10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 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	33-0768598
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7475 Lusk Boulevard, San Diego, California (Address of principal executive offices)	92121 (Zip Code)

Registrant’s telephone number, including area code:

(858) 909-1800

Securities registered pursuant to Section 12(b) of the Act

Title of Each Class:	Name of Each Exchange on which Registered:
Common Stock, par value $0.001 per share	The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933, as amended.  YES þ     NO  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended.  YES o     NO þ

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 than 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 website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  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	Smaller reporting company o
		(Do not check if a smaller reporting company)

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $1.7 billion as of the last business day of the registrant’s most recently completed second fiscal quarter (i.e. June 30, 2009), based upon the closing sale price for the registrant’s common stock on that day as reported by the NASDAQ Global Select Market. Shares of common stock held by each officer and director have been excluded in that such persons may be deemed to be affiliates.

As of February 19, 2010, there were 38,829,879 shares of the registrant’s common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates information by reference to the registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on May 25, 2010.

NuVasive, Inc.

Form 10-K for the Fiscal Year ended December 31, 2009

PART I
	Item 1.	Business	1
	Item 1A.	Risk Factors	17
	Item 1B.	Unresolved Staff Comments	30
	Item 2.	Properties	30
	Item 3.	Legal Proceedings	30
	Item 4.	Submission of Matters to a Vote of Security Holders	31
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
	Item 6.	Selected Financial Data	34
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	46
	Item 8.	Financial Statements and Supplementary Data	47
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	47
	Item 9A.	Controls and Procedures	47
	Item 9B.	Other Information	50
PART III
	Item 10.	Directors and Executive Officers and Corporate Governance	51
	Item 11.	Executive Compensation	51
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	51
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	51
	Item 14.	Principal Accounting Fees and Services	51
PART IV
	Item 15.	Exhibits, Financial Statements and Schedules	51
SIGNATURES			58
Index to Consolidated Financial Statements			60
EX-10.10
EX-10.26
EX-10.27
EX-10.28
EX-10.29
EX-10.30
EX-10.53
EX-10.54
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I

This Annual Report on Form 10-K, particularly in Item 1. “Business” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the documents incorporated by reference, include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including, but not limited to, statements regarding our future financial position, business strategy and plans and objectives of management for future operations. When used in this Annual Report, the words “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report, and in particular, the risks discussed under the heading “Risk Factors” and those discussed in other documents we file with the Securities and Exchange Commission. Except as required by law, we do not intend to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report and in the documents incorporated in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements.

Item 1.   Business.

Overview

We are a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. Our currently-marketed product portfolio is focused on applications for spine fusion surgery, a market estimated to exceed $5.1 billion in the United States in 2010. Our principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS^®, as well as a growing offering of cervical, biologics and motion preservation products. In the spine surgery market, our currently-marketed products are primarily used to enable access to the spine and to perform restorative and fusion procedures. We focus significant research and development efforts to expand our MAS product platform, advance the applications of our unique technology to additional procedures, and develop motion preserving products such as our total disc replacement products. We dedicate significant resources toward training spine surgeons on our unique technology and products. Currently, we are training approximately 400 to 500 surgeons annually, which includes surgeons new to our MAS product platform as well as surgeons previously trained on our MAS product platform who are attending advanced training programs.

Our MAS platform combines four categories of our product offerings:

•  NeuroVision^® — a proprietary software-driven nerve avoidance system;

•  MaXcess^® — a unique split-blade design retraction system providing enhanced surgical access to the spine;

•  Biologics — includes our FormaGraft^® and Osteocel^® line of products; and

•  Specialized implants — includes our SpheRx^® and Armada^tm pedicle screw systems, CoRoent^® suite of implants, and several fixation systems.

We believe our MAS platform provides a unique and comprehensive solution for safe and reproducible minimally disruptive surgical treatment of spine disorders by enabling surgeons to access the spine in a manner that affords direct visibility and avoidance of critical nerves. The fundamental difference between our MAS platform

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and what has been previously named MIS, or minimally invasive surgery, is the ability to customize safe and reproducible access to the spine while allowing surgeons to continue to use instruments that are familiar to them. Simply stated, the MAS platform does not force surgeons to reinvent approaches that add complexity and undermine safety, ease and efficacy. An important ongoing objective has been to maintain a leading position in access and nerve avoidance, as well as being the leader and pioneer in lateral surgery. Our MAS platform, with the unique advantages provided by NeuroVision, enables an 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. Our MaXcess instruments provide access to the spine in a manner that affords direct visibility and our NeuroVision system allows surgeons to avoid critical nerves. We believe that the procedures facilitated by our MAS platform reduce operating times, decrease trauma and blood loss, and lead to faster overall patient recovery times compared to open spine surgery.

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. In 2009, we acquired Cervitech, Inc., a company focused on clinical approval of the PCM^® cervical disc system, a motion preserving total disc replacement device. This strategic acquisition allows us the potential to accelerate our entry into the growing mechanical cervical disc replacement market. Currently, the PCM investigational device has reached the two-year follow-up end point in its U.S. Food and Drug Administration (FDA) approved clinical trial in the United States. Approval, if obtained, will further strengthen our cervical product offering and will enable us to continue our trend of increasing our market share. Our biologic offering includes FormaGraft, a collagen synthetic product used to aid the fusion process, and Osteocel, an allograft cellular matrix containing viable mesenchymal stem cells, or MSCs, to aid in spinal fusion. In 2009, we invested in Progentix Orthobiology, B.V., a company organized under the laws of the Netherlands involved in the development of osteoinductive bone graft material technology. As part of the investment transaction, we became the exclusive distributor for certain Progentix biologic products.

Our corporate headquarters are located in San Diego, California. We lease approximately 202,000 square feet in San Diego. Our headquarters has a six-suite state-of-the-art cadaver operating theatre designed to accommodate the training of spine surgeons. Our primary distribution and warehousing operations are located in our facility in Memphis, Tennessee. Our business requires overnight delivery of products and surgical instruments for almost all surgeries involving our products. Because of its location and proximity to overnight third-party transporters, our Memphis facility has greatly enhanced our ability to meet demanding delivery schedules and provide a greater level of customer service.

Recent Product Introductions

In the last few years, we have introduced numerous new products and product enhancements that have significantly expanded our MAS platform, enhanced the applications of the XLIF procedure, expanded our offering of cervical products and marked our entrance into the growing motion preservation market. We have also acquired complementary and strategic assets and technology, particularly in the area of biologics. Our newly-launched and acquired products are highlighted by the following products:

•  Implants — our implant products, which include among other implants the CoRoent Family of Products and our SpheRx and Armada pedicle screw systems, have historically focused on the lumbar spine; with our recent and planned product introductions, such as VuePoint^® OCT and Thoracic XLIF, we will increasingly address the cervical and thoracic spine as well.

•  NeuroVision M5^tm — is, along with its predecessors, the enabling technology for the XLIF procedure, and utilizes proprietary technology and hunting algorithms to locate and avoid critical nerves during spine surgery. NeuroVision M5’s name refers to five monitoring modalities, covering the entire spine, available in this enhanced version of our technology, which include: (i) stimulated electromyography (EMG); (ii) free run EMG; (iii) motor evoked potentials (MEPs); (iv) somatosensory evoked potentials (SSEPs); and (v) navigated guidance.

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•  Biologics — In 2008 we expanded our biologics offering by acquiring Osteocel, an allograft cellular matrix containing viable MSCs to aid in fusion. Additionally, in early 2009 we made an investment in Progentix Orthobiology, B.V., a private company working to develop a novel synthetic osteoinductive bone graft material. This investment includes options and obligations to buy Progentix Orthobiology, B.V. over time as development milestones are achieved.

Our Strategy

Our objective is to become a leading provider of creative medical products that provide comprehensive solutions for the surgical treatment of spine disorders. We are pursuing the following business strategies in order to achieve this objective:

•  Establish our MAS Platform as a Standard of Care.  We believe our MAS platform has the potential to become the standard of care for spine surgery as spine surgeons continue to adopt our products and recognize their benefits. We also believe that our MAS platform has the potential to dramatically improve the clinical results of spine surgery. We dedicate significant resources to educating spine surgeons on the clinical benefits of our products, and we intend to capitalize on patient demand for minimally disruptive surgical alternatives.

•  Continue to Develop and Introduce New Creative Products.  One of our core competencies is our ability to develop and commercialize creative spine surgery products. In the past three years, we have introduced more than 40 new products and product enhancements. We have several additional products currently under development that should expand our presence in fusion surgery as well as provide an entry into the motion preservation market segment. We intend to accomplish this with an unwavering commitment to our MAS platform and building on our core technology. We believe that these additional products will allow us to generate, on average, greater revenues per spine surgery procedure while improving patient care.

•  Expand the Reach of Our Exclusive Sales Force.  We believe that having a sales force dedicated to selling only our spine surgery products is critical to achieve continued growth across product lines, greater market penetration and increased sales. In 2006, we completed our transition to an exclusive sales force, and we have seen the benefits of that effort. Our U.S. sales force is achieving deeper penetration in our accounts and further establishing NuVasive as a technology leader in the spine industry. In the United States, our exclusive sales force is managed by an Executive Vice President and four Area Vice Presidents, each of whom is responsible for a geographic region of the country. Each Area Vice President is responsible for Sales Directors, who in turn are responsible for Area Business Managers, or ABMs, who are NuVasive shareowners (our employees) responsible for a defined territory. The remainder of the U.S. sales force are both direct (our shareowners) and exclusive independent sales representatives or exclusive distributor agents, each acting as our sole representative and selling only NuVasive spine products in a given territory.

•  Provide Tailored Solutions in Response to Surgeon Needs.   Responding quickly to the needs of spine surgeons, which we refer to as Absolute Responsiveness^®, is central to our corporate culture, critical to our success and, we believe, differentiates us from our competition. We solicit information and feedback from our surgeon customers and clinical advisors regarding the utility of, and potential improvements, to our products. For example, we have an on-site machine shop to allow us to rapidly manufacture product prototypes and a state-of-the-art cadaver operating theatre to provide clinical training and validate new ideas through prototype testing.

•  Selectively License or Acquire Complementary Spine Products and Technologies.  In addition to building our company through internal product development efforts, we intend to selectively license or acquire complementary products and technologies that we believe will keep us on the forefront of innovation. By acquiring complementary products, we believe we can leverage our expertise at bringing new products to market that are intended to improve patient outcomes, simplify techniques, shorten procedures, reduce hospitalization and rehabilitation times and, as a result, reduce costs.

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Industry Background and Market

The spine is the core of the human skeleton, and provides a crucial balance between structural support and flexibility. It consists of 29 separate bones called vertebrae that are connected together by connective tissue to permit a normal range of motion. The spinal cord, the body’s central nerve conduit, is enclosed within the spinal column. Vertebrae are paired into what are called motion segments that move by means of three joints: two facet joints and one spine disc. The four major categories of spine disorders are degenerative conditions, deformities, trauma and tumors. The largest market, and the focus of our business historically, is degenerative conditions of the facet joints and disc space. These conditions can result in instability and pressure on the nerve roots as they exit the spinal column, causing back pain or radiating pain in the arms or legs.

In the U.S., over 5 million people suffer from some type of chronic back pain. The prescribed treatment depends on the severity and duration of the disorder. Initially, physicians will prescribe non-operative, conservative procedures including bed rest, medication, lifestyle modification, exercise, physical therapy, chiropractic care and steroid injections. In most cases, non-operative treatment options are effective; however, some patients require spine fusion surgery. It is estimated that over 600,000 spine fusion procedures are performed annually, and the vast majority are done using traditional open surgical techniques from either an anterior or posterior approach. These traditional open surgical approaches require a large incision in the patient’s abdomen or back in order to enable the surgeon to see the spine and surrounding area. Most open procedures are invasive, lengthy and complex, and may result in significant blood loss, extensive dissection of tissue and lengthy hospitalization and rehabilitation.

Back pain is one of the leading causes of healthcare expenditures in the United States, with a direct cost of more than $50 billion annually for diagnosis, treatment and rehabilitation. The U.S. market for lumbar and cervical spine fusion, the focus of our business, was estimated to be over $4.6 billion in 2009 and is estimated to grow to over $5.1 billion in 2010.

We believe that the implant market for spine surgery procedures will continue to grow because of the following market dynamics:

•  Increased Use of Implants.  The use of implants has evolved into the standard of care in spine surgery. Over the past five years, there has been a significant increase in the percentage of spine fusion surgeries using implants and we estimate that over 85% of all spine fusion surgeries now involve implants.

•  Demand for Surgical Alternatives with Less Tissue Disruption.  As with other surgical markets, we anticipate that the broader acceptance of surgical treatments with less tissue disruption will result in increased demand for these types of surgical procedures.

•  Increasing Demand for Motion-preserving Treatments.  Motion-preserving treatments potentially offer earlier intervention in the degenerative disease process for many patients.

•  Favorable Demographics.  The population segment most likely to experience back pain is expected to increase as a result of aging baby boomers, people born between 1946 and 1965. We believe this population segment will demand a quicker return to activities of daily living following surgery than prior generations.

Surgical Alternatives with Less Tissue Disruption

The benefits of minimally invasive surgery procedures in other areas of orthopedics have significantly contributed to the strong and growing demand for surgical alternatives with less tissue disruption of the spine. Surgeons and hospitals seek spine procedures that result in fewer operative complications, shorter surgery times and decreased hospitalization. At the same time, patients seek procedures that cause less trauma and allow for faster recovery times. Despite these benefits, the rate of adoption of surgical alternatives with less tissue disruption procedures has been relatively slow with respect to the spine.

We believe the two principal factors contributing to spine surgeons’ slow adoption of traditional “minimally invasive” spine alternatives are: (i) the limited or lack of direct access to and visibility of the surgical anatomy; and (ii) the associated complex instruments that have been required to perform these procedures. Most traditional “minimally invasive” spine systems do not allow the surgeon to directly view the spine and provide only restrictive visualization through a camera system or endoscope, while also requiring the use of complex surgical techniques. In

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addition, most traditional “minimally invasive” spine systems use complex or highly customized surgical instruments that require special training and the completion of a large number of trial cases before the surgeon becomes proficient using the system.

The NuVasive Solution — Maximum Access Surgery (MAS)

Our MAS platform allows surgeons to perform a wide range of minimally disruptive procedures, while overcoming the shortcomings of traditional “minimally invasive” spine surgical techniques. We believe our products improve clinical results and have both the potential to expand the number of minimally disruptive procedures performed and become a standard of care in spine fusion and non-fusion surgery.

Our MAS platform combines four product categories: NeuroVision, MaXcess, biologics and specialized implants. NeuroVision enables surgeons to navigate around nerves while MaXcess affords direct customized access to the spine for implant delivery. MaXcess also allows surgeons to use well-established traditional instruments in a minimally disruptive and less traumatic manner while our biologics offering compliments our MAS platform by facilitating fusion. We also offer a variety of specialized implants that enable sufficient structural support while conforming to the anatomical requirements of the patient.

Our products facilitate minimally disruptive applications of the following spine surgery procedures, among others:

•  Lumbar fusion procedures in which the surgeon approaches the spine through the patient’s back or abdomen;

•  Decompression, which is removal of a portion of bone over the nerve root or disc from under the nerve root to relieve pinching of the nerve; and

•  Procedures designed to correct and/or stabilize the spine while simultaneously maintaining motion.

Importantly, our products also enable innovative procedures such as the XLIF. The XLIF procedure, which we developed with leading spine surgeons, allows surgeons to access the spine from the side of the patient’s body rather than from the front or back, which results in less operating time and reduced patient trauma and blood loss.

MAS — NeuroVision

NeuroVision utilizes electromyography, or EMG, proprietary algorithms and graphical user interfaces to provide surgeons with an enhanced nerve avoidance system. Our system functions by monitoring changes in electrical signals across muscle groups, which allows us to detect underlying changes in nerve activity. We connect the instruments that surgeons use to a computer system that provides real time feedback during surgery. Our system analyzes and then translates complex neurophysiologic data into simple, useful information to assist the surgeon’s clinical decision-making process. For example, during a pedicle screw test, in which the integrity of the bone where the implant is placed is tested, if the insertion of a screw results in a breach of the bone, a red light and corresponding numeric value will result so that the surgeon may reposition the implant to avoid potential nerve impingement or irritation. If no breach of the bone occurs, a green light and corresponding numeric value will result.

Surgeons can dynamically link familiar surgical instruments to NeuroVision, thus creating an interactive set of instruments that enable the safe navigation of neural anatomy. The connection is accomplished using a clip that is attached to the instrument, effectively providing the benefits of NeuroVision through an instrument already familiar to the surgeon. The system’s proprietary software and easy to use graphical user interface enables the surgeon to make critical decisions in real time resulting in safer and faster procedures with the potential for improved patient outcomes. With recent additions, the health and integrity of the spinal cord can also be assessed using motor evoked potentials (MEPs) and somatosensory evoked potentials (SSEPs). Both methods of intraoperative monitoring involve applying stimulation and recording the response that must travel along the motor or sensory aspect of the spinal cord. The data developed using NeuroVision can now be sent to health care professionals for additional interpretation of intraoperative information via networking capabilities and software that allows real-time assessment from remote locations.

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MAS — MaXcess

Our MaXcess system consists of instrumentation and specialized implants that provide maximum access to the spine with minimal soft tissue disruption. MaXcess has a split blade design consisting of three blades that can be positioned to build the surgical exposure in the shape and size specific to the surgical requirements rather than the fixed tube design of traditional “minimally invasive” spine surgical systems. MaXcess’ split blade design also provides expanded access to the spine, which allows surgeons to perform surgical procedures using instruments that are similar to those used in open procedures but with a significantly smaller incision. The ability to use familiar instruments reduces the learning curve and facilitates the adoption of our products. Our system’s illumination of the operative corridor aids in providing surgeons with direct visualization of the patient’s anatomy, without the need for additional technology or other special equipment.

Over the years, several improvements to our MaXcess systems have been made, including incorporating nerve avoidance technology with the use of NeuroVision, superior and inferior blades that “kick-out” at an angle to spread the tissue closest to the pathology point further than prior versions, and a removable fourth blade, which provides greater posterior surgical options and incorporates an improved tilted blade-locking mechanism. Further, our MaXcess products are used in the cervical spine for posterior application, the lumbar spine for decompression, transforaminal interbody fusion, or TLIF, fusion and have been used in the thoracic region as the lateral approach has broadened from the lumbar to the thoracic region as well as into adult degenerative scoliosis procedures.

MAS — Specialized Implants

We have a number of implants designed to be used with our MAS platform. These implants are used for interbody disc height restoration for fusion and stabilization of the spine. Our implants are available in a variety of shapes and sizes to accommodate the anatomical requirements of the patient and the particular fusion procedure. Our implants are designed for insertion into the smallest possible space while maximizing surface area contact for fusion. Our fixation systems have been uniquely designed to be delivered through our MaXcess system to provide stabilization of the spine. These systems enable minimally disruptive placement of implants and are intended to reduce operating time and patient morbidity, often through a single approach.

We also made significant progress in the last few years on our research and development initiatives related to motion preservation. The PCM clinical trial is complete and the trial protocol requires a two-year follow-up period, which was completed in the fourth quarter of 2009, on all patients before submitting to the FDA for potential approval. We anticipate submitting for FDA approval in the first quarter of 2010. The clinical trial for NeoDisc^®, a nucleus-like total disc replacement device, is a prospective, randomized, controlled, multi-center clinical trial to evaluate the safety and efficacy of NeoDisc by comparing the outcomes of patients to traditional anterior cervical discectomy and fusion. Enrollment began in the third quarter of 2006 and is now complete.

Our motion preservation product development efforts also include our mechanical lateral total disc replacement (XL TDR^tm). We filed with the FDA for Investigational Device Exemptions, or IDEs, on the XL TDR in late 2007 and were granted an IDE in 2008.

MAS — Biologics

As part of our MAS offering, we have expanded our product offerings in the last few years to include products in the biologics market. The biologics market in spine surgery has grown to approximately $1.7 billion and consists of autograft (autologous human tissue), allograft (donated human tissue), a varied offering of synthetic products, stem cell-based products, and growth factors. We made our initial entry into this market in 2007 by acquiring rights to FormaGraft, a collagen-based synthetic product. We expanded this offering in 2008 by acquiring Osteocel, an allograft cellular matrix containing viable MSCs to aid in fusion. Additionally, in early 2009, we made an investment in Progentix Orthobiology, B.V., a private company working to develop a novel synthetic osteoinductive bone graft material.

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Development Projects

We are developing proprietary total disc replacement devices for lateral lumbar spine applications and separately for cervical spine applications. These devices are intended to allow surgeons to address a patient’s pain and dysfunction while maintaining normal range of motion and avoiding future adjacent level degeneration that can occur after spine fusion. Commercialization of these devices, including PCM, NeoDisc^®, and XL TDR^®, will require premarket approval rather than 510(k) clearance. In the cervical spine, the PCM investigational device, a total disc replacement device designed to preserve motion, has reached the two-year follow-up end point in its FDA-approved clinical trial in the United States. We anticipate submitting for FDA approval in the first quarter of 2010. Approval, if obtained, of PCM will further strengthen our cervical product offering and will enable us to continue our trend of increasing our market share. Also in the cervical spine, patient enrollment in the FDA-approved clinical trial of the NeoDisc nucleus-like total disc replacement device in the United States is complete. The NeoDisc study’s two-year follow-up period is scheduled for completion in late 2010.

Our lumbar motion preservation development efforts include XL TDR, a mechanical total disc replacement implanted through the XLIF approach. Enrollment in an FDA-approved XL TDR clinical trial in the United States was initiated in 2009 and will continue throughout 2010.

In addition to the motion preservation platforms previously mentioned, we continue development on a wide variety of projects intended to broaden surgical applications such as with tumor, trauma, and deformity, and increase fixation options for greater vertical integration of our MAS techniques. We also continue expanding our cervical product portfolio to provide for a comprehensive cervical offering that will include segmentation of both the fixation and motion preservation markets.

Research and Development

Our research and development efforts are primarily focused on developing further enhancements to our existing products, launching new product categories, as well as developing our total disc products. As of December 31, 2009, our research staff consists of 23 shareowners (employees), including six who hold Ph.D. degrees and three who hold other advanced degrees. Our research and development group has extensive experience in developing products to treat spine pathology and this group continues to work closely with our clinical advisors and spine surgeon customers to design products that are intended to improve patient outcomes, simplify techniques, shorten procedures, reduce hospitalization and rehabilitation times and, as a result, reduce costs.

Sales and Marketing

In the United States, we currently sell our products through a combination of exclusive independent sales agencies and direct sales representatives employed by us. Importantly, both our direct sales representatives as well as our independent sales agencies are exclusive and sell only NuVasive spine surgery products. Each member of our U.S. sales force is responsible for a defined territory, with our independent sales representatives acting as our sole representative in their respective territories. The determination of whether to engage a directly-employed shareowner or exclusive distributor is made on a territory by territory basis, with a focus on the candidate who brings the best skills and experience. Currently, the split between directly-employed and independent sales agents in our sales force is roughly equal. Outside the United States, we currently sell our products through a combination of exclusive distributors and direct sales representatives employed by us.

The transition to an exclusive sales force has been a very positive contributor to our growth in sales. There are many reasons that we believe strongly in an exclusive sales force, none more important than having a sales force that is properly trained and incentivized to sell and represent only our portfolio of products.

Our global sales force is managed by three Executive Vice Presidents managing the following territories: Asia Pacific, EMEA (Europe, Middle East and Africa) and the Americas. The Executive Vice President of the Americas manages four Area Vice Presidents. Each Area Vice President is responsible for a portion of the United States and manages the directly-employed and independent sales agents engaged in that territory. Outside of the United States, the Executive Vice Presidents manage directly-employed sales agents and independent distributors in that territory.

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Surgeon Training and Education

NuVasive devotes significant resources to training and educating surgeons regarding the safety and reproducibility of our surgical techniques and our complimentary instruments and implants. We maintain a state-of-the-art cadaver operating theatre and training facility at our corporate headquarters to help promote adoption of our products. Currently, we are training approximately 400 to 500 surgeons annually in the XLIF technique and our other MAS platform products including: NeuroVision, MaXcess and specialized implants. NuVasive has also helped to establish SOLAS^®, the Society of Lateral Access Surgery, a group of spine surgeons dedicated to the development and expanded application of lateral spine surgery techniques that offer significant patient benefits and improved clinical outcome through peer-to-peer communication, clinical education efforts, and research. The number of surgeons trained annually includes first-time surgeons new to our MAS product platform as well as surgeons previously trained on our MAS product platform who are attending advanced training programs.

Manufacturing and Supply

We rely on third parties for the manufacture of our products, their components and servicing. We currently maintain alternative manufacturing sources for some components of NeuroVision, MaXcess, and SpheRx, as well as some of our other finished goods products. We have and are in the process of identifying and qualifying additional suppliers for our highest volume products to maintain consistent supply to our customers. Our outsourcing strategy is targeted at companies that meet FDA, International Organization for Standardization, or ISO, and quality standards supported by internal policies and procedures. Supplier performance is maintained and managed through a supplier qualification and corrective action program intended to ensure that all product requirements are met or exceeded. We believe these manufacturing relationships minimize our capital investment, help control costs, and allow us to compete with larger volume manufacturers of spine surgery products.

Following the receipt of products or product components from our third-party manufacturers, we conduct inspection, packaging and labeling, as needed, at either our headquarters facility or our distribution facility. Under our existing contracts, we reserve the exclusive right to inspect and assure conformance of each product and product component to our specifications. In the future, we may consider manufacturing certain products or product components internally, if and when demand or quality requirements make it appropriate to do so.

We currently rely on Tissue Banks International, Inc. and AlloSource, Inc. as our only suppliers of allograft tissue implants. AlloSource is also our exclusive supplier of Osteocel, which is processed from allograft and was acquired from Osiris Therapeutics, Inc. Like our relationships with our device manufacturing suppliers, we subject our tissue processing suppliers to the same quality criteria in terms of selection, qualification, and verification of processed tissue quality upon receipt of goods, as well as hold them accountable to compliance with FDA regulation, state requirements, as well as voluntary industry standards such as the American Association of Tissue Banks, or AATB.

We acquired NeoDisc, an investigational cervical disc replacement device, from Pearsalls Limited. NeoDisc is currently the subject of a clinical trial, and our supply of the product comes solely from Pearsalls Limited.

We acquired rights to FormaGraft, a ceramic/collagen bone graft matrix used to promote spinal fusion, from Radius Medical, LLC. Our supply of the product comes solely from Maxigen Biotech.

We acquired PCM, a motion preserving total disc replacement device, through our acquisition of Cervitech, Inc. Our supply of the product comes solely from Waldemar Link GmbH & Co. KG, a company that was affiliated with Cervitech prior to the acquisition. We are in the process of establishing alternate suppliers.

We, and our third-party manufacturers, are subject to the FDA’s quality system regulations, state regulations, such as the regulations promulgated by the California Department of Health Services, and regulations promulgated by the European Union. For tissue products, we are FDA registered and licensed in the States of California, New York, Florida, Maryland and Oregon. For our device implants and instruments, we are FDA registered, California licensed, CE marked and ISO certified. CE is an abbreviation for European Compliance. Our facility and the facilities of our third-party manufacturers are subject to periodic unannounced inspections by regulatory authorities, and may undergo compliance inspections conducted by the FDA and corresponding state agencies. The FDA may impose enforcement, inspections or audits at any time.

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Loaned Instrument Sets

We seek to deliver surgical instrument sets, including our NeuroVision systems, just in time to fulfill our customer obligations to meet surgery schedules. We do not receive separate economic value specific to the loaned instrument sets from the surgeons or hospitals that utilize them. In most cases, once the surgery is finished, the instrument sets are returned to us and we prepare them for shipment to meet future surgeries. This strategy minimizes backlogs, while increasing asset turns and maximizing cash flow. Our pool of surgical equipment that we loan to or place with hospitals continues to increase as we expand our distribution channels and increase market penetration of our products. These loaned instrument sets are important to the growth of our business and we anticipate additional investments in our loaner assets.

Intellectual Property

We rely on a combination of patent, trademark, copyright, trade secret and other intellectual property laws, nondisclosure agreements and other measures to protect our intellectual property rights. We believe that in order to have a competitive advantage, we must develop and maintain the proprietary aspects of our technologies. We require our shareowners, consultants and advisors to execute confidentiality agreements in connection with their employment, consulting or advisory relationships with us. We also require our shareowners, consultants and advisors who we expect to work on our products to agree to disclose and assign to us all inventions conceived during the work day, using our property or which relate to our business. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary.

Patents

As of December 31, 2009, we had 66 issued U.S. patents, 45 foreign national patents, and 272 pending patent applications, including 210 U.S. applications, 8 international (PCT) applications and 54 foreign national applications. Our issued and pending patents cover, among other things:

•  MAS surgical access and spine systems;

•  Neurophysiology enabled instrumentation and methodology, including pedicle screw test systems, navigated guidance, and surgical access systems;

•  Implants and related instrumentation and targeting systems;

•  Biologics, including Osteocel and Formagraft; and

•  Motion preservation products.

Our issued patents begin to expire in 2018. We do not believe that the expiration of any single patent is likely to significantly affect our intellectual property position.

We have undertaken to protect our neurophysiology platform, including the NeuroVision nerve monitoring system, through a comprehensive strategy covering various important aspects of our neurophysiology-enabled instrumentation, including, screw test, navigated guidance, surgical access and related methodology. Our NeuroVision patent portfolio includes 15 issued U.S. patents, 48 U.S. patent applications (including 45 U.S. utility patent applications, 2 U.S. provisional applications, and 1 U.S. design application), 12 issued foreign national patents, 2 international (PCT) patent applications, and 25 foreign national applications on this system and related instrumentation.

We have also undertaken to protect our XLIF surgical technique franchise, including methodology, implants, and systems used during XLIF procedures. Our XLIF patent portfolio includes 56 U.S. utility patent applications, 7 U.S. provisional patent applications, 1 international (PCT) patent application, and 17 foreign national patent applications covering various additional aspects of XLIF methodology, implants, and systems.

Our biologics IP portfolio includes 4 U.S. patent applications, 2 foreign applications, and 1 International Application (PCT) owned outright by NuVasive. It also includes 4 U.S. patents and 4 foreign patents exclusively licensed from Osiris Therapeutics.

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We acquired a substantial intellectual property portfolio as part of our purchase of Cervitech, Inc. This portfolio includes 9 issued U.S. patents, 18 U.S. applications, 167 issued foreign national patents, 1 international (PCT) application, and 182 foreign national applications, directed at the PCM cervical arthroplasty system and related technologies.

The medical device industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. Patent litigation can involve complex factual and legal questions and its outcome is uncertain. Our success will depend in part on our not infringing patents issued to others, including our competitors and potential competitors. As the number of entrants into our market increases, the possibility of future patent infringement claim against us grows. While we take extensive efforts to ensure that our products do not infringe other parties’ patents and proprietary rights, our products and methods may be covered by patents held by our competitors. There are numerous risks associated with our intellectual property. For a complete discussion of these risks, please see the “Risk Factors” section of this Annual Report.

