10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-50744

NUVASIVE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 33-0768598
(I.R.S. Employer
Identification No.)

7475 Lusk Boulevard
San Diego, CA 92121
(Address of principal executive offices, including zip code)

(858) 909-1800
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ     No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o     No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o  Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ

As of April 30, 2009, there were 36,452,068 shares of the registrant’s common stock outstanding.

NUVASIVE, INC.

QUARTERLY REPORT ON FORM 10-Q

March 31, 2009

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of March 31, 2009 (Unaudited) and December 31, 2008	3
Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008	4
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	20
Item 4. Controls and Procedures	21
PART II—OTHER INFORMATION	22
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 5. Other Information	22
Item 6. Exhibits	23
SIGNATURES	24
EX-2.1
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-31.1
EX-31.2
EX-32

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NUVASIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	March 31,			December 31,
	2009			2008
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	144,761		$	132,318
Short-term marketable securities		40,330			45,738
Accounts receivable, net		50,032			51,622
Inventory		82,236			68,834
Prepaid expenses and other current assets		2,675			3,466
Total current assets		320,034			301,978
Property and equipment, net		75,399			73,686
Long-term marketable securities		18,430			45,305
Goodwill		32,437			2,332
Intangible assets, net		70,550			54,767
Other assets		8,491			9,338
Total assets	$	525,341		$	487,406
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	31,096		$	26,633
Accrued payroll and related expenses		15,372			17,132
Acquisition related liabilities		24,653			—
Royalties payable		2,204			1,722
Total current liabilities		73,325			45,487
Senior convertible notes		230,000			230,000
Long-term acquisition related liabilities		—			12,111
Other long-term liabilities		16,550			12,177
Commitments and contingencies
Noncontrolling interests		14,770			—
Stockholders’ equity:
Common stock, $0.001 par value; 70,000 shares authorized, 36,405 and 36,310 issued and outstanding at March 31, 2009 and December 31, 2008, respectively		36			36
Additional paid-in capital		391,135			383,293
Accumulated other comprehensive loss		(665	)		(190	)
Accumulated deficit		(199,810	)		(195,508	)
Total stockholders’ equity		190,696			187,631
Total liabilities and stockholders’ equity	$	525,341		$	487,406

See accompanying notes to unaudited condensed consolidated financial statements.

3

NUVASIVE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	Three Months Ended March 31,
	2009			2008
Revenues	$	80,008		$	51,184
Cost of goods sold		14,774			9,095
Gross profit		65,234			42,089
Operating expenses:
Sales, marketing and administrative		58,481			39,317
Research and development		10,193			6,976
In-process research and development		—			4,176
Total operating expenses		68,674			50,469
Interest income and other, net		776			1,160
Interest expense		(1,868	)		(434	)
Interest and other income (expense), net		(1,092	)		726
Consolidated net loss	$	(4,532	)	$	(7,654	)
Net loss attributable to noncontrolling interests		(230	)		—
Net loss attributable to NuVasive, Inc.	$	(4,302	)	$	(7,654	)
Net loss per share:
Basic and diluted	$	(0.12	)	$	(0.22	)
Weighted average shares — basic and diluted		36,365			35,411

See accompanying notes to unaudited condensed consolidated financial statements.

4

NUVASIVE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months Ended March 31,
	2009			2008
Operating activities:
Net loss	$	(4,302	)	$	(7,654	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		5,488			3,883
In-process research and development		—			4,176
Stock-based compensation		6,682			5,150
Other non-cash adjustments		842			(47	)
Noncontrolling interests		(230	)		—
Changes in operating assets and liabilities:
Accounts receivable		1,361			(2,929	)
Inventory		(14,100	)		(9,306	)
Prepaid expenses and other current assets		609			(1,040	)
Accounts payable and accrued liabilities		10,052			5,260
Accrued payroll and related expenses		(1,777	)		(1,728	)
Net cash provided by (used in) operating activities		4,625			(4,235	)
Investing activities:
Cash paid for acquisitions		—			(6,256	)
Cash paid for investment in Progentix (Note 3)		(10,000	)		—
Acquisition related milestone payments		(10,000	)		—
Purchases of property and equipment		(5,567	)		(11,369	)
Purchases of short-term marketable securities		(7,658	)		(3,005	)
Sales of short-term marketable securities		27,725			17,300
Purchases of long-term marketable securities		(6,758	)		(8,582	)
Sales of long-term marketable securities		18,975			2,000
Other assets		—			740
Net cash provided by (used in) investing activities		6,717			(9,172	)
Financing activities:
Payments of long-term liabilities		—			—
Issuance of convertible debt, net of costs		—			222,414
Purchase of convertible note hedges		—			(45,758	)
Sale of warrants		—			31,786
Issuance of common stock		1,160			1,579
Net cash provided by financing activities		1,160			210,021
Effect of exchange rate changes on cash		(59	)		—
Increase in cash and cash equivalents		12,443			196,614
Cash and cash equivalents at beginning of year		132,318			61,915
Cash and cash equivalents at end of year	$	144,761		$	258,529
Supplemental disclosure of non-cash transactions:
Leasehold improvements paid by lessor				$	2,848

See accompanying notes to unaudited condensed consolidated financial statements.

5

NuVasive, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business

     NuVasive, Inc. (the Company or NuVasive) was incorporated in Delaware on July 21, 1997. The Company is a medical device company focused on the design, development, and marketing of products for the surgical treatment of spine disorders. The Company’s product portfolio is focused primarily on the U.S. spine implant market. Additionally, the Company has expanded into the global biologics market, the international market, and is developing products for the emerging motion preservation market.

     NuVasive’s principal product offering is based on its Maximum Access Surgery, or MAS^® platform. The MAS platform combines four categories of products that collectively minimize soft tissue disruption during spine surgery with maximum visualization and safe, easy reproducibility for the surgeon: NeuroVision^®, a proprietary software-driven nerve avoidance system; MaXcess^®, a unique split-blade retractor system; a wide variety of specialized implants; and several biologic fusion enhancers. MAS significantly reduces surgery time and returns patients to activities of daily living much faster than conventional approaches. Having redefined spine surgery with the MAS platform’s lateral approach, known as eXtreme Lateral Interbody Fusion, or XLIF^®, the Company has built an entire spine franchise. With products today spanning lumbar, thoracic and cervical applications, the Company will continue to expand and evolve its offering predicated on its research and development focus and dedication to outstanding service levels supported by a culture of Absolute Responsiveness^®.

     The Company loans its MAS systems to surgeons and hospitals that purchase implants and disposables for use in individual procedures. In addition, NeuroVision, MaXcess and surgical instrument sets are placed with hospitals for an extended period at no up-front cost to them provided they commit to minimum monthly purchases of disposables and implants. The Company sells a small quantity of MAS instrument sets, MaXcess and NeuroVision systems to hospitals. The Company also offers a range of bone allograft in patented saline packaging and spine implants such as rods, plates and screws. Implants and disposables are shipped from the Company’s facilities or from limited disposable inventories stored at independent sales agents’ sites.

2. Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP). In the opinion of management, the consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented.

     The accompanying unaudited condensed consolidated financial statements as of December 31, 2008 and for the three-months ended March 31, 2008 include the accounts of the Company and its wholly owned subsidiaries, NuVasive Europe GmbH and NuVasive UK Limited. The unaudited condensed consolidated financial statements as of March 31, 2009 and for the three months then ended include the accounts of the Company and its wholly owned subsidiaries as well as the accounts of a variable interest entity, Progentix Orthobiology, B.V. (Progentix), which is consolidated pursuant to Financial Accounting Standards Board (FASB) Interpretation No. 46 (revised 2003), Consolidation of Variable Interest Entities, or FIN 46R. There has been no material activity by the Company’s subsidiaries during the periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation.

     These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2008 included in NuVasive’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. Operating results for the three-months ended March 31, 2009 and 2008 are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

3. Investment in Progentix Orthobiology, B.V.

     On January 13, 2009, the Company completed the purchase of forty percent (40%) of the capital stock of Progentix Orthobiology, B.V., a company organized under the laws of the Netherlands (Progentix), from existing shareholders (the Progentix Shareholders) pursuant to a Preferred Stock Agreement for $10 million in cash (the Initial Investment). Progentix has as its objective the development and exploitation of knowledge and products in the field of bone defects and the recovery of bone tissue in general. Progentix wishes to further extend the existing knowledge and patent position in the field of Osteoinductive Bone Graft Material Technology. Since inception, Progentix has incurred approximately $2.0 million in losses.

6

     NuVasive and Progentix also entered into a Senior Secured Facility Agreement dated January 13, 2009, whereby Progentix may borrow up to $5 million from NuVasive to fund ongoing clinical and regulatory efforts (the Loan). The proceeds of the Loan are to be utilized towards achievement of all milestones, as defined in the Preferred Stock Purchase Agreement. The Loan accrues interest at a rate of six percent (6%) per year. Other than its obligations under the Loan, NuVasive is not obligated to provide additional funding to Progentix. Concurrent with the Preferred Stock Purchase Agreement, NuVasive, Progentix and the Progentix Shareholders entered into an Option Purchase Agreement dated January 13, 2009 (the Option Agreement), whereby NuVasive may be obligated (the Put Option), upon the achievement within two years of certain milestones by Progentix, to purchase the remaining sixty percent (60%) of capital stock of Progentix from its shareholders for $45 million, payable in a combination of cash or NuVasive common stock at the Company’s sole discretion, subject to certain adjustments (the Remaining Shares).

     NuVasive may also be obligated, in the event that Progentix achieves the milestones contemplated above within the requisite two-year period, to make additional payments to Progentix of up to an aggregate total of $25 million, payable in a combination of cash or NuVasive common stock, at the Company’s sole discretion, subject to certain adjustments, upon completion of additional milestones and dependent on NuVasive’s sales success. NuVasive also has the right under the Option Agreement to purchase the Remaining Shares (the Call Option) at any time between the second anniversary and the fourth anniversary of the Option Agreement (the Option Period) for $35 million, payable in a combination of cash or NuVasive common stock, at the Company’s sole discretion, subject to certain adjustments. In the event NuVasive achieves in excess of a specified annual sales run rate on Progentix products during the Option Period, NuVasive may be required to purchase the Remaining Shares for $35 million. NuVasive and Progentix also entered into a Distribution Agreement dated January 13, 2009, whereby Progentix appointed NuVasive as its exclusive distributor for certain Progentix products. The Distribution Agreement will be in effect for a term of ten years unless earlier terminated in accordance with its terms.

     Under FIN 46R, Consolidation of Variable Interest Entities, an entity that does not have the ability to finance its activities without additional subordinated financial support or that has equity investors that cannot make significant decisions about the its operations or that do not absorb their proportionate share of expected losses or will not receive the expected residual returns of the entity, are accounted for as a variable interest entity, or VIE. The application of FIN 46R to a given arrangement requires significant management judgment. The enterprise that is deemed to have the obligation to absorb a majority of the expected losses or the right to receive a majority of expected residual returns of the VIE is considered the primary beneficiary. An enterprise is required to consolidate a VIE if it is considered the primary beneficiary of the VIE.

     Pursuant to the guidance in FIN 46R, the Company has determined that Progentix is a variable interest entity, NuVasive is its primary beneficiary, and as a result the financial position and results of operations of Progentix have been included in the consolidated financial statements from the date of the Initial Investment. This determination was made based on the Put Option and Call Option to acquire the Remaining Shares at prices that were fixed upon entry into the arrangement, with the specific prices based upon the achievement of certain milestones within a specified period of time. The fixed nature of the Put Option and the Call Option limit Progentix Shareholders’ potential future returns.

     Pursuant to FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (FAS 160), the equity interests in Progentix not owned by the Company are reported as noncontrolling interests on the consolidated balance sheet of the Company. Losses incurred by Progentix are charged to the Company and to the noncontrolling interest holders based on their ownership percentage. The Remaining Shares and the Option Agreement that was entered into between NuVasive, Progentix and the Progentix Shareholders are not considered to be freestanding financial instruments as defined by FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (FAS 150). Therefore the Remaining Shares and the Option Agreement are accounted for as a combined unit on the consolidated financial statements as a redeemable noncontrolling interest that is initially recorded at fair value and classified as mezzanine equity under the provisions of EITF Topic No. D-98, Classification and Measurement of Redeemable Securities (EITF D-98).

     Pursuant to the provisions of EITF D-98, when the embedded Put Option is exercisable and therefore the Remaining Shares considered currently redeemable (i.e., at the option of the holder), the instrument should be adjusted to its maximum redemption amount. If the embedded Put Option is considered not currently exercisable (e.g., because a contingency has not been met), and it is not probable that the embedded Put Option will become exercisable, an adjustment is not necessary until it is probable that the embedded Put Option will become exercisable. At March 31, 2009, the embedded Put Option was not deemed currently exercisable and therefore the Remaining Shares were not redeemable because the milestones referred to previously had not been met. Furthermore, at March 31, 2009, as it is not currently possible to predict the outcome of such milestones, the Company concluded it is not probable that the milestones will be met and that the Remaining Shares will become redeemable. The probability of redemption will be reevaluated on at least a quarterly basis.

7

     In accordance with FIN 46R, we have recorded the identifiable assets, liabilities and noncontrolling interests in the VIE at their fair value upon initial consolidation. There has been no material change to the balances consolidated at the date of the Initial Investment, therefore only the balances consolidated as of March 31, 2009 are included below. Total assets and liabilities of Progentix as of March 31, 2009 are as follows (in thousands):

	March 31, 2009
Total current assets	$	1,036
Identifiable intangible assets, net		16,752
Goodwill		12,655
Accounts payable & accrued expenses		570
Deferred tax liabilities		4,310
Noncontrolling interests		14,770

     Intangible assets consolidated pursuant to the Progentix investment are included in the Intangible assets, net balance in the consolidated balance sheet as of March 31, 2009 and consist of the following (in thousands):

	Weighted-
	Average		Gross				Intangible
	Amortization		Carrying		Accumulated		Assets,
	(in years)		Amount		Amortization		Net
Non-competition agreement		2	$	300	$	32	$	268
Existing technology		10		5,400		116		5,284
In-process research and development		10		11,200		—		11,200
Total Progentix intangible assets			$	16,900	$	148	$	16,752

4. Osteocel Biologics Business Acquisition

     On July 24, 2008, NuVasive completed the acquisition of certain assets of Osiris Therapeutics, Inc. (Osiris) (the Osteocel^® Biologics Business Acquisition) for $35 million in cash paid at closing pursuant to the Asset Purchase Agreement, as amended. The completion date of this transaction is referred to as the Technology Closing Date. At the Technology Closing Date, the Company also entered into a Manufacturing Agreement, as amended (collectively with the Asset Purchase Agreement, the Agreements) with Osiris.

     Under the terms of the Agreements, NuVasive is obligated to make additional payments of up to $50 million, including milestone-based contingent payments not to exceed $37.5 million and a non-contingent $12.5 million payment for the transfer of the manufacturing facility Osiris currently utilizes to manufacture the Osteocel product. Through March 25, 2009, a total of $5.0 million in cash had been paid toward these contingent milestone obligations.

     On March 25, 2009, the Company and Osiris entered into an additional agreement which amended certain provisions of the Agreements (the March 2009 Amendments). Under the terms of the March 2009 Amendments, the Manufacturing Agreement expired and Osiris ceased all manufacturing activity related to Osteocel in April 2009. Additionally, under the terms of the March 2009 Amendments, the parties agreed to remove the performance contingencies otherwise applicable to $17.5 million of the remaining contingent milestone payments available to Osiris under the Agreements and amended these milestone payments (the Amended Milestones). In accordance with the March 2009 Amendments, a payment in cash for the Amended Milestones in the amount of $5.0 million was made on March 31, 2009. An additional $12.5 million is payable on June 30, 2009. The Amendments also provide for Osiris to retain their manufacturing facility and for NuVasive to accelerate the timing of the payment of the non-contingent $12.5 million payable initially recorded related to the transfer of the manufacturing facility to September 30, 2009. No additional manufacturing related assets or additional tangible assets will transfer to NuVasive.

     The terms of the remaining milestone payment of $15 million under the Agreements are unchanged and are based on the achievement of a specified sales amount by NuVasive. Each of the Amended Milestone payments may be made in cash or through the delivery of NuVasive common stock of equivalent value, as initially contemplated by the Asset Purchase Agreement.

     The Company’s purchase price allocation was updated in the first quarter of 2009 to reflect the payment of $5 million for the payment of the first of the Amended Milestones in March 2009 and to reflect the impact of the March 2009 Amendments. The Goodwill balance related to the Osteocel^® Biologics Business Acquisition was $18.7 million as of March 31, 2009. Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired.

8

     A rollforward of the goodwill balance associated with the Osteocel Biologics Business Acquisition is as follows (in thousands):

Initial long-term liability balance recorded (July 2008)	$	(3,721	)
First Milestone Achievement (December 2008)		5,000
First payment under the March 2009 Amendments		5,000
Record non-contingent payment pursuant to the March 2009 Amendments		12,453
Total Osteocel Goodwill at March 31, 2009	$	18,732

5. Acquisition of Pedicle Screw Technology

     In March 2008, NuVasive completed a buy-out of royalty obligations on SpheRx^® pedicle screw and related technology products and acquired new pedicle screw intellectual property for cash payments aggregating $6.3 million. Of the aggregate purchase price, $2.1 million, representing the present value of the expected future cash flows associated with the terminated royalty obligations, was allocated to intangible assets to be amortized on a straight-line basis over a seven-year period. The remaining $4.2 million was allocated to in-process research and development (IPR&D) as the associated projects had not yet reached technological feasibility and had no alternative future uses.

6. Intangible Assets

     Identifiable intangible assets consisted of the following as of March 31, 2009 (in thousands):

	Weighted-
	Averaged		Gross
	Amortization		Carrying		Accumulated			Intangible
	(in years)		Amount		Amortization			Assets, net
Intangible Assets Subject to Amortization:
Trade name and trademarks		15	$	4,700	$	(211	)	$	4,489
Customer relationships		14		9,730		(1,593	)		8,137
Developed technology		14		31,275		(3,786	)		27,489
Manufacturing know-how and trade secrets		13		20,305		(1,070	)		19,235
In-process research and development		10		11,200		—			11,200
			$	77,210	$	(6,660	)	$	70,550
Intangible Assets Not Subject to Amortization:
Goodwill									32,437
Total Intangible assets								$	102,987

     Future estimated amortization expense related to acquired intangible assets subject to amortization is as follows (in thousands):

Remaining 2009	$	3,989
2010		6,375
2011		6,145
2012		6,139
2013		6,132
2014		6,098
Thereafter		35,672
	$	70,550

Amortization expense was $1.3 million and $0.4 million for the three month periods ended March 31, 2009, and March 31, 2008, respectively.

7. Convertible Senior Notes

     In March 2008, the Company issued $230.0 million principal amount of 2.25% Convertible Senior Notes (the Notes), which includes the subsequent exercise of the initial purchasers’ option to purchase an additional $30.0 million aggregate principal amount of the Notes. The net proceeds from the offering, after deducting the initial purchasers’ discount and costs directly related to the offering, were approximately $208.4 million. The Company will pay 2.25% interest per annum on the principal amount of the Notes, payable semi-annually in arrears in cash on March 15 and September 15 of each year. The Notes mature on March 15, 2013 (the Maturity Date). The Company made two interest payments of approximately $2.7 million each in September 2008 and March 2009.

     The Notes will be convertible into shares of the Company’s common stock, $0.001 par value per share, based on an initial conversion rate, subject to adjustment, of 22.3515 shares per $1,000 principal amount of the Notes (which represents an initial conversion price of approximately $44.74 per share). Holders may convert their notes at their option on any day up to and including the second scheduled trading day immediately preceding the Maturity Date. If a fundamental change to the Company’s business occurs, as defined in the Notes, holders of the Notes have the right to require that the Company repurchase the Notes, or a portion thereof, at the principal amount plus accrued and unpaid interest.

9

     In connection with the offering of the Notes, the Company entered into convertible note hedge transactions (the Hedge) with the initial purchasers and/or their affiliates (the Counterparties) entitling the Company to purchase up to 5.1 million shares of the Company’s common stock at an initial stock price of $44.74 per share, each of which is subject to adjustment. In addition, the Company sold to the Counterparties warrants to acquire up to 5.1 million shares of the Company’s common stock (the Warrants), subject to adjustment, at an initial strike price of $49.13 per share, subject to adjustment. The cost of the Hedge that was not covered by the proceeds from the sale of the Warrants was approximately $14.0 million and is reflected as a reduction of additional paid-in capital as of March 31, 2009. The impact of the Hedge is to raise the effective conversion price of the Notes to approximately $49.13 per share (or approximately 20.3542 shares per $1,000 principal amount of the Notes). The Hedge is expected to reduce the potential equity dilution upon conversion of the Notes if the daily volume-weighted average price per share of the Company’s common stock exceeds the strike price of the Hedge. The Warrants could have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company’s common stock during a given measurement period (the quarter or year to date period) exceeds the strike price of the Warrants.

8. Net Loss Per Share

     NuVasive computes net loss per share using the weighted-average number of common shares outstanding during the period. For the three-months ended March 31, 2009, due to the net loss reported in all periods, options and unvested restricted stock units to purchase 1.4 million shares of common stock equivalents were not included in the computation of earnings per share because their effect would be anti-dilutive. There were no potentially dilutive common shares related to the Company’s 2.25% Convertible Senior Notes due 2013, or the related warrants, for the three-month periods ended March 31, 2009 and 2008, as the Company’s average stock price for the respective periods was less than the conversion price of the Notes. Although these securities are currently not included in the net loss per share calculation, they could be dilutive when, and if, the Company reports earnings.

	Three Months Ended
	March 31,
(in thousands, except per share amounts)	2009			2008
Numerator:
Net loss attributable to NuVasive, Inc.	$	(4,302	)	$	(7,654	)
Denominator for basic and diluted net loss per share:
Weighted average common shares outstanding		36,365			35,411
Basic and diluted net loss per share	$	(0.12	)	$	(0.22	)

10

9. Comprehensive Loss

     The components of comprehensive loss are as follows (in thousands):

	Three Months Ended
	March 31,
	2009			2008
Net loss attributable to NuVasive, Inc.	$	(4,302	)	$	(7,654	)
Other comprehensive income (loss):
Unrealized gain (loss) on investments		(272	)		27
Translation adjustments		(203	)		43
Total comprehensive loss	$	(4,777	)	$	(7,584	)

10. Marketable Securities

     Effective January 1, 2008, the Company adopted FASB Statement No. 157, Fair Value Measurements (SFAS 157), which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. On February 6, 2008, the FASB deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. These nonfinancial items include assets and liabilities such as reporting units measured at fair value in a goodwill impairment test and nonfinancial assets acquired and liabilities assumed in a business combination. The Company measures certain assets at fair value and thus there was no impact on the Company’s consolidated financial statement at the adoption of SFAS 157. SFAS 157 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurement be classified and disclosed in one of the following three categories:

Level 1:	Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.
Level 2:	Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
Level 3:	Unobservable inputs are used when little or no market data is available.

     The Company measures available-for-sale securities at fair value on a recurring basis. All of the Company’s assets measured at fair value on a recurring basis subject to the disclosure requirements of SFAS 157 as of March 31, 2009 are categorized as Level 1. The Company recorded an unrealized loss of $272,000 and an unrealized gain of $27,000 in the three-months ended March 31, 2009 and 2008, respectively. The unrealized gain (loss) is included as a component of other comprehensive income (loss) within stockholders’ equity.

     Effective January 1, 2009, the Company implemented FASB Statement No. 157, Fair Value Measurements, or SFAS 157, for nonfinancial assets and liabilities that are remeasured at fair value on a non-recurring basis. The adoption of SFAS 157 for nonfinancial assets and liabilities that are remeasured at fair value on a non-recurring basis did not have a material impact on the financial position or results of operations; however, it could have an impact in future periods. In addition, the Company may have additional disclosure requirements in the event they complete an acquisition or incur asset impairment in future periods.

11. Income Taxes

     The Company accounts for income taxes in accordance with FAS No. 109, Accounting for Income Taxes. Deferred income tax assets and liabilities are recognized for temporary differences between financial statement and income tax carrying values using tax rates in effect for the years such differences are expected to reverse. At December 31, 2008, the Company had net deferred tax assets of $85.4 million primarily attributable to net operating loss carry-overs, research and exploration credits, original issue discount, stock-based compensation expense and fixed assets. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize such deferred income tax assets, a full valuation allowance has been established. With immaterial exception, the Company continues to maintain a full valuation allowance against its deferred tax assets as of March 31, 2009.

     On July 13, 2006, the FASB issued Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). Under FIN 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the provisions of FIN 48 on January 1, 2007, its effective date. There have been no changes in unrecognized tax benefits or other items pertaining to FIN 48 since December 31, 2008 and as such, disclosures included in the Company’s 2008 Annual Report on Form 10-K continue to be relevant for the period ended March 31, 2009.

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12. Stock-Based Compensation

     For purposes of calculating the stock-based compensation under FAS 123(R), Share Based Payments, the Company estimates the fair value of stock options granted to employees and shares issued under the Employee Stock Purchase Plan, or ESPP Plan, using a Black-Scholes option-pricing model. No shares were issued under the ESPP Plan in the three months ended March 31, 2009 and 2008. The assumptions used to estimate the fair value of stock awards granted in the three months ended March 31, 2009 and 2008 are as follows:

	Three Months			Three Months
	Ended March 31, 2009			Ended March 31, 2008
Stock Options
Volatility	45% to 46%				42	%
Expected term (years)		3.3 to 4.9			2.5 to 4.5
Risk free interest rate	1.4% to 1.7%			2.5% to 2.8%
Expected dividend yield		0.0	%		0.0	%

     The compensation cost that has been included in the statement of operations for all stock-based compensation arrangements was as follows:

	Three Months Ended
	March 31,
(in thousands, except per share amounts)	2009			2008
Sales, marketing and administrative expense	$	5,241		$	4,504
Research and development expense		1,441			646
Stock-based compensation expense	$	6,682		$	5,150
Effect on basic and diluted net loss per share	$	(0.18	)	$	(0.15	)

     Stock-based compensation for stock options and restricted stock units is recognized and amortized on an accelerated basis in accordance with Financial Accounting Standards Board Interpretation No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option Award Plans.

Restricted Stock Units

          During the three months ended March 31, 2009, approximately 151,000 time-vested restricted stock units, or RSUs, were granted at a grant date fair value of $34.90 per share. For the three months ended March 31, 2009, the Company recorded $625,000 of stock-based compensation expense related to RSUs. During the three months ended March 31, 2008, there were no RSUs granted and thus, no related stock-based compensation was recorded during that period.

13. New Building Lease

     On November 6, 2007, the Company entered into a 15-year lease agreement for the purpose of relocating the Company’s corporate headquarters to an approximately 140,000 square foot two-building campus style complex in San Diego. Rental payments consist of base rent that escalates at an annual rate of three percent over the 15-year period of the lease, plus building related expenses paid to the landlord. In addition, through options to acquire additional space in the project and to require the construction of an additional building on the campus, the agreement provides for facility expansion rights to an aggregate of more than 300,000 leased square feet. In connection with the lease, the Company issued a $3.1 million irrevocable transferable letter of credit. Relocation to the new facility was completed during August 2008.

     The Company expects to sublease its previous corporate headquarters through August 2012, the date on which the related lease agreement expires; however, the Company also expects that the space will remain vacant for approximately an additional 17 months from March 31, 2009 with no associated sublease income during that time. Upon moving the final phase of shareowners (employees) and operations to the new headquarters during August of 2008, the Company recorded a loss equal to the estimated present value of expected net future cash flows in the amount of $4.8 million. The Company has assumed, in performing the calculation of the loss, that the facility would remain vacant for approximately 24 months from the cease use date in August 2008 given the current market conditions. As of the date of this filing, the Company has not yet entered into a sublease agreement and cannot be assured that a sublease, if any, will provide the anticipated sublease income used to calculate the above charge taken in the year-ended December 31, 2008.

     For financial reporting purposes, rent expense is recognized on a straight-line basis over the term of the lease. Accordingly, rent expense recognized in excess of rent paid is reflected as a liability in the accompanying consolidated balance sheets.

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The table below provides the minimum cash payments required under the new and old building leases for rent and related operating expenses.

	Previous		New
Year	Headquarters		Headquarters		Total
(in thousands)
Remaining 2009	$	951	$	4,558	$	5,509
2010		1,305		5,801		7,106
2011		1,344		6,003		7,347
2012		921		6,214		7,135
2013		—		6,431		6,431
Thereafter		—		75,907		75,907
	$	4,521	$	104,914	$	109,435

14. Impact of Recently Issued Accounting Standards

Recently Adopted Accounting Standards

     Effective January 1, 2009, the Company implemented Statement of Financial Accounting Standards (SFAS) No. 141(R), Business Combination, FAS 141(R). This standard requires an acquiring company to measure all assets acquired and liabilities assumed, including contingent considerations and all contractual contingencies, at fair value as of the acquisition date. In addition, an acquiring company is required to capitalize in-process research and development and either amortize it over the life of the product, or write it off if the project is abandoned or impaired. FAS 141(R) amended FAS 109, and FIN 48. Previously, FAS 109 and FIN 48, respectively, generally required post-acquisition adjustments related to business combination deferred tax asset valuation allowances and liabilities for uncertain tax positions to be recorded as an increase or decrease to goodwill. FAS 141(R) does not permit this accounting and, generally, requires any such changes to be recorded in current period income tax expense. Thus, all changes to valuation allowances and liabilities for uncertain tax positions established in acquisition accounting, whether the business combination was accounted for under FAS 141 or FAS 141(R), will be recognized in current period income tax expense. The Company expects FAS No. 141R will have an impact on the consolidated financial statements, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions consummated after the effective date of January 1, 2009.

     Effective January 1, 2009, the Company implemented FAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51, or FAS 160. This standard addresses the accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. FAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. FAS 160 is effective for fiscal years beginning after December 15, 2008. The Company expects FAS 160 will have an impact on the consolidated financial statements, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the investments made after the effective date of January 1, 2009.

     In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3), which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142. This pronouncement requires enhanced disclosures concerning a company’s treatment of costs incurred to renew or extend the term of a recognized intangible asset. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company does not expect the adoption to have a material impact on the consolidated financial statements.

     In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). This standard provides guidance for using fair value to measure assets and liabilities. It also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair valued measurements on earnings. SFAS 157 applies whenever standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial assets and liabilities in financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted this statement for financial assets and liabilities measured at fair value effective January 1, 2008. There was no material financial statement impact as a result of adoption. In accordance with the guidance of FASB Staff Position (FSP) No. 157-2, Effective Date of FASB Statement No. 157, the Company has postponed adoption of the standard for non-financial assets and liabilities that are measured at fair value on a non-recurring basis, until 2009. The Company is currently evaluating the impact of adoption of this standard but does not anticipate it to have a material impact on its consolidated financial position, results of operations or liquidity.

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     In October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP 157-3). FSP 157-3 clarifies the application of SFAS No. 157 in a market that is not active, and is effective as of the issue date, including application to prior periods for which financial statements have not been issued. There was no material financial statement impact as a result of adoption.

Recently Issued Accounting Standards

     In May 2008 the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, or FAS 162. This statement identifies the sources of accounting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles, or GAAP, in the U.S. FAS 162 is effective 60 days following the SEC approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company currently adheres to the hierarchy of GAAP as presented in FAS 162, and adoption is not expected to have a material impact on the consolidated financial statements.

          In April 2009, the FASB issued the following new accounting standards:

i.)	FASB Staff Position FAS 157-4, Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, or FSP FAS 157-4; FSP FAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157. FSP FAS 157-4 provides additional authoritative guidance in determining whether a market is active or inactive, and whether a transaction is distressed, is applicable to all assets and liabilities (i.e. financial and nonfinancial) and will require enhanced disclosures.
ii.)	FASB Staff Position FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments, or FSP FAS 115-2, FAS 124-2, and EITF 99-20-2; and FSP FAS 115-2, FAS 124-2, and EITF 99-20-2 provides additional guidance to provide greater clarity about the credit and noncredit component of an other-than-temporary impairment event and to more effectively communicate when an other-than-temporary impairment event has occurred. This FSP applies to debt securities.
iii.)	FASB Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, or FSP FAS 107-1 and APB 28-1. FSP FAS 107-1 and APB 28-1, amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements.

          These standards are effective for periods ending after June 15, 2009. The Company is evaluating the impact that these standards will have on the consolidated financial statements.

15. Legal Proceedings

     Medtronic Sofamor Danek USA, Inc. Litigation

     As previously disclosed, in August 2008, Medtronic Sofamor Danek USA, Inc. and its related entities (Medtronic) filed suit against NuVasive in the United States District Court for the Southern District of California (Medtronic Litigation), alleging that certain of NuVasive’s products infringe, or contribute to the infringement of, twelve U.S. patents assigned or licensed to Medtronic (three of the patents have since been removed from the case, leaving nine patents remaining). On March 9, 2009, NuVasive filed inter partes reexamination requests with the U.S. Patent and Trademark Office, requesting that six of the nine patents in suit be reexamined (those relating to anterior cervical plates). Also on March 9, 2009, NuVasive filed a motion to stay requesting that the Court stay the litigation proceedings on these six patents pending the outcome of any reexamination proceeding. On April 28, 2009, NuVasive amended its counterclaim to assert NuVasive’s U.S. Patent No. 7,207,949 against Medtronic, which NuVasive contends is being infringed by Medtronic’s NIM-Eclipse System, Quadrant products, and DLIF surgical technique. The Medtronic Litigation is in the early stages of the proceedings. An order establishing a schedule for the case is expected in the near term. NuVasive believes Medtronic’s claims lack merit and intends to defend the case vigorously. As of March 31, 2009, the probability of an outcome cannot be reasonably determined, nor can the Company reasonably estimate a potential loss, therefore, in accordance with FAS 5, the Company has not recorded an accrual related to this litigation.

16. Subsequent Event

     On April 22, 2009, NuVasive announced that it has agreed to purchase 100% of the capital of Cervitech^® Inc., a New Jersey based company focused on clinical approval of the PCM^® cervical disc system, a motion preserving total disc replacement device. This strategic acquisition allows NuVasive the potential to accelerate its entry into the growing mechanical cervical disc replacement market. The initial payment for purchase of Cervitech will be approximately $47 million, with an additional contingent payment of $33 million upon FDA approval of the device. At NuVasive’s discretion, all payments may be made in up to 50% of NuVasive common stock.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements May Prove Inaccurate

     You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited consolidated financial statements and the notes to those statements included in this report. This discussion may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under heading “Risk Factors,” and elsewhere in this report, and similar discussions in our other Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ending December 31, 2008. We do not intend to update these forward looking statements to reflect future events or circumstances.

Overview

     We are a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. Our product portfolio is focused primarily on the $4.6 billion U.S. spine implant market. Additionally, we have expanded into the $1.5 billion global biologics market, the $1.5 billion international market, and are developing products for the emerging motion preservation market.

     Our principal product offering is based on our Maximum Access Surgery, or MAS^® platform. The MAS platform combines four categories of products that collectively minimize soft tissue disruption during spine surgery with maximum visualization and safe, easy reproducibility for the surgeon: NeuroVision^®, a proprietary software-driven nerve avoidance system; MaXcess^®, a unique split-blade retractor system; a wide variety of specialized implants; and several biologic fusion enhancers. MAS significantly reduces surgery time and returns patients to activities of daily living much faster than conventional approaches. Having redefined spine surgery with the MAS platform’s lateral approach, known as eXtreme Lateral Interbody Fusion, or XLIF^®, we have built an entire spine franchise. With nearly 50 products today spanning lumbar, thoracic and cervical applications, we will continue to expand and evolve our offering predicated on our R&D focus and dedication to outstanding service levels supported by our culture of Absolute Responsiveness^®.

     In recent years we have significantly expanded our product offering relating to procedures in the cervical spine as well as in the area of biologics. Our cervical product offering now provides a full set of solutions for cervical fusion surgery, including both allograft and CoRoent^® implants, as well as cervical plating and posterior fixation products. Our biologic offering began in 2007 with the acquisition of rights to FormaGraft^®, a collagen synthetic product used to aid the fusion process. This offering expanded in 2008 with the acquisition of Osteocel^® from Osiris Therapeutics, an allograft cellular matrix containing viable mesenchymal stem cells, or MSCs, to aid in spinal fusion.

     We also offer a suite of traditional spine surgery products, including certain products in our CoRoent suite of implants, a titanium surgical mesh system, a line of precision-machined cervical and lumbar allograft implants, and related instrumentation. Our Triad^® and Extensure^® lines of bone allograft, in our patented saline packaging, is human bone that has been processed and precision shaped for transplant. We also offer fusion fixation products that offer unique technological benefits such as our Gradient Plus^tm cervical plate and SpheRx pedicle screw system.

     We have an active product development pipeline focused on expanding our current fusion product platform as well as products designed to preserve spinal motion. In August 2008, we completed the enrollment of our pivotal clinical trial for NeoDisc^®, our cervical disc replacement device. The trial protocol requires a two-year follow up period on all patients before submitting to the FDA for potential approval.

     Since inception, we have been unprofitable. As of March 31, 2009, we had an accumulated deficit of $199.8 million.

     Revenues. The majority of our revenues were derived from the sale of disposables and implants and we expect this trend to continue in the near term. We loan our NeuroVision systems and surgical instrument sets at no cost to surgeons and hospitals that purchase disposables and implants for use in individual procedures; there are no minimum purchase requirements of disposables and implants related to these loaned surgical instruments. In addition, we place NeuroVision, MaXcess and other MAS or cervical surgical instrument sets with hospitals for an extended period at no up-front cost to them provided they commit to minimum monthly purchases of disposables and implants. Our implants and disposables are currently sold and shipped from our primary distribution and warehousing operations facility located in Memphis, Tennessee. We recognize revenue for disposables or implants used upon receiving a purchase order from the hospital indicating product use or implantation. In addition, we sell a small number of MAS instrument sets, MaXcess devices, and NeuroVision systems. To date, we have derived less than 5% of our total revenues from these sales.

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     Sales and Marketing. Through March 31, 2009, substantially all of our operations are located in the United States and substantially all of our sales to date have been generated in the United States. We sell our products through a sales force comprised of exclusive independent sales agencies and our own directly employed sales professionals; both selling only NuVasive spine surgery products. Our sales force provides a delivery and consultative service to our surgeon and hospital customers and is compensated based on sales and product placements in their territories. Sales force commissions are reflected in our statement of operations in the sales, marketing and administrative expense line. We expect to continue to expand our distribution channel. Beginning late in 2007 and continuing today, we are continuing our expansion in international sales efforts with the initial focus on European markets. We expect our international sales force to be made up of a combination of distributors and direct sales personnel.

Critical Accounting Policies

     Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates including those related to bad debts, inventories, valuation of goodwill, intangibles and other long-term assets, income taxes, and stock-based compensation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. Our critical accounting policies and estimates are discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2008 and there have been no material changes during the three months ended March 31, 2009.

Results of Operations

Revenue

	March 31,
(dollars in thousands)	2009		2008		$ Change		% Change
Three months ended	$	80,008	$	51,184	$	28,824		56.3	%

     Revenues have increased over time due primarily to continued market acceptance of our products within our MAS^® platform, including NeuroVision^® and MaXcess^® disposables, and our specialized implants such as our XLP^® lateral plate, SpheRx^® pedicle screw systems, and CoRoent^® suite of products. The continued adoption of minimally invasive procedures for spine has led to the continued expansion of our innovative lateral procedure known as eXtreme Lateral Interbody Fusion, or XLIF^®, in which surgeons access the spine for a fusion procedure from the side of the patient’s body, rather than from the front or back. The execution of our strategy of expanding our product offering for the lumbar region and addressing broader indications further up the spine in the thoracic and cervical regions through product introductions in 2008 and 2007 has contributed to revenue growth in each year. We expect revenue to continue to increase, which can be attributed to the continued adoption of our XLIF procedure and deeper penetration into existing accounts as our sales force executes on the strategy of selling the full mix of our products. In addition, the expansion of our biologics offering, including FormaGraft^®, acquired in January 2007 and Osteocel^®, acquired in July 2008, our investment in Progentix in January 2009, our recent announcement of the acquisition of Cervitech, Inc. and our new product introductions and strategic business and asset acquisitions are expected to lead to continued revenue growth.

Cost of Goods Sold

	March 31,
(dollars in thousands)	2009			2008			$ Change		% Change
Three months ended	$	14,774		$	9,095		$	5,679		62.4	%
% of revenue		18.5	%		17.8	%

     Cost of goods sold consists of purchased goods and overhead costs, including depreciation expense for instruments.

     The increase in cost of goods sold in total dollars in the three month period ended March 31, 2009 compared to the same period in 2008 resulted primarily from (i) increased direct costs of $2 million primarily to support revenue growth; (ii) increased costs related to sales of Osteocel of $2 million, which was acquired subsequent to March 31, 2008; and (iii) increased depreciation expense of $1.2 million incurred on the increased amount of surgical instrument sets we hold for use in surgeries. We expect cost of goods sold, as a percentage of revenue, to remain at these levels for the remainder of 2009.

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Operating Expenses

     Sales, Marketing and Administrative.

	March 31,
(dollars in thousands)	2009			2008			$ Change		% Change
Three months ended	$	58,481		$	39,317		$	19,164		48.7	%
% of revenue		73.1	%		76.8	%

     Sales, marketing and administrative expenses consist primarily of compensation, commission and training costs for personnel engaged in sales, marketing and customer support functions; distributor commissions; surgeon training costs; shareowner (employee) related expenses for our administrative functions; third party professional service fees; amortization of acquired intangible assets; and facilities and insurance expenses.

     The increases in sales, marketing and administrative expenses principally result from growth in our revenue and the overall growth of the Company, including expenses that fluctuate with sales and expenses associated with investments in our infrastructure and headcount growth.

     Increases in costs based on revenue, such as sales force compensation and other direct costs related to the sales force, royalty expense, and shipping costs were $7.3 million for the three month period ended March 31, 2009 compared to the same period in 2008. The increases are consistent with our increased revenue growth of approximately 56% in the first quarter of 2009 as compared to the same period in 2008.

     We also experienced increased costs as a result of overall Company growth and headcount additions in our marketing and administrative support functions. Marketing and administrative compensation and personnel costs increased $6.6 million for the three month period ended March 31, 2009 compared to the same period in 2008 and facility, equipment and computer expenses increased by $2.3 million for the three month period ended March 31, 2009, compared to the same period in 2008, primarily as a result of the move to our new corporate headquarters, as discussed below.

     During the first quarter of 2009, we adopted FAS 141R, Business Combinations, which requires that acquisition related costs be expensed in the period in which the costs are incurred. This differs from previous accounting in that the acquisition related expenses were included as part of the value of the acquired company. We incurred approximately $1.9 million in acquisition related costs related to the investment in Progentix and our anticipated acquisition of Cervitech with no comparable expense during the same period in 2008.

     We incurred other significant expenses in 2008 that are designed to increase the scalability of our business over time. We completed the implementation of our new enterprise resource planning, or ERP, software system in 2008. We incurred a total of $10.9 million in costs related to the ERP project through June 2008, which has been capitalized. We are amortizing the capitalized costs over a 7-year period beginning in July 2008.

     In addition, we entered into a lease of a two-building campus-style headquarters complex in November 2007 to accommodate our continued growth. The relocation process to the new facility was achieved in stages that began in March 2008 and completed in August 2008. As a result, we began to incur increased facility costs beginning in March 2008.

     On a long-term basis, as a percentage of revenue, we expect total sales, marketing and administrative costs to continue to decrease over time as we continue to see the synergies of investments we have made.

     Research and Development.

	March 31,
(dollars in thousands)	2009			2008			$ Change		% Change
Three months ended	$	10,193		$	6,976		$	3,217		46.1	%
% of revenue		12.7	%		13.6	%

     Research and development expense consists primarily of product research and development, clinical trial costs, regulatory and clinical functions, and shareowner (employee) related expenses.

     The increase in research and development costs in the periods presented are primarily due to expenses related to litigation support costs of $1.6 million incurred during the first quarter of 2009 with no comparable expenses during the same period in 2008. Compensation and other shareowner related expenses increased $1.3 million, including an increase in stock-based compensation of $0.8 million, for the three-months ended March 31, 2009, compared to the same period in 2008, primarily due to increased headcount to support our product development and enhancement efforts. We expect research and development costs to continue to increase in absolute dollars for the foreseeable future in support of our ongoing development activities and planned clinical trial activities; however, as a percentage of revenue these costs are expected to decrease in the near term and then stabilize over time.

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     In-Process Research and Development.

     In 2008, we recorded in-process research and development (IPR&D) charges of $4.2 million related to the acquisition of pedicle screw technology in the first quarter of 2008. As of the date of the acquisition, the projects associated with the IPR&D efforts had not yet reached technological feasibility and the research and development in-process had no alternative future uses. Accordingly, the amount was charged to expense on the acquisition date in accordance with FAS 141, Business Combinations.

     During the first quarter 2009, we adopted FAS 141(R), Business Combinations, which is applied prospectively for all new business acquisitions entered into after January 1, 2009, and which requires that IPR&D acquired is no longer charged to expense on the acquisition date, but rather recorded as an asset on the balance sheet. Amounts recorded as IPR&D beginning after January 1, 2009, will begin being amortized upon first sales of the product over the estimated useful life of the technology. As of March 31, 2009, we have recorded approximately $11.2 million on our balance sheet related to IPR&D in conjunction with the Progentix Investment, as described above. In accordance with FAS 141R, there were no charges to the income statement during the first quarter 2009.

Interest and Other Income, Net

	March 31,
(dollars in thousands)	2009			2008			$ Change		% Change
Interest income and other, net	$	776		$	1,160
Interest expense		(1,868	)		(434	)
Total Interest and other income (expense), net	$	(1,092	)	$	726		$	1,818		250	%
% of revenue		(1.4	)%		1.4	%

     Interest and other income (expense), net, consists primarily of interest income earned on marketable securities offset by interest expense incurred related to the Company’s convertible debt offering signed in March 2008. The net change in these amounts in the periods presented is due to (i) an increase of $1.4 million in interest expense for the three-months ended March 31, 2009 related to the convertible debt offering due to having a full quarter of interest expense in the first quarter of 2009 as compared to only a partial month during the same period in 2008, and (ii) higher balances in marketable securities offset by lower interest rates resulting in a decrease of $0.4 million in interest income for the three-months ended March 31, 2009.

Stock-Based Compensation

	Three Months Ended
	March 31,
(in thousands)	2009		2008
Sales, marketing and administrative expense	$	5,241	$	4,504
Research and development expense		1,441		646
Total stock-based compensation expense	$	6,682	$	5,150

     We granted approximately 1.2 million and 1.5 million options in the first three months of 2009 and 2008, respectively, with a per option grant date weighted average fair value of $13.25 and $14.14, respectively. In addition, in 2009 we granted approximately 151,000 restricted stock units with a weighted average grant date fair value of $34.90. We recognize stock-based compensation expense on an accelerated basis in accordance with FIN 28, which effectively results in the recognition of approximately 60% of the total compensation expense for a particular option within 12 months of its grant date. The increase in stock-based compensation expense in the three- months ended March 31, 2009 compared to the same period in 2008 is due primarily to the amortization of prior year grants during Q1 2009, decrease in options granted during the first quarter 2009 at a lower weighted average fair value as compared to the same period in 2008 offset by the grant of restricted stock units during the first quarter of 2009 with no comparable grant during the same period in 2008. Restricted stock units tend to have a higher associated stock based compensation expense as they are valued at market price on the day of grant.

