 31, 2019
	[***]

	June 30, 2020, and each six-month period thereafter
	[***]

1.4    Amendment of Section 9.1.  The first sentence of Section 9.1 is hereby deleted and replaced in its entirety by the following language:
The term of this Agreement shall commence on the Effective Date and expire upon the shorter of: (i) twenty (20) years after the Amendment No. 3 Effective Date; and (ii) the date upon which there is no longer a Valid Claim within the Licensed Patent rights contained in a Licensed Product.  For the purposes of this Agreement, “Valid Claim” shall mean a claim indicated as allowable in an issued, unexpired patent or in a pending patent application within the Licensed Patent Rights that (i) has not been finally cancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdiction, (ii) has not been revoked, held invalid, or declared unpatentable or unenforceable in a decision of a court or other body of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal, (iii) has not been rendered unenforceable through disclaimer or otherwise, and (iv) is not lost through an interference proceeding.  The Licensee agrees and acknowledges that its current OsseoFix implant contains Licensed Patent Rights as of the Amendment No. 3 Effective Date.
1.5    Amendment and Restatement of Subsections 9.2.2 and 9.2.3.  Sections 9.2.2 and 9.2.3 are hereby deleted and replaced in their entirety by the following language:
9.2.2    Termination Rights for Failure to Pay Royalties.  In the event that the Licensee fails (i) to pay any amounts due under Sections 4.1.3 or 4.1.4 within the forty-five (45) day time period required by such Sections, and thereafter does not make payment within fifteen (15) days of notice of non-payment received from Licensor, Licensor shall have the right to terminate this Agreement thirty (30) days thereafter.  However, notwithstanding any termination of this Agreement, in the event of a termination pursuant to Section 9.2.2, Licensee shall remain obligated to pay Licensor within thirty (30) additional days after the end of the fifteen (15) day cure period, the following amounts, and Licensor shall have the following rights, which provisions shall survive such termination:
(a)    if the termination is a result of the non-payment of an amount due pursuant to Section 4.1.3, Licensee shall remain obligated to pay Licensor the payment then due as required under Section 9.3.1(ii) and Section 4.1.3 plus [***]; 

Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.4

(b)    if the termination is a result of the non-payment of an amount due pursuant to Section 4.1.4, the Licensee shall remain obligated to pay Licensor the payment then due as required under Section 9.3.1(ii) and Section 4.1.4 plus [***]; and
(c)    Notwithstanding the termination of the Agreement pursuant to this Section 9.2.2, Licensee shall have the right on a non-exclusive basis, for nine (9) months after the date of termination, but only after payment in full of the amounts due Licensor under Sections 9.2.2(a) or 9.2.2(b) above, to sell or otherwise dispose of all finished Licensed Products then on hand.  Licensee shall owe no further royalties on sales that occur during such nine (9)-month period, provided that the Licensee has made the amounts due to the Licensor under Sections 9.2.2(a) or 9.2.2(b) above.  If the amounts due under Sections 9.2.2(a) or 9.2.2(b) above are not paid, a royalty of 8.5% of Net Sales shall also be due to Licensor during such nine (9)-month period.
9.2.3    Voluntary Termination.  Licensee shall have the right to terminate this Agreement upon not less than ninety (90) days prior written notice to Licensor, provided that the payments due under Section 9.2.2(a) or the payments due under Section 9.2.2(b) (as of the date of such termination), as the case may be, are paid in full by the effective termination date.  
1.6    Amendment and Restatement of Schedule A.  Schedule A of the Agreement, as a result of the amendment to the definition of Territory, is hereby amended and restated in its entirety as set forth in the new Schedule A attached to this Amendment.
2.EXECUTION PAYMENT
Within three (3) days of the Amendment No. 3 Effective Date, the Licensee shall make a payment to the Licensor equal to $[***].
3.MISCELLANEOUS
In the event of any conflict between the provisions of this Amendment and the Agreement, the provisions of this Amendment shall prevail.  Other than as set forth in this Amendment, the remainder of the Agreement shall remain in full force and effect.
[Signatures Follow]

Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.4

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representative.
		
	ALPHATEC SPINE, INC.
	STOUT MEDICAL GROUP, LP:

By:    Stout Medical Group, Inc.
Its:    General Partner

By:  /s/ Michael O’Neill    By:     /s/ Tom Molz 
    Name:    Michael O’Neill        Name:    Tom Molz
Title:    CFO        Title:    President and CEO

Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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