Trademarks

As of December 31, 2009, we had 84 trademark registrations, both domestic and foreign, including the following U.S. trademarks: NuVasive, NeuroVision, MAS, MaXcess, XLIF, SpheRx, DBR, CoRoent, SmartPlate, Creative Spine Technology, Triad, InStim, NeoDisc, ExtenSure, FormaGraft, Osteocel, Nerve Avoidance Leader, Absolute Responsiveness, Affix, Gradient Plus, Halo, SOLAS, VuePoint, XL TDR and XLP. We also had 46 trademark applications pending, both domestic and foreign, including the following trademarks: ExtenSure, Embrace, Embody, ILIF, Magnitude, M5, NVM5, Acuity, Armada, Attrax, The Better Way Back, and Leverage.

Competition

We are aware of a number of major medical device companies that have developed or plan to develop products for use in surgical alternatives with less tissue disruption in each of our current and future product categories.

Our currently marketed products are, and any future products we commercialize will be, subject to intense competition. Many of our current and potential competitors have substantially greater financial, technical and marketing resources than we do, and they may succeed in developing products that would render our products obsolete or noncompetitive. In addition, many of these competitors have significantly greater operating history and reputations than we do in their respective fields. Our ability to compete successfully will depend on our ability to develop proprietary products that reach the market in a timely manner, receive adequate reimbursement and are safer, less invasive and less expensive than alternatives available for the same purpose. Because of the size of the potential market, we anticipate that companies will dedicate significant resources to developing competing products. Below are our primary competitors grouped by our product categories.

Our NeuroVision system competes with the conventional nerve monitoring systems offered by Medtronic Sofamor Danek (Medtronic), Cadwell, and Nicolet Biomedical. We believe our system competes favorably with these systems on ease of use for the spine surgeon, with the added advantage that our NeuroVision System was designed to support surgeon directed applications with automated, real-time information. Medtronic’s NIM-Eclipse neuromonitoring system, acquired from Axon, while surgeon directed, requires manual interpretation for neuromonitoring. Several companies offer products that compete with our MaXcess system, SpheRx pedicle screw system and implants, including competitive offerings by DePuy Spine, Inc. (Depuy), a Johnson & Johnson company, Medtronic and Stryker Spine.

Competition is intense in the fusion product market. We believe that our most significant competitors are Medtronic, DePuy, Stryker Spine and Synthes, Inc., each of which has substantially greater sales and financial resources than we do. Medtronic, in particular, has a broad classic fusion product line. We believe our differentiation in the market is an innovative portfolio of products elegantly delivered through our MaXcess system, as well as through our XLIF approach, complemented by additional innovative and pull-though products along the entirety of the spine. However, with the introduction of competing lateral techniques, such as Medtronic’s DLIF, we face more competition in the market.

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Competition in the motion preservation segment is increasing, with Medtronic, DePuy, Stryker Spine and Synthes, Inc. all investing in this rapidly growing market. In the cervical total disc replacement (TDR) segment, our PCM and NeoDisc, currently in clinical trials, if approved, will face competition from several products that received FDA approval in 2007 including Medtronic’s Prestige and Bryan TDRs as well as Synthes, Inc.’s ProDisc TDR.

While our acquisition of Osteocel and our investment in Progentix Orthobiology, B.V. provide us with additional products to compete in the biologics market, competition is increasing. In addition to our larger competitors, which are investing in their biologics platforms, we face competition from smaller orthobiologics companies such as Orthovita and Osteotech.

We also face competition from a significant number of smaller companies with more limited product offerings and geographic reach than our larger competitors. These companies, who represent intense competition in specified markets, include Globus Medical, Inc., Zimmer Spine, Orthofix International N.V. (Blackstone Medical, Inc.), Biomet EBI/Spine, Alphatec Spine, Inc., and others.

Government Regulation

Our products are medical devices and tissues subject to extensive regulation by the FDA and other regulatory bodies. FDA regulations govern, among other things, the following activities that we or our partners perform and will continue to perform:

•  product design and development;

•  product testing;

•  product manufacturing;

•  product labeling;

•  product storage;

•  premarket clearance or approval;

•  advertising and promotion; and

•  product sales and distribution.

FDA’s Premarket Clearance and Approval Requirements

Unless an exemption applies, each medical device we wish to commercially distribute in the United States will require either prior 510(k) clearance or prior premarket approval from the FDA. The FDA classifies medical devices into one of three classes. Devices deemed to pose lower risk are placed in either class I or II, which requires the manufacturer to submit to the FDA a premarket notification requesting permission for commercial distribution. This process is known as 510(k) clearance. Some low risk devices are exempt from this requirement. Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) device are placed in class III, requiring premarket approval.

510(k) Clearance Pathway

To obtain 510(k) clearance, a premarket notification must be submitted demonstrating that the proposed device is substantially equivalent to a previously cleared 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of premarket approval applications. The FDA’s 510(k) clearance pathway usually takes from three to twelve months from the date the application is completed, but it can take significantly longer.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, will require a new 510(k) clearance or could require premarket approval. The FDA requires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with a manufacturer’s determination. If the FDA disagrees

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with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or premarket approval is obtained. If the FDA requires us to seek 510(k) clearance or premarket approval for any modifications to a previously cleared product, we may be required to cease marketing or recall the modified device until we obtain this clearance or approval. Also, in these circumstances, we may be subject to significant regulatory fines or penalties. We have made and plan to continue to make additional product enhancements that we believe do not require new 510(k) clearances.

Premarket Approval Pathway

A premarket approval (PMA) application must be submitted if the device cannot be cleared through the 510(k) process. A premarket approval application must be supported by extensive data including, but not limited to, technical information, preclinical data, clinical trial data, manufacturing data and labeling to demonstrate, to the FDA’s satisfaction, the safety and efficacy of the device for its intended use. Once a complete PMA application is submitted, the FDA begins an in-depth review which generally takes between one and three years, but may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided. Also, during the review period, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. In addition, the FDA will conduct a preapproval inspection of the manufacturing facility to ensure compliance with quality system regulations. New PMAs or PMA supplements are required for significant modifications to the manufacturing process, labeling or design of a device that is approved through the PMA process. A PMA supplement often require submission of the same type of information as an original PMA application, except that a supplement is limited to information needed to support any changes from the device covered by the original PMA application, and may not require as extensive clinical data or the convening of an advisory panel.

Human Cell, Tissue, and Cellular and Tissue Based Products

Our allograft implant products and our Osteocel products are regulated by FDA as Human Cell, Tissue, and Cellular and Tissue Based Products. FDA regulations do not currently require products regulated as minimally manipulated human tissue-based products to be 510(k) cleared or PMA approved before they are marketed. We are, however, required to register our establishment, list these products with the FDA and comply with Current Good Tissue Practices for Human Cell, Tissue, and Cellular and Tissue Based Product Establishments. The FDA periodically inspects tissue processors to determine compliance with these requirements. Violations of applicable regulations noted by the FDA during facility inspections could adversely affect the continued marketing of our products. We believe we comply with all aspects of the Current Good Tissue Practices, although there can be no assurance that we will comply, or will comply on a timely basis, in the future. Entities that provide us with allograft bone tissue are responsible for performing donor recovery, donor screening and donor testing and our compliance with those aspects of the Current Good Tissue Practices regulations that regulate those functions are dependent upon the actions of these independent entities.

The procurement and transplantation of allograft bone tissue is subject to U.S. federal law pursuant to the National Organ Transplant Act, or NOTA, a criminal statute which prohibits the purchase and sale of human organs used in human transplantation, including bone and related tissue, for “valuable consideration.” NOTA permits reasonable payments associated with the removal, transportation, processing, preservation, quality control, implantation and storage of human bone tissue. With the exception of removal and implantation, we provide services in all of these areas. We make payments to vendors in consideration for the services they provide in connection with the recovery and screening of donors. Failure to comply with the requirements of NOTA could result in enforcement action against us.

The procurement of human tissue is also subject to state anatomical gift acts and some states have statutes similar to NOTA. In addition, some states require that tissue processors be licensed by that state. Failure to comply with state laws could also result in enforcement action against us.

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Clinical Trials

A clinical trial is almost always required to support a PMA application and is sometimes required for a 510(k) premarket notification. These trials generally require approval of a submitted application for an IDE to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to evaluate the device in humans and that the testing protocol is scientifically sound. The IDE application must be approved in advance by the FDA for a specified number of subjects, unless the product is deemed a non-significant risk device and eligible for more abbreviated IDE requirements. Clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the responsible institutional review boards. Future clinical trials of our motion preservation designs will likely require that we obtain IDEs from the FDA prior to commencing clinical trials. We have gained IDE approval from the FDA to begin a clinical trial relating to NeoDisc, our embroidery cervical disc replacement device, and have completed patient enrollment for this trial. We filed with the FDA for IDEs on the mechanical lateral TDR (XL TDR), and were granted an IDE in 2008. Currently, the PCM investigational device is in an FDA-approved clinical trial in the United States with two-year follow-up completed in the fourth quarter of 2009. We anticipate submitting for FDA approval in the first quarter of 2010. Our clinical trials must be conducted in accordance with FDA regulations and other federal regulations concerning human subject protection and privacy and must be publicly registered. The results of our clinical trials may not be sufficient to obtain approval of our product. There are numerous risks associated with conducting such a clinical trial, including the high costs and uncertain outcomes. For a complete discussion of these risks, please see the “Risk Factors” section of this Annual Report.

Pervasive and Continuing FDA Regulation

After a device is placed on the market, numerous regulatory requirements apply. These include, but are not limited to:

•  quality system regulation, which requires manufacturers to follow design, testing, process control, and other quality assurance procedures;

•  labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; and

•  medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

•  fines, injunctions, and civil penalties;

•  recall or seizure of our products;

•  operating restrictions, partial suspension or total shutdown of production;

•  refusing our request for 510(k) clearance or premarket approval of new products;

•  withdrawing 510(k) clearance or premarket approvals that are already granted; and

•  criminal prosecution.

We are subject to unannounced device inspections by the FDA and the California Food and Drug Branch, as well as other regulatory agencies overseeing the implementation and adherence of applicable state and federal tissue licensing regulations. These inspections may include our subcontractors’ facilities.

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Sales and Marketing Commercial Compliance

Federal anti-kickback laws and regulations prohibit any knowing and willful offer, payment, solicitation or receipt of any form of remuneration by an individual or entity in return for, or to induce:

•  the referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other government-sponsored healthcare program; or

•  purchasing, leasing, ordering or arranging for any service or product for which payment may be made by a government-sponsored healthcare program.

Possible sanctions for violation of these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and forfeiture of amounts collected in violation of such prohibitions.

In addition to the anti-kickback law, federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid. Off-label promotion has been pursued as a violation of the federal false claims laws. Pursuant to FDA regulations, we can only market our products for cleared or approved uses. Although surgeons are permitted to use medical devices for indications other than those cleared or approved by the FDA based on their medical judgment, we are prohibited from promoting products for such off-label uses. Additionally, the majority of states in which we market our products have similar anti-kickback, false claims, anti-fee splitting and self-referral laws, imposing substantial penalties for violations.

To enforce compliance with the federal laws, the U.S. Department of Justice (DOJ) has increased its scrutiny of interactions between healthcare companies and healthcare providers which has led to an unprecedented level of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time- and resource-consuming. Additionally, if a healthcare company settles an investigation with the DOJ or other law enforcement agencies, the company may be forced to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Additionally, the commercial compliance environment is continually evolving in the healthcare industry as some states, including California, Massachusetts and Vermont, mandate implementation of commercial compliance programs, along with the tracking and reporting of gifts, compensation, and other remuneration to physicians. Federal legislation, pursuant to the Physician Payments Sunshine Act of 2009 (Sunshine Act), has been proposed and is moving forward in Congress under the Healthcare Reform Act of 2009. The Sunshine Act would require public disclosure to the federal government of payments to physicians, including in-kind transfers of value such as free gifts or meals. These requirements all provide for penalties for non-compliance. The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

International

International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ.

The European Union, which consists of 27 countries in Europe, has adopted numerous directives and standards regulating the design, manufacture, clinical trials, labeling, and adverse event reporting for medical devices. Other countries, such as Switzerland, have voluntarily adopted laws and regulations that mirror those of the European Union with respect to medical devices. Devices that comply with the requirements of a relevant directive will be entitled to bear CE conformity marking and, accordingly, can be commercially distributed throughout Europe. The method of assessing conformity varies depending on the class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a “Notified Body.” This third-party assessment consists of an audit of the manufacturer’s quality system and technical review of the manufacturer’s product. We have now successfully passed several Notified Body audits since our original certification in 2001,

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granting us ISO registration and allowing the CE conformity marking to be applied to certain of our devices under the European Union Medical Device Directive. We have expanded our certification scope and are now working with two different Notified Bodies overseeing our currently released, as well as forthcoming, product development projects.

The Japanese government in recent years made revisions to the Pharmaceutical Affairs Law (PAL) that made significant changes to the preapproval regulatory systems. These changes have in part, stipulated that in addition to obtaining a manufacturing or import approval from the Ministry of Health, Labor and Welfare (MHLW) certain low-risk medical devices can now be evaluated by third-party organizations. Based on the risk-based classification, manufacturers are provided three procedures for satisfying the PAL requirements prior to placing products on the market, Pre-market Submission (Todokede), Pre-market Certification (Ninsho) and Pre-market Approval (Shonin). NuVasive intends to market devices in Japan that will be assessed by both government entities and third party organizations using all three procedures in place for manufacturers. The level of review and time line for medical device approval will depend on the risk-based classification and subsequent regulatory procedure that the medical device is aligned based on assessment against the Pharmaceutical Affairs Law. Manufacturers must also obtain a manufacturing or import license from the prefectural government prior to importing medical devices. We will also be pursuing authorizations required by the prefectural government.

Third-Party Reimbursement

We expect that sales volumes and prices of our products will continue to be largely dependent on the availability of reimbursement from third-party payers, such as governmental programs, for example, Medicare and Medicaid, private insurance plans and managed care programs. Reimbursement is contingent on established coding for a given procedure, coverage of the codes by the third-party payers, and adequate payment for the resources used.

Physician coding for procedures is established by the American Medical Association (AMA). For coding related to spine surgery, the North American Spine Society (NASS) is the primary liaison to AMA. In July of 2006 NASS established the proper physician coding for the XLIF procedure by declaring it to be encompassed in existing codes that describe an anterolateral approach to the spine. This position was confirmed in a formal statement in January 2010. Hospital coding is established by the Centers for Medicare and Medicaid Services (CMS). XLIF is not currently included in the nomenclature for hospital codes but has been proposed as an additional descriptor of existing codes. CMS’ proposal is slated for review and ratification in 2010. All physician and hospital coding is subject to change which could impact reimbursement and physician practice behavior.

Independent of the coding status, third-party payers may deny coverage based on their own criteria, such as if they feel that a device or procedure is not well established clinically, is not the most cost-effective treatment available, or is used for an unapproved indication. In December 2007, a certain third-party payer, Cigna Healthcare, established a national policy that labels XLIF as experimental or investigational and states that they do not provide reimbursement for the XLIF procedure. Since December 2007, other third-party payers also established similar non-coverage policies, which are both national and local in scope. Such policies are not customarily intended to dictate the practice of medicine or override the judgment of the regional medical directors of a given third-party payer and these policies have not materially impacted our operating results. NuVasive will continue to provide the appropriate resources to patients, physicians, hospitals, and insurers in order to ensure the best in patient care and clarity regarding XLIF reimbursement and work to remove the non-coverage policies. National and regional coverage policy decisions are subject to unforeseeable change and have the potential to impact physician behavior. For a complete discussion of these risks, please see the “Risk Factors” section of this Annual Report.

Payment amounts are established by government and private payer programs and are subject to fluctuations which could impact physician practice behavior. Third-party payers are increasingly challenging the prices charged for medical products and services.

In international markets, reimbursement and healthcare payment systems vary significantly by country and many countries have instituted price ceilings on specific product lines. There can be no assurance that our products will be accepted by third-party payers, that reimbursement will be available or, if available, that the third-party payers’ reimbursement policies will not adversely affect our ability to sell our products profitably.

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Particularly in the United States, third-party payers carefully review, and increasingly challenge, the prices charged for procedures and medical products as well as any technology that they, in their own judgment, consider experimental or investigational. In addition, an increasing percentage of insured individuals are receiving their medical care through managed care programs, which monitor and often require pre-approval of the services that a member will receive. Many managed care programs are paying their providers on a capitated basis, which puts the providers at financial risk for the services provided to their patients by paying them a predetermined payment per member per month. The percentage of individuals covered by managed care programs is expected to grow in the United States over the next decade.

We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry to reduce the costs of products and services. There can be no assurance that third-party reimbursement and coverage will be available or adequate, or that future legislation, regulation, or reimbursement policies of third-party payers will not adversely affect the demand for our products or our ability to sell these products on a profitable basis. The unavailability or inadequacy of third-party payer coverage or reimbursement could have a material adverse effect on our business, operating results and financial condition.

Healthcare Fraud and Abuse

Healthcare fraud and abuse laws apply to our business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid or most other federally-funded health care programs. The federal Anti-Kickback Law prohibits unlawful inducements for the referral of business reimbursable under federally-funded health care programs, such as remuneration provided to physicians to induce them to use certain tissue products or medical devices reimbursable by Medicare or Medicaid. The Anti-Kickback Law is subject to evolving interpretations. For example, the government has enforced the Anti-Kickback Law to reach large settlements with healthcare companies based on sham consultant arrangements with physicians. The majority of states also have anti-kickback laws which establish similar prohibitions. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees could be subject to severe criminal and civil penalties including, for example, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid.

Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Violations of the False Claims Act can result in very significant monetary penalties and treble damages. The federal government is using the False Claims Act, and the accompanying threat of significant liability, in its investigations of health care providers, suppliers and manufacturers throughout the country for a wide variety of Medicare billing practices, and has obtained multi-million and multi-billion dollar settlements in addition to individual criminal convictions. Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating health care providers’, suppliers’, and manufacturers’ compliance with the health care billing, coverage and reimbursement rules and fraud and abuse laws.

Shareowners (our employees)

We refer to our employees as shareowners. As of December 31, 2009, we had 665 shareowners, of which 118 were employed in research and development, 21 in regulatory and quality assurance, 236 in general and administrative and operations and 290 in sales and marketing (including 37 international shareowners). In addition to our shareowners, we partner with exclusive independent sales agencies and independent distributors who sell our products in the United States and internationally, respectively. None of our shareowners are represented by a labor union and we believe our shareowner relations are good.

NuVasive Cheetah Gives Back Foundation

NuVasive Cheetah Gives Back Foundation^tm is a non-profit organization that has common management with the Company. NuVasive Cheetah Gives Back Foundation is committed to providing innovative medical devices,

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surgical support, and necessary funds to those in need of life-saving spine surgery around the world and encouraging creativity through the support of the San Diego performing arts community. We are not required to make contributions to NuVasive Cheetah Gives Back Foundation, except for amounts pledged. No amounts were pledged as of December 31, 2009.

Corporate Information

Our business was incorporated in Delaware in July 1997. Our principal executive offices are located at 7475 Lusk Boulevard, San Diego, California 92121, and our telephone number is (858) 909-1800. Our website is located at www.nuvasive.com.

We file our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports, electronically with the Securities and Exchange Commission (the “Commission”). We make these reports available free of charge on our website under the investor relations page as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Commission. All such reports were made available in this fashion during 2009.

This report may refer to brand names, trademarks, service marks or trade names of other companies and organizations, and these brand names, trademarks, service marks and trade names are the property of their respective holders.

Item 1A.   Risk Factors

Risk factors which could cause actual results to differ from our expectations and which could negatively impact our financial condition and results of operations are discussed below and elsewhere in this report. If any of the following risks 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. Further, additional risks not currently known to us or that we currently believe are immaterial also may impair our business, operations, liquidity and stock price materially and adversely.

Risks Related to Our Business and Industry

Certain third-party payers have stated non-coverage decisions concerning our XLIF technology, additional third-party payers may adopt similar policies and such medical reimbursement decisions may negatively impact our ability to sell our complete product portfolio and expand our operations and increase profitability.

Sales of our products will depend on the availability of adequate reimbursement from third-party payers. Healthcare providers, such as hospitals that purchase medical devices for treatment of their patients, generally rely on third-party payers to reimburse all or part of the costs and fees associated with the procedures performed with these devices. Likewise, spine surgeons rely primarily on third-party reimbursement for the surgical fees they earn. Spine surgeons are unlikely to use our products if they do not receive reimbursement adequate to cover the cost of their involvement in the surgical procedures.

Certain third-party payers have stated non-coverage decisions concerning our XLIF technology and implementation of such policies could significantly alter our ability to sell any products that the payers categorize under “XLIF.” Additional payers may also state that our XLIF technology is not covered. The inability to successfully market XLIF due to lack of reimbursement coverage may adversely impact our ability to acquire new physician clients, increase market penetration with existing clients, or retain existing clients across NuVasive product lines.

The XLIF procedure is a significant feature of our Maximum Access Surgery, or MAS, product platform, which is our principal product offering. Lack of XLIF reimbursement coverage may deter physician interest in XLIF, and in turn MAS and the entirety of our product offering. Any such decisions could adversely impact our ability to sell our products.

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We also believe that future reimbursement may be subject to increased restrictions both in the United States and in international markets. Future legislation, regulation or reimbursement policies of third-party payers may adversely affect the demand for our existing products or our products currently under development and limit our ability to sell our products on a profitable basis.

To the extent we sell our products internationally, market acceptance may depend, in part, upon the availability of reimbursement within prevailing healthcare payment systems. Reimbursement and healthcare payment systems in international markets vary significantly by country, and include both government sponsored healthcare and private insurance.

Pricing pressure from our competitors may impact our ability to sell our products at prices necessary to expand our operations and increase profitability.

The market for spine surgery products is large and growing at a significant rate. This has attracted numerous new companies and technologies, and encouraged more established companies to intensify competitive pressure. New entrants to our markets include numerous niche companies with singular product focus, as well as companies owned partially by spine surgeons, who have significant market knowledge and access to the surgeons who use our products. As a result of this increased competition, we believe there will be growing pricing pressure in the near future. If competitive forces drive down the price we are able to charge for our products, our profit margins will shrink, which will hamper our ability to invest in and grow our business and increase profitability.

We are in a highly competitive market segment and face competition from large, well-established medical device manufacturers as well as new market entrants.

The market for spine surgery products and procedures is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants. With respect to NeuroVision, our nerve avoidance system, we compete with Medtronic Sofamor Danek, Inc., a wholly owned subsidiary of Medtronic, Inc., and Nicolet Biomedical, a VIASYS Healthcare company, both of which have significantly greater resources than we do, as well as numerous regional nerve monitoring companies. With respect to MaXcess, our minimally disruptive surgical system, our largest competitors are Medtronic Sofamor Danek, Inc., DePuy Spine, Inc., a Johnson & Johnson company, and Synthes-Stratec, Inc. We compete with many of the same companies with respect to our other products. We also compete with numerous smaller companies with respect to our implant products, many of whom have a significant regional market presence. At any time, these companies may develop alternative treatments, products or procedures for the treatment of spine disorders that compete directly or indirectly with our products.

Many of our larger competitors are either publicly traded or divisions or subsidiaries of publicly traded companies, and enjoy several competitive advantages over us, including:

•  significantly greater name recognition;

•  established relations with a greater number of spine surgeons, hospitals, other healthcare providers and third-party payers;

•  larger and more well established distribution networks with significant international presence;

•  products supported by long-term clinical data;

•  greater experience in obtaining and maintaining U.S. Food and Drug Administration, or FDA, and other regulatory approvals or clearances for products and product enhancements;

•  more expansive portfolios of intellectual property rights; and

•  greater financial and other resources for product research and development, sales and marketing and litigation.

In addition, the spine industry is becoming increasingly crowded with new market entrants, including companies owned at least partially by spine surgeons. Many of these new competitors focus on a specific product or market segment, making it more difficult for us to expand our overall market position. If these companies become

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successful, we expect that competition will become even more intense, leading to greater pricing pressure and making it more difficult for us to expand.

Our future success depends on our strategy of obsoleting our own products and our ability to timely acquire, develop and introduce new products or product enhancements that will be accepted by the market.

We have the objective of staying ahead of the spine market by obsoleting our own products with new products and enhancements. It is important to our business that we continue to build upon our product offering to surgeons and hospitals, and enhance the products we currently offer. As such, our success will depend in part on our ability to acquire, develop and introduce new products and enhancements to our existing products to keep pace with the rapidly changing spine market. We cannot assure you that we will be able to successfully acquire, develop, obtain regulatory approval for or market new products or that any of our future products or enhancements will be accepted by the surgeons who use our products or the payers who financially support many of the procedures performed with our products. Additionally, in our quest to obsolete our products, we must effectively manage our inventory, the demand for new and current product and the regulatory process for new products in order to avoid unintended financial and accounting consequences.

If we do not effectively manage our strategy of obsoleting our products by acquiring or developing new products or product enhancements that we can introduce in time to meet market demand or if there is insufficient demand for these products or enhancements, our results of operations may suffer.

If clinical trials of our current or future product candidates do not produce results necessary to support regulatory approval in the United States, we will be unable to commercialize these products.

Several investigational devices in our development pipeline, including our NeoDisc cervical disc replacement device, PCM, and, and lateral TDR (XL TDR), will require premarket approval, or PMA, from the FDA. A PMA application must be submitted if the device cannot be cleared through the less rigorous 510(k) process. A PMA application must be supported by extensive data including, but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use.

As a result, to receive regulatory approval for NeoDisc, PCM, XLTDR or other devices requiring PMA approval, we must conduct, at our own expense, adequate and well controlled clinical trials to demonstrate efficacy and safety in humans. Clinical testing is expensive, takes many years and has an uncertain outcome. Clinical failure can occur at any stage of the testing. Our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and/or non-clinical testing. Our failure to adequately demonstrate the efficacy and safety of any of our devices would prevent receipt of regulatory approval and, ultimately, the commercialization of that device.

Our NeoDisc, PCM, and XLTDR devices are currently the subject of an Investigational Device Exemption clinical study. There is no assurance that these devices will be approved for sale in the United States by the FDA. The clinical study may prove that the device does not provide the intended benefit or that there are unintended negative side effects of the device that make it unsafe or not effective. In addition, the NeoDisc device includes embroidery technology, which has not been thoroughly studied for use as permanent implants in the spine. Any failure or delay in obtaining regulatory approval for these devices will hamper our ability to commercialize the device in the United States.

If our acquisitions are unsuccessful, our business may be harmed.

As part of our business strategy, we have acquired companies, technologies and product lines to maintain our objectives of developing or acquiring innovative technologies. Acquisitions involve numerous risks, including the following:

•  the possibility that we will pay more than the value we derive from the acquisition, which could result in future non-cash impairment charges;

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•  difficulties in integration of the operations, technologies, and products of the acquired companies, which may require significant attention of our management that otherwise would be available for the ongoing development of our business;

•  the assumption of certain known and unknown liabilities of the acquired companies; and

•  difficulties in retaining key relationships with shareowners (employees), customers, partners and suppliers of the acquired company.

Any of these factors could have a negative impact on our business, results of operations or financing position. Specifically, our Osteocel acquisition is the largest acquisition we have ever completed, with a total acquisition price of $85 million. If we failed to properly value that business, or fail to generate expected revenues or profits from operation of that business, our results of operations will suffer. Additionally, our investment in Progentix Orthobiology B.V., a private company working to develop a novel synthetic biologic, includes options and obligations to buy Progentix Orthobiology B.V. over time as development milestones are achieved. If the Progentix products are not commercially successful or unable to meet expected commercial success, but certain development milestones are achieved, we may be obligated to purchase Progentix Orthobiology B.V. at a price greater than the value of the company.

Further, past and potential acquisitions entail risks, uncertainties and potential disruptions to our business, especially where we have little experience as a company developing or marketing a particular product or technology (as is the case with the Osteocel biologic product). For example, we may not be able to successfully integrate an acquired company’s operations, technologies, products and services, information systems and personnel into our business. Acquisitions may also further strain our existing financial and managerial controls, and divert management’s attention away from our other business concerns.

Our reliance on single source suppliers could limit our ability to meet demand for our products in a timely manner or within our budget.

We rely on third-party suppliers and manufacturers to supply and manufacture our products. To be successful, our contract manufacturers must be able to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable cost and on a timely basis. Our anticipated growth could strain the ability of suppliers to deliver an increasingly large supply of products, materials and components. If we are unable to obtain sufficient quantities of high quality components to meet customer demand on a timely basis, we could lose customers, our reputation may be harmed and our business could suffer.

We currently use one or two manufacturers for each of our devices or components. Our dependence on one or two manufacturers involves several risks, including limited control over pricing, availability, quality and delivery schedules. If any one or more of our manufacturers cease to provide us with sufficient quantities of our components in a timely manner or on terms acceptable to us, or cease to manufacture components of acceptable quality, we would have to seek alternative sources of manufacturing. We could incur delays while we locate and engage alternative qualified suppliers and we might be unable to engage alternative suppliers on favorable terms. Any such disruption or increased expenses could harm our commercialization efforts and adversely affect our ability to generate revenue.

Invibio, Inc. is our exclusive supplier of polyetheretherketone, which comprises our PEEK partial vertebral body product called CoRoent^®. We have a supply agreement with Invibio, pursuant to which we have agreed to purchase our entire supply of polyetheretherketone for our current product lines from Invibio. We also have an exclusive supply arrangement with Delphi Corporation (Delphi) pursuant to which Delphi is our exclusive supplier of NeuroVision^® systems. In the event we experience delays, shortages, or stoppages of supply with either supplier, we would be forced to locate a suitable alternative supplier which could take significant time and result in significant expense. Any inability to meet our customers’ demands for these products could lead to decreased sales and harm our reputation and result in the loss of customers to our competitors, which could cause the market price of our common stock to decline.

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Maxigen Biotech, Inc., or MBI, is our exclusive supplier of our FormaGraft^® product. We are party to a supply agreement with MBI, pursuant to which we have agreed to purchase our entire supply of FormaGraft from MBI. We may require that MBI significantly expand its manufacturing capacity to meet our potential forecasted needs, and no assurance can be given that MBI will be able to meet our requirements. If we experience difficulties in dealing with MBI we may not be able to secure an adequate source of supply of FormaGraft, which could adversely affect our operational results.

We acquired PCM, a motion preserving total disc replacement device, through our acquisition of Cervitech, Inc. Our supply of the product comes solely from Waldemar Link GmbH & Co. KG, a company that was affiliated with Cervitech prior to the acquisition. We are in the process of determining whether to establish alternate suppliers and there is no assurance that we will be able to establish a new supplier which could adversely affect our operational results.