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Liquidity and Capital Resources

     Since our inception in 1997, we have incurred significant losses and as of March 31, 2009, we had an accumulated deficit of approximately $199.8 million. We have not yet achieved profitability, and do not expect to be profitable in 2009. We expect our sales, marketing and administrative expense and research and development expense will continue to grow and, as a result, we will need to generate significant net sales to achieve profitability. To date, our operations have been funded primarily with proceeds from the sale of our equity securities.

     In March 2008, we issued $230.0 million principal amount of 2.25% Convertible Senior Notes due 2013 (the Notes). The net proceeds from the offering, after deducting the initial purchasers’ discount and costs directly related to the offering, were approximately $208.4 million. We will pay 2.25% interest per annum on the principal amount of the Notes, payable semi-annually in arrears in cash on March 15 and September 15 of each year. The Notes mature on March 15, 2013.

     Cash, cash equivalents and short-term and long-term marketable securities, was $203.5 million at March 31, 2009 and $223.4 million at December 31, 2008. The decrease was due primarily to the payment of $10 million related to our investment in Progentix, in addition to $10 million related to Osteocel milestones paid during the first quarter of 2009.

     Net cash provided by operating activities was $4.6 million in the first quarter of 2009 compared to $4.2 million used in operating activities in the same period in 2008, an increase of $8.8 million in net cash provided by operating activities. We spent an incremental $4.8 million during the first three months of 2009 as compared to the same period in 2008 for inventory to support our increased operations and growing business, offset by an incremental increase in collections on our accounts receivable of $4.3 million during the first quarter of 2009 as compared to the same period in 2008 due to an increase in cash collection efforts period over period.

     Net cash provided by investing activities was $6.7 million in the first quarter of 2009 compared to $9.2 million used in investing activities in the same period in 2008. The increase in net cash provided by investing activities of $15.9 million is primarily due to the net change of $24.6 million in the cash provided by the activity in our investment portfolio and to a $5.8 million decrease in capital asset purchases, offset by an increase of $13.7 million used in acquisition related cash payments for our investment in Progentix and payment of Osteocel milestones.

     Net cash provided by financing activities was $1.2 million in the first quarter of 2009 compared to $210.0 million in the same period in 2008. The change in net cash provided by financing activities of $208.9 million is primarily due to the receipt of net proceeds of $208.4 million from the issuance of convertible debt in March 2008.

     We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our working capital requirements and of our capital expenditures for additional loaner assets, our operating results, and cash used in any future acquisitions. In addition, we expect to incur additional capital expenditures for leasehold improvements for the new headquarters facility. We have sufficient cash and investments on hand to finance our operations for the foreseeable future.

Commitments

     Progentix Investment

     On January 13, 2009 (the Investment Date), we completed the purchase of forty percent (40%) of the capital stock of Progentix Orthobiology, B.V., a company organized under the laws of the Netherlands (Progentix), from existing shareholders pursuant to a Preferred Stock Agreement for $10 million in cash. Additionally, we, Progentix and the shareholders of Progentix entered into an Option Purchase Agreement dated January 13, 2009 (the Option Agreement), whereby we may be obligated, upon the achievement of certain milestones by Progentix within two years, to purchase the remaining sixty percent (60%) of capital stock of Progentix for $45 million, payable in a combination of cash or NuVasive common stock at our sole discretion, subject to certain adjustments (the Remaining Shares). We may also be obligated in the event that Progentix achieves the milestones contemplated above within the requisite two year period to make additional payments to Progentix of up to an aggregate total of $25 million, payable in a combination of cash or stock at the our sole discretion, upon completion of additional milestones and dependent on our sales success. We also have the right under the Option Agreement to purchase the Remaining Shares at any time between the second anniversary of the Option Agreement and the fourth anniversary of the Option Agreement (the Option Period) for $35 million, payable in a combination of cash or NuVasive common stock at our sole discretion, and in certain circumstances where we achieve in excess of a certain annual sales run rate on Progentix products during the Option Period, we may be required to purchase the Remaining Shares for $35 million. We also entered into a Distribution Agreement with Progentix dated January 13, 2009, whereby Progentix appointed us as its exclusive distributor for certain Progentix products. The Distribution Agreement shall remain in effect for a term of ten years unless earlier terminated in accordance with its terms.

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     We entered into a Senior Secured Facility Agreement with Progentix dated January 13, 2009 (the Facility Agreement) whereby Progentix may borrow up to $5 million from us to fund ongoing clinical and regulatory efforts (the Loan). The Loan accrues interest at a rate of six percent (6%) per year. The total amount of the Loan and any related accrued interest may be paid in cash or applied against any potential future purchase price of the Remaining Shares. We are not obligated to provide any additional funding to Progentix other than as stipulated in the Loan. Progentix borrowed $1 million under the Loan at the Investment Date.

     Convertible Senior Notes

In March 2008, we issued $230.0 million principal amount of 2.25% Convertible Senior Notes (the Notes), which includes the subsequent exercise of the initial purchasers’ option to purchase an additional $30.0 million aggregate principal amount of the Notes. The net proceeds from the offering, after deducting the initial purchasers’ discount and costs directly related to the offering, were approximately $208.4 million. We will pay 2.25% interest per annum on the principal amount of the Notes, payable semi-annually in arrears in cash on March 15 and September 15 of each year. The Notes mature on March 15, 2013 (the Maturity Date).

     Osteocel Biologics Business Acquisition

     In connection with the Asset Purchase Agreement and Manufacturing Agreement, each as amended, that were entered into in connection with the, Osteocel Biologics Business Acquisition, we are required to make non-contingent payments of $25.0 million to Osiris Therapeutics, Inc. (Osiris) during 2009. Also, we will make an additional milestone-based contingent payment to Osiris in the amount of $15 million related to a sales performance milestone. Both the contingent and non-contingent payments to Osiris are payable in either cash or a combination of cash and NuVasive common stock, at our election.

     Building Leases

     On November 6, 2007, we entered into a 15-year lease agreement for the purpose of relocating our corporate headquarters to an approximately 140,000 square foot two-building campus style complex. Rental payments consist of base rent of $2.43 per square foot, escalating at an annual rate of three percent over the 15-year period of the lease, plus related operating expenses. Relocation to the new facility began in the first quarter of 2008 and was completed in August 2008. In addition, through options to acquire additional space in the project and to require the construction of an additional building on the campus, the agreement provides for facility expansion rights to an aggregate of more than 300,000 leased square feet. Under the terms of this lease, and the lease of our previous headquarters, we are required to make minimum lease payments, including operating expenses as follows:

	Previous		New
Year	Headquarters		Headquarters		Total
(in thousands)
Remaining 2009	$	951	$	4,558	$	5,509
2010		1,305		5,801		7,106
2011		1,344		6,003		7,347
2012		921		6,214		7,135
2013		—		6,431		6,431
Thereafter		—		75,907		75,907
	$	4,521	$	104,914	$	109,435

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

     Our exposure to interest rate risk at March 31, 2009 is related to our investment portfolio which consists largely of debt instruments of high quality corporate issuers and the U.S. government and its agencies. Due to the short-term nature of these investments, we have assessed that there is no material exposure to interest rate risk arising from our investments. Fixed rate investments and borrowings may have their fair market value adversely impacted from changes in interest rates. At March 31, 2009, we did not hold any material asset-backed investment securities and in 2008 and 2007, we did not realize any losses related to asset-backed investment securities.

     Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. The fair market value of fixed rate securities may be adversely impacted by fluctuations in interest rates while income earned on floating rate securities may decline as a result of decreases in interest rates. Under our current policies, we do not use interest rate derivative instruments to manage exposure to interest rate changes. We attempt to ensure the safety and preservation of our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by investing in investment grade securities. We have historically maintained a relatively short average maturity for our investment portfolio, and we believe a hypothetical 10% adverse move in interest rates along the entire interest rate yield curve would not materially affect the fair value of our interest sensitive financial instruments.

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     Foreign Currency Exchange Risk. We have operated mainly in the United States of America, and the majority of our sales since inception have been made in U.S. dollars. Further, the majority of our sales to international markets have been to independent distributors in transactions conducted in U.S. dollars. Accordingly, we have not had any material exposure to foreign currency rate fluctuations.

Item 4. Controls and Procedures.

     Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

     Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) as of March 31, 2009. Based on such evaluation, our management has concluded as of March 31, 2009, the Company’s disclosure controls and procedures are effective.

     Changes in Internal Control over Financial Reporting. There has been no change to our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     As previously disclosed, in August 2008, Medtronic Sofamor Danek USA, Inc. and its related entities (Medtronic) filed suit against NuVasive in the United States District Court for the Southern District of California (Medtronic Litigation), alleging that certain of NuVasive’s products infringe, or contribute to the infringement of, twelve U.S. patents assigned or licensed to Medtronic (three of the patents have since been removed from the case, leaving nine patents remaining). On March 9, 2009, NuVasive filed inter partes reexamination requests with the U.S. Patent and Trademark Office, requesting that six of the nine patents in suit be reexamined (those relating to anterior cervical plates). Also on March 9, 2009, NuVasive filed a motion to stay requesting that the Court stay the litigation proceedings on these six patents pending the outcome of any reexamination proceeding. On April 28, 2009, NuVasive amended its counterclaim to assert NuVasive’s U.S. Patent No. 7,207,949 against Medtronic, which NuVasive contends is being infringed by Medtronic’s NIM-Eclipse System, Quadrant products, and DLIF surgical technique. The Medtronic Litigation is in the early stages of the proceedings. An order establishing a schedule for the case is expected in the near term. NuVasive believes Medtronic’s claims lack merit and intends to defend the case vigorously.

Item 1A. Risk Factors

     An investment in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described under Item 1A of Part I of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2008 (the Risk Factors) together with all other information contained or incorporated by reference in this report before you decide to invest in our common stock. If any of the risks described in this report or in our annual report actually occurs, our business, financial condition, results of operations and our future growth prospects could be materially and adversely affected. Under these circumstances, the trading price of our common stock could decline, and you may lose all or part of your investment.

Item 5. Other Information

     Other Events

     On March 12, 2009, Jeff Rydin, NuVasive’s Senior Vice President of U.S. Sales, a named executive officer of NuVasive, adopted a stock trading plan for trading in NuVasive’s common stock, currently held or issuable upon the exercise of stock options, in accordance with the guidelines specified by the Securities and Exchange Commission’s Rule 10b5-1 under the Securities Exchange Act of 1934. Mr. Rydin will file Form 4s evidencing sales under his stock trading plan as required under Section 16 of the Securities Exchange Act of 1934. This type of trading plan allows a corporate insider to gradually diversify holdings of company stock while minimizing any market effects of such trades by spreading them out over an extended period of time and eliminating any market concern that such trades were made by a person while in possession of material nonpublic information. Consistent with Rule 10b5-1, NuVasive’s insider trading policy permits personnel to implement Rule 10b5-1 trading plans provided that, among other things, such personnel are not in possession of any material nonpublic information at the time they adopt such plans.

     Pursuant to the stock trading plan adopted by Mr. Rydin, in June and July 2009, he will sell 10,000 shares each month if the stock is above a prearranged minimum price, and may sell up to 10,000 additional shares each month based on increasing price levels. Any shares remaining unsold following the respective sale date will be available for sale at the applicable prearranged minimum price in the following month until sold or, if not sold in a prior month, until expiration of the plan.

     Under the plan, the plan’s agent will undertake to sell specified numbers of shares each month if the stock trades above the prearranged minimum prices. The individual stockholder will have no control over the timing of any sales under the plan and there is no assurance that any shares will be sold. Sales under Mr. Rydin’s plan will take effect in June 2009 and will expire in November 2009.

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Item 6. Exhibits

EXHIBIT INDEX

Exhibit No	Description
2.1	Amendment No. 2 to Asset Purchase Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc.
3.1 (1)	Restated Certificate of Incorporation
3.2 (2)	Restated Bylaws
10.1	Amendment No. 3 to Manufacturing Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc.
10.2†	Preferred Stock Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.3 †	Option Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.4 †	Exclusive Distribution Agreement, dated January 13, 2009, between the Company and Progentix Orthobiology, B.V.
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
32 *	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on August 13, 2004 (Commission File No. 000-50744-04972978).
(2)	Incorporated by reference to our Current Report on Form 8-K filed with the Commission on December 15, 2008 (Commission File No. 000-50744-04972978).
†	The Commission has granted confidential treatment to us with respect to certain omitted portions of this exhibit (indicated by asterisks). We have filed separately with the Commission an unredacted copy of the exhibit.
*	These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of NuVasive, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NuVasive, Inc.

Date: May 8, 2009

By:	/s/ Alexis V. Lukianov
	Alexis V. Lukianov
	Chairman and Chief Executive Officer

Date: May 8, 2009

By:	/s/ Kevin C. O’Boyle
	Kevin C. O’Boyle
	Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No	Description
2.1	Amendment No. 2 to Asset Purchase Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc.
3.1 (1)	Restated Certificate of Incorporation
3.2 (2)	Restated Bylaws
10.1	Amendment No. 3 to Manufacturing Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc.
10.2†	Preferred Stock Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.3 †	Option Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.4 †	Exclusive Distribution Agreement, dated January 13, 2009, between the Company and Progentix Orthobiology, B.V.
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
32 *	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)	Incorporated by reference to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on August 13, 2004 (Commission File No. 000-50744-04972978).
(2)	Incorporated by reference to our Current Report on Form 8-K filed with the Commission on December 15, 2008 (Commission File No. 000-50744-04972978).
†	The Commission has granted confidential treatment to us with respect to certain omitted portions of this exhibit (indicated by asterisks). We have filed separately with the Commission an unredacted copy of the exhibit.
*	These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of NuVasive, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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EX-2.1

Exhibit 2.1

AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT

     This AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT (this “Second Amendment”), dated as of March 25, 2009, is by and between Osiris Therapeutics, Inc., a Delaware corporation (“Seller”), and NuVasive, Inc., a Delaware corporation (“Purchaser”). Capitalized terms used herein and not otherwise defined shall have the meaning given them in that certain Asset Purchase Agreement by and between Seller and Purchaser dated May 8, 2008, as amended pursuant to that certain Amendment to Asset Purchase Agreement by and between Seller and Purchaser dated September 30, 2008 (collectively, the “Agreement”). Seller and Purchaser shall each be referred to herein as a “Party” and collectively as the “Parties.”

     WHEREAS, pursuant to Section 9.3 of the Agreement, the Agreement may be amended by a written instrument signed by the parties to the Agreement; and

     NOW, THEREFORE, in consideration of the foregoing, the agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

     1. Amendments.

          (a) Section 1.1(a)(ii) of the Agreement shall be deleted in its entirety.

          (b) Section 1.3 of the Agreement shall be amended by deleting in its entirety the second sentence thereof and inserting in its place the following:

     “The consummation of the Manufacturing Asset Transfer (the “Manufacturing Closing”) shall be held on the fifteenth day following the execution by Purchaser and Seller of this Second Amendment (the “Manufacturing Closing Date”) and at such time all conditions to the Manufacturing Closing shall be deemed to have been waived or satisfied. In connection with the Manufacturing Closing, either (a) the Purchaser shall assume that certain Amended and Restated Tissue Procurement Processing and Supply Agreement by and between Seller and AlloSource, dated February 1, 2008 (the “AlloSource Supply Agreement”) or (b) the AlloSource Supply Agreement shall be amended, modified, supplemented or terminated.”

          (c) Section 1.5(a) of the Agreement shall be amended and restated in its entirety, as follows:

     “(a) Milestones; Milestone Payments. From and after the Technology Closing Date, in addition to the consideration set forth in Section 1.4 above, Purchaser shall, with respect to Sections 1.5(a)(i) and 1.5(a)(vi) below, subject to, and contingent upon achievement of the post-Technology Closing performance milestones of the Business set forth in Sections 1.5(a)(i) and 1.5(a)(vi) below, and, with respect to Sections 1.5(a)(ii), 1.5(a)(iii) and 1.5(a)(iv) below, on the dates set forth in Sections 1.5(a)(ii), 1.5(a)(iii) and 1.5(a)(iv) below (each, a “Milestone”) not later than the applicable date for satisfaction of each Milestone set forth below (each a

“Milestone Expiration Date”), pay to Seller an amount of cash (in United States dollars of immediately available funds) or common stock, par value $0.001 per share, of Purchaser (“Purchaser Common Stock”) (the form of payment of which is to be determined in the sole discretion of Purchaser), equal to the First Milestone Payment, Second Milestone Payment, Third Milestone Payment, Fourth Milestone Payment, Fifth Milestone Payment and/or Sixth Milestone Payment, as applicable (the “Applicable Milestone Payment”) and each Milestone shall be independent of each other Milestone and may be satisfied and payment become due therefore regardless of non-satisfaction of any other Milestone; provided, however, that (i) if Purchaser elects to issue shares of Purchaser Common Stock in respect of any Applicable Milestone Payment, then prior to such issuance and upon request by the Purchaser, Seller shall deliver to Purchaser such representations and warranties as Purchaser shall reasonably request for purposes of exempting the issuance of such shares from the registration requirements of the Securities Act, and (ii) if Purchaser elects to issue shares of Purchaser Common Stock in respect of any Applicable Milestone Payment, the number of shares of Purchaser Common Stock to be issued shall be equal to the Applicable Milestone Payment divided by the Purchaser Common Stock Value. The obligations of Purchaser under this Section 1.5(a) are subject to the provisions of Section 1.5(c) below (regarding Purchaser’s Rights of Set-Off). For avoidance of doubt, in no event shall the sum of all Applicable Milestone Payments made by Purchaser to Seller under this Section 1.5 exceed Fifty Million Dollars ($50,000,000) (the “Maximum Milestone Amount.

     (i) If at any time following the Technology Closing Date but at or prior to April 15, 2009, Seller shall have delivered to Purchaser an aggregate of 75,000 cubic centimeters of Product (the “First Delivery Threshold”) in accordance with the terms and provisions of, and subject to the specifications set forth in, the Manufacturing Agreement, Purchaser shall pay to Seller Five Million Dollars ($5,000,000) (the “First Milestone Payment”). The parties acknowledge and agree that the First Milestone Payment was previously made by Purchaser and that no further amount shall be due or owing with respect thereto.

     (ii) Purchaser shall pay to Seller Five Million Dollars ($5,000,000) on the date that Purchaser executes the Second Amendment (the “Second Milestone Payment”).

     (iii) Purchaser shall pay to Seller Twelve Million Five Hundred Thousand Dollars ($12,500,000) on June 30, 2009 (the “Third Milestone Payment”).

     (iv) Purchaser shall pay to Seller Twelve Million Five Hundred Thousand Dollars ($12,500,000) on September 30, 2009 (the “Fourth Milestone Payment”).

     (v) [Intentionally Omitted].

     (vi) If at any time following the Technology Closing Date the Business shall generate Thirty-Five Million Dollars ($35,000,000) in cumulative Net Sales (the “Net Sales Threshold”), Purchaser shall pay to Seller Fifteen Million Dollars ($15,000,000) (the “Sixth Milestone Payment”).

     If any payment under this Section 1.5(a) is made in the form of Purchaser Common Stock, then on the date of such payment Purchaser shall provide to Seller (I) a certificate from a

duly authorized officer of Purchaser certifying that as of the date of such issuance (x) the Purchaser Common Stock so issued has been duly authorized and is validly issued, fully-paid and non-assessable and, (y) the provisions of Rule 144(c) of the Securities Act, are satisfied and (II) a legal opinion from Purchaser’s legal counsel that such Purchaser Common Stock has been duly authorized and validly issued, is fully paid and non-assessable. If Purchaser is unable to satisfy the requirement set forth in the immediately preceding sentence, Seller shall be under no obligation to accept Purchaser Common Stock as payment for the Applicable Milestone Payment and Purchaser shall make such Applicable Milestone Payment in the form of cash, in United States dollars of immediately available funds.”

          (d) Sections 6.1 (a), (b), and (d-i) of the Agreement shall be deleted in their entirety, and Seller hereby specifically affirms that the representations and warranties in Section 6.1(c) thereof are true and correct as of the date hereof.

          (e) Section 8.2(d) of the Agreement shall be amended by adding at the end thereof the following phrase “ ... and all liabilities associated with the assumption or termination of the AlloSource Supply Agreement as contemplated by the Second Amendment.”

          (f) Section 9.13 of the Agreement shall be amended by deleting the definitions of “Allowable Work in Process” and “WIP Value” in their entirety. In addition, the Index of Defined Terms contained in Section 9.13 shall be amended by eliminating the reference to Work in Process contained therein.

     2. Columbia Facility. Notwithstanding anything to the contrary in the Agreement (or any exhibit or schedule to the Agreement), the Parties agree that Seller shall not transfer, lease or sub-lease the 7015 Albert Einstein, Columbia Maryland facility (the “Columbia Facility”) to Purchaser, and Purchaser shall have no obligation to lease or sub-lease the Columbia Facility. The Parties agree that (i) the Sublease Agreement by and between Broadwing Corporation and Osiris, dated June 2, 2006 and the Agreement of Lease by and between Columbia Gateway S-18, L.L.C. and Osiris, dated June 6, 2006 shall not be Assumed Contracts (as defined in the Agreement) pursuant to the Agreement, and (ii) Schedule 1.1(a)(x) to the Agreement shall be amended to remove the Sublease Agreement by and between Broadwing Corporation and Osiris, dated June 2, 2006 and the Agreement of Lease by and between Columbia Gateway S-18, L.L.C. and Osiris, dated June 6, 2006 from such Schedule 1.1(a)(x) to the Agreement. Purchaser agrees to timely dispose, at Purchaser’s cost, of all of the assets at the Columbia Facility set forth on Exhibit A attached to this Second Amendment.

     3. No Further Amendment. Except to the extent expressly modified by this Amendment, all of the provisions of the Agreement shall remain in full force and effect, without modification or amendment and are ratified in all respects. This Amendment is limited by its terms and does not and shall not serve to amend or waive any provision of the Agreement except as expressly provided for in this Amendment.

     4. Governing Law; General Provisions. This Amendment, including the validity hereof and the rights and obligations of the parties hereunder, shall be construed, interpreted, enforced and governed by and under the laws of the State of Delaware applicable to contracts

made and to be performed entirely in such state, without regard to its rules regarding conflicts of law provisions.

     5. Counterparts, Facsimile Execution. This Amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which shall constitute one and the same instrument. The Parties need not sign the same counterpart.

[Signature Page to Follow]

     IN WITNESS WHEREOF, Seller and Purchaser have each caused this Amendment No. 2 to Asset Purchase Agreement to be executed by their respective duly authorized officers, all as of the date first above written.

SELLER: Osiris Therapeutics, Inc.
By:	/s/ Richard W. Hunt
	Name:	Richard W. Hunt
	Title:	CFO
PURCHASER: NuVasive, Inc.
By:	/s/ Jason Hannon
	Name:	Jason Hannon
	Title:	SVP, GC & Secretary

EX-10.1

Exhibit 10.1

AMENDMENT NO. 3 TO MANUFACTURING AGREEMENT

     THIS AMENDMENT NO. 3 TO MANUFACTURING AGREEMENT (this “Third Amendment”) is made and entered into as of March 25, 2009 (the “Effective Date”), by and between Osiris Therapeutics, Inc., a Delaware corporation (“Osiris”), and NuVasive, Inc., a Delaware corporation (“NuVasive”).

RECITALS

     WHEREAS, on May 8, 2008, Osiris and NuVasive entered into an Asset Purchase Agreement pursuant to which Osiris agreed to sell, and NuVasive agreed to purchase, technology related to manufacturing the Osteocel product line (as more specifically set forth therein), such sale and purchase taking place July 24, 2008, which Asset Purchase Agreement was subsequently amended September 30, 2008 (the “Purchase Agreement”).

     WHEREAS, pursuant to the Purchase Agreement, on July 24, 2008, Osiris and NuVasive entered into a Manufacturing Agreement whereby Osiris agreed to manufacture and deliver to NuVasive, and NuVasive agreed to purchase, the Product (as defined therein), which Manufacturing Agreement was subsequently amended on September 30, 2008 and on October 22, 2008 (the “Manufacturing Agreement”).

     WHEREAS, Osiris and NuVasive wish to enter into this Third Amendment to provide for the end of the Term of the Manufacturing Agreement and to provide for the terms and conditions associated with such termination.

     NOW, THEREFORE, in consideration for the mutual covenants of the parties expressed herein, the sufficiency of which consideration is acknowledged, it is agreed that the Manufacturing Agreement is amended as of the Effective Date as follows:

AMENDMENT

1.	Defined Terms. Except as otherwise provided in this Amendment, capitalized terms will have the meanings assigned to them in the Manufacturing Agreement.
2.	Termination of Manufacturing Agreement. Notwithstanding anything to the contrary in the Manufacturing Agreement, NuVasive and Osiris agree that:

(a) Section 7.1 of the Manufacturing Agreement shall be deleted in its entirety and inserting in its place the following.

“This Agreement shall commence on the Effective Date and remain in effect until the fifteenth day following the execution by NuVasive and Osiris of this Amendment (the “Termination Date”) and immediately following the Termination Date, Osiris shall cease all manufacturing operations with respect to the Product except as set forth in this Agreement as amended by the Third Amendment.”

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(b)

NuVasive and Osiris shall use commercially reasonable efforts to obtain the consent of AlloSource to terminate that certain Amended and Restated Tissue Procurement Processing and Supply Agreement by and between Osiris and AlloSource, dated February 1, 2008 (the “AlloSource Supply Agreement”). In the event that AlloSource does not agree to terminate the AlloSource Supply Agreement, NuVasive agrees to assume the AlloSource Supply Agreement.

(c)

In the event that AlloSource requests Product to be shipped in freezers designated to be assets of NuVasive, NuVasive hereby authorizes Osiris to ship such Product in such freezers to AlloSource.

3.	Full Force and Effect. Except as set forth in this Amendment, the Manufacturing Agreement shall continue unmodified and in full force and effect.
4.	Counterparts. This Amendment may be executed in any number of counterparts, all of which shall be deemed one original and complete instrument.
5.	Insurance. “Section 6.5 of the Manufacturing agreement will be amended to replace the word “occurrence” to ‘claims made”.

[Remainder of page left intentionally blank]

-2-

     IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to Manufacturing Agreement as of the date first set forth above.

OSIRIS THERAPEUTICS, INC.			NUVASIVE, INC.
By:	/s/ Richard W. Hunt		By:	/s/ Jason Hannon
	Name:	Richard W. Hunt		Name:	Jason Hannon
	Its:	CFO		Its:	SVP, GC & Secretary

EX-10.2

EXECUTION COPY

EXHIBIT 10.2

PREFERRED STOCK PURCHASE AGREEMENT

among

NUVASIVE, INC.,

PROGENTIX ORTHOBIOLOGY, B.V.

and

The Sellers listed on Schedule A attached hereto

January 13, 2009

TABLE OF CONTENTS

			Page
1.	SALE AND TRANSFER OF THE INITIAL SHARES			2
	1.1	Sale and Transfer of the Initial Shares		2
	1.2	Closing of the Purchase of the Initial Shares		2
	1.3	Notary		2
2.	REPRESENTATIONS AND WARRANTIES OF THE SELLERS WITH RESPECT TO THE SELLER SHARES			3
	2.1	Authority; Execution and Delivery; Enforceability		3
	2.2	Non-Contravention		3
	2.3	Title to Seller Shares		3
	2.4	Consents and Approvals		4
	2.5	Litigation and Claims		4
	2.6	No Finder		4
3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY			4
	3.1	Organization and Good Standing		4
	3.2	Authority; No Conflict		5
	3.3	Capitalization		6
	3.4	Financial Statements		6
	3.5	Books and Records		6
	3.6	Title to Properties; Encumbrances		7
	3.7	Condition and Sufficiency of Assets		7
	3.8	Accounts Receivable		8
	3.9	Inventory		8
	3.10	No Undisclosed Liabilities		8
	3.11	Taxes		8
	3.12	No Material Adverse Change		10
	3.13	Pensions		10
	3.14	Legal Proceedings; Orders		10
	3.15	Absence of Certain Changes and Events		11
	3.16	Contracts; No Defaults		12
	3.17	Insurance		14
	3.18	Environmental Matters		16
	3.19	Employees		17
	3.20	Intellectual Property		17
	3.21	Certain Payments		21
	3.22	Authorizations; Regulatory Compliance		21
	3.23	Products; Product Liability		23
	3.24	Customers and Suppliers		23
	3.25	Capital Expenditures		24
	3.26	Relationships with Affiliates		24
	3.27	Brokers		24
	3.28	Disclosure		24

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TABLE OF CONTENTS
(continued)

			Page
4.	REPRESENTATIONS AND WARRANTIES OF PURCHASER			24
	4.1	Organization and Good Standing		24
	4.2	Authority; No Conflict		25
	4.3	Certain Proceedings		25
	4.4	Brokers		26
	4.5	No Other Representations		26
5.	CONDUCT OF BUSINESS DURING THE OPTION PERIOD			26
	5.1	Conduct of Business of the Company		26
	5.2	Clinical Trials		29
	5.3	FDA Approval Matters		29
	5.4	Payment of Taxes, Etc		30
6.	ADDITIONAL AGREEMENTS			30
	6.1	Access to Properties and Information		30
	6.2	Notification of Certain Matters		30
	6.3	Confidentiality; Publicity		30
	6.4	Use of Proceeds from the Facility		31
	6.5	Monthly and Quarterly Statements		31
	6.6	Audits		31
	6.7	Recapitalization		31
7.	INDEMNIFICATION; REMEDIES			31
	7.1	Survival; Right to Indemnification Not Affected by Knowledge		31
	7.2	Indemnification and Payment of Damages by Sellers		32
	7.3	Indemnification and Payment of Damages by Purchaser		33
	7.4	Limitations on Indemnification		33
	7.5	Procedure for Indemnification—Third Party Claims		34
	7.6	Procedure for Indemnification—Other Claims		35
	7.7	Remedies Exclusive		35
8.	CLOSING DELIVERABLES			35
	8.1	Closing Deliverables of the Company		35
	8.2	Closing Deliverables of the Purchaser		37
	8.3	Closing Deliverables of the Parties		38
9.	GENERAL PROVISIONS			38
	9.1	Expenses		38
	9.2	Notices		38
	9.3	Jurisdiction; Service of Process		39
	9.4	Dispute Resolution		39
	9.5	Waiver		40
	9.6	Entire Agreement and Modification		41
	9.7	Assignments, Successors, and No Third-Party Rights		41

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TABLE OF CONTENTS
(continued)

				Page
		9.8	Release of Claims		41
		9.9	Severability		41
		9.10	Section Headings, Construction		42
		9.11	Time of Essence		42
		9.12	Governing Law		42
		9.13	Counterparts		42
10.	DEFINITIONS				42
		Index of Other Defined Terms:			52

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SCHEDULES AND EXHIBITS

Schedule A	Sellers Schedule
Exhibit A	Option Purchase Agreement
Exhibit B	Facility Agreement
Exhibit C	Amended Articles of Association
Exhibit D	Notarial Deed
Exhibit E	Form of Proprietary Inventions Agreement
Exhibit F	Opinion of Counsel
Exhibit G	Distribution Agreement
Exhibit H	Revos License Agreement
Exhibit I	Pledge Agreement
Exhibit J	Shareholders’ Agreement
Exhibit K	Founders’ Non-competition Agreement (Bruijn)
Exhibit L	Founders’ Non-competition Agreement (Blitterswijk)
Exhibit M	Investor Non-competition Agreement

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PREFERRED STOCK PURCHASE AGREEMENT

     THIS PREFERRED STOCK PURCHASE AGREEMENT (“Agreement”) is made as of January 13, 2009 (the “Effective Date”), by and among NuVasive, Inc., a Delaware corporation (“Purchaser”), Progentix Orthobiology B.V., a company organized under the laws of the Netherlands (the “Company”), and the shareholders of the Company as set forth on Schedule A attached hereto (each a “Seller,” and collectively, the “Sellers,” and along with the Company, the “Seller Parties”).

RECITALS

     The Sellers desire to sell, and Purchaser desires to purchase, 7,200 ordinary shares, €1.00 par value per share, and 1,600 cumulative preference shares, €1.00 par value per share, of the Company, for an aggregate purchase price of $10,000,000, which shares represent, immediately after such issuance, forty percent (40%) of the outstanding capital stock of the Company on a fully-diluted basis (the “Initial Shares”).

     Purchaser and the Seller Parties have entered into an Option Purchase Agreement, dated as of the date hereof, in the form attached hereto as Exhibit A (the “Option Purchase Agreement”), pursuant to which, and subject to certain exceptions set forth therein, (i) Purchaser may elect, in its sole discretion, to cause the Sellers to sell to Purchaser the remaining issued and outstanding shares of the capital stock of the Company held by the Sellers (the “Remaining Shares,” and along with the Initial Shares, the “Seller Shares”) upon delivery of a Purchase Election Notice (as defined therein) to the Sellers’ Representative (as defined in the Option Purchase Agreement) at any time between the second anniversary of the date of the Option Purchase Agreement and the fourth anniversary thereof (the “Call Option Period”), and (ii) Purchaser shall be obligated to purchase from the Sellers all of the Remaining Shares in the event (A) the Sellers’ Representative (as defined in the Option Purchase Agreement) delivers a Milestone Completion Notice (as defined therein) to Purchaser at any time between the date of the Option Purchase Agreement and the second anniversary thereof (the “Put Option Period”) or (B) Purchaser’s *** (as defined in the Option Purchase Agreement) is greater than *** at any time during the Call Option Period. Any purchase of the Remaining Shares by the Purchaser pursuant to the Option Purchase Agreement shall be referred to herein as an “Acquisition.” The period from the date of the Option Agreement through the expiration of the Call Option Period shall be referred to herein as the “Option Period.”

     In connection with this Agreement and the Option Purchase Agreement, Purchaser has entered into a Facility Agreement with the Company, dated as of the date hereof, in the form attached hereto as Exhibit B (the “Facility Agreement”) pursuant to which Purchaser is lending up to $5,000,000 to the Company.

     In connection with this Agreement and the Option Purchase Agreement, pursuant to a notarial deed of amendment to the Company’s Articles of Association in the form attached hereto as Exhibit C (the “Amended Articles”), which includes among other things, the creation

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

of cumulative preference shares A (the “Series A Preferred Stock”) and cumulative preference shares B (the “Series B Preferred Stock”), and pursuant to the execution of the notarial deed with respect to the Amended Articles, (i) the cumulative preference shares held by the Sellers shall be converted into shares of Series A Preferred Stock, and (ii) the Initial Shares purchased by Purchaser pursuant to the terms herein shall be converted into shares of Series B Preferred Stock, such that Purchaser will own shares of the Series B Preferred Stock, representing, immediately after such issuance, forty percent (40%) of the outstanding capital stock of the Company on a fully-diluted basis (the “Recapitalization”). The Company has filed a declaration of no-objection with the Dutch Ministry of Justice with respect to the Amended Articles.

AGREEMENT

     The parties, intending to be legally bound, agree as follows:

1. SALE AND TRANSFER OF THE INITIAL SHARES.

     1.1 Sale and Transfer of the Initial Shares.

          (a) On the Closing Date (as defined below), subject to the conditions set forth in this Section 1, Purchaser or its designee shall purchase, and the Sellers shall sell and issue to Purchaser, the Initial Shares for the aggregate purchase price of $10,000,000 (the “Purchase Price”) as set forth on Schedule A attached hereto. At the Closing (as defined below), Purchaser shall transfer (i) an amount of cash (in United States dollars of immediately available funds) equal to the Purchase Price minus the Seller Funded Expenses (the “Upfront Payment”) to the third party account of the Notary in accordance with the instructions in the Notary Instruction Letter, and (ii) on behalf of the Sellers, the amounts set forth on the Estimated Closing Certificate to the persons listed therein.. Prior to the transfer of the Initial Shares, the Notary shall hold the Upfront Payment on behalf of Purchaser. After the transfer of the Initial Shares, the Notary shall hold the Upfront Payment on behalf of the Sellers. As soon as possible after the Closing, but in any event within one (1) Business Day of the Closing Date, the Notary shall pay to the Sellers an amount equal to the Upfront Payment, pursuant to the allocation set forth on Schedule A attached hereto (the “Pro Rata Allocation”)

          (b) The parties acknowledge and agree that the aggregate fair market value of the Initial Shares as of the Closing Date is equal to the Purchase Price for the Initial Shares, and the parties agree to file all Tax Returns in a manner consistent with this sentence and not to take any Tax position inconsistent with this sentence.

     1.2 Closing of the Purchase of the Initial Shares. The closing of the purchase and sale of the Initial Shares (the “Closing”) shall take place at the offices of DLA Piper Nederland N.V., ‘Meerparc’, Amstelveenseweg 638, 1081 JJ Amsterdam, the Netherlands, as soon as practicable, or at such other time, date and place as are mutually agreed upon by the Company and Purchaser (the “Closing Date”). At the Closing, the Notary shall execute the deed of transfer of the Initial Shares through the notarial deed in the form substantially attached hereto as Exhibit D. Immediately thereafter, the Notary shall transfer the Upfront Payment to the Sellers, all in accordance with the instruction letter from the Notary.

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     1.3 Notary. The Seller Parties are aware that the Notary is a civil law notary working at DLA Piper Nederland N.V., the firm that advises Purchaser in respect of the matters set out in this Agreement. With reference to the Code of Conduct (Verordening beroeps- en gedragsregels) established by the Royal Notarial Professional Organization (Koninklijke Notariële Beroepsorganisatie), parties hereby acknowledge and confirm that (i) the Notary shall execute any and all deeds related to the Closing Documents; and (ii) Purchaser is assisted and represented by DLA Piper Nederland N.V. in relation to the Closing Documents and any other agreements that may be concluded, or disputes that may arise, in connection therewith.

2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS WITH RESPECT TO THE SELLER SHARES

     Each Seller, severally but not jointly, hereby represents and warrants to Purchaser as to such Seller and the Seller Shares owned by such Seller, as of the Effective Date and as of the Closing Date, as set forth below. Each exception to such representations and warranties set forth in the Seller Parties Disclosure Schedule is identified by reference to, or has been grouped under a heading referring to, a specific section of this Agreement, and the disclosures in any section or subsection of the Seller Parties Disclosure Schedule shall qualify other sections and subsections in this Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

     2.1 Authority; Execution and Delivery; Enforceability. Each Seller has full power, authority and capacity to execute and deliver this Agreement and to perform such Seller’s respective obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Seller and constitutes the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

     2.2 Non-Contravention. The execution and delivery of this Agreement by such Seller does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof, will not (or would not with the giving of notice or the passage of time):

          (a) constitute a default under or a violation or breach (with or without notice) of, result in the acceleration of any obligation under, any provision of any contract or other instrument to which such Seller is a party or result in the termination or revocation of any authorization held by such Seller or the Company necessary to the ownership of the Seller Shares or the operation of the business of the Company;

          (b) violate any Order or any Legal Requirement affecting such Seller; or

          (c) result in the creation of any Encumbrance on the Seller Shares.

     2.3 Title to Seller Shares. Each Seller is and will be on the Closing Date the holder and beneficial owner of the Seller Shares owned by such Seller. The Seller Shares owned by such Seller as of the Effective Date are as set forth on Part 2.3 of the Seller Parties Disclosure Schedule. Each Seller has good and valid title to the Seller Shares owned by such Seller as set forth on Part 2.3 of the Seller Parties Disclosure Schedule, free and clear of all Encumbrances.

3

At the Closing, each Seller will transfer legal and beneficial, good and valid title to each of the Initial Shares owned by such Seller, free and clear of all Encumbrances. No Seller is currently bound by any contract, agreement, arrangement, commitment or understanding (written or oral) with, and has not granted any option or right currently in effect or which would arise after the Effective Date, any Person other than Purchaser with respect to the acquisition of any of Initial Shares.

     2.4 Consents and Approvals. Except as set forth in the Seller Parties Disclosure Schedule, no consent, approval, waiver, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Body, and no consent, approval, waiver or other similar authorization of any other Person (including, without limitation, any Person who is a party to a Contract binding on or affecting the Company or any Subsidiary), is required to be obtained by or on behalf of such Sellers as a result of, or in connection with, or as a condition of the lawful execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

     2.5 Litigation and Claims. There is no Action pending or, to the Knowledge of such Seller, Threatened, against or affecting such Seller that could reasonably be expected to affect such Seller’s ability to consummate the transactions contemplated hereby.

     2.6 No Finder. Except as set forth in the Seller Parties Disclosure Schedule, neither such Seller nor any party acting on such Seller’s behalf has paid or become obligated to pay any fee or commission to any broker, finder or intermediary for or on account of the transactions contemplated hereby, and the Company will not be liable or obligated in any way whatsoever with respect to any such fee or commission.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to Purchaser, as of the Effective Date and as of the Closing Date, as set forth below. Each exception to such representations and warranties set forth in the Seller Parties Disclosure Schedule is identified by reference to, or has been grouped under a heading referring to, a specific section of this Agreement, and the disclosures in any section or subsection of the Seller Parties Disclosure Schedule shall qualify other sections and subsections in this Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

     3.1 Organization and Good Standing.

          (a) Part 3.1 of the Seller Parties Disclosure Schedule contains a complete and accurate list for the Company of its name, its jurisdiction of incorporation, other jurisdictions in which it is authorized to do business, and its capitalization (including the identity of each stockholder and the number of shares held by each). The Company is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts. The Company is a private company with limited liability duly qualified to do business as a foreign corporation and is in good standing under the

4

laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.

          (b) The Company made available to Purchaser in the Data Room copies of the Organizational Documents of the Company, as currently in effect.

     3.2 Authority; No Conflict.

          (a) The Closing Documents to which the Company is a party have been authorized by the board of directors (“Board of Directors”) of the Company and, to the extent required, by the shareholders of the Company. Upon the execution and delivery by the Company of such Closing Documents, such Closing Documents will constitute the legal, valid, and binding obligations of the Company, enforceable against it in accordance with their respective terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditor’s rights and to general equity principles. The execution and delivery of such Closing Documents by the Company and the performance of the Contemplated Transactions by it does not conflict with any provision of the Organizational Documents of the Company.

          (b) Neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

               (i) contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of the Company, or (B) any resolution adopted by the board of directors or the shareholders of the Company;

               (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Company, or any of the assets owned or used by the Company, may be subject;

               (iii) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by the Company or that otherwise relates to the business of, or any of the assets owned or used by, the Company;

               (iv) cause the Company to become subject to, or to become liable for the payment of, any Tax;

               (v) cause any of the assets owned by the Company to be reassessed or revalued by any taxing authority or other Governmental Body;

               (vi) contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to

5

accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; or

               (vii) result in the imposition or creation of any Encumbrance upon or with respect to any of the assets owned or used by the Company, other than Permitted Encumbrances.

Except as set forth in Part 3.2 of the Disclosure Schedule the Company is not nor will it be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

     3.3 Capitalization. As of immediately prior to the Closing (without giving effect to the Recapitalization), the authorized equity securities of the Company consist of 60,000 ordinary shares, par value €1 per share, of which 18,000 shares are issued and outstanding and 30,000 cumulative preference shares, par value €1 per share, of which 4,000 shares are issued and outstanding. No shares or classes of the Company’s capital are reserved for issuance. No reference to any purported Encumbrance appears in the shareholders’ register of the Company. All of the outstanding equity securities of the Company have been duly authorized and validly issued and are fully paid. Except as set forth in Part 3.3 of the Seller Parties Disclosure Schedule, there are no Contracts relating to the issuance, sale, transfer or voting of any issued or issuable equity securities or other securities (including, but not limited, to any options, stock appreciation rights, warrants or other instruments or securities exercisable or exchangeable for, or convertible into, equity securities) of the Company. None of the outstanding equity securities or other securities of the Company was issued in violation of any Legal Requirement. The Company does not own, nor does it have any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business. The Company does not have any Subsidiaries.

     3.4 Financial Statements. The Company has made available to Purchaser in the Data Room the unaudited balance sheet of the Company and the related unaudited statements of income, changes in stockholders’ equity, and cash flow balance sheet of the Company as of December 31, 2008 (the “Balance Sheet”) and the related unaudited statements of income, changes in shareholders’ equity, and cash flow for the twelve (12) months then ended (collectively, the “Financial Statements”), including in each case the notes thereto (except that the unaudited Financial Statements may not contain all required footnotes and the interim Financial Statements are subject to year-end adjustments). The Financial Statements fairly present in all material respects the financial condition and the results of operations, changes in stockholders’ equity, and cash flow of the Company as at the respective dates of and for the periods referred to in the Financial Statements. The Financial Statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such Financial Statements. No financial statements of any Person other than the Company are required to be included in the consolidated financial statements of the Company.

     3.5 Books and Records. The books and records of the Company, all of which have been made available to Purchaser in the Data Room, are complete and correct in all material

6

respects and have been maintained in accordance with sound business practices in the Netherlands, including the maintenance of an adequate system of internal controls. The minute books of the Company contain materially accurate and complete records of all meetings held of, and corporate action taken by, the stockholders, the Board of Directors and the Supervisory Board of Directors of the Company, and no meeting of any such stockholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Company.

     3.6 Title to Properties; Encumbrances. The Company does not currently own, nor has it ever owned (a) any real property, (b) any leasehold interests or (c) any buildings, plants, structures and/or equipment. Part 3.6 of the Seller Parties Disclosure Schedule contains a complete and accurate list of all (A) the Assets that the Company purports to own, including all of the properties and assets reflected in the Balance Sheet (except for assets held under capitalized leases disclosed or not required to be disclosed in Part 3.6 of the Seller Parties Disclosure Schedule and personal property sold since the date of the Balance Sheet, as the case may be, in the Ordinary Course of Business), and (B) all of the properties and assets purchased or otherwise acquired by the Company since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice), which subsequently purchased or acquired properties and assets (other than inventory and short-term investments) are listed in Part 3.6 of the Seller Parties Disclosure Schedule. The Company is the sole owner and has good and marketable title (or leasehold title, as the case may be) to the Assets free and clear of all Encumbrances, and the Assets reflected in the Balance Sheet are free and clear of all Encumbrances and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets, (i) mortgages or security interests shown on the Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (ii) mortgages or security interests incurred in connection with the purchase of property or assets after the date of the Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (iii) liens for current taxes not yet due, and (iv) Encumbrances pursuant to the Pledge Agreement (as defined below) or the Facility Agreement and (v) Encumbrances incurred in the Ordinary Course of the Business, consistent with past practice, or created by the express provisions of the Contracts, each of the type identified on Part 3.6 of the Seller Parties Disclosure Schedule (together, the “Permitted Encumbrances”). All such assets are suitable for the uses to which they are being put or have been put in the Ordinary Course of Business and are in good working order, ordinary wear and tear excepted.

     3.7 Condition and Sufficiency of Assets. Except as set forth on Part 3.7 of the Seller Parties Disclosure Schedule, the Assets are all assets of the Company used in or related to the processing and manufacturing of the Products. Xpand Biotechnology B.V., a private company with limited liability (“Xpand”), transferred to the Company the Company Proprietary Rights and prior to such transfer of the Company Proprietary Rights, Xpand was the sole and rightful owner of the Company Proprietary Rights. Except as set forth on Part 3.7 of the Seller Parties Disclosure Schedule, the Assets and the Company Proprietary Rights of the Company

7

constitute all of the assets, property, real personal or mixed, tangible or intangible, of the Company used in or held for use in for the operation of the Business as presently conducted.

     3.8 Accounts Receivable. The Company currently has no accounts receivable, nor has it previously had any accounts receivable prior to the Closing Date.

     3.9 Inventory. The Company currently has no inventory, nor has it previously had any inventory prior to the Closing Date.

