ASSIGNMENT AND EARN-OUT AGREEMENT

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:

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

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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 1^st 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 3^rd party not affiliated with K2 (the “Other Patents”) and K2 is obligated to make royalty or similar payments to such 3^rd 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:

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.

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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:

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EXHIBIT A

“Contributed Intellectual Property”

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