Further, Tissue Banks International, Inc. and AlloSource, Inc. collectively supply us with all of our allograft implants, and will continue to be our only sources for the foreseeable future. The processing of human tissue into allograft implants is very labor intensive and it is therefore difficult to maintain a steady supply stream. AlloSource is also our exclusive supplier of Osteocel, which is processed from allograft and was acquired from Osiris Therapeutics, Inc. Allograft, which is donated human tissue, is a supply-constrained material and there is ongoing risk that there will be insufficient supply to produce the necessary quantity of Osteocel and our other allograft products. In addition, due to seasonal changes in mortality rates, some scarce tissues used for our allograft products are at times in particularly short supply. Allograft also carries with it the possibility of disease transmission, which could result in negative patient outcomes and negative publicity for us. We cannot be certain that our supply of allograft from Tissue Banks International and AlloSource, Inc. will be available at current levels or will be sufficient to meet our needs. If we are no longer able to obtain allograft from these sources in amounts sufficient to meet our needs, we may not be able to locate and engage replacement sources of allograft on commercially reasonable terms, if at all. Any interruption of our business caused by the need to locate additional sources of allograft could reduce our revenues.

We are dependent on the services of Alexis V. Lukianov and Keith Valentine, and the loss of either of them could harm our business.

Our continued success depends in part upon the continued service of Alexis V. Lukianov, our Chairman and Chief Executive Officer, and Keith Valentine, our President and Chief Operating Officer, who are critical to the overall management of NuVasive as well as to the development of our technology, our culture and our strategic direction. We have entered into employment agreements with Messrs. Lukianov and Valentine, but neither of these agreements guarantees the service of the individual for a specified period of time. The loss of either Messr. Lukianov or Valentine could have a material adverse effect on our business, results of operations and financial condition. We have not obtained and do not expect to obtain any key-person life insurance policies.

If we fail to properly manage our anticipated growth, our business could suffer.

The rapid growth of our business has placed a significant strain on our managerial, operational and financial resources and systems. To execute our anticipated growth successfully, we must:

•  generate higher revenues to cover a higher level of operating expenses, and our ability to do so may depend on factors that we do not control;

•  attract and retain highly qualified management, scientific, manufacturing and sales and marketing personnel;

•  assimilate new staff members and manage the complexities associated with a larger, faster growing and more geographically diverse organization;

•  expand our clinical development resources to manage and execute increasingly global, larger and more complex clinical trials;

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•  expand our sales and marketing resources for international expansion and to launch an increasing number of new products from our product pipeline;

•  accurately anticipate demand for the products we manufacture and maintain adequate manufacturing capacity for both commercial and clinical supply while maintaining quality standards; and

•  upgrade our internal business processes and capabilities (e.g., information technology platform and systems, product distribution and tracking) to create the scalability that a growing business demands.

Further, our anticipated growth, both internationally and domestically, will place additional strain on our suppliers and manufacturers, resulting in increased need for us to carefully monitor quality assurance. Any failure by us to manage our growth effectively could have an adverse effect on our ability to achieve our development and commercialization goals.

If we fail to obtain, or experience significant delays in obtaining, FDA clearances or approvals for our future products or product enhancements, our ability to commercially distribute and market our products could suffer.

Our medical devices are subject to rigorous regulation by the FDA and numerous other federal, state and foreign governmental authorities. The process of obtaining regulatory clearances or approvals to market a medical device, particularly from the FDA, can be costly and time consuming, and there can be no assurance that such clearances or approvals will be granted on a timely basis, if at all. In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act, or is the subject of an approved premarket approval application, or PMA. The FDA will clear marketing of a medical device through the 510(k) process if it is demonstrated that the new product is substantially equivalent to other 510(k)-cleared products. The PMA process is more costly, lengthy and uncertain than the 510(k) clearance process. Additionally, any modification to a 510(k)-cleared device that could significantly affect its safety or efficacy, or that would constitute a major change in its intended use, requires a new 510(k) clearance or, possibly, premarket approval. The FDA may not agree with any of our decisions regarding whether new clearances or approvals are necessary.

Our failure to comply with such regulations could lead to the imposition of injunctions, suspensions or loss of regulatory approvals, product recalls, termination of distribution, or product seizures. In the most egregious cases, criminal sanctions or closure of our manufacturing facilities are possible.

Pursuant to FDA regulations, we can only market our products for cleared or approved uses. If the FDA determines that our promotional materials or training constitutes promotion of an unapproved use, it could request that we modify our training or promotional materials or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider promotional or training materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities. Additionally, surgeons use several of our products for unapproved uses. While surgeons are permitted by the FDA to use our products for unapproved uses, there is a heightened risk of an enforcement action by a governmental enforcement authority when surgeons engage in that practice.

Foreign governmental authorities that regulate the manufacture and sale of medical devices have become increasingly stringent and, to the extent we market and sell our products in foreign countries, we may be subject to rigorous regulation in the future. In such circumstances, we would rely significantly on our foreign independent sales agencies to comply with the varying regulations, and any failures on their part could result in restrictions on the sale of our products in foreign countries.

The safety of our products is not yet supported by long-term clinical data and our products may therefore prove to be less safe and effective than initially thought.

We obtained clearance to offer almost all of our products that require FDA clearance or approval through the FDA’s 510(k) clearance process. The FDA’s 510(k) clearance process is less rigorous than the PMA process and requires less supporting clinical data. As a result, we currently lack the breadth of published long-term clinical data

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supporting the safety of our products and the benefits they offer that might have been generated in connection with the PMA process. For these reasons, spine surgeons may be slow to adopt our products; we may not have comparative data that our competitors have or are generating and we may be subject to greater regulatory and product liability risks. Further, future patient studies or clinical experience may indicate that treatment with our products does not improve patient outcomes. Such results would reduce demand for our products, affect our ability to have sustainable reimbursement for our products from third-party payers, significantly reduce our ability to achieve expected revenues and could prevent us from sustaining or increasing profitability. Moreover, if future results and experience indicate that our products cause unexpected or serious complications or other unforeseen negative effects, we could be subject to significant legal liability and harm to our business reputation. The spine medical device market has been particularly prone to costly product liability litigation.

If we or our suppliers fail to comply with the FDA’s quality system regulations, the manufacture of our products could be delayed and we may be subject to an enforcement action by the FDA.

We and our suppliers are required to comply with the FDA’s quality system regulations, which cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of our products. The FDA enforces the quality system regulation through inspections. If we or one of our suppliers fail a quality system regulations inspection or if any corrective action plan is not sufficient, the manufacture of our products could be delayed. We underwent an FDA inspection in April 2005 regarding our allograft implant business and another FDA inspection in June 2007 regarding our medical device activities. In connection with these inspections as well as prior inspections, the FDA requested minor corrective actions, which we have taken to satisfy the corrective actions. There can be no assurance the FDA will not subject us to further enforcement action and the FDA may impose additional inspections at any time.

Additionally, we are the legal manufacturer of record for the products that are distributed and labeled by NuVasive, regardless of whether the products are manufactured by us or our suppliers. Thus, a failure by us or our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

•  fines, injunctions, and civil penalties;

•  recall or seizure of our products;

•  operating restrictions, partial suspension or total shutdown of production;

•  refusing our request for 510(k) clearance or premarket approval of new products;

•  withdrawing 510(k) clearance or premarket approvals that are already granted; and

•  criminal prosecution.

Risks Related to Our Financial Results and Need for Financing

We may be unable to grow our revenue or earnings as anticipated, which may have a material adverse effect on our future operating results.

We have experienced rapid growth since our inception, and have increased our revenues from $38.4 million in 2004, the year of our initial public offering, to $370.3 million in 2009. We anticipate continued growth and have provided guidance related to such growth for 2010. Our ability to achieve the anticipated growth will depend upon, among other things, the success of our growth strategies, which we cannot assure you will be successful. In addition, we may have more difficulty maintaining our prior rate of growth of revenues or recent earnings. Our future success will depend upon various factors, including the strength of our brand image, the market success of our current and future products, competitive conditions and our ability to manage increased revenues, if any, or implement our growth strategy. In addition, we anticipate significantly expanding our infrastructure and adding personnel in connection with our anticipated growth, which we expect will cause our selling, general and administrative expenses to increase in absolute dollars and which may cause our selling, general and administrative expenses to increase as a percentage of revenue. Because these expenses are generally fixed, particularly in the short-term, operating results may be adversely impacted if we do not achieve our anticipated growth.

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The financial crisis and general slowdown of the economy may adversely affect our liquidity and the liquidity of our customers.

At December 31, 2009, we had $65.4 million in cash and cash equivalents and $139.2 million in investments in marketable securities. We have historically invested these amounts in U.S. treasuries and government agencies, corporate debt, money market funds, commercial paper and municipal bonds meeting certain criteria. Certain of these investments are subject to general credit, liquidity and other market risks. The general condition of the financial markets and the economy has exacerbated those risks and may affect the value of our current investments and restrict our ability to access the capital markets.

The liquidity of our customers and suppliers may also be affected by the current financial crisis. If our suppliers experience credit or liquidity problems important sources of raw materials or manufactured goods may be affected. If our customers’ liquidity and creditworthiness is negatively impacted by the current financial crisis and the condition of the economy, our ability to collect on our outstanding invoices and our collection cycles may be adversely affected.

Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.

Our quarterly operating results are difficult to predict and may fluctuate significantly from period to period, particularly because our sales prospects are uncertain. These fluctuations may also affect our annual operating results and may cause those results to fluctuate unexpectedly from year to year. The level of our revenues and results of operations at any given time will be based primarily on the following factors:

•  our ability to increase sales of our products to hospitals and surgeons;

•  the efficiency of our distribution network to maximize our inventory of products and instruments in order to meet the demands of our customers;

•  our ability to expand and maintain an effective and dedicated sales force;

•  pricing pressure applicable to our products, including adverse third-party reimbursement outcomes;

•  results of clinical research and trials on our existing products and products in development and our ability to obtain FDA approval or clearance;

•  the mix of our products sold and the geographic markets in which our products are sold (i.e., profit margins differ between our products and between different geographic markets, both domestically and internationally);

•  timing of new product launches, acquisitions, licenses or other significant events by us or our competitors;

•  the ability of our suppliers to timely provide us with an adequate supply of materials and components and meet our quality requirements;

•  the evolving product offerings of our competitors and the potential introduction of new and competing technologies; and

•  regulatory approvals and legislative and reimbursement policy changes affecting the products we may offer or those of our competitors.

Many of the products we may seek to develop and introduce in the future will require FDA approval or clearance, without which we cannot begin to commercialize them in the United States, and commercialization of them outside of the United States would likely require other regulatory approvals and import licenses. As a result, it will be difficult for us to forecast demand for these products with any degree of certainty. In addition, we will be increasing our operating expenses as we build our commercial capabilities. Accordingly, we may experience significant, unanticipated quarterly losses. Because of these factors, our operating results in one or more future quarters may fail to meet the expectations of securities analysts or investors.

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Upon the achievement of certain milestones related to our acquisitions, we may be required to make payments which may affect our liquidity and our financial results.

In connection with our recent acquisitions, we may be obligated to make payments in the future upon the achievement of certain milestones. We currently have $33.0 million in outstanding potential milestone obligations under our agreement with the shareholders of Cervitech and may be required to make milestone payments upon the completion of certain milestones and purchase the remaining sixty (60) percent of Progentix Orthobiology B.V. for an aggregate amount up to $69 million. The likelihood of those milestones being achieved and the timing of such payments are uncertain and are subject to change over time. If we are required to make those payments, particularly at a time when we are experiencing financial difficulty, our liquidity, financial results and financial condition may be adversely affected.

We expect our operating expenses to continue to increase as we attempt to expand into international markets, which could disrupt our U.S. business operations, present risks not originally contemplated and harm our operating results.

We have invested, and expect to increase our investment for the foreseeable future, in our expansion into international markets. We currently expect that our operating expenses will continue to increase as we expand into international markets. We have only limited experience in expanding into international markets as well as marketing and operating our products and services in such markets. Certain international markets take a lot of time and resources to receive product approvals and clearances to sell and promote products. After we receive the appropriate approvals and clearances, international markets may be slower than domestic markets in adopting our products and are expected to yield lower profit margins when compared to our domestic operations.

Additionally, our international endeavors may involve significant risks and uncertainties, including distraction of management from current operations, insufficient revenue to offset expenses associated with our international strategy, and unidentified issues not discovered in our due diligence. Because expansion into international markets is inherently risky, no assurance can be given that such strategies and initiatives will be successful and will not materially adversely affect our financial condition and operating results. Even if our international expansion is successful, our expenses may increase at a greater pace than our revenues and our operating results could be harmed.

Risks Related to Our Intellectual Property and Potential Litigation

We are currently involved in a patent litigation action involving Medtronic and, if we do not prevail in this action, we could be liable for past damages and might be prevented from making, using, selling, offering to sell, importing or exporting certain of our products.

On August 18, 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, alleging that certain of our products infringe, or contribute to the infringement of, U.S. patents owned by Medtronic. Medtronic is a large, publicly-traded corporation with significantly greater financial resources than us.

Intellectual property litigation is expensive, complex and lengthy and its outcome is difficult to predict. We may also be subject to negative publicity due to the litigation. Pending or future patent litigation against us or any strategic partners or licensees may force us or any strategic partners or licensees to stop or delay developing, manufacturing or selling potential products that are claimed to infringe a third party’s intellectual property, unless that party grants us or any strategic partners or licensees rights to use its intellectual property, and may significantly divert the attention of our technical and management personnel. In the event that our right to market any of our products is successfully challenged, and if we fail to obtain a required license or are unable to design around a patent, our business, financial condition or results of operations could be materially adversely affected. In such cases, we may be required to obtain licenses to patents or proprietary rights of others in order to continue to commercialize our products. However, we may not be able to obtain any licenses required under any patents or proprietary rights of third parties on acceptable terms, or at all, and any licenses may require substantial royalties or other payments by us. Even if any strategic partners, licensees or we were able to obtain rights to the third party’s intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual property. Furthermore, if we are found to infringe patent claims of a third party, we may, among other

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things, be required to pay damages, including up to treble damages and attorney’s fees and costs, which may be substantial.

An unfavorable outcome for us in this patent litigation could significantly harm our business if such outcome makes us unable to commercialize some of our current or potential products or cease some of our business operations. In addition, costs of defense and any damages resulting from the litigation may materially adversely affect our business and financial results. The litigation may also harm our relationships with existing customers and subject us to negative publicity, each of which could harm our business and financial results.

Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain.

Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws, and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. For example, our pending U.S. and foreign patent applications may not issue as patents in a form that will be advantageous to us or may issue and be subsequently successfully challenged by others and invalidated. In addition, our pending patent applications include claims to material aspects of our products and procedures that are not currently protected by issued patents. Both the patent application process and the process of managing patent disputes can be time consuming and expensive. Competitors may be able to design around our patents or develop products which provide outcomes which are comparable to ours. Moreover, competitors may challenge our issued patents through the reexamination process (in the U.S.) and/or opposition proceedings (outside the U.S.), such as was done by Medtronic on two of our U.S. patents related to aspects of our XLIF surgical technique. We asserted these patents against Medtronic as part of our ongoing patent litigation. Patent reexamination was granted by the U.S. Patent Office in each case. If the U.S. Patent Office cancels or narrows the claims in these patents, it could prevent or hinder us from being able to enforce them against competitors.

Although we have taken steps to protect our intellectual property and proprietary technology, including entering into confidentiality agreements and intellectual property assignment agreements with our officers, shareowners, consultants and advisors, such agreements may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of some foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States.

In addition, there are numerous proposed changes to the patent laws and rules of the U.S. Patent and Trademark Office which, if enacted, may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. Moreover, Congress is considering several significant changes to the U.S. patent laws, including (among other things) changing from a “first to invent” to a “first inventor to file” system, limiting where a patentee may file a patent suit, requiring the apportionment of patent damages, and creating a post-grant opposition process to challenge patents after they have issued.

In the event a competitor infringes upon our patent or other intellectual property rights, enforcing those rights may be costly, difficult and time consuming. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents against a challenge.

In addition, certain product categories, including pedicle screws, have been the subject of significant patent litigation in recent years. Since we sell pedicle screws and recently introduced our SpheRx and Armada pedicle screw systems, any related litigation could harm our business.

The medical device industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. It is not unusual for parties to exchange letters surrounding allegations of intellectual property infringement and licensing arrangements. Patent litigation can involve complex factual and legal questions and its outcome is uncertain. Any claim relating to infringement of patents that is successfully asserted against us may require us to pay substantial damages, including treble damages in some cases. Even if we were to prevail, any litigation could be costly and time-consuming and would divert the attention of our

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management and key personnel from our business operations. Our success will also depend in part on our not infringing patents issued to others, including our competitors and potential competitors. If our products are found to infringe the patents of others, our development, manufacture and sale of such potential products could be severely restricted or prohibited. In addition, our competitors may independently develop technologies similar to ours. Because of the importance of our patent portfolio to our business, we may lose market share to our competitors if we fail to adequately protect our intellectual property rights.

As the number of entrants into our market increases, the possibility of a patent infringement claim against us grows. While we make an effort to ensure that our products do not infringe other parties’ patents and proprietary rights, our products and methods may be covered by patents held by our competitors. In addition, our competitors may assert that future products we may market infringe their patents.

A patent infringement suit brought against us or any of our strategic partners or licensees may force us or such strategic partners or licensees to stop or delay developing, manufacturing or selling potential products that are claimed to infringe a third party’s intellectual property, unless that party grants us or our strategic partners or licensees rights to use its intellectual property. In such cases, we may be required to obtain licenses to patents or proprietary rights of others in order to continue to commercialize our products. However, we may not be able to obtain any licenses required under any patents or proprietary rights of third parties on acceptable terms, or at all and any licenses may require substantial royalties or other payments by us. Even if our strategic partners, licensees or we were able to obtain rights to the third party’s intellectual property, these rights may be non-exclusive, thereby giving our competitors access to the same intellectual property. Ultimately, we may be unable to commercialize some of our potential products or may have to cease some of our business operations as a result of patent infringement claims, which could severely harm our business.

If we become subject to product liability claims, we may be required to pay damages that exceed our insurance coverage.

Our business exposes us to potential product liability claims that are inherent in the testing, manufacture and sale of medical devices for spine surgery procedures. Spine surgery involves significant risk of serious complications, including bleeding, nerve injury, paralysis and even death. In addition, we sell allograft products, derived from cadaver bones, which pose the potential risk of biological contamination. If any such contamination is found to exist, sales of allograft products could decline and our reputation would be harmed.

Currently, we maintain product liability insurance in the amount of $10 million. Any product liability claim brought against us, with or without merit, could result in the increase of our product liability insurance rates or the inability to secure coverage in the future. In addition, if our product liability insurance proves to be inadequate to pay a damage award, we may have to pay the excess out of our cash reserves which may harm our financial condition. If longer-term patient results and experience indicate that our products or any component cause tissue damage, motor impairment or other adverse effects, we could be subject to significant liability. Finally, even a meritless or unsuccessful product liability claim could harm our reputation in the industry, lead to significant legal fees and could result in the diversion of management’s attention from managing our business.

Any claims relating to us making improper payments to physicians for consulting services, or other potential violations of laws or regulations governing interactions between us and healthcare providers, could be time consuming and costly.

Our relationship with surgeons, hospitals and the marketers of our products are subject to scrutiny under various state and federal anti-kickback, self-referral, false claims and similar laws, often referred to collectively as healthcare fraud and abuse laws. Healthcare fraud and abuse laws are complex, and even minor, inadvertent violations can potentially give rise to claims that the relevant law has been violated. Any violations of these laws could result in a material adverse effect on the market price of our common stock, as well as our business, financial condition and results of operations. We cannot assure you that any of the healthcare fraud and abuse laws will not change or be interpreted in the future in a manner which restricts or adversely affects our business activities or relationships with surgeons, hospitals and marketers of our products.

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Federal anti-kickback laws and regulations prohibit any knowing and willful offer, payment, solicitation or receipt of any form of remuneration by an individual or entity in return for, or to induce:

•  the referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other government-sponsored healthcare program; or

•  purchasing, leasing, ordering or arranging for any service or product for which payment may be made by a government-sponsored healthcare program.

Possible sanctions for violation of these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs and forfeiture of amounts collected in violation of such prohibitions. From 2007 through 2009, numerous medical device manufacturers have entered into deferred prosecution agreements and corporate integrity agreements with the federal government and paid hundreds of millions of dollars, in aggregate, to the government over allegations that the companies had paid kickbacks to surgeons to reward and incentivize use of their surgical implant products. In addition, the government has indicted and prosecuted employees of companies for their alleged involvement in kickback arrangements. Furthermore, the majority of states in which we market our products have similar anti-kickback laws, imposing substantial penalties for violations. To enforce compliance with federal laws, the U.S. Department of Justice, or DOJ, has increased its scrutiny of the interactions between healthcare companies and healthcare providers, which has led to an unprecedented level of investigations and settlements in the healthcare industry. Dealing with DOJ investigations can be time- and resource-consuming. Additionally, if a healthcare company settles an investigation with the DOJ, or other law enforcement agencies, it may be forced to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Further, the commercial compliance environment is continually evolving in the healthcare industry with certain states mandating implementation of commercial compliance programs and disclosure requirements while similar legislation has been proposed and is proceeding on the federal level in the form of the Physician Payment Sunshine Act.

In addition to the anti-kickback law, federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid. Examples of enforcement under this law include the prosecution of several pharmaceutical and device companies for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the company’s marketing of the product for unapproved, and thus non-reimbursable, uses. Pursuant to FDA regulations, we can only market our products for cleared or approved uses. Although surgeons are permitted to use medical devices for indications other than those cleared or approved by the FDA based on their medical judgment, we are prohibited from promoting products for such off-label uses. We market our products and provide promotional materials and training programs to surgeons regarding the use of our products. Although we believe our marketing, promotional materials and training programs for surgeons do not constitute promotion of unapproved uses of our products, if it is determined that our marketing, promotional materials or training programs constitute promotion of unapproved uses, we could be subject to significant fines in addition to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure and criminal penalty.

We must comply with a variety of other laws, such as the Healthcare Insurance Portability and Accountability Act of 1996, which protects the privacy of individually identifiable healthcare information, and the Federal Trade Commission Act and similar laws regulating advertisement and consumer protections.

The scope and enforcement of these laws is uncertain and subject to rapid change, especially in light of the lack of applicable precedent and regulations. There can be no assurance that federal or state regulatory authorities will not challenge or investigate our current or future activities under these laws. Any such challenge or investigation could have a material adverse effect on our business, financial condition and results of operations. Any state or federal regulatory review of us, regardless of the outcome, would be costly and time consuming. Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive.

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We or our suppliers may be the subject of claims for non-compliance with FDA regulations in connection with the processing or distribution of allograft products.

It is possible that allegations may be made against us or against donor recovery groups or tissue banks, including those with which we have a contractual relationship, claiming that the acquisition or processing of tissue for allograft products does not comply with applicable FDA regulations or other relevant statutes and regulations. Allegations like these could cause regulators or other authorities to take investigative or other action against us, or could cause negative publicity for us or our industry generally. These actions or any negative publicity could cause us to incur substantial costs, divert the attention of our management from our business, harm our reputation and cause the market price of our shares to decline.

Risks Related to the Securities Markets and Ownership of Our Common Stock

We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors to sell their shares.

The market price of our common stock is likely to be volatile and may fluctuate substantially. For example, the closing price for our stock on the last day of the past four quarters was: $31.38 on March 31, 2009; $44.60 on June 30, 2009; $41.76 on September 30, 2009; and $31.98 on December 31, 2009. Fluctuation in the stock price may occur due to many factors, including:

•  general market conditions and other factors (such as the effect the financial crisis is having on stock markets as a whole), including factors unrelated to our operating performance or the operating performance of our competitors;

•  volume and timing of orders for our products;

•  the introduction of new products or product enhancements by us or our competitors;

•  changes in the availability of third-party reimbursement in the United States or other countries;

•  disputes or other developments with respect to intellectual property rights or other potential legal actions;

•  our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;

•  quarterly variations in our or our competitor’s results of operations;

•  sales of large blocks of our common stock, including sales by our executive officers and directors;

•  announcements of technological or medical innovations for the treatment of spine pathology;

•  changes in governmental regulations or in the status of our regulatory approvals, clearances or applications;

•  the acquisition or divestiture of businesses, products, assets or technology;

•  litigation, including intellectual property litigation;

•  announcements of actions by the FDA or other regulatory agencies; and

•  changes in earnings estimates or recommendations by securities analysts.

Market price fluctuations may negatively affect the ability of investors to sell our shares at consistent prices.

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Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change of control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. Some of these provisions:

•  authorize the issuance of preferred stock which can be created and issued by the board of directors without prior stockholder approval, with rights senior to those of the common stock;

•  provide for a classified board of directors, with each director serving a staggered three-year term;

•  prohibit our stockholders from filling board vacancies, calling special stockholder meetings, or taking action by written consent;

•  prohibit our stockholders from making certain changes to our certificate of incorporation or bylaws except with 662/3% stockholder approval; and

•  require advance written notice of stockholder proposals and director nominations.

In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our certificate of incorporation, our bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer, or proxy contest involving our company. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.

We do not intend to pay cash dividends.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. In addition, the terms of any future debt or credit facility may preclude us from paying any dividends. As a result, capital appreciation, if any, of our common stock will be our stockholders’ source of potential gain for the foreseeable future.

Item 1B.   Unresolved Staff Comments

None.

Item 2.   Properties.

Our current corporate headquarters are located in San Diego, California. We lease approximately 202,000 square feet in San Diego, with approximately 62,000 square feet leased through August 2012 and an additional 140,000 square feet leased to us until August 2023. Under a master lease agreement relating to the 140,000 square foot facility, through options to acquire additional space in the project and to require the construction of an additional building on the campus, we have facility expansion rights to an aggregate of more than 300,000 leased square feet. In 2006, we purchased an approximately 100,000 square foot building in Memphis, Tennessee that we use as our primary distribution and warehouse facility.

Item 3.   Legal Proceedings.

We have been involved in a series of related lawsuits involving families of decedents who donated their bodies through UCLA’s willed body program. The complaint alleges that the head of UCLA’s willed body program, Henry G. Reid, and a third party, Ernest V. Nelson, improperly sold some of the donated cadavers to the defendants (including NuVasive). Plaintiffs allege the following causes of action: (i) breach of fiduciary duty; (ii) negligence;

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(iii) fraud; (iv) negligent misrepresentation; (v) negligent infliction of emotional distress; (vi) intentional infliction of emotional distress; (vii) intentional interference with human remains; (viii) negligent interference with human remains; (ix) violation of California Business and Professions Code Section 17200; and (x) injunctive and declaratory relief. We had been dismissed from these lawsuits by the trial court but the decision was appealed and in July 2008, the appellate court reversed the trial court’s decision to dismiss us from these lawsuits. We have appealed this decision, the appellate court has heard our appeal and we are currently awaiting the decision of the Court.

Although the outcome of this lawsuit cannot be determined with certainty, we believe that we acted within the relevant law in procuring the cadavers for our clinical research and intend to vigorously defend ourselves against the claims contained in the complaint.

As reported by us previously, Medtronic Sofamor Danek USA, Inc. and its related entities (Medtronic), on August 18, 2008, filed a patent infringement lawsuit against NuVasive in the United States District Court for the Southern District of California, alleging that certain of NuVasive’s products or methods, including the XLIF procedure, infringe, or contribute to the infringement of, twelve U.S. patents: Nos. 5,860,973; 5,772,661; 6,936,051; 6,936,050; 6,916,320; 6,945,933; 6,969,390; 6,428,542; 6,592,586 assigned or licensed to Medtronic (Medtronic Patents). Medtronic is seeking unspecified monetary damages and a court injunction against future infringement by NuVasive. NuVasive has answered the complaint denying the allegations, and filed counterclaims seeking dismissal of Medtronic’s complaint and a declaration that NuVasive has not infringed and currently does not infringe any valid claim of the Medtronic Patents. Additionally, NuVasive has made counterclaims against Medtronic seeking the following relief: (i) Medtronic being permanently enjoined from charging that NuVasive has infringed or is infringing the Medtronic Patents; (ii) a declaration that the Medtronic Patents are invalid; (iii) a declaration that the 5,860,973 and 5,772,661 patents are unenforceable due to inequitable conduct; and (iv) costs and reasonable attorneys’ fees.

NuVasive filed an amended counterclaim on September 4, 2009, alleging that NuVasive’s U.S. Patent Nos. 7,207,949; 7,582,058; and 7,470,236 are being infringed by Medtronic’s NIM-Eclipse System and accessories and Quadrant products, and DLIF (Direct Lateral Interbody Fusion) surgical technique. Medtronic, on June 23, 2009, filed a request for inter partes reexamination with the Patent Office on NuVasive’s U.S. Patent No. 7,207,949. On October 14, 2009, Medtronic filed a request for inter partes reexamination on NuVasive’s U.S. Patent No. 7,582,058. The Patent Office granted both requests and issued rejections of the claims. Both reexaminations are pending.

Given the number of patents asserted in the litigation, the parties agreed to proceed on a limited number of patents. The court determined to proceed only with patents that are not the subject of active reexamination proceedings. As a result, the initial phase of the case includes three Medtronic patents and one NuVasive patent. This initial phase of the case is in a discovery phase. A full schedule for the initial phase of the lawsuit, including a trial date for the patents included in the initial phase of the lawsuit, has not yet been set by the Court.

On September 25, 2009, Neurovision Medical Products, Inc. (NMP) filed suit against NuVasive in the U.S. District Court for the Central District of California (Case No. 2:09-cv-06988-R-JEM) alleging trademark infringement and unfair competition. NMP is seeking cancellation of NuVasive’s “NeuroVision” trademark registrations, injunctive relief and damages based on NMP’s valuation of the “NeuroVision” mark. NuVasive intends to vigorously pursue defense of the claims, and on November 23, 2009, denied the allegations in the NMP’s complaint and filed a counterclaim against NMP for unfair competition and declaratory relief. The case is pending in the United States District Court and is in the early stages of the proceedings. An order establishing a schedule for the case is expected in the middle of 2010.

Item 4.   Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of our security holders during the quarter ended December 31, 2009.

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PART II

Item 5.   Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Stock Market Price

Our common stock is traded on the NASDAQ Global Select Market under the symbol “NUVA.” The following table presents, for the periods indicated, the high and low sale prices per share of our common stock during the periods indicated, as reported on NASDAQ.

	High		Low
2008:
First Quarter	$	43.85	$	31.17
Second Quarter		46.06		34.48
Third Quarter		58.88		42.88
Fourth Quarter		51.17		29.27
2009:
First Quarter	$	39.95	$	24.17
Second Quarter		45.06		28.39
Third Quarter		45.01		38.25
Fourth Quarter		44.08		27.45

We had approximately 146 stockholders of record as of January 31, 2010. We believe that the number of beneficial owners is substantially greater than the number of record holders because a large portion of our common stock is held of record through brokerage firms in “street name.”

Recent Sales of Unregistered Securities

During the fiscal year ended December 31, 2009, we did not issue any securities that were not registered under the Securities Act of 1933, except as disclosed in previous filings with the Commission.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain future earnings, if any, for development of our business and do not anticipate that we will declare or pay cash dividends on our capital stock in the foreseeable future.