     3.10 No Undisclosed Liabilities. The Company has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise), except for (a) liabilities or obligations reflected or reserved against in the Balance Sheet, (b) liabilities or obligations incurred since the Balance Sheet Date in the Ordinary Course of Business, (c) liabilities of a type or nature not required to be reflected in the Financial Statements, which are not material, individually or in the aggregate, or (d) liabilities or obligations set forth in Part 3.10 of the Seller Parties Disclosure Schedule. Except as set forth in Part 3.10 of the Seller Parties Disclosure Schedule the Company is not a guarantor or indemnitor of any Indebtedness of any other Person.

     3.11 Taxes.

          (a) The Company has paid on a timely basis all Taxation that was due and payable on or before the Closing Date. The unpaid taxes of the Company for all Tax periods through the Balance Sheet Date do not exceed the accruals and reserves for Taxation (excluding accruals and reserves for deferred Taxation established to reflect timing differences between book and Tax income) set forth on the Balance Sheet.

          (b) All notices and returns required to have been given or made, have been properly and duly submitted by the Company to the relevant Governmental Body and all information, notices, computations and returns submitted to such Governmental Body are true, accurate and complete and are not the subject of any dispute nor are likely to become the subject of any dispute with such Governmental Body. The Company has not been informed by any Governmental Body that such Governmental Body formally asserts that the Company was required to file any Tax Return that was not filed, and, to the Sellers’ Knowledge, no such assertion is planned by any Governmental Body. The Company has not (i) waived any statute of limitations with respect to Taxation, (ii) requested any extension of time within which to file any Tax Return, or (iii) executed or filed any power of attorney with any taxing authority. All records that the Company is required to keep for Taxation purposes, have been duly kept and are available for inspection at the Company premises.

          (c) The amount of Taxation chargeable to the Company has not been affected by any concession, arrangements, agreement or other formal or informal arrangement with any Governmental Body (not being a concession, agreement or arrangement available to companies generally). The Company is not subject to a special Tax regime. The Company is not required to include any amounts in income, or to exclude any items of deduction in a taxable period beginning after the Closing Date as a result of (i) an instalment sale or open transaction arising in a taxable period ending on or before the Closing Date; (ii) a prepaid amount received, or paid, in

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a taxable period ending on or before the Closing Date; (iii) deferred gains that could be recognized in a taxable period ending after the Closing Date; or (iv) any similar item of deferred income or expense.

          (d) In relation to Tax, the Company has not been subject to and is not currently subject to any investigation, audit or visit by any Governmental Body, and, to the Sellers’ Knowledge, no such investigation, audit or visit is planned by any Governmental Body.

          (e) Since its incorporation, the Company has not been involved in any Taxation controversy and/or litigation with or against any Governmental Body.

          (f) The Company has made all deductions and/or withholdings in respect, or in account, of any Taxation from any payments made by the Company that it is obliged or entitled to have made and has accounted in full to the appropriate authority for all amounts so deducted and/or withheld.

          (g) The Company has not received any notice from any Governmental Body that required or will require the Company to withhold Taxation from any payment made since the Balance Sheet Date in respect of which such withheld Taxation has not been accounted for in full to the appropriate authority.

          (h) The Company has not claimed or been granted exemptions from Taxation that may give rise to the assessment and/or payment of Taxation in connection with any transactions involving the Company, including but not limited to this Agreement, reorganisations, mergers and/or disposals of the Company.

          (i) All applications by the Company for governmental subsidies, which have been made or are reflected in the Balance Sheet have been duly and correctly made and no refunds and no interest, penalties or additions regarding such refunds are or will be due in respect of governmental subsidies.

          (j) The Company

               (i) has always been resident, for Tax purposes, in the Netherlands;

               (ii) is not and has never been resident, for Tax purposes, in any other jurisdiction;

               (iii) does not have and has never had a taxable presence outside the Netherlands; and

               (iv) is not deemed to have and has never been deemed to have had a taxable presence outside the Netherlands.

          (k) No Taxation, for which any other person or entity is or may be liable, will be charged in any way to the Company, and the Company is not a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement.

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          (l) Each transaction between the Sellers or any Affiliate of the Sellers on the one hand and the Company on the other hand is and has been done at an arm’s length basis.

          (m) The Company is not liable for Taxation imposed on or due by any third party, including, without limitation, any sub-contractor, the Sellers or any Affiliate of the Sellers, except to the extent that full provision has been made in the Financial Statements of the Company.

          (n) Other than by their own expiration over time, there is no limitation on the utilization by the Company of its net operating losses, built-in losses, Tax credits or similar items under the Tax laws of any jurisdiction (other than any such limitations arising as a result of the consummation of the Contemplated Transactions).

          (o) The Company does not own any interest in any entity that is characterized as a partnership for Tax purposes.

          (p) There are no Tax liens or other Encumbrances with respect to Taxation upon any of the Assets of the Company, other than Permitted Encumbrances.

          (q) The Company has delivered or made available to Purchaser in the Data Room for inspection (i) complete and correct copies of all Tax Returns of the Company relating to Taxation and (ii) complete and correct copies of all documents from any Governmental Body received by or agreed to by or on behalf of the Company relating to Taxation since the Company’s formation.

     3.12 No Material Adverse Change. Since the date of the Balance Sheet, there has not been a Material Adverse Effect.

     3.13 Pensions. The Company has no, and has never had any retirement benefit schemes, early retirement schemes, pre-pension schemes or other pension arrangements, relating to the Business (the “Pension Schemes”), in operation or proposed.

     3.14 Legal Proceedings; Orders.

          (a) There is no pending Proceeding:

               (i) that has been commenced by or against the Company or that otherwise relates to or may affect the business of, or any of the assets owned or used by, the Company; or

               (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions.

To Sellers’ Knowledge, (1) no such Proceeding has been Threatened, and (2) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding. Seller Parties have made available to Purchaser in the Data Room copies of all pleadings, correspondence, and other documents relating to each Proceeding listed in Part 3.14(a) of the Seller Parties Disclosure Schedule. The Proceedings listed in Part 3.14(a)

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of the Seller Parties Disclosure Schedule could not reasonably be expected to have a Material Adverse Effect.

          (b) There is no Order to which the Company, or any of the assets owned or used by the Company, is subject.

          (c) No officer, director, agent, or employee of the Company is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the business of the Company.

          (d) The Company is, and at all times has been, in full compliance with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject.

          (e) No event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which the Company, or any of the assets owned or used by the Company, is subject.

          (f) The Company has not received, at any time, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which the Company, or any of the assets owned or used by the Company, is or has been subject.

     3.15 Absence of Certain Changes and Events. Except as set forth in Part 3.15 of the Seller Parties Disclosure Schedule, since the Balance Sheet Date, the Company has conducted its business only in the Ordinary Course of Business and none of the following actions or events has occurred:

          (a) any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of the Company (whether or not covered by insurance) that has had or could reasonably be expected to have a Material Adverse Effect;

          (b) (i) any declaration, accrual, set aside or payment of any dividend or any other distribution in respect of any shares of capital stock of the Company, or (ii) any repurchase, redemption or other acquisition by the Company of any shares of capital stock or other securities;

          (c) any sale, issuance or grant, or authorization of the issuance of, (i) shares or other securities of the Company, (ii) any option, warrant or right to acquire any shares or any other securities of the Company, or (iii) any instrument convertible into or exchangeable for shares or other securities of the Company;

          (d) any amendment or waiver of any of the rights of the Company under any share purchase agreement;

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          (e) any amendment to any Organizational Document of the Company, any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, share split, reverse share split or similar transaction involving the Company;

          (f) any creation of any Subsidiary of the Company or acquisition by the Company of any equity interest or other interest in any other Person;

          (g) any capital expenditure by the Company which, when added to all other capital expenditures made on behalf of the Company since the Balance Sheet Date, exceeds €10,000 in the aggregate;

          (h) except in the Ordinary Course of Business, any action by the Company to (i) enter into or suffer any of the assets owned or used by it to become bound by any Material Contract (as defined in Section 3.16), or (ii) amend or terminate, or waive any material right or remedy under, any Material Contract;

          (i) any (i) acquisition, lease or license by the Company of any material right or other material asset from any other Person, (ii) sale or other disposal or lease or license by the Company of any material right or other material asset to any other Person, or (iii) waiver or relinquishment by the Company of any right, except for rights or other assets acquired, leased, licensed or disposed of in the Ordinary Course of Business;

          (j) any write-off as uncollectible, or establishment of any extraordinary reserve with respect to, any Indebtedness of the Company;

          (k) any pledge of any assets of or sufferance of any of the assets of the Company to become subject to any Encumbrance, except for Permitted Encumbrances and pledges of immaterial assets made in the Ordinary Course of Business;

          (l) any (i) loan by the Company to any Person, or (ii) the incurrence or guarantee by the Company of any Indebtedness by the Company;

          (m) any (i) adoption, establishment, entry into or amendment by the Company of any Pension Scheme or (ii) payment of any bonus or any profit sharing or similar payment to, or material increase in the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of the directors or officers of the Company;

          (n) any change of the methods of accounting or accounting practices of the Company in any material respect;

          (o) any material Tax election by the Company;

          (p) any commencement or settlement of any Proceeding by the Company; and

          (q) any agreement or commitment to take any of the actions referred to in clauses (c) through (p) above.

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     3.16 Contracts; No Defaults.

          (a) Part 3.16(a) of the Seller Parties Disclosure Schedule contains a complete and accurate list, and Seller Parties have made available to Purchaser in the Data Room true and complete copies of, each Contract, other instrument or document (including of any amendments) to which the Company is a party or by which its assets are subject or bound:

               (i) with any director, officer or Affiliate of the Company;

               (ii) evidencing, governing or relating to Indebtedness;

               (iii) not entered into in the Ordinary Course of Business that involves expenditures or receipts;

               (iv) that in any way purports to restrict the business activity of the Company or any of its Affiliates or to limit the freedom of the Company or any of its Affiliates to engage in any line of business or to compete with any Person or in any geographic area or to hire or retain any Person;

               (v) relating to the employment of, or the performance of services by, any employee or consultant, or pursuant to which the Company is or may become obligated to make any severance, termination or similar payment to any current or former employee or director; or pursuant to which the Company is or may become obligated to make any bonus or similar payment (other than payments constituting base salary) to any current or former employee or director;

               (vi) (A) relating to the acquisition, transfer, development, sharing or license of any Proprietary Rights (except for any Contract pursuant to which (1) any Proprietary Rights is licensed to the Company under any third party software license generally available to the public, or (2) any Proprietary Rights is licensed by the Company to any Person on a non exclusive basis); or (B) of the type referred to in Section 3.20(d);

               (vii) providing for indemnification of any officer, director, employee or agent;

               (viii) (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any Person with any preemptive right, right of participation, right of maintenance or any similar right with respect to any securities, or (C) providing the Company with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

               (ix) incorporating or relating to any guaranty, any warranty or any indemnity or similar obligation, except for Contracts substantially identical to the standard forms of end user licenses made available by Seller Parties to Purchaser in the Data Room;

               (x) relating to any currency hedging;

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               (xi) (A) imposing any confidentiality obligation on the Company or any other Person, or (B) containing “standstill” or similar provisions;

               (xii) (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations, or (B) directly or indirectly benefiting any Governmental Body (including any subcontract or other Contract between the Company and any contractor or subcontractor to any Governmental Body);

               (xiii) contemplating or involving the payment or delivery of cash or other consideration in an amount or having a value in excess of €5,000 in the aggregate, or contemplating or involving the performance of services having a value in excess of €5,000 in the aggregate; and

               (xiv) any other Contract, if a breach of such Contract could reasonably be expected to have a Material Adverse Effect.

          (b) Each of the foregoing is a “Material Contract.”

               (i) Each Material Contract is valid and in full force and effect, and is enforceable against the Company in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

               (ii) The Company has not violated or breached, or committed any default under, any Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a Material Adverse Effect; and, to Sellers’ Knowledge, no other Person has violated or breached, or committed any default under, any Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a Material Adverse Effect.

               (iii) Except as set forth on Part 3.16(b) of the Seller Parties Disclosure Schedule, to Sellers’ Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will or would reasonably be expected to, (A) result in a violation or breach of any of the provisions of any Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any Material Contract, (C) give any Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any Material Contract, (D) give any Person the right to accelerate the maturity or performance under any Material Contract, (E) result in the disclosure, release or delivery of the Company Source Code, or (F) give any Person the right to cancel, terminate or modify any Material Contract, except in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a Material Adverse Effect.

               (iv) The Company has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Material Contract, except in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a Material Adverse Effect.

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     3.17 Insurance.

          (a) Seller Parties have made available to Purchaser in the Data Room:

               (i) true and complete copies of all policies of insurance to which the Company is a party or under which the Company, or any director of the Company, in his capacity as such, is or has been covered at any time preceding the date of this Agreement;

               (ii) true and complete copies of all pending applications for policies of insurance; and

               (iii) any statement by the auditor of the Company’s financial statements with regard to the adequacy of such entity’s coverage or of the reserves for claims.

          (b) The Company:

               (i) has no self-insurance arrangements by or affecting the Company, including any reserves established thereunder;

               (ii) has not concluded contracts or arrangements, other than a policy of insurance, for the transfer or sharing of any risk by the Company;

               (iii) has made available to Purchaser in the Data Room all obligations of the Company to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided; and

               (iv) has not suffered any loss experience or received any claim under any policy for the current policy year.

          (c) All policies to which the Company is a party or that provide coverage to the Company, or any director or officer of the Company in his capacity as such:

               (i) are valid, outstanding, and enforceable;

               (ii) are issued by an insurer that is financially sound and reputable;

               (iii) taken together, provide adequate insurance coverage for the assets and the operations of the Company for all risks normally insured against by a Person carrying on the same business or businesses as the Company;

               (iv) are sufficient for compliance with all Legal Requirements and Contracts to which the Company is a party or by which any of them is bound;

               (v) will continue in full force and effect following the consummation of the Contemplated Transactions; and

               (vi) do not provide for any retrospective premium adjustment or other experienced-based liability on the part of the Company.

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          (d) The Company has not received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder.

          (e) The Company has paid all premiums due, and has otherwise performed all of its respective obligations, under each policy to which the Company is a party or that provides coverage to the Company or director thereof.

          (f) The Company has given notice to the insurer of all claims that may be insured under any policy provided by such insurer.

     3.18 Environmental Matters.

          (a) The Company is, and at all times has been, in material compliance with, and has not been and is not in violation of or liable under, any Environmental Law. To Sellers’ Knowledge, there is no actual order, written notice, or other written communication from, nor has any order, notice, or other communication been Threatened from (i) any Governmental Body or private citizen, or (ii) the current or prior owner or operator of any Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Company had an interest, or with respect to any property or Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by the Company, or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

          (b) There are no pending or, to Sellers’ Knowledge, Threatened claims, Encumbrances, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal, or mixed) in which the Company has or had an interest.

          (c) The Company has not received, any citation, directive, inquiry, notice, Order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Company had an interest, or with respect to any property or facility to which Hazardous Materials generated, manufactured, refined, transferred, imported, used, or processed by the Company, or any other Person for whose conduct they are or may be held responsible, have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

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          (d) The Company has no Environmental, Health, and Safety Liabilities with respect to the Facilities or, with respect to any other properties and assets (whether real, personal, or mixed) in which the Company (or any predecessor), has or had an interest, or at any property geologically or hydrologically adjoining the Facilities or any such other property or assets.

          (e) Except as set forth on Part 3.18(e) of the Seller Parties Disclosure Schedule, there are no Hazardous Materials present on or in the Environment at the Facilities or at any geologically or hydrologically adjoining property, including any Hazardous Materials contained in barrels, above or underground storage tanks, landfills, land deposits, dumps, equipment (whether moveable or fixed) or other containers, either temporary or permanent, and deposited or located in land, water, sumps, or any other part of the Facilities or such adjoining property, or incorporated into any structure therein or thereon. The Company has not permitted or conducted any, and to Sellers’ Knowledge there is no, Hazardous Activity conducted with respect to the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Company has or had an interest.

          (f) There has been no Release or, to Sellers’ Knowledge, Threat of Release, of any Hazardous Materials at or from the Facilities or at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the Facilities, or from or by any other properties and assets (whether real, personal, or mixed) in which the Company has or had an interest, or any geologically or hydrologically adjoining property.

          (g) The Company has delivered to Purchaser true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by the Company pertaining to Hazardous Materials or Hazardous Activities in, on, or under the Facilities, or concerning compliance by the Company with Environmental Laws.

     3.19 Employees. The Company has no employees, nor has it ever had any employees, prior to the Closing Date. The Company is not a party to any collective labour agreement.

     3.20 Intellectual Property.

          (a) With respect to Proprietary Rights of the Company:

               (i) Part 3.20(a)(i)(A) of the Seller Parties Disclosure Schedule lists all of the Patents owned by the Company, setting forth in each case the jurisdictions in which Issued Patents have been issued and Patent Applications have been filed. Part 3.20(a)(i)(B) of the Seller Parties Disclosure Schedule lists all of the Patents in which the Company has any right, title or interest (including without limitation interest acquired through a license or other right to use) other than those owned by the Company, setting forth in each case the jurisdictions in which the Issued Patents have been issued and Patent Applications have been filed, and the nature of the right, title or interest held by the Company. Except as set forth on Part 3.20(a)(i)(A) of the Seller Parties Disclosure Schedule, the Company has obtained a Patent with respect to each Product;

               (ii) Part 3.20(a)(ii)(A) of the Seller Parties Disclosure Schedule lists all of the Registered Trademarks owned by the Company, setting forth in each case the jurisdictions in which Registered Trademarks have been registered and trademark applications for registration

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have been filed. Part 3.20(a)(ii)(B) of the Seller Parties Disclosure Schedule lists all of the Registered Trademarks in which the Company has any right, title or interest, other than those owned by the Company (including without limitation interest acquired through a license or other right to use), setting forth in each case the jurisdictions in which Registered Trademarks have been registered and trademark applications for registration have been filed, and the nature of the right, title or interest held by the Company;

               (iii) Part 3.20(a)(iii)(A) of the Seller Parties Disclosure Schedule lists all of the Registered Copyrights owned by the Company, setting forth in each case the jurisdictions in which Copyrights have been registered and applications for copyright registration have been filed. Part 3.20(a)(iii)(B) of the Seller Parties Disclosure Schedule lists all of the Registered Copyrights in which the Company has any right, title or interest, other than those owned by the Company (including without limitation interest acquired through a license or other right to use), setting forth in each case the jurisdictions in which the Registered Copyrights have been registered and applications for copyright registration have been filed, and the nature of the right, title or interest held by the Company; and

               (iv) The Company has good and valid title to all of the Company Proprietary Rights identified in Parts 3.20(a)(i)(A), 3.20(a)(ii)(A) and 3.20(a)(iii)(A) of the Seller Parties Disclosure Schedule and all Trade Secrets owned by the Company, free and clear of all Encumbrances, except for Permitted Encumbrances. The Company has a valid right to use, license and otherwise exploit all Proprietary Rights identified in Parts 3.20(a)(i)(B), 3.20(a)(ii)(B), and 3.20(a)(iii)(B) of the Seller Parties Disclosure Schedule and all Trade Secrets used by the Company, other than those owned by the Company (including without limitation interest acquired through a license or other right to use). Except as set forth on Part 3.20(a)(iv) of the Seller Parties Disclosure Schedule, the Company Proprietary Rights identified in Part 3.20(a) of the Seller Parties Disclosure Schedule, together with the Trade Secrets used by the Company, constitutes (A) all Proprietary Rights used or proposed as of the Effective Date to be used in the business of the Company as conducted prior to or on the Effective Date or as proposed to be conducted by Company as of the Effective Date and (B) all Proprietary Rights necessary or appropriate to make, use, offer for sale, sell or import the Product(s).

          (b) Part 3.20(b) of the Seller Parties Disclosure Schedule lists all oral and written contracts, agreements, licenses and other arrangements relating to the Company Proprietary Rights or the Product(s), as follows:

               (i) Part 3.20(b)(i) lists: (A) any agreement granting any right to make, have made, manufacture, use, sell, offer to sell, import, export, or otherwise distribute any Product(s), with or without the right to sublicense the same, on an exclusive basis; (B) any license of Proprietary Rights to or from the Company, with or without the right to sublicense the same, on an exclusive basis; (C) joint development agreements; (D) any agreement by which the Company grants any ownership right to the Company Proprietary Rights owned by the Company; (E) any agreement under which the Company undertakes any ongoing royalty or payment obligations with respect to an Company Proprietary Right; (F) any agreement under which the Company grants an option relating to the Company Proprietary Rights; (G) any agreement under which any party is granted any right to access Company Source Code or to use Company Source Code to create derivative works of the Products; (H) any Agreement pursuant

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to which the Company has deposited or is required to deposit with an escrow agent or any other Person the Company Source Code, and further describes whether the execution of this Agreement or the consummation of any of the transactions contemplated hereby could reasonably be expected to result in the release or disclosure of the Company Source Code; and (I) any agreement or other arrangement limiting any of the Company’s ability to transact business in any market, field or geographical area or with any Person, or that restricts the use, transfer, delivery or licensing of Company Proprietary Rights (or any tangible embodiment thereof);

               (ii) Part 3.20(b)(ii) of the Seller Parties Disclosure Schedule lists all licenses, sublicenses and other agreements to which the Company is a party and pursuant to which the Company is authorized to use any Proprietary Rights owned by any Person, excluding standardized nonexclusive licenses for “off the shelf” or other software widely available through regular commercial distribution channels on standard terms and conditions and were obtained by the Company in the Ordinary Course of Business. Except as set forth in 3.20(b)(iii) of the Seller Parties Disclosure Schedule, there are no royalties, fees or other amounts payable by the Company to any Person by reason of the ownership, use, sale or disposition of Company Proprietary Rights;

               (iii) Except as set forth in Part 3.20(b)(iii) of the Seller Parties Disclosure Schedule, the Company has not entered into any written or oral contract, agreement, license or other arrangement to indemnify any other person against any charge of infringement of the Company Proprietary Rights, other than indemnification provisions contained in standard sales or agreements to customers or end users arising in the Ordinary Course of Business, the forms of which have been delivered to Purchaser or its counsel;

               (iv) Part 3.20(b)(iv) of the Seller Parties Disclosure Schedule lists any Product that contains any software that may be subject to an open source or general public license, a description of such Product and the open source or general public license applicable to such Product. Except as set forth in Part 3.20(b)(iv) of the Seller Parties Disclosure Schedule, none of the Products contains any software that may be subject to an open source or general public license; and

               (v) There are no outstanding obligations other than as disclosed in Part 3.20(b) of the Seller Parties Disclosure Schedule to pay any amounts or provide other consideration to any other Person in connection with the Company Proprietary Rights (or any tangible embodiment thereof).

          (c) Except as set forth in Part 3.20(c) of the Seller Parties Disclosure Schedule:

               (i) The Company does not jointly own, license or claim any right, title or interest with any other Person of the Company Proprietary Rights. No current or former officer, manager, director, stockholder, member, employee, consultant or independent contractor of the Company has any right, title or interest in, to or under the Company Proprietary Rights in which the Company has (or purports to have) any right, title or interest that has not been exclusively assigned, transferred or licensed to Company;

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               (ii) No Person has asserted or Threatened a claim, nor, to Sellers’ Knowledge, are there any facts which could give rise to a claim, which would adversely affect the Company’s ownership rights to, or rights under, the Company Proprietary Rights, or any contract, agreement, license or and other arrangement under which the Company claims any right, title or interest under the Company Proprietary Rights or restricts in any material respect the use, transfer, delivery or licensing by the Company of the Company Proprietary Rights or Products;

               (iii) The Company is not subject to any proceeding or outstanding decree, order, judgment or stipulation restricting in any manner the use, transfer or licensing of the Company Proprietary Rights by the Company, the use, transfer or licensing of any Product by the Company, or which may affect the validity, use or enforceability of the Company Proprietary Rights; and

               (iv) To Sellers’ Knowledge, no Company Proprietary Rights have been infringed or misappropriated by any Person and there is no unauthorized use, disclosure or misappropriation of the Company Proprietary Rights by any current or former officer, manager, director, stockholder, member, employee, consultant or independent contractor of the Company.

          (d) Except as set forth in Part 3.20(d) of the Seller Parties Disclosure Schedule:

               (i) all Patents in which the Company has any right, title or interest have been duly filed or registered (as applicable) with the applicable Governmental Body, and maintained, including the submission of all necessary filings and fees in accordance with the legal and administrative requirements of the appropriate Governmental Body, and have not lapsed, expired or been abandoned;

               (ii) (A) all Patents in which the Company has any right, title or interest, disclose patentable subject matter, have been prosecuted in good faith and are in good standing, (B) there are no inventorship challenges to any such Patents, (C) no interference has been declared or provoked relating to any such Patents, (D) all Issued Patents in which the Company has any right, title or interest are valid and enforceable, and (E) all maintenance and annual fees have been fully paid, and all fees paid during prosecution and after issuance of any patent have been paid in the correct entity status amounts, with respect to Issued Patents in which the Company has any right, title or interest;

               (iii) To Sellers’ Knowledge, there is no material fact with respect to any Patent Application in which the Company has any right, title or interest that would (A) preclude the issuance of an Issued Patent from such Patent Application (with valid claims no less broad in scope than the claims as currently pending in such Patent Application), (B) render any Issued Patent issuing from such Patent Application invalid or unenforceable, or (C) cause the claims included in such Patent Application to be narrowed; and

               (iv) No Person has asserted or Threatened a claim, nor, to Sellers’ Knowledge, are there any facts which could give rise to a claim, that the Product (or the

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Company Proprietary Right embodied in the Product) infringes or misappropriates any third party Proprietary Rights.

          (e) The Company has taken all commercially reasonable and customary measures and precautions necessary to protect and maintain the confidentiality of all Trade Secrets in which the Company has any right, title or interest and otherwise to maintain and protect the full value of all such Trade Secrets. Without limiting the generality of the foregoing, except as set forth in Part 3.20(e) of the Seller Parties Disclosure Schedule:

               (i) All current and former consultants and independent contractors to the Company or to any entity that assigned Company Proprietary Rights to the Company, including but not limited to Xpand, who are or were involved in, or who have contributed to, the creation or development of the Company Proprietary Rights have executed and delivered to the Company an agreement (containing no exceptions to or exclusions from the scope of its coverage) that is substantially identical to the form of Nondisclosure Agreement made available to Purchaser in the Data Room. Each current and former consultant or independent contractor of the Company is obligated to assist the Company with respect to the protection of the Company Proprietary Rights. No current or former employee, officer, director, stockholder, consultant or independent contractor to the Company has any right, claim or interest in or with respect to the Company Proprietary Rights; and

               (ii) Except as disclosed as required under Section 3.20(b)(i) above, the Company has not disclosed or delivered to any Person, or permitted the disclosure or delivery to any escrow agent or other Person, of the Company Source Code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or would reasonably be expected to, result in the disclosure or delivery to any Person of the Company Source Code.

          (f) Except with respect to demonstration or trial copies, no product, system, program or software module designed, developed, sold, licensed or otherwise made available by the Company to any Person, including without limitation the Product(s), contains any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” or other software routines or hardware components designed to permit unauthorized access or to disable or erase software, hardware or data without the consent of the user.

     3.21 Certain Payments. Neither the Company or any director, officer, agent, or employee of the Company, or any other Person associated with or acting for or on behalf of the Company, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services in violation of any Legal Requirement or (b) established or maintained any fund or asset that has not been recorded in the books and records of the Company.

     3.22 Authorizations; Regulatory Compliance. Part 3.22 of the Seller Parties Disclosure Schedule sets forth a complete list of all material approvals, clearances, authorizations, licenses or registrations required by any Governmental Body in the European Union or in the Netherlands having regulatory authority or jurisdiction over the Business and the

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Products, whether required of the Company or, to the Sellers’ Knowledge, required of any of its suppliers or manufacturers. Except as set forth on Part 3.22 of the Seller Parties Disclosure Schedule:

          (a) The Business and the Products are in compliance in all material respects with all current applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body having regulatory authority or jurisdiction over the Business and the Products.

          (b) The Company and, to Sellers’ Knowledge, its suppliers and manufacturers are in compliance in all material respects with all applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body, relating to the methods and materials used in, and the facilities and controls used for, the design, manufacture, processing, packaging, labeling, storage and distribution of the Products and all Products have been processed, manufactured, packaged, labeled, stored, handled and distributed by the Company in compliance with the quality control procedures and specifications made available by the Company to Purchaser in the Data Room and all applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body. Further, no action has been taken by any Governmental Body or, to Sellers’ Knowledge, is in the process of being taken that will slow, halt or enjoin the manufacturing of the Products or the operation of the Business or subject the manufacturing of the Products or the Business to regulatory enforcement action.

          (c) The Company has not received and, to Sellers’ Knowledge, its manufacturers or suppliers have not received from the FDA or any other Governmental Body, and to Sellers’ Knowledge, there are no facts which would furnish any reasonable basis for, any notice of adverse findings, FDA warning letters, regulatory letters, notices of violations, warning letters, Section 305 criminal proceeding notices under the FDCA or other similar communication from the FDA or other Governmental Body, and there have been no seizures conducted or, to Sellers’ Knowledge, Threatened by the FDA or other Governmental Body, and no recalls, market withdrawals, field notifications, notifications of misbranding or adulteration, or safety alerts conducted, requested or Threatened by the FDA or other Governmental Body relating to the Business or to the Products.

          (d) Except as set forth on Part 3.22(d) of the Seller Parties Disclosure Schedule, for each of the Products, no pre-market notification (“510(k)”) submission is required and no 510(k) submission has been filed with the FDA or any other Governmental Body on or prior to Closing Date.

          (e) To Sellers’ Knowledge, there are no currently existing facts that will (i) cause the withdrawal or recall, or require suspension or additional approvals or clearances, of any Products currently sold by the Company, (ii) require a change in the manufacturing, marketing classification, labeling or intended use of any such Products, or (iii) require the termination or suspension of marketing of any such Products.

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          (f) Except as set forth on Part 3.22 (f) of the Seller Parties Disclosure Schedule: (i) none of the Products manufactured, marketed or sold by the Company have been recalled or subject to a field safety notification (whether voluntarily or otherwise); (ii) to Sellers’ Knowledge, none of the Products manufactured, marketed or sold by the Company’s manufacturers and suppliers on the Company’s behalf has been recalled or subject to a field safety notification (whether voluntary or otherwise); and (iii) Seller Parties have not received written notice (whether completed or pending) of any proceeding seeking recall, suspension or seizure of any Products sold or proposed to be sold by the Company.

          (g) The Company has submitted to the FDA all Biological Product Deviation Reports relating to performance issues that could lead to serious injury or death that the Company has been required to submit under applicable federal statutes, rules, regulations, standards, guides or orders administered or promulgated by the FDA related to the Products. To Sellers’ Knowledge, except as set forth on Part 3.22(g) of the Seller Parties Disclosure Schedule, no circumstances have arisen that would require Company to submit a Biological Product Deviation Report to the FDA.

     3.23 Products; Product Liability.

          (a) Each of the Products (including all Finished Inventory): (i) is, and at all times up to and including the sale thereof has been processed, manufactured, packaged, labeled, stored, handled, distributed, shipped, marketed and promoted, and in all other respects has been, in compliance with all applicable laws, statutes, rules, regulations, ordinances or orders administered, issued or enforced by the FDA or any other governmental entity, and (ii) is, and at all relevant times has conformed in all material respects to all specifications and any promises, warranties or affirmations of fact made in all regulatory filings or set forth in any regulatory approvals, authorizations or clearances pertaining thereto or made on the container or label for such Product or in connection with its sale. There is no design or manufacturing defect with respect to the Products.

          (b) Part 3.23(b) of the Seller Parties Disclosure Schedule sets forth the forms of the Company’s service or product warranties that are currently applicable to services or merchandise related to the Business (including, without limitation, the Products). Except as set forth on Part 3.23(b) of the Seller Parties Disclosure Schedule, there are no existing or, to Sellers’ Knowledge, Threatened, claims against the Company for services or merchandise related to the Business which are defective or fail to meet any service or product warranties other than in the Ordinary Course of Business consistent with past experience. The Company has not incurred liability arising out of any injury to individuals as a result of the ownership, possession, or use of any Product and, to Sellers’ Knowledge, there has been no inquiry or investigation made in respect thereof by any Governmental Body.

     3.24 Customers and Suppliers. The Company does not currently have customers, nor has it ever had any customers prior to the Closing Date. Part 3.24 of the Seller Parties Disclosure Schedule identifies the Business’ ten (10) largest suppliers (measured by euro volume in each case) during the period from the formation of the Company through December 31, 2008, showing with respect to each, the name and address, euro volume and nature of the relationship. The Company is not required to provide any bonding or other financial security arrangements in

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connection with any of the transactions with its suppliers. Seller Parties have not received any communication of any intention of any supplier identified on Part 3.24 of the Seller Parties Disclosure Schedule to discontinue its relationship as a supplier of, or materially reduce its sales to the Company (or, post- Closing, from or to Purchaser).

     3.25 Capital Expenditures. Set forth on Part 3.25 of the Seller Parties Disclosure Schedule is a list of the Company’s approved capital expenditure projects related to the Business including: (i) projects which have been commenced but are not yet completed; (ii) projects which have not been commenced; and (iii) projects which have been completed in respect of which payment has been made, since the formation of the Company.

     3.26 Relationships with Affiliates. Neither Sellers nor, to Sellers’ Knowledge, any Affiliate of any Seller has or had any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Company’s businesses. Neither Sellers nor, to Sellers’ Knowledge, any Affiliate of any Seller owns or has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with the Company, or (ii) engaged in competition with the Company with respect to any line of the products or services of the Company in any market presently served by the Company. Except as set forth in Part 3.26 of the Seller Parties Disclosure Schedule, neither Seller nor, to Sellers’ Knowledge, any Affiliate of Sellers is a party to any Contract with, or has any claim or right against, the Company.

     3.27 Brokers. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission in connection with the Contemplated Transactions based upon arrangements made by or on behalf of the Company.

     3.28 Disclosure. Except as set forth in Part 3.28 of the Seller Parties Disclosure Schedule:

          (a) No representation or warranty of Seller Parties in this Agreement and no statement in the Disclosure Schedule omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

          (b) There is no fact known to Seller Parties that has specific application to Seller Parties (other than general economic or industry conditions) and that materially adversely affects or, as far as Seller Parties can reasonably foresee, materially Threatens, the assets, business, prospects, financial condition, or results of operations of the Company (on a consolidated basis) that has not been set forth in this Agreement or the Seller Parties Disclosure Schedule.

4. REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Seller Parties as follows:

     4.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Purchaser has

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full corporate power and authority to execute and deliver this Agreement and the Closing Documents, to perform its obligations hereunder and thereunder and to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use. Purchaser is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except whether the failure to do so would not have a material adverse effect on Purchaser’s ability to perform its obligations hereunder.

     4.2 Authority; No Conflict.

          (a) This Agreement and the Closing Documents have been authorized by Purchaser’s board of directors and, to the extent required, the stockholders of Purchaser. This Agreement constitutes the legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles. Upon the execution and delivery by Purchaser of the Closing Documents, the Closing Documents will constitute the legal, valid, and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, enforceable against Purchaser in accordance with their respective terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

          (b) Except as set forth in Part 4.2 of the Purchaser Disclosure Schedule, or as would not have a material adverse effect on Purchaser’s ability to perform its obligations hereunder, neither the execution and delivery of this Agreement by Purchaser nor the consummation or performance of any of the Contemplated Transactions by Purchaser will directly or indirectly (with or without notice or lapse of time):

               (i) contravene, conflict with or result in a violation of (A) any provision of Purchaser’s Organizational Documents or (B) any resolution adopted by the board of directors or the stockholders of Purchaser; or

               (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or Order to which Purchaser, or any of the assets owned or used by Purchaser, may be subject.

Except as set forth in Part 4.2 of the Purchaser Disclosure Schedule, Purchaser is not and will not be required to obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

     4.3 Certain Proceedings. There is no Action or Proceeding pending or, to the knowledge of Purchaser, Threatened in writing, against or affecting Purchaser that could reasonably be expected to affect Purchaser’s ability to challenge, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with the consummation of the

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Contemplated Transactions. To Purchaser’s knowledge, no such Proceeding has been Threatened.

     4.4 Brokers. Purchaser and its officers and agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement and will indemnify and hold Sellers harmless from any such payment alleged to be due by or through Purchaser as a result of the action of Purchaser or its officers or agents.

     4.5 No Other Representations. Purchaser acknowledges that the Company does not make any representation or warranty with respect to any projections, estimates or budgets delivered to or made available to Purchaser of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company or the future business and operations of the Company.

5. CONDUCT OF BUSINESS DURING THE OPTION PERIOD

     5.1 Conduct of Business of the Company. The Company covenants and agrees that, during the period beginning on the date hereof and ending on the termination or expiration of the Option Period (as set forth in the Option Purchase Agreement), unless the Supervisory Board of Directors (including the director designated by Purchaser) shall approve or the Purchaser Representative (as defined below) shall otherwise consent in writing, the business of the Company shall be conducted only in, and the Company shall not take any action except in, the Ordinary Course of Business and in a manner consistent with past practice; and the Company shall use commercially reasonable efforts to preserve intact its business organization and to preserve the current relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. Without limiting the foregoing, the Company shall not do, or enter into any agreement or understanding to do, any of the following prior to the expiration or termination of the Option Period without providing notice of such to a designated representative of Purchaser (the “Purchaser Representative”) and obtaining the approval of the Supervisory Board of Directors (including the director designated by Purchaser) or the prior written consent of Purchaser Representative. The Purchaser Representative shall use commercially reasonable efforts to respond to such request for written consent within five (5) Business Days of Purchaser’s receipt of the Company’s notice. The Purchaser Representative shall initially be Jason Hannon, who shall serve until Purchaser designates another individual upon two (2) Business Days prior written notice to the Company in accordance with Section 9.2 hereof. Each of the clauses below shall constitute an independent obligation of the Company, not qualified by any other such clause, and shall be deemed to be cumulative:

          (a) Organizational Documents. Cause or permit any amendments to its Articles of Association or other organizational documents to the extent such amendment would reasonably be expected to adversely affect the Purchaser.

          (b) Dividends; Repurchases; Changes in Capital Stock. Except as otherwise specifically contemplated in this Agreement (i) declare or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, (ii) issue or authorize the issuance of any other securities in respect of, in lieu of or in

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substitution for shares of its outstanding capital stock, or (iii) repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock (other than pursuant to repurchase rights of the Company that permit the Company to repurchase securities from the holders thereof at the original purchase price therefor in connection with the termination of services of such holder as an employee of or consultant to the Company);

          (c) Stock Option Plans, Warrants, Etc. Grant any options, warrants or other rights to directly or indirectly acquire shares of capital stock of the Company;

          (d) Material Contracts. Enter into any Material Contract or commitment, or violate, amend or otherwise modify or waive (other than in the Ordinary Course of Business) any of the terms of any Material Contract other than Contracts that are entered into in the Ordinary Course of Business;

          (e) Issuance of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or securities or other instruments (including notes or other evidences of Indebtedness) convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or other convertible instruments or securities;

          (f) Company Proprietary Rights. Other than pursuant to the Distribution Agreement or the sale of the Company’s inventory in the Ordinary Course of Business:

               (i) (A) sell, license, assign or transfer any Company Proprietary Rights or other properties or assets which are material, individually or in the aggregate, when taken as a whole, to any other person other than Purchaser, or (B) except for Permitted Encumbrances, encumber any Company Proprietary Rights; or

               (ii) License, or otherwise acquire, any Company Proprietary Rights not owned by the Company or Purchaser from any third party on terms requiring any royalty payments;

          (g) Marketing or Other Rights. Except with the consent of Purchaser, such consent not to be unreasonably withheld, enter into or amend, in any material respect, any agreement pursuant to which any other party is granted manufacturing, marketing or other development or distribution rights of any type or scope with respect to any of the Company’s products or technology;

          (h) Indebtedness. Except for Indebtedness incurred pursuant to the Facility Agreement and trade payables incurred and paid in the Ordinary Course of Business, incur any Indebtedness or guarantee any such Indebtedness or issue or sell any debt securities or guarantee any debt securities of others;

          (i) Repayment of Indebtedness. Except for Indebtedness repaid pursuant to the Facility Agreement, repay in cash or repurchase for cash any Indebtedness to any Affiliate of the Company, or any securities representing Indebtedness convertible into capital stock of the Company;

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          (j) Leases. Enter into any operating lease with an annual commitment in excess of €10,000;

          (k) Insurance. Materially reduce the amount of any material insurance coverage provided by insurance policies in effect on the Effective Date;

          (l) Termination or Waiver. Terminate or waive any right that has material value to the Company, other than in the Ordinary Course of Business;

          (m) Employee Benefit Plans; New Hires; Pay Increases. Adopt or amend any employee benefit plan or arrangement, pay any special bonuses or special remuneration to any employee or director (other than pre-existing obligations) which in the aggregate exceed 20% of the Company’s then-current annual aggregate salary obligation, or, except in the Ordinary Course of Business consistent with past practices, increase the salaries, bonuses or wage rates of its employees;

          (n) Severance Arrangements. Adopt or approve any severance, bonus or benefit acceleration arrangements (whether individually or more broadly) that could be triggered after the consummation of the Acquisition;

          (o) Lawsuits. Commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where it in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that it consults with Purchaser prior to the filing of such a suit, or (iii) against Purchaser with respect to this Agreement or the Closing Documents;

          (p) Acquisitions. Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets or capital stock of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof which are material, individually or in the aggregate, to the Company’s business, taken as a whole;

          (q) Taxes. Make or change any election in respect of Taxes, adopt or request permission of any Taxation Authority to change any accounting method in respect of Taxes, enter into any closing agreement in respect of Taxes, settle any claim or assessment in respect of Taxes, surrender or allow to expire any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or take (or permit any Subsidiary to take) any such actions with respect to any Subsidiary;

          (r) Other Transactions. Except for an Acquisition pursuant to the Option Purchase Agreement, merge or consolidate with any entity, or liquidate, dissolve or effect a recapitalization or reorganization in any form of transaction;

          (s) Proprietary Inventions Agreements. Hire or employ, any employee or consultant having access to confidential or proprietary information of the Company unless such employee or consultant enters into, or has entered into, a proprietary information and inventions agreement or a confidentiality agreement, with the Company in the form of Exhibit E attached

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hereto, or amend or otherwise modify, or grant a waiver under, any such confidentiality or proprietary information agreement with any such person;

          (t) Related Party Transactions. Enter into any transaction with any director, officer, employee, significant stockholder or family member of or consultant to any such person, corporation or other entity of which any such person beneficially owns 10% or more of the equity interests or has 10% or more of the voting power, or Subsidiary or Affiliate of the Company, except (i) as approved by a majority of the disinterested directors of the Company on terms and conditions which are fair and reasonable to the Company and no less favorable to the Company as could be obtained from a third party on an arms-length basis and (ii) transactions with Purchaser;

          (u) Principal Business. Engage in any business other than the Business;

          (v) Other Activities. Knowingly engage in any other activity which could reasonably be expected to (i) materially impair the ability of Purchaser to exercise its Call Option (as defined in the Option Purchase Agreement) or (ii) materially impair the ability of Purchaser or the Company to consummate the Acquisition; or

          (w) Subsidiaries. Permit any Subsidiary of the Company to take any action from which the Company would be prohibited pursuant to this Section 5.1.

     5.2 Clinical Trials. From time to time and at the reasonable request of Purchaser, the Company shall provide Purchaser with updates concerning the progress of and developments in and results of the Company’s clinical trials. In addition, the Company shall (a) invite Purchaser to participate in all meetings with clinical investigators, (b) make available to Purchaser copies of all written communication provided to and from such investigators, and (c) make available to Purchasers copies of any interim data and data analysis generated with respect to its clinical trials. At least thirty (30) days prior to finalizing such protocols or delivering drafts or copies thereof to institutional review boards or regulatory authorities, selecting such clinical investigators and engaging in such clinical trials, the Company shall furnish to Purchaser for its review and comment and shall consult with Purchaser regarding, (i) clinical trial protocols, (ii) lists of clinical investigators, (iii) copies of all forms of clinical investigator contracts, and (iv) patient data forms for any of its proposed clinical trials. All information obtained by Purchaser pursuant to this Section 5.2 shall be kept confidential in accordance with Section 6.3 of this Agreement to the extent it constitutes “Confidential Information” thereunder.

     5.3 FDA Approval Matters.

     (a) The Company shall notify Purchaser of any material communications with the FDA or any corollary entity in any other jurisdiction, including outside of the United States of America, or any other Governmental Body, whether written or oral, as soon as reasonably practicable, but in no event later than five (5) Business Days after the receipt of such communication, and within such same time period, the Company shall provide Purchaser with copies of any such written communications and written summaries of any such oral communications.

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     (b) From time to time and at the reasonable request of Purchaser, the Company shall provide Purchaser with updates concerning the progress of the Company’s regulatory filings and strategy for obtaining necessary regulatory approvals to market and sell the products of the Company. The Company shall furnish to Purchaser for its review and comment, and shall consult with Purchaser regarding, any material regulatory filing prior to finalizing such filings and delivering them to the relevant regulatory authorities.

     5.4 Payment of Taxes, Etc. The Company shall, and shall cause each of its Subsidiaries to, timely file all of its Tax Returns as they become due (taking all timely filed proper extension requests into account), all such Tax Returns to be true, correct and complete, and the Company shall, and shall cause each of its Subsidiaries to, timely pay and discharge as they become due and payable all Taxes (other than Taxes contested in good faith by the Company or its Subsidiaries in appropriate proceedings), assessments and other governmental charges or levies imposed upon it or its income or any of its property as well as all claims of any kind (including claims for labor, materials and supplies) that, if unpaid, may by law become an Encumbrance, other than a Permitted Encumbrance.

6. ADDITIONAL AGREEMENTS

     6.1 Access to Properties and Information. At all times until the earlier of (i) the expiration of the Option Period and (ii) the consummation of the Acquisition, the Company will afford to Purchaser and its authorized representatives, upon reasonable notice, reasonable access during normal business hours to all properties, books, records, contracts and documents of the Company as Purchaser and such authorized representatives may reasonably request and a complete opportunity to make such investigations as Purchaser and such authorized representatives reasonably request, and the Company will furnish or cause to be furnished to Purchaser and its authorized representatives all such information with respect to the affairs and businesses of the Company as they may reasonably request. All information obtained by Purchaser pursuant to this Section 6.1 shall be kept confidential in accordance with Section 6.3 of this Agreement to the extent it constitutes “Confidential Information” thereunder. No investigation pursuant to this Section 6.1 shall affect any representation or warranty in this Agreement or the Closing Documents of any party hereto or thereto or any condition to the obligations of the parties hereto or thereto.

     6.2 Notification of Certain Matters. Each of the parties to this Agreement shall give prompt notice to the other parties of the occurrence or non-occurrence of any event which would likely cause any representation or warranty made by such party herein to be untrue or inaccurate or any covenant, condition or agreement contained herein not to be complied with or satisfied (provided, however, that, any such disclosure shall not in any way be deemed to amend, modify or in any way affect the representations, warranties and covenants made by any party in or pursuant to this Agreement).

     6.3 Confidentiality; Publicity. Except as may be required by law or as otherwise permitted or expressly contemplated herein, no party hereto or their respective Affiliates, employees, agents and representatives shall disclose to any third party this Agreement, the subject matter or terms hereof or (except with regard to disclosures by Purchaser of confidential information of the Company following the Closing) any confidential information or other

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proprietary knowledge concerning the business or affairs of any other party (“Confidential Information”) which it may have acquired from such party in the course of pursuing the transactions contemplated by this Agreement without the prior consent of the other parties hereto; provided, that any information that is otherwise publicly available, without breach of this provision, or has been obtained from a third party without a breach of such third party’s duties, shall not be deemed confidential information. No press release or other public announcement related to this Agreement or the transactions contemplated hereby shall be issued by any party without the prior written consent of the other parties hereto.