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PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return data (through December 31, 2009) for the Company’s common stock since May 13, 2004 (the date on which the Company’s common stock was first registered under Section 12 of the Exchange Act) to the cumulative return over such period of (i) The NASDAQ Stock Market Composite Index, and (ii) NASDAQ Medical Equipment Index. The graph assumes that $100 was invested on the date on which the Company completed the initial public offering of its common stock, in the common stock and in each of the comparative indices. The graph further assumes that such amount was initially invested in the Common Stock of the Company at the price to which such stock was first offered to the public by the Company on the date of its initial public offering. The stock price performance on the following graph is not necessarily indicative of future stock price performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG NUVASIVE, INC.,
THE NASDAQ COMPOSITE INDEX
AND THE NASDAQ MEDICAL EQUIPMENT INDEX

* $100 invested on 12/31/04 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

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Item 6.   Selected Financial Data.

The selected consolidated financial data set forth in the table below has been derived from our audited financial statements. The data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto appearing elsewhere in this report.

	Year Ended December 31,
	2009		2008			2007			2006			2005
	(In thousands, except per share amounts)
Statement of Operations Data:
Total revenues	$	370,340	$	250,082		$	154,290		$	98,091		$	62,606
Gross profit (1)(2)		309,230		211,074			130,522			81,954			52,053
Total operating expenses (1)(2)		297,913		238,934			147,774			136,180			83,547
Consolidated net income (loss) (3)		4,437		(27,528	)		(11,265	)		(47,910	)		(30,339	)
Net income (loss) attributable to NuVasive, Inc.		5,808		(27,528	)		(11,265	)		(47,910	)		(30,339	)
Net income (loss) per share attributable to NuVasive, Inc.:
Basic	$	0.16	$	(0.77	)	$	(0.32	)	$	(1.47	)	$	(1.24	)
Diluted	$	0.15	$	(0.77	)	$	(0.32	)	$	(1.47	)	$	(1.24	)

	December 31,
	2009		2008		2007		2006		2005
	(In thousands)
Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	204,660	$	223,361	$	89,698	$	117,402	$	19,490
Working capital		262,355		256,491		118,188		136,236		32,829
Total assets		653,764		487,406		225,687		196,184		71,490
Convertible senior notes		230,000		230,000		—		—		—
Other long-term liabilities		59,166		24,288		1,119		1,399		1,665
Noncontrolling interests		13,629		—		—		—		—
Total stockholders’ equity		296,222		187,631		196,578		176,303		58,136

(1)	Expenses incurred for royalties have been reclassified from sales, marketing and administrative expense to cost of goods sold. Royalty expense was $8.7 million, $6.5 million, $5.2 million, $3.0 million and $1.2 million for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, respectively.
(2)	Expenses incurred for depreciation of loaned instrument sets have been reclassified from cost of goods sold to sales, marketing and administrative expense. Depreciation expense for loaned instrument sets was $18.2 million, $11.8 million, $8.8 million, $5.9 million and $3.0 million for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, respectively.
(3)	Consolidated net income (loss) for the year ended December 31, 2009 includes the results of Progentix Orthobiology, B.V., a variable interest entity which is consolidated pursuant to existing guidance issued by the Financial Accounting Standards Board (FASB).

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Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements May Prove Inaccurate

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes to those statements included in this report. This discussion and analysis 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.

Overview

We are a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. Our currently-marketed product portfolio is focused on applications for spine fusion surgery, a market estimated to exceed $5.1 billion in the United States in 2010. Our principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS^®, as well as a growing offering of biologics, cervical and motion preservation products. In the spine surgery market, our currently-marketed products are primarily used to enable access to the spine and to perform restorative and fusion procedures. We focus significant research and development efforts to expand our MAS product platform, advance the applications of our unique technology to additional procedures and develop motion preserving products such as our total disc replacement products. We dedicate significant resources to our sales and marketing efforts, including training spine surgeons on our unique technology and products. Currently, we are training approximately 400 to 500 surgeons annually, which includes surgeons new to our MAS product platform as well as surgeons previously trained on our MAS product platform who are attending advanced training programs.

Our MAS platform combines four categories of our product offerings:

•  NeuroVision^® — a proprietary software-driven nerve avoidance system;

•  MaXcess^® — a unique split-blade design retraction system providing enhanced surgical access to the spine;

•  Biologics — includes our FormaGraft^® and Osteocel^® line of products; and

•  Specialized implants — includes our SpheRx^® and Armada^tm pedicle screw systems, CoRoent^® suite of implants, and several fixation systems.

Our MAS platform, with the unique advantages provided by NeuroVision, enables an 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. Our MaXcess instruments provide access to the spine in a manner that affords direct visibility and our NeuroVision system allows surgeons to avoid critical nerves. Certain insurance providers have stated a policy of not providing reimbursement for the XLIF procedure. NuVasive cannot offer definitive time frames nor final outcomes regarding reversal of the non-coverage policies, as the process is dictated by third-party insurance providers. To date, these policies have not materially impacted our operating results.

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. In 2009, we acquired Cervitech^® Inc. (Cervitech), a company focused on clinical approval of the PCM cervical disc system, a motion preserving total disc replacement device. This strategic acquisition allows us the potential to accelerate our entry into the growing mechanical cervical disc replacement market. Currently, the PCM investigational device has reached the two-year follow-up end point in its FDA-approved clinical trial in the United States. Approval, if obtained, will further strengthen our cervical product offering and will enable us to continue our trend of increasing our market share. Our biologic offering includes FormaGraft, a collagen synthetic product used to aid the fusion process, and Osteocel, an allograft cellular matrix containing viable mesenchymal stem cells, or MSCs, to aid in spinal fusion.

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In 2009 we purchased forty percent (40%) of the capital stock of Progentix Orthobiology, B.V. (Progentix), a company organized under the laws of the Netherlands, from existing shareholders 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.

We have an active product development pipeline focused on expanding our current fusion product platform as well as products designed to preserve spinal motion.

At December 31, 2009, we had an accumulated deficit of $189.7 million.

Revenues.  The majority of our revenues are 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 acknowledgement of a purchase order from the hospital indicating product use or implantation. In addition, we sell an immaterial 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.

Sales and Marketing.  Through 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 in the United States through a sales force comprised of exclusive independent sales agents 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 of international sales efforts with the focus on both European and Asian markets. Our international sales force is made up of a combination of independent distributors and direct sales personnel.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our audited 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 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.

We believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition.  We follow the provisions of the Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition, which sets forth guidelines for the timing of revenue recognition based upon factors such as passage of title, installation, payment and customer acceptance. We recognize revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Specifically, revenue from the sale of implants and disposables is recognized upon acknowledgement of a purchase order from the hospital indicating product use or implantation or upon shipment to third

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party customers who immediately accept title. Revenue from the sale of our instrument sets is recognized upon receipt of a purchase order and the subsequent shipment to customers who immediately accept title.

Allowance for Doubtful Accounts and Sales Return Reserve.  We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is reviewed quarterly and is estimated based on the aging of account balances, collection history and known trends with current customers and in the economy in general. As a result of this review, the allowance is adjusted on a specific identification basis. An increase to the allowance for doubtful accounts results in a corresponding charge to sales, marketing and administrative expense. We maintain a relatively large customer base that mitigates the risk of concentration with any one particular customer. However, if the overall condition of the healthcare industry were to deteriorate, or if the historical data used to calculate the allowance provided for doubtful accounts does not accurately reflect our customer’s future failure to pay outstanding receivables, significant additional allowances could be required.

In addition, we establish a reserve for estimated sales returns that is recorded as a reduction to revenue. This reserve is maintained to account for future return of products sold in the current period. This reserve is reviewed quarterly and is estimated based on an analysis of our historical experience related to product returns.

Excess and Obsolete Inventory.  We provide an inventory reserve for estimated obsolescence and excess inventory based upon historical turnover and assumptions about future demand for our products and market conditions. Our allograft products have shelf lives ranging from two to four years and are subject to demand fluctuations based on the availability and demand for alternative products. Our inventory, which consists primarily of disposables and specialized implants, is at risk of obsolescence following the introduction and development of new or enhanced products. Our estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. The estimates we use for demand are also used for near-term capacity planning and inventory purchasing and are consistent with our revenue forecasts. Increases in the reserve for excess and obsolete inventory result in a corresponding charge to cost of goods sold.

A stated goal of our business is to focus on continual product innovation and to obsolete our own products. While we believe this provides a competitive edge, it also results in the risk that our products and related capital instruments will become obsolete prior to sale or to the end of their anticipated useful lives. If we introduce new products or next-generation products, we may be required to dispose of existing inventory prior to the end of their estimated useful life and/or write off the value or accelerate the depreciation of the capital instruments.

Accounting for Income Taxes.  Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and the valuation allowance recorded against our net deferred tax assets. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, history of earnings, and reliability of forecasting. At December 31, 2009, we have maintained a valuation allowance equal to substantially all of the U.S. deferred tax assets as we concluded we are not able to meet the “more likely than not” future realization threshold required.

At December 31, 2009, we have federal and state net operating loss carryforwards of approximately $115.0 million and $74.0 million, respectively. The federal and state loss carryforwards begin to expire in 2017 and in the year prescribed by state statute, respectively, unless previously utilized. At December 31, 2009, we have federal and state research and development tax credit carryforwards of $2.2 million and $2.1 million, respectively. The federal research and development tax credits begin to expire in 2017 unless previously utilized and the state tax credits carry forward indefinitely.

Valuation of Stock-Based Compensation.  The estimated fair value of share-based awards exchanged for shareowner (employee) and non-employee director services are expensed over the requisite service period. Option

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awards issued to non-employees (excluding non-employee directors) are recorded at their fair value as determined in accordance with authoritative guidance, and are periodically revalued as the options vest and are recognized as expense over the related service period.

For purposes of calculating stock-based compensation, we estimate the fair value of stock options and shares issued under the Employee Stock Purchase Plan using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected volatility is based on the historical volatility of our common stock over the most recent period commensurate with the estimated expected term of the stock options. The expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of our stock options. The dividend yield assumption is based on our history and expectation of no dividend payouts.

If factors change and we employ different assumptions, stock-based compensation expense may differ significantly from what we have recorded in the past. If there is a difference between the assumptions used in determining stock-based compensation expense and the actual factors which become known over time, specifically with respect to anticipated forfeitures, we may change the input factors used in determining stock-based compensation costs for future grants. These changes, if any, may materially impact our results of operations in the period such changes are made.

Valuation of Goodwill and Intangible Assets.  Our goodwill represents the excess of the cost over the fair value of net assets acquired from our business combinations. Our intangible assets are comprised primarily of acquired technology, in-process research and development, manufacturing know-how, licensed technology, supply agreements and trade names and trademarks. We make significant judgments in relation to the valuation of goodwill and intangible assets resulting from business combinations and asset acquisitions.

The determination of the value of goodwill and intangible assets arising from business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including in-process research and development (IPR&D). Goodwill and IPR&D are not amortized. The value and useful lives assigned to other acquired intangible assets impact future amortization.

Authoritative guidance requires that goodwill and intangible assets with indefinite lives be assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. For purposes of assessing the impairment of goodwill and intangible assets with indefinite lives, the Company estimates the value of the reporting unit using its market capitalization as the best evidence of fair value. If the carrying amount of a reporting unit exceeds its fair value, then a goodwill impairment test is performed to measure the amount of the impairment loss, if any. We performed our annual test of goodwill during the fourth quarter of 2009, and have determined there has been no impairment of goodwill or intangible assets with indefinite lives through December 31, 2009.

We evaluate our intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets consist of purchased technology, trademarks and trade names, customer relationships and agreements, manufacturing know-how and other intangibles and are amortized on a straight-line basis over their estimated useful lives of two to 20 years. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, we make an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, we reduce the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. Any such impairment charge could be significant and could have a material adverse effect on our reported financial results. We have not recognized any impairment charges on our intangible assets through December 31, 2009.

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Property and Equipment.  Property and equipment is carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives. We depreciate the instrument sets that we loan to or place with hospitals over an estimated useful life of three years. If we introduce new products or next-generation products, we may be required to dispose of loaned instrument sets prior to the end of their estimated useful life and/or write off the value or accelerate the depreciation of the these assets. Maintenance and repairs on all property and equipment are expensed as incurred.

The above listing is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP. See our consolidated financial statements and notes thereto included in this report, which contain accounting policies and other disclosures required by GAAP.

Results of Operations

Revenue

	Year Ended December 31,						2008 to 2009					2007 to 2008
	2009		2008		2007		$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Revenue	$	370,340	$	250,082	$	154,290	$	120,258		48	%	$	95,792		62	%

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^tm 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 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 Osteocel, acquired in July 2008, other strategic business and asset acquisitions and new product introductions are expected to lead to continued revenue growth.

Cost of Goods Sold, excludes amortization of purchased technology

	Year Ended December 31,									2008 to 2009					2007 to 2008
	2009			2008			2007			$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Cost of Goods Sold	$	61,110		$	39,008		$	23,768		$	22,102		57	%	$	15,240		64	%
% of total revenue		17	%		16	%		15	%

Cost of goods sold consists of costs of purchased goods and royalty expense.

Cost of goods sold as a percentage of revenue increased slightly in 2009 over 2008, primarily driven by the mix shift in total revenues represented by our biologic product line that have a lower margin relative to other product lines. The increase in cost of goods sold in total dollars in 2009 compared to 2008 and in 2008 compared to 2007 resulted primarily from increased material costs of $19.9 million and $13.9 million, respectively, associated with higher revenues in each year. We expect cost of goods sold, as a percentage of revenue, to remain relatively consistent for the foreseeable future.

Consistent with our philosophy of continual product innovation and obsoleting our own products, we have launched several new products and enhancements over the last few years. In connection with the product launches, certain implants were rendered obsolete. As a result, we incurred additional expenses of $873,000, $119,000 and $461,000 in 2009, 2008 and 2007, respectively, related to inventory rendered obsolete. This expense is included in cost of goods sold in the accompanying consolidated statement of operations for the respective years.

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Operating Expenses

Sales, Marketing and Administrative

	Year Ended December 31,									2008 to 2009					2007 to 2008
	2009			2008			2007			$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Sales, Marketing and Administrative	$	254,997		$	189,126		$	121,676		$	65,871		35	%	$	67,450		55	%
% of total revenue		69	%		76	%		79	%

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; depreciation expense for loaned instrument sets used in surgeries; shipping costs; surgeon training costs; shareowner (employee) related expenses for our administrative functions; and third-party professional service fees.

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, and shipping costs were $31.2 million, $17.1 million, and $10.5 million in 2009, 2008 and 2007, respectively, compared to the prior years. The increases are consistent with our increased revenue growth of approximately 48% in 2009 as compared to 2008 and 62% percent in 2008 as compared to 2007; and an overall increase in sales force headcount of approximately 42% in 2009 compared to 2008 and 26% in 2008 as compared to 2007. Total costs related to our sales force, as a percent of revenue, were 30.0%, 31.3%, and 33.4% in 2009, 2008, and 2007, respectively.

We also experienced increased costs as a result of overall company growth and headcount additions in our marketing and administrative support functions. Our marketing and administrative headcount increased over 35% during 2009. Marketing and administrative compensation and personnel costs increased $17.5 million and $19.6 million in 2009 and 2008, respectively, compared to the prior years. Depreciation expense related to our loaned instrument sets increased $6.4 million and $3.0 million in 2009 and 2008, respectively, as compared to previous years, due to higher capital levels of instrument sets used in surgeries. Equipment and computer expenses increased by $3.1 million and $2.1 million in 2009 and 2008, respectively, compared to the same periods in prior years, primarily as a result of headcount growth and increased costs to support the increasing number of shareowners (employees). Stock-based compensation increased $1.7 million and $6.4 million in 2009 and 2008, respectively, compared to the prior years. The increase in 2009 as compared to 2008 and 2008 as compared to 2007 is primarily related to an increase in the number of option grants due to increased headcount year over year for all years presented and valuation-related changes for all options granted, most significantly, the market value of our common stock.

During the first quarter of 2009, we adopted the Financial Accounting Standard Board’s (FASB) revised authoritative guidance for business combinations, which requires that acquisition related costs be expensed in the period in which the costs are incurred. This differs from previous accounting treatment in that the acquisition related expenses were included as part of the purchase price of the acquired company. We incurred approximately $2.4 million in acquisition related costs in connection with our investment in Progentix and acquisition of Cervitech in 2009 with no comparable expense during the same periods in 2008 or 2007.

As previously disclosed, in 2008, Medtronic Sofamor Danek USA, Inc. and its related entities (Medtronic) filed an intellectual property suit against us. As a result of the litigation, our sales, marketing and administrative expenses increased $3.1 million and $1.5 million during 2009 and 2008, respectively.

The increases in costs discussed above were offset by decreases in costs for 2009 compared to the same period in 2008, related to charges totaling $7.4 million for vacating the Company’s previous corporate headquarters and incremental transition costs related to our ERP system which were recorded in 2008. In August 2008, we relocated our corporate headquarters to a two-building campus style complex in San Diego. In connection with vacating our former corporate headquarters, we recorded a charge of approximately $4.8 million to sales, marketing, and

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administrative expenses for lease termination costs and other related items. In addition, during 2008, we incurred non-capitalizable expenses totaling $2.6 million related to the implementation of our new ERP system which was completed in the third quarter of 2008. During the third quarter of 2009, due to continued growth, we decided to reoccupy the former corporate headquarters facility. Accordingly, in 2009, the remaining liability related to lease termination costs of $2.0 million was reversed and is recorded as a reduction of sales, marketing, and administrative expenses for the year ended December 31, 2009.

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

Research and Development

	Year Ended December 31,									2008 to 2009					2007 to 2008
	2009			2008			2007			$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Research and Development	$	37,581		$	25,943		$	24,581		$	11,638		45	%	$	1,362		6	%
% of total revenue		10	%		10	%		16	%

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

In the last several years, we have introduced numerous new products and product enhancements that have significantly expanded our MAS platform, enhanced the applications of the XLIF procedure, expanded our offering of cervical products, and marked our entrance into the growing motion preservation market. We have also acquired complementary and strategic assets and technology, particularly in the area of biologics. We are developing proprietary total disc replacement devices for lateral lumbar spine applications and separately for cervical spine applications, which are currently in different phases of clinical trials and related studies. We anticipate continuing to incur costs related to such clinical trials and studies through at least 2011.

The increases in research and development costs in 2009 compared to 2008 and in 2008 compared to 2007 are primarily due to increases in compensation and other shareowner related expenses of $5.3 million and $3.1 million in 2009 and 2008, respectively, primarily due to increased headcount to support our product development and enhancement efforts, including an increase in stock based compensation of $1.1 million in 2009 as compared to 2008, and increased expenses related to ongoing clinical trial and other research activities of $4.0 million in 2009 as compared to 2008, including $2.4 million in research expenses related to our investment in Progentix Orthobiology. These increases are offset by decreased clinical trial and related study costs of $0.6 million in 2008 compared to 2007 due in part to the NeoDisc^® trial becoming fully enrolled during August 2008, with no comparable costs for NeoDisc in 2009.

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.

Amortization of Intangible Assets

	Year Ended December 31,									2008 to 2009					2007 to 2008
	2009			2008			2007			$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Amortization of intangible assets	$	5,335		$	2,989		$	1,517		$	2,346		79	%	$	1,472		97	%
% of total revenue		1	%		1	%		1	%

Amortization of intangible assets relates to amortization of finite-lived intangible assets acquired. The increase in amortization expense in 2009 compared to 2008 and in 2008 compared to 2007 is due to the increased acquisition activity undertaken in 2008 and 2009.

We expect expenses recorded in connection with the amortization of intangible assets to continue to increase in absolute dollars for the foreseeable future as amortization of acquired in-process research and development commences upon it reaching technological feasibility.

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In-Process Research and Development

During 2008, we recorded in-process research and development (IPR&D) charges of $20.9 million related to the acquisitions of pedicle screw technology and Osteocel. As of the date of the acquisitions, 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 amounts were charged to expense on the acquisition dates in accordance with the authoritative guidance in effect on the dates of acquisition.

During the first quarter of 2009, we adopted the FASB’s revised authoritative guidance for business combinations, which is applied prospectively for all new business acquisitions entered into after January 1, 2009 and provides 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 December 31, 2009, we have recorded approximately $46.0 million on our balance sheet related to IPR&D in conjunction with our investment in Progentix and acquisition of Cervitech as further development is required and regulatory approval has not been obtained. In accordance with authoritative guidance, as the technology has not yet been proven, the amortization of the acquired IPR&D has not begun. Currently, the PCM investigational device acquired from Cervitech, which represents approximately $34.8 million of the $46.0 million total capitalized IPR&D, has reached the two-year follow-up end point in its FDA approved clinical trial in the United States. We anticipate submitting for FDA approval in the first quarter of 2010.

Interest and Other Income (Expense), Net

	Year Ended December 31,									2008 to 2009						2007 to 2008
	2009			2008			2007			$ Change			% Change			$ Change			% Change
	(Dollars in thousands)
Interest income	$	1,507		$	5,599		$	5,216
Interest expense		(7,116	)		(5,571	)		(1	)
Other income, net		461			304			772
Total interest and other income (expense), net	$	(5,148	)	$	332		$	5,987		$	(5,480	)		(1651	)%	$	(5,655	)		(94	)%
% of total revenue		(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 financing signed in March 2008. The net change in these amounts in the years presented is principally due to (i) an increase in interest expense of $1.3 million and $5.4 million in 2009 and 2008, respectively, related to the convertible debt offering due to having a full year of interest expense in the 2009 period as compared to only a partial year during the same 2008 period; and (ii) lower average balances in marketable securities in 2009, coupled with lower interest rates, resulting in a decrease of $4.1 million in interest income in 2009 as compared to 2008.

Stock-Based Compensation

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

	Year Ended December 31,									2008 to 2009					2007 to 2008
	2009			2008			2007			$ Change		% Change			$ Change		% Change
	(Dollars in thousands)
Stock-Based Compensation
Sales, Marketing & Administrative	$	19,549		$	17,837		$	11,404		$	1,712		10	%	$	6,433		56	%
Research & Development		4,244			3,110			2,217			1,134		37	%		893		40	%
Total Stock-Based Compensation	$	23,793		$	20,947		$	13,621		$	2,846		14	%	$	7,326		54	%
% of total revenue		6	%		8	%		9	%

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Stock-based compensation related to stock options is recognized and amortized on an accelerated basis in accordance with authoritative guidance. The increase in stock-based compensation in 2009 of approximately $2.8 million as compared to 2008 and $7.3 million in 2008 as compared 2007, can be attributed to an increase in number of option grants due to increased headcount year over year for all years presented and changes in valuation assumptions utilized in the Black-Scholes option pricing model, most significantly, the market value of our common stock. In addition, during 2009, we began granting restricted stock units (RSUs) which tend to have higher associated stock-based compensation expense as they are valued at the full market price on the day of grant.

As of December 31, 2009, there was $13.5 million and $6.1 million of unrecognized compensation expense for stock options and RSUs, respectively, which is expected to be recognized over a weighted-average period of approximately 1.1 years and 3.3 years, respectively. In addition, as of December 31, 2009, there was $2.4 million of unrecognized compensation expense for shares expected to be issued under the Employee Stock Purchase Plan which is expected to be recognized through October 2011.

Business Combinations and Asset Acquisitions

Investment in Progentix Orthobiology, B.V.  On January 13, 2009, 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 (the Progentix Shareholders) pursuant to a Preferred Stock Purchase Agreement. NuVasive, Progentix and the Progentix Shareholders also entered into an Option Purchase Agreement dated January 13, 2009 (the Option Agreement), whereby (i) the Progentix Shareholders have two separate rights, upon the achievement of pre-defined development milestones by Progentix or sales milestones by us, to cause us to purchase the remaining sixty percent (60%) of capital stock of Progentix (Remaining Shares) at pre-defined prices (the Put Options), and (ii)we have the right, upon the occurrence of pre-defined events, to purchase the remaining sixty percent (60%) of capital stock of Progentix (the Call Option). 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.

In accordance with authoritative guidance issued by the FASB, we determined that Progentix is a variable interest entity (VIE) and that we are the primary beneficiary. Accordingly, the financial position and results of operations of Progentix have been included in the consolidated financial statements from the date of the initial investment. The equity interests in Progentix not owned by us are reported as noncontrolling interests on our consolidated balance sheet. Losses incurred by Progentix are charged to us and to the noncontrolling interest holders based on their ownership percentage. The Remaining Shares and the Option Agreement that was entered into between us, Progentix and the Progentix Shareholders are not considered to be freestanding financial instruments as defined by authoritative guidance. Therefore the Remaining Shares and the Option Agreement are accounted for as a combined unit in the consolidated financial statements as a redeemable noncontrolling interest that was initially recorded at fair value and classified as mezzanine equity.

On December 30, 2009, we entered into an amendment (the Amendment) to the Option Agreement and the Distribution Agreement with Progentix and the Progentix Shareholders in connection with the execution of an exclusive supply agreement between us and Ceremed, Inc. The Amendment, among other things, extends by five months the period of time allotted for the achievement of each of the milestones required to trigger the Put Options, reduces the transfer price paid to Progentix by us for the supply of product, and also reduces by up to $14 million the purchase price to be paid by us upon execution of either of the Put Options or the Call Option. As the Remaining Shares and the Option Agreement are accounted for as a combined unit in the consolidated financial statements, the Amendment resulted in the retirement of the noncontrolling equity interests originally recorded in January 2009, and in accordance with authoritative guidance, the noncontrolling equity interests were recorded at fair value as of December 30, 2009, the date of the Amendment. The fair value of the equity interests issued on December 30, 2009 approximated the carrying value of the noncontrolling equity interests on that date.

Acquisition of Cervitech^® Inc.  In May 2009, we purchased Cervitech^® Inc., (Cervitech), a New Jersey based company focused on clinical approval of the PCM^® cervical disc system, a motion preserving total disc replacement device, for an estimated purchase price of approximately $79 million, consisting of cash totaling approximately $25 million and the issuance of 638,261 shares of NuVasive common stock to certain stockholders of Cervitech and

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$29.7 million of contingent consideration due upon FDA approval of the PCM device. Of the estimated total purchase price of $79 million, $34.8 million and $55.8 million was allocated to in-process research and development and goodwill, respectively, based on management’s valuation of the fair value of the assets acquired and liabilities assumed on the date of acquisition. This strategic acquisition allows us the potential to accelerate our entry into the growing mechanical cervical disc replacement market. Currently, the PCM investigational device has reached the two-year follow-up end point in its FDA approved clinical trial in the United States. We anticipate submitting for FDA approval in the first quarter of 2010. Approval, if obtained, will further strengthen our cervical product offering and will enable us to continue our trend of increasing our market share.

Acquisition of Osteocel^® Biologics Business.  In July 2008, we completed the acquisition of certain assets of Osiris Therapeutics, Inc. (the Osteocel Biologics Business Acquisition). The transaction provides us with a comprehensive stem cell biologic platform with benefits similar to autograft, as well as rights to acquire the next generation cultured version of the product. Osteocel is a unique bone matrix product that provides the three beneficial properties similar to autograft: osteoconduction (provides a scaffold for bone growth), osteoinduction (bone formation stimulation) and osteogenesis (bone production). Osteocel allows surgeons to offer the benefits of these properties to patients without the discomfort and potential complications of autograft harvesting, in addition to eliminating the time spent on a secondary surgical procedure. Osteocel is produced for use in spinal applications through a proprietary processing method that preserves the native stem cell population that resides in marrow rich bone. The acquisition is consistent with our objective of developing or acquiring innovative technologies. Of the total purchase price of $85 million, $35 million was paid to Osiris at closing (the Initial Purchase Price) and additional payments of $45 million were made in 2009. Of the total purchase price, $16.7 million was allocated to in-process research and development, and recorded in expense in 2008, as the associated projects had not yet reached technological feasibility and had no alternative future uses.

Acquisition of Pedicle Screw Technology.  In March 2008, we completed a buy-out of royalty obligations on SpheRx^® pedicle screw and related technology products and acquired new pedicle screw intellectual property totaling $6.3 million. Of the total 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, and recorded as expense in 2008, as the associated projects had not yet reached technological feasibility and had no alternative future uses.

Radius Medical LLC.  In January 2007, we acquired assets used by Radius Medical LLC, or Radius, in connection with the design, development, marketing and distribution of collagen-based medical biomaterials, together with the intellectual property rights, contractual rights, inventories, and certain liabilities related thereto. In connection with the transaction, we made net cash payments totaling $7.0 million and issued 451,677 unregistered shares of our common stock, which were subsequently registered. As part of the acquisition, we also acquired certain rights and obligations under a supply agreement with Maxigen Biotech, Inc. (MBI) with respect to product manufacturing and distributor rights. MBI is a Taiwanese company that manufactures FormaGraft and owns a portion of the core technology.

In connection with the acquisition of Radius, we made a separate $2.0 million equity investment in MBI. In May 2007, the equity investment in MBI was completed resulting in NuVasive ownership of approximately 9% of MBI. We account for this investment at cost and is included in other assets on the consolidated balance sheets.

These transactions and their impact to our consolidated statement of position and results of operations are fully described in Notes 2 and 3 to the consolidated financial statements included in this report.

Liquidity and Capital Resources

Since our inception in 1997, we have incurred significant losses and as of December 31, 2009, we had an accumulated deficit of approximately $189.7 million. To date, our operations have been funded primarily with proceeds from the sale of our equity securities which total $297.1 million since inception, including $210.1 million sold in the public markets.

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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 and can be settled only in shares of our common stock.

Cash, cash equivalents and marketable securities was $204.7 million at December 31, 2009 and $223.4 million at December 31, 2008. The decrease was due primarily to the payments of $78.9 million in connection with purchases of property and equipment and business acquisitions, offset by an increase in cash flows provided by operations.

Net cash provided by operating activities was $46.4 million in 2009 compared to cash used in operating activities of $5.0 million in 2008. The increase in cash provided from operating activities is from our improved operating results in 2009 as compared to 2008, as well as improved collections from accounts receivable representing a net increase in cash of $16.6 million in 2009 as compared to 2008. We spent an incremental $14.4 million during 2008 as compared to 2007 for inventory to support our increased operations and growing business and in preparation for the introduction of NeuroVision M5, representing a significant upgrade to our core MAS platform, which was introduced at the beginning of the fourth quarter of 2008.

Net cash used by investing activities was $127.9 million in 2009 compared to net cash used by investing activities of $144.6 million in 2008. The decrease in net cash used by investing activities of $16.7 million is primarily due to the net change of $14.3 million in the activity in our investment portfolio, the net change of $4.8 million in cash used to fund the acquisition and investments and a $6.9 million decrease in capital asset purchases. Included in the $15.4 million net increase of capital expenditures in 2008 as compared to 2007, is approximately $9.5 million and $10.9 million of expenditures related to the new San Diego facility and for the implementation of our new ERP system, respectively.

Net cash provided by financing activities was $14.5 million in 2009 compared to $220.0 million in 2008. The decrease in cash provided by financing activities of $205.6 million is primarily due to the receipt of net proceeds of $208.4 million from the issuance of the Notes in March 2008, which financing was not replicated or needed in 2009.

We expect that our cash, cash equivalents and marketable securities balance 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 instrument sets, our operating results, and cash used in any future acquisitions. We have sufficient cash and investments on hand to finance our operations for the foreseeable future.