     6.4 Use of Proceeds from the Facility. Unless set forth in the Operating Budget or otherwise approved by Board of Directors (including the director designated by Purchaser), the proceeds from the Facility Agreement may only be used (a) to fund development of the Company Proprietary Rights for purposes of achieving the Milestones (as defined in the Option Purchase Agreement), or (b) for purposes of fulfilling its obligations under the Distribution Agreement (as defined below).

     6.5 Monthly and Quarterly Statements. For so long as Purchaser owns at least twenty percent (20%) of the outstanding capital stock of the Company on a fully-diluted basis, (a) within four (4) Business Days of the end of each month, the Company agrees to prepare and furnish to Purchaser (by mail, facsimile or e-mail) unaudited Financial Statements for the applicable month, and (b) within four (4) Business Days of the end of each quarter, the Company agrees to prepare and furnish to Purchaser (by mail, facsimile or e-mail) unaudited Financial Statements for the applicable quarter. The Financial Statements shall fairly present in all material respects, in conformity with GAAP, the financial condition and the results of operations, changes in stockholders’ equity, and cash flow of the Company as at the respective dates of and for the periods referred to in the Financial Statements. The Financial Statements shall reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such Financial Statements. In the event the Company fails to deliver monthly or quarterly unaudited Financial Statements to Purchaser on a timely basis, the Company shall pay to Purchaser $10,000 for each Business Day that such statement is not provided to Purchaser past the applicable deadline.

     6.6 Audits. Upon the request of Purchaser, on an annual basis, the Company shall have a third party auditor of a nationally recognized certified public accounting firm conduct an audit in accordance with GAAP and shall conduct a review of its internal controls in accordance with the requirements set forth under Section 404 of the Sarbanes-Oxley Act, as amended.

     6.7 Recapitalization. Immediately upon receiving a declaration of no-objection from the Dutch Ministry of Justice with respect to the Amended Articles, the Company shall instruct the Notary to execute the notarial deed of amendment, as a result of which, the Recapitalization shall be effected. The shares issued to Purchaser as part of the Recapitalization shall be free and clear of all Encumbrances.

7. INDEMNIFICATION; REMEDIES

     7.1 Survival; Right to Indemnification Not Affected by Knowledge. All representations and warranties of Purchaser and Seller Parties contained herein or in any other

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Closing Document or document, certificate or other instrument required to be delivered hereunder or thereunder in connection with the transactions contemplated hereby shall survive the Closing and shall continue until *** after the Closing (the “Survival Period”), provided that (a) the representations and warranties set forth in *** , shall survive until sixty (60) days after the expiration of the applicable statutes of limitations (including any extensions or waivers thereof) and (b) the representations and warranties set forth in *** shall survive indefinitely ((a) and (b), together, the “Fundamental Representations”); provided, further, that to the extent any written claim for indemnification is made prior to the expiration date of the representations and warranties on which any such claim for indemnification is based, the expiration of such representations and warranties shall not affect the right of any Indemnified Person to seek indemnification for Damages in respect of such claim pursuant to Section 7 hereof. The right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations. Notwithstanding the Survival Period, Purchaser’s rights to indemnification under the Option Purchase Agreement shall not be affected in the event that a claim for indemnification has been made prior to the expiration of the Survival Period under the Option Purchase Agreement (in accordance with the terms and conditions set forth therein).

     7.2 Indemnification and Payment of Damages by Sellers.

          (a) Each Seller, severally but not jointly, shall indemnify and hold harmless Purchaser, the Company, and their respective Representatives, stockholders, controlling persons, and affiliates (collectively, the “Purchaser Indemnified Persons”) from and against and shall pay to the relevant Purchaser Indemnified Persons the amount of any and all losses, liabilities, claims, damages (excluding incidental, punitive and consequential damages), deficiencies, judgments, fines, penalties, fees, costs and expenses (including costs of investigation and defense and reasonable attorneys’ fees) and diminutions in value of the Product(s), whether or not involving a third-party claim (collectively, “Damages”), incurred by such Purchaser Indemnified Person arising directly or indirectly from or in connection with any breach of any representation or warranty of such Seller contained in Section 2 hereof or any covenant or obligation of such Seller in this Agreement.

          (b) Each Seller, severally but not jointly, will indemnify and hold harmless the Purchaser Indemnified Persons for, and will pay to the applicable Purchaser Indemnified Persons the amount of any Damages arising, directly or indirectly, from or in connection with:

               (i) any Breach of any representation or warranty made by the Company under Section 3 hereof;

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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               (ii) any Breach of any representation or warranty made by the Company with respect to any certificate or other document delivered by the Company pursuant to this Agreement; or

               (iii) any Breach by the Company of any covenant or obligation of the Company in this Agreement.

               (iv) Notwithstanding the foregoing, at the election of a Purchaser Indemnified Person, in its sole discretion (but subject to the provisions of this Section 7), to the extent that any Purchaser Indemnified Person is (or may be) entitled to be indemnified by any Seller for Damages hereunder, a Purchaser Indemnified Person shall be entitled (without limiting any other remedy available to such Purchaser Indemnified Person) to recover such Damages by set off against any amounts owed to such Seller under the Option Purchase Agreement; provided, that to the extent the amount so set-off exceeds the amount of Damages for which it is finally determined that such Purchaser Indemnified Person is entitled to be indemnified, promptly following such final determination, Purchaser shall remit such excess to such Seller. The remedies provided in this Section 7.2 will not be exclusive of or limit any other remedies that may be available to the Purchaser Indemnified Persons under this Section 7.

     7.3 Indemnification and Payment of Damages by Purchaser. Purchaser will indemnify and hold harmless Sellers and their respective Representatives, stockholders, controlling persons and affiliates (collectively, the “Seller Indemnified Persons” and, together with the Purchaser Indemnified Persons, the “Indemnified Persons”), and will pay to Seller Indemnified Persons the amount of any Damages arising, directly or indirectly, from or in connection with (a) any Breach of any representation or warranty made by Purchaser in this Agreement or in any certificate delivered by Purchaser pursuant to this Agreement, (b) any Breach by Purchaser of any covenant or obligation of Purchaser in this Agreement, or (c) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Purchaser (or any Person acting on its behalf) in connection with any of the Contemplated Transactions.

     7.4 Limitations on Indemnification.

          (a) No claim shall be made unless, and only to the extent that, the cumulative amount of Damages incurred buy the Indemnified Persons exceeds *** (the “Basket”), and upon exceeding such amount, the Indemnified Persons shall be entitled to be indemnified for all Damages (including all Damages below such amount).

          (b) Notwithstanding anything to the contrary set forth in this Agreement, the total Damages payable by the Sellers pursuant to Section 7.2 shall not exceed *** (the “Cap”), except to the extent (i) such Damages are due to fraud or intentional misrepresentation of any of the Sellers, or (ii) such Damages are due to a breach of a Fundamental Representation; provided, however, that in no event shall the aggregate amount of Damages recoverable from any Seller pursuant to Section 7.2 exceed *** .

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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          (c) Notwithstanding anything to the contrary set forth in this Agreement, the total Damages payable by Purchaser pursuant to Section 7.3 shall not exceed the Cap, except to the extent (i) such Damages are due to fraud or intentional misrepresentation of any of the Purchaser, or (ii) such Damages are due to a breach of a Fundamental Representation.

          (d) Neither the Sellers nor Purchaser shall have any liability under any provision of this Agreement for any multiple of damages or diminution in value, other than for diminution in value of the Product(s).

     7.5 Procedure for Indemnification—Third Party Claims.

          (a) Promptly after receipt by an Indemnified Person under Section 7.2 or Section 7.3 of notice of the commencement of any Proceeding against it, such Indemnified Person will, if a claim is to be made against an Indemnifying Person under such Section, give notice to the Indemnifying Person of the commencement of such claim, but the failure to notify the Indemnifying Person will not relieve the Indemnifying Person of any liability that it may have to any Indemnified Person, except to the extent that the Indemnifying Person demonstrates that the defense of such action is prejudiced by the Indemnified Person’s failure to give such notice.

          (b) If any Proceeding referred to in Section 7.5(a) is brought against an Indemnified Person and it gives notice to the party from which such Indemnified Person is entitled to receive indemnification (an “Indemnifying Person”) of the commencement of such Proceeding, the Indemnifying Person will be entitled to participate in such Proceeding and, to the extent that it wishes (unless (i) the Indemnifying Person is also a party to such Proceeding and the Indemnified Person determines in good faith that joint representation would be inappropriate, or (ii) the Indemnifying Person fails to provide reasonable assurance to the Indemnified Person of its financial capacity to defend such Proceeding and provide indemnification with respect to such Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the Indemnified Person and, after notice from the Indemnifying Person to the Indemnified Person of its election to assume the defense of such Proceeding, the Indemnifying Person will not, as long as it diligently conducts such defense, be liable to the Indemnified Person under this Section 7 for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the Indemnified Person in connection with the defense of such Proceeding, other than reasonable costs of investigation. If the Indemnifying Person assumes the defense of a Proceeding: (i) it will be conclusively established for purposes of this Agreement that the claims made in that Proceeding are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be effected by the Indemnifying Person without the Indemnified Person’s consent unless (A) there is no finding or admission of any violation of Legal Requirements or any violation of the rights of any Person, provided such settlement or compromise would not materially and adversely prejudice the business or other commercial interests of the Indemnified Person, and (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Person; and (iii) the Indemnified Person will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an Indemnifying Person of the commencement of any Proceeding and the Indemnifying Person does not, within ten (10) days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its

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election to assume the defense of such Proceeding, the Indemnifying Person will be bound by any determination made in such Proceeding or any compromise or settlement effected by the Indemnified Person if it is ultimately determined that the Indemnified Person is entitled to indemnification.

          (c) Notwithstanding the foregoing, if an Indemnified Person determines in good faith that there is a reasonable probability that a Proceeding may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnified Person may, by notice to the Indemnifying Person, assume the exclusive right to defend, compromise, or settle such Proceeding, but the Indemnifying Person will not be bound by any determination of a Proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld).

          (d) Each Seller hereby consents to the non-exclusive jurisdiction of any court in which a Proceeding is brought against any indemnified party for purposes of any claim that an Indemnified Person may have under this Agreement with respect to such Proceeding or the matters alleged therein, and agrees that process may be served on Sellers with respect to such a claim anywhere in the world.

     7.6 Procedure for Indemnification—Other Claims. A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the party from whom indemnification is sought.

     7.7 Remedies Exclusive. Except in the event of fraud or willful misconduct (in which case the defrauded party shall have all rights and remedies available under this Agreement and available under the law against the party that committed such fraud or willful misconduct), the remedies provided in this Section 7 shall be the exclusive remedies of the parties hereto and their heirs, Affiliates, successors, and assigns after the Closing with respect to the representations and warranties set forth in this Agreement. Except as set forth in this Section 7.7, no party may bring or commence any Proceeding with respect to the representations and warranties set forth in this Agreement, whether in contract, tort or otherwise, except to bring a claim for (a) fraud or willful misconduct against the party that committed such fraud or willful misconduct and (b) indemnification in accordance with Section 7. Notwithstanding the foregoing, nothing contained in this Agreement shall limit the rights of any party hereto to seek or obtain injunctive relief or other equitable remedies to which such party may otherwise be entitled. The provisions of this Section 7 constitute an integral part of the consideration given pursuant to this Agreement and were specifically bargained for and reflected in the total amount of the Purchase Price payable to the Sellers.

8. CLOSING DELIVERABLES.

     8.1 Closing Deliverables of the Company. At or prior to the Closing Date, the Company shall deliver to Purchaser the following:

          (a) Amended Articles of Association. Evidence of filing the declaration of no-objection for the Amended Articles with the Dutch Ministry of Justice establishing the rights,

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preferences and privileges of the Series B Preferred Stock and executed powers of attorney and shareholder resolutions authorizing the Notary to execute the notarial deed of amendment upon receipt of the declaration of no-objection from the Dutch Ministry of Justice.

          (b) Government Approvals. All approvals from any applicable Governmental Body necessary to consummate the transactions contemplated hereby, with exception of the declaration of no-objection with respect to the Amended Articles from the Dutch Ministry of Justice.

          (c) Third Party Consents. All written consents, approvals, waivers, notices or similar authorizations required to be obtained or given by the Company in order to consummate the transactions contemplated hereby, in form and substance reasonably satisfactory to Purchaser.

          (d) Certificate of Statutory Director. The following documents, certified as of the Closing Date by the Company’s Statutory Director as being the true, correct and complete documents of the Company:

               (i) a copy of the articles of association of the Company as in effect immediately prior to the Closing Date;

               (ii) copies of resolutions adopted by the Board of Directors and shareholders of the Company authorizing the transactions contemplated by this Agreement; and

               (iii) the shareholders’ register of the Company.

          (e) Legal Opinion. An opinion, dated as of the Closing Date, from counsel for the Seller Parties, opining as to the matters set forth in Exhibit F.

          (f) Option Purchase Agreement. The Option Purchase Agreement duly executed by the Sellers and an authorized officer of the Company.

          (g) Distribution Agreement. The Distribution Agreement in the form attached hereto as Exhibit G (the “Distribution Agreement”) dated as of the Closing Date and duly executed by an authorized officer of Company.

          (h) Revos License Agreement. The Revos License Agreement in the form attached hereto as Exhibit H (the “Revos License Agreement”) dated as of the Closing Date and duly executed by an authorized officer of Company.

          (i) Facility Agreement. The Facility Agreement, duly executed by an authorized officer of the Company.

          (j) Pledge Agreement. The Pledge Agreement, dated as of the Closing Date, by and between Purchaser and Company, in the form attached hereto as Exhibit I (the “Pledge Agreement”), duly executed by an authorized officer of the Company.

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          (k) Shareholders’ Agreement. The Amended and Restated Shareholders’ Agreement in the form attached hereto as Exhibit J (the “Shareholders’ Agreement”) dated as of the Closing Date and duly executed by the Sellers and an authorized officer of the Company

          (l) Founders’ Non-Competition Agreements. The Founders’ Non-Competition Agreements in the forms attached hereto as Exhibit K and Exhibit L (each, a “Founders’ Non-Competition Agreement”) dated as of the Closing Date and duly executed by each of Joost D de Bruijn and Clemens van Blitterswijk respectively.

          (m) Investor Non-Competition Agreement. The Investor Non-Competition Agreement in the form attached hereto as Exhibit M (the “Investor Non-Competition Agreement”) dated as of the Closing Date and duly executed by Edward van Wezel.

          (n) Estimated Closing Certificate. A certificate of the Statutory Director of the Company, prepared to the reasonable satisfaction of Purchaser (the “Estimated Closing Certificate”) setting forth the Company’s good faith estimate of the aggregate amount of all legal, financial advisory, investment banking and other fees and expenses incurred by or on behalf of the Sellers or the Company in connection with the negotiation, preparation and execution of this Agreement, the Closing Documents and the Contemplated Transactions (the “Seller Funded Expenses”), to the extent that such Seller Funded Expenses will not be paid prior to the close of business on the Business Day immediately preceding the Closing Date (the amounts set forth on the Estimated Closing Certificate with respect to the Seller Funded Expenses shall be conclusive for the purposes, absent manifest error).

     8.2 Closing Deliverables of the Purchaser. At or prior to the Closing Date, the Purchaser shall deliver to the Company the following:

          (a) Government Approvals. All approvals from any applicable Governmental Body necessary to consummate the transactions contemplated hereby.

          (b) Third Party Consents. All written consents, approvals, waivers, notices or similar authorizations required to be obtained or given by the Purchaser in order to consummate the transactions contemplated hereby, in form and substance reasonably satisfactory to Company.

          (c) Secretary’s Certificate. The following documents, certified as of the Closing Date by the Secretary of the Purchaser as being the true, correct and complete documents of the Purchaser:

               (i) copies of the certificate of incorporation and bylaws of the Purchaser as in effect immediately prior to the Closing Date;

               (ii) copies of resolutions adopted by the board of directors and shareholders of the Purchaser authorizing the transactions contemplated by this Agreement; and

               (iii) certified good standing certificates, or certificates of compliance, relating to the Purchaser and each subsidiary, dated within five (5) Business Days of the Closing Date, issued by the State of Delaware and the jurisdiction of formation of each Subsidiary.

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          (d) Option Purchase Agreement. The Option Purchase Agreement dated as of the Closing Date and duly executed by an authorized officer of the Purchaser.

          (e) Distribution Agreement. The Distribution Agreement dated as of the Closing Date and duly executed by an authorized officer of Purchaser.

          (f) Revos License Agreement. The Revos License Agreement dated as of the Closing Date and duly executed by an authorized officer of Purchaser.

          (g) Facility Agreement. The Facility Agreement, duly executed by an authorized officer of Purchaser.

          (h) Shareholders’ Agreement. The Shareholders’ Agreement, duly executed by an authorized officer of Purchaser.

          (i) Notarial Deed. Confirmation from the Notary that he has received the amount due pursuant to Section 1.1(a).

     8.3 Closing Deliverables of the Parties. At or prior to the Closing Date, the parties shall execute the notarial deed of transfer of the Initial Shares substantially in the form of Exhibit D.

9. GENERAL PROVISIONS

     9.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants.

     9.2 Notices. All notices, Consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when: (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); or (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment confirmed with a copy delivered as provided in clause (a), in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties):

          If to Purchaser, addressed to:

NuVasive, Inc.
7473 Lusk Boulevard
San Diego, California 92121
Attn: General Counsel
Fax: (858) 909-2479

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          With a copy to:

DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Attn: Michael Kagnoff
Fax: (858) 456-3075

          If to Seller Parties, addressed to:

Progentix Orthobiology BV
Professor Bronkhorstlaan 10, building 48
3723 MB Bilthoven
The Netherlands
Attention: Joost de Bruijn
Fax: +31 (0)30 229 7299

          With a copy to:

Goodwin Procter llp
Exchange Place
53 State Streeet
Boston, MA 02109
Attn: Michael H. Bison, Esq.
Fax: (617) 523-1231

and

CORP. advocaten
De Lairessestraat 137-143
1075 HJ Amsterdam
Attention: Edwin Renes
Fax: + 31 (0)20 578 83 05

     9.3 Jurisdiction; Service of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the United States District Court for the Southern District of New York or the state courts located in New York, New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

     9.4 Dispute Resolution.

          (a) Any dispute arising out of or relating to this Agreement or the breach, termination or validity hereof shall be finally settled by arbitration conducted expeditiously in accordance with the Center for Public Resources Rules for Nonadministered Arbitration of Business Disputes (the “CPR Rules”). The Center for Public Resources shall appoint a neutral

39

advisor from its National CPR Panel. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be New York, New York.

          (b) Such proceedings shall be administered by the neutral advisor in accordance with the CPR Rules as he/she deems appropriate, however, such proceedings shall be guided by the following agreed upon procedures:

               (i) mandatory exchange of all relevant documents, to be accomplished within forty-five (45) days of the initiation of the procedure;

               (ii) no other discovery;

               (iii) hearings before the neutral advisor which shall not exceed three hours; such hearings to take place in one or two days at a maximum; and

               (iv) decision to be rendered not later than ten (10) days following such hearings.

          (c) Each of Purchaser, the Company and the Sellers (i) hereby unconditionally and irrevocably submits to the jurisdiction of the United States District Court for the Southern District of New York, for the purpose of enforcing the award or decision in any such proceeding and (ii) hereby waives, and agrees not to assert in any civil action to enforce the award, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that the civil action is brought in an inconvenient forum, that the venue of the civil action is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (iii) hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an enforcement of the judgment of any such court. Each of Purchaser, the Company and Sellers hereby consents to service of process by registered mail at the address to which notices are to be given. Each of Purchaser, the Company and the Sellers agrees that its submission to jurisdiction and its consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment against Purchaser, the Company or the Sellers in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction; provided, however, that any party may at its option bring suit, or institute other judicial proceedings, in any state or federal court of the United States or of any country or place where the other parties or their assets, may be found.

     9.5 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law: (a) no claim or right arising out of this Agreement or the documents referred to in

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this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

     9.6 Entire Agreement and Modification. This Agreement, along with the Option Purchase Agreement, supersedes all prior agreements between the parties with respect to its subject matter (including the Non-Binding Letter of Intent between Purchaser and the Company dated November 28, 2008 and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by Purchaser and Seller Parties.

     9.7 Assignments, Successors, and No Third-Party Rights. Neither party may assign any of its rights under this Agreement without the prior consent of the other parties, except that Purchaser may assign any of its rights under this Agreement to any Subsidiary of Purchaser. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns.

     9.8 Release of Claims. In consideration of the Purchase Price and the other covenants and agreements set forth herein and in the Option Purchase Agreement, effective as of the Closing except as set forth in this Agreement or any exhibit or schedule to this Agreement, including, without limitation, the Closing Documents (which are hereby excluded from this Section 9.8) and except for any claims arising after the Closing Date, effective as of the Closing, Sellers hereby fully and forever release and discharge Purchaser and the Company (and their Representatives and Affiliates) from any and all claims, accusations, demands, liabilities, obligations, responsibilities, suits, actions and causes of action, whether liquidated or unliquidated, fixed or contingent, known or unknown, or otherwise, in each case, arising out of, relating to, or otherwise connected with all prior relationships with or dealings with, between or among any or all of the parties hereto, and any of their business or other relationships arising out of or related to the same. Each Seller acknowledges that it may discover facts or law different from or in addition to the facts or law that they know or believe to be true with respect to the claims released in this Section 9.8 and agrees, nonetheless, that this Section 9.8 and the release contained herein shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them. Each Seller further agrees that, to the fullest extent permitted by law, it will not prosecute, nor allow to be prosecuted on his behalf, in any administrative agency, whether state or federal, or in any court, whether state or federal, any claim or demand of any type related to the matters released in this Section 9.8.

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     9.9 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

     9.10 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

     9.11 Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

     9.12 Governing Law. This Agreement will be governed by the laws of the State of New York without regard to conflicts of laws principles.

     9.13 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or other electronic transmission), each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

10. DEFINITIONS

     For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 10:

     “Acquisition”—has the meaning set forth in the Recitals to this Agreement.

     “Action” means any action, suit, claim, charge, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, hearing, complaint, demand or other proceeding to, from, by or before any arbitrator, court, tribunal or other Governmental Body.

     “Affiliate”—has the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date hereof.

     “Agreement”—as defined in the first paragraph of this Agreement.

     “Amended Articles”—as defined in the recitals to this Agreement.

     “Applicable Contract”—any Contract (a) under which the Company has or may acquire any rights, (b) under which the Company has or may become subject to any obligation or liability, or (c) by which the Company or any of the assets owned or used by it is or may become bound.

42

     “Assets”—means all of the personal properties and assets of any nature owned or used by the Company (whether real, personal, or mixed and whether tangible or intangible).

     “Balance Sheet”—as defined in Section 3.4.

     “Balance Sheet Date”—December 31, 2008.

     “Blocks Product”—shall have the meaning set forth on Exhibit E to the Option Purchase Agreement.

     “Breach”—a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been, in each case, as of the date any representation or warranty is made, or any covenant or obligation is required to be performed (as applicable), (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

     “Business”—All operations and rights relating to the development, manufacturing, marketing and sale of the Product

     “Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banking institutions in Amsterdam, The Netherlands or San Diego, California are authorized or obligated by law or executive order to be closed. For purposes of this Agreement (unless otherwise specified as a Business Day), the word “day” shall mean a calendar day. Whenever any party hereto is required to provide notice, approval or otherwise respond within any specified period up Business Days, such period shall commence at 9:00 a.m. local time in the city specified in such party’s address for notice in Section 9.2 on the first whole Business Day of such period and shall expire at 5:00 p.m., local time in such city.

     “Call Option Period”—has the meaning set forth in the Recitals to this Agreement.

     “Closing”—as defined in Section 1.2.

     “Closing Date”—the date and time as of which the Closing actually takes place.

     “Closing Documents”—this Agreement, the Option Purchase Agreement, the Facility Agreement, the Amended Articles, the Distribution Agreement, the Revos License Agreement, the Shareholders’ Agreement, the Founders’ Non-Competition Agreements and the Investor Non-Competition Agreement and each other document or agreement executed and delivered in connection with the Contemplated Transactions.

     “Company”— Progentix Orthobiology B.V. or any of its direct or indirect Subsidiaries.

     “Company Common Stock”—as defined in the Recitals to this Agreement.

43

     “Company Proprietary Rights”—any Proprietary Rights owned by or licensed to the Company or otherwise used in the Business.

     “Company Source Code”—any source code, or any portion, aspect or segment of any source code, relating to any Proprietary Rights owned by or licensed to the Company or otherwise used by the Company.

     “Consent”—any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

     “Contemplated Transactions”—all of the transactions contemplated by this Agreement, including:

          (a) the sale of the Initial Shares by Sellers to Purchaser;

          (b) the performance by Purchaser, the Company and Sellers of their respective covenants and obligations under this Agreement; and

          (c) Purchaser’s acquisition of the Initial Shares.

     “Contract”—any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

     “Copyrights”—all copyrights, copyrightable works, semiconductor topography and mask work rights, and applications for registration thereof, including all rights of authorship, use, publication, reproduction, distribution, performance transformation, moral rights and rights of ownership of copyrightable works, semiconductor topography works and mask works, and all rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright, semiconductor topography and mask work conventions.

     “Data Room”—the virtual data room on the Company’s website at *** pursuant to which the Company made available certain of its documents to Purchaser.

     “Encumbrance”—any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

     “Environment”—soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

44

     “Environmental, Health, and Safety Liabilities”—any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:

          (a) any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and regulation of chemical substances or products);

          (b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law;

          (c) financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions (“Cleanup”) required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or

          (d) any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law.

The terms “removal,” “remedial,” and “response action,” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended (“CERCLA”) or the equivalent thereof under the Environmental Laws of any other jurisdiction.

     “Environmental Law”—any Legal Requirement that requires or relates to:

          (e) advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment;

          (f) preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment;

          (g) reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated;

          (h) assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of;

          (i) protecting resources, species, or ecological amenities;

45

          (j) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;

          (k) cleaning up pollutants that have been released, preventing the threat of release, or paying the costs of such clean up or prevention; or

          (l) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets, including the Environmental Protection Act (“Wet milieubeheer”), Environmental Activities Decree (“Activiteitenbesluit”), Soil Protection Act (“Wet bodembescherming”), Waste Water Protection Act (“Wet verontreiniging oppervlaktewateren”) and the European communitty Regulation on the Registration, Evaluation, Authorisation and restriction of chemical substances, EC 1907 /2006, (Verordening op de Registratie, Evaluatie, Autorisatie en beperkingen van Chemische stiffen).

     “Facilities”—any real property, leaseholds, or other interests currently or formerly owned or operated by the Company and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by the Company.

     “Facility Agreement”—as defined in the Recitals to this Agreement.

     “FDA”—United Stated Food and Drug Administration.

     “FDCA”—Federal Food Drug and Cosmetic Act.

     “Financial Statements”—as defined in Section 3.4(a).

     “Finished Inventory”—means all finished goods inventory of Product.

     “GAAP—generally accepted United States accounting principles, applied on a consistent basis.

     “Governmental Authorization”—any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

     “Governmental Body”—any:

          (m) nation, state, province, county , city, town, village, district, or other jurisdiction of any nature;

          (n) national, federal, state, local, municipal, foreign, or other government;

          (o) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

          (p) multi-national organization or body; or

46

          (q) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

     “Granules Product”—shall have the meaning set forth on Exhibit E to the Option Purchase Agreement.

     “Hazardous Activity”—the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the Facilities, or that may affect the value of the Facilities or the Company.

     “Hazardous Materials”—any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

     “Indebtedness”—as applied to any person, (a) all indebtedness for borrowed money, whether current or funded, or secured or unsecured, (b) all indebtedness for the deferred purchase price of property or services represented by a note or other security, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all indebtedness secured by a purchase money mortgage or other lien to secure all or part of the purchase price of property subject to such mortgage or lien, (e) all obligations under capital leases in respect of which such person is liable as lessee, (f) any liability in respect of banker’s acceptances or letters of credit, and (g) all indebtedness referred to in clauses (a), (b), (c), (d), (e) or (f) above which is directly or indirectly guaranteed by or which such person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.

     “Initial Shares”—as defined in the Recitals to this Agreement.

     “Issued Patents”—all issued patents, reissued or reexamined patents, revivals of patents, utility models, certificates of invention, registrations of patents and extensions thereof, regardless of country or formal name, issued by the United States Patent and Trademark Office and any other applicable Governmental Body.

     “Knowledge”—an individual will be deemed to have “Knowledge” of a particular fact or other matter if:

          (r) such individual is actually aware of such fact or other matter; or

47

          (s) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter.

A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

     “Legal Requirement”—any national, federal, state, provincial, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

     “Material Adverse Effect”—an event, violation, inaccuracy, circumstance or other matter shall be deemed to have a “Material Adverse Effect” on the Company if such event, violation, inaccuracy, circumstance or other matter (considered together with all other matters that would constitute exceptions to the representations and warranties set forth in this Agreement but for the presence of “Material Adverse Effect” or other materiality qualifications, or any similar qualifications, in such representations and warranties) had or would reasonably be expected to have a material adverse effect on: (i) the business, condition, capitalization, assets, liabilities, operations or financial performance of the Company; (ii) the ability of Seller Parties to consummate the Contemplated Transactions; or (iii) Purchaser’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the Initial Shares, other than any event, change, occurrence or effect resulting from (A) changes in general economic, financial market, business or geopolitical conditions, (B) general changes or developments in any of the industries in which the Company operates, (C) changes in any applicable Legal Requirements or applicable accounting regulations or principles or interpretations thereof, (D) any outbreak or escalation of hostilities or war or any act of terrorism, (E) the announcement of the acquisition of the Initial Shares by Purchaser pursuant to this Agreement or (F) any action taken at the written request of Purchaser.

     “Material Contract”—as defined Section 3.16(b).

     “Notary” means Mr. Sander Wiggers, civil law notary with DLA Piper Nederland N.V. or his deputy, substitute or successor in office.

     “Occupational Safety and Health Law”—any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions, including the Working Conditions Act (“Arbeidsomstandighedenwet”) and the Working Conditions Decree (“Arbeidsomstandighedenbesluit”).

     “Operating Budget”—shall mean a detailed operating budget of the Company in respect of the applicable fiscal year, which operating budget has been approved by the Board of Directors (including the director designated by Purchaser).

     “Option Period”—as defined in the Recitals to this Agreement.

48

     “Option Purchase Agreement”—as defined in the Recitals to this Agreement.

     “Order”—any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

     “Ordinary Course of Business”—an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

          (t) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

          (u) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority) and is not required to be specifically authorized by the parent company (if any) of such Person; and

          (v) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

     “Organizational Documents”—(a) the articles of association; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

     “Patents”—the Issued Patents and the Patent Applications.

     “Patent Applications”—all published or unpublished nonprovisional and provisional patent applications, reexamination proceedings, invention disclosures and records of invention.

     “Person”—any individual, corporation, limited liability company, partnership, association, trust or any other entity or organization, including a Governmental Body.

     “Proceeding”—any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

     “Product”—shall mean the Blocks Product, the Granules Product and the Putty Product.

     “Proprietary Rights”—any: (a)(i) Issued Patents, (ii) Patent Applications, (iii) Trademarks, fictitious business names and domain name registrations, (iv) Copyrights, (v) Trade Secrets, (vi) all other ideas, inventions, designs, manufacturing and operating specifications, technical data, and other intangible assets, intellectual properties and rights (whether or not appropriate steps have been taken to protect, under applicable law, such other intangible assets, properties or rights); or (b) any right to use or exploit any of the foregoing.

49

     “Purchaser”—as defined in the first paragraph of this Agreement.

     “Purchaser Disclosure Schedule”—the Disclosure Schedule delivered by Purchaser to Sellers, if any, concurrently with the execution and delivery of this Agreement.

     “Put Option Period”—has the meaning set forth in the Recitals to this Agreement.

     “Putty Product”—shall have the meaning set forth on Exhibit E to the Option Purchase Agreement.

     “Registered Copyrights”—all copyrights for which registrations have been obtained or applications for registration have been filed in any applicable Governmental Body, and all copyrights for which registration is not required.

     “Registered Trademarks”—all trademarks for which registrations have been obtained or applications for registration have been filed in any applicable Governmental Body.

     “Release”—any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

     “Remaining Shares”—as defined in the Recitals to this Agreement.

     “Representative”—with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

     “Seller”—as defined in the first paragraph of this Agreement.

     “Seller Parties”—as defined in the first paragraph of this Agreement.

     “Seller Parties Disclosure Schedule”—the Disclosure Schedule delivered by the Seller Parties to Purchaser, concurrently with the execution and delivery of this Agreement.

     “Seller Shares”—as defined in the Recitals of this Agreement.

     “Sellers’ Knowledge” means the Knowledge of each of the Sellers on ***

     “Series A Preferred Stock”—as defined in the Recitals to this Agreement.

     “Series B Preferred Stock”—as defined in the Recitals to the Agreement.

     “Subsidiary”—with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

50

held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.

     “Tax” or “Taxation”— means any and all forms of taxation by any tax authority, whether international, national or local, including without limitation to the generality of the foregoing, corporate income tax, capital tax, wage tax, real property tax, transfer taxes, registration tax, VAT, dividend withholding tax, environmental tax, divestment payments, custom duties, stock exchange tax, exercise tax or gift tax, including but not limited to penalties, interest and any other costs or expenses related to or associated with any tax matter and all contributions or premiums which are payable pursuant to industry or governmental social security regulations, including penalties, interest and any other costs or expenses relating to or associated with any social security matter.

     “Tax Returns” means all returns, computations ,declarations, reports, statements and other documents related to Taxation, including any schedule or attachment thereto and any related or supporting work papers or information with respect to any of the foregoing, including any amendment thereof, and the term. “Tax Return” means any one of the foregoing Tax Returns.

     “Threat of Release”—a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

     “Threatened”— a claim, Proceeding, dispute, action, or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing).

     “Trade Secrets”—all product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, research and development, manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code), computer software and database technologies, systems, structures and architectures (and related processes, formulae, composition, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, methods and information), and any other information, however documented, that is a trade secret within the meaning of the applicable trade-secret protection law.

     “Trademarks”—all (i) trademarks, service marks, marks, logos, insignias, designs, names or other symbols, (ii) applications for registration of trademarks, service marks, marks, logos, insignias, designs, names or other symbols, (iii) trademarks, service marks, marks, logos, insignias, designs, names or other symbols for which registrations has been obtained.

     “Xpand”—Xpand Biotechnology B.V., a private company with limited liability, incorporated under the laws of the Netherlands.

51

     Index of Other Defined Terms:

Defined Terms	Section Reference
510(k)	Section 3.22(d)
Basket	Section 7.4(a)
Board of Directors	Section 3.2(a)
Cap	Section 7.4(b)
Confidential Information	Section 6.3
CPR Rules	Section 9.4
Damages	Section 7.2
Distribution Agreement	Section 8.1(g)
Estimated Closing Certificate	Section 8.1(n)
Founders’ Non-Competition Agreement	Section 8.1(l)
Fundamental Representations	Section 7.1
Indemnified Persons	Section 7.3
Indemnifying Persons	Section 7.5(a)
Investor Non-Competition Agreement	Section 8.1(m)
Pension Schemes	Section 3.13
Permitted Encumbrance	Section 3.6
Pledge Agreement	Section 8.1(j)
Pro Rata Allocation	Section 1.1(a)
Purchase Price	Section 1.1(a)
Purchaser Indemnified Persons	Section 7.2.
Purchaser Representative	Section 5.1
Revos License Agreement	Section 8.1(h)

52

Defined Terms	Section Reference
Seller Funded Expenses	Section 8.1(n)
Seller Indemnified Persons	Section 7.3
Shareholders’ Agreement	Section 8.1(k)
Survival Period	Section 7.1
Upfront Payment	Section 1.1(a)

53

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

PURCHASER: NUVASIVE, INC.
By:	/s/ Alexis V. Lukianov
	Name:	Alexis V. Lukianov
	Title:	Chief Executive Officer

COMPANY: PROGENTIX ORTHOBIOLOGY B.V.
By JD de Bruijn Holding BV, its solely authorized statutory director
By:	/s/ Joost D de Bruijn
	Name:	Joost D de Bruijn
	Title:	General Director

Signature Page to Preferred Stock Purchase Agreement

SELLERS: JD DE BRUIJN HOLDING BV
By:	/s/ Joost D de Bruijn
	Name:	Joost D de Bruijn
	Title:	General Director
INCUBATION BV
By:	/s/ Clemens van Blitterswijk
	Clemens van Blitterswijk
By:	/s/ FrankJan van der Velden
	FrankJan van der Velden
BIOGENERATION VENTURES BV
By:	/s/ Edward van Wezel
	Edward van Wezel
By:	/s/ Willem Hazenberg
	Willem Hazenberg
HUIPIN YUAN
/s/ Huipin Yuan

[Signature Page to Preferred Stock Purchase Agreement]

SCHEDULE A

Sellers Schedule

	Pro Rata
Seller	Allocation
BioGeneration Ventures BV		29.106	%
JD de Bruijn Holding BV		28.359	%
Incubation BV		39.060	%
Huipin Yuan		3.475	%

EXHIBIT A

Option Purchase Agreement

EXHIBIT B

Facility Agreement

EXHIBIT C

Amended Articles of Association

EXHIBIT D

Notarial Deed

EXHIBIT E

Form of Proprietary Inventions Agreement

EXHIBIT F

Form of Legal Opinion

     1. Each of the Closing Documents is a valid and binding obligation of the Company, enforceable by Purchaser against the Company in accordance with its terms.

     2. We do not have knowledge of any action, suit or proceeding against the Company that is pending or has been overtly threatened in writing.

EXHIBIT G

Distribution Agreement

EXHIBIT H

Revos License Agreement

EXHIBIT I

Pledge Agreement

EXHIBIT J

Shareholders’ Agreement

EXHIBIT K

Founders’ Non-Competition Agreement (Bruijn)

EXHIBIT L

Founders’ Non-Competition Agreement (Blitterswijk)

EXHIBIT M

Investor Non-Competition Agreement

EX-10.3

EXECUTION COPY

EXHIBIT 10.3

OPTION PURCHASE AGREEMENT

among

NUVASIVE, INC.,

PROGENTIX ORTHOBIOLOGY, B.V.

and

The Sellers listed on Schedule A attached hereto

January 13, 2009

TABLE OF CONTENTS

			Page
1.	CALL AND PUT OPTIONS			2
	1.1	Purchaser’s Call Option		2
	1.2	Sellers’ Put Option		4
	1.3	No Obligation		6
	1.4	Closing		6
	1.5	Seller Shares		7
	1.6	Purchase Price		7
	1.7	Milestone Payments		8
	1.8	Second Put Option		9
	1.9	Escrow Arrangements		11
	1.10	Notary		12
	1.11	Time for Determination; Dispute Mechanism		12
	1.12	Acknowledgement of Sellers and Purchaser		14
	1.13	Withholding		14
	1.14	Working Capital		14
2.	REPRESENTATIONS AND WARRANTIES OF THE SELLERS WITH RESPECT TO THE SELLER SHARES			14
	2.1	Authority; Execution and Delivery; Enforceability		15
	2.2	Non-Contravention		15
	2.3	Title to Seller Shares		15
	2.4	Consents and Approvals		15
	2.5	Litigation and Claims		16
	2.6	No Finder		16
3.	REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED COMPANY			16
	3.1	Organization and Good Standing		16
	3.2	Authority; No Conflict		16
	3.3	Capitalization		18
	3.4	Financial Statements		18
	3.5	Books and Records		18
	3.6	Title to Properties; Encumbrances		19
	3.7	Condition and Sufficiency of Assets		19
	3.8	Accounts Receivable		19
	3.9	Inventory		20
	3.10	No Undisclosed Liabilities		20
	3.11	Taxes		20
	3.12	No Material Adverse Change		22
	3.13	Pensions		22
	3.14	Legal Proceedings; Orders		22
	3.15	Absence of Certain Changes and Events		23
	3.16	Contracts; No Defaults		25
	3.17	Insurance		27
	3.18	Environmental Matters		28

-i-

TABLE OF CONTENTS
(continued)

			Page
	3.19	Employees		29
	3.20	Intellectual Property		29
	3.21	Certain Payments		34
	3.22	Authorizations; Regulatory Compliance		34
	3.23	Products; Product Liability		35
	3.24	Customers and Suppliers		36
	3.25	Capital Expenditures		36
	3.26	Relationships with Affiliates		36
	3.27	Brokers		37
	3.28	Disclosure		37
4.	REPRESENTATIONS AND WARRANTIES OF PURCHASER			37
	4.1	Organization and Good Standing		37
	4.2	Authority; No Conflict		37
	4.3	Certain Proceedings		38
	4.4	Brokers		38
	4.5	Issuance of Shares		38
	4.6	Securities Law Matters		38
	4.7	No Other Representations		39
5.	COVENANTS			39
	5.1	Notices; Consents; Filings		39
	5.2	Further Assurances		39
	5.3	Exclusivity		40
	5.4	Notification of Certain Matters		41
	5.5	Confidentiality; Publicity		41
	5.6	Post-Closing Cooperation		41
	5.7	Tax Matters		42
	5.8	Execution of Further Documents		43
	5.9	Registration Rights		43
	5.10	Right of First Refusal/Right of Notice		45
	5.11	Sellers’ Right to Audit Purchaser’s Net Sales		46
6.	INDEMNIFICATION; REMEDIES			46
	6.1	Survival; Right to Indemnification Not Affected by Knowledge		46
	6.2	Indemnification and Payment of Damages by Sellers		47
	6.3	Indemnification and Payment of Damages by Purchaser		48
	6.4	Limitations on Indemnification		48
	6.5	No Bar		49
	6.6	Procedure for Indemnification—Third Party Claims		49
	6.7	Procedure for Indemnification—Other Claims		50
	6.8	Remedies Exclusive		51
	6.9	Rights of Set-Off		51
	6.10	Sellers’ Representative		51

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TABLE OF CONTENTS
(continued)

			Page
	6.11	***		52
7.	CLOSING CONDITIONS			53
	7.1	Conditions Precedent to Obligations of Purchaser		53
	7.2	Conditions Precedent to Obligations of Seller Parties		55
8.	TERMINATION			56
	8.1	Termination		56
	8.2	Effect of Termination		57
9.	GENERAL PROVISIONS			57
	9.1	Expenses		57
	9.2	Notices		57
	9.3	Jurisdiction; Service of Process		59
	9.4	Dispute Resolution		59
	9.5	Waiver		60
	9.6	Entire Agreement and Modification		60
	9.7	Assignments, Successors, and No Third-Party Rights		60
	9.8	Release of Claims		60
	9.9	Severability		61
	9.10	Section Headings, Construction		61
	9.11	Time of Essence		61
	9.12	Governing Law		61
	9.13	Counterparts		61
10.	DEFINITIONS			61

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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SCHEDULES AND EXHIBITS

Schedule A	Sellers Schedule
Exhibit A	Notarial Deed
Exhibit B	Purchase Election Notice
Exhibit C	Milestone Completion Notice
Exhibit D	Form of True-Up Agreement
Exhibit E	Manufacturing Specifications
Exhibit F	Pre-Clinical Model
Exhibit G	Study Model
Exhibit H	Patent Claims
Exhibit I	Sales Run Rate Amounts
Exhibit J	Opinion of Counsel
Exhibit K	Form of Escrow Agreement
Exhibit L	Founders’ Non-Competition Agreement (Bruijn)
Exhibit M	Founders’ Non-Competition Agreement (Blitterswijk)
Exhibit N	Investor Non-Competition Agreement

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OPTION PURCHASE AGREEMENT

     THIS OPTION PURCHASE AGREEMENT (“Agreement”) is made as of January 13, 2009 (“Effective Date”), by and among NuVasive, Inc., a Delaware corporation (“Purchaser”), Progentix Orthobiology B.V., a company organized under the laws of the Netherlands (the “Acquired Company”), the shareholders of the Acquired Company as set forth on Schedule A attached hereto (each a “Seller,” and collectively, the “Sellers,” and along with the Acquired Company, the “Seller Parties”) and Edward van Wezel and Joost D de Bruijn (each, the “Sellers’ Representative”).

RECITALS

     Purchaser and the Seller Parties have entered into a Preferred Stock Purchase Agreement, dated as of the date hereof (the “Preferred Stock Purchase Agreement”), pursuant to which Purchaser is purchasing 7,200 ordinary shares €1.00 par value per share, and 1,600 cumulative preference shares, par value €1.00 per share, of the Acquired Company from the Sellers for an aggregate purchase price of $10,000,000, which shares shall represent immediately after such issuance, forty percent (40%) of the outstanding capital stock of the Acquired Company on a fully-diluted basis.

     Subject to the terms and conditions set forth herein, (i) Purchaser may elect, in its sole discretion, to cause Sellers to sell to Purchaser all of their issued and outstanding shares of the capital stock of the Acquired Company held by them representing the remaining sixty percent (60%) of the outstanding capital stock of the Company on a fully-diluted basis (the “Seller Shares”) upon delivery of a Purchase Election Notice (as defined below) to the Sellers’ Representative at any time between the second anniversary of the Effective Date and the fourth anniversary of the Effective Date (the “Call Option Period”), and (ii) Purchaser shall be obligated to purchase from Sellers all of the Seller Shares in the event (A) the Sellers’ Representative delivers a Milestone Completion Notice (as defined below) to Purchaser at any time between the date of this Agreement and the second anniversary of the Effective Date (the “Put Option Period”) or (B) Purchaser’s *** (as defined below) is greater than     ***     at any time during the Call Option Period. Any purchase of the Seller Shares by Purchaser shall be referred to herein as an “Acquisition.” The period from the date of the Option Agreement through the expiration of the Call Option Period shall be referred to herein as the “Option Period.”

     In connection with this Agreement and the Preferred Stock Purchase Agreement, pursuant to a notarial deed of amendment to the Acquired Company’s Articles of Association in the form attached hereto as Exhibit A (the “Amended Articles”), which includes among other things, the creation of cumulative preference shares A (the “Series A Preferred Stock”) and cumulative preference shares B (the “Series B Preferred Stock”), and pursuant to the execution of the notarial deed with respect to the Amended Articles, (i) the cumulative preference shares held by the Sellers shall be converted into shares of Series A Preferred Stock, and (ii) the Initial Shares (as defined in the Preferred Stock Purchase Agreement) purchased by Purchaser pursuant

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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to the Preferred Stock Purchase Agreement shall be converted into shares of Series B Preferred Stock, representing, immediately after such issuance, forty percent (40%) of the outstanding capital stock of the Acquired Company on a fully-diluted basis (the “Recapitalization”). The Acquired Company has filed a declaration of no-objection with the Dutch Ministry of Justice with respect to the Amended Articles.

     To the extent applicable, the parties have complied with the provisions of the Social and Economic Council Merger Regulation (SER-besluit Fusiegedragsregels 2000) and the Works Council Act (Wet op de ondernemingsraden).

     Parties acknowledge that no notification to the Dutch Competition Authority (Nederlandse Mededingingsautoriteit) or any other competition authority is required for the transaction contemplated by this Agreement.