Contractual Obligations and Commitments

Contractual obligations and commitments represent future cash commitments and liabilities under agreements with third parties, including our Convertible Senior Notes, operating leases and other contractual obligations. The following summarizes our long-term contractual obligations and commitments as of December 31, 2009 (in thousands):

			Payments Due by Period
			Less Than
	Total		1 Year		1 to 3 Years		4 to 5 Years		After 5 Years
Convertible Senior Notes(1)	$	18,113	$	5,175	$	12,938	$	—	$	—
Operating leases		82,214		7,214		14,316		11,000		49,684
Royalty obligations		1,110		180		360		360		210
Clinical advisory agreements		1,498		308		480		480		230
Total	$	102,935	$	12,877	$	28,094	$	11,840	$	50,124

(1) The Convertible Senior Notes in the above table include only the interest payments totaling 2.25% per annum as the Convertible Senior Notes are only convertible into the Company’s common stock and not settled using cash. See Note 7 to the consolidated financial statements for further discussion of the terms of the Convertible Senior Notes.

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The following obligations and commitments are not included in the table above:

In connection with the 2005 acquisition of RSB Spine LLC, we are contingently obligated to make additional consideration payments over a period of 12 years based upon sales of the products derived from Smart Plate^® Gradient CLP^tm and related technology.

As a result of our acquisition of Radius Medical LLC in January 2007, we are obligated to purchase, on an annual basis, a minimum number of units of FormaGraft^® from Maxigen Biotech, Inc. at an annual cost of approximately $900,000.

In connection with the investment in Progentix, we are contingently obligated to make additional payments of up to $69 million based upon the achievement of specified milestones. In addition, we are obligated to advance an additional $2 million to Progentix in accordance with the terms of a loan agreement entered into in conjunction with the investment.

In connection with the acquisition of Cervitech, we are contingently obligated to make additional payments up to $33 million upon FDA approval of the PCM device. The milestone payment may be made in cash or a combination of cash and up to half in NuVasive common stock, at the Company’s discretion.

We have not included an amount related to uncertain tax benefits or liabilities in the table above because we cannot make a reasonably reliable estimate regarding the timing of settlements with taxing authorities, if any. As of December 31, 2009, the liability included in the consolidated balance sheets related to tax uncertainties is immaterial.

The expected timing of payments of the obligations discussed above is estimated based on current information. Timing of payment and actual amounts paid may be different depending on the time of receipt of services or changes to agreed-upon amounts for some obligations. Amounts disclosed as contingent or milestone-based obligations depend on the achievement of the milestones or the occurrence of the contingent events and can vary significantly.

Off-Balance Sheet Arrangements

We have not engaged in any off-balance sheet activities.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Sensitivity and Risk.  Our exposure to interest rate risk at December 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 December 31, 2009, we do not hold any material asset-backed investment securities and in 2009, we did not realize any losses related to asset-backed investment securities. Based upon our overall interest rate exposure as of December 31, 2009, a change of 10 percent in interest rates, assuming the amount of our investment portfolio remains constant, would not have a material effect on interest expense. Further, this analysis does not consider the effect of the change in the level of the overall economic activity that could exist in such an environment.

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. Accordingly, we have assessed that we do not have any material exposure to foreign currency rate fluctuations.

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. The primary objective of our investment activities is to preserve the principal while at the same time maximizing yields without significantly increasing the risk. To achieve this objective, we maintain our portfolio of cash equivalents and investments in instruments that meet high credit quality standards, as specified in our investment policy. None of our investments are held for trading purposes. Our policy also limits the amount of credit exposure to any one issue, issuer and type of instrument.

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The following table presents the carrying value and related weighted-average rate of return for our investment portfolio as of December 31, 2009 (dollars in thousands):

			Weighted Average
	Carrying Value		Rate of Return
Money market funds	$	41,423		0.5	%
Certificates of deposit		1,973		1.1	%
Corporate notes		4,959		1.1	%
U.S. government treasury securities		27,983		0.2	%
Securities of government-sponsored entities		104,332		0.5	%
Total interest bearing instruments	$	180,670

As of December 31, 2009, the stated maturities of our investments are $99.3 million within one year and $40.0 million from one to three years. These investments are recorded on the balance sheet at fair market value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income.

Market Price Sensitive Instruments.  In order to reduce the potential equity dilution, we entered into convertible note hedge transactions (the Hedge) entitling us to purchase up to 5.1 million shares of our common stock at an initial stock price of $44.74 per share, each of which is subject to adjustment. Upon conversion of our Convertible Senior Notes, the Hedge is expected to reduce the equity dilution if the daily volume-weighted average price per share of our common stock exceeds the strike price of the Hedge. We also entered into warrant transactions with the counterparties of the Hedge entitling them to acquire up to 5.1 million shares of our common stock, subject to adjustment, at an initial strike price of $49.13 per share, subject to adjustment. The warrant transactions could have a dilutive effect on our earnings per share to the extent that the price of our common stock during a given measurement period (the quarter or year to date period) at maturity of the warrants exceeds the strike price of the warrants.

Item 8.   Financial Statements and Supplementary Data.

The consolidated financial statements and supplementary data required by this item are set forth at the pages indicated in Item 15.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

Item 9A.   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 recognized 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 was 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 SEC Rules 13a — 15(e) and 15d — 15(e)) as of December 31, 2009. Based on such evaluation, our management has concluded as of December 31, 2009, the Company’s disclosure controls and procedures are effective.

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Management’s Report on Internal Control over Financial Reporting.  Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Management has used the framework set forth in the report entitled Internal Control — Integrated Framework published by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission to evaluate the effectiveness of the Company’s internal control over financial reporting. Management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2009. Ernst & Young LLP, the Company’s independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting which is included herein.

Changes in Internal Control over Financial Reporting.  We are involved in ongoing evaluations of internal controls. In anticipation of the filing of this Form 10-K, our Chief Executive Officer and Chief Financial Officer, with the assistance of other members of our management, performed an evaluation of any change in internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is likely to materially affect, our internal controls 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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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
NuVasive, Inc.

We have audited NuVasive, Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). NuVasive, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, NuVasive, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of NuVasive, Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009 of NuVasive, Inc. and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

San Diego, California

February 26, 2010

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Item 9B.   Other Information.

Compensatory Arrangements with Certain Officers

Fiscal 2009 Bonus Awards

The Committee awarded the following performance bonuses, in accordance with the metrics previously adopted by the Committee, to the Company’s named executive officers with respect to fiscal 2009:

		Fiscal
Name	Position	2009 Bonus
Alexis V. Lukianov	Chairman & Chief Executive Officer	$	900,000
Keith C. Valentine	President & Chief Operating Officer		550,000
Michael J. Lambert	Executive Vice President & Chief Financial Officer		125,000
Patrick Miles	President, Americas		425,000
Jeffrey Rydin	Executive Vice President, Americas Sales		425,000

Compensation Agreement

On February 24, 2010, the Company entered into a compensatory letter agreement (Compensatory Letter Agreement) with its principal financial officer, Michael Lambert. The agreement with Mr. Lambert supersedes all prior agreements with him relating to compensation.

The base salary is consistent with the base salary disclosed in the Company’s 8-K dated January 8, 2010. The Compensatory Letter Agreement also sets forth the target bonus and the severance benefits for Mr. Lambert if involuntarily terminated by the Company. The terms of the severance benefits are summarized as follows:

	Involuntary Termination Prior to Change
	of Control or 12 Months or	Involuntary Termination within
Position	More After Change of Control	12 Months of a Change of Control
Michael Lambert Executive Vice President & CFO	100% of Compensation	150% of Compensation

The terms “Change of Control”, “Compensation”, and “Involuntary Termination” are defined in the Compensatory Letter Agreement. A copy of the Compensatory Letter Agreement is furnished as Exhibit 10.30 and is hereby incorporated herein by reference.

Other Events

On November 4, 2009, Alex Lukianov, our CEO and Chairman, 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. Lukianov will file Forms 4 evidencing sales under their 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. Lukianov, commencing in February 2010, will sell up to 5,000 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. Under Mr. Lukianov’s plan, the plan’s agent will undertake to sell specified numbers of shares each month if the stock trades above the prearranged minimum prices. Mr. Lukianov 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. Lukianov’s plan took effect in February 2010 and will expire in November 2010.

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PART III

Certain information required by Part III is omitted from this report because the Company will file a definitive proxy statement within 120 days after the end of its fiscal year pursuant to Regulation 14A (the “Proxy Statement”) for its annual meeting of stockholders to be held on May 25, 2010, and certain information included in the Proxy Statement is incorporated herein by reference.

Item 10.   Directors and Executive Officers and Corporate Governance.

We have adopted a Code of Conduct and Ethics for all officers, directors and shareowners. The Code of Conduct and Ethics is available on our website, www.nuvasive.com, and in our filings with the Securities and Exchange Commission. We intend to disclose future amendments to, or waivers from, provisions of our Code of Conduct and Ethics that apply to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, or Controller, or persons performing similar functions, within four business days of such amendment or waiver.

The other information required by this Item 10 will be set forth in the Proxy Statement and is incorporated in this report by reference.

Item 11.   Executive Compensation.

The information required by this item will be set forth in the Proxy Statement and is incorporated in this report by reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be set forth in the Proxy Statement and is incorporated in this report by reference.

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be set forth in the Proxy Statement and is incorporated in this report by reference.

Item 14.   Principal Accountant Fees and Services.

The information required by this item will be set forth in the Proxy Statement and is incorporated in this report by reference.

PART IV

Item 15.   Exhibits and Financial Statement Schedules.

(a) The following documents are filed as a part of this report:

(1) Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2009 and 2008

Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules: Schedule II — Valuation Accounts

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All other financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

(3) Exhibits. See subsection (b) below.

(b) Exhibits. The following exhibits are filed as part of this report:

Exhibit
Number	Description
2.1	Asset Purchase Agreement, dated May 8, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on August 8, 2008)
2.2†	Amendment to Asset Purchase Agreement, dated September 30, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
2.3	Amendment No. 2 to Asset Purchase Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
2.4†	Share Purchase Agreement, by and among NuVasive, Inc. and the stockholders of Cervitech, Inc., as listed therein, dated April 22, 2009 (incorporated by reference to our Registration Statement on Form S-3 (File No. 333-159098) filed with the Commission on May 8, 2009)
3.1	Restated Certificate of Incorporation (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 13, 2004)
3.2	Restated Bylaws (incorporated by reference to our Current Report on Form 8-K filed with the Commission on December 15, 2008)
4.1	Second Amended and Restated Investors’ Rights Agreement, dated July 11, 2002, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
4.2	Amendment No. 1 to Second Amended and Restated Investors’ Rights Agreement, dated June 19, 2003, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
4.3	Amendment No. 2 to Second Amended and Restated Investors’ Rights Agreement, dated February 5, 2004, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
4.4	Registration Rights Agreement, dated as of August 4, 2005, between NuVasive, Inc. and Pearsalls Limited (incorporated by reference to our Current Report on Form 8-K filed with the Commission on August 10, 2005)
4.5	Registration Rights Agreement Termination Agreement, dated as of September 26, 2006, between NuVasive, Inc. and Pearsalls Limited (incorporated by reference to our Current Report on Form 8-K filed with the Commission on September 29, 2006)
4.6	Indenture, dated March 7, 2008, between the NuVasive Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
4.7	Form of 2.25% Convertible Senior Note due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
4.8	Registration Rights Agreement, dated March 7, 2007, among NuVasive, Inc. and Goldman, Sachs & Co., and J.P. Morgan Securities Inc., related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
4.9	Specimen Common Stock Certificate (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 16, 2006)
10.1#	1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)

52

Exhibit
Number	Description
10.2#	Form of Notice of Grant of Stock Option under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
10.3#	Form of Stock Option Agreement under our 1998 Stock Option/Stock Issuance Plan, and form of addendum thereto (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
10.4#	Form of Stock Purchase Agreement under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
10.5#	Form of Stock Issuance Agreement under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to Amendment No. 4 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on May 11, 2004)
10.6#	Form of Stock Issuance Agreement under our 1998 Stock Option/Stock Issuance Plan, dated April 21, 2004, and May 4, 2004 (incorporated by reference to Amendment No. 4 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on May 11, 2004)
10.7#	2004 Equity Incentive Plan, as amended (incorporated by reference to Appendix A to our Definitive Proxy Statement) filed with the Commission on April 11, 2007)
10.8#	Form of Stock Option Award Notice under our 2004 Equity Incentive Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004)
10.9#	Form of Option Exercise and Stock Purchase Agreement under our 2004 Equity Incentive Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004).
10.10#	Form of Restricted Stock Unit Award Agreement under our 2004 Equity Incentive Plan
10.11#	2004 Employee Stock Purchase Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004)
10.12#	Amendment No. 1 to 2004 Employee Stock Purchase Plan (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
10.13#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Current Report on Form 8-K filed with the Commission on August 8, 2008)
10.14#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Keith C. Valentine (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.15#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.16#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Patrick Miles (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.17#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Jeffrey P. Rydin (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.18#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Jason M. Hannon (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.19#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)

53

Exhibit
Number	Description
10.20#	Amendment No. 2 to Compensation Letter Agreement, dated August 5, 2009, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 6, 2009)
10.21#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Keith C. Valentine (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.22#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.23#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Patrick Miles (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.24#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Jeffrey P. Rydin (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.25#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Jason M. Hannon (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
10.26#	Compensation Letter Agreement, dated November 4, 2009, between NuVasive, Inc. and Pat Miles
10.27#	Compensation Letter Agreement, dated November 4, 2009, between NuVasive, Inc. and Jeff Rydin
10.28#	Compensation Letter Agreement, dated December 28, 2009, between NuVasive, Inc. and Jason Hannon
10.29#	Offer Letter Agreement, dated October 19, 2009, between NuVasive, Inc. and Michael Lambert
10.30#	Compensation Letter Agreement, dated February 24, 2010, between NuVasive, Inc. and Michael Lambert
10.31#	Severance Agreement, dated September 2, 2009, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 6, 2009)
10.32#	Form of Indemnification Agreement between NuVasive, Inc. and each of our directors and officers (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
10.33	Sublease, dated October 12, 2004, by and between NuVasive, Inc. and Gateway, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 15, 2004)
10.34#	Summary of 2008 annual salaries and annual stock grants for our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on January 11, 2008)
10.35#	Summary of the 2008 bonus payments to our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on February 29, 2008)
10.36#	Summary of 2009 annual salaries and annual stock grants for our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on January 8, 2009)
10.37	Customer Agreement, dated as of June 27, 2007, by and between NuVasive, Inc. and International Business Machines Corporation (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 8, 2007)
10.38	IBM Global Services Agreement, dated as of June 27, 2007, by and between NuVasive, Inc. and International Business Machines Corporation (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 8, 2007)
10.39	Lease Agreement for Sorrento Summit, entered into as of November 6, 2007, between the Company and HCPI/Sorrento, LLC. (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on November 8, 2007)

54

Exhibit
Number	Description
10.40	Purchase Agreement, dated March 3, 2008, among NuVasive, Inc. and Goldman, Sachs & Co., and J.P. Morgan Securities Inc., related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.41	Confirmation of Call Option Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.42	Confirmation of Call Option Transaction, dated March 3, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.43	Confirmation of Warrant Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.44	Confirmation of Warrant Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.45	Amendment to the Confirmation of Call Option Transaction, dated March 11, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.46	Amendment to the Confirmation of Call Option Transaction, dated March 11, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.47	Amendment to the Confirmation of Warrant Transaction, dated March 11, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.48	Amendment to the Confirmation of Warrant Transaction, dated March 11, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
10.49	Form of Voting Agreement, dated May 8, 2008, by and among each of Peter Friedli, Venturetec, Inc., U.S. Venture 05, Inc., Joyce, Ltd. and C Randal Mills, Ph.D, and the Company (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.50†	Manufacturing Agreement, dated July 24, 2008 by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
10.51†	Amendment to Manufacturing Agreement, dated September 30, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
10.52	Amendment No. 3 to Manufacturing Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
10.53†	Preferred Stock Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.54†	Option Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
10.55†	Exclusive Distribution Agreement, dated January 13, 2009, between the Company and Progentix Orthobiology, B.V. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
21.1	List of subsidiaries of NuVasive, Inc.
23.1	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended

55

Exhibit
Number	Description
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. section 1350
32.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. section 1350

†	Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk. We have filed separately with the Commission an unredacted copy of the exhibit.
#	Indicates management contract or compensatory plan.

56

SUPPLEMENTAL INFORMATION

Copies of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 25, 2010, and copies of the form of proxy to be used for such Annual Meeting, will be furnished to the SEC prior to the time they are distributed to the Registrant’s Stockholders.

57

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

By:  /s/  Alexis V. Lukianov

Alexis V. Lukianov

Chairman and Chief Executive Officer

(Principal Executive Officer)

Date: February 26, 2010

By:  /s/  Michael J. Lambert

Michael J. Lambert

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

Date: February 26, 2010

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Alexis V. Lukianov and Michael Lambert, jointly and severally, his or her attorneys-in -fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in -fact, or his or her substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  Alexis V. Lukianov Alexis V. Lukianov	Chairman and Chief Executive Officer (Principal Executive Officer)	February 26, 2010
/s/  Michael J. Lambert Michael J. Lambert	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 26, 2010
/s/  Jack R. Blair Jack R. Blair	Director	February 26, 2010
/s/  Peter C. Farrell Peter C. Farrell	Director	February 26, 2010

58

Signature	Title	Date
/s/  Robert J. Hunt Robert J. Hunt	Director	February 26, 2010
/s/  Lesley H. Howe Lesley H. Howe	Director	February 26, 2010
/s/  Eileen M. More Eileen M. More	Director	February 26, 2010
/s/  Richard W. Treharne Richard W. Treharne	Director	February 26, 2010

59

NUVASIVE, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	61
Consolidated Balance Sheets as of December 31, 2009 and 2008	62
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007	63
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2009, 2008 and 2007	64
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007	65
Notes to Consolidated Financial Statements	66

60

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

NuVasive, Inc.

We have audited the accompanying consolidated balance sheets of NuVasive, Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of NuVasive, Inc. at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, NuVasive, Inc. changed its method of accounting for business combinations with the adoption of the guidance originally issued in Financial Accounting Standards Board (FASB) Statement No. 141(R), Business Combinations (codified in FASB ASC Topic 805, Business Combinations), effective January 1, 2009.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), NuVasive, Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

San Diego, California

February 26, 2010

61

NUVASIVE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

	December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	65,413		$	132,318
Short-term marketable securities		99,279			45,738
Accounts receivable, net of allowances of $4,163 and $1,952, respectively		58,462			51,622
Inventory		90,191			68,834
Prepaid expenses and other current assets		3,757			3,466
Total current assets		317,102			301,978
Property and equipment, net		82,602			73,686
Long-term marketable securities		39,968			45,305
Intangible assets, net		103,338			54,768
Goodwill		102,882			2,331
Other assets		7,872			9,338
Total assets	$	653,764		$	487,406
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	26,489		$	26,633
Accrued payroll and related expenses		25,535			17,132
Royalties payable		2,334			1,722
Other current liabilities		389			—
Total current liabilities		54,747			45,487
Senior convertible notes		230,000			230,000
Long-term acquisition related liabilities		30,694			12,111
Other long-term liabilities		28,472			12,177
Commitments and contingencies
Noncontrolling interests		13,629			—
Stockholders’ equity:
Common stock, $0.001 par value; 70,000 shares authorized, 38,774 and 36,310 issued and outstanding at December 31, 2009 and 2008, respectively		39			36
Additional paid-in capital		485,757			383,293
Accumulated other comprehensive income (loss)		126			(190	)
Accumulated deficit		(189,700	)		(195,508	)
Total stockholders’ equity		296,222			187,631
Total liabilities and stockholders’ equity	$	653,764		$	487,406

See accompanying notes to consolidated financial statements.

62

NUVASIVE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

	Year Ended December 31,
	2009			2008			2007
Revenue	$	370,340		$	250,082		$	154,290
Cost of goods sold (excluding amortization of purchased technology)		61,110			39,008			23,768
Gross profit		309,230			211,074			130,522
Operating expenses:
Sales, marketing and administrative		254,997			189,126			121,676
Research and development		37,581			25,943			24,581
Amortization of intangible assets		5,335			2,989			1,517
In-process research and development		—			20,876			—
Total operating expenses		297,913			238,934			147,774
Interest and other income (expense), net:
Interest income		1,507			5,599			5,216
Interest expense		(7,116	)		(5,571	)		(1	)
Other income, net		461			304			772
Total interest and other income (expense), net		(5,148	)		332			5,987
Income (loss) before income taxes		6,169			(27,528	)		(11,265	)
Income tax expense		1,732			—			—
Consolidated net income (loss)	$	4,437		$	(27,528	)	$	(11,265	)
Net loss attributable to noncontrolling interests	$	(1,371	)	$	—		$	—
Net income (loss) attributable to NuVasive, Inc.	$	5,808		$	(27,528	)	$	(11,265	)
Net income (loss) per share attributable to NuVasive, Inc.:
Basic	$	0.16		$	(0.77	)	$	(0.32	)
Diluted	$	0.15		$	(0.77	)	$	(0.32	)
Weighted average shares:
Basic		37,426			35,807			34,782
Diluted		38,751			35,807			34,782

See accompanying notes to consolidated financial statements.

63

NUVASIVE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

								Accumulated
					Additional			Other						Total
	Common Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance at December 31, 2006		33,929	$	34	$	333,009		$	(25	)	$	(156,715	)	$	176,303
Issuance of common stock under employee and director stock option and purchase plans		949		1		7,338			—			—			7,339
Issuance of common stock in connection with acquisitions		452		—		10,501			—			—			10,501
Stock-based compensation expense		—		—		13,621			—			—			13,621
Comprehensive loss:
Unrealized gain on marketable securities		—		—		—			50			—			50
Foreign currency translation		—		—		—			29			—			29
Net loss attributable to NuVasive, Inc.		—		—		—			—			(11,265	)		(11,265	)
Comprehensive loss attributable to NuVasive, Inc.															(11,186	)
Balance at December 31, 2007		35,330		35		364,469			54			(167,980	)		196,578
Issuance of common stock under employee and director stock option and purchase plans		980		1		11,849			—			—			11,850
Convertible Note hedge, net of warrants		—		—		(13,972	)		—			—			(13,972	)
Stock-based compensation expense		—		—		20,947			—			—			20,947
Comprehensive loss:
Unrealized gain on marketable securities, net		—		—		—			519			—			519
Foreign currency translation		—		—		—			(763	)		—			(763	)
Net loss attributable to NuVasive, Inc.		—		—		—			—			(27,528	)		(27,528	)
Comprehensive loss attributable to NuVasive, Inc.															(27,772	)
Balance at December 31, 2008		36,310		36		383,293			(190	)		(195,508	)		187,631
Issuance of common stock under employee and director stock option and purchase plans		824		1		12,555			—			—			12,556
Issuance of common stock in connection with acquisitions		1,640		2		64,214			—			—			64,216
Stock-based compensation expense		—		—		23,793			—			—			23,793
Tax benefits related to stock-based compensation awards		—		—		1,902			—			—			1,902
Comprehensive income:
Unrealized loss on marketable securities, net		—		—		—			(494	)		—			(494	)
Foreign currency translation		—		—		—			810			—			810
Net income attributable to NuVasive, Inc.		—		—		—			—			5,808			5,808
Comprehensive income attributable to NuVasive, Inc.															6,124
Balance at December 31, 2009		38,774	$	39	$	485,757		$	126		$	(189,700	)	$	296,222

See accompanying notes to consolidated financial statements.

64

NUVASIVE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Years Ended December 31,
	2009			2008			2007
Operating activities:
Consolidated net income (loss)	$	4,437		$	(27,528	)	$	(11,265	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		29,841			23,105			12,952
In-process research and development		—			20,876			—
Stock-based compensation		23,793			20,947			13,621
Lease abandonment (reversal)		(1,997	)		4,403			—
Allowance for doubtful accounts and sales return reserve, net of write-offs		2,211			1,026			189
Allowance for excess and obsolete inventory		2,297			(836	)		514
Other non-cash adjustments		3,359			179			109
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(8,582	)		(25,152	)		(8,725	)
Inventory		(23,133	)		(32,451	)		(18,026	)
Prepaid expenses and other current assets		760			274			349
Accounts payable and accrued liabilities		5,932			5,098			5,719
Accrued payroll and related expenses		7,501			5,057			3,676
Net cash provided by (used in) operating activities		46,419			(5,002	)		(887	)
Investing activities:
Cash paid for acquisitions and investments		(46,055	)		(41,256	)		(6,970	)
Purchases of property and equipment		(32,878	)		(39,795	)		(24,403	)
Purchases of short-term marketable securities		(92,494	)		(90,150	)		(75,135	)
Sales of short-term marketable securities		66,447			63,659			129,818
Purchases of long-term marketable securities		(64,784	)		(69,036	)		(23,540	)
Sales of long-term marketable securities		41,861			32,267			17,000
Other assets		—			(304	)		(2,483	)
Net cash (used in) provided by investing activities		(127,903	)		(144,615	)		14,287
Financing activities:
Payments of long-term liabilities		—			(300	)		(300	)
Issuance of convertible debt, net of costs		—			222,442			—
Purchase of convertible note hedges		—			(45,758	)		—
Sale of warrants		—			31,786			—
Tax benefits related to stock-based compensation awards		1,902			—			—
Issuance of common stock		12,556			11,850			7,339
Net cash provided by financing activities		14,458			220,020			7,039
Effect of exchange rate changes on cash		121			—			—
(Decrease) increase in cash and cash equivalents		(66,905	)		70,403			20,439
Cash and cash equivalents at beginning of year		132,318			61,915			41,476
Cash and cash equivalents at end of year	$	65,413		$	132,318		$	61,915
Supplemental disclosure of non-cash transactions:
Landlord paid tenant improvements	$	—		$	7,309		$	—
Issuance of common stock in connection with acquisitions	$	64,216		$	—		$	10,501
Supplemental cash flow information:
Interest paid	$	5,175		$	2,703		$	—
Income taxes paid	$	798		$	227		$	88

See accompanying notes to consolidated financial statements.

65

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Organization and Significant Accounting Policies

Description of Business.  NuVasive, Inc. (the Company or NuVasive) was incorporated in Delaware on July 21, 1997. The Company designs, develops and markets products for the surgical treatment of spine disorders. The Company began commercializing its products in 2001. Its product portfolio is focused primarily on applications for spine fusion surgery. Its principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS^®, as well as a growing offering of biologics, cervical and motion preservation products. In the spine surgery market, our currently-marketed products are primarily used to enable access to the spine and to perform restorative and fusion procedures. The Company also focuses significant research and development efforts on MAS and motion preservation products in the areas of (i) fusion procedures in the lumbar and thoracic spine; (ii) cervical fixation products; and (iii) motion preservation products such as our total disc replacement products. The Company dedicates significant resources to sales and marketing efforts, including training spine surgeons on its unique technology and products.

The Company loans its MAS systems to surgeons and hospitals who purchase disposables and implants 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 an immaterial 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.

The Company’s business is considered as operating in one segment based upon the Company’s organizational structure, the way in which the operations are managed and evaluated and the lack of availability of separate financial results. Substantially all of the Company’s assets and sales are in the United States.

The Company evaluated subsequent events through February 26, 2010, the date on which these financial statements were issued.

Basis of Presentation and Principles of Consolidation.  The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. In addition, the consolidated financial statements as of December 31, 2009 and for the year then ended include the accounts of a variable interest entity, Progentix Orthobiology, B.V. (Progentix), which is consolidated pursuant to existing guidance issued by the Financial Accounting Standards Board (FASB). All significant intercompany balances and transactions have been eliminated in consolidation. There has been no material activity by the Company’s subsidiaries during the years presented.

Use of Estimates.  To prepare financial statements in conformity with generally accepted accounting principles accepted in the United States of America, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Concentration of Credit Risk and Significant Customers.  Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term and long-term marketable securities and accounts receivable. The Company limits its exposure to credit loss by placing its cash and investments with high credit quality financial institutions. Additionally, the Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain principal and maximize liquidity. No single customer represented greater than ten percent of sales for any of the years presented.

Fair Value of Financial Instruments.  The Company’s financial instruments consist principally of cash and cash equivalents, short-term and long-term marketable securities, accounts receivable, accounts payable, accrued expenses and Senior Convertible Notes. The carrying amounts of financial instruments such as cash equivalents,

66

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accounts receivable, accounts payable and accrued expenses approximate the related fair values due to the short-term maturities of these instruments. Marketable securities consist of available-for-sale securities that are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of shareholders’ equity. The estimated fair value of the Senior Convertible Notes is determined by using available market information as of December 31, 2009.

Cash and Cash Equivalents.  The Company considers all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents.

Marketable Securities.  The Company defines marketable securities as income yielding securities that can be readily converted into cash. Marketable securities include U.S. Treasury and agency obligations, certificates of deposit (CDs) issued by domestic banks, commercial paper and corporate notes and bonds.

Accounts Receivable and Related Valuation Accounts.  Accounts receivable in the accompanying consolidated balance sheets are presented net of allowances for doubtful accounts and sales returns.

The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for specific receivables if and when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices as well as a review of the overall quality and age of those invoices not specifically reviewed. In determining the provision for invoices not specifically reviewed, the Company analyzes historical collection experience and current economic trends. If the historical data used to calculate the allowance provided for doubtful accounts does not reflect the Company’s future ability to collect outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required.

In addition, the Company establishes a reserve for estimated sales return that is recorded as a reduction to revenue. This reserve is maintained to account for the future return of products sold in the current period. Product returns were not material for the years ended December 31, 2009, 2008 and 2007.

Inventory.  Inventory consists primarily of finished goods, disposables and specialized implants, is stated at the lower of cost or market and is recorded in cost of goods sold based on a method that approximates cost. The Company reviews the components of its inventory on a periodic basis for excess, obsolete or impaired inventory, and records a reserve for the identified items. At December 31, 2009 and 2008, the balance of the allowance for excess and obsolete inventory is $5.1 million and $2.8 million, respectively.

Goodwill and Intangible Assets.  Goodwill represents the excess of the aggregate purchase price over the fair value of the tangible and identifiable intangible assets acquired by the Company. The goodwill recorded as a result of the business combinations in the years presented is not deductible for tax purposes. Goodwill and indefinite lived intangible assets, which consists of in-process research and development acquired, are not amortized. The Company assesses goodwill and indefinite lived intangible assets for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. For purposes of assessing the impairment of goodwill, the Company estimates the value of the reporting units using its market capitalization as the best evidence of fair value. If the carrying amount of a reporting unit exceeds its fair value, then a goodwill impairment test is performed to measure the amount of the impairment loss, if any. During the years ended December 31, 2009, 2008 and 2007, the Company did not record any impairment charges related to their goodwill.

Intangible assets are initially measured at their fair value, determined either by the fair value of the consideration exchanged for the intangible asset, or the estimated discounted cash flows expected to be generated from the intangible asset. Intangible assets with a finite life, such as acquired technology, manufacturing know-how, licensed technology, supply agreements and certain trade names and trademarks, are amortized on a straight-line

67

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

basis over their estimated useful life, ranging from two to twenty years. Intangible assets with a finite life are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.

In determining the useful lives of intangible assets, we consider the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, changes in surgical techniques, market influences and other economic factors. For technology based intangible assets, we consider the expected life cycles of products which incorporate the corresponding technology. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold.

Property, Plant and Equipment.  Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Instrument sets are depreciated using the straight-line method over their estimated useful life of three years. Leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter. Maintenance and repairs are expensed as incurred. The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value.

Revenue Recognition.  The Company follows the provisions of the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition, which sets forth guidelines for the timing of revenue recognition based upon factors such as passage of title, installation, payment and customer acceptance. The Company recognizes revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Specifically, revenue from the sale of implants and disposables is recognized upon acknowledgement of a purchase order from the hospital indicating product use or implantation or upon shipment to third party customers who immediately accept title. Revenue from the sale of instrument sets is recognized upon receipt of a purchase order and the subsequent shipment to customers who immediately accept title.

Research and Development.  Research and development costs are expensed as incurred.

Product Shipment Costs.  Amounts billed to customers for shipping and handling of products are reflected in revenues and are not significant for any period presented. Product shipment costs are included in sales, marketing and administrative expense in the accompanying consolidated statements of operations and were $11.9 million, $9.3 million, and $6.1 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Income Taxes.  A deferred tax asset or liability is determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized.

Net Income (Loss) Per Share.  The Company computes basic net income (loss) per share using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to NuVasive, Inc. for the period by the weighted-average number of common shares outstanding during the period and the weighted average number of dilutive common stock equivalents, such as outstanding unvested restricted stock units, options, and warrants. Common stock equivalents are only included in the calculation of diluted earnings per share when their effect is dilutive.

The warrants sold to the initial purchasers of the Convertible Senior Notes (See Note 7)  and/or their affiliates to acquire up to 5.1 million shares of the Company’s common stock, subject to adjustment, were excluded from the calculation of diluted net income (loss) per share for the years ended December 31, 2009 and 2008 as their effect is

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anti-dilutive for the periods. In addition, the Senior Convertible Notes are convertible into shares of the Company’s common stock, 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), and have been excluded from the diluted net income (loss) per share calculation for the years ended December 31, 2009 and 2008 as their effect is anti-dilutive.

	Year Ended December 31,
	2009		2008			2007
	(In thousands, except per share amounts)
Numerator:
Net income (loss) attributable to NuVasive, Inc.	$	5,808	$	(27,528	)	$	(11,265	)
Denominator for basic and diluted net income (loss) per share:
Weighted average common shares outstanding for basic		37,426		35,807			34,782
Dilutive potential common stock outstanding:
Stock options		1,280		—			—
Restricted stock units		45		—			—
Weighted average common shares outstanding for diluted		38,751		35,807			34,782
Basic net income (loss) per share attributable to NuVasive, Inc.	$	0.16	$	(0.77	)	$	(0.32	)
Diluted net income (loss) per share attributable to NuVasive, Inc.	$	0.15	$	(0.77	)	$	(0.32	)

Diluted net income (loss) per share does not include the effect of anti-dilutive common share equivalents from outstanding stock options or restricted stock units. There were 3.1 million anti-dilutive common share equivalents excluded from the calculation at December 31, 2009. Due to the net loss reported in 2008 and 2007, the effect of all outstanding stock options is anti-dilutive and is therefore excluded.

Comprehensive Income (Loss).  Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) includes unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The Company has disclosed Comprehensive income (loss) as a component of stockholders’ equity.

The components of Accumulated other comprehensive income (loss), net of tax, is as follows (in thousands):

	December 31,
	2009		2008			2007
Translation adjustments, net of tax	$	110	$	(700	)	$	33
Unrealized (loss) gain on marketable securities, net of tax		16		510			21
Total accumulated other comprehensive income (loss)	$	126	$	(190	)	$	54

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Comprehensive income (loss) consists of the following (in thousands):

	Year Ended December 31,
	2009			2008			2007
Consolidated net income (loss)	$	4,437		$	(27,528	)	$	(11,265	)
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities, net of tax		(494	)		519			50
Translation adjustments, net of tax		810			(763	)		29
Total consolidated comprehensive income (loss)		4,753			(27,772	)		(11,186	)
Plus: Net loss attributable to noncontrolling interests		1,371			—			—
Comprehensive income (loss) attributable to NuVasive, Inc.	$	6,124		$	(27,772	)	$	(11,186	)

Recently Adopted Accounting Standards.  Effective January 1, 2009, the Company implemented the FASB’s revised authoritative guidance for business combinations. This revised guidance 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 upon commercialization, or write it off if the project is abandoned or impaired. Previously, post-acquisition adjustments related to business combination deferred tax asset valuation allowances and liabilities for uncertain tax positions were generally required to be recorded as an increase or decrease to Goodwill. The revised guidance 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, regardless of the guidance used to initially account for the business combination, will be recognized in current period income tax expense. Additionally, this guidance requires that contingent purchase consideration be remeasured to estimated fair value at each reporting period with the change in fair value recorded in the results of operations. The adoption of the revised guidance will have an impact on the Company’s 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. The impact of the adoption of this guidance in 2009 resulted in the capitalization of in-process research and development totaling $46 million that would have been expensed under the previous guidance.

Effective January 1, 2009, the Company adopted the revised authoritative guidance for the accounting treatment afforded preacquisition contingencies in a business combination. Under the revised guidance, an acquirer is required to recognize at fair value an “asset acquired or liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of the liability can be determined during the measurement period.” If the acquisition-date fair value cannot be determined, the acquirer will apply the authoritative guidance used to evaluate contingencies to determine whether the contingency should be recognized as of the acquisition date or after the acquisition date. The adoption of the revised guidance will have an impact on the Company’s 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 FASB’s revised authoritative guidance for consolidation, which 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

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equity investments when a subsidiary is deconsolidated. The guidance also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. The adoption of the revised guidance is expected to impact the Company’s 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.

Effective January 1, 2009, the Company adopted the FASB’s revised authoritative guidance 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. This guidance requires enhanced disclosures concerning a company’s treatment of costs incurred to renew or extend the term of a recognized intangible asset. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Effective April 1, 2009, the Company adopted FASB’s revised authoritative guidance for fair value measurements which clarifies the measurement of fair value 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. The Company also adopted additional authoritative guidance for determining whether a market is active or inactive, and whether a transaction is distressed, is applicable to all assets and liabilities (financial and nonfinancial) and which requires enhanced disclosures. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Effective April 1, 2009, the Company adopted authoritative guidance which 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. The adoption of this guidance, which applies to investments in debt securities, did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Effective January 1, 2009, the Company adopted an amendment to authoritative guidance which requires separate accounting for the debt and equity components of convertible debt issuances that have a cash settlement feature permitting settlement partially or fully in cash upon conversion. A component of such debt issuances that is representative of the approximate fair value of the conversion feature at inception should be bifurcated and recorded to equity, with the resulting debt discount amortized to interest expense in a manner that reflects the issuer’s nonconvertible, unsecured debt borrowing rate. The Company’s outstanding Senior Convertible Notes do not include a cash settlement feature, therefore, the amendment did not have any impact on the Company’s consolidated financial statements.

Effective January 1, 2009, the Company adopted a new standard which clarifies how to determine whether certain instruments or features are indexed to an entity’s own stock. This new standard outlines a two-step approach to evaluate the instrument’s contingent exercise provisions and the instrument’s settlement provisions. The Company evaluated the provisions of the new standard and the embedded conversion options in its outstanding Senior Convertible Notes and warrants and determined that the embedded conversion options are indexed to its own stock and, therefore, do not require bifurcation and separate accounting.

Effective January 1, 2009, the Company adopted authoritative guidance which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and therefore need to be included in the earnings allocation in calculating earnings per share under the two-class method and requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. The non-vested share-based payment awards issued by the Company do not include non-forfeitable rights to dividends or dividend equivalents, therefore the adoption of this guidance did not have any impact on the Company’s consolidated financial statements.

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Recently Issued Accounting Standards.  In June 2009, the FASB issued revised authoritative guidance that, among other things, requires a qualitative rather than a quantitative analysis to determine the primary beneficiary of a variable interest entity (VIE), which amends previous guidance for consideration of related party relationships in the determination of the primary beneficiary of a VIE, amends certain guidance for determining whether an entity is a VIE, requires continuous assessments of whether an enterprise is the primary beneficiary of a VIE, and requires enhanced disclosures about an enterprise’s involvement with a VIE. This guidance is effective for years beginning January 1, 2010. The Company is currently evaluating the impact the adoption will have on its consolidated financial statements.

Reclassifications.  Certain amounts in prior periods have been reclassified to conform with current year presentation. These reclassifications had no effect on previously reported net income (loss) or net income (loss) per share.

Expenses incurred for royalties have been reclassified from sales, marketing and administrative expense to cost of goods sold. Royalty expense was $8.7 million, $6.5 million, and $5.2 million for the years ended December 31, 2009, 2008 and 2007, respectively.

As previously discussed, the Company loans its MAS systems to surgeons and hospitals who purchase disposables and implants for use in individual procedures. These systems, or loaned instrument sets, are comprised of tools and equipment which facilitate the implantation of the spinal implants. They are not part of the tangible product sold and title of the loaned instrument sets never passes to the surgeon or hospital. To better reflect the true economic nature and be consistent with industry practice, depreciation expense recorded on loaned instrument sets has been reclassified from cost of sales to sales, marketing and administrative expenses. Depreciation expense was $18.2 million, $11.8 million and $8.8 million for the years ended December 31, 2009, 2008 and 2007 respectively.

In addition, the amortization of intangible assets, which was previously included in sales, marketing and administrative expense, is now presented as a separate line item within operating expenses.

			Reclassifications related to
									Amortization
	As Previously					Depreciation			of Intangible			Current Year
	Reported		Royalty Expense			Expense			Assets			Presentation
Year Ended December 31, 2008:
Cost of goods sold	$	44,301	$	6,543		$	(11,836	)	$	—		$	39,008
Sales, marketing and administrative expense		186,822		(6,543	)		11,836			(2,989	)		189,126
Amortization of intangible assets		—		—			—			2,989			2,989
Year Ended December 31, 2007:
Cost of goods sold	$	27,382	$	5,170		$	(8,784	)	$	—		$	23,768
Sales, marketing and administrative expense		119,579		(5,170	)		8,784			(1,517	)		121,676
Amortization of intangible assets		—		—			—			1,517			1,517

2.   Business Combinations

Cervitech^® Inc. Acquisition

On May 8, 2009 (the Closing Date), the Company completed the purchase of all of the outstanding shares of Cervitech, Inc., a Delaware corporation (Cervitech), pursuant to a Share Purchase Agreement dated April 22, 2009 (the Purchase Agreement) for an initial payment of approximately $49 million consisting of cash totaling approximately $25 million and the issuance of 638,261 shares of NuVasive common stock to certain stockholders

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of Cervitech. Cervitech, a New Jersey based company, is focused on the clinical approval of the PCM^® cervical disc system, a motion preserving total disc replacement device in the United States. This acquisition allows NuVasive the potential to accelerate its entry into the growing mechanical cervical disc replacement market.

In addition to the initial payment, the Company may be obligated to make an additional milestone payment of $33 million if the U.S. Food and Drug Administration (FDA) issues an approval order allowing the commercialization of Cervitech’s PCM device in the United States with an intended use for treatment of degenerative disc disease. The milestone payment may be made in cash or a combination of cash and up to half in NuVasive common stock, at the Company’s discretion.

Purchase Price

The acquisition of Cervitech was recorded using the acquisition method of accounting in accordance with the revised authoritative guidance for business combinations.

The estimated purchase price is determined as follows (in thousands):

Cash paid to sellers	$	25,055
Market value of NuVasive common stock issued on Closing Date		24,215
Contingent consideration liability, due on achieving milestone		29,722
Total estimated purchase price	$	78,992

The preliminary allocation of the estimated purchase price is based on management’s preliminary valuation of the fair value of tangible, intangible assets and in-process research and development acquired and liabilities assumed as of the Closing Date and such estimates are subject to revision. The area of the purchase price allocation that is not yet finalized relates primarily to the valuation of income tax related assets acquired. Consequently, the amounts recorded at December 31, 2009 are subject to change, and the final amounts may differ. The following table summarizes the allocation of the estimated initial purchase price (in thousands):

	Estimated			Estimated Useful
	Fair Value			Life
Total current assets	$	1,233			—
Property, plant and equipment		59			—
Developed technology		700			14 years
Non-compete agreement		100			2 years
Trade name		700			10 years
In-process research and development		34,800			14 years
Goodwill		55,443
Current liabilities		(483	)
Deferred income tax liabilities		(13,560	)
Total estimated initial purchase price allocation	$	78,992

The Goodwill balance related to the Cervitech Acquisition was $55.4 million as of December 31, 2009. Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired. Of the $55.4 million recorded as goodwill, none is expected to be deductible for tax purposes.

Contingent Consideration Liability

The arrangement requires the Company to pay an additional amount not to exceed $33 million in the event that Cervitech’s device receives FDA approval. The fair value of the contingent consideration at the Closing Date was

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determined to be $29.7 million using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observable in the market. The key assumptions in applying this approach were the interest rate and the probability assigned to the milestone being achieved. Management will remeasure the fair value of the contingent consideration at each reporting period, with any change in its fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in the estimate of the probability of achieving the milestone, being recorded in the current period’s earnings. During the year ended December 31, 2009, there were no changes in estimate to affect the fair value of the contingent consideration liability other than accretion related solely to the passage of time. For the year ended December 31, 2009, the Company recorded approximately $1.0 million in expense to reflect the change in the fair value of the contingent consideration and increasing the fair value of the contingent consideration liability to $30.7 million at December 31, 2009. The $1.0 million change in fair value is recorded in the statement of operations as sales, marketing and administrative expenses.

Results of Operations

The accompanying consolidated statement of operations for the year ended December 31, 2009 reflect the operating results of Cervitech since the date of the acquisition. The amount of loss attributable to Cervitech included in the Company’s consolidated statement of operations from the acquisition date to December 31, 2009 was $3.3 million. For the year ended December 31, 2009, the Company’s consolidated results of operations include acquisition-related expenses of $1.3 million which are included in sales, marketing and administrative expenses.

The Company has prepared the following unaudited pro forma financial statement information to compare results of the periods presented assuming the Cervitech acquisition had occurred as of the beginning of the periods presented. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be an indicator of the results of operations that would have actually resulted had the acquisition occurred at the beginning of each of the periods presented, or of future results of operations.

	Year Ended
	December 31,
	2009		2008
Revenue	$	370,878	$	252,625
Net income (loss) attributable to NuVasive, Inc.	$	3,879	$	(38,427	)
Net income (loss) per share — basic and diluted	$	0.10	$	(1.05	)

The above pro forma unaudited results of operations do not include pro forma adjustments relating to costs of integration or post-integration cost reductions that may be incurred or realized by the Company in excess of actual amounts incurred or realized through December 31, 2009.

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 intends to further extend the existing knowledge and patent position in the field of Osteoinductive Bone Graft Material Technology. Since inception in January 2008, Progentix has incurred approximately $3.8 million in losses.

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

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obligations under the Loan Agreement, NuVasive is not obligated to provide additional funding to Progentix. At December 31, 2009, the Company had advanced Progentix $3 million in accordance with the Loan Agreement.

Concurrent with the Preferred Stock Purchase Agreement, NuVasive, Progentix and the Progentix Shareholders entered into an Option Purchase Agreement dated January 13, 2009, as amended (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 an amount up to $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 shareholders, excluding NuVasive, of up to an aggregate total of $25 million, payable in a combination of cash and/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, as amended, 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 an amount up to $35 million, payable in a combination of cash and/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 an amount up to $35 million. NuVasive and Progentix also entered into a Distribution Agreement, as amended, 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.

In accordance with authoritative guidance issued by the FASB, the Company has determined that Progentix is a variable interest entity (VIE) as it does not have the ability to finance its activities without additional subordinated financial support and its equity investors will not absorb their proportionate share of expected losses and will be limited in the receipt of the potential residual returns of Progentix. Additionally, pursuant to this guidance, NuVasive is considered its primary beneficiary as NuVasive has the obligation to absorb a majority of the expected losses and the right to receive a majority of expected residual returns of Progentix. This conclusion was reached due to the existence of 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. Accordingly, the financial position and results of operations of Progentix have been included in the consolidated financial statements from the date of the Initial Investment. The liabilities recognized as a result of consolidating Progentix do not represent additional claims on the Company’s general assets. The creditors of Progentix have claims only on the assets of Progentix, which are not material, and the assets of Progentix are not available to NuVasive.

Pursuant to authoritative guidance, the equity interests in Progentix not owned by the Company, which includes shares of both common and preferred stock, are reported as noncontrolling interests on the consolidated balance sheet of the Company. The preferred stock represents 18% of the noncontrolling equity interests and provides for a cumulative 8% dividend, if and when declared by Progentix’s Board of Directors. As the rights and conversion features of the preferred stock are substantially the same as those of the common stock, the preferred stock is classified as noncontrolling interest and shares in the allocation of the losses incurred by Progentix. 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 authoritative guidance. 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.

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Pursuant to authoritative guidance, 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 December 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 December 31, 2009, 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 at each reporting period.

On December 30, 2009, NuVasive, Progentix and the Progentix Shareholders entered into an amendment (the Amendment) to the Option Agreement and the Distribution Agreement in connection with the execution of an exclusive supply agreement between the Company and Ceremed, Inc. The Amendment extends by five months the period of time allotted for the achievement of each of the milestones required to trigger the Put Options, reduces the original amounts to be paid upon the exercise of the Put and Call Options by an amount up to $14 million, and reduces the transfer price to be paid to Progentix by NuVasive for the supply of product. As the Remaining Shares and the Option Agreement are accounted for as a combined unit in the consolidated financial statements, this amendment resulted in the redemption of the noncontrolling equity interests originally issued in January 2009, and in accordance with authoritative guidance, the noncontrolling equity interests were recorded at fair value as of December 30, 2009, the date of the amendment. The fair value of the equity interests issued on December 30, 2009 approximated the carrying value of the noncontrolling equity interests on that date.

In accordance with authoritative guidance, 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 December 31, 2009 are included below. Total assets and liabilities of Progentix as of December 31, 2009 are as follows (in thousands):

Total current assets	$	581
Identifiable intangible assets, net		16,357
Goodwill		12,654
Accounts payable & accrued expenses		467
Other long term liabilities		82
Deferred tax liabilities		4,140
Noncontrolling interests		13,629

Intangible assets consolidated pursuant to the Progentix investment are included in the Intangible assets, net balance in the consolidated balance sheet as of December 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	$	145	$	155
Existing technology		13		5,400		398		5,002
In-process research and development		—		11,200		—		11,200
Total Progentix intangible assets			$	16,900	$	543	$	16,357

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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 $35.0 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 these Agreements, NuVasive was obligated to make additional payments of up to $50.0 million, including milestone-based contingent payments not to exceed $20.0 million and a non-contingent $30.0 million payment. The contingent payments were based on achieving specified sales amounts and were not included in the preliminary estimate of the purchase price of the Osteocel Biologics Business. The Company paid the first milestone of $5 million in cash during the fourth quarter of 2008. During the year ended December 31, 2009, the Company paid all remaining obligations in cash totaling $5.0 million and through the issuance of 1,001,421 shares of the Company’s common stock with a market value of $40.0 million.

The Company’s purchase price allocation was updated in 2009 to reflect the milestone-based payments made in 2009 and to reflect the impact of the amendments made to the Agreements in March 2009, which eliminated the performance contingencies applicable to $30.0 million of the $45.0 million in then-remaining milestones.

This acquisition provides NuVasive with a comprehensive stem cell biologic platform with benefits similar to autograft, as well as rights to acquire the next generation cultured version of the product. Osteocel is a unique bone matrix product that provides the three beneficial properties similar to autograft: osteoconduction (provides a scaffold for bone growth), osteoinduction (bone formation stimulation) and osteogenesis (bone production). Osteocel allows surgeons to offer the benefits of these properties to patients without the discomfort and potential complications of autograft harvesting, in addition to eliminating the time spent on a secondary surgical procedure. Osteocel is produced for use in spinal applications through a proprietary processing method that preserves the native stem cell population that resides in marrow rich bone.

Purchase Price

The purchase price has been allocated to the tangible and intangible assets acquired based on their respective fair values as of the Technology Closing Date. The allocation of the purchase price resulted in an excess of the total purchase price over the fair value of net tangible and intangible assets acquired by approximately $33.7 million.

The purchase price is determined as follows (in thousands):

Cash paid on Technology Closing Date	$	35,000
Cash payments		10,000
Market value of NuVasive common stock issued		39,371
Transaction costs and other		544
Total purchase price	$	84,915

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The following table summarizes the allocation of the purchase price (in thousands):

	Estimated		Estimated Useful
	Fair Value		Life
Manufacturing know-how and trade secrets	$	19,800		13 years
Developed technology		7,200		10 years
Discounted price purchase contract		2,500		0.5 years
Trade name and trademarks		4,700		15 years
Customer contracts and relationships		330		0.5-2 years
In-process research and development		16,700		—
Goodwill		33,685		—
Total estimated initial purchase price allocation	$	84,915

The Company recorded an in-process research and development (IPR&D) charge of $16.7 million related to the Osteocel Biologics Business Acquisition. 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 and is reported as a separate IPR&D line item on the statement of operations.

Radius Acquisition

On January 23, 2007, NuVasive and Radius Medical, LLC (Radius), along with certain members and managers of Radius, entered into an Asset Purchase Agreement (the Purchase Agreement) providing for the acquisition by NuVasive of substantially all of Radius’ right, title and interest in and to the assets used by Radius in connection with the design, development, marketing and distribution of collagen-based medical biomaterials, together with the intellectual property rights, contractual rights, inventories, and certain liabilities related thereto. In connection with the transaction, Radius received net cash payments of approximately $5.0 million and 451,677 unregistered shares of NuVasive common stock. The Company has included the results of the acquired Radius operations in its statement of operations from the date of the acquisition. The Company does not consider the Radius acquisition material to its results of operations or financial position, and therefore is not presenting pro forma information.

The transaction provides NuVasive with a biologic product, FormaGraft^®, a synthetic bone void filler designed to aid in bone growth with fusion procedures, and a platform for future development. FormaGraft received 510(k) clearance from the Food and Drug Administration (FDA) in May 2005. The acquisition is consistent with the Company’s objectives of developing or acquiring innovative technologies.

As part of the acquisition, NuVasive also acquired, as of January 23, 2007, all of Radius’ right, title and interest in and to that certain Supply Agreement dated November 4, 2004, by and between Maxigen Biotech, Inc. (MBI) and Radius, as amended to date (the MBI Supply Agreement). MBI is a Taiwanese company that manufactures FormaGraft and owns a portion of the core technology underlying FormaGraft. Under the MBI Supply Agreement and following NuVasive’s succession to Radius’ interest therein, MBI has agreed to exclusively sell to NuVasive (and NuVasive has agreed to exclusively purchase from MBI) such quantities as NuVasive may order of all current and future products manufactured by MBI for use as synthetic bone graft substitutes consisting of certain collagens or ceramics, and grants exclusive distributor rights to NuVasive for North America, EU countries, South American and Central American countries, Australia, New Zealand and their respective territories (with additional territories on a non-exclusive basis). NuVasive is required to purchase a minimum of $0.9 million of product from MBI per calendar year. In 2009 and 2008, NuVasive purchased a total of $0.9 million and $1.5 million of product from MBI, respectively. MBI has also granted to NuVasive an exclusive, perpetual, royalty-free license to use all such MBI products, and all related proprietary rights and proprietary information relating thereto, including without limitation, rights to conduct research and development, develop modifications, improvements or additional

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products and to use and sell such improvements and additional products. Radius was required to pay MBI a one-time license fee in consideration for the above described license, which obligation was satisfied by Radius.

Purchase Price

The total purchase consideration consisted of (in thousands):

Net cash paid to Radius	$	4,970
Market value of NuVasive common stock issued on the Closing Date		10,501
Cash deposited in escrow		2,000
Acquisition-related costs, consisting primarily of professional fees		306
Total purchase price	$	17,777

The Company has allocated the total purchase consideration to the assets acquired based on their respective fair values at the acquisition date. The following table summarizes the allocation of the purchase price (in thousands).

MBI Supply Agreement	$	9,400
Licensed technology		7,145
Inventory		132
Goodwill		1,100
Total purchase price	$	17,777

In connection with the acquisition of Radius, NuVasive made a separate $2.0 million equity investment in MBI. On May 1, 2007, the equity investment in MBI was completed resulting in NuVasive ownership of approximately 9% of MBI. The Company accounts for this investment at cost and includes it in other assets on the consolidated balance sheet. As of December 31, 2009, there have been no indicators of impairment of the Company’s investment in MBI.

3.   Asset Acquisitions

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 as the associated projects had not yet reached technological feasibility and had no alternative future uses.

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4.   Marketable Securities.

Marketable securities include U.S. government treasury securities, government-sponsored entity securities and corporate notes that are classified as available-for-sale. A summary of the Company’s marketable securities, including the gross unrealized gains and losses and fair values for those marketable securities, are as follows (in thousands):

	Contractual				Gross		Gross
	Maturity				Unrealized		Unrealized
	(in Years)		Cost		Gains		Losses			Fair Value
December 31, 2009:
Classified as current assets
Certificates of deposit		Less than 1	$	1,979	$	—	$	(6	)	$	1,973
Corporate notes		Less than 1		4,955		4		—			4,959
U.S. government treasury securities		Less than 1		27,963		24		(4	)		27,983
Securities of government-sponsored entities		Less than 1		64,317		67		(20	)		64,364
Short-term marketable securities				99,214		95		(30	)		99,279
Classified as non-current assets
Securities of government-sponsored entities		1 to 2		40,026		8		(66	)		39,968
Total marketable securities at December 31, 2009			$	139,240	$	103	$	(96	)	$	139,247

				Gross		Gross
				Unrealized		Unrealized
	Cost			Gains		Losses			Fair Value
December 31, 2008:
Classified as current assets
Money market funds	$	118,129		$	—	$	—		$	118,129
Commercial paper		1,452			—		(2	)		1,450
Corporate notes		4,283			4		(6	)		4,281
Securities of government-sponsored entities		40,054			197		(5	)		40,246
		163,918			201		(13	)		164,106
Less cash equivalents		(118,368	)		—		—			(118,368	)
Short-term marketable securities		45,550			201		(13	)		45,738
Classified as non-current assets
Corporate notes		4,467			15		(52	)		4,430
Securities of government-sponsored entities		40,495			380		—			40,875
Total marketable securities at December 31, 2008	$	90,512		$	596	$	(65	)	$	91,043

The Company reviews its investments to identify and evaluate investments that have an indication of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and

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near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. At December 31, 2009, all of the Company’s investments in a gross unrealized loss position had been in such a position for less than twelve months. These declines in value are not considered other-than-temporary as the Company has both the intent and ability to hold these investments until their maturity. The Company does not use derivative financial instruments. The Company places our cash investments in instruments that meet high credit quality standards, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument.

Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. Realized gains and losses for securities sold were immaterial for all years presented. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income.

5.   Fair Value Measurements

Effective January 1, 2008, the Company adopted the authoritative guidance for the fair value measurements, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. The Company measures certain assets at fair value and thus there was no impact on the Company’s consolidated financial statements upon adoption of the guidance. The guidance requires fair value measurements 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’s assets and liabilities, which are measured at fair value on a recurring basis, at December 31, 2009 were determined using the following inputs (in thousands):

			Quoted Price		Significant		Significant
			in Active		Other		Unobservable
			Market		Observable		Inputs
	Total		(Level 1)		Inputs (Level 2)		(Level 3)
Marketable securities:
U.S government treasury securities	$	27,983	$	27,983	$	—	$	—
Securities of government-sponsored entities		104,332		104,332		—	$	—
Corporate notes		4,959		4,959		—	$	—
Certificates of deposit		1,973		1,973		—	$	—
Total marketable securities at December 31, 2009	$	139,247	$	139,247	$	—	$	—
Contingent Consideration:
Long-term acquisition related liabilities	$	30,694	$	—	$	—	$	30,694

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The following table sets forth the change in the estimated fair value for the Company’s liability measured using significant unobservable inputs (level 3) for the year ended December 31, 2009 (in thousands).

	Fair Value Measurement
	Using
	Significant Unobservable
	Inputs
	(Level 3)
Fair Value Measurement at December 31, 2008	$	—
Contingent consideration liability recorded upon acquisition		29,722
Change in fair value measurement included in operating expenses		972
Fair Value Measurement at December 31, 2009	$	30,694

Effective January 1, 2009, the Company implemented the authoritative guidance for nonfinancial assets and liabilities that are remeasured at fair value on a non-recurring basis. As the Company has not elected to measure any non-financial assets or liabilities at fair value that were not previously required to be remeasured at fair value, the adoption of this guidance did not have a material impact on the financial position or results of operations. However, it could have an impact in future periods.

6.   Balance Sheet Details

Property and Equipment, net.  Property and equipment, net, consisted of the following (in thousands):

	December 31,
	2009			2008
Instrument sets	$	85,730		$	62,376
Machinery and equipment		14,899			10,077
Computer equipment and software		12,449			16,190
Leasehold improvements		15,156			15,470
Furniture and fixtures		5,243			3,583
Land, building and improvements		5,511			5,333
		138,988			113,029
Less: accumulated depreciation and amortization		(56,386	)		(39,343	)
	$	82,602		$	73,686

Depreciation expense was $23.4 million, $17.0 million, and $11.4 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Goodwill and Intangible Assets.  Goodwill and intangible assets were acquired in connection with business combinations and asset acquisitions discussed in Notes 2 and 3.

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Goodwill and intangible assets as of December 31, 2009 consisted of the following (in thousands):

	Weighted-
	Average		Gross
	Amortization		Carrying		Accumulated			Intangible
	(in years)		Amount		Amortization			Assets, net
Intangible Assets Subject to Amortization:
Purchased technology:
Developed technology		15	$	31,975	$	(5,548	)	$	26,427
Manufacturing know-how and trade secrets		13		20,408		(2,394	)		18,014
Trade name and trademarks		14		5,900		(520	)		5,380
Customer relationships		14		9,730		(2,213	)		7,517
			$	68,013	$	(10,675	)	$	57,338
Intangible Assets Not Subject to Amortization:
In-process research and development									46,000
Goodwill									102,882
Total Intangible assets, net								$	206,220

Goodwill and intangible assets as of December 31, 2008 consisted of the following (in thousands):

	Weighted-
	Average		Gross
	Amortization		Carrying		Accumulated			Intangible
	(in years)		Amount		Amortization			Assets, net
Intangible Assets Subject to Amortization:
Purchased technology:
Developed technology		15	$	25,875	$	(3,165	)	$	22,710
Manufacturing know-how and trade secrets		13		19,800		(647	)		19,153
Trade name and trademarks		15		4,700		(133	)		4,567
Customer relationships		14		9,730		(1,392	)		8,338
			$	60,105	$	(5,337	)	$	54,768
Intangible Assets Not Subject to Amortization:
Goodwill									2,331
Total Intangible assets, net								$	57,099

Total expense related to the amortization of intangible assets was $5.3 million, $3.0 million and $1.5 million for the years ended December 31, 2009, 2008 and 2007, respectively.