AGREEMENT

     The parties, intending to be legally bound, agree as follows:

1. CALL AND PUT OPTIONS

     1.1 Purchaser’s Call Option.

          (a) Purchaser’s Rights. Purchaser shall have an exclusive option to acquire, at its sole election and on the terms and conditions set forth herein, all, but not less than all, of the Seller Shares, which option may be exercised at any time during the Call Option Period. In connection therewith, each Seller hereby grants to Purchaser an exclusive right, exercisable at any time during the Call Option Period, to acquire all, but not less than all, of the Seller Shares held by such Seller on the terms set forth in this Section 1.1 (the “Call Option”).

          (b) Exercise of Call Option.

               (i) Notice. Purchaser may exercise the Call Option by giving notice, in substantially the form attached hereto as Exhibit B (the “Purchase Election Notice”), to the Sellers’ Representative (which, in turn, shall deliver copies of the Purchase Election Notice to each Seller), at any time during the Call Option Period. The Purchase Election Notice shall set forth the Purchaser’s calculation of the Initial Purchase Price (as defined below) and the proposed closing date of the Acquisition (which shall be the Business Day immediately following the expiration of the Call Option Review Period (as defined below)), in each case, subject to the dispute resolution procedures set forth in Section 1.11.

               (ii) Disclosure Schedules.

                    (A) Attached to this Agreement is a schedule of disclosures and exceptions to the representations and warranties made by the Seller Parties pursuant to Section 2 and Section 3 of this Agreement (the “Seller Parties Disclosure Schedule”). At any time and from time to time during the Call Option Period, but no more than three (3) times during the Call Option Period, Purchaser may, upon written notice to the Sellers’ Representative (a “Disclosure Schedule Request”), require the Seller Parties to prepare, as if such representations and

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warranties were made as of the date of such request, an updated schedule of disclosures and exceptions to the representations and warranties of the Seller Parties contained in Section 2 and Section 3 of the this Agreement (an “Updated Seller Parties Disclosure Schedule”), except to the extent any such representations and warranties refer expressly to an earlier date. The Acquired Company shall prepare and deliver to Purchaser an Updated Seller Parties Disclosure Schedule within ten (10) days of receipt of a Disclosure Schedule Request by the Sellers’ Representative. Any Updated Seller Parties Disclosure Schedule delivered pursuant to this Agreement shall refer only to (1) disclosures of actual facts contained in the Seller Parties Disclosure Schedule, and (2) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or have been discovered since the Effective Date, and the Updated Seller Parties Disclosure Schedule shall not otherwise limit or modify any of the representations and warranties made in this Agreement. No disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule.

                    (B) Within ten (10) days after receipt of the Purchase Election Notice, the Sellers’ Representative shall deliver to Purchaser an Updated Seller Parties Disclosure Schedule. The Updated Seller Parties Disclosure Schedule shall refer only to (1) disclosures of actual facts contained on the Seller Parties Disclosure Schedule attached to this Agreement, and (2) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or been discovered since the Effective Date of this Agreement, and the Updated Seller Parties Disclosure Schedule shall specifically qualify by the existence of the facts or events set forth therein (but not otherwise limit or modify) any of the representations and warranties made in this Agreement. No disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule. In the event an Updated Seller Parties Disclosure Schedule is not delivered to Purchaser within the ten (10) day time period, the most recent Updated Seller Parties Disclosure Schedule delivered to the Purchaser, or, if none, the Seller Parties Disclosure Schedule, shall be deemed to be the final Updated Seller Parties Disclosure Schedule for all purposes of this Agreement, and all references in this Agreement to the Updated Seller Parties Disclosure Schedule shall be deemed to refer to such most recent Updated Seller Parties Disclosure Schedule or Seller Parties Disclosure Schedule, as applicable.

               (iii) Review Period. Purchaser shall have a further period of ten (10) days after receipt of such Updated Seller Parties Disclosure Schedule to review such Updated Seller Parties Disclosure Schedule (or if no such Updated Seller Parties Disclosure Schedule is delivered within the time period specified in paragraph above, then ten (10) days following the expiration of such period) (the “Call Option Review Period”), and shall have the right at its election to rescind its exercise of the Call Option, in its sole discretion, at any time during the Call Option Review Period by notice to the Sellers’ Representative (the “Call Option Rescission Notice”), if it is not satisfied in any manner with its review of such Updated Seller Parties Disclosure Schedule. In the event that Purchaser delivers a Call Option Rescission Notice to the

3

Sellers’ Representative within the Call Option Review Period, Purchaser shall be deemed to have not exercised the Call Option at such time, and the parties’ respective rights and obligations under this Agreement shall continue as though no Purchase Election Notice had been delivered until the expiration of the Call Option Period. In the event that Purchaser does not deliver a Call Option Rescission Notice during the Call Option Review Period, the closing of the Acquisition shall be consummated on the later of (x) the Business Day immediately following expiration of the Call Option Review Period in accordance with the terms herein and (y) the Business Day immediately following the final determination of the Initial Purchase Price pursuant to Section 1.11.

     1.2 Sellers’ Put Option.

          (a) Purchaser’s Obligations. In the event that the Acquired Company achieves the Base Milestones (as defined below) during the Put Option Period, Purchaser shall have an obligation, subject to Section 1.2(b)(iii) below, to acquire all of the Seller Shares on the terms and conditions set forth herein (the “Put Option”). In connection therewith, subject to Section 1.2(b)(iii), Purchaser shall have a binding obligation to acquire from each Seller all, but not less than all, of the Seller Shares held by such Seller on the terms set forth in this Section 1.2.

          (b) Exercise of Put Option.

               (i) Notice. The Sellers’ Representative shall exercise the Put Option and cause Purchaser to consummate the Acquisition by delivery of a written notice to Purchaser specifying successful completion of the Base Milestones in the form attached hereto as Exhibit C (the “Milestone Completion Notice”). The Milestone Completion Notice shall also set forth the Sellers’ Representative’s calculation of the Initial Purchase Price (as defined below) and the proposed closing date of the Acquisition (which shall be the Business Day immediately following the expiration of the Put Option Review Period (as defined below) subject to the exceptions set forth in Section 1.2(b)(iii) below), and in each case, subject to the dispute resolution procedures set forth in Section 1.11.

               (ii) Disclosure Schedules. Along with the Milestone Completion Notice delivered by the Sellers’ Representative, the Sellers’ Representative shall deliver to Purchaser an Updated Seller Parties Disclosure Schedule. The Updated Seller Parties Disclosure Schedule shall refer only to (A) disclosures of actual facts contained on the Seller Parties Disclosure Schedule attached to this Agreement; and (B) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or been discovered since the Effective Date, and the Updated Seller Parties Disclosure Schedule shall specifically qualify by the existence of the facts or events set forth therein (but not otherwise limit or modify) any of the representations and warranties made in this Agreement. No disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule. In the event an Updated Seller Parties Disclosure Schedule is not delivered to Purchaser with the Milestone Completion Notice, the most recent Updated Seller Parties Disclosure Schedule delivered to Purchaser, or, if none, the Seller Parties Disclosure Schedule,

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shall be deemed to be the final Updated Seller Parties Disclosure Schedule for all purposes of this Agreement, and all references in this Agreement to the Updated Seller Parties Disclosure Schedule shall be deemed to refer to such most recent Updated Seller Parties Disclosure Schedule or Seller Parties Disclosure Schedule, as applicable.

               (iii) Review Period. Purchaser shall have a period of ten (10) days after receipt of such Updated Seller Parties Disclosure Schedule to review such Updated Seller Parties Disclosure Schedule (or if no such Updated Seller Parties Disclosure Schedule is delivered within the time period specified in paragraph above, then ten (10) days following the expiration of such period) (a “Put Option Review Period”), and shall not be obligated to consummate the Acquisition by notice to the Sellers’ Representative (a “Put Option Rescission Notice”), if (A) any Seller Parties have materially breached any of the representations, warranties or covenants set forth in this Agreement or the Preferred Stock Purchase Agreement or Purchaser’s rights under the Amended Articles or the Seller Parties are unable to deliver the certificate required under Section 7.1(e) hereof, (B) the Acquired Company has suffered or incurred a Material Adverse Effect, (C) the Acquired Company is subject to (1) an Action or there is an Action Threatened involving a claim that any Product infringes the proprietary rights of a third party, (2) an Action or there is an Action Threatened involving a claim that any Product has resulted in personal injury or death to a human patient or Purchaser in good faith has determined that a Product recall is required to correct a material defect in any Product, or (3) an Action or there is an Action Threatened or an investigation proceeding by any Governmental Body regarding the conduct of the Acquired Company or involving any Product, or (D) any of the Sellers breach their non-competition obligations under the Founders’ Non-Competition Agreements (as defined in the Preferred Stock Purchase Agreement) or the Investor Non-Competition Agreement (as defined in the Preferred Stock Purchase Agreement), Notwithstanding the foregoing, in the event Purchaser disputes in good faith that the Base Milestones have not been successfully completed, then Purchaser shall not be obligated to consummate the Acquisition until the Purchaser and Sellers resolve the dispute in accordance with Section 1.11. In the event that Purchaser delivers a Put Option Rescission Notice to the Sellers’ Representative within the Put Option Review Period, Purchaser shall not be obligated to consummate the Acquisition and Purchaser shall be entitled, at its sole option, to terminate this Agreement in accordance with Section 8 herein. In the event that none of the events described in clause (A),(B),(C), or (D) have occurred, the closing of the Acquisition shall be consummated on the later of (x) the Business Day immediately following expiration of the Put Option Review Period in accordance with the terms herein and (y) the Business Day immediately following the final determination of the Initial Purchase Price pursuant to Section 1.11, provided that in the event that Company delivers a Milestone Completion Notice to Purchaser prior to January 1, 2010, the consummation of the Acquisition shall not occur until after January 1, 2010, at which time the consummation of the Acquisition shall occur at a date and time mutually agreeable to Purchaser and the Sellers’ Representative, which date and time shall be no later than March 31, 2010.

               (iv) Cure Period. In the event that Purchaser delivers a Put Option Rescission Notice to the Sellers’ Representative as a result of any of the events described in clause (A),(B), or (C) in Section 1.2(b)(iii) above and this Agreement is not terminated pursuant to Section 1.2(b)(iii), and the event which triggered the Put Option Rescission Notice is cured at any time prior to seven (7) years from the Effective Date of this Agreement, then the Sellers’

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Representative shall notify Purchaser within ten (10) Business Days of such cure (the “Cure Notice”) and shall deliver to Purchaser an Updated Seller Parties Disclosure Schedule at such time. Any Updated Seller Parties Disclosure Schedule delivered pursuant to this Section shall refer only to (A) disclosures of actual facts contained in the Seller Parties Disclosure Schedule, and (B) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or have been discovered since the date of this Agreement, and the Updated Seller Parties Disclosure Schedule shall not otherwise limit or modify any of the representations and warranties made in this Agreement. No disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule. In the event an Updated Seller Parties Disclosure Schedule is not delivered to Purchaser with the Cure Notice, the most recent Updated Seller Parties Disclosure Schedule delivered to Purchaser, or, if none, the Seller Parties Disclosure Schedule, shall be deemed to be the final Updated Seller Parties Disclosure Schedule for all purposes of this Agreement, and all references in this Agreement to the Updated Seller Parties Disclosure Schedule shall be deemed to refer to such most recent Updated Seller Parties Disclosure Schedule or Seller Parties Disclosure Schedule, as applicable. Upon delivery by the Sellers’ Representative of the Cure Notice and the Updated Seller Parties Disclosure Schedule to Purchaser, Purchaser shall have an exclusive option (“the “Cure Option”) to acquire, at its sole election and on the terms set forth in the Milestone Completion Notice, all, but not less than all, of the Seller Shares within thirty (30) days of receiving the Cure Notice and the Updated Seller Parties Disclosure Schedule (the “Cure Option Period”). Purchaser may exercise the Cure Option by delivering a Purchase Election Notice to the Sellers’ Representative at any time during the Cure Option Period. The Purchase Election Notice shall set forth the Initial Purchase Price (as set forth in the Milestone Completion Notice) and the proposed closing date of the Acquisition (which shall be the Business Day immediately following the expiration of the Cure Option Period), in each case, subject to the dispute resolution procedures set forth in Section 1.11.

     1.3 No Obligation. Notwithstanding anything to the contrary in this Agreement, none of the parties hereto shall have any obligation to consummate the Acquisition unless and until Purchaser delivers a Purchase Election Notice to the Sellers’ Representative or the Sellers’ Representative delivers a Milestone Completion Notice or a Second Put Option Notice (as defined below) to Purchaser. The parties agree and acknowledge that Purchaser is under no obligation to deliver any Purchase Election Notice or any Disclosure Schedule Request at any time.

     1.4 Closing. Subject to the fulfillment or waiver of all of the conditions contained in Section 7, on the closing date specified in the Purchase Election Notice, the Milestone Completion Notice or the Second Put Option Notice, as the case may be, or, if later, the Business Day immediately following the final determination of the Initial Purchase Price pursuant to Section 1.11, a closing (the “Closing”) will be held at the offices of DLA Piper Nederland N.V., ‘Meerparc’, Amstelveenseweg 638, 1081 JJ Amsterdam, the Netherlands (or such other place as the parties may agree), to the extent required in the presence of the Notary, and the date of Closing is referred to herein as the “Closing Date.” On the Closing Date, Purchaser and Seller Parties shall cause the Acquisition to be consummated.

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     1.5 Seller Shares. Subject to the terms and conditions of this Agreement, at the Closing, the Notary shall execute the deed of transfer of the Seller Shares through the notarial deed in the form substantially attached hereto as Exhibit A. Immediately thereafter, the Notary shall transfer the Initial Purchase Price to the Sellers in accordance with the instruction letter from the Notary.

     1.6 Purchase Price.

          (a) The initial purchase price for the Shares will be calculated as set forth in Section 1.6(b) below (the “Initial Purchase Price”). At the Closing, Purchaser shall transfer an amount of cash (in United States dollars of immediately available funds), or common stock, par value $0.001 per share, of Purchaser (“Purchaser Common Stock”), equal to the Initial Purchase Price minus (i) the Escrow Amounts, (ii) the Seller Funded Expenses and (iii) the Loan Amount (the “Upfront Payment”) to the third party account of the Notary in accordance with the instructions in the Notary Instruction Letter. Prior to the transfer of the Seller Shares, the Notary shall hold the Upfront Payment on behalf of Purchaser. After the transfer of the Seller Shares, the Notary shall hold the Upfront Payment on behalf of the Sellers. As soon as possible after the Closing, but in any event within one (1) Business Day of the Closing Date, the Notary shall pay to Sellers the Upfront Payment, pursuant to the allocation set forth on Schedule A attached hereto (the “Proceeds Allocation”) and to the bank accounts or brokerage accounts so indicated by the Sellers. If there are any changes to the Proceeds Allocation after the Effective Date, the Sellers’ Representative shall notify Purchaser within five (5) Business Days of any such changes, and shall deliver to Purchaser an updated Proceeds Allocation executed by each of the Sellers (a “Revised Proceeds Allocation”). Unless and until Purchaser receives a Revised Proceeds Allocation, Sellers shall be bound by the Proceeds Allocation set forth on Schedule A attached hereto.

          (b) If Purchaser elects to issue shares of Purchaser Common Stock in respect of some or all of the Upfront Payment, then:

               (i) prior to such issuance and upon request by Purchaser, (A) Sellers shall deliver to Purchaser such representations and warranties as Purchaser shall reasonably request for purposes of exempting the issuance of such shares from the registration requirements of the Securities Act and (B) the number of shares of Purchaser Common Stock to be issued shall be equal to (x) the Upfront Payment less the amount of any cash transferred to the Notary in respect of the Initial Purchase Price, divided by (y) the closing price of the Purchaser Common Stock on the Qualified Stock Exchange on the Closing Date;

               (ii) to the extent that the Upfront Payment consists of cash and Purchaser Common Stock, each Seller shall receive the same proportion of cash and Purchaser Common Stock as each other Seller; and

               (iii) at each Seller’s sole election, Purchaser shall execute the True-Up Agreement in substantially the form attached hereto as Exhibit D with respect to the shares of Purchaser Common Stock issued to each Seller so electing.

          (c) The Initial Purchase Price shall be determined as follows:

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               (i) The Initial Purchase Price shall be $45,000,000 plus, if applicable, any amounts payable pursuant to Section 1.6(c)(iii) if (x) the Sellers’ Representative delivers a Milestone Completion Notice to the Purchaser during the Put Option Period and (y) each of the following milestones (each, a “Base Milestone,” and collectively, the “Base Milestones”) has been achieved by the Acquired Company on or prior to the date of the Milestone Completion Notice:

                    (A) ***;

                    (B) ***; and

                    (C) The Acquired Company has successfully completed ***.

               (ii) In the event Purchaser delivers a Purchase Election Notice to the Sellers’ Representative during the Call Option Period, the Initial Purchase Price shall be $35,000,000, and in no event shall the Purchaser be obligated to pay Sellers any amounts in respect of the Milestones.

               (iii) In addition to the amounts specified in Section 1.6(c)(i), the Initial Purchase Price shall be increased by the following amounts if, in addition to the Base Milestones, any of the following milestones (each an “Additional Milestone,” and collectively the “Additional Milestones”) has been achieved by the Acquired Company prior to delivery of the Milestone Completion Notice. The Base Milestones and the Additional Milestones shall together be referred to herein as the “Milestones.”

                    (A) $5,000,000, provided the Acquired Company has successfully completed the ***;

                    (B) $5,000,000, provided the Acquired Company is issued a patent *** (the “Patent”);

                    (C) $10,000,000, provided ***, except as provided in Section 5.11 hereof; and

                    (D) $5,000,000, provided ****, except as provided in Section 5.11 hereof.

     1.7 Milestone Payments. From and after the Closing Date but prior to the expiration of the Put Option Period (the “Post-Closing Milestone Period”), in addition to the consideration set forth in Section 1.6(c) above, in the event that (x) the Acquired Company has achieved the Base Milestones and the Sellers’ Representative has delivered a Milestone Completion Notice, but the Acquired Company has not achieved an Additional Milestone on the Closing Date, and (y) the Acquired Company achieves the Additional Milestone during the Post-Closing Milestone Period, Purchaser shall pay to Sellers the additional amount payable in respect of such Additional Milestone in cash or, at Purchaser’s sole election, in shares of Purchaser Common

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Stock, as set forth in Section 1.6(b)(iii) (each, a “Milestone Payment,” and collectively, the “Milestone Payments”). The Milestone Payments and the Initial Purchase Price shall be referred to herein together as the “Aggregate Purchase Price.” Upon achieving an Additional Milestone, Purchaser shall promptly provide written notice to Sellers’ Representative specifying the Additional Milestone achieved, and Purchaser shall pay the applicable Milestone Payment to Sellers within ten (10) Business Days thereof to the bank accounts or brokerage accounts indicated by the Sellers in accordance with the Proceeds Allocation, subject in each case, to the dispute resolution procedures set forth in Section 1.11. In the event of a Change of Control of Purchaser, Purchaser agrees to either (a) cause the acquirer to assume, whether in writing or by operation of law, all remaining Milestone Payments subject to the terms and conditions set forth herein or (b) accelerate the remaining Milestone Payments such that the Milestone Payments become payable immediately prior to the closing of the Change of Control transaction.

     1.8 Second Put Option.

          (a) Purchaser’s Obligations. From the date of the expiration of the Put Option Period through the fourth anniversary of the Effective Date (the “Second Put Option Period”), in the event the Purchaser’s *** is greater than *** at any time during the Second Put Option Period (the “Second Put Option Condition”), Purchaser shall be obligated to purchase from Sellers all of the Seller Shares in accordance with the terms of Section 1.6(a) for an Initial Purchase Price of $35,000,000, less (i) the Escrow Amounts, (ii) the Seller Funded Expenses and (iii) the Loan Amount provided, that at no time shall Purchaser be required to validate its      ***      to the Sellers, except as provided in Section 5.11 hereof, and provided further, that in no event shall the Purchaser be obligated to pay to Sellers any amounts in respect of Milestones (the “Second Put Option”).

          (b) Exercise of Second Put Option.

               (i) Notice. In the event a Second Put Option is triggered, Purchaser shall notify the Sellers’ Representative of such event within five (5) Business Days, and thereafter, the Sellers’ Representative shall have ten (10) Business Days to exercise the Second Put Option and cause Purchaser to consummate the Acquisition by delivery of a written notice to Purchaser by the Sellers’ Representative (“Second Put Option Notice”) specifying the Initial Purchase Price and the date that the closing of the Acquisition shall be consummated pursuant to Section 1.8(c) below.

               (ii) Disclosure Schedules. Along with the Second Put Option Notice delivered by the Sellers’ Representative to Purchaser, the Sellers’ Representative shall deliver to Purchaser an Updated Seller Parties Disclosure Schedule. The Updated Seller Parties Disclosure Schedule shall refer only to (A) disclosures of actual facts contained on the Seller Parties Disclosure Schedule attached to this Agreement; and (B) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or been discovered since the Effective Date, and the Updated Seller Parties Disclosure Schedule shall specifically qualify by the existence of the facts or events set forth therein (but not otherwise limit or modify) any of the representations and warranties made in this Agreement. No

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disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule. In the event an Updated Seller Parties Disclosure Schedule is not delivered to Purchaser with the Second Put Option Notice, the most recent Updated Seller Parties Disclosure Schedule delivered to Purchaser, or, if none, the Seller Parties Disclosure Schedule, shall be deemed to be the final Updated Seller Parties Disclosure Schedule for all purposes of this Agreement, and all references in this Agreement to the Updated Seller Parties Disclosure Schedule shall be deemed to refer to such most recent Updated Seller Parties Disclosure Schedule or Seller Parties Disclosure Schedule, as applicable.

               (iii) Review Period. Purchaser shall have a period of ten (10) days after receipt of such Updated Seller Parties Disclosure Schedule to review such Updated Seller Parties Disclosure Schedule (or if no such Updated Seller Parties Disclosure Schedule is delivered within the time period specified in paragraph above, then ten (10) days following the expiration of such period) (a “Second Put Option Review Period”), and shall not be obligated to consummate the Acquisition by notice to the Sellers’ Representative (a “Second Put Option Rescission Notice”), if (A) any Seller Parties have materially breached any of the representations, warranties or covenants set forth in this Agreement or the Preferred Stock Purchase Agreement or Purchaser’s rights under the Amended Articles or the Seller Parties are unable to deliver the certificate required under Section 7.1(e) hereof, (B) the Acquired Company has suffered or incurred a Material Adverse Effect, (C) the Acquired Company is subject to (1) an Action or there is an Action Threatened involving a claim that any Product infringes the proprietary rights of a third party, (2) an Action or there is an Action Threatened involving a claim that any Product has resulted in personal injury or death to a human patient or Purchaser in good faith has determined that a Product recall is required to correct a material defect in any Product, or (3) an Action or there is an Action Threatened or an investigation proceeding by any Governmental Body regarding the conduct of the Acquired Company or involving any Product, or (D) any of the Sellers breach their non-competition obligations under the Founders’ Non-Competition Agreements (as defined in the Preferred Stock Purchase Agreement) or the Investor Non-Competition Agreement (as defined in the Preferred Stock Purchase Agreement). In the event that Purchaser delivers a Second Put Option Rescission Notice to the Sellers’ Representative within the Second Put Option Review Period, Purchaser shall not be obligated to consummate the Acquisition and Purchaser shall be entitled, at its sole option, to terminate this Agreement in accordance with Section 8 herein. In the event that none of the events described in clause (A),(B),(C), or (D) have occurred, the closing of the Acquisition shall be consummated on the later of (x) the Business Day immediately following expiration of the Second Put Option Review Period in accordance with the terms herein and (y) the Business Day immediately following the final determination of the Initial Purchase Price pursuant to Section 1.11.

               (iv) Second Cure Period. In the event that Purchaser delivers a Second Put Option Rescission Notice to the Sellers’ Representative as a result of any of the events described in clause (A),(B), or (C) in Section 1.8(b)(iii) above and this Agreement is not terminated pursuant to Section 1.8(b)(iii), and the event which triggered the Second Put Option Rescission Notice is cured at any time prior to seven (7) years from the Effective Date of this Agreement, then the Sellers’ Representative shall notify Purchaser within ten (10) Business Days

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of such cure (the “Second Cure Notice”) and shall deliver to Purchaser an Updated Seller Parties Disclosure Schedule at such time. Any Updated Seller Parties Disclosure Schedule delivered pursuant to this Section shall refer only to (A) disclosures of actual facts contained in the Seller Parties Disclosure Schedule, and (B) disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or have been discovered since the date of this Agreement, and the Updated Seller Parties Disclosure Schedule shall not otherwise limit or modify any of the representations and warranties made in this Agreement. No disclosure of a fact or event on any Updated Seller Parties Disclosure Schedule shall be deemed to cure any failure to disclose such fact or event on any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule, or otherwise amend any previously delivered Seller Parties Disclosure Schedule or Updated Seller Parties Disclosure Schedule. In the event an Updated Seller Parties Disclosure Schedule is not delivered to Purchaser with the Second Cure Notice, the most recent Updated Seller Parties Disclosure Schedule delivered to Purchaser, or, if none, the Seller Parties Disclosure Schedule, shall be deemed to be the final Updated Seller Parties Disclosure Schedule for all purposes of this Agreement, and all references in this Agreement to the Updated Seller Parties Disclosure Schedule shall be deemed to refer to such most recent Updated Seller Parties Disclosure Schedule or Seller Parties Disclosure Schedule, as applicable. Upon delivery by the Sellers’ Representative of the Second Cure Notice and the Updated Seller Parties Disclosure Schedule to Purchaser, Purchaser shall have an exclusive option (the “Second Cure Option”) to acquire, at its sole election and on the terms set forth in the Milestone Completion Notice, all, but not less than all, of the Seller Shares within thirty (30) days of receiving the Second Cure Notice and the Updated Seller Parties Disclosure Schedule (the “Second Cure Option Period”). Purchaser may exercise the Second Cure Option by delivering a Purchase Election Notice to the Sellers’ Representative at any time during the Second Cure Option Period. The Purchase Election Notice shall set forth the Initial Purchase Price (as set forth in the Second Put Option Notice) and the proposed closing date of the Acquisition (which shall be the Business Day immediately following the expiration of the Second Put Option Review Period), in each case, subject to the dispute resolution procedures set forth in Section 1.11.

     1.9 Escrow Arrangements.

          (a) Subject to the terms and conditions of this Agreement and the Escrow Agreement, at the Closing, Purchaser shall deposit in an account (the “Escrow Account”) with U.S. Bank National Association, or another escrow agent mutually agreeable to the Purchaser and the Acquired Company, provided such escrow agent is a bank or trust company organized under the laws of the United States of America or of the State of New York having (or if such bank or trust company is a member of a bank company, its bank holding company shall have) a combined capital and surplus of not less than $50,000,000 (the “Escrow Agent”), out of the Initial Purchase Price, an aggregate of ten percent (10%) of the Initial Purchase Price plus an amount equal to $1,500,000 (the “General Escrow Amount”) for claims for Damages pursuant to Section 6.2 hereof, which amounts shall be in cash and not shares of Purchaser Common Stock.

          (b) Subject to the terms and conditions of this Agreement and the Escrow Agreement, at the Closing, Purchaser shall deposit in the Escrow Account with the Escrow

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Agent, out of the Initial Purchase Price, an aggregate of *** (the “Special Escrow Amount,” and together with the General Escrow Amount, the “Escrow Amounts”) for claims for Damages in connection with ***, which amounts shall be in cash and not shares of Purchaser Common Stock.

     1.10 Notary. The Sellers are aware that the Notary is a civil law notary working at DLA Piper Nederland N.V., the firm that advises Purchaser in respect of the matters set out in this Agreement. With reference to the Code of Conduct (Verordening beroeps- en gedragsregels) established by the Royal Notarial Professional Organization (Koninklijke Notariële Beroepsorganisatie), parties hereby acknowledge and confirm that (i) the Notary shall execute any and all deeds related to the Closing Documents; and (ii) Purchaser is assisted and represented by DLA Piper Nederland N.V. in relation to the Closing Documents and any other agreements that may be concluded, or disputes that may arise, in connection therewith.

     1.11 Time for Determination; Dispute Mechanism.

          (a) Initial Purchase Price. If Purchaser, at any time, objects to the Sellers determination that a Milestone has been completed, then Purchaser shall deliver a dispute notice (a “Pre-Closing Milestone Dispute Notice”) to the Sellers’ Representative within fifteen (15) days following delivery of the Milestone Completion Notice. Purchaser, on the one hand, and the Sellers’ Representative, on the other, shall attempt in good faith to resolve any such objections within fifteen (15) days of the receipt by the Sellers’ Representative of the Pre-Closing Milestone Dispute Notice. If no Pre-Closing Milestone Dispute Notice is delivered within the fifteen (15) day time period, then the Initial Purchase Price specified in the Milestone Completion Notice shall be deemed to be accepted.

          (b) Milestone Payments. In the event that any Sellers believe that any Additional Milestone has been achieved during the Post-Closing Milestone Period, the Sellers’ Representative shall provide notice of such achievement to Purchaser. If Purchaser determines in its sole and reasonable discretion that such Additional Milestone has been achieved during the Post-Closing Milestone Period, then within thirty (30) days of such notice from Sellers’ Representative or, if earlier, within thirty (30) days of Purchaser’s determination that such Additional Milestone has been achieved, Purchaser shall notify Sellers’ Representative of its determination and pay to Sellers the Additional Milestone Payment payable in respect of such Additional Milestone. If Sellers’ Representative delivers such a notice and Purchaser determines, in its sole and reasonable discretion, that the applicable Additional Milestone has not been achieved, then, within thirty (30) days of Sellers’ Representative’s notice Purchaser shall notify Sellers’ Representative of such determination. If Sellers’ Representative believes that Sellers are entitled to payment of all or any portion of an Additional Milestone Payment hereunder which they have not received within thirty (30) days following the achievement of the Additional Milestone for which payment is due, Sellers’ Representative may, not later than twelve (12) months following the achievement of such Additional Milestone, deliver to Purchaser a notice setting forth Sellers’ Representative’s determination that all or a portion of such Additional Milestone Payment is due under this Agreement (the “Post-Closing Assessment Notice”). If Sellers’ Representative does not deliver to Purchaser a Post-Closing Assessment

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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Notice within such twelve (12) month period, then Sellers shall have been deemed to agree that the Additional Milestone has not been met and no payment with respect to such Additional Milestone is due to Sellers hereunder and Sellers shall have no further rights to such Milestone Payment or any portion thereof. Such Post-Closing Assessment Notice may be delivered before or after the expiration of the Post-Closing Milestone Period without affecting Sellers’ rights to the applicable Milestone Payment, provided that that applicable Additional Milestone was actually achieved prior to the expiration of such Post-Closing Milestone Period. If Purchaser shall object to Sellers’ determination that a Additional Milestone has been achieved as set forth in the Post-Closing Assessment Notice, then Purchaser shall deliver a dispute notice (a “Post-Closing Milestone Dispute Notice”) to Sellers’ Representative within fifteen (15) days following Sellers’ Representative’s delivery of the Post-Closing Assessment Notice. A representative of Purchaser, on the one hand, and the Sellers’ Representative, on the other, shall attempt in good faith to resolve any such objections within fifteen (15) days of the receipt by Sellers of the Post-Closing Milestone Dispute Notice. If no Post-Closing Milestone Dispute Notice is delivered within the fifteen (15) day time period, then Sellers’ determination that the Additional Milestone has been achieved, and that the amount of the Milestone Payment specified in the Post-Closing Milestone Dispute Notice is due hereunder, shall be deemed to be accepted and Purchaser shall pay to Sellers those amounts set forth in the Post-Closing Assessment Notice no later than five (5) days after the expiration of such fifteen (15) day time period.

          (c) Second Put Option Condition. If Sellers at any time believe that the Second Put Option Condition has been satisfied and Sellers’ Representative has not received a Second Put Option Notice, the Sellers’ Representative shall deliver a notice of such achievement to Purchaser no later than thirty (30) days after the expiration of the Second Put Option Period (the “Second Put Option Dispute Notice,” and together with any Pre-Closing Milestone Dispute Notice and any Post-Closing Milestone Dispute Notice, a “Dispute Notice”). Purchaser, on the one hand, and the Sellers’ Representative, on the other, shall attempt in good faith to resolve within fifteen (15) days of the receipt by Purchaser of the Second Put Option Dispute Notice whether the Second Put Option Condition has been satisfied. If Sellers’ Representative fails to deliver the Second Put Option Dispute Notice within thirty (30) days following the expiration of the Second Put Option Period, it shall be definitively determined that the Second Put Option Condition has not been satisfied.

          (d) Dispute Resolution. If Purchaser and Sellers shall be unable to resolve any such dispute within the fifteen (15) day period following the non-objecting party’s receipt of a Dispute Notice, then within five (5) days thereafter, Purchaser and the Sellers’ Representative shall designate an arbitrator to resolve any and all matters that remain in dispute and were properly included in the Dispute Notice. The dispute shall be resolved by arbitration in New York, New York administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules (the “AAA Rules”), provided, however, that Purchaser and the Sellers’ Representative shall agree on the selection of an independent medical or scientific expert (the “Independent Expert”) who will make a report to the arbitrator which the arbitrator will be required to use as the basis for his or her decision. In the event that Purchaser and the Sellers’ Representative are unable to agree on the arbitrator within such five (5) day period, AAA will have the authority to select an arbitrator within five (5) Business Days thereafter. In the event that Purchaser and the Sellers’ Representative are unable to agree on the Independent Expert, the arbitrator shall have the authority to determine the Independent Expert. The Sellers’

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Representative and Purchaser shall use reasonable efforts to cause the arbitrator to render a written decision resolving the matters submitted on a timely basis to the arbitrator within thirty (30) days of the receipt of such submission. The arbitrator’s decision shall be based solely on written submissions made on a timely basis by the Sellers’ Representative and Purchaser and their respective representatives and not by independent review. The arbitrator shall address only those items in dispute and may not assign a value greater than the greatest value for such item claimed by either party or smaller than the smallest value for such item claimed by either party. Judgment may be entered upon the determination of the arbitrator in any court having jurisdiction over the party against which such determination is to be enforced. The fees and expenses of the arbitrator incurred pursuant to this Section 1.11(d) shall be borne by Purchaser and Sellers (in accordance with their respective Proceeds Allocations), pro rata, based on the difference between the amount of the Initial Purchase Price or Milestone Payment (as the case may be), as finally determined by the arbitrator pursuant to this clause (d), and the amount of the Initial Purchase Price or Milestone Payment (as the case may be) asserted by each party in the Milestone Completion Notice, the Post-Closing Assessment Notice or the Second Put Option Notice, as the case may be, and the Dispute Notice, as applicable.

     1.12 Acknowledgement of Sellers and Purchaser. Sellers and Purchaser acknowledge that (i) Purchaser has no obligation to aid or assist the Acquired Company in order to achieve any Milestone or to maximize any Milestone, (ii) the parties solely intend the express provisions of the Closing Documents to govern their contractual relationship, and (iii) unless and until Purchaser, at its sole election, issues a Purchase Election Notice, or unless and until the Sellers’ Representative issues a Milestone Completion Notice or Second Put Option Notice, Purchaser is under no obligation to purchase the Seller Shares from Sellers. The Sellers hereby waive, on their behalf and on behalf of any of their successors and assigns, any fiduciary duty (but, for avoidance of doubt, not any implied covenant of good faith and fair dealing) of Purchaser to Sellers, with respect to the matters contemplated by this Section 1.12.

     1.13 Withholding. Purchaser shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to Sellers such amounts as Purchaser is required to deduct and withhold under any Tax law, with respect to the making of such payment. Purchaser shall notify Sellers of the basis for such withholding no less than fifteen (15) days prior to the proposed withholding and shall consider in good faith any views of Sellers with respect to whether such withholding is required under the United States Internal Revenue Code of 1986 (as amended), or any provisions of state or local Tax law, with respect to the making of such payment, provided however, that Sellers provide to Purchaser such documentation as Purchaser reasonably requests to support Sellers’ views with respect to whether such withholding is required.

     1.14 Working Capital. One (1) day prior to the Closing, the Sellers’ Representative shall deliver to Purchaser a financial statement setting forth the Working Capital of the Business on the Closing Date.

2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS WITH RESPECT TO THE SELLER SHARES

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     Each Seller, severally but not jointly, hereby represents and warrants to Purchaser as to such Seller and the Seller Shares owned by such Seller, as set forth below. Each exception to such representations and warranties set forth in the Seller Parties Disclosure Schedule is identified by reference to, or has been grouped under a heading referring to, a specific section of this Agreement, and the disclosures in any section or subsection of the Seller Parties Disclosure Schedule shall qualify other sections and subsections in this Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

     2.1 Authority; Execution and Delivery; Enforceability. Each Seller has full power, authority and capacity to execute and deliver this Agreement and to perform such Seller’s respective obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Seller and constitutes the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

     2.2 Non-Contravention. The execution and delivery of this Agreement by such Seller does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof, will not (or would not with the giving of notice or the passage of time):

          (a) constitute a default under or a violation or breach (with or without notice) of, result in the acceleration of any obligation under, any provision of any contract or other instrument to which such Seller is a party or result in the termination or revocation of any authorization held by such Seller or the Acquired Company necessary to the ownership of the Seller Shares or the operation of the business of the Acquired Company;

          (b) violate any Order or any Legal Requirement affecting such Seller; or

          (c) result in the creation of any Encumbrance on the Seller Shares.

     2.3 Title to Seller Shares. Each Seller is and will be on the Closing Date the holder and beneficial owner of the Seller Shares owned by such Seller. The Seller Shares owned by such Seller as of the Effective Date are as set forth on Part 2.3 of the Seller Parties Disclosure Schedule. Each Seller has good and valid title to the Seller Shares owned by such Seller as set forth on Part 0 of the Seller Parties Disclosure Schedule, free and clear of all Encumbrances. At the Closing, each Seller will transfer legal and beneficial, good and valid title to each of the Seller Shares owned by such Seller, free and clear of all Encumbrances. No Seller is bound by any contract, agreement, arrangement, commitment or understanding (written or oral) with, and has not granted any option or right currently in effect or which would arise after the Effective Date to, any Person other than Purchaser with respect to the acquisition of any Seller Shares.

     2.4 Consents and Approvals. Except as set forth in the Seller Parties Disclosure Schedule, no consent, approval, waiver, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Body, and no consent, approval, waiver or other similar authorization of any other Person (including, without limitation, any Person who is a party to a Contract binding on or affecting the Acquired Company or any Subsidiary), is required

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to be obtained by or on behalf of such Sellers as a result of, or in connection with, or as a condition of the lawful execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

     2.5 Litigation and Claims. There is no Action pending or, to the Knowledge of such Seller, Threatened, against or affecting such Seller that could reasonably be expected to affect such Seller’s ability to consummate the transactions contemplated hereby.

     2.6 No Finder. Except as set forth in the Seller Parties Disclosure Schedule, neither such Seller nor any party acting on such Seller’s behalf has paid or become obligated to pay any fee or commission to any broker, finder or intermediary for or on account of the transactions contemplated hereby, and the Acquired Company will not be liable or obligated in any way whatsoever with respect to any such fee or commission.

3. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED COMPANY

     The Acquired Company hereby represents and warrants to Purchaser as set forth below. Each exception to such representations and warranties set forth in the Seller Parties Disclosure Schedule is identified by reference to, or has been grouped under a heading referring to, a specific section of this Agreement, and the disclosures in any section or subsection of the Seller Parties Disclosure Schedule shall qualify other sections and subsections in this Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

     3.1 Organization and Good Standing.

          (a) Part 3.1 of the Seller Parties Disclosure Schedule contains a complete and accurate list for the Acquired Company of its name, its jurisdiction of incorporation, other jurisdictions in which it is authorized to do business, and its capitalization (including the identity of each stockholder and the number of shares held by each), in each case as of the Effective Date. The Acquired Company is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts. The Acquired Company is a private company with limited liability duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.

          (b) The Acquired Company made available to Purchaser in the Data Room copies of the Organizational Documents of the Acquired Company, as currently in effect.

     3.2 Authority; No Conflict.

          (a) The Closing Documents to which the Acquired Company is a party have been authorized by the board of directors (“Board of Directors”) of the Acquired Company and, to the extent required, by the shareholders of the Acquired Company. Upon the execution and

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delivery by the Acquired Company of such Closing Documents, such Closing Documents will constitute the legal, valid, and binding obligations of the Acquired Company, enforceable against it in accordance with their respective terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditor’s rights and to general equity principles. The execution and delivery of such Closing Documents by the Acquired Company and the performance of the Contemplated Transactions by it does not conflict with any provision of the Organizational Documents of the Acquired Company.

          (b) Neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

               (i) contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of the Acquired Company, or (B) any resolution adopted by the board of directors or the shareholders of the Acquired Company;

               (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which the Acquired Company, or any of the assets owned or used by the Acquired Company, may be subject;

               (iii) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by the Acquired Company or that otherwise relates to the business of, or any of the assets owned or used by, the Acquired Company;

               (iv) cause the Acquired Company to become subject to, or to become liable for the payment of, any Tax;

               (v) cause any of the assets owned by the Acquired Company to be reassessed or revalued by any taxing authority or other Governmental Body;

               (vi) contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract; or

               (vii) result in the imposition or creation of any Encumbrance upon or with respect to any of the assets owned or used by the Acquired Company, other than Permitted Encumbrances.

Except as set forth in Part 3.2 of the Disclosure Schedule the Acquired Company is not nor will it be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

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     3.3 Capitalization. As of the Effective Date (without giving effect to the Recapitalization), the authorized equity securities of the Acquired Company consist of 60,000 ordinary shares, par value €1 per share, of which 18,000 shares are issued and outstanding and 30,000 cumulative preference shares, par value €1 per share, of which 4,000 shares are issued and outstanding. As of the Effective Date, no shares or classes of the Acquired Company’s capital are reserved for issuance. No reference to any purported Encumbrance appears in the shareholders’ register of the Acquired Company. All of the outstanding equity securities of the Acquired Company have been duly authorized and validly issued and are fully paid. Except as set forth in Part 3.3 of the Seller Parties Disclosure Schedule, as of the Effective Date, there are no Contracts relating to the issuance, sale, transfer or voting of any issued or issuable equity securities or other securities (including, but not limited, to any options, stock appreciation rights, warrants or other instruments or securities exercisable or exchangeable for, or convertible into, equity securities) of the Acquired Company. None of the outstanding equity securities or other securities of the Acquired Company was issued in violation of any Legal Requirement. As of the Effective Date, the Acquired Company does not own, nor does it have any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business. As of the Effective Date, the Acquired Company does not have any Subsidiaries.

     3.4 Financial Statements. The Acquired Company has made available to Purchaser in the Data Room the unaudited balance sheet of the Acquired Company and the related unaudited statements of income, changes in stockholders’ equity, and cash flow balance sheet of the Acquired Company as of December 31, 2008 (the “Balance Sheet”) and the related unaudited statements of income, changes in shareholders’ equity, and cash flow for the twelve (12) months then ended (collectively, the “Financial Statements”), including in each case the notes thereto (except that the unaudited Financial Statements may not contain all required footnotes and the interim Financial Statements are subject to year-end adjustments). The Financial Statements fairly present in all material respects the financial condition and the results of operations, changes in stockholders’ equity, and cash flow of the Acquired Company as at the respective dates of and for the periods referred to in the Financial Statements. The Financial Statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such Financial Statements. No financial statements of any Person other than the Acquired Company are required to be included in the consolidated financial statements of the Acquired Company.

     3.5 Books and Records. The books and records of the Acquired Company, all of which have been made available to Purchaser in the Data Room, are complete and correct in all material respects and have been maintained in accordance with sound business practices in the Netherlands, including the maintenance of an adequate system of internal controls. The minute books of the Acquired Company contain materially accurate and complete records of all meetings held of, and corporate action taken by, the stockholders, the Board of Directors and the Supervisory Board of Directors of the Acquired Company, and no meeting of any such stockholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Acquired Company.

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     3.6 Title to Properties; Encumbrances. As of the Effective Date, the Acquired Company does not own (a) any real property, (b) any leasehold interests or (c) any buildings, plants, structures and/or equipment. Part 3.6 of the Seller Parties Disclosure Schedule contains a complete and accurate list as of the Effective Date of all (A) Assets that the Acquired Company purports to own, including all of the properties and assets reflected in the Balance Sheet (except for assets held under capitalized leases disclosed or not required to be disclosed in Part 3.6 of the Seller Parties Disclosure Schedule and personal property sold since the date of the Balance Sheet, as the case may be, in the Ordinary Course of Business), and (B) all of the properties and assets purchased or otherwise acquired by the Acquired Company from the date of the Balance Sheet through the Effective Date (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice), which subsequently purchased or acquired properties and assets (other than inventory and short-term investments) are listed in Part 3.6 of the Seller Parties Disclosure Schedule. The Acquired Company is the sole owner and has good and marketable title (or leasehold title, as the case may be) to the Assets free and clear of all Encumbrances, and the Assets reflected in the Balance Sheet are free and clear of all Encumbrances and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets, (i) mortgages or security interests shown on the Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (ii) mortgages or security interests incurred in connection with the purchase of property or assets after the date of the Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (iii) liens for current taxes not yet due, (iv) Encumbrances pursuant to the Pledge Agreement or the Facility Agreement and (v) Encumbrances incurred in the Ordinary Course of Business, consistent with past practice, or created by the express provisions of the Contracts, each of the type identified on Part 3.6 of the Seller Parties Disclosure Schedule (together, the “Permitted Encumbrances”). All such assets are suitable for the uses to which they are being put or have been put in the Ordinary Course of the Business and are in good working order, ordinary wear and tear excepted.

     3.7 Condition and Sufficiency of Assets. As of the Effective Date, except as set forth on Part 3.7 of the Seller Parties Disclosure Schedule, the Assets are all assets of the Acquired Company used in or related to the processing and manufacturing of the Products. Xpand Biotechnology B.V., a private company with limited liability (“Xpand”), transferred to the Acquired Company the Acquired Company Proprietary Rights and prior to such transfer of the Acquired Company Proprietary Rights, Xpand was the sole and rightful owner of the Acquired Company Proprietary Rights. Except as set forth on Part 3.7 of the Seller Parties Disclosure Schedule, the Assets and the Acquired Company Proprietary Rights of the Acquired Company constitute all of the assets, property, real personal or mixed, tangible or intangible, of the Acquired Company used in or held for use in for the operation of the Business as presently conducted as of the Effective Date.

     3.8 Accounts Receivable. As of the Effective Date, the Acquired Company has no accounts receivable, nor has it previously had any accounts receivable prior to the Effective Date.

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     3.9 Inventory. As of the Effective Date, the Acquired Company has no inventory, nor has it previously had any inventory prior to the Effective Date.

     3.10 No Undisclosed Liabilities. As of the Effective Date, the Acquired Company has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Balance Sheet, except for (a) liabilities or obligations reflected or reserved against in the Balance Sheet, (b) liabilities or obligations incurred since the Balance Sheet Date in the Ordinary Course of Business, (c) liabilities of a type or nature not required to be reflected in the Financial Statements, which are not material, individually or in the aggregate, or (d) liabilities or obligations set forth in Part 3.10 of the Seller Parties Disclosure Schedule. Except as set forth in Part 3.10 of the Seller Parties Disclosure Schedule the Acquired Company is not a guarantor or indemnitor of any Indebtedness of any other Person.

     3.11 Taxes.

          (a) The Acquired Company has paid on a timely basis all Taxation that was due and payable on or before the Closing Date. The unpaid taxes of the Acquired Company for all Tax periods through the Balance Sheet Date do not exceed the accruals and reserves for Taxation (excluding accruals and reserves for deferred Taxation established to reflect timing differences between book and Tax income) set forth on the Balance Sheet.