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Total future amortization expense related to intangible assets subject to amortization at December 31, 2009 is set forth in the table below (in thousands):

2010	$	5,334
2011		5,070
2012		5,048
2013		5,043
2014		5,056
Thereafter through 2027		31,787
Total future amortization expense	$	57,338

The change to goodwill during the year ended December 31, 2009 is comprised of the following (in thousands):

Balance at December 31, 2008	$	2,331
Additions recorded in connection with investment in Progentix		12,654
Additions recorded in connection with additional payments to Osiris		32,454
Additions recorded in connection with acquisition of Cervitech		55,443
Balance at December 31, 2009	$	102,882

Accounts Payable and Accrued Liabilities.  Accounts payable and accrued liabilities consisted of the following (in thousands):

	December 31,
	2009		2008
Accounts payable	$	10,594	$	15,656
Accrued expenses		15,550		10,669
Other		345		308
	$	26,489	$	26,633

Other Long-Term Liabilities.  Other long-term liabilities consisted of the following (in thousands):

	December 31,
	2009		2008
Deferred rent	$	10,333	$	9,256
Deferred tax liabilities		17,700		—
Other		439		2,921
	$	28,472	$	12,177

7.   Senior Convertible Notes

In March 2008, the Company issued $230.0 million principal amount of 2.25% unsecured Senior Convertible 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 pays 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 fair value of the outstanding Notes at December 31, 2009 is approximately $228.1 million.

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The Notes are convertible into shares of the Company’s common stock, 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 thereof plus accrued and unpaid interest.

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 December 31, 2008. 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.   Commitments

Leases

The Company leases office facilities and equipment under various operating lease agreements. The initial terms of these leases range from three years to 15 years and generally provide for periodic rent increases and renewal options. Certain leases require the Company to pay taxes, insurance and maintenance.

In November 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 common area maintenance 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.

In connection with this relocation, in the third quarter of 2008, the Company recorded a liability for approximately $3.9 million related to lease termination costs in connection with vacating the Company’s former corporate headquarters. During the third quarter of 2009, due to continued growth, the Company decided to reoccupy the former corporate headquarters facility and accordingly, reversed the remaining lease termination costs liability of $2.0. This amount was recorded as a reduction of sales, marketing, and administrative expenses for the year ended December 31, 2009. The activity for this liability is summarized as follows (in thousands):

	August 1,					December 31,					Reversal of			December 31,
	2008		Cash expenses			2008		Cash expenses			liability			2009
Lease termination liabiltiy	$	3,886	$	(717	)	$	3,169	$	(1,172	)	$	(1,997	)	$	—

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

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consolidated balance sheets. Rent expense, including expenses directly associated with the facility leases, was approximately $6.4 million, $4.4 million, and $1.8 million for the years ended December 31, 2009, 2008, and 2007, respectively.

The Company’s future minimum annual lease payments, including payments for costs directly associated with the facility leases, for years ending after December 31, 2009 are as follows (in thousands):

	Operating
	Leases
2010	$	7,214
2011		7,302
2012		7,014
2013		6,042
2014		4,958
Thereafter		49,684
Total minimum payments	$	82,214

Other Commitments

In connection with the acquisition of RSB, the Company is contingently obligated to make additional annual payments over a period of 12 years based upon sales of the products derived from Smart Plate^® Gradient CLP^tm and related technology. Through December 31, 2009, these amounts have not been significant.

As a result of the acquisition of Radius Medical LLC in January 2007, the Company is obligated to purchase, on an annual basis, a minimum number of units of FormaGraft from Maxigen Biotech, Inc. at an annual cost of approximately $900,000.

In connection with the investment in Progentix as described in Note 2, the Company is contingently obligated to make additional payments of up to $69 million based upon the achievement of specified milestones. In addition, the Company is obligated to advance an additional $2 million in accordance with the terms a loan agreement entered into in conjunction with the investment.

In connection with the acquisition of Cervitech as described in Note 2, the Company is contingently obligated to make additional payments up to $33 million upon FDA approval of the PCM device. The milestone payment may be made in cash or a combination of cash and up to half in NuVasive common stock, at the Company’s discretion.

Contingencies

The Company is party to certain claims and legal actions arising in the normal course of business. The Company does not expect any such claims and legal actions to have a material adverse effect on its business, results of operations or financial condition.

9.   Stockholders’ Equity

Preferred Stock.  There are 5,000,000 shares of preferred stock authorized and none issued or outstanding at December 31, 2009 and 2008.

Stock Option and Restricted Stock Units.  In October 1998, the Company adopted the 1998 Stock Incentive Plan (the 1998 Plan) to grant options to purchase common stock to eligible employees, non-employee members of the board of directors, consultants and other independent advisors who provide services to the Company. Under the 1998 Plan, 4.3 million shares of common stock, as amended, were reserved for issuance upon exercise of options

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granted by the Company. The board of directors determines the terms of the stock option agreements, including vesting requirements. Options under the 1998 Plan have a 10-year term and generally vest over a period not to exceed four years from the date of grant. All options granted under the 1998 Plan allow for early exercise prior to the option becoming fully vested. Unvested common shares obtained upon early exercise of options are subject to repurchase by the Company at the original issue price.

In April 2004, the board of directors replaced the 1998 Plan with the 2004 Equity Incentive Plan (the 2004 Plan) under which 7 million shares (plus the remaining shares available for grant under the 1998 Plan) of the Company’s common stock are authorized for future issuance, and reserved for purchase upon exercise of options granted. In addition, the 2004 Plan provides for automatic annual increases in the number of shares reserved for issuance thereunder equal to the lesser of (i) 4% of the Company’s outstanding shares on the last business day in December of the calendar year immediately preceding; (ii) 4,000,000 shares; or (iii) a number of shares determined by the board of directors. As of December 31, 2009, 39,786 shares remained available for future grant under the 2004 Plan.

The 2004 Plan provides for the grant of incentive and nonstatutory stock options, restricted stock units (RSUs) and rights to purchase stock to employees, directors and consultants of the Company. The 2004 Plan provides that incentive stock options will be granted only to employees and are subject to certain limitations as to fair value during a calendar year. Under the 2004 Plan, the exercise price of incentive stock options must equal at least the fair value on the date of grant and the exercise price of non-statutory stock options and the issuance price of common stock under the stock issuance program may be no less than 85% of the fair value on the date of grant or issuance. The options are exercisable for a period of up to ten years after the date of grant and generally vest 25% one year from date of grant and ratably each month thereafter for a period of 36 months. The RSUs generally vest 25% per year beginning one year from date of grant. In addition, the board of directors has provided for the acceleration of 50% of the unvested options of all employees upon a change in control and the vesting of the remaining unvested options for those employees that are involuntarily terminated within a year of the change in control.

Following is a summary of stock option activity through December 31, 2009 under all stock option plans (in thousands, except per share amounts):

						Weighted-Average		Aggregate
				Weighted		Remaining		Intrinsic
	Underlying			Avg. Exercise		Contractual		Value as of
	Shares			Price		Term (Years)		December 31, 2009
Outstanding at December 31, 2008		5,205		$	25.92
Granted		1,371		$	35.01
Exercised		(769	)	$	15.12
Cancelled		(90	)	$	32.63
Outstanding at December 31, 2009		5,717		$	29.44		7.45	$	32,950
Exercisable at December 31, 2009		3,089		$	24.49		6.63	$	29,867
Vested or Expected to Vest at December 31, 2009		5,533		$	27.29		7.36	$	41,901

The aggregate intrinsic value of options at December 31, 2009 is based on the Company’s closing stock price on December 31, 2009 of $31.98. The Company received $9.3 million, $8.8 million and $5.4 million in proceeds from the exercise of stock options during the years ended December 31, 2009, 2008 and 2007, respectively.

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Restricted Stock Units.  A summary of restricted stock unit (RSU) activity for the period indicated was as follows:

				Weighted
				Average
	Number of			grant Date
	Shares			Fair Value
Nonvested at December 31, 2008		—		$	—
Granted		293,150			36.51
Vested		—			—
Cancelled		(16,800	)		34.58
Nonvested at December 31, 2009		276,350		$	36.62

As the Company began issuing RSUs in January 2009 with annual vesting, no awards vested during the year ended December 31, 2009.

Employee Stock Purchase Plan.  In 2004, the board of directors approved the Employee Stock Purchase Plan (ESPP). The ESPP initially allowed for the issuance of up to 100,000 shares of NuVasive common stock, increasing annually on December 31 by the lesser of (i) 600,000 shares; (ii) 1% of the outstanding shares of NuVasive common stock; or (iii) a lesser amount determined by the board of directors. Under the terms of the ESPP, employees can elect to have up to 15% of their annual compensation, up to a maximum of $25,000 per year withheld to purchase shares of NuVasive common stock. The purchase price of the common stock is equal to 85% of the lower of the fair market value per share of the common stock on the commencement date of the two-year offering period or the end of each semi-annual purchase period. In 2009, 2008, and 2007, 106,575, 131,916, and 113,494 shares, respectively, were purchased under the ESPP and approximately 1.1 million remain available for issuance under the ESPP as of December 31, 2009.

Stock-Based Compensation.  The compensation cost that has been included in the statement of operations for all share-based compensation arrangements was as follows (in thousands, except per share amounts):

	Years Ended December 31,
	2009			2008			2007
Sales, marketing and administrative expense	$	19,549		$	17,837		$	11,404
Research and development expense		4,244			3,110			2,217
Stock-based compensation expense	$	23,793		$	20,947		$	13,621
Effect on basic net income (loss) per share	$	(0.64	)	$	(0.58	)	$	(0.39	)
Effect on diluted net income (loss) per share	$	(0.61	)	$	(0.58	)	$	(0.39	)

The Company estimates the fair value of stock options and shares issued to employees under the Employee Stock Purchase Plan using a Black-Scholes option-pricing model on the date of grant. The fair value of RSUs is based on the stock price on the date of grant. The fair value of equity instruments that are expected to vest are recognized and amortized on an accelerated basis over the requisite service period. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, expected term and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options. The expected term of the Company’s stock options is based on historical experience. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

88

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the Employee Stock Purchase Plan (ESPP) are as follows:

	Year Ended December 31,
	2009	2008	2007
Stock Options
Volatility	45% to 48%	42% to 45%	50%
Expected term (years)	3.3 to 4.9	4.0 to 4.5	2.5 to 4.5
Risk free interest rate	1.4% to 2.5%	1.6% to 3.4%	3.4% to 4.9%
Expected dividend yield	0.0%	0.0%	0.0%
ESPP
Volatility	40% to 65%	42%	50%
Expected term (years)	0.5 to 2.0	0.5 to 2.0	0.5 to 2.0
Risk free interest rate	0.9% to 4.9%	1.5% to 3.0%	4.4% to 4.9%
Expected dividend yield	0.0%	0.0%	0.0%

The weighted-average fair value of options granted in the years ended December 31, 2009, 2008, and 2007, was $13.28, $14.46, and $10.81 per share, respectively. As of December 31, 2009, there was $13.5 million of unrecognized compensation expense for stock options which is expected to be recognized over a weighted-average period of approximately 1.1 years. In addition, as of December 31, 2009, there was $2.4 million of unrecognized compensation expense for shares expected to be issued under the Employee Stock Purchase Plan which is expected to be recognized through October 2011. The total intrinsic value of options exercised was $17.7 million, $28.1 million, and $20.2 million, respectively, the years ended December 31, 2009, 2008 and 2007.

At December 31, 2009, there was $6.1 million of unrecognized compensation cost related to RSUs which the Company will amortize to expense in over a weighted-average period of approximately 3.3 years. Unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

Common Stock Reserved for Future Issuance.  The following table summarizes common shares reserved for issuance at December 31, 2009 on exercise or conversion of (in thousands):

Common stock options:
Issued and outstanding	5,717
Available for future grant	40
Available for issuance under the Employee Stock Purchase Plan	1,104
Issued and outstanding Restricted Stock Units	276
Senior Convertible Notes	5,141
Senior Convertible Note warrants	5,141
Total shares reserved for future issuance	17,419

89

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.   Income Taxes

The income (loss) before income taxes by region is summarized as follows (in thousands):

	Year Ended December 31,
	2009			2008			2007
	(In thousands)
United States	$	13,093		$	(26,671	)	$	(11,348	)
Foreign		(6,924	)		(857	)		83
Total income (loss) before income taxes	$	6,169		$	(27,528	)	$	(11,265	)

The components of income tax expense consists of the following (in thousands):

	Year Ended December 31,
	2009			2008		2007
Current income tax expense:
Federal	$	715		$	—	$	—
State		1,763			—		—
Foreign		36			—		—
Total current		2,514			—		—
Deferred income tax expense:		—			—		—
Federal		—			—		—
State		—			—		—
Foreign		(782	)		—		—
Total deferred		(782	)		—		—
Total income tax expense	$	1,732		$	—	$	—

The income tax expense (benefit) is different from that which would be obtained by applying the statutory federal income tax rate (35%) to income before taxes and before reduction for non-controlling interests. These differences are the result of the following items (in thousands):

	Year Ended December 31,
	2009			2008			2007
Provision at statutory rate	$	2,159		$	(9,635	)	$	(3,943	)
Foreign provision in excess of federal statutory rate		498			52			—
State income taxes (benefit), net of federal benefit		1,146			97			—
Permanent differences		3,323			1,751			2,093
Other		471			253			(1,285	)
Change in valuation allowance		(5,865	)		7,482			3,135
Total income tax expense	$	1,732		$	—		$	—

90

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2009			2008
Deferred Tax Assets:
Net operating loss carry-forwards	$	31,422		$	31,854
Capitalized assets		15,566			21,201
Stock based compensation		16,357			9,939
Original issue discount		12,222			15,097
General business credit carry-forwards		3,564			4,974
Other		5,491			2,351
Gross deferred tax assets		84,622			85,416
Net valuation allowance		(84,010	)		(85,416	)
Net deferred tax assets	$	612		$	—
Deferred Tax Liabilities:
Acquired intangibles	$	(17,700	)	$	—
Deferred tax liabilities		(17,700	)		—
Consolidated net deferred tax assets (liabilities)		(17,088	)		—
Less: Deferred tax liability, net, attributable to noncontrolling interests		2,117			—
Net deferred tax assets (liabilities)	$	(14,971	)	$	—

With the exception of Puerto Rico and the Netherlands, the Company continues to maintain a full valuation allowance on its net deferred tax assets in all jurisdictions. During 2009, the Company established a U.S. deferred tax liability pertaining to intangibles, purchased as part of its Cervitech stock acquisition, for which tax basis does not exist. Such deferred tax liability cannot be used to offset deferred tax assets when analyzing the Company’s end of year valuation allowance as the acquired intangibles are indefinite lived.

Included in the Company’s net deferred tax liability balance at December 31, 2009, is a $12.2 million deferred tax asset pertaining to future tax deductions of original issue discount related to the Company’s 2008 Treas. Reg. § 1.1275-6 hedge transaction. The aforementioned deferred tax asset and corresponding valuation allowance were recorded with an offset to additional-paid-in-capital (APIC). If, and when, the Company’s valuation allowance is released, any remaining benefit attributable to such deferred tax asset will be recognized as an increase to APIC. Further, any current year benefit associated with original issue discount deductions is recognized as an increase to APIC.

At December 31, 2009, the Company has federal net operating loss carryovers of $115.0 million that begin to expire in 2017. In addition, the Company has state net operating loss carryovers of approximately $74.0 million which will begin to expire in the year prescribed by applicable state statute.

Included in the aforementioned federal and state net operating loss carryovers are $39.0 million of excess tax benefit carryovers related to stock option deduction windfalls that will be realized in APIC following utilization of all continuing operations tax attributes.

During 2008, NuVasive elected the “with and without method — direct effects only,” prescribed in accordance with authoritative guidance, with respect to recognition of stock option excess tax benefits within APIC and will utilize continuing operations net operating losses to offset taxable income before utilization of windfall tax benefits.

91

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At December 31, 2009, the Company has federal research and development (“R&D”) credit carryovers of approximately $2.2 million which will begin to expire in 2017. At December 31, 2009, the Company has California R&D credit carryovers of approximately $2.1 million which can be carried forward indefinitely.

IRC §382 limits the utilization of tax attribute carryforwards that arise prior to certain cumulative changes in a corporation’s ownership. During 2009, the Company completed a formal IRC §382 study with respect to potential ownership changes and additional limitations were not identified. Previous limitations due to §382 have been reflected in the deferred tax asssets at December 31, 2009.

In accordance with authoritative guidance, 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 taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Unrecognized tax benefits balance at December 31, 2007	$	—
Increase related to prior year tax positions		981
Unrecognized tax benefits balance at December 31, 2008		981
Increase related to prior year tax positions		2,293
Unrecognized tax benefits balance at December 31, 2009	$	3,274

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. Because the Company has generated net operating losses since inception for both state and federal purposes, no additional tax liability, penalties or interest has been recognized for balance sheet or income statement purposes as of and for the period ended December, 31, 2009.

Of the Company’s total unrecognized tax benefits on December 31, 2009 and 2008, $2.1 million and $637,000, respectively, would impact the Company’s effective income tax rate if recognized, were the Company to remove its valuation allowance.

The Company may have significant changes to their unrecognized tax benefits for R&D credits when the formal R&D credit study is completed, which is expected to be within the next 12 months. The Company cannot estimate the range of the possible changes at this time.

The Company is subject to taxation in the U.S. and various foreign and state jurisdictions. All of the Company’s tax years are subject to examination due to the carry forward of un-utilized net operating losses and R&D credits

11.   Legal Proceedings

UCLA Litigation

The Company has been involved in a series of related lawsuits involving families of decedents who donated their bodies through UCLA’s willed body program. The complaint alleges that the head of UCLA’s willed body program, Henry G. Reid, and a third party, Ernest V. Nelson, improperly sold some of the donated cadavers to the defendants (including NuVasive). Plaintiffs allege the following causes of action: (i) breach of fiduciary duty, (ii) negligence, (iii) fraud, (iv) negligent misrepresentation, (v) negligent infliction of emotional distress, (vi) intentional infliction of emotional distress, (vii) intentional interference with human remains, (viii) negligent interference with human remains, (ix) violation of California Business and Professions Code Section 17200 and (x) injunctive and declaratory relief. NuVasive been dismissed from these lawsuits by the trial court but the decision was appealed and in July 2008, the appellate court reversed the trial court’s decision to dismiss the

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NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company from these lawsuits. The Company has appealed this decision, the appellate court has heard the Company’s appeal and the Company is currently awaiting the decision of the Court.

Although the outcome of this lawsuit cannot be determined with certainty, the Company believes that they acted within the relevant law in procuring the cadavers for clinical research and intend to vigorously defend themselves against the claims contained in the complaint.

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 were later withdrawn by Medtronic, leaving nine patents. NuVasive brought counterclaims against Medtronic alleging infringement of certain of NuVasive’s patents. Because of the number of patents involved, each side selected three patents to proceed with in the first phase of the litigation. The Medtronic Litigation is still in its early stages. On January 11, 2010, the parties filed their opening claim construction briefs to provide their interpretations of the patent claims at issue in the initial phase of the case. On January 20, 2010, the parties filed their responsive claim construction briefs. A claim construction hearing is scheduled for February 25, 2010. A full schedule for the initial phase of the lawsuit, including a trial date for the patents included in the initial phase of the lawsuit, has not yet been set by the Court. NuVasive believes its own claims have merit and that Medtronic’s claims lack merit. As of December 31, 2009, the probability of a favorable outcome cannot be reasonably determined, nor can the Company reasonably estimate a potential loss, therefore, in accordance with the authoritative guidance on the evaluation of contingencies, the Company has not recorded an accrual related to this litigation.

Trademark Infringement Litigation

In September 2009, Neurovision Medical Products, Inc. (NMP) filed suit against NuVasive in the U.S. District Court for the Central District of California (Case No. 2:09-cv-06988-R-JEM) alleging trademark infringement and unfair competition. NMP is seeking cancellation of NuVasive’s “NeuroVision” trademark registrations, injunctive relief and damages based on NMP’s valuation of the “NeuroVision” mark. NuVasive intends to vigorously pursue defense of the claims, and on November 23, 2009, denied the allegations in the NMP’s complaint and filed a counterclaim against NMP for unfair competition and declaratory relief. The case is pending in the United States District Court and is in the early stages of the proceedings. An order establishing a schedule for the case is expected in the middle of 2010.

Contingencies

The Company is party to certain claims and legal actions arising in the normal course of business. The Company does not expect any such claims and legal actions to have a material adverse effect on its business, results of operations or financial condition.

93

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.   Quarterly Data (unaudited)

The following quarterly financial data, in the opinion of management, reflects all adjustments, consisting of normal recurring adjustments necessary, for a fair presentation of results for the periods presented (in thousands, except per share amounts):

	Year Ended December 31, 2009
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Total revenues	$	80,008		$	88,481		$	94,916		$	106,935
Cost of goods sold (excluding amortization of purchased technology)(1)(2)		12,999			14,235			15,874			18,002
Gross profit(1)(2)		67,009			74,246			79,042			88,933
Operating expenses:
Sales, marketing and administrative(1)(2)(3)(4)		60,527			60,274			61,720			72,476
Research and development(3)		8,586			8,178			9,874			10,943
Amortization of intangible assets(4)		1,336			1,372			1,364			1,263
Total operating expenses(1)(2)		70,449			69,824			72,958			84,682
Interest and other income (expense), net:
Interest income		732			383			203			189
Interest expense		(1,771	)		(2,060	)		(1,609	)		(1,676	)
Other income, net(5)		44			93			188			136
Total interest and other income (expense), net		(995	)		(1,584	)		(1,218	)		(1,351	)
Income (loss) before income taxes		(4,435	)		2,838			4,866			2,900
Income tax expense(5)		97			526			430			679
Consolidated net (loss) income	$	(4,532	)	$	2,312		$	4,436		$	2,221
Net income (loss) attributable to NuVasive, Inc.	$	(4,302	)	$	2,765		$	5,064		$	2,281
Basic and diluted net income (loss) per common share	$	(0.12	)	$	0.07		$	0.13		$	0.06

94

NUVASIVE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Year Ended December 31, 2008
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
Total revenues	$	51,184		$	57,417		$	66,915		$	74,566
Cost of goods sold (excluding amortization of purchased technology)(6)(7)		8,267			8,697			11,255			10,789
Gross profit(6)(7)		42,917			48,720			55,660			63,777
Operating expenses:
Sales, marketing and administrative(4)(6)(7)		39,728			42,506			54,566			52,326
Research and development		6,976			6,426			6,396			6,145
Amortization of intangible assets(4)		417			467			931			1,174
In-process research and development		4,176			—			16,700			—
Total operating expenses(6)(7)		51,297			49,399			78,593			59,645
Interest and other income (expense), net:
Interest income		1,137			1,777			1,460			1,225
Interest expense		(434	)		(1,663	)		(1,719	)		(1,755	)
Other income, net		23			70			113			98
Total interest and other income (expense), net		726			184			(146	)		(432	)
Consolidated net (loss) income	$	(7,654	)	$	(495	)	$	(23,079	)	$	3,700
Net income (loss) attributable to NuVasive, Inc.	$	(7,654	)	$	(495	)	$	(23,079	)	$	3,700
Basic and diluted net income (loss) per common share	$	(0.22	)	$	(0.01	)	$	(0.64	)	$	0.10

(1)	Expenses incurred for royalties have been reclassified from sales, marketing and administrative expense to cost of goods sold totaling $2.2 million, $2.1 million, and $2.0 million for the first quarter, second quarter, and third quarter of 2009, respectively.
(2)	Expenses incurred for depreciation of loaned instrument sets have been reclassified from cost of goods sold to sales, marketing and administrative expense totaling $4.0 million, $4.6 million, and $4.6 million for the first quarter, second quarter, and third quarter of 2009, respectively.
(3)	Expenses incurred for intellectual property litigation have been reclassified from research and development expense to sales, marketing and administrative expense totaling $1.6 million, $1.0 million, and $0.8 million for the first quarter, second quarter, and third quarter of 2009, respectively. No comparable reclassification was necessary for the 2008 periods.
(4)	Expenses incurred related to the amortization of intangible assets, which was previously included in sales, marketing and administrative expense, is now presented as a separate line item within operating expenses.
(5)	Expenses incurred related to income tax expense, which was previously included in other income (expense), net, is now presented as a separate line item.
(6)	Expenses incurred for royalties have been reclassified from sales, marketing and administrative expense to cost of goods sold totaling $1.7 million, $1.8 million, $2.1 million and $1.0 million for the first quarter, second quarter, third quarter, and fourth quarter of 2008, respectively.
(7)	Expenses incurred for depreciation of loaned instrument sets have been reclassified from cost of goods sold to sales, marketing and administrative expense totaling $2.5 million, $2.6 million, $3.1 million, and $3.6 million for the first quarter, second quarter, third quarter, and fourth quarter of 2008, respectively.

95

NuVasive, Inc.

Schedule II: Valuation Accounts

(In thousands)

	Balance at						Balance at
	Beginning of Period		Additions(1)		Deductions(2)		End of Period
Accounts Receivable Valuation Accounts
Year ended December 31, 2009	$	1,952	$	2,794	$	583	$	4,163
Year ended December 31, 2008	$	926	$	1,393	$	367	$	1,952
Year ended December 31, 2007	$	737	$	991	$	802	$	926

	Balance at						Balance at
	Beginning of Period		Additions(3)		Deductions(4)		End of Period
Inventory Reserve
Year ended December 31, 2009	$	2,778	$	6,507	$	4,210	$	5,075
Year ended December 31, 2008	$	3,614	$	3,208	$	4,044	$	2,778
Year ended December 31, 2007	$	3,100	$	3,551	$	3,037	$	3,614

(1)	Amount represents customer balances deemed uncollectible.
(2)	Uncollectible accounts written-off.
(3)	Amount represents excess and obsolete reserve recorded to cost of sales.
(4)	Excess and obsolete inventory written-off against reserve.

96

Exhibit
Number			Description
	2	.1	Asset Purchase Agreement, dated May 8, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on August 8, 2008)
	2	.2†	Amendment to Asset Purchase Agreement, dated September 30, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
	2	.3	Amendment No. 2 to Asset Purchase Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
	2	.4†	Share Purchase Agreement, by and among NuVasive, Inc. and the stockholders of Cervitech, Inc., as listed therein, dated April 22, 2009 (incorporated by reference to our Registration Statement on Form S-3 (File No. 333-159098) filed with the Commission on May 8, 2009)
	3	.1	Restated Certificate of Incorporation (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 13, 2004)
	3	.2	Restated Bylaws (incorporated by reference to our Current Report on Form 8-K filed with the Commission on December 15, 2008)
	4	.1	Second Amended and Restated Investors’ Rights Agreement, dated July 11, 2002, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	4	.2	Amendment No. 1 to Second Amended and Restated Investors’ Rights Agreement, dated June 19, 2003, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	4	.3	Amendment No. 2 to Second Amended and Restated Investors’ Rights Agreement, dated February 5, 2004, by and among NuVasive, Inc. and the other parties named therein (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	4	.4	Registration Rights Agreement, dated as of August 4, 2005, between NuVasive, Inc. and Pearsalls Limited (incorporated by reference to our Current Report on Form 8-K filed with the Commission on August 10, 2005)
	4	.5	Registration Rights Agreement Termination Agreement, dated as of September 26, 2006, between NuVasive, Inc. and Pearsalls Limited (incorporated by reference to our Current Report on Form 8-K filed with the Commission on September 29, 2006)
	4	.6	Indenture, dated March 7, 2008, between the NuVasive Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	4	.7	Form of 2.25% Convertible Senior Note due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	4	.8	Registration Rights Agreement, dated March 7, 2007, among NuVasive, Inc. and Goldman, Sachs & Co., and J.P. Morgan Securities Inc., related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	4	.9	Specimen Common Stock Certificate (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 16, 2006)
	10	.1#	1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	10	.2#	Form of Notice of Grant of Stock Option under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	10	.3#	Form of Stock Option Agreement under our 1998 Stock Option/Stock Issuance Plan, and form of addendum thereto (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	10	.4#	Form of Stock Purchase Agreement under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)

97

Exhibit
Number			Description
	10	.5#	Form of Stock Issuance Agreement under our 1998 Stock Option/Stock Issuance Plan (incorporated by reference to Amendment No. 4 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on May 11, 2004)
	10	.6#	Form of Stock Issuance Agreement under our 1998 Stock Option/Stock Issuance Plan, dated April 21, 2004, and May 4, 2004 (incorporated by reference to Amendment No. 4 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on May 11, 2004)
	10	.7#	2004 Equity Incentive Plan, as amended (incorporated by reference to Appendix A to our Definitive Proxy Statement filed with the Commission on April 11, 2007)
	10	.8#	Form of Stock Option Award Notice under our 2004 Equity Incentive Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004)
	10	.9#	Form of Option Exercise and Stock Purchase Agreement under our 2004 Equity Incentive Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004).
	10	.10#	Form of Restricted Stock Unit Award Agreement under our 2004 Equity Incentive Plan
	10	.11#	2004 Employee Stock Purchase Plan (incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on April 8, 2004)
	10	.12#	Amendment No. 1 to 2004 Employee Stock Purchase Plan (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
	10	.13#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Current Report on Form 8-K filed with the Commission on August 8, 2008)
	10	.14#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Keith C. Valentine (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.15#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.16#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Patrick Miles (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.17#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Jeffrey P. Rydin (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.18#	Compensation Letter Agreement, dated August 5, 2008, between NuVasive, Inc. and Jason M. Hannon (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.19#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.20#	Amendment No. 2 to Compensation Letter Agreement, dated August 5, 2009, between NuVasive, Inc. and Alexis V. Lukianov (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 6, 2009)
	10	.21#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Keith C. Valentine (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.22#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.23#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Patrick Miles (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)

98

Exhibit
Number			Description
	10	.24#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Jeffrey P. Rydin (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.25#	Amendment to Compensation Letter Agreement, dated December 10, 2008, between NuVasive, Inc. and Jason M. Hannon (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on March 2, 2009)
	10	.26#	Compensation Letter Agreement, dated November 4, 2009, between NuVasive, Inc. and Pat Miles
	10	.27#	Compensation Letter Agreement, dated November 4, 2009, between NuVasive, Inc. and Jeff Rydin
	10	.28#	Compensation Letter Agreement, dated December 28, 2009, between NuVasive, Inc. and Jason Hannon
	10	.29#	Offer Letter Agreement, dated October 19, 2009, between NuVasive, Inc. and Michael Lambert
	10	.30#	Compensation Letter Agreement, dated February 24, 2010, between NuVasive, Inc. and Michael Lambert
	10	.31#	Severance Agreement, dated September 2, 2009, between NuVasive, Inc. and Kevin C. O’Boyle (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 6, 2009)
	10	.32#	Form of Indemnification Agreement between NuVasive, Inc. and each of our directors and officers (incorporated by reference to our Registration Statement on Form S-1 (File No. 333-113344) filed with the Commission on March 5, 2004)
	10	.33	Sublease, dated October 12, 2004, by and between NuVasive, Inc. and Gateway, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 15, 2004)
	10	.34#	Summary of 2008 annual salaries and annual stock grants for our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on January 11, 2008)
	10	.35#	Summary of the 2008 bonus payments to our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on February 29, 2008)
	10	.36#	Summary of 2009 annual salaries and annual stock grants for our Chief Executive Officer, our Chief Financial Officer and our other named executive officers (incorporated by reference to our Current Report on Form 8-K filed with the Commission on January 8, 2009)
	10	.37	Customer Agreement, dated as of June 27, 2007, by and between NuVasive, Inc. and International Business Machines Corporation (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 8, 2007)
	10	.38	IBM Global Services Agreement, dated as of June 27, 2007, by and between NuVasive, Inc. and International Business Machines Corporation (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on August 8, 2007)
	10	.39	Lease Agreement for Sorrento Summit, entered into as of November 6, 2007, between the Company and HCPI/Sorrento, LLC. (incorporated by reference to our Annual Report on Form 10-K filed with the Commission on November 8, 2007)
	10	.40	Purchase Agreement, dated March 3, 2008, among NuVasive, Inc. and Goldman, Sachs & Co., and J.P. Morgan Securities Inc., related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.41	Confirmation of Call Option Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.42	Confirmation of Call Option Transaction, dated March 3, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.43	Confirmation of Warrant Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.44	Confirmation of Warrant Transaction, dated March 3, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)

99

Exhibit
Number			Description
	10	.45	Amendment to the Confirmation of Call Option Transaction, dated March 11, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.46	Amendment to the Confirmation of Call Option Transaction, dated March 11, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.47	Amendment to the Confirmation of Warrant Transaction, dated March 11, 2008, to NuVasive, Inc. from Goldman, Sachs & Co. related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.48	Amendment to the Confirmation of Warrant Transaction, dated March 11, 2008, to NuVasive, Inc. from JPMorgan Chase Bank related to the 2.25% Convertible Senior Notes due 2013 (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 9, 2008)
	10	.49	Form of Voting Agreement, dated May 8, 2008, by and among each of Peter Friedli, Venturetec, Inc., U.S. Venture 05, Inc., Joyce, Ltd. and C Randal Mills, Ph.D, and the Company (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.50†	Manufacturing Agreement, dated July 24, 2008 by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on August 8, 2008)
	10	.51†	Amendment to Manufacturing Agreement, dated September 30, 2008, by and between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on November 7, 2008)
	10	.52	Amendment No. 3 to Manufacturing Agreement, dated March 25, 2009, between the Company and Osiris Therapeutics, Inc. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
	10	.53†	Preferred Stock Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
	10	.54†	Option Purchase Agreement, dated January 13, 2009, among the Company, Progentix Orthobiology, B.V. and the sellers listed on Schedule A thereto
	10	.55†	Exclusive Distribution Agreement, dated January 13, 2009, between the Company and Progentix Orthobiology, B.V. (incorporated by reference to our Quarterly Report on Form 10-Q filed with the Commission on May 8, 2009)
	21	.1	List of subsidiaries of NuVasive, Inc.
	23	.1	Consent of Independent Registered Public Accounting Firm
	31	.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
	31	.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
	32	.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. section 1350
	32	.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. section 1350

†	Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk. We have filed separately with the Commission an unredacted copy of the exhibit.
#	Indicates management contract or compensatory plan.