          (b) All notices and returns required to have been given or made, have been properly and duly submitted by the Acquired Company to the relevant Governmental Body and all information, notices, computations and returns submitted to such Governmental Body are true, accurate and complete and are not the subject of any dispute nor are likely to become the subject of any dispute with such Governmental Body. The Acquired Company has not been informed by any Governmental Body that such Governmental Body formally asserts that the Acquired Company was required to file any Tax Return that was not filed, and, to the Sellers’ Knowledge, no such assertion is planned by any Governmental Body. The Acquired Company has not (i) waived any statute of limitations with respect to Taxation, (ii) requested any extension of time within which to file any Tax Return, or (iii) executed or filed any power of attorney with any taxing authority. All records that the Acquired Company is required to keep for Taxation purposes, have been duly kept and are available for inspection at the Acquired Company premises.

          (c) The amount of Taxation chargeable to the Acquired Company has not been affected by any concession, arrangements, agreement or other formal or informal arrangement with any Governmental Body (not being a concession, agreement or arrangement available to companies generally). The Acquired Company is not subject to a special Tax regime. The Acquired Company is not required to include any amounts in income, or to exclude any items of deduction in a taxable period beginning after the Closing Date as a result of: (i) an instalment sale or open transaction arising in a taxable period ending on or before the Closing Date; (ii) a prepaid amount received, or paid, in a taxable period ending on or before the Closing Date; (iii) deferred gains that could be recognized in a taxable period ending after the Closing Date; or (iv) any similar item of deferred income or expense.

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          (d) In relation to Tax, the Acquired Company has not been subject to and is not currently subject as of the Effective Date to any investigation, audit or visit by any Governmental Body, and, to the Sellers’ Knowledge, no such investigation, audit or visit is planned by any Governmental Body.

          (e) Since its incorporation through the Effective Date, the Acquired Company has not been involved in any Taxation controversy and/or litigation with or against any Governmental Body.

          (f) The Acquired Company has made all deductions and/or withholdings in respect, or in account, of any Taxation from any payments made by the Acquired Company that it is obliged or entitled to have made and has accounted in full to the appropriate authority for all amounts so deducted and/or withheld.

          (g) The Acquired Company has not received any notice from any Governmental Body that required or will require the Acquired Company to withhold Taxation from any payment made since the Balance Sheet Date in respect of which such withheld Taxation has not been accounted for in full to the appropriate authority.

          (h) The Acquired Company has not claimed or been granted exemptions from Taxation that may give rise to the assessment and/or payment of Taxation in connection with any transactions involving the Acquired Company, including but not limited to this Agreement, reorganisations, mergers and/or disposals of the Acquired Company.

          (i) All applications by the Acquired Company for governmental subsidies, which have been made or are reflected in the Balance Sheet have been duly and correctly made and no refunds and no interest, penalties or additions regarding such refunds are or will be due in respect of governmental subsidies.

          (j) The Acquired Company

               (i) has always been resident, for Tax purposes, in the Netherlands;

               (ii) is not and has never been resident, for Tax purposes, in any other jurisdiction;

               (iii) does not have and has never had a taxable presence outside the Netherlands; and

               (iv) is not deemed to have and has never been deemed to have had a taxable presence outside the Netherlands.

          (k) No Taxation, for which any other person or entity is or may be liable, will be charged in any way to the Acquired Company, and the Acquired Company is not a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement.

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          (l) Each transaction between the Sellers or any Affiliate of the Sellers on the one hand and the Acquired Company on the other hand is and has been done at an arm’s length basis.

          (m) The Acquired Company is not liable for Taxation imposed on or due by any third party, including, without limitation, any sub-contractor, the Sellers or any Affiliate of the Sellers, except to the extent that full provision has been made in the Financial Statements of the Acquired Company.

          (n) Other than by their own expiration over time, there is no limitation on the utilization by the Acquired Company of its net operating losses, built-in losses, Tax credits or similar items under the Tax laws of any jurisdiction (other than any such limitations arising as a result of the consummation of the Contemplated Transactions).

          (o) The Acquired Company does not own any interest in any entity that is characterized as a partnership for Tax purposes.

          (p) There are no Tax liens or other Encumbrances with respect to Taxation upon any of the Assets of the Acquired Company, other than with respect to Permitted Encumbrances.

          (q) The Acquired Company has delivered or made available to Purchaser in the Data Room for inspection (i) complete and correct copies of all Tax Returns of the Acquired Company relating to Taxation and (ii) complete and correct copies of all documents from any Governmental Body received by or agreed to by or on behalf of the Acquired Company relating to Taxation since the Acquired Company’s formation.

     3.12 No Material Adverse Change. Since the date of the Balance Sheet, there has not been a Material Adverse Effect.

     3.13 Pensions. As of the Effective Date, the Acquired Company has no, and has never had any retirement benefit schemes, early retirement schemes, pre-pension schemes or other pension arrangements, relating to the Business (the “Pension Schemes”), in operation or proposed.

     3.14 Legal Proceedings; Orders.

          (a) There is no pending Proceeding:

               (i) that has been commenced by or against the Acquired Company or that otherwise relates to or may affect the business of, or any of the assets owned or used by, the Acquired Company; or

               (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions.

To Sellers’ Knowledge, (1) no such Proceeding has been Threatened, and (2) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement

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of any such Proceeding. Seller Parties have made available to Purchaser in the Data Room copies of all pleadings, correspondence, and other documents relating to each Proceeding listed in Part 3.14(a) of the Seller Parties Disclosure Schedule. The Proceedings listed in Part 3.14(a) of the Seller Parties Disclosure Schedule could not reasonably be expected to have a Material Adverse Effect.

          (b) There is no Order to which the Acquired Company, or any of the assets owned or used by the Acquired Company, is subject.

          (c) No officer, director, agent, or employee of the Acquired Company is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the business of the Acquired Company.

          (d) The Acquired Company is, and at all times has been, in full compliance with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject.

          (e) No event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which the Acquired Company, or any of the assets owned or used by the Acquired Company, is subject.

          (f) The Acquired Company has not received, at any time, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which the Acquired Company, or any of the assets owned or used by the Acquired Company, is or has been subject.

     3.15 Absence of Certain Changes and Events. Except as set forth in Part 3.15 of the Seller Parties Disclosure Schedule, since the Balance Sheet Date through the Effective Date, the Acquired Company has conducted its business only in the Ordinary Course of Business and none of the following actions or events has occurred:

          (a) any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of the Acquired Company (whether or not covered by insurance) that has had or could reasonably be expected to have a Material Adverse Effect;

          (b) (i) any declaration, accrual, set aside or payment of any dividend or any other distribution in respect of any shares of capital stock of the Acquired Company, or (ii) any repurchase, redemption or other acquisition by the Acquired Company of any shares of capital stock or other securities;

          (c) any sale, issuance or grant, or authorization of the issuance of, (i) shares or other securities of the Acquired Company, (ii) any option, warrant or right to acquire any shares or any other securities of the Acquired Company, or (iii) any instrument convertible into or exchangeable for shares or other securities of the Acquired Company;

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          (d) any amendment or waiver of any of the rights of the Acquired Company under any share purchase agreement;

          (e) any amendment to any Organizational Document of the Acquired Company, any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, share split, reverse share split or similar transaction involving the Acquired Company;

          (f) any creation of any Subsidiary of the Acquired Company or acquisition by the Acquired Company of any equity interest or other interest in any other Person;

          (g) any capital expenditure by the Acquired Company which, when added to all other capital expenditures made on behalf of the Acquired Company since the Balance Sheet Date, exceeds €10,000 in the aggregate;

          (h) except in the Ordinary Course of Business, any action by the Acquired Company to (i) enter into or suffer any of the assets owned or used by it to become bound by any Material Contract (as defined in Section 3.16), or (ii) amend or terminate, or waive any material right or remedy under, any Material Contract;

          (i) any (i) acquisition, lease or license by the Acquired Company of any material right or other material asset from any other Person, (ii) sale or other disposal or lease or license by the Acquired Company of any material right or other material asset to any other Person, or (iii) waiver or relinquishment by the Acquired Company of any right, except for rights or other assets acquired, leased, licensed or disposed of in the Ordinary Course of Business;

          (j) any write-off as uncollectible, or establishment of any extraordinary reserve with respect to, any Indebtedness of the Acquired Company;

          (k) any pledge of any assets of or sufferance of any of the assets of the Acquired Company to become subject to any Encumbrance, except for Permitted Encumbrances and pledges of immaterial assets made in the Ordinary Course of Business;

          (l) any (i) loan by the Acquired Company to any Person, or (ii) any incurrence or guarantee of Indebtedness by the Acquired Company;

          (m) any (i) adoption, establishment, entry into or amendment by the Acquired Company of any Pension Scheme or (ii) payment of any bonus or any profit sharing or similar payment to, or material increase in the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of the directors or officers of the Acquired Company;

          (n) any change of the methods of accounting or accounting practices of the Acquired Company in any material respect;

          (o) any material Tax election by the Acquired Company;

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          (p) any commencement or settlement of any Proceeding by the Acquired Company; and

          (q) any agreement or commitment to take any of the actions referred to in clauses (c) through (p) above.

     3.16 Contracts; No Defaults.

          (a) Part 3.16(a) of the Seller Parties Disclosure Schedule contains a complete and accurate list as of the Effective Date, and Seller Parties have made available to Purchaser in the Data Room true and complete copies of, each Contract, other instrument or document (including of any amendments) to which the Acquired Company is a party or by which its assets are subject or bound:

               (i) with any director, officer or Affiliate of the Acquired Company;

               (ii) evidencing, governing or relating to Indebtedness;

               (iii) not entered into in the Ordinary Course of Business that involves expenditures or receipts;

               (iv) that in any way purports to restrict the business activity of the Acquired Company or any of its Affiliates or to limit the freedom of the Acquired Company or any of its Affiliates to engage in any line of business or to compete with any Person or in any geographic area or to hire or retain any Person;

               (v) relating to the employment of, or the performance of services by, any employee or consultant, or pursuant to which the Acquired Company is or may become obligated to make any severance, termination or similar payment to any current or former employee or director; or pursuant to which the Acquired Company is or may become obligated to make any bonus or similar payment (other than payments constituting base salary) to any current or former employee or director;

               (vi) (A) relating to the acquisition, transfer, development, sharing or license of any Proprietary Rights (except for any Contract pursuant to which (1) any Proprietary Rights is licensed to the Acquired Company under any third party software license generally available to the public, or (2) any Proprietary Rights is licensed by the Acquired Company to any Person on a non exclusive basis); or (B) of the type referred to in Section 3.20(d);

               (vii) providing for indemnification of any officer, director, employee or agent;

               (viii) (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any Person with any preemptive right, right of participation, right of maintenance or any similar right with respect to any securities, or (C) providing the Acquired Company with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

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               (ix) incorporating or relating to any guaranty, any warranty or any indemnity or similar obligation, except for Contracts substantially identical to the standard forms of end user licenses made available by Seller Parties to Purchaser in the Data Room;

               (x) relating to any currency hedging;

               (xi) (A) imposing any confidentiality obligation on the Acquired Company or any other Person, or (B) containing “standstill” or similar provisions;

               (xii) (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations, or (B) directly or indirectly benefiting any Governmental Body (including any subcontract or other Contract between the Acquired Company and any contractor or subcontractor to any Governmental Body);

               (xiii) contemplating or involving the payment or delivery of cash or other consideration in an amount or having a value in excess of €5,000 in the aggregate, or contemplating or involving the performance of services having a value in excess of €5,000 in the aggregate; and

               (xiv) any other Contract, if a breach of such Contract could reasonably be expected to have a Material Adverse Effect.

          (b) Each of the foregoing is a “Material Contract.”

               (i) Each Material Contract is valid and in full force and effect, and is enforceable against the Acquired Company in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

               (ii) The Acquired Company has not violated or breached, or committed any default under, any Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a Material Adverse Effect; and, to Sellers’ Knowledge, no other Person has violated or breached, or committed any default under, any Material Contract, except for violations, breaches and defaults that have not had and would not reasonably be expected to have a Material Adverse Effect.

               (iii) Except as set forth on Part 3.16(b) of the Seller Parties Disclosure Schedule, to Sellers’ Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will or would reasonably be expected to, (A) result in a violation or breach of any of the provisions of any Material Contract, (B) give any Person the right to declare a default or exercise any remedy under any Material Contract, (C) give any Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any Material Contract, (D) give any Person the right to accelerate the maturity or performance under any Material Contract, (E) result in the disclosure, release or delivery of the Acquired Company Source Code, or (F) give any Person the right to cancel, terminate or modify any Material Contract, except in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a Material Adverse Effect.

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               (iv) The Acquired Company has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Material Contract, except in each such case for defaults, acceleration rights, termination rights and other rights that have not had and would not reasonably be expected to have a Material Adverse Effect.

     3.17 Insurance.

          (a) Seller Parties have made available to Purchaser in the Data Room:

               (i) true and complete copies of all policies of insurance to which the Acquired Company is a party or under which the Acquired Company, or any director of the Acquired Company, in his capacity as such, is or has been covered at any time preceding the date of this Agreement;

               (ii) true and complete copies of all pending applications for policies of insurance; and

               (iii) any statement by the auditor of the Acquired Company’s financial statements with regard to the adequacy of such entity’s coverage or of the reserves for claims.

          (b) The Acquired Company:

               (i) has no self-insurance arrangements by or affecting the Acquired Company, including any reserves established thereunder;

               (ii) has not concluded contracts or arrangements, other than a policy of insurance, for the transfer or sharing of any risk by the Acquired Company;

               (iii) has made available to Purchaser in the Data Room all obligations of the Acquired Company to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided; and

               (iv) has not suffered any loss experience or received any claim under any policy for the current policy year.

          (c) All policies to which the Acquired Company is a party or that provide coverage to the Acquired Company, or any director or officer of the Acquired Company in his capacity as such:

               (i) are valid, outstanding, and enforceable;

               (ii) are issued by an insurer that is financially sound and reputable;

               (iii) taken together, provide adequate insurance coverage for the assets and the operations of the Acquired Company for all risks normally insured against by a Person carrying on the same business or businesses as the Acquired Company;

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               (iv) are sufficient for compliance with all Legal Requirements and Contracts to which the Acquired Company is a party or by which any of them is bound;

               (v) will continue in full force and effect following the consummation of the Contemplated Transactions; and

               (vi) do not provide for any retrospective premium adjustment or other experienced-based liability on the part of the Acquired Company.

          (d) The Acquired Company has not received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder.

          (e) The Acquired Company has paid all premiums due, and has otherwise performed all of its respective obligations, under each policy to which the Acquired Company is a party or that provides coverage to the Acquired Company or director thereof.

          (f) The Acquired Company has given notice to the insurer of all claims that may be insured under any policy provided by such insurer.

     3.18 Environmental Matters.

          (a) The Acquired Company is, and at all times has been, in material compliance with, and has not been and is not in violation of or liable under, any Environmental Law. To Sellers’ Knowledge, there is no actual order, written notice, or other written communication from, nor has any order, notice, or other communication been Threatened from (i) any Governmental Body or private citizen, or (ii) the current or prior owner or operator of any Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Acquired Company had an interest, or with respect to any property or Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by the Acquired Company, or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

          (b) There are no pending or, to Sellers’ Knowledge, Threatened claims, Encumbrances, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal, or mixed) in which the Acquired Company has or had an interest.

          (c) The Acquired Company has not received, any citation, directive, inquiry, notice, Order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any

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Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Acquired Company had an interest, or with respect to any property or facility to which Hazardous Materials generated, manufactured, refined, transferred, imported, used, or processed by the Acquired Company, or any other Person for whose conduct they are or may be held responsible, have been transported, treated, stored, handled, transferred, disposed, recycled, or received.

          (d) The Acquired Company has no Environmental, Health, and Safety Liabilities with respect to the Facilities or, with respect to any other properties and assets (whether real, personal, or mixed) in which the Acquired Company (or any predecessor), has or had an interest, or at any property geologically or hydrologically adjoining the Facilities or any such other property or assets.

          (e) Except as set forth on Part 3.18(e) of the Seller Parties Disclosure Schedule, there are no Hazardous Materials present on or in the Environment at the Facilities or at any geologically or hydrologically adjoining property, including any Hazardous Materials contained in barrels, above or underground storage tanks, landfills, land deposits, dumps, equipment (whether moveable or fixed) or other containers, either temporary or permanent, and deposited or located in land, water, sumps, or any other part of the Facilities or such adjoining property, or incorporated into any structure therein or thereon. The Acquired Company has not permitted or conducted any, and to Sellers’ Knowledge there is no, Hazardous Activity conducted with respect to the Facilities or any other properties or assets (whether real, personal, or mixed) in which the Acquired Company has or had an interest.

          (f) There has been no Release or, to Sellers’ Knowledge, Threat of Release, of any Hazardous Materials at or from the Facilities or at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the Facilities, or from or by any other properties and assets (whether real, personal, or mixed) in which the Acquired Company has or had an interest, or any geologically or hydrologically adjoining property.

          (g) The Acquired Company has delivered to Purchaser true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by the Acquired Company pertaining to Hazardous Materials or Hazardous Activities in, on, or under the Facilities, or concerning compliance by the Acquired Company with Environmental Laws.

     3.19 Employees. The Acquired Company has no employees, nor has it ever had any employees, prior to the Effective Date. The Acquired Company is not a party to any collective labour agreement.

     3.20 Intellectual Property.

          (a) With respect to Proprietary Rights of the Acquired Company:

               (i) Part 3.20(a)(i)(A) of the Seller Parties Disclosure Schedule lists all of the Patents owned by the Acquired Company as of the Effective Date, setting forth in each

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case the jurisdictions in which Issued Patents have been issued and Patent Applications have been filed. Part 3.20(a)(i)(B) of the Seller Parties Disclosure Schedule lists all of the Patents in which the Acquired Company has any right, title or interest as of the Effective Date (including without limitation interest acquired through a license or other right to use) other than those owned by the Acquired Company, setting forth in each case the jurisdictions in which the Issued Patents have been issued and Patent Applications have been filed, and the nature of the right, title or interest held by the Acquired Company. Except as set forth on Part 3.20(a)(i)(A) of the Seller Parties Disclosure Schedule, the Acquired Company has obtained a Patent with respect to each Product;

               (ii) Part 3.20(a)(ii)(A) of the Seller Parties Disclosure Schedule lists all of the Registered Trademarks owned by the Acquired Company as of the Effective Date, setting forth in each case the jurisdictions in which Registered Trademarks have been registered and trademark applications for registration have been filed. Part 3.20(a)(ii)(B) of the Seller Parties Disclosure Schedule lists all of the Registered Trademarks in which the Acquired Company has any right, title or interest as of the Effective Date, other than those owned by the Acquired Company (including without limitation interest acquired through a license or other right to use), setting forth in each case the jurisdictions in which Registered Trademarks have been registered and trademark applications for registration have been filed, and the nature of the right, title or interest held by the Acquired Company;

               (iii) Part 3.20(a)(iii)(A) of the Seller Parties Disclosure Schedule lists all of the Registered Copyrights owned by the Acquired Company as of the Effective Date, setting forth in each case the jurisdictions in which Copyrights have been registered and applications for copyright registration have been filed. Part 3.20(a)(iii)(B) of the Seller Parties Disclosure Schedule lists all of the Registered Copyrights in which the Acquired Company has any right, title or interest as of the Effective Date, other than those owned by the Acquired Company (including without limitation interest acquired through a license or other right to use), setting forth in each case the jurisdictions in which the Registered Copyrights have been registered and applications for copyright registration have been filed, and the nature of the right, title or interest held by the Acquired Company; and

               (iv) The Acquired Company has good and valid title to all of the Acquired Company Proprietary Rights identified in Parts 3.20(a)(i)(A), 3.20(a)(ii)(A) and 3.20(a)(iii)(A) of the Seller Parties Disclosure Schedule and all Trade Secrets owned by the Acquired Company, free and clear of all Encumbrances, except for Permitted Encumbrances. The Acquired Company has a valid right to use, license and otherwise exploit all Proprietary Rights identified in Parts 3.20(a)(i)(B), 3.20(a)(ii)(B), and 3.20(a)(iii)(B) of the Seller Parties Disclosure Schedule and all Trade Secrets used by the Acquired Company, other than those owned by the Acquired Company (including without limitation interest acquired through a license or other right to use). Except as set forth on Part 3.20(a)(iv) of the Seller Parties Disclosure Schedule, the Acquired Company Proprietary Rights identified in Part 3.20(a) of the Seller Parties Disclosure Schedule, together with the Trade Secrets used by the Acquired Company, constitutes (A) all Proprietary Rights used or currently proposed as of the Effective Date to be used in the business of the Acquired Company as conducted prior to or on the Effective Date, or as proposed to be conducted by Acquired Company as of the Effective Date

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and (B) all Proprietary Rights necessary or appropriate to make, use, offer for sale, sell or import the Product(s).

          (b) Part 3.20(b) of the Seller Parties Disclosure Schedule lists all oral and written contracts, agreements, licenses and other arrangements relating to the Acquired Company Proprietary Rights or the Product(s) as of the Effective Date, as follows:

               (i) Part 3.20(b)(i) lists as of the Effective Date: (A) any agreement granting any right to make, have made, manufacture, use, sell, offer to sell, import, export, or otherwise distribute any Product(s), with or without the right to sublicense the same, on an exclusive basis; (B) any license of Proprietary Rights to or from the Acquired Company, with or without the right to sublicense the same, on an exclusive basis; (C) joint development agreements; (D) any agreement by which the Acquired Company grants any ownership right to the Acquired Company Proprietary Rights owned by the Acquired Company; (E) any agreement under which the Acquired Company undertakes any ongoing royalty or payment obligations with respect to an Acquired Company Proprietary Right; (F) any agreement under which the Acquired Company grants an option relating to the Acquired Company Proprietary Rights; (G) any agreement under which any party is granted any right to access Acquired Company Source Code or to use Acquired Company Source Code to create derivative works of the Products; (H) any Agreement pursuant to which the Acquired Company has deposited or is required to deposit with an escrow agent or any other Person the Acquired Company Source Code, and further describes whether the execution of this Agreement or the consummation of any of the transactions contemplated hereby could reasonably be expected to result in the release or disclosure of the Acquired Company Source Code; and (I) any agreement or other arrangement limiting any of the Acquired Company’s ability to transact business in any market, field or geographical area or with any Person, or that restricts the use, transfer, delivery or licensing of Acquired Company Proprietary Rights (or any tangible embodiment thereof);

               (ii) Part 3.20(b)(ii) of the Seller Parties Disclosure Schedule lists all licenses, sublicenses and other agreements to which the Acquired Company is a party and pursuant to which the Acquired Company is authorized to use any Proprietary Rights owned by any Person, excluding standardized nonexclusive licenses for “off the shelf” or other software widely available through regular commercial distribution channels on standard terms and conditions and were obtained by the Acquired Company in the Ordinary Course of Business. Except as set forth in 3.20(b)(iii) of the Seller Parties Disclosure Schedule, there are no royalties, fees or other amounts payable by the Acquired Company to any Person by reason of the ownership, use, sale or disposition of Acquired Company Proprietary Rights;

               (iii) Except as set forth in Part 3.20(b)(iii) of the Seller Parties Disclosure Schedule, the Acquired Company has not entered into any written or oral contract, agreement, license or other arrangement to indemnify any other person against any charge of infringement of the Acquired Company Proprietary Rights, other than indemnification provisions contained in standard sales or agreements to customers or end users arising in the Ordinary Course of Business, the forms of which have been delivered to Purchaser or its counsel;

               (iv) Part 3.20(b)(iv) of the Seller Parties Disclosure Schedule lists any Product that contains any software that may be subject to an open source or general public

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license, a description of such Product and the open source or general public license applicable to such Product. Except as set forth in Part 3.20(b)(iv) of the Seller Parties Disclosure Schedule, none of the Products contains any software that may be subject to an open source or general public license; and

               (v) There are no outstanding obligations other than as disclosed in Part 3.20(b) of the Seller Parties Disclosure Schedule to pay any amounts or provide other consideration to any other Person in connection with the Acquired Company Proprietary Rights (or any tangible embodiment thereof).

          (c) Except as set forth in Part 3.20(c) of the Seller Parties Disclosure Schedule:

               (i) The Acquired Company does not jointly own, license or claim any right, title or interest with any other Person of the Acquired Company Proprietary Rights. No current or former officer, manager, director, stockholder, member, employee, consultant or independent contractor of the Acquired Company has any right, title or interest in, to or under the Acquired Company Proprietary Rights in which the Acquired Company has (or purports to have) any right, title or interest that has not been exclusively assigned, transferred or licensed to Acquired Company;

               (ii) No Person has asserted or Threatened a claim, nor, to Sellers’ Knowledge, are there any facts which could give rise to a claim, which would adversely affect the Acquired Company’s ownership rights to, or rights under, the Acquired Company Proprietary Rights, or any contract, agreement, license or and other arrangement under which the Acquired Company claims any right, title or interest under the Acquired Company Proprietary Rights or restricts in any material respect the use, transfer, delivery or licensing by the Acquired Company of the Acquired Company Proprietary Rights or Acquired Company Products;

               (iii) The Acquired Company is not subject to any proceeding or outstanding decree, order, judgment or stipulation restricting in any manner the use, transfer or licensing of the Acquired Company Proprietary Rights by the Acquired Company, the use, transfer or licensing of the Acquired Company Product by the Acquired Company, or which may affect the validity, use or enforceability of the Acquired Company Proprietary Rights; and

               (iv) To Sellers’ Knowledge, no Acquired Company Proprietary Rights have been infringed or misappropriated by any Person and there is no unauthorized use, disclosure or misappropriation of the Acquired Company Proprietary Rights by any current or former officer, manager, director, stockholder, member, employee, consultant or independent contractor of the Acquired Company.

          (d) Except as set forth in Part 3.20(d) of the Seller Parties Disclosure Schedule:

               (i) all Patents in which the Acquired Company has any right, title or interest have been duly filed or registered (as applicable) with the applicable Governmental Body, and maintained, including the submission of all necessary filings and fees in accordance

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with the legal and administrative requirements of the appropriate Governmental Body, and have not lapsed, expired or been abandoned;

               (ii) (A) all Patents in which the Acquired Company has any right, title or interest, disclose patentable subject matter, have been prosecuted in good faith and are in good standing, (B) there are no inventorship challenges to any such Patents, (C) no interference has been declared or provoked relating to any such Patents, (D) all Issued Patents in which the Acquired Company has any right, title or interest are valid and enforceable, and (E) all maintenance and annual fees have been fully paid, and all fees paid during prosecution and after issuance of any patent have been paid in the correct entity status amounts, with respect to Issued Patents in which the Acquired Company has any right, title or interest;

               (iii) To Sellers’ Knowledge, there is no material fact with respect to any Patent Application in which the Acquired Company has any right, title or interest that would (A) preclude the issuance of an Issued Patent from such Patent Application (with valid claims no less broad in scope than the claims as currently pending in such Patent Application), (B) render any Issued Patent issuing from such Patent Application invalid or unenforceable, or (C) cause the claims included in such Patent Application to be narrowed; and

               (iv) No Person has asserted or Threatened a claim, nor, to Sellers’ Knowledge, are there any facts which could give rise to a claim, that the Acquired Company Product (or the Acquired Company Proprietary Right embodied in the Acquired Company Product) infringes or misappropriates any third party Proprietary Rights.

          (e) The Acquired Company has taken all commercially reasonable and customary measures and precautions necessary to protect and maintain the confidentiality of all Trade Secrets in which the Acquired Company has any right, title or interest and otherwise to maintain and protect the full value of all such Trade Secrets. Without limiting the generality of the foregoing, except as set forth in Part 3.20(e) of the Seller Parties Disclosure Schedule:

               (i) All current and former consultants and independent contractors to the Acquired Company or to any entity that assigned Acquired Company Proprietary Rights to the Acquired Company, including but not limited to Xpand, who are or were involved in, or who have contributed to, the creation or development of the Acquired Company Proprietary Rights have executed and delivered to the Acquired Company an agreement (containing no exceptions to or exclusions from the scope of its coverage) that is substantially identical to the form of Nondisclosure Agreement made available to Purchaser in the Data Room. Each current and former consultant or independent contractor of the Acquired Company is obligated to assist the Acquired Company with respect to the protection of the Acquired Company Proprietary Rights. No current or former employee, officer, director, stockholder, consultant or independent contractor to the Acquired Company has any right, claim or interest in or with respect to the Acquired Company Proprietary Rights; and

               (ii) Except as disclosed as required under Section 3.20(b)(i) above, the Acquired Company has not disclosed or delivered to any Person, or permitted the disclosure or delivery to any escrow agent or other Person, of the Acquired Company Source Code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of

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time) will, or would reasonably be expected to, result in the disclosure or delivery to any Person of the Acquired Company Source Code.

          (f) Except with respect to demonstration or trial copies, no product, system, program or software module designed, developed, sold, licensed or otherwise made available by the Acquired Company to any Person, including without limitation the Acquired Company Product(s), contains any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” or other software routines or hardware components designed to permit unauthorized access or to disable or erase software, hardware or data without the consent of the user.

     3.21 Certain Payments. Neither the Acquired Company or any director, officer, agent, or employee of the Acquired Company, or any other Person associated with or acting for or on behalf of the Acquired Company, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services in violation of any Legal Requirement or (b) established or maintained any fund or asset that has not been recorded in the books and records of the Acquired Company.

     3.22 Authorizations; Regulatory Compliance. Part 3.22 of the Seller Parties Disclosure Schedule sets forth a complete list of all material approvals, clearances, authorizations, licenses or registrations required by any Governmental Body in the European Union or in the Netherlands having regulatory authority or jurisdiction over the Business and the Products, whether required of the Acquired Company or, to the Sellers’ Knowledge, required of any of its suppliers or manufacturers. Except as set forth on Part 3.22 of the Seller Parties Disclosure Schedule:

          (a) The Business and the Products are in compliance in all material respects with all current applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body having regulatory authority or jurisdiction over the Business and the Products.

          (b) The Acquired Company and, to Sellers’ Knowledge, its suppliers and manufacturers are in compliance in all material respects with all applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body, relating to the methods and materials used in, and the facilities and controls used for, the design, manufacture, processing, packaging, labeling, storage and distribution of the Products and all Products have been processed, manufactured, packaged, labeled, stored, handled and distributed by the Acquired Company in compliance with the quality control procedures and specifications made available by the Acquired Company to Purchaser in the Data Room and all applicable laws, statutes, rules, regulations, ordinances, standards, guidelines or orders administered, issued or enforced by the FDA or any other Governmental Body. Further, no action has been taken by any Governmental Body or, to Sellers’ Knowledge, is in the process of being taken that will slow, halt or enjoin the manufacturing of the Products or the operation of the Business or subject the manufacturing of the Products or the Business to regulatory enforcement action.

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          (c) The Acquired Company has not received and, to Sellers’ Knowledge, its manufacturers or suppliers have not received from the FDA or any other Governmental Body, and to Sellers’ Knowledge, there are no facts which would furnish any reasonable basis for, any notice of adverse findings, FDA warning letters, regulatory letters, notices of violations, warning letters, Section 305 criminal proceeding notices under the FDCA or other similar communication from the FDA or other Governmental Body, and there have been no seizures conducted or, to Sellers’ Knowledge, Threatened by the FDA or other Governmental Body, and no recalls, market withdrawals, field notifications, notifications of misbranding or adulteration, or safety alerts conducted, requested or Threatened by the FDA or other Governmental Body relating to the Business or to the Products.

          (d) Except as set forth on Part 3.22(d) of the Seller Parties Disclosure Schedule, for each of the Products, no pre-market notification (“510(k)”) submission is required and no 510(k) submission has been filed with the FDA or any other Governmental Body on or prior to Closing Date.

          (e) To Sellers’ Knowledge, there are no currently existing facts that will (i) cause the withdrawal or recall, or require suspension or additional approvals or clearances, of any Products currently sold by the Acquired Company, (ii) require a change in the manufacturing, marketing classification, labeling or intended use of any such Products, or (iii) require the termination or suspension of marketing of any such Products.

          (f) Except as set forth on Part 3.22 (f) of the Seller Parties Disclosure Schedule: (i) none of the Products manufactured, marketed or sold by the Acquired Company have been recalled or subject to a field safety notification (whether voluntarily or otherwise); (ii) to Sellers’ Knowledge, none of the Products manufactured, marketed or sold by the Acquired Company’s manufacturers and suppliers on the Acquired Company’s behalf has been recalled or subject to a field safety notification (whether voluntary or otherwise); and (iii) Seller Parties have not received written notice (whether completed or pending) of any proceeding seeking recall, suspension or seizure of any Products sold or proposed to be sold by the Acquired Company.

          (g) The Acquired Company has submitted to the FDA all Biological Product Deviation Reports relating to performance issues that could lead to serious injury or death that the Acquired Company has been required to submit under applicable federal statutes, rules, regulations, standards, guides or orders administered or promulgated by the FDA related to the Products. To Sellers’ Knowledge, except as set forth on Part 3.22(g) of the Seller Parties Disclosure Schedule, no circumstances have arisen that would require Acquired Company to submit a Biological Product Deviation Report to the FDA.

     3.23 Products; Product Liability.

          (a) Each of the Products (including all Finished Inventory): (i) is, and at all times up to and including the sale thereof has been processed, manufactured, packaged, labeled, stored, handled, distributed, shipped, marketed and promoted, and in all other respects has been, in compliance with all applicable laws, statutes, rules, regulations, ordinances or orders administered, issued or enforced by the FDA or any other governmental entity, and (ii) is, and at all relevant times has conformed in all material respects to all specifications and any promises,

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warranties or affirmations of fact made in all regulatory filings or set forth in any regulatory approvals, authorizations or clearances pertaining thereto or made on the container or label for such Product or in connection with its sale. There is no design or manufacturing defect with respect to the Products.

          (b) Part 3.23(b) of the Seller Parties Disclosure Schedule sets forth the forms of the Acquired Company’s service or product warranties that are currently applicable to services or merchandise related to the Business (including, without limitation, the Products). Except as set forth on Part 3.23(b) of the Seller Parties Disclosure Schedule, there are no existing or, to Sellers’ Knowledge, Threatened, claims against the Acquired Company for services or merchandise related to the Business which are defective or fail to meet any service or product warranties other than in the Ordinary Course of Business consistent with past experience. The Acquired Company has not incurred liability arising out of any injury to individuals as a result of the ownership, possession, or use of any Product and, to Sellers’ Knowledge, there has been no inquiry or investigation made in respect thereof by any Governmental Body.

     3.24 Customers and Suppliers. The Acquired Company does not currently have customers, nor has it ever had any customers prior to the Effective Date, other than Purchaser. Part 3.24 of the Seller Parties Disclosure Schedule identifies the Business’ ten (10) largest suppliers (measured by euro volume in each case) during the period from the formation of the Acquired Company through December 31, 2008, showing with respect to each, the name and address, euro volume and nature of the relationship. The Acquired Company is not required to provide any bonding or other financial security arrangements in connection with any of the transactions with its suppliers. As of the Effective Date, Seller Parties have not received any communication of any intention of any supplier identified on Part 3.24 of the Seller Parties Disclosure Schedule to discontinue its relationship as a supplier of, or materially reduce its sales to the Acquired Company (or, post- Closing, from or to Purchaser).

     3.25 Capital Expenditures. Set forth on Part 3.25 of the Seller Parties Disclosure Schedule is a list of the Acquired Company’s approved capital expenditure projects related to the Business as of the Effective Date including: (i) projects which have been commenced but are not yet completed; (ii) projects which have not been commenced; and (iii) projects which have been completed in respect of which payment has been made, since the formation of the Acquired Company.

     3.26 Relationships with Affiliates. Neither Sellers nor, to Sellers’ Knowledge, any Affiliate of any Seller has or had any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Acquired Company’s businesses. Neither Sellers nor, to Sellers’ Knowledge, any Affiliate of any Seller owns or has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with the Acquired Company, or (ii) engaged in competition with the Acquired Company with respect to any line of the products or services of the Acquired Company in any market presently served by the Acquired Company. Except as set forth in Part 3.26 of the Seller Parties Disclosure Schedule, neither Seller nor, to Sellers’ Knowledge, any Affiliate of Sellers is a party to any Contract with, or has any claim or right against, the Acquired Company.

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     3.27 Brokers. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission in connection with the Contemplated Transactions based upon arrangements made by or on behalf of the Acquired Company.

     3.28 Disclosure. Except as set forth in Part 3.28 of the Seller Parties Disclosure Schedule:

          (a) As of the Closing Date, no representation or warranty of Seller Parties in this Agreement and no statement in the Disclosure Schedule omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

          (b) As of the Closing Date, there is no fact known to Seller Parties that has specific application to Seller Parties (other than general economic or industry conditions) and that materially adversely affects or, as far as Seller Parties can reasonably foresee, materially threatens, the assets, business, prospects, financial condition, or results of operations of the Acquired Company (on a consolidated basis) that has not been set forth in this Agreement or the Seller Parties Disclosure Schedule.

4.	REPRESENTATIONS AND WARRANTIES OF PURCHASER
	Purchaser represents and warrants to the Seller Parties as follows:

     4.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Purchaser has full corporate power and authority to execute and deliver this Agreement and the Closing Documents, to perform its obligations hereunder and thereunder and to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use. Purchaser is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except whether the failure to do so would not have a material adverse effect on Purchaser’s ability to perform its obligations hereunder.

     4.2 Authority; No Conflict.

          (a) This Agreement and the Closing Documents have been authorized by Purchaser’s board of directors and, to the extent required, the stockholders of Purchaser. This Agreement constitutes the legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles. Upon the execution and delivery by Purchaser of the Closing Documents, the Closing Documents will constitute the legal, valid, and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, enforceable against Purchaser in accordance with their respective terms, subject to bankruptcy and other similar Legal Requirements of general applicability relating to or affecting creditors’ rights and to general equity principles.

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          (b) Except as set forth in Part 4.2 of the Purchaser Disclosure Schedule, or as would not have a material adverse effect on Purchaser’s ability to perform its obligations hereunder, neither the execution and delivery of this Agreement by Purchaser nor the consummation or performance of any of the Contemplated Transactions by Purchaser will directly or indirectly (with or without notice or lapse of time):

               (i) contravene, conflict with or result in a violation of (A) any provision of Purchaser’s Organizational Documents or (B) any resolution adopted by the board of directors or the stockholders of Purchaser; or

               (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or Order to which Purchaser, or any of the assets owned or used by Purchaser, may be subject.

Except as set forth in Part 4.2 of the Purchaser Disclosure Schedule, Purchaser is not and will not be required to obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

     4.3 Certain Proceedings. There is no Action or Proceeding pending or, to the knowledge of Purchaser, Threatened in writing, against or affecting Purchaser that could reasonably be expected to affect Purchaser’s ability to challenge, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with the consummation of the Contemplated Transactions. To Purchaser’s knowledge, no such Proceeding has been Threatened.

     4.4 Brokers. Purchaser and its officers and agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement and will indemnify and hold Sellers harmless from any such payment alleged to be due by or through Purchaser as a result of the action of Purchaser or its officers or agents.

     4.5 Issuance of Shares. Subject to the accuracy of any representations and warranties made by the Sellers at the time of such issuance, the issuance and delivery of any shares of Purchaser’s Common Stock pursuant to this Agreement is and shall be in compliance with applicable federal and state securities laws and such shares, when issued, shall be duly authorized, validly issued, fully paid and non-assessable and free and clear of all Encumbrances.

     4.6 Securities Law Matters.

          (a) The Purchaser Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is quoted on the Qualified Stock Exchange and Purchaser has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Purchaser Common Stock under the Exchange Act or delisting the Purchaser Common Stock from the Qualified Stock Exchange, nor has Purchaser received any notification that the SEC or the Qualified Stock Exchange is contemplating terminating such registration or listing. Purchaser is a WKSI. Other than such filings and notifications as have occurred (and will be

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supplemented following the execution of this Agreement), no consent, approval, authorization or order of, or filing, notification or registration with, the Qualified Stock Exchange is required for the quoting of Purchaser’s Common Stock on the Qualified Stock Exchange. Purchaser is in compliance with the listing or maintenance requirements of the Qualified Stock Exchange, except as would not reasonably be expected to result in the delisting of Purchaser’s Common Stock from the Qualified Stock Exchange.

          (b) Purchaser has been subject to, and has complied with, all of the reporting requirements of the Exchange Act for the twelve (12) month period preceding the Closing and Purchaser is eligible to register securities on Form S-3 under the Securities Act. Purchaser has made available to Sellers true and complete copies of (i) its Annual Report on Form 10-K Purchaser’s most recently completed fiscal year as filed with the U.S. Securities and Exchange Commission (the “SEC”), and (ii) all other reports and amendments thereto (including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed by Purchaser with the SEC since the end of Purchaser’s most recently completed fiscal year (collectively, the “SEC Reports”). As of their respective dates, and as of the date of the last amendment thereof, if amended after filing, to Purchaser’s knowledge, none of such reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

     4.7 No Other Representations. Purchaser acknowledges that the Acquired Company does not make any representation or warranty with respect to any projections, estimates or budgets delivered to or made available to Purchaser of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Acquired Company or the future business and operations of the Acquired Company.

5. COVENANTS

     5.1 Notices; Consents; Filings. From and after the delivery of a Purchase Election Notice or the delivery of a Milestone Completion Notice or Second Put Option Notice, as the case may be, until the Closing, the Seller Parties shall use their commercially reasonable best efforts, at the Seller Parties’ expense, to obtain the consents described in the Seller Parties Disclosure Schedule. In the event that any of the Seller Parties shall fail to obtain any third party consent necessary for the consummation of the transactions contemplated hereby, the Sellers shall use commercially reasonable best efforts, and take any such actions reasonably requested by Purchaser, to minimize any adverse effect upon the Acquired Company and Purchaser, their respective Subsidiaries, and their respective businesses resulting, or which could reasonably be expected to result after the Closing, from the failure to obtain such consent.

     5.2 Further Assurances.

          (a) Following the delivery of a Purchase Election Notice, a Milestone Completion Notice, or a Second Put Option Notice, as the case may be, each of Purchaser and the Acquired Company will:

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               (i) use its commercially reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Acquisition and the transactions contemplated hereby, including using its commercially reasonable best efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of governmental authorities as are necessary for the consummation of the Acquisition and the other transactions contemplated hereby and to fulfill the conditions set forth in Section 7. In case, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall use their commercially reasonable best efforts to take all such action; and

               (ii) cooperate and use its commercially reasonable best efforts to vigorously contest and resist any action, including administrative or judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that is in effect and that restricts, prevents or prohibits consummation of the Acquisition and the other transactions contemplated hereby, including by vigorously pursuing all available avenues of administrative and judicial appeal.

          (b) From the Effective Date until the Closing, the parties hereto will take all further action that is necessary or desirable to carry out the purposes of this Agreement, and the proper officers and directors of each party to this Agreement shall use their commercially reasonable best efforts to take all such action and shall refrain from taking any actions which would be contrary to, inconsistent with or against, or would frustrate the essential purposes of, the transactions contemplated by this Agreement, if Purchaser were to deliver a Purchase Election Notice or the Acquired Company were to deliver a Milestone Completion Notice or a Second Put Option Notice.

     5.3 Exclusivity.

          (a) From and after the date of this Agreement until the Closing or termination of this Agreement pursuant to Section 8, the Acquired Company will not, nor will it authorize or permit any of its officers, directors, Affiliates or employees or any investment banker, attorney or other advisor or representative retained by it to, directly or indirectly, (i) solicit, initiate or induce the making, submission or announcement of any Acquisition Proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any non-public information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal, (iii) engage in discussions with any person with respect to any Acquisition Proposal, except as to disclose the existence of these provisions, (iv) endorse or recommend any Acquisition Proposal, or (v) enter into any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any Acquisition Proposal. The Seller Parties and the Acquired Company’s subsidiaries will, and will cause their respective officers, directors, Affiliates, employees, investment bankers, attorneys and other advisors and representatives to, immediately cease any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any officer, director or employee of the Acquired Company or any of its subsidiaries or any

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investment banker, attorney or other advisor or representative of the Acquired Company or any of its subsidiaries shall be deemed to be a breach of this Section 5.3 by the Acquired Company.

          (b) In addition to the obligations of the Acquired Company set forth in Section 5.3(a), the Acquired Company as promptly as practicable shall advise Purchaser in writing of any Acquisition Proposal or of any request for nonpublic information or other inquiry which the Acquired Company reasonably believes could lead to an Acquisition Proposal, the material terms and conditions of such Acquisition Proposal (to the extent known), and the identity of the person or group making any such request, inquiry or Acquisition Proposal. The Acquired Company agrees to keep Purchaser informed on a current basis of the status and details (including any material amendments or proposed amendments) of any such request, inquiry or Acquisition Proposal.

     5.4 Notification of Certain Matters. Each of the parties to this Agreement shall give prompt notice to the other parties of the occurrence or non-occurrence of any event which would likely cause any representation or warranty made by such party herein to be untrue or inaccurate or any covenant, condition or agreement contained herein not to be complied with or satisfied (provided, however, that, any such disclosure shall not in any way be deemed to amend, modify or in any way affect the representations, warranties and covenants made by any party in or pursuant to this Agreement).

     5.5 Confidentiality; Publicity. Except as may be required by law to comply with applicable governmental regulations or as otherwise permitted or expressly contemplated herein, no party hereto or their respective Affiliates, employees, agents and representatives shall disclose to any third party this Agreement (provided that Purchaser may file this Agreement with the SEC), the subject matter or terms hereof or (except with regard to disclosures by Purchaser of confidential information of the Acquired Company following the Closing) any confidential information or other proprietary knowledge concerning the business or affairs of any other party which it may have acquired from such party in the course of pursuing the transactions contemplated by this Agreement without the prior consent of the other parties hereto; provided, that any information that is otherwise publicly available (including by reason of Purchaser’s filings with the SEC), without breach of this provision, or has been obtained from a third party without a breach of such third party’s duties, shall not be deemed confidential information. No press release or other public announcement related to this Agreement or the transactions contemplated hereby shall be issued by any party without the prior written consent of the other parties hereto.

     5.6 Post-Closing Cooperation.

          (a) Sellers agree further that, following the Closing Date, if any consent or waiver set forth in Part 3.2 of the Seller Parties Disclosure Schedule has not been delivered to Purchaser by Seller Parties at or prior to the Closing Date, Sellers shall use commercially reasonable efforts to assist the Acquired Company to obtain such approval or permit at the sole expense of Sellers following the Closing Date.

          (b) Sellers agree further that, if reasonably requested by Purchaser, at Purchaser’s sole expense, Sellers shall reasonably cooperate with Purchaser to provide

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reasonable access to records and personnel of the Acquired Company to the extent still in Sellers’ possession or control and to the extent Purchaser finds such access necessary in order to transition the Business into service of Purchaser.

          (c) At or prior to the Closing Date, Sellers shall cause Purchaser to be designated as an additional loss payee with respect to any loss related to the Assets on all insurance policies identified on Part 3.17 of the Seller Parties Disclosure Schedule.

          (d) Each of the parties agrees to cooperate with the other in the preparation and filing of all forms, notifications, reports and information, if any, required or reasonably deemed advisable pursuant to any law, rule or regulation in connection with the transactions contemplated by this Agreement.

     5.7 Tax Matters.

               (a) Preparation and Filing of Tax Returns. Purchaser shall prepare or cause to be prepared and file or cause to be filed on a timely basis all Tax Returns of the Acquired Company for all taxable periods ending after the Closing Date. The Seller Parties shall prepare or cause to be prepared and file or cause to be filed on a timely basis all Tax Returns of the Acquired Company for all taxable periods ending on or before the Closing Date. With respect to any and all Tax Returns of the Acquired Company for any taxable period ending on the Closing Date and for any taxable period ending before the Closing Date for which such Tax Returns have not been filed as of the Closing Date, at least sixty (60) days prior to filing, the Seller Parties shall provide Purchaser with a draft of each such Tax Return for review and comment. The Seller Parties shall consider all reasonable comments of Purchaser with respect to the Tax Returns prior to filing. None of the Seller Parties shall file any amended Tax Returns with respect to the Acquired Company without the prior written consent of Purchaser, which shall not be unreasonably withheld, conditioned or delayed.

               (b) Liability for Income Taxes. Immediately upon written demand from Purchaser, Sellers shall reimburse Purchaser for all income Taxes of the Acquired Company for any income Tax period ending on or before the close of the Closing Date (a “Pre-Closing Tax Period”) and for Sellers’ portion (as determined pursuant to Section 5.7(c) of all income Taxes of the Acquired Company for any income Tax period that begins before the Closing Date and ends after the Closing Date (a “Straddle Period”). Purchaser shall be responsible for all income Taxes of the Acquired Company for any income Tax period that begins after the Closing Date (a “Post-Closing Tax Period”) and for its portion (as determined pursuant to Section 5.7(c)) of all income Taxes of the Acquired Company for any Straddle Period. Any amounts paid by Sellers to Purchaser pursuant to this Section 5.7 shall be treated as an adjustment to the Purchase Price unless otherwise required by Law.

               (c) Apportionment of Straddle Period Income Taxes. With respect to any Straddle Period, the income Taxes attributable to such Straddle Period shall be apportioned between the portion of the Straddle Period that begins on the first day of the Straddle Period and ends at the close of the Closing Date (the “Pre-Closing Straddle Period”), which portion shall be the responsibility of Sellers, and the portion of the Straddle Period that begins on the date immediately following the Closing Date and ends on the last day of the Straddle Period (“Post-

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Closing Straddle Period”), which portion shall be the responsibility of Purchaser. The portion of the income Tax allocated to the Pre-Closing Straddle Period shall equal the amount which would be payable if the Straddle Period ended on the last day of the Pre-Closing Straddle Period, provided that all permitted allowances, exemptions and deductions that are normally computed on the basis of an entire year or period (such as depreciation) shall accrue on a daily basis. The portion of the income Tax allocated to the Post-Closing Straddle Period shall equal the balance of the income Tax attributable to the Straddle Period.

               (d) Tax Cooperation. Sellers and Purchaser shall provide each other party with such information and records and access to such of its officers, directors, employees and agents as may be reasonably requested by such other party in connection with the preparation of any tax return or any audit or other proceeding relating to the Acquired Company. Sellers and Purchaser shall cooperate in good faith, as and to the extent reasonably requested by one another in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include using commercially reasonable efforts to retain and (upon a party’s request) provide records and information that are reasonably relevant to any such audit, litigation, or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Sellers and Purchaser agree to use commercially reasonable efforts to retain all books and records with respect to Tax matters pertinent to the Acquired Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority. Notwithstanding the foregoing, the Seller Parties shall use their respective best efforts to retain copies of all relevant Tax records relating to the Acquired Company for periods prior to the Closing, and neither Purchaser nor the Acquired Company, nor any Affiliate of Purchaser or the Acquired Company shall be liable for failure to provide to any Seller Party any information or documentation of any kind relating to any Tax period prior to the Closing.

               (e) Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes incurred in connection with the sale of Seller Shares shall be borne and paid by Sellers.

     5.8 Execution of Further Documents. From and after the Closing, upon the reasonable request of Purchaser, Sellers shall, at the expense of Purchaser, execute, acknowledge and deliver all such further deeds, bills of sale, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be required or appropriate to convey and transfer to and vest in Purchaser and protect its right, title and interest in the capital stock of the Acquired Company to be transferred hereunder and to carry out the transactions contemplated by this Agreement.

     5.9 Registration Rights.

               (a) Mandatory Registration Statement. In the event that Purchaser determines to issue shares of its Common Stock as part of the Upfront Payment, Purchaser agrees to file with the Securities and Exchange Commission as soon as reasonably practicable, but in no event later than one (1) Business Day following the Closing, an automatic shelf

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registration statement on Form S-3ASR with respect to at least the number of shares of Purchaser Common Stock to be issued on the Closing Date (including the prospectus, amendments and supplements to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement, the “Mandatory Registration Statement”). Notwithstanding anything herein to the contrary, Purchaser may not issue shares of Purchaser Common Stock in respect of any Milestone Payment (x) to the extent that the aggregate number of shares of Purchaser Common Stock issued hereunder would exceed the number of shares of Purchaser Common Stock covered by the Mandatory Registration Statement unless, prior to the date of such issuance, Purchaser (i) amends such Mandatory Registration Statement to include all such shares of Purchaser Common Stock or (ii) files a shelf registration on Form S-3 (or such other form under the Securities Act then available to Purchaser providing for the resale pursuant to Rule 415 from time to time by the holders of any and all registrable shares), which amendment or registration statement has either been declared effective by the SEC prior the date of such issuance or become effective automatically as a result of Purchaser’s status as a WKSI or (y) unless such shares have been approved for listed on the Qualified Stock Exchange, subject only to official notice of issuance.

               (b) Suspension. The Purchaser shall use its best efforts to keep any Mandatory Registration Statement continuously effective for six (6) months following the time at which a Mandatory Registration Statement becomes effective. During such time, the Purchaser may suspend the use of any Mandatory Registration Statement by written notice to the Sellers for a period not to exceed an aggregate of sixty (60) calendar days.

               (c) Indemnification by Purchaser. Upon the registration of the shares of Purchaser Common Stock pursuant to Section 5.9(a), Purchaser shall indemnify and hold harmless each Seller, against any losses, claims, damages or liabilities, joint or several, to which such Seller may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Mandatory Registration Statement, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and Purchaser hereby agrees to reimburse such Seller for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that Purchaser shall not be liable to such Seller in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Mandatory Registration Statement, or amendment or supplement, in reliance upon and in conformity with written information furnished to Purchaser by such Seller expressly for use therein.

               (d) Indemnification by the Sellers. Each Seller agrees, as a consequence of the inclusion of any of such Seller’s shares of Purchaser Common Stock in the Mandatory Registration Statement, severally and not jointly, to (i) indemnify and hold harmless Purchaser, its directors, its officers who sign the Mandatory Registration Statement and each person, if any, who controls Purchaser within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which Purchaser or

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such other persons may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Mandatory Registration Statement, or any amendment or supplement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to Purchaser by or on behalf of such Seller, and (ii) reimburse Purchaser and such other persons for any legal or other expenses reasonably incurred by Purchaser in connection with investigating or defending any such action or claim as such expenses are incurred.

     5.10 Right of First Refusal/Right of Notice.

          (a) Right of First Refusal. After the expiration of the Option Period through the termination of the Distribution Agreement, if the Acquired Company receives a bona fide offer from any party with respect to any transaction which would result in the sale of substantially all of the Acquired Company’s assets or the sale of all or such portion of the Acquired Company’s capital stock such that, following such transaction, the buyer would own shares having a majority of the combined voting power on a fully diluted basis of all of classes of the Acquired Company’s equity securities (each, a “Sale of the Acquired Company”), the Acquired Company shall provide Purchaser a copy of the offer (upon condition of confidentiality) (the “Sale Notice”). On receipt of the Sale Notice, Purchaser shall have the right and option (the “Right of First Refusal”), exercisable at any time by providing written notice to the Acquired Company during the period of fifteen (15) Business Days following Purchaser’s receipt of the Sale Notice, to elect to purchase all, but not less than all, of the offered securities or assets in connection with the Sale of the Acquired Company, at the same price and upon the same terms and conditions contained in the Sale Notice (the “Purchaser Notice”). The Acquired Company will not, following receipt of the Purchaser Notice through the date ninety (90) days thereafter (the “ROFR Period”), for so long as Purchaser continues to negotiate with the Acquired Company the terms of a definitive agreement, directly or indirectly, facilitate, solicit, recommend or encourage any offer by, or enter into any agreement with any person or entity that would, if the transaction contemplated thereby were completed, result in a Sale of the Acquired Company.

          (b) Failure to Agree. If Purchaser does not deliver a Purchase Election Notice within fifteen (15) Business Days of the Sale Notice or if after good faith negotiations Purchaser and the Acquired Company are unable to agree upon the terms of a definitive agreement for a Sale of the Acquired Company during the ROFR Period, then the Acquired Company shall be free for a period of one (1) year to enter into a Sale of the Acquired Company with the buyer identified in the Sale Notice on substantially the terms set forth in the Sale Notice which financial terms and conditions shall not be less favorable to the Acquired Company when taken in their totality than the terms and conditions last offered in writing by Purchaser to the Acquired Company during the ROFR Period.

          (c) Right of Notice. After the expiration of the Option Period through the termination of the Distribution Agreement, (i) if the Acquired Company decides to commence

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discussion with any party with respect to a Sale of the Acquired Company, then the Acquired Company will provide Purchaser with notice of such within three (3) Business Days of the commencement of such discussions or (ii) if the Acquired Company receives a proposal or offer from any party with respect to any transaction that would result in a Sale of the Acquired Company, and the Acquired Company decides to proceed with such proposal or offer, the Acquired Company shall provide Purchaser with notice and a brief description of any offer or proposal within three (3) Business Days of the receipt of such offer or proposal.

     5.11 Sellers’ Right to Audit Purchaser’s Net Sales.

          (a) Within thirty (30) days following the expiration of the Put Option Period, Purchaser shall deliver a sales report to the Sellers with respect to Purchaser’s Net Sales of the Products during each of the first two (2) years during the Put Option Period. The sales report shall include Net Sales of Products by month during each of the two years during the Put Option Period.

          (b) Within thirty (30) days following the end of each calendar quarter ending during the Call Option Period, Purchaser shall deliver a sales report to the Sellers with respect to Purchaser’s Net Sales of Products during the most recently completed calendar quarter ending during the Call Option Period. The sales report shall include Net Sales of Products by month during the most recent completed calendar quarter.

          (c) At any time during the Call Option Period and during the thirty (30) day period following the expiration of the Call Option Period, up to a maximum of two (2) times, the Purchaser shall permit, upon reasonable written notice from the Sellers’ Representative to Purchaser and at Sellers’ sole expense, an independent auditor with a nationally recognized certified public accounting firm selected by the Sellers’ Representative and reasonably acceptable to Purchaser to audit the books and records of Purchaser to verify Net Sales of Products. If such inspections should disclose underreporting of Net Sales by an amount of five percent (5%) or greater, Purchaser shall reimburse Sellers for the cost of the audit within five (5) Business Days of the completion date of the Sellers’ audit. In the event Purchaser has underreported Net Sales, Sellers shall be entitled to use the post-audit calculations for purposes of determining whether Sellers are entitled to receive a Milestone Payment or exercise their Put Option or Second Put Option under this Agreement, in each case, subject to the dispute resolution procedures set forth in Section 1.11. Any audit shall not unreasonably interfere with Purchaser’s business activities.

6. INDEMNIFICATION; REMEDIES

     6.1 Survival; Right to Indemnification Not Affected by Knowledge. All representations and warranties of Purchaser and Seller Parties contained herein or in any other Closing Document or document, certificate or other instrument required to be delivered hereunder or thereunder in connection with the transactions contemplated hereby shall survive the Closing and shall continue until      ***      after the Closing (the “General Indemnity Escrow Period”), provided that (a) the representations and warranties set forth in      ***     

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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shall survive until sixty (60) days after the expiration of the applicable statutes of limitations (including any extensions or waivers thereof) and (b) the representations and warranties set forth in      ***      shall survive indefinitely ((a) and (b), together, the “Fundamental Representations”); provided, further, that to the extent any written claim for indemnification is made prior to the expiration date of the representations and warranties on which any such claim for indemnification is based, the expiration of such representations and warranties shall not affect the right of any Indemnified Person to seek indemnification for Damages in respect of such claim pursuant to Section 6 hereof. The right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

     6.2 Indemnification and Payment of Damages by Sellers.

          (a) From and after the Closing. each Seller, severally but not jointly, shall indemnify and hold harmless Purchaser, the Acquired Company, and their respective Representatives, stockholders, controlling persons, and affiliates (collectively, the “Purchaser Indemnified Persons”) from and against and shall pay to the relevant Purchaser Indemnified Persons the amount of any and all losses, liabilities, claims, damages (excluding incidental, punitive and consequential damages), deficiencies, judgments, fines, penalties, fees, costs and expenses (including costs of investigation and defense and reasonable attorneys’ fees), and diminutions in value of the Product(s), whether or not involving a third-party claim (collectively, “Damages”), incurred by such Purchaser Indemnified Person arising directly or indirectly from or in connection with any breach of any representation or warranty of such Seller contained in Section 2 hereof or of any covenant or obligation of such Seller in this Agreement.

          (b) From and after the Closing, each Seller, severally but not jointly, will indemnify and hold harmless the Purchaser Indemnified Persons for, and will pay to the applicable Purchaser Indemnified Persons the amount of any Damages arising, directly or indirectly, from or in connection with:

               (i) any Breach of any representation or warranty made by the Acquired Company under Section 3 hereof;

               (ii) any Breach of any representation or warranty made by the Acquired Company with respect to the Preferred Stock Purchase Agreement to the extent not satisfied or waived prior to Closing (subject to the limitations set forth in Section 7 of the Preferred Stock Purchase Agreement but notwithstanding the Survival Period (as defined in the Preferred Stock Purchase Agreement), provided that the Acquired Company was notified of such

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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Breach within eighteen (18) months of the date of the Preferred Stock Agreement), any certificate or other document delivered by the Acquired Company pursuant to this Agreement; or

               (iii) any Breach by Sellers or the Acquired Company of any covenant or obligation in this Agreement or the Preferred Stock Purchase Agreement to the extent not satisfied or waived prior to Closing (subject to the limitations set forth in Section 7 of the Preferred Stock Purchase Agreement in the case of any Breach of any covenant or obligation in the Preferred Stock Purchase Agreement).

               (iv) Notwithstanding the foregoing, at the election of a Purchaser Indemnified Person, in its sole discretion (but subject to the provisions of this Section 6), a Purchaser Indemnified Person shall be entitled (without limiting any other remedy available to such Purchaser Indemnified Person) to recover the Damages by set off against the General Escrow Amount in accordance with Section 6.9. The remedies provided in this Section 6.2 will not be exclusive of or limit any other remedies that may be available to the Purchaser Indemnified Persons under this Section 6.

          (c) Notwithstanding anything else herein to the contrary, for purposes of determining whether there has been a Breach of the representations and warranties of the Seller Parties under Sections 2 and 3 hereof, each representation and warranty which refers to the “Effective Date” shall be true and correct as of the “Closing Date” notwithstanding that such representation or warranty, as the case may be, refers to the “Effective Date,” provided that such representations and warranties shall be qualified by each Updated Seller Parties Disclosure Schedule to the extent there are any disclosures of actual facts in existence on the date of such Updated Seller Parties Disclosure Schedule that have occurred or been discovered since the Effective Date, and (i) such disclosures are not material, or (ii) the Acquired Company obtained the approval of the Supervisory Board of Directors of the Acquired Company (including the director designated by the Purchaser) or the prior written consent of the Purchaser Representative (as defined in the Preferred Stock Purchase Agreement) pursuant to Section 5.1 of the Preferred Stock Purchase Agreement with respect to an action of the Acquired Company which action directly caused such material change.

     6.3 Indemnification and Payment of Damages by Purchaser. From and after the Closing, Purchaser will indemnify and hold harmless Sellers and their respective Representatives, stockholders, controlling persons and affiliates (collectively, the “Seller Indemnified Persons” and, together with the Purchaser Indemnified Persons, the “Indemnified Persons”), and will pay to Seller Indemnified Persons the amount of any Damages arising, directly or indirectly, from or in connection with (a) any Breach of any representation or warranty made by Purchaser in this Agreement or in any certificate delivered by Purchaser pursuant to this Agreement, (b) any Breach by Purchaser of any covenant or obligation of Purchaser in this Agreement, or (c) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Purchaser (or any Person acting on its behalf) in connection with any of the Contemplated Transactions.

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     6.4 Limitations on Indemnification.

          (a) No claim shall be made unless, and only to the extent that, the cumulative amount of Damages incurred buy the Indemnified Persons exceeds *** (the “Basket”), and upon exceeding such amount, the Indemnified Persons shall be entitled to be indemnified for all Damages (including all Damages below such amount). Notwithstanding the foregoing, any claim in respect of a dispute relating to the Working Capital may be made by the Indemnified Persons without regard to the Basket.

          (b) Notwithstanding anything to the contrary set forth in this Agreement, the total Damages payable by Sellers pursuant to Section 6.2 shall not exceed an amount equal to *** percent (***%) of the Aggregate Purchase Price (the “Cap”), except to the extent (i) such Damages are due to fraud or intentional misrepresentation of any of the Sellers, or (ii) such Damages are due to a breach of a Fundamental Representation; provided, however, that in no event shall the aggregate amount of Damages recoverable from any Seller pursuant to Section 6.2 exceed *** ; and provided further, any *** shall be excluded from counting towards the Cap.

          (c) Notwithstanding anything to the contrary set forth in this Agreement, the total Damages payable by Purchaser pursuant to Section 6.3 shall not exceed the Cap, except to the extent (i) such Damages are due to fraud or intentional misrepresentation of any of the Purchaser, or (ii) such Damages are due to a breach of a Fundamental Representation; and provided, that any *** shall be excluded from counting towards the Cap.

          (d) With respect to any Damages recoverable by the Purchaser Indemnified Persons for the matters referred to in Section 6.2, the Purchaser Indemnified Persons shall be obligated to first exhaust the General Escrow Amount or any right of set-off pursuant to Section 6.9 hereof or Section 7.3 of the Preferred Stock Purchase Agreement before proceeding against any Seller.

          (e) Neither the Sellers nor Purchaser shall have any liability under any provision of this Agreement for any multiple of damages or diminution in value, other than for diminution in value of the Product(s).

     6.5 No Bar. Subject to Section 6.4(d), if the General Escrow Amount is insufficient to set off the aggregate of all claims made hereunder for Damages, then Purchaser may take any action or exercise any remedy available to it by appropriate legal proceedings to collect any such Damages.

     6.6 Procedure for Indemnification—Third Party Claims.

     (a) Promptly after receipt by an Indemnified Person under Section 6.2 or Section 6.3 of notice of the commencement of any Proceeding against it, such Indemnified Person will, if a claim is to be made against an Indemnifying Person under such Section, give notice to the Indemnifying Person of the commencement of such claim, but the failure to notify the Indemnifying Person will not relieve the Indemnifying Person of any liability that it may

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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have to any Indemnified Person, except to the extent that the Indemnifying Person demonstrates that the defense of such action is prejudiced by the Indemnified Person’s failure to give such notice.

          (b) If any Proceeding referred to in Section 6.6(a) is brought against an Indemnified Person and it gives notice to the party from which such Indemnified Person is entitled to receive indemnification (an “Indemnifying Person”) of the commencement of such Proceeding, the Indemnifying Person will be entitled to participate in such Proceeding and, to the extent that it wishes (unless (i) the Indemnifying Person is also a party to such Proceeding and the Indemnified Person determines in good faith that joint representation would be inappropriate, or (ii) the Indemnifying Person fails to provide reasonable assurance to the Indemnified Person of its financial capacity to defend such Proceeding and provide indemnification with respect to such Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the Indemnified Person and, after notice from the Indemnifying Person to the Indemnified Person of its election to assume the defense of such Proceeding, the Indemnifying Person will not, as long as it diligently conducts such defense, be liable to the Indemnified Person under this Section 6 for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the Indemnified Person in connection with the defense of such Proceeding, other than reasonable costs of investigation. If the Indemnifying Person assumes the defense of a Proceeding, (i) it will be conclusively established for purposes of this Agreement that the claims made in that Proceeding are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be effected by the Indemnifying Person without the Indemnified Person’s consent unless (A) there is no finding or admission of any violation of Legal Requirements or any violation of the rights of any Person, provided such settlement or compromise would not materially and adversely prejudice the business or other commercial interests of the Indemnified Person, and (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Person; and (iii) the Indemnified Person will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an Indemnifying Person of the commencement of any Proceeding and the Indemnifying Person does not, within ten (10) days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its election to assume the defense of such Proceeding, the Indemnifying Person will be bound by any determination made in such Proceeding or any compromise or settlement effected by the Indemnified Person if it is ultimately determined that the Indemnified Person is entitled to indemnification.

          (c) Notwithstanding the foregoing, if an Indemnified Person determines in good faith that there is a reasonable probability that a Proceeding may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnified Person may, by notice to the Indemnifying Person, assume the exclusive right to defend, compromise, or settle such Proceeding, but the Indemnifying Person will not be bound by any determination of a Proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld).

          (d) Each Seller hereby consents to the non-exclusive jurisdiction of any court in which a Proceeding is brought against any indemnified party for purposes of any claim that an

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Indemnified Person may have under this Agreement with respect to such Proceeding or the matters alleged therein, and agrees that process may be served on Sellers with respect to such a claim anywhere in the world.

     6.7 Procedure for Indemnification—Other Claims. A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the party from whom indemnification is sought.

     6.8 Remedies Exclusive. From and after the Closing, except in the event of fraud or willful misconduct (in which case the defrauded party shall have all rights and remedies available under this Agreement and available under the law against the party that committed such fraud or willful misconduct), the remedies provided in this Section 6 shall be the exclusive remedies of the parties hereto and their heirs, Affiliates, successors, and assigns after the Closing with respect to the representations and warranties set forth in this Agreement. Except as set forth in this Section 6.8, no party may bring or commence any Proceeding with respect to the representations and warranties set forth in this Agreement, whether in contract, tort or otherwise, except to bring a claim for (a) fraud or willful misconduct against the party that committed such fraud or willful misconduct and (b) indemnification in accordance with Section 6. Notwithstanding the foregoing, nothing contained in this Agreement shall limit the rights of any party hereto to seek or obtain injunctive relief or other equitable remedies to which such party may otherwise be entitled. The provisions of this Section 6 constitute an integral part of the consideration given pursuant to this Agreement and were specifically bargained for and reflected in the total amount of the Aggregate Purchase Price payable to the Sellers.

     6.9 Rights of Set-Off. To the extent than any Purchaser Indemnified Person is (or may be) entitled to be indemnified by any Seller for Damages hereunder, Purchaser shall have the right to withhold and set-off against any amount otherwise due to be paid (but not yet paid) to such Seller pursuant to this Agreement the amount of any such Damages to which any Purchaser Indemnified Persons may be entitled under this Section 6 hereof or any other agreement entered into pursuant to this Agreement (except with respect to the Distribution Agreement); provided, that to the extent the amount so set-off exceeds the amount of Damages for which it is finally determined that such Purchaser Indemnified Person is entitled to be indemnified, promptly following such final determination, Purchaser shall remit such excess to the Sellers’ Representative.

     6.10 Sellers’ Representative.

          (a) By virtue of the approval and adoption of this Agreement by the requisite consent of the Sellers, each of the Sellers shall be deemed to have agreed to appoint each of Edward van Wezel and Joost D de Bruijn as its agent and attorney-in-fact and as the Sellers’ Representative for and on behalf of the Sellers to give and receive notices and communications, to authorize payment to any Indemnified Person from the Escrow Account in satisfaction of claims by any Indemnified Person, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Person against any Seller or by

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any Seller against any Indemnified Person or any dispute between any Indemnified Person and any such Seller, in each case relating to this Agreement or the transactions contemplated hereby, and to take all other actions that are either (i) necessary or appropriate in the judgment of the Sellers’ Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement or the Escrow Agreement. Such agency may be changed by the Sellers with the right to a majority of the Escrow Account from time-to-time. Notwithstanding the foregoing, the Sellers’ Representative may resign at any time by providing written notice of intent to resign to the Sellers, which resignation shall be effective upon the earlier of (A) thirty (30) calendar days following delivery of such written notice or (B) the appointment of a successor by the holders of a majority in interest of the Escrow Account. No bond shall be required of the Sellers’ Representative, and the Sellers’ Representative shall not receive any compensation for its services. Until notified in writing signed by an authorized person on behalf of the Sellers that the Sellers’ Representative has resigned or been removed and that a successor has been appointed, Purchaser shall be entitled to rely upon any instruction, notice, decision, action or inaction of the Sellers’ Representative whether in receipt of a writing signed by one or both of the individuals serving in such capacity. Any notice delivered by Purchaser or Sellers’ Representative, as the case may be, shall be delivered in accordance with Section 9.2 hereof.

          (b) The Sellers’ Representative shall not be liable for any act done or omitted hereunder as Sellers’ Representative while acting in good faith, even if such act or omission constitutes negligence on the part of such Sellers’ Representative. The Sellers’ Representative shall only have the duties expressly stated in this Agreement and shall have no other duty, express or implied. The Sellers’ Representative may engage attorneys, accountants and other professionals and experts. The Sellers’ Representative may in good faith rely conclusively upon information, reports, statements and opinions prepared or presented by such professionals, and any action taken by the Sellers’ Representative based on such reliance shall be deemed conclusively to have been taken in good faith. The Sellers shall indemnify the Sellers’ Representative and hold the Sellers’ Representative harmless against any loss, liability or expense incurred on the part of the Sellers’ Representative (so long as the Sellers’ Representative was acting in good faith in connection therewith) and arising out of or in connection with the acceptance or administration of the Sellers’ Representative duties hereunder, including the reasonable fees and expenses of any legal counsel retained by the Sellers’ Representative and reasonable travel expenses for services rendered as Sellers’ Representative (“Sellers’ Representative Expenses”). The Sellers’ Representative shall have the right to retain Sellers’ Representative Expenses from the Escrow Account prior to any distribution to the Sellers. Prior to any such distribution from the Escrow Account, the Sellers’ Representative shall deliver to the Escrow Agent a certificate setting forth the Sellers’ Representative Expenses actually incurred. A decision, act, consent or instruction of the Sellers’ Representative, including an amendment, extension or waiver of this Agreement pursuant to its authority hereunder, shall constitute a decision of the Sellers and shall be final, binding and conclusive upon the Sellers.

     6.11 ***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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7. CLOSING CONDITIONS

     7.1 Conditions Precedent to Obligations of Purchaser. The obligation of Purchaser to consummate the transactions contemplated under this Agreement are subject to the fulfillment of each of the following conditions, any or all of which may be waived in whole or in part by Purchaser, in its sole discretion:

          (a) Delivery of the Applicable Notice. Purchaser shall have delivered a Purchase Election Notice to the Acquired Company or the Sellers’ Representative shall have delivered a Milestone Completion Notice or Second Put Option Notice to Purchaser.

          (b) Representations and Warranties. Each representation and warranty contained in Section 2 and Section 3 which is qualified as to materiality shall be true and correct and each such representation and warranty that is not so qualified shall be true and correct in all material respects, in each case as of the date hereof and at and as of the Closing as if made at and as of such time, except that the representations and warranties made by the Seller Parties which address matters only as of a particular date shall remain true and correct as of such date.

          (c) Performance. The Seller Parties shall each have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by them prior to or at the Closing.

          (d) No Material Adverse Effect. Between the date of the execution of this Agreement and the Closing Date, the Acquired Company and its Subsidiaries shall not have suffered or experienced a Material Adverse Effect.

          (e) Certificates. Purchaser shall have received (i) a certificate of the Sellers’ Representative certifying to the fulfillment of the conditions specified in Section 7.1(b), Section 7.1(c) and Section 7.1(d), (ii) a certificate of the Sellers’ Representative certifying the Working Capital specified in Section 1.14. and (ii) such other evidence with respect to the fulfillment of said conditions as Purchaser may reasonably request.

          (f) No Injunction. There shall not be pending, Threatened or in effect any injunction or restraining order issued by a court of competent jurisdiction in an Action against (i) the consummation of the transactions contemplated hereby, or (ii) the right of the Acquired Company or any Subsidiary to operate their respective businesses after Closing on substantially the same basis as operated on the Effective Date.

          (g) Government Approvals. The parties hereto shall have received all approvals from any applicable Governmental Body necessary to consummate the transactions contemplated hereby.

          (h) Third Party Consents. The Seller Parties shall have obtained and delivered to Purchaser all written consents, approvals, waivers, notices or similar authorizations required to be obtained or given by the Sellers in order to consummate the transactions contemplated hereby, in form and substance reasonably satisfactory to Purchaser.

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          (i) Resignations. Purchaser shall have received the written resignations of all directors of the Acquired Company, effective as of the Closing.

          (j) Shareholders Register. Purchaser shall have received the shareholders’ register (aandeelhoudersregister) of the Acquired Company.

          (k) Certificate of Statutory Director. Purchaser shall have received the following documents, certified as of the Closing Date by the Statutory Director of the Acquired Company as being the true, correct and complete documents of the Acquired Company:

               (i) a copy of the articles of association of the Acquired Company as in effect immediately prior to the Closing Date;

               (ii) copies of resolutions adopted by the Board of Directors and shareholders of the Acquired Company authorizing the transactions contemplated by this Agreement; and

               (iii) the shareholders’ register of the Acquired Company.

          (l) Legal Opinion. Purchaser shall have received an opinion, dated as of the Closing Date, from counsel for the Seller Parties, opining as to the matters set forth in Exhibit J.

          (m) Estimated Closing Certificate. Purchaser shall have received a certificate of the Sellers’ Representative, prepared to the reasonable satisfaction of Purchaser (the “Estimated Closing Certificate”) setting forth the Acquired Company’s good faith estimate of the aggregate amount of all legal, financial advisory, investment banking and other fees and expenses incurred by or on behalf of the Sellers or the Acquired Company in connection with the negotiation, preparation and execution of this Agreement, the Closing Documents and the transactions contemplated hereby and thereby (the “Seller Funded Expenses”), to the extent that such Seller Funded Expenses will not be paid prior to the close of business on the Business Day immediately preceding the Closing Date (the amounts set forth on the Estimated Closing Certificate with respect to the Seller Funded Expenses shall be conclusive for the purposes).

          (n) Escrow Agreement. Purchaser shall have received the Indemnity Escrow Agreement, dated as of the date hereof, by and among the Purchaser, the Sellers and the Escrow Agent in the form attached hereto as Exhibit K (an “Escrow Agreement”) duly executed by the Escrow Agent, each of the Sellers, the Sellers’ Representative and an authorized officer of the Acquired Company.

          (o) Founders’ Non-Competition Agreements. Purchaser shall have received the Founders’ Non-Competition Agreements in the forms attached hereto as Exhibit L and Exhibit M (each, a “Founders’ Non-Competition Agreement”) dated as of the Closing Date and duly executed by each of Joost D de Bruijn and Clemens van Blitterswijk respectively.

          (p) Investor Non-Competition Agreement. Purchaser shall have received the Investor Non-Competition Agreement in the form attached hereto as Exhibit N (the “Investor Non-Competition Agreement”) dated as of the Closing Date and duly executed by Edward van Wezel.

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          (q) Shareholders Consent. Seller Parties shall have received an executed shareholder’s resolution (under the condition precedent of the Purchaser becoming the sole shareholders of the Acquired Company): (A) appointing a new statutory director to the board of the Acquiring Company, (B) accepting the resignations of the statutory director delivered pursuant to clause 7.1(i) above and (C) granting discharge to the resigning statutory director for his/its management to the extent such management appears from the annual accounts or has been otherwise brought to the attention of the general meeting of shareholders.

     7.2 Conditions Precedent to Obligations of Seller Parties. The obligation of the Seller Parties to consummate the transactions contemplated by this Agreement are subject to the fulfillment of each of the following conditions, any or all of which may be waived in whole or in part by the Seller Parties:

          (a) Delivery of the Applicable Notice. Purchaser shall have delivered a Purchase Election Notice to the Acquired Company or the Acquired Company shall have delivered a Milestone Completion Notice or Second Put Option Notice to Purchaser.

          (b) Representations and Warranties. Each representation and warranty contained in Section 4 which is qualified as to materiality shall be true and correct and each such representation and warranty that is not so qualified shall be true and correct in all material respects, in each case as of the date hereof and at and as of the Closing as if made at and as of such time, except that the representations and warranties made by Purchaser which address matters only as of a particular date shall remain true and correct as of such date.

          (c) Performance. Purchaser shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by Purchaser prior to or at the Closing.

          (d) Certificates. The Seller Parties shall have received (a) a certificate of an executive officer of Purchaser, dated the Closing Date, certifying to the fulfillment of the conditions specified in Section 7.2(b), Section 7.2(c) and Section 7.2(d), and (b) such other evidence with respect to the fulfillment of said conditions as Seller Parties may reasonably request.

          (e) Secretary’s Certificate. Seller Parties shall have received the following documents, certified as of the Closing Date by the Secretary of the Purchaser as being the true, correct and complete documents of the Acquired Company:

               (i) copies of the certificate of incorporation and bylaws of the Purchaser as in effect immediately prior to the Closing Date;

               (ii) copies of resolutions adopted by the board of of the Purchaser authorizing the transactions contemplated by this Agreement;

               (iii) certified good standing certificates, or certificates of compliance relating to the Purchaser, dated within five (5) Business Days of the Closing Date, issued by the State of Delaware.

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          (f) No Injunction. There shall not be in effect any injunction or restraining order issued by a court of competent jurisdiction in an Action against the consummation of the transactions contemplated hereby.

          (g) Government Approvals. The parties hereto shall have received all approvals from any applicable Governmental Body necessary to consummate the transactions contemplated hereby.

          (h) Third Party Consents. Purchaser shall have obtained and delivered to the Seller Parties any written consents, approvals, waivers, notices or similar authorizations required to be obtained by Purchaser in order to consummate the transactions contemplated hereby, in form and substance reasonably satisfactory to the Seller Parties.

          (i) Notary. The Notary shall confirm to the parties that he has received the amount due pursuant to Section 1.6. At or prior to the Closing Date, the parties shall execute the notarial deed of transfer of the Seller Shares substantially in the form of Exhibit C.

          (j) Seller Funded Expenses. Purchaser shall provide sufficient funds to the Acquired Company to enable the Acquired Company to pay all Seller Funded Expenses to the extent that they have not been paid prior to the close of business on the Business Day immediately preceding the Closing Date, up to the amount thereof set forth in the Estimated Closing Certificate. At the Closing, the Acquired Company shall pay such Seller Funded Expenses, up to the amount of the Seller Funded Expenses that have not been paid prior the close of business on the Business Day immediately preceding the Closing Date as set forth in Estimated Closing Certificate.

          (k) Escrow Agreement. Seller Parties shall have received the Escrow Agreement duly executed by the Escrow Agent and an authorized officer of Purchaser.

8. TERMINATION

     8.1 Termination. This Agreement may be terminated and the Acquisition may be abandoned at any time prior to the Closing, notwithstanding any requisite approval and adoption of this Agreement and the transactions contemplated hereby by the shareholders of the Acquired Company:

          (a) by duly authorized mutual written consent executed by each of Purchaser and the Seller Parties.

          (b) automatically if there shall be any law that makes consummation of the Acquisition illegal or otherwise prohibited or if any court of competent jurisdiction or Governmental Body shall have issued an order, decree, ruling or taken any other action restraining, enjoining or otherwise prohibiting the Acquisition and such order, decree, ruling or other action shall have become final and non-appealable.

          (c) by Purchaser, pursuant to Section 1.2(b)(iii) or Section 1.8(b)(iii).

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          (d) automatically, upon (i) expiration or termination of the Call Option Period without a Purchase Election Notice having been delivered by Purchaser, (ii) expiration or termination of the Put Option Period without a Milestone Completion Notice having been delivered by the Sellers’ Representative and (iii) thirty (30) days after expiration or termination of the Second Put Option Period without a Section Put Option Notice having been delivered by the Sellers’ Representative.

     8.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void, there shall be no liability under this Agreement on the part of Purchaser, the Acquired Company, the Sellers, the Sellers’ Representative or any of their respective officers, directors, or stockholders, and all rights and obligations of any party hereto shall cease, except for liabilities arising from a breach of this Agreement prior to such termination; provided, that the provisions of Section 5.5, Section 8 and Section 9 (excluding Section 9.8) shall survive the termination of this Agreement for any reason.

9. GENERAL PROVISIONS

     9.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants.

     9.2 Notices. All notices, Consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when: (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); or (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment confirmed with a copy delivered as provided in clause (a), in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties):

          If to Purchaser, addressed to:

NuVasive, Inc.
7473 Lusk Boulevard
San Diego, California 92121
Attn: General Counsel
Fax: (858) 909-2479

          With a copy to:

DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Attn: Michael Kagnoff
Fax: (858) 456-3075

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          If to Seller Parties or the Sellers’ Representative, addressed to:

Progentix Orthobiology BV
Professor Bronkhorstlaan 10, building 48
3723 MB Bilthoven
The Netherlands
Attention: Joost de Bruijn
Fax: +31 (0)30 229 7299

and

BioGeneration Ventures B.V.
Gooimeer 2 — 35
1411 DC Naarden
The Netherlands
Attention: Edwin van Wezel

          With a copy to:

Goodwin Procter LLP
Exchange Place
53 State Streeet
Boston, MA 02109
Attn: Michael H. Bison, Esq.
Fax: (617) 523-1231

and

CORP. advocaten
De Lairessestraat 137-143
1075 HJ Amsterdam
Attention: Edwin Renes
Fax: + 31 (0)20 578 83 05

     9.3 Jurisdiction; Service of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the United States District Court for the Southern District of New York or the state courts located in New York, New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

     9.4 Dispute Resolution.

          (a) Except as provided in Section 1.11, any dispute arising out of or relating to this Agreement or the breach, termination or validity hereof shall be finally settled by arbitration conducted expeditiously in accordance with the Center for Public Resources Rules for

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Nonadministered Arbitration of Business Disputes (the “CPR Rules”). The Center for Public Resources shall appoint a neutral advisor from its National CPR Panel. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be New York, New York.

          (b) Such proceedings shall be administered by the neutral advisor in accordance with the CPR Rules as he/she deems appropriate, however, such proceedings shall be guided by the following agreed upon procedures:

               (i) mandatory exchange of all relevant documents, to be accomplished within forty-five (45) days of the initiation of the procedure;

               (ii) no other discovery;

               (iii) hearings before the neutral advisor which shall not exceed three hours; such hearings to take place in one or two days at a maximum; and

               (iv) decision to be rendered not later than ten (10) days following such hearings.

          (c) Each of Purchaser, the Acquired Company and the Sellers (i) hereby unconditionally and irrevocably submits to the jurisdiction of the United States District Court for the Southern District of New York, for the purpose of enforcing the award or decision in any such proceeding and (ii) hereby waives, and agrees not to assert in any civil action to enforce the award, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that the civil action is brought in an inconvenient forum, that the venue of the civil action is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (iii) hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an enforcement of the judgment of any such court. Each of Purchaser, the Acquired Company and Sellers hereby consents to service of process by registered mail at the address to which notices are to be given. Each of Purchaser, the Acquired Company and the Sellers agrees that its submission to jurisdiction and its consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment against Purchaser, the Acquired Company or the Sellers in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction; provided, however, that any party may at its option bring suit, or institute other judicial proceedings, in any state or federal court of the United States or of any country or place where the other parties or their assets, may be found.

     9.5 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by

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applicable law: (a) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

     9.6 Entire Agreement and Modification. This Agreement, along with the Preferred Stock Purchase Agreement, supersedes all prior agreements between the parties with respect to its subject matter (including the Letter of Intent between Purchaser and the Acquired Company dated November 28, 2008 and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by Purchaser and Seller Parties.

     9.7 Assignments, Successors, and No Third-Party Rights. Neither party may assign any of its rights under this Agreement without the prior consent of the other parties, except that Purchaser may assign any of its rights under this Agreement to any Subsidiary of Purchaser and in the event of a Change of Control of Purchaser, Purchaser shall cause the acquirer to assume, whether in writing or by operation of law, all of Purchaser’s obligations under this Agreement. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns.

     9.8 Release of Claims. In consideration of the Aggregate Purchase Price and the other covenants and agreements set forth herein, effective as of the Closing except as set forth in this Agreement or any exhibit or schedule to this Agreement, including, without limitation, the Closing Documents (which are hereby excluded from this Section 9.8), effective as of the Closing, Sellers hereby fully and forever release and discharge Purchaser and the Acquired Company (and their Representatives and Affiliates) from any and all claims, accusations, demands, liabilities, obligations, responsibilities, suits, actions and causes of action, whether liquidated or unliquidated, fixed or contingent, known or unknown, or otherwise, in each case, arising out of, relating to, or otherwise connected with all prior relationships with or dealings with, between or among any or all of the parties hereto, and any of their business or other relationships arising out of or related to the same. Each Seller acknowledges that it may discover facts or law different from or in addition to the facts or law that they know or believe to be true with respect to the claims released in this Section 9.8 and agrees, nonetheless, that this Section 9.8 and the release contained herein shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them. Each Seller further agrees that, to the fullest extent permitted by law, it will not prosecute, nor allow to be prosecuted on his behalf, in any administrative agency, whether state or federal, or in any court,

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whether state or federal, any claim or demand of any type related to the matters released in this Section 9.8.

     9.9 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

     9.10 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

     9.11 Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

     9.12 Governing Law. This Agreement will be governed by the laws of the State of New York without regard to conflicts of laws principles.

     9.13 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or other electronic transmission), each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

10. DEFINITIONS

     For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 10:

     “Acquired Company”— Progentix Orthobiology B.V. or any of its direct or indirect Subsidiaries or any successors thereto.

     “Acquired Company Proprietary Rights”—any Proprietary Rights owned by or licensed to the Acquired Company or otherwise used in the business of the Acquired Company.

     “Acquired Company Source Code”—any source code, or any portion, aspect or segment of any source code, relating to any Proprietary Rights owned by or licensed to the Acquired Company or otherwise used by the Acquired Company.

     “Acquisition”—as defined in the Recitals to this Agreement.

     “Acquisition Proposal” means any bona fide offer or proposal (other than an offer or proposal by Purchaser) relating to (a) any transaction or series of related transactions other than the transactions contemplated by this Agreement or the Preferred Stock Purchase Agreement involving the purchase of all or any significant portion of the capital stock or assets of the Acquired Company, (b) any agreement to enter into a business combination with the Acquired

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Company, (c) any agreement made, other than in the ordinary course of business, for the license, sale or other disposition of Acquired Company Proprietary Rights, and (d) any other extraordinary business transaction involving or otherwise relating to the Acquired Company or Acquired Company Proprietary Rights.

     “Action”—means any action, suit, claim, charge, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, hearing, complaint, demand or other proceeding to, from, by or before any arbitrator, court, tribunal or other Governmental Body.

     “Affiliate”—has the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date hereof.

     “Agreement”—as defined in the first paragraph of this Agreement.

     “Amended Articles”—as defined in the recitals to this Agreement

     “Applicable Contract”—any Contract (a) under which the Acquired Company has or may acquire any rights, (b) under which the Acquired Company has or may become subject to any obligation or liability, or (c) by which the Acquired Company or any of the assets owned or used by it is or may become bound.

     “Assets”— means all of the personal properties and assets of any nature owned or used by the Acquired Company (whether real, personal, or mixed and whether tangible or intangible).

     “Balance Sheet”—as defined in Section 3.4.

     “Balance Sheet Date”—December 31, 2008.

     “Blocks Product”—shall have the meaning set forth on Exhibit E hereto.

     “Breach”—a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been, in each case, as of the date any representation or warranty is made, or any covenant or obligation is required to be performed (as applicable), (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

     “Business”—All operations and rights relating to the development, manufacturing, marketing and sale of the Product

     “Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banking institutions in Amsterdam, The Netherlands or San Diego, California are authorized or obligated by law or executive order to be closed. For purposes of this Agreement

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(unless otherwise specified as a Business Day), the word “day” shall mean a calendar day. Whenever any party hereto is required to provide notice, approval or otherwise respond within any specified period up Business Days, such period shall commence at 9:00 a.m. local time in the city specified in such party’s address for notice in Section 9.2 on the first whole Business Day of such period and shall expire at 5:00 p.m., local time in such city.

     “Call Option Period”—as defined in the Recitals to this Agreement.

     “Change of Control”—the acquisition of the Purchaser by another entity by means of any transaction or series of related transactions to which the Purchaser is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Purchaser outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Purchaser held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the Purchaser or such surviving entity outstanding immediately after such transaction or series of transactions.

     “Closing”—as defined in Section 1.1(c).

     “Closing Date”—the date and time as of which the Closing actually takes place.

     “Closing Documents”—this Agreement, the Founders’ Non-Competition Agreements, the Investor Non-Competition Agreement, the Escrow Agreement and each other document or agreement executed and delivered in connection with the Contemplated Transactions.

     “Consent”—any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

     “Contemplated Transactions”—all of the transactions contemplated by this Agreement, including:

          (a) the sale of the Seller Shares by Sellers to Purchaser;

          (b) the performance by Purchaser and Sellers of their respective covenants and obligations under this Agreement; and

          (c) Purchaser’s acquisition and ownership of the Seller Shares and exercise of control over the Acquired Company.

     “Contract”—any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

     “Copyrights”—all copyrights, copyrightable works, semiconductor topography and mask work rights, and applications for registration thereof, including all rights of authorship, use, publication, reproduction, distribution, performance transformation, moral rights and rights of ownership of copyrightable works, semiconductor topography works and mask works, and all

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rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright, semiconductor topography and mask work conventions.

     “Data Room”—the virtual data room on the Acquired Company’s website at *** pursuant to which the Acquired Company made available certain of its documents to Purchaser, or any additional documents delivered to Purchaser in any other virtual data room established by the Acquired Company after the Effective Date, provided that (i) the Acquired Company makes such data room available to Purchaser, (ii) the Acquired Company provides Purchaser written instructions to enable Purchaser to obtain access to such data room and (iii) any documents included in the virtual data room were not in existence as of the Effective Date.

     “Distribution Agreement”—the Distribution Agreement dated as of the Effective Date, by and between Purchaser and the Acquired Company.

     “Encumbrance”—any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

     “Environment”—soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

     “Environmental, Health, and Safety Liabilities”—any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:

          (a) any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and regulation of chemical substances or products);

          (b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law;

          (c) financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions (“Cleanup”) required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or

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          (d) any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law.

The terms “removal,” “remedial,” and “response action,” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended (“CERCLA”), or the equivalent thereof under the Environmental Laws of any other jurisdiction.

     “Environmental Law”—any Legal Requirement that requires or relates to:

          (a) advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment;

          (b) preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment;

          (c) reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated;

          (d) assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of;

          (e) protecting resources, species, or ecological amenities;

          (f) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;

          (g) cleaning up pollutants that have been released, preventing the threat of release, or paying the costs of such clean up or prevention; or

          (h) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

     “Exchange Act”—Securities Exchange Act of 1934, as amended

     “Facilities”—any real property, leaseholds, or other interests currently or formerly owned or operated by the Acquired Company and any buildings, plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently or formerly owned or operated by the Acquired Company; including the Environmental Protection Act (“Wet milieubeheer”), Environmental Activities Decree (“Activiteitenbesluit”), Soil Protection Act (“Wet bodembescherming”), Waste Water Protection Act (“Wet verontreiniging oppervlaktewateren”) and the European communitty Regulation on the Registration, Evaluation, Authorisation and restriction of chemical substances, EC 1907 /2006, (Verordening op de Registratie, Evaluatie, Autorisatie en beperkingen van Chemische stiffen).

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     “Facility Agreement”—means the Senior Secured Facility Agreement dated as of the Effective Date by and between Purchaser and the Acquired Company.

     “FDA”—the United States Food and Drug Administration.

     “FDCA”—Federal Food Drug and Cosmetic Act.

     “Financial Statements”—as defined in Section 3.4(a).

     “Finished Inventory”—means all finished goods inventory of Product.

     “GAAP” —generally accepted United States accounting principles, applied on a consistent basis.

     “Granules Product”—shall have the meaning set forth on Exhibit E hereto.

     “Governmental Authorization”—any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

     “Governmental Body”—any:

          (a) nation, state, province, county , city, town, village, district, or other jurisdiction of any nature;

          (b) national, federal, state, local, municipal, foreign, or other government;

          (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

          (d) multi-national organization or body; or

          (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

     “Hazardous Activity”—the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the Facilities or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the Facilities, or that may affect the value of the Facilities or the Acquired Company.

     “Hazardous Materials”—any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

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     “Indebtedness”—as applied to any person, (a) all indebtedness for borrowed money, whether current or funded, or secured or unsecured, (b) all indebtedness for the deferred purchase price of property or services represented by a note or other security, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all indebtedness secured by a purchase money mortgage or other lien to secure all or part of the purchase price of property subject to such mortgage or lien, (e) all obligations under leases which shall have been or must be, in accordance with GAAP, recorded as capital leases in respect of which such person is liable as lessee, (f) any liability in respect of banker’s acceptances or letters of credit, and (g) all indebtedness referred to in clauses (a), (b), (c), (d), (e) or (f) above which is directly or indirectly guaranteed by or which such person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.

     “Issued Patents”—all issued patents, reissued or reexamined patents, revivals of patents, utility models, certificates of invention, registrations of patents and extensions thereof, regardless of country or formal name, issued by the United States Patent and Trademark Office and any other applicable Governmental Body.

     “Knowledge”—an individual will be deemed to have “Knowledge” of a particular fact or other matter if:

          (a) such individual is actually aware of such fact or other matter; or

          (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter.

A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

     “Legal Requirement”—any national, federal, state, provincial, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

     “Loan Amount”—the amount of unpaid principal and interest which the Acquired Company owes Purchaser at the Closing under the Facility Agreement, minus (i) any amount by which Working Capital exceeds zero ($0) as of Closing, plus (ii) any amount by which Working Capital is less than zero ($0) as of the Closing minus (iii) the reasonable expenses incurred by the Acquired Company in connection with any audit required by Section 6.6 of the Preferred Stock Purchase Agreement.

     “Material Adverse Effect”—an event, violation, inaccuracy, circumstance or other matter shall be deemed to have a “Material Adverse Effect” on the Acquired Company if such event, violation, inaccuracy, circumstance or other matter (considered together with all other matters

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that would constitute exceptions to the representations and warranties set forth in this Agreement but for the presence of “Material Adverse Effect” or other materiality qualifications, or any similar qualifications, in such representations and warranties) had or would reasonably be expected to have a material adverse effect on: (i) the business, condition, capitalization, assets, liabilities, operations or financial performance of the Acquired Company; (ii) the ability of Seller Parties to consummate the Contemplated Transactions; or (iii) Purchaser’s ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the Seller Shares or the Acquired Company, other than any event, change, occurrence or effect resulting from (A) changes in general economic, financial market, business or geopolitical conditions, (B) general changes or developments in any of the industries in which the Acquired Company operates, (C) changes in any applicable Legal Requirements or applicable accounting regulations or principles or interpretations thereof, (D) any outbreak or escalation of hostilities or war or any act of terrorism, (E) the announcement of the acquisition of the Acquired Company pursuant to this Agreement or (F) any action taken at the written request of Purchaser.

     “Material Contract”—as defined Section 3.16(b).

     “Net Sales” —means ***.

     “Notary”—means Sander Wiggers, civil law notary with DLA Piper Nederland N.V. or his deputy, substitute or successor in office.

     “Occupational Safety and Health Law”—any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions, including the Working Conditions Act (“Arbeidsomstandighedenwet”) and the Working Conditions Decree (“Arbeidsomstandighedenbesluit”).

     “Option Period”—as defined in the recitals to this Agreement

     “Order”—any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

     “Ordinary Course of Business”—an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

          (a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

          (b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority) and is not required to be specifically authorized by the parent company (if any) of such Person; and

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          (c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

     “Organizational Documents”—(a) the articles of association; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

     “Patents”—the Issued Patents and the Patent Applications.

     “Patent Applications”—all published or unpublished nonprovisional and provisional patent applications, reexamination proceedings, invention disclosures and records of invention.

     “Person”—any individual, corporation, limited liability company, partnership, association, trust or any other entity or organization, including a Governmental Body.

     “Pledge Agreement” —means the Pledge Agreement of Intellectual Property Assets dated as of the Effective Date by and between Purchaser and the Acquired Company and any other security agreement entered into by Purchaser and any Seller Party in connection with the Facility Agreement.

     “Post-Closing Straddle Period” —as defined Section 5.7(c).

     “Post-Closing Tax Period” —as defined Section 5.7b).

     “Pre-Closing Straddle Period” —as defined Section 5.7(c).

     “Pre-Closing Tax Period” —as defined Section 5.7(b).

     “Preferred Stock Purchase Agreement” —as defined in the Recitals to this Agreement.

     “Proceeding”—any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

     “Product(s)”—the Blocks Product, the Granules Product and the Putty Product.

     Proprietary Rights”—any: (a)(i) Issued Patents, (ii) Patent Applications, (iii) Trademarks, fictitious business names and domain name registrations, (iv) Copyrights, (v) Trade Secrets, (vi) all other ideas, inventions, designs, manufacturing and operating specifications, technical data, and other intangible assets, intellectual properties and rights (whether or not appropriate steps have been taken to protect, under applicable law, such other intangible assets, properties or rights); or (b) any right to use or exploit any of the foregoing.

     “Purchaser”—as defined in the first paragraph of this Agreement.

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     “Purchaser Disclosure Schedule”—the Disclosure Schedule delivered by Purchaser to Sellers, if any, concurrently with the execution and delivery of this Agreement.

     “Put Option Period”—as defined in the Recitals to this Agreement.

     “Putty Product”—shall have the meaning set forth on Exhibit E hereto.

     “Qualified Stock Exchange” —the NASDAQ Global Select Market; provided that, if as of the applicable date, the Purchaser Common Stock is not then listed on the NASDAQ Global Select Market, such national securities exchange in the United States on which the Purchaser Common Stock is then traded.

     “Recapitalization”—has the meaning set forth in the recitals to this Agreement.

     “Registered Copyrights”—all copyrights for which registrations have been obtained or applications for registration have been filed in any applicable Governmental Body, and all copyrights for which registration is not required.

     “Registered Trademarks”—all trademarks for which registrations have been obtained or applications for registration have been filed in any applicable Governmental Body.

     “Release”—any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

     “Representative”—with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

     “Sales Run Rate”—*** times Purchaser’s actual Net Sales for the most recently completed *** months.

     “Securities Act”—the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

     “Seller”—as defined in the first paragraph of this Agreement.

     “Seller Parties”—as defined in the first paragraph of this Agreement.

     “Seller Parties Disclosure Schedule”—the Disclosure Schedule delivered by Seller Parties to Purchaser, concurrently with the execution and delivery of this Agreement.

     “Seller Shares”—as defined in the Recitals of this Agreement.

     “Sellers’ Knowledge” means the Knowledge of each of the Sellers on ***

     “Sellers’ Representative”—as defined in the first paragraph of this Agreement.

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     “Series A Preferred Stock”—as defined in the Recitals to this Agreement.

     “Series B Preferred Stock”—as defined in the Recitals to this Agreement.

     “Straddle Period” —as defined in Section 5.7(b).

     “Subsidiary”—with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Acquired Company.

     “Tax” or “Taxation”— means any and all forms of taxation by any tax authority, whether international, national or local, including without limitation to the generality of the foregoing, corporate income tax, capital tax, wage tax, real property tax, transfer taxes, registration tax, VAT, dividend withholding tax, environmental tax, divestment payments, custom duties, stock exchange tax, exercise tax or gift tax, including but not limited to penalties, interest and any other costs or expenses related to or associated with any tax matter and all contributions or premiums which are payable pursuant to industry or governmental social security regulations, including penalties, interest and any other costs or expenses relating to or associated with any social security matter.

     “Tax Returns” means all returns, computations ,declarations, reports, statements and other documents related to Taxation, including any schedule or attachment thereto and any related or supporting work papers or information with respect to any of the foregoing, including any amendment thereof, and the term. “Tax Return” means any one of the foregoing Tax Returns.

     “Threat of Release”—a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

     “Threatened”—a claim, Proceeding, dispute, action, or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing).

     “Trade Secrets”—all product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, research and development, manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code), computer software and database technologies, systems, structures and architectures (and related processes, formulae, composition, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, methods and information), and any other information, however documented, that is a trade secret within the meaning of the applicable trade-secret protection law.

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     “Trademarks”—all (i) trademarks, service marks, marks, logos, insignias, designs, names or other symbols, (ii) applications for registration of trademarks, service marks, marks, logos, insignias, designs, names or other symbols, (iii) trademarks, service marks, marks, logos, insignias, designs, names or other symbols for which registrations has been obtained.

     “Updated Company Disclosure Schedule”—upon notice sellers must give purchasers an updated disclosure schedule, as if such representations and warranties were made as of the date of such Updated Company Disclosure Schedule.

     “WKSI”—well-known seasoned issuer within the meaning of Section 405 of the Securities Act (or any successor provision thereto).

     “Working Capital” shall mean the amount, if any, by which the aggregate of the Current Assets of the Acquired Company exceeds the aggregate of the Current Liabilities of the Acquired Company as of the Closing Date; “Current Assets” shall mean all the current assets of the Acquired Company as of the Closing Date; and “Current Liabilities” shall mean the current liabilities of the Acquired Company as of the Closing Date, excluding the unpaid principal and interest the Acquired Company owes to Purchaser under the Facility Agreement and the Seller Funded Expenses.

     “Xpand”—Xpand Biotechnology B.V., a private company with limited liability, incorporated under the laws of the Netherlands.

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          Index of Other Defined Terms:

Defined Terms	Section Reference
510(k)	Section 3.22(d)
AAA Rules	Section 1.11(c)
Additional Milestone	Section 1.6(c)(iii)
Aggregate Purchase Price	Section 1.7
Base Milestones	Section 1.6(c)(i)
Basket	Section 6.4(a)
Board of Directors	Section 3.2(a)
Call Option	Section 1.1(a)
Call Option Rescission Period	Section 1.1(b)(iii)
Call Option Review Period	Section 1.1(b)(iii)
Cap	Section 6.4(b)
CPR Rules	Section 9.4
Cure Notice	Section 1.2(b)(iv)
Cure Option	Section 1.2(b)(iv)
Cure Option Period	Section 1.2(b)(iv)
Damages	Section 6.2(a)
Disclosure Schedule Request	Section 1.1(b)(ii)
Escrow Agent	Section 1.9(a)
Escrow Agreement	Section 7.1(n)
Escrow Amounts	Section 1.9(a)
Estimated Closing Certificate	Section 7.1(m)
Founders’ Non-Competition Agreement	Section 7.1(o)
Fundamental Representations	Section 6.1

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Defined Terms	Section Reference
General Escrow Amount	Section 1.9(a)
General Indemnity Escrow Period	Section 6.1
Indemnified Persons	Section 6.3
Indemnifying Persons	Section 6.6(b)
Independent Expert	Section 1.11(d)
Initial Purchase Price	Section 1.6(a)
Investor Non-Competition Agreement	Section 7.1(p)
Mandatory Registration Statement	Section 5.9(a)
Milestone	Section 1.6(c)(iii)
Milestone Completion Notice	Section 1.2(b)(i)
Milestone Payments	Section 1.7
Pension Schemes	Section 3.13
Permitted Encumbrance	Section 3.6
Post Closing Milestone Assessment Notice	Section 1.11(b)
Post-Closing Milestone Period	Section 1.7
Pre-Closing Milestone Dispute Notice	Section 1.11(a)
Proceeds Allocation	Section 1.6(a)
Purchase Election Notice	Section 1.1(b)(i)
Purchaser Common Stock	Section 1.6(a)
Purchaser Indemnified Persons	Section 6.2(a)
Purchaser Notice	Section 5.10(a)
Put Option	Section 1.2(a)
Put Option Review Period	Section 1.2(b)(iii)
Revised Proceeds Allocation	Section 1.6(a)
Right of First Refusal	Section 5.10(a)

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Defined Terms	Section Reference
ROFR Period	Section 5.10(a)
Sale Notice	Section 5.10(a)
Sale of the Acquired Company	Section 5.10(a)
SEC	Section 4.6(b)
SEC Reports	Section 4.6(b)
Second Cure Notice	Section 1.8(b)(iv)
Second Cure Option	Section 1.8(b)(iv)
Second Cure Option Period	Section 1.8(b)(iv)
Second Put Option	Section 1.8(a)
Second Put Option Condition	Section 1.8(a)
Second Put Option Notice	Section 1.8(b)(i)
Second Put Option Period	Section 1.8(a)
Second Put Option Rescission Notice	Section 1.8(b)(iii)
Second Put Option Review Period	Section 1.8(b)(iii)
Seller Funded Expenses	Section 7.1(m)
Seller Indemnified Persons	Section 6.3
Seller Parties Disclosure Schedule	Section 1.1(b)(ii)
Sellers’ Representative Expenses	Section 6.11(b)
Special Escrow Amount	Section 1.9(b)
***	***
***	***
Updated Seller Parties Disclosure Schedule	Section 1.1(b)(ii)
Upfront Payment	Section 1.6(a)

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

PURCHASER:			ACQUIRED COMPANY:
NUVASIVE, INC.			PROGENTIX ORTHOBIOLOGY B.V.
			By JD de Bruijn Holding BV, its
			solely authorized statutory director
By:	/s/ Alexis V. Lukianov		By:	/s/ Joost D de Bruijn
	Name:	Alexis V. Lukianov		Name:	Joost D de Bruijn
	Title:	Chief Executive Officer		Title:	General Director
			SELLERS’ REPRESENTATIVE:
			EDWARD VAN WEZEL
			/s/ Edward Van Wezel
			JOOST D DE BRUIJN
			/s/ Joost D de Bruijn

Signature Page to Option Purchase Agreement

SELLERS: JD DE BRUIJN HOLDING BV
By:	/s/ Joost D de Bruijn
	Name:	Joost D de Bruijn
	Title:	General Director
INCUBATION BV
By:	/s/ Clemens van Blitterswijk
	Clemens van Blitterswijk
By:	/s/ FrankJan van der Velden
	FrankJan van der Velden
BIOGENERATION VENTURES BV
By:	/s/ Edward van Wezel
	Edward van Wezel
By:	/s/ Willem Hazenberg
	Willem Hazenberg
HUIPIN YUAN
/s/ Huipin Yuan

Signature Page to Option Purchase Agreement

SCHEDULE A

Sellers Schedule

	Seller Shares Owned by
Seller	Seller	Proceeds Allocation
Incubation BV	9,918 ordinary shares	45.08%
JD de Bruijn Holding BV	7,200 ordinary shares	32.73%
BioGeneration Ventures BV	4,000 preference shares	18.18%
Huipin Yuan	882 ordinary shares	4.01%

EXHIBIT A

Notarial Deed

EXHIBIT B

Purchase Election Notice

EXHIBIT C

Milestone Completion Notice

EXHIBIT D

Form of True-Up Agreement

EXHIBIT E

Manufacturing Specifications

EXHIBIT F

Pre-Clinical Model

EXHIBIT G

Study Model

EXHIBIT H

Patent Claims

EXHIBIT I

Sales Run Rate Amounts

1.	***
2.	***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

EXHIBIT J

Form of Legal Opinion

     1. Each of the Closing Documents is a valid and binding obligation of the Acquired Company, enforceable by Purchaser against the Acquired Company in accordance with its terms.

     2. We do not have knowledge of any action, suit or proceeding against the Acquired Company that is pending or has been overtly threatened in writing.

EXHIBIT K

Form of Escrow Agreement

EXHIBIT L

Founders’ Non-Competition Agreement (Bruijn)

EXHIBIT M

Founders’ Non-Competition Agreement (Blitterswijk)

EXHIBIT N

Investor Non-Competition Agreement

EX-10.4

EXHIBIT 10.4

EXCLUSIVE DISTRIBUTION AGREEMENT

     THIS EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) is made as of January 13, 2009 (the “Effective Date”), by and between NuVasive, Inc., a corporation organized under the laws of the State of Delaware, U.S.A., with an address at 7473 Lusk Boulevard, San Diego, California 92121 (“NuVasive”), and Progentix Orthobiology B.V., a corporation organized under the laws of Holland, with an address at Professor Bronkhorstlaan 10, building 48, 3723 MB Bilthoven, The Netherlands (“Progentix”).

RECITALS

     NuVasive entered into that certain Preferred Stock Purchase Agreement (the “Preferred Stock Purchase Agreement”) with Progentix and the shareholders of Progentix (the “Progentix Shareholders”) of even date herewith pursuant to which NuVasive purchased shares of Progentix from the Progentix Shareholders representing, immediately after such issuance, forty percent (40%) of the outstanding capital stock of Progentix on a fully-diluted basis.

     NuVasive entered into that certain Option Purchase Agreement (the “Option Purchase Agreement”) with Progentix and the Progentix Shareholders of even date herewith pursuant to which, and subject to certain exceptions set forth therein, (i) NuVasive may elect, in its sole discretion, to cause the Progentix Shareholders to sell to NuVasive all of their issued and outstanding shares of the capital stock of Progentix upon delivery of a Purchase Election Notice (as defined therein) to the Company (the “Call Option”) at any time between the second anniversary of the Option Purchase Agreement and the fourth anniversary of the Option Purchase Agreement (the “Call Option Period”), and (ii) NuVasive shall be obligated to purchase from the Progentix Shareholders all of the shares of capital stock of Progentix held by the Shareholders in the event (A) the Progentix Shareholders (or the Shareholder Representative) delivers a Milestone Completion Notice (as defined therein) to NuVasive (the “Put Option”) at any time between the date of the Option Purchase Agreement and the second anniversary of the Option Purchase Agreement (the “Put Option Period”), or (B) the Progentix Shareholders (or the Shareholder Representative) delivers a Second Put Option Notice (as defined therein) to Nuvasive (the “Second Put Option”) at any time between the second anniversary of the Option Purchase Agreement and the fourth anniversary of the Option Purchase Agreement. The period from the date of the Option Purchase Agreement through the expiration of the Call Option Period shall be referred to herein as the “Option Period.”

     In connection with the Option Purchase Agreement, Progentix desires to appoint NuVasive as its exclusive distributor for the products described on Exhibit A (the “Products”) pursuant to the terms and conditions contained herein.

AGREEMENT

The parties, intending to be legally bound, agree as follows:

1. APPOINTMENT; LICENSE.

     1.1 Appointment. Progentix hereby appoints NuVasive, for the term of this Agreement, as its exclusive, worldwide distributor of the Products for all indications and applications other than the Retained Field (the “Field”). NuVasive hereby accepts such appointment. As used herein, “exclusive” shall mean that Progentix shall not itself promote, market or sell the Products anywhere in the world (other than as set forth in Section 1.2 below) and shall not appoint any other agents, representatives or distributors to promote, market or sell the Products (other than as set forth in Section 1.2 below) anywhere in the world. NuVasive shall have the right to appoint sub-distributors as it determines in its sole discretion.

     1.2 Retained Rights. Progentix shall retain for itself and/or its designee and/or licensee the right to promote, market and sell Products into the Retained Field (as defined below), but excluding sales to hospitals or other surgical centers. For clarity, Progentix may subcontract the right to manufacture Products to a third party. As used herein, “Retained Field” shall mean dental and craniomaxillofacial applications. For clarity, NuVasive shall not have the right to promote, market and sell Products into the Retained Field.

     1.3 Product Discontinuance. Progentix shall not discontinue the supply of any or all Products in the Field or make any material changes to any Products manufactured hereunder without the prior written consent of NuVasive.

     1.4 Independent Purchaser Status. NuVasive is an independent purchaser and seller of the Products. Neither party shall act as an agent or legal representative of the other party. Neither party shall have the right or power to act for or bind the other party in any respect or to pledge its credit. NuVasive shall be free to resell the Products on such terms as it may, in its sole discretion, determine, including, without limitation, price, returns, credits and discounts. NuVasive shall be responsible for all of its own expenses with respect to the promotion, marketing, distribution and sales of Product. The detailed operations of NuVasive under this Agreement are subject to the sole control and management of NuVasive.

2. PROMOTIONAL; REGISTRATIONS.

     2.1 Promotional Materials. Promptly following the Effective Date, and as and when Progentix generates new promotional material, Progentix shall provide to NuVasive samples of all such advertising and promotional literature and documentation produced by or for Progentix for the Products, if any. NuVasive shall have the right to reproduce, prepare translations, use and distribute such literature and documentation in connection with its activities under this Agreement.

     2.2 Registrations. At its own expense, Progentix shall diligently seek to obtain from the regulatory authorities in major markets as mutually agreed in good faith (which will include without limitation the U.S. Food and Drug Administration (“FDA”) and European Medicines Agency (“EMEA”)) all registrations, licenses, permits and/or approvals required by such regulatory authorities for the promotion, marketing and sale of Products in the Field (collectively, “Registrations”). Progentix shall keep NuVasive informed of the status of the Registrations and shall consult with NuVasive regarding any responses or other actions by Progentix regarding the Registrations. After the second (2nd) anniversary of the Effective Date, NuVasive shall have the right upon written notice to Progentix to assume control over the

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process of acquiring the Registrations, provided that NuVasive shall be responsible for its own expenses related thereto and further provided that NuVasive shall cooperate and consult in good faith with Progentix in connection therewith. In any such event, Progentix and its personnel, at NuVasive’s expense, shall cooperate with NuVasive in obtaining the Registrations. Upon the earlier of the expiration or termination of this Agreement, Progentix shall again assume control over the process of acquiring the Registrations. In any such event, NuVasive and its personnel shall cooperate with Progentix in transferring such control back to Progentix.

     2.3 Intellectual Property Prosecution. At its own expense, Progentix shall control the preparation, filing, prosecution, maintenance and enforcement of patents and other intellectual property rights relating to the Products, and shall seek to obtain all such available rights in a diligent and commercially reasonable manner. After the second (2nd) anniversary of the Effective Date, NuVasive shall have the right upon written notice to Progentix to exclusively control the preparation, filing, prosecution, maintenance and enforcement of patents and other intellectual property rights relating to the Products in the Field; provided that NuVasive shall be responsible for its own expenses related thereto and further provided that NuVasive shall cooperate and consult in good faith with Progentix in connection therewith. In any such event, Progentix and its personnel, at Progentix’s expense, shall cooperate with NuVasive, execute all lawful papers and instruments and make all rightful oaths and declarations as may be necessary in the preparation, filing, prosecution, maintenance and enforcement of all patents and other intellectual property rights relating to the Products in the Field. Upon the earlier of the expiration or termination of this Agreement, Progentix shall again assume exclusive control the preparation, filing, prosecution, maintenance and enforcement of patents and other intellectual property rights relating to the Products in the Field. In any such event, NuVasive and its personnel shall cooperate with Progentix in transferring such exclusive control back to Progentix.

     2.4 Trademark. NuVasive shall have the right to use any of Progentix’s trademarks in connection with the promotion, marketing, distribution and sale of the Products in the Field. Upon reasonable request, NuVasive will provide Progentix with samples of any proposed and/or actual use, quality and style of the Progentix’s trademarks. NuVasive will strictly comply with all standards with respect to Progentix’s trademarks which may be furnished by Progentix from time to time, and all uses of Progentix’s trademarks in proximity to the trade name, trademark, service name or service mark of any third party will be consistent with the standards furnished by Progentix to NuVasive from time to time. NuVasive will not engage, participate or otherwise become involved in any activity or course of action that diminishes, tarnishes or otherwise adversely affects the goodwill associated with any Progentix trademark. If Progentix determines that NuVasive is using or displaying any of Progentix’s trademarks in a manner that is or may be detrimental to Progentix’s interest, Progentix may issue reasonable instructions to NuVasive concerning the manner, if any in which NuVasive may continue to use such trademarks. NuVasive shall promptly comply with such instructions or cease the use or display of such trademarks. Any goodwill associated with any Progentix trade marks affixed or applied or used in relation to the Products shall accrue to the sole benefit of Progentix.

     2.5 Product Recalls. In the case of a Product recall or other corrective field action other than a Product recall or corrective field action to the extent resulting from NuVasive’s

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negligence or breach of this Agreement, the parties shall work together and NuVasive shall promptly implement such Product recall or corrective field action at Progentix’s expense.

3. TERMS AND CONDITIONS OF SALE.

     3.1 Rolling Forecasts. Except as set forth in Section 3.2 below, not later than thirty (30) days prior to the beginning of each calendar quarter during the term of this Agreement, NuVasive shall prepare and provide Progentix with a twelve (12) month rolling forecast of its good faith estimated purchase requirements for each of the Products (the “Rolling Forecast”). The quantity of the Products specified in the Rolling Forecast for the first three (3) month period reflected therein shall be a binding obligation of NuVasive to purchase, and a binding obligation of Progentix to supply, the forecasted quantity. The remainder of the Rolling Forecast shall be non-binding, and for planning purposes only. Progentix shall have no obligation to supply above one hundred fifty percent (150%) of the quantity of Products specified in the first three (3) month period of the Rolling Forecast, but if requested by NuVasive, Progentix shall exercise commercially reasonable efforts to deliver up to one hundred fifty percent (150%), of the quantity of Products specified in the first three (3) month period of the Rolling Forecast. For each of the fourth through twelfth months in each Rolling Forecast, although the quantities forecast may exceed one hundred twenty-five percent (125%) of the amount forecast for such month in the previous Rolling Forecast, the supply obligations of Progentix shall not exceed one hundred twenty-five percent (125%) of the amount forecast for such month in the previous Rolling Forecast; provided that, if requested by NuVasive, Progentix shall exercise commercially reasonable efforts to supply such excess.

     3.2 Limitations. Notwithstanding anything in this Agreement to the contrary, in no event shall Progentix be required to supply more than (i) *** cubic centimeters of the Granules Product during the first six months of this Agreement and in any event with delivery prior to the end of the sixth month of this Agreement, (ii) more than *** cubic centimeters of the Granules Product over any two (2) month period during the seventh through twelfth months of this Agreement or (iii) a total of *** cubic centimeters of the Granules Product over the first twelve (12) months of this Agreement. Notwithstanding anything in this Agreement to the contrary, the parties shall mutually agree upon product specifications and initial supply and purchase obligations with respect to the Putty Product and the Block Product.

     3.3 Shipping. Progentix shall ship Products to NuVasive in accordance with the times set forth in NuVasive’s purchase order (or binding portion of the Rolling Forecast, as applicable). The Products shall be delivered FCA Progentix manufacturing facility (Incoterms 2000). Risk of loss shall pass to NuVasive upon delivery by Progentix to NuVasive’s designated carrier. NuVasive shall be responsible to pay all carrier costs, shipping and handling charges.

     3.4 Disposables. If any of the Products are disposable or perishable, Progentix shall provide such Products with shelf life of no less than two (2) years on the date of the shipment to NuVasive.

*** *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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     3.5 Non-Conforming Product. NuVasive shall send to Progentix a notice regarding any Product that deviates or otherwise fails to comply with the warranties described in Section 5 (each a “Defect” and/or “Defective”) or shortages with respect to any shipment of Products (a “Deficiency Notice”) within thirty (30) calendar days after receipt of the Products. If a Defect in the Products could not reasonably be discovered within this thirty (30) calendar day period (a “Latent Defect”), then NuVasive shall have the right to reject such Products within ten (10) calendar days after discovering the Latent Defect. Progentix shall either request NuVasive to return or destroy such Defective Product (in each case, at Progentix’s expense) and shall promptly furnish to NuVasive replacement Products that are not Defective. Subject to the provisions of this Section, NuVasive has the right to reject and return, at the expense of Progentix and for full credit, any Defective portion of any shipment, without invalidating the remainder of the order.

     3.6 Capacity. At all times during the term of this Agreement, Progentix shall maintain sufficient capacity to meet NuVasive’s forecasted requirements with respect to the Products. Notwithstanding the foregoing, Progentix shall not be required to maintain such capacity in the event such capacity would reasonably require the purchase of additional manufacturing equipment or the incurrence of related manufacturing expenses and NuVasive shall not approve such expenditures (i.e., pursuant to the terms of the Preferred Stock Purchase Agreement, Option Purchase Agreement or any other agreement contemplated thereunder).

4. PRICE AND PAYMENT.

     4.1 Price. Prices payable by NuVasive for the Products shall be as follows. The price for each Product shall be calculated promptly following the beginning of each calendar quarter by determining NuVasive’s “Average Gross Sales Price” for such Product during the immediately prior calendar quarter and multiplying such price by the “Sales Percentage” as determined in Section 4.2. In the event the Product is sold on a stand-alone basis, “Average Gross Sales Price” shall mean *** . The price for each Product during the initial calendar quarter shall be determined in good faith by the parties based on the estimate of the applicable selling price and using the above formula with such estimated gross sales price. Notwithstanding the foregoing, the price for the Granule Product shall initially be set at *** per cubic centimetre and shall never be less than *** per cubic centimetre. In the event the Product is sold in combination with one or more other products or components (a “Combination Product”), then “Average Gross Sales Price” shall be calculated as set forth above, multiplied by a proration factor that is determined as follows: *** .

     4.2 Sales Percentage. Commencing on the Effective Date and continuing until the second (2nd) anniversary of the Effective Date, the Sales Percentage shall be *** percent (***%). After the second (2nd) anniversary of the Effective Date and until the fourth (4th) anniversary of the Effective Date, the Sales Percentage shall be *** percent (***%). Following the fourth (4th) anniversary of the Effective Date, the Sales Percentage shall be *** percent (***%). Notwithstanding the foregoing, if Progentix delivers to NuVasive a Milestone Completion Notice (as defined in the Option Purchase Agreement), triggering the Put Option and NuVasive does not consummate the Acquisition (as defined in the Option Purchase Agreement)

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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as a result of such notice, then unless any of the items set forth in Section 1.2(b)(iii)(C) of the Option Purchase Agreement has occurred, each of the above referenced Sales Percentages shall be increased by *** percent (***%) (e.g., in such case the Sales Percentage after the fourth (4th) anniversary of the Effective Date shall be increased to *** percent (***%)). If NuVasive disputes whether Progentix appropriately sent the Milestone Completion Notice (i.e., NuVasive believes that the applicable Milestone was not achieved), then the Sales Percentages shall be increased in accordance with the foregoing sentence while the parties resolve such dispute in accordance with the dispute resolution procedures in the Option Purchase Agreement. If the dispute is resolved in NuVasive’s favor, then the Sales Percentages shall be reduced to their appropriate amount and NuVasive shall have the right to credit, against future payments owing to Progentix, the difference between the amounts that were paid to Progentix and the amounts that should have been paid to Progentix if the Sales Percentages were not prematurely increased. If Progentix delivers to NuVasive the Second Put Option Notice (as defined in the Option Purchase Agreement), triggering the Second Put Option and NuVasive does not purchase all the shares of capital stock of Progentix from the Progentix Shareholders as a result of such notice, then unless any of the items set forth in Section 1.8(b)(iii)(C) of the Option Purchase Agreement has occurred, each of the above referenced Sales Percentages shall be increased by *** percent (***%) (e.g., in such case the Sales Percentage after the fourth (4th) anniversary of the Effective Date shall be increased to *** percent (***%)).

     4.3 Payment on Invoice. At the time of shipping the Products to NuVasive, Progentix shall invoice NuVasive for the Products included in such shipment. NuVasive shall pay each such invoice within thirty (30) days after the date thereof. NuVasive shall make all payments in United States dollars. Past due amounts will bear interest at the lower of a rate of one and one-half percent (1.5%) compounded annually and the maximum annual percentage rate permitted by law. If any portion of an invoice is disputed in good faith, then NuVasive shall pay the undisputed amounts as set forth herein and the parties shall use good faith efforts to reconcile the disputed amount as soon as practicable.

     4.4 Books and Records/Audit Rights. NuVasive shall keep books and records accurately showing all Products sold under the terms of this Agreement. The relevant portions of such books and records shall be open to inspection by representatives of Progentix, at Progentix’s cost, solely for the purposes of determining the correctness of the Aggregate Gross Sales Price as determined in Section 4.1. Such audit, conducted no more than once per calendar year, shall be during normal business hours after reasonable advance notice and subject to suitable confidentiality provisions. In the event an audit shows a deficiency to be due, NuVasive shall immediately pay such deficiency. NuVasive shall pay the reasonable costs and expenses of the audit if the deficiency is more than ten percent (10%) of the amount due during such audit period. If the audit shows that an excess was paid, NuVasive shall be entitled to deduct the amount of such excess from the payment due for the next calendar quarter. Such books and records shall be preserved for a period of at least two (2) years after the date of the royalty payment to which they pertain, and no audit may be conducted with respect to royalties due in any calendar year that is more than two (2) years preceding the calendar year in which the audit is being conducted. Books and records for a given calendar quarter may only be audited once.

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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5. WARRANTIES AND DISCLAIMERS.

     5.1 Products Warranties.

          (a) Progentix represents and warrants that:

               (i) All Products supplied hereunder (i) in the case of Granule Products, shall conform with the manufacturing and technical specifications and procedures for the Granule Product to be set forth in a draft form 510(k) prepared by Progentix (a copy of which shall be made available to NuVasive in a reasonable time after the Effective Date), (ii) in the case of all Products, shall conform to applicable specifications for such Product as mutually agreed by the parties from time to time and attached hereto as Exhibit A, and (iii) shall not contain any Macropores (as defined in Exhibit B attached hereto) (collectively, the “Specifications”).

               (ii) The production and supply of the Products and other activities contemplated herein, and all Products supplied hereunder shall comply with all applicable laws and regulations.

               (iii) Title to all Products provided to NuVasive under this Agreement shall pass as provided in this Agreement, free and clear of any security interest, lien, or other encumbrance.

               (iv) Neither Progentix nor any of its employees have been “debarred” by the FDA or the EMEA, or subject to a similar sanction from another Regulatory Agency, nor have debarment proceedings against Progentix or any of its employees been commenced. Progentix will promptly notify NuVasive in writing if any such proceedings have commenced or if Progentix or any of its employees are debarred by the FDA or the EMEA or other Regulatory Agencies. Furthermore, Progentix represents and warrants that it shall not knowingly hire or retain as an officer or employee any person who has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the FDCA. If at any time this representation and warranty is no longer accurate, Progentix shall notify NuVasive of such fact promptly after discovery of such fact.

          (b) NuVasive represents and warrants that its performance under this Agreement shall comply with all applicable United States and international laws and regulations.

     5.2 Disclaimer. EXCEPT AS PROVIDED IN THIS SECTION, NEITHER PARTY MAKES ANY WARRANTIES OR CONDITIONS (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF AND EACH PARTY EXPRESSLY DISCLAIMS ANY SUCH ADDITIONAL WARRANTIES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, PROVIDED, HOWEVER, THAT THIS SECTION 5.2 SHALL NOT APPLY TO EITHER PARTY’S INDEMNIFICATION OBLIGATION SET FORTH IN SECTION 8.

6. QUALITY

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     6.1 Supporting Documentation; Samples. Progentix shall maintain complete and accurate copies of executed batch records sufficient to trace the history of each batch (including all documents supporting executed batch records (e.g., in-process control testing, environmental monitoring, analytical release data, microbial release data, raw material data)), and representative samples from each lot of the Products, for record keeping, stability testing, and other regulatory purposes, including as may be required by the Specifications and applicable laws and regulations, for as long as required by such Specifications and applicable laws and regulations. Subject to the foregoing, Progentix shall notify NuVasive before disposing of any of the foregoing, and NuVasive shall have the option of having such records and samples delivered to NuVasive or its designee. Upon the request of NuVasive, Progentix shall provide NuVasive reasonable access to and copies of such records and samples.

     6.2 Quality Control. Prior to any delivery of Products, Progentix shall perform quality control testing procedures and inspections to verify that the Products to be delivered conforms fully to the Specifications. Each delivery of Products shall be accompanied by a complete and accurate certificate of analysis in a form acceptable to NuVasive and describing all current requirements of the Specifications and results of tests performed certifying that the Products supplied has been produce, controlled and released in accordance with applicable Specifications and applicable laws and regulations.

     6.3 Other Records. Progentix shall maintain complete and accurate technical, scientific and other records developed in the course of its performance under this Agreement, including all data in the form required by applicable laws and regulations. Progentix shall maintain such records for a period of three (3) years after expiration or termination of this Agreement or such longer period as applicable laws and regulations may require.

     6.4 Inspections. Upon reasonable prior written notice given by NuVasive to Progentix, Progentix shall permit NuVasive or its designee to inspect and audit, during Progentix’s business hours, the production of the Products, and relevant books and records, including those kept under this Section 6, in order to determine Progentix’s compliance with applicable laws and regulations and this Agreement. In addition, NuVasive shall be entitled to review Progentix’s standard operating procedures applicable to Progentix’s performance of its obligations hereunder, at any time upon its request. NuVasive’s exercise or failure to exercise any of its rights to audit Progentix’s manufacturing facility or records pursuant to this Section shall in no way alter or affect Progentix’s obligations under this Agreement. In the event NuVasive provides Progentix with a written audit report, within thirty (30) days of receipt of such audit report, Progentix shall provide NuVasive in writing a proposed action plan subject to NuVasive’s prior written approval to address the issues described by NuVasive in the report.

7. CONFIDENTIALITY.

     7.1 Confidentiality Obligations. During the term of this Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, each party shall maintain in confidence all confidential information received from the other party that is marked or acknowledged to be confidential (collectively, the “Confidential Information”), and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis to those of its directors, officers and employees to the extent such disclosure is reasonably necessary in

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connection with such party’s activities as expressly authorized by this Agreement. To the extent that disclosure is authorized by this Agreement, prior to disclosure, the receiving party shall obtain agreement of any such person or entity to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement. The receiving party shall notify the disclosing party promptly upon discovery of any unauthorized use or disclosure of the Confidential Information and the receiving party shall be liable for any such unauthorized use or disclosure.

     7.2 Confidentiality Exceptions. The obligations of the receiving party under Section 7.1 shall not apply to any information with respect to which the receiving party is able demonstrate by written evidence that such information (a) was publicly known prior to the disclosure of such information to the receiving party; (b) became publicly known, without fault on the part of the receiving party, subsequent to disclosure; (c) was otherwise known by the receiving party prior to communication by the disclosing party to the receiving party of such information; (d) was received by the receiving party at any time from a source other than the disclosing party lawfully having the right to disclose such information; or (e) was independently developed by the receiving party without the use of the Confidential Information of the disclosing party.

     7.3 Permitted Disclosures. The confidentiality obligations contained in Section 7.1 above shall not apply to the extent that the receiving party is required to disclose information by law, regulation or order of a governmental agency or a court of competent jurisdiction, provided that the receiving party shall provide written notice thereof to the disclosing party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof.

8. INDEMNIFICATION AND INSURANCE.

     8.1 NuVasive. Subject to Section 8.3, NuVasive shall indemnify and hold harmless Progentix, its directors, officers, employees, agents, successors and assigns from and against any liabilities, expenses, or costs (including reasonable attorneys’ fees and court costs) arising out of any claim, complaint, suit, proceeding, or cause of action brought against any of them by a third party (a “Claim”) resulting from: (a) the negligent or intentionally wrongful acts or omissions of NuVasive in connection with this Agreement; or (b) a breach by NuVasive of this Agreement; in each case subject to the requirements set forth in Section 8.3 below. Notwithstanding the foregoing, NuVasive shall have no obligations under this Section 8.1 for any liabilities, expenses, or costs arising out of or relating to claims covered under Section 8.2 below.

     8.2 Progentix. Subject to Section 8.3, Progentix shall indemnify and hold harmless NuVasive, its directors, officers, employees, agents, successors and assigns from and against all liabilities, expenses, and costs (including reasonable attorneys’ fees and court costs) arising out of any Claim resulting from: (a) the negligent or intentionally wrongful acts or omissions of Progentix in connection with this Agreement, (b) a breach by Progentix of this Agreement, or (c) the infringement or misappropriation of a third party’s patent or other intellectual property rights by the making, using, selling, offering for sale or importation of the Products. Notwithstanding the foregoing, Progentix shall have no obligations under this Section 8.2 for any liabilities, expenses, or costs arising out of or relating to claims covered under Section 8.1 above.

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     8.3 Indemnification Procedure. If either party becomes aware of a Claim that is included within the indemnification described in either Section 8.1 or Section 8.2, such party shall immediately notify the other party. NuVasive shall have the sole right to control the defense and settlement of any such Claim; provided, however, that Progentix shall remain liable for all liabilities, expenses and costs (including reasonable attorney’s fees and court costs) resulting from NuVasive’s defense and settlement of Claims included within the indemnification described in Section 8.2. Progentix and its employees shall provide full information and reasonable assistance to NuVasive and its legal representatives with respect to the Claims.

     8.4 Insurance. Each party shall maintain commercial general liability insurance, including contractual liability insurance and products liability insurance against claims regarding its activities contemplated by this Agreement, in such amounts as it customarily maintains for similar products and activities. Each party shall maintain such insurance during the term of this Agreement and thereafter for so long as it maintains insurance for itself covering such activities.

9. TERM AND TERMINATION.

     9.1 Term. This Agreement shall commence on the Effective Date and continue in full force and effect until terminated in accordance with Section 9.2.

     9.2 Termination. This Agreement may be terminated as follows:

          (a) By either party, if the other party commits a material breach of this Agreement and fails to cure such material breach within sixty (60) calendar days after receiving written notice thereof;

          (b) By Progentix, upon the earlier of (i) ten (10) years after the Effective Date, and (ii) the date NuVasive abandons or discontinues its sales and marketing efforts for all of the Products, with no good faith intention of resuming such efforts (i.e., a force majeure or other event outside of NuVasive’s reasonable control shall not trigger this clause (ii)).

     9.3 Rights of Parties on Termination. The following provisions shall apply on the expiration or termination of this Agreement.

          (a) NuVasive shall have the non-exclusive right, for one (1) year after the effective date of termination (the “Sell-Off Period”), to sell the Products in NuVasive’s inventory in accordance with the terms and conditions set forth in this Agreement.

          (b) The following Sections shall survive any termination or expiration of this Agreement: 2.2, 2.3, 2.4, 2.5, 3.5, 5, 6, 7, 8, 9.3, 9.4 and 10.

     9.4 Transfer of Manufacturing.

          (a) If, prior to the date NuVasive exercises its Call Option or Progentix exercises its Put Option or its Second Put Option, Progentix materially fails to supply the quantities of Products meeting the Specifications as ordered by NuVasive hereunder, then upon written request of NuVasive, Progentix shall cooperate with NuVasive and transfer to a

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manufacturer selected by NuVasive and acceptable to Progentix (such acceptance not to be unreasonably withheld, conditioned or delayed), all technology, know-how, trade secrets, manufacturing methods and documentation related thereto as reasonably necessary for the continued manufacture of the Products. Following any such transfer under this clause (a), the then-current Sales Percentage shall be increased by *** percent (***%).

          (b) If, after NuVasive exercises its Call Option or Progentix exercises its Put Option or its Second Put Option, Progentix materially fails to supply the quantities of Products meeting the Specifications as ordered by NuVasive hereunder, then, upon written request of NuVasive, Progentix shall cooperate with NuVasive and transfer to a manufacturer selected by NuVasive and acceptable to Progentix (such acceptance not to be unreasonably withheld, conditioned or delayed), all technology, know-how, trade secrets, manufacturing methods and documentation related thereto as reasonably necessary for the continued manufacture of the Products.

10. GENERAL PROVISIONS.

     10.1 Notices. All notices, consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); or (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment confirmed with a copy delivered as provided in clause (a), in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties):

If to NuVasive, addressed to:

NuVasive, Inc.
7473 Lusk Boulevard
San Diego, California 92121
Attn: General Counsel
Fax: (858) 909-2479

With a copy to:

DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Attn: Michael Kagnoff
Fax: (858) 456-3075

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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If to Progentix, addressed to:

Progentix Orthobiology BV
Professor Bronkhorstlaan 10, building 48
3723 MB Bilthoven
The Netherlands
Attention: Joost de Bruijn
Fax: +31 (0)30 229 7299

With a copy to:

Goodwin Procter LLP
Exchange Place
53 State Streeet
Boston, MA 02109
Attn: Michael H. Bison, Esq.
Fax: (617) 523-1231

and

CORP. advocaten
De Lairessestraat 137-143
1075 HJ Amsterdam
Attention: Edwin Renes
Fax: + 31 (0)20 578 83 05

     10.2 Dispute Resolution. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the courts located in the city of New York, New York and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

     10.3 Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

     10.4 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given

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by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

     10.5 Entire Agreement and Modification. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by each of the parties hereto.

     10.6 Assignments, Successors, and No Third-Party Rights. Except as otherwise provided herein, neither party may assign any of its rights under this Agreement (whether by operation of law or otherwise) without the prior consent of the other party in each case, which consent shall not be unreasonably withheld; provided that each party may assign this Agreement as a whole without such consent to an affiliate or in connection with the acquisition (whether by merger, consolidation, sale or otherwise) of such party or of that part of such party’s business to which this Agreement relates, provided that such party provides written notice to the other party of such assignment and the assignee thereof agrees in writing to be bound as such party hereunder. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any third party any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns.

     10.7 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

     10.8 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

     10.9 Governing law and regulation. This Agreement will be governed by the laws of the State of New York without regard to conflicts of laws principles.

     10.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

     10.11 Force Majeure. Neither party shall be liable to the other party for non-performance of or delay in performing its obligations hereunder to the extent that performance is

13

rendered impossible by strike, riot, war, acts of God, earthquake, fire, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason to the extent that the failure to perform is beyond the reasonable control of the non-performing party.

14

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement effective as of the Effective Date.

NUVASIVE, INC.			PROGENTIX ORTHOBIOLOGY B.V.
			By JD de Bruijn Holding BV, its solely authorized statutory director
By:	/s/ Alexis V. Lukianov		By:	/s/ Joost D de Bruijn
	Name:	Alexis V. Lukianov		Name:	Joost D de Bruijn
	Title:	Chief Executive Officer		Title:	General Director

Signature Page to Exclusive Distribution Agreement

EXHIBIT A

PRODUCTS AND SPECIFICATIONS

***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

16

EXHIBIT B

DEFINITION OF MACROPORES

***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

17

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Alexis V. Lukianov, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of NuVasive, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2009

/s/ Alexis V. Lukianov Alexis V. Lukianov

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Kevin C. O’Boyle, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of NuVasive, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2009

/s/ Kevin C. O’Boyle  

Kevin C. O’Boyle 

Executive Vice President and Chief Financial Officer 

EX-32

Exhibit 32

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NuVasive, Inc. (the Company) on Form 10-Q for the period ended March 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the Quarterly Report), I, Alexis V. Lukianov, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     1. The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. That information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2009

/s/ Alexis V. Lukianov  

Alexis V. Lukianov 

Chairman and Chief Executive Officer 

In connection with the Quarterly Report of NuVasive, Inc. (the Company) on Form 10-Q for the period ended March 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the Quarterly Report), I, Kevin C. O’Boyle, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     1. The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2. That information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2009

/s/ Kevin C. O’Boyle  

Kevin C. O’Boyle 

Executive Vice President and Chief Financial Officer