100

EX-10.10

Exhibit 10.10

NuVasive, Inc.
2004 Equity Incentive Plan
Terms and Conditions of Restricted Stock Unit Award

     This Terms and Conditions of Restricted Stock Unit Award, including the Award Letter to which it is attached (this “Terms and Conditions”) is dated as of the Grant Date.

     Pursuant to the terms of the 2004 Equity Incentive Plan (the “Plan”) the Company hereby awards to Employee Restricted Stock Units on the terms and conditions as set forth in this Terms and Conditions and the Plan. Capitalized terms used but not defined in this Terms and Conditions shall have the meaning specified in the Plan.

     In consideration of the mutual promises set forth below, the parties hereto agree as follows:

     1. Award of Restricted Stock Units. Subject to the terms and conditions of this Terms and Conditions and the Plan (the terms of which are incorporated herein by reference) and effective as of the date set forth above, the Company hereby grants to the Employee the amount of Restricted Stock Units set forth in the Award Letter.

     2. Vesting. Restricted Stock Units vest annually over four (4) years. Thus, to the extent the Employee remains continuously employed by the Company at the end of each such period following the first day of the month in which the Grant Date falls (each a “Vesting Date”), twenty-five percent (25%) of the Restricted Stock Units will vest and become payable in Company shares as set forth in Section 4. Notwithstanding the vesting schedule described above, fifty percent (50%) of the Employee’s then unvested Restricted Stock Units shall fully vest upon the consummation of a Fundamental Transaction. Further, all Restricted Stock Units shall fully vest in the event of the Employee’s “Involuntary Termination” within twelve (12) months following a Fundamental Transaction. The term “Involuntary Termination” means an Involuntary Termination of the Employee for reasons other than death, disability or cause (as reasonably determined by the Company).

     3. Effect of Termination of Service or Leave of Absence. If the Employee’s service is terminated by the Employee or by the Company or a Subsidiary for any reason, including Employee’s death or Disability before all Restricted Stock Units have vested, the unvested Restricted Stock Units shall be forfeited unless otherwise determined by the Committee. As of the 31st (or 91st if reemployment is guaranteed by statute or contract) day of a leave of absence, vesting credit will no longer accrue unless otherwise determined by the Committee or required by contract or statute. If Employee returns to service immediately after the end of an approved leave of absence, vesting credit shall continue to accrue from that date of continued employment.

     4. Conversion Settlement. Conversion of Restricted Stock Units into shares of Company Stock shall be registered in the Employee’s name as soon as practicable on or after the Vesting Date, but in no event later than March 15^th of the calendar year following the year in which the Vesting Date occurs.

     5. Tax Liability and Withholding. To meet the obligations of the Company, any Subsidiary and Employee with respect to any withholding taxes, social insurance liability, or the like under any statute, ordinance, rule, or regulation in or connection with the award, deferral, or settlement of the Restricted Stock Units (collectively, the “Tax Liability”), the Committee shall require that the Company withhold a number of shares of Company Stock otherwise deliverable having a Fair Market Value sufficient to satisfy the Tax Liability. Employee acknowledges that the Tax Liability requirements may change from time to time as laws or interpretations change and regardless of the Company’s or the Subsidiary’s actions in this regard, Employee hereby acknowledges and agrees that the Tax Liability shall be Employee’s responsibility and liability. The Company or Subsidiary may also in lieu of or in addition to the foregoing, at its sole discretion, either require the Employee to deposit with the Company or Subsidiary an amount of cash sufficient to satisfy the Tax Liability and/or, withhold the required amounts from the Employee’s pay during the pay periods next following the date on which any such applicable Tax Liability otherwise arises. The Company shall not deliver any of the shares of Company Stock until and unless the Employee has made the deposit required herein or proper provision for required withholding has been made. Employee hereby consents to any action reasonably taken by the Company to satisfy the Tax Liability.

     6. Restriction on Transferability. Until distribution, the Restricted Stock Units may not be sold, transferred, pledged, assigned, or otherwise alienated at any time. Any attempt to do so contrary to the provisions hereof shall be null and void. Notwithstanding the above, distribution can be made pursuant to will, the laws of descent and distribution, intra-family transfer instruments or to an inter vivos trust.

     7. Rights as Shareholder. The Employee shall not have voting or any other rights as a shareholder of the Company with respect to the Restricted Stock Units. Upon settlement of the Restricted Stock Units into shares of Company Stock, the Employee will obtain full voting and other rights as a shareholder of the Company.

     8. Administration. The Committee shall have the power to interpret the Plan and this Terms and Conditions and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Employee, the Company, and all other interested persons. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Terms and Conditions.

     9. Effect on Other Employee Benefit Plans. The value of the Restricted Stock Units granted pursuant to this Terms and Conditions shall not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Subsidiary except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Subsidiary’s employee benefit plans.

     10. No Employment Rights. The award of the Restricted Stock Units pursuant to this Terms and Conditions shall not give the Employee any right to remain employed by the Company or a Subsidiary. Also, the award is completely within the discretion of the Company.

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It is not made as a part of any ongoing element of compensation or something which Employee should expect to receive annually or on any other periodic basis. It does not constitute part of Employee’s salary or wages and unless specifically agreed to otherwise with the Company is not relevant for purposes of determining any post-employment payment or severance.

     11. Amendment. This Terms and Conditions may be amended only by a writing executed by the Company and the Employee which specifically states that it is amending this Terms and Conditions. Notwithstanding the foregoing, this Terms and Conditions may be amended solely by the Committee by a writing which specifically states that it is amending this Terms and Conditions, so long as a copy of such amendment is delivered to the Employee, and provided that no such amendment adversely affects the rights of the Employee (but limiting the foregoing, the Committee reserves the right to change, by written notice to the Employee, the provisions of the Restricted Stock Units or this Terms and Conditions in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to Restricted Stock Units which are then subject to restrictions as provided herein).

     12. Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Terms and Conditions provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Employee by the Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party.

          (a) Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, this Terms and Conditions, the Plan’s prospectus, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to the Employee electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

          (b) Consent to Electronic Delivery. The Employee acknowledges that the Employee has read Section 12(a) of this Terms and Conditions and consents to the electronic delivery of the Plan documents, as described in Section 12(a). The Employee acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Employee by contacting the Company by telephone or in writing. The Employee further acknowledges that the Employee will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Employee understands that the Employee must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Employee may revoke his or her consent to the electronic delivery of documents described in Section 12(a) or may change the electronic mail address to which such

-3-

documents are to be delivered (if Employee has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Employee understands that he or she is not required to consent to electronic delivery of documents described in Section 12(a).

     13. Severability. If all or any part of this Terms and Conditions or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Terms and Conditions or the Plan not declared to be unlawful or invalid. Any Section of this Terms and Conditions (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

     14. Construction. The Restricted Stock Units are being issued pursuant to Section 8 of the Plan and are subject to the terms of the Plan. A copy of the Plan has been given to the Employee, and additional copies of the Plan are available upon request during normal business hours at the principal executive offices of the Company. To the extent that any provision of this Terms and Conditions violates or is inconsistent with an express provision of the Plan, the Plan provision shall govern and any inconsistent provision in this Terms and Conditions shall be of no force or effect.

     15. Miscellaneous.

          (a) The Board may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any way adversely affect the Participant’s rights under this Terms and Conditions, without the Participant’s written approval.

          (b) This Terms and Conditions shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

          (c) All obligations of the Company under the Plan and this Terms and Conditions, with respect to the Restricted Stock Units, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

          (d) By accepting the Restricted Stock Units, Employee acknowledges that his or her personal employment information regarding participation in the Plan and information necessary to determine and pay, if applicable, benefits under the Plan must be shared with other entities, including companies related to the Company and persons responsible for certain acts in the administration of the Plan. By accepting the Restricted Stock Units, Employee consents to such transmission of personal data as the Company believes is appropriate to administer the Plan.

          (e) To the extent not preempted by federal law, this Terms and Conditions shall be governed by, and construed in accordance with, the laws of the State of California.

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EX-10.26

Exhibit 10.26

November 4 , 2009

Pat Miles
4934 Del Mar Mesa Road
San Diego, CA 92130

Dear Pat,

Congratulations on your promotion to President of the Americas. Being awarded an executive promotion means that you are a NuVasive “A+” Player. You have successfully performed your stretch goals, demonstrated outstanding performance standards, have embraced your challenges with enthusiasm, and have continuously worked to perpetuate and grow our culture. I trust that you feel “lucky” and have an “attitude of gratitude” about your continued growth prospects.

You will officially begin work in this capacity on January 1, 2010. Your new rate of compensation is $37,500/month. In connection with your promotion, we anticipate granting you, subject to the approval of the Board of Directors, 85,000 Restricted Stock Units (the “RSUs”) representing a promise to issue shares of NuVasive stock upon vesting. The RSU’s will vest over four years in accordance with the Company’s 2004 Equity Incentive Plan and in anticipation of you delivering outstanding results.

In addition to your compensation increase, your current target bonus for 2010 is 75% of your annual base salary (with ability to over-perform), with the actual amount being determined at the discretion of the Board of Directors. All bonus payments will be paid in accordance with the terms of your letter agreement, dated August 5, 2008, as amended. I fully anticipate that you will do your part to drive outstanding performance across all of these measures and that you will personally contribute to your Department’s and the Company’s success.

As Shareowners, our common goal is to contribute meaningfully toward NuVasive’s growth targets, deliver new and creative products, leverage resources for profitability and exercise Absolute Responsiveness^® to the maximum level. I look forward to continuing the journey with you.

I wish you tremendous success in your new role!

Onward and Upward! NUVASIVE, INC.
By:	/s/Alexis V. Lukianov
	Alexis V. Lukianov

Please sign below indicating your understanding and acceptance of this promotion and return the fully executed letter to Jen Crutchfield. You should keep one copy of this letter for your records.

/s/Pat Miles  

Pat Miles 

EX-10.27

Exhibit 10.27

November 4, 2009

Jeff Rydin
PO Box 5000, PMB 94
Rancho Santa Fe, CA 92067

Dear Jeff,

Congratulations on your promotion to Executive Vice President, Americas, Sales & Chairman of the Global Sales Executive Committee. Being awarded an executive promotion means that you are a NuVasive “A+” Player. You have successfully performed your stretch goals, demonstrated outstanding performance standards, have embraced your challenges with enthusiasm, and have continuously worked to perpetuate and grow our culture. I trust that you feel “lucky” and have an “attitude of gratitude” about your continued growth prospects.

You will officially begin work in this capacity on January 1, 2010. Your new rate of compensation is $33,333/month. In connection with your promotion, we anticipate granting you, subject to the approval of the Board of Directors, 50,000 Restricted Stock Units (the “RSUs”) representing a promise to issue shares of NuVasive stock upon vesting. The RSU’s will vest over four years in accordance with the Company’s 2004 Equity Incentive Plan and in anticipation of you delivering outstanding results.

In addition to your compensation increase, your current target bonus for 2010 is 75% of your annual base salary (with ability to over-perform), with the actual amount being determined at the discretion of the Board of Directors. All bonus payments will be paid in accordance with the terms of your letter agreement, dated August 5, 2008, as amended. I fully anticipate that you will do your part to drive outstanding performance across all of these measures and that you will personally contribute to your Department’s and the Company’s success.

As Shareowners, our common goal is to contribute meaningfully toward NuVasive’s growth targets, deliver new and creative products, leverage resources for profitability and exercise Absolute Responsiveness^® to the maximum level. I look forward to continuing the journey with you.

I wish you tremendous success in your new role!

Onward and Upward! NUVASIVE, INC.
By:	/s/Alexis V. Lukianov
	Alexis V. Lukianov

Please sign below indicating your understanding and acceptance of this promotion and return the fully executed letter to Jen Crutchfield. You should keep one copy of this letter for your records.

/s/Jeff Rydin  

Jeff Rydin 

EX-10.28

Exhibit 10.28

December 17, 2009

Jason Hannon
11183 Corte Cangrejo
San Diego, CA 92130

Dear Jason,

Congratulations on your promotion to Executive Vice President & General Counsel. Being awarded an executive promotion means that you are a NuVasive “A+” Player. You have successfully performed your stretch goals, demonstrated outstanding performance standards, have embraced your challenges with enthusiasm, and have continuously worked to perpetuate and grow our culture. I trust that you feel “lucky” and have an “attitude of gratitude” about your continued growth prospects.

You will officially begin work in this capacity on January 1, 2010. Your new rate of compensation is $33,333/month. In connection with your promotion, we anticipate granting you, subject to the approval of the Board of Directors, 100,000 stock options (the “Options”), with a strike price equal to the market value of the Company’s stock on the date of grant. Twenty-five percent (25%) of the Options will vest on the one-year anniversary of the grant date, and the remainder in 1/36^th increments per month over the following 3 years, in accordance with the Company’s 2004 Equity Incentive Plan and in anticipation of you delivering outstanding results.

In addition to your compensation increase, your current target bonus for 2010 is 50% of your annual base salary (with ability to over-perform), with the actual amount being determined at the discretion of the Board of Directors. All bonus payments will be paid in accordance with the terms of your letter agreement, dated August 5, 2008, as amended. I fully anticipate that you will do your part to drive outstanding performance across all of these measures and that you will personally contribute to your Department’s and the Company’s success.

As Shareowners, our common goal is to contribute meaningfully toward NuVasive’s growth targets, deliver new and creative products, leverage resources for profitability and exercise Absolute Responsiveness^® to the maximum level. I look forward to continuing the journey with you.

I wish you tremendous success in your new role!

Onward and Upward! NUVASIVE, INC.
By:	/s/Alexis V. Lukianov
	Alexis V. Lukianov

Please sign below indicating your understanding and acceptance of this promotion and return the fully executed letter to Jen Crutchfield. You should keep one copy of this letter for your records.

/s/Jason Hannon  

Jason Hannon 

EX-10.29

Exhibit 10.29

October 16, 2009

Michael Lambert
2527 Bunya Street
Newport Beach, Ca 92660

Dear Michael,

NuVasive, Inc. (the “Company”) is pleased to offer you employment on the terms and conditions stated in this letter. The Company is offering you the exempt position of Executive Vice President and Chief Financial Officer. As the EVP/CFO, you will report to me, Chief Executive Officer, and your job duties will be further outlined upon your employment. We would like you to begin work in this capacity with the Company on November 9, 2009 (the “Start Date”).

Your initial rate of compensation will be $37,500 per month. Beginning in 2010, you will be eligible for a bonus of up to $450,000 the Executive Management Bonus Plan, tied to achievement of Individual Performance Measures, department goals and Company performance. On the Start Date, you will be granted 20,000 stock options (the “Options”), with a strike price equal to the market value of the Company’s stock on the Start Date. Twenty-five percent (25%) of the Options will vest on your one-year anniversary with the Company, and the remainder in 1/36^th increments per month over the following 3 years. On January 1, 2010, you will receive 50,000 Restricted Stock Units (RSUs) representing shares of NuVasive stock. You will also be eligible to receive annual RSUs, based upon your good performance with the Company, with a target grant of 150,000 RSUs over your first three years with the Company. These RSUs will vest over four years in accordance with the provisions of the Company’s 2004 Equity Incentive Plan. You will also be eligible for medical, dental and life insurance, 401K, ESPP and three (3) weeks of vacation per year.

We understand that this opportunity will require you to relocate to the San Diego area. To assist you with that relocation, the Company will provide you with full reimbursement of any relocation expenses you incur, along with $20,000.00 (gross) to cover temporary living arrangements. If you voluntarily leave NuVasive within 12 months of your start date, you will be required to repay NuVasive a prorated amount of this relocation assistance.

Your employment with the Company will not be for any specific term and may be terminated by you or by the Company at any time, with or without cause and with or without notice. The at-will nature of your employment described in this letter shall constitute the entire agreement between you and the Company concerning the duration of your employment and the circumstances under which either you or the Company may terminate the employment relationship. As a Shareowner (employee) of the Company, you will be required to comply with all Company policies and procedures.

The Company will provide you with an Executive Vice President level Change of Control Severance Agreement upon your employment.

Your employment pursuant to this offer is contingent upon your execution of the attached Proprietary Information and Inventions Agreement and upon your compliance with all contractual obligations that you may have with your former employer. You agree that during the course of performing your duties on behalf of NuVasive, you will not use or disclose to NuVasive any confidential or proprietary information that may belong to others. You have already indicated to us that you have no such information in your possession.

Please sign below and return the fully executed letter to Jen Crutchfield of our Human Resources department, along with the executed Proprietary Information and Inventions Agreement.

We are looking forward to having you join the NuVasive team.

Very truly yours, NUVASIVE, INC.
By:	/s/ Alexis V. Lukianov
	Alexis V. Lukianov

I have read and accept this employment offer.

Dated: 10/19/09	/s/ Michael Lambert
	Michael Lambert

EX-10.30

Exhibit 10.30

February 24, 2010

Dear Mr. Lambert,

     This letter agreement confirms the material compensation terms of your employment with NuVasive. This letter agreement supersedes all prior agreements relating to your compensation arrangements and is in addition to any and all benefits that are made generally available to NuVasive employees. It is also in addition to benefits available to you as an executive of NuVasive. Defined terms used herein have the meanings set forth in the attached Appendix of Defined Terms.

     This letter agreement has no impact on other types of agreements or arrangements between you and NuVasive, including agreements related to confidentiality, intellectual property ownership, non-solicitation or non-competition obligations, etc. You agree to continue abiding by all such arrangements, as well as all NuVasive policies and procedures.

     Your current annual base salary is $450,000, payable in installments in accordance with NuVasive’s regular payroll practices. Your base salary is subject to change and is reviewed at least annually. You are eligible to receive a performance bonus on an annual basis. The performance bonus is determined at the discretion of the Board of Directors and is based on a combination of company performance and your individual performance. Your annual cash bonus is up to 100% of your base salary, with the actual amount being determined at the discretion of the Board of Directors. The performance bonus, if any, that is payable to you shall be paid no later than March 15th of the year following the calendar year in which it is earned. Additionally, you are eligible to receive, in the discretion of the Board of Directors, an annual grant of NuVasive equity securities pursuant to the 2004 Equity Incentive Plan with a target grant of 50,000 restricted stock units representing shares of NuVasive stock each of 2011 and 2012.

     You also have certain severance benefits related to an Involuntary Termination of your employment or a Change of Control of NuVasive. In the event of an Involuntary Termination of your employment, you shall be entitled to the Severance Benefit. In the event of a Change of Control of NuVasive, you shall be entitled to the Change of Control Benefit. In addition, the Section 409A Terms shall be applicable to the Severance Benefit.

     We look forward to your continued success with NuVasive.

Truly Yours,

NUVASIVE, INC.

/s/Alexis V. Lukianov   Alexis V. Lukianov /s/ Eileen M. More   Eileen M. More

Page 2 — Compensation Letter

I have read and accept the terms of this letter.

/s/Michael Lambert Michael Lambert

Defined Terms:

“Change of Control Benefit” shall mean the: Company Acceleration Plan.

“Severance Benefit” is equal to the following: (1) upon an Involuntary Termination prior to a Change of Control, Severance Benefit is equal to 100% of Compensation; (2) upon an Involuntary Termination within 12 months following a Change of Control, Severance Benefit is equal to 150% of Compensation; or (3) upon an Involuntary Termination more than 12 months following a Change of Control, Severance Benefit is equal to 100% of Compensation. Such amount shall be due and payable immediately upon any such termination and upon the condition that you execute NuVasive’s standard form of release of claims and that such release of claims becomes effective in accordance with its terms on or prior to the 45th day following such termination.

“Change of Control” is defined as either a Change in Control or Fundamental Transaction as defined in the 2004 Equity Incentive Plan.

“Company Acceleration Plan” is defined as the Company’s policy pursuant to which 50% of all unvested equity awards under any of the Company’s equity compensation plans (including the 2004 Equity Incentive Plan) immediately accelerate upon a Change of Control of the Company, and all remaining equity awards immediately accelerate upon an involuntary termination (except for death, disability or Cause) of service within 18 months following such an event.

“Compensation” is defined as annual salary and bonus most recently paid (even if not in prior year).

“Involuntary Termination” is defined as an involuntary Termination (as defined in the 2004 Equity Incentive Plan) for reasons other than death, disability or Cause. “Cause” is defined as any of the following: (i) the Executive’s repeated failure to satisfactorily perform the Executive’s job duties; (ii) the Executive’s refusal or failure to follow lawful directions of the Board; (iii) the Executive’s conviction of a crime involving moral turpitude; (iv) the Executive engaging or in any manner participating in any activity which is directly competitive with or injurious to the Company. The term Involuntary Termination shall include a voluntary resignation by the Executive following any of the following (each a “Voluntary Resignation"): a requirement (refused by the Executive) to directly report to someone other than the CEO, a significant reduction of the Executive’s job responsibilities or title, a requirement (refused by the Executive) that the Executive move for his/her principal place of employment more than 50 miles from the then-current principal place of employment (unless such requirement was agreed to in connection with the hiring of the Executive), or a reduction of greater than 15% in the Executive’s base pay or bonus opportunity (where not all Executives are similarly affected).

“Section 409A Terms” — the following terms shall be applicable to the Severance Benefit: Notwithstanding anything in this Agreement to the contrary, no Severance Benefit payable pursuant to this Agreement which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid

until Executive has incurred a “separation from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that Executive is a “specified employee” within the meaning of the Section 409A Regulations no Severance Benefit that constitutes a deferral of compensation shall paid to Executive before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of Executive’s separation from service or, if earlier, the date of Executive’s death following such separation from service. All such amounts that would, but for these defined terms, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date. The Company intends that the Severance Benefit will not be subject to taxation under Section 409A of the Code. The provisions of this Letter Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code. However, the Company does not guarantee any particular tax effect for income provided to Executive pursuant to this Agreement. In any event, except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to Executive, the Company shall not be responsible for the payment of any applicable taxes on compensation paid or provided to Executive pursuant to this Agreement.

EX-10.53

EXECUTION COPY

EXHIBIT 10.53

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

-i-

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

-ii-

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

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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

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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

30

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

34

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,

35

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.

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     “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.

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     “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.

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     “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;

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          (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

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          (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

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          (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.

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     “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.

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     “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.

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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.

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     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)

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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)

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     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

Filed separately as Exhibit 10.54 to this Annual Report on Form 10-K.

EXHIBIT B

DATED JANUARY 13, 2009

(1) NUVASIVE, INC.

as Lender

- and -

(2) PROGENTIX ORTHOBIOLOGY B.V.

as Borrower

USD 5,000,000

SENIOR SECURED FACILITY AGREEMENT

DLA Piper Nederland N.V.
Finance & Projects
Amsterdam

USD 5,000,000 SENIOR SECURED FACILITY AGREEMENT

THIS AGREEMENT is dated January 13, 2009 (the “Effective Date”)

BETWEEN

1.	NUVASIVE, INC., a company incorporated under the laws of Delaware, having its registered office at 7475 Lusk Boulevard, San Diego CA 92121, United States (the “Lender”); and
2.	PROGENTIX ORTHOBIOLOGY B.V. a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organised and existing under the laws of the Netherlands, registered with the chamber of commerce under file number 30234249 and having its registered office at Professor Bronkhorstlaan 10 D, (3723 MB) Bilthoven, the Netherlands (the “Borrower”),

The Lender and the Borrower also referred to as “Party” or “Parties”.

RECITALS

A.	The Lender will, on or about the date hereof, make an initial preferred equity investment of USD 10,000,000 in the Borrower.
B.	In addition to the proposed acquisition by the Lender of the shares in the capital of the Borrower, the Lender wishes to lend to the Borrower and the Borrower wishes to borrow from the Lender subject to the terms and conditions set forth in this Agreement.
C.	Parties hereby further agree as follows.

IT IS AGREED AS FOLLOWS

1.	DEFINITIONS
1.1	In this Agreement, unless the context otherwise requires, the following words and expressions have the following meanings:

Agreement	means this USD 5,000,000 facility agreement between Lender and Borrower;
Base Milestones	has the meaning set forth in the Option Purchase Agreement;
Business Day	means a day other than a Saturday or Sunday on which banks are open for business in Amsterdam, the Netherlands;
Operating Budget	has the meaning set forth in the Preferred Stock Purchase Agreement;
Distribution Agreement	has the meaning set forth in the Preferred Stock Purchase Agreement;
Event of Default	means an event of default specified as such in clause 9;

IP Pledge Agreement	means the Pledge Agreement of Intellectual Property Rights, dated as of the date hereof, by and between the Lender and the Borrower, relating to the pledge of the Borrower’s intellectual property rights;
Loan	means the loan made available by the Lender to the Borrower pursuant to Clause 2.1 of this Agreement or the principal amount outstanding for the time being of that loan;
Option Purchase Agreement	means the Option Purchase Agreement, dated the date hereof, by and among Lender, Borrower and the shareholders of Borrower;
Preferred Stock Purchase Agreement	means the Preferred Stock Purchase Agreement, dated the date hereof, by and among Lender, Borrower and the shareholders of Borrower;
Proprietary Rights	has the meaning set forth in the Option Purchase Agreement;
Repayment Date	means the date defined in Clause 5.1.;
Updated Seller Parties	has the meaning set forth in the Option Purchase Agreement;
Disclosure Schedule
USD	means United States dollar; and
Utilisation Date	means the applicable date on which Lender makes a Loan.

1.2	In this Agreement, unless the context otherwise requires (a) references to the singular shall include the plural and vice versa and (b) Clause headings are for ease of reference only and shall not affect the construction of the relevant provision.
1.3	Except where this Agreement expressly provides otherwise, a person who is not a Party has no right to exercise or enforce any term or condition of this Agreement.
2.	THE FACILITY
2.1	Subject to the terms of this Agreement, the Lender shall make available to the Borrower from time to time a USD facility in an aggregate amount of USD 5,000,000 (five million USD) and the Borrower accepts such facility. This facility shall remain in effect through the earlier of the expiration or termination of the Option Period (as defined in the Option Purchase Agreement).
2.2	Unless otherwise agreed by the Lender or approved by the Borrower’s non-executive board of directors (but specifically including any representative of Lender thereon), the Borrower shall apply any Loans made under the facility towards (i) further development of the Borrower’s portfolio of synthetic osteoinductive scaffolds, including the CuriOs product for purposes of achieving the Base Milestones, (ii) fulfilling its obligations under the Distribution Agreement with Lender, dated as of the date hereof, or (iii) any other payments made in accordance with the Borrower’s Operating Budget, it being agreed that Borrower may apply any Loans to satisfy

	general operating expenses, including without limitation general and administrative, rent, utilities, insurance and similar expenses, as expressly permitted hereunder to the extent contemplated by Borrower’s Operating Budget.
2.3	The Lender is not obliged to monitor or verify the application of any Loan.
3.	UTILISATION
3.1	The Borrower may utilise the facility from time to time by delivery to the Lender of (i) a duly completed utilisation request in the form attached hereto at Schedule 3 and (ii) an Updated Seller Parties Disclosure Schedule sufficiently in advance prior to the contemplated date of extension of the Loan. Any amount proposed to be utilised shall always exceed the equivalent in USD of EUR 1,000,000, provided that any Updated Seller Parties Disclosure delivered pursuant to this Section 3.1 shall not be counted as a Disclosure Schedule Request (as defined under the Option Purchase Agreement) pursuant to Section 1.1(b)(ii)(A) of the Option Purchase Agreement.
3.2	Upon receipt of such utilization request and an Updated Seller Parties Disclosure Schedule, the Lender shall make available the Loan to the Borrower by means of payment of the same into the Borrower’s account the particulars of which shall be specified in the utilisation request.
3.3	The Loan will be disbursed in one amount on the Utilisation Date and any amount not drawn will be immediately cancelled.
3.4	Notwithstanding anything to the contrary contained in any other agreement between the parties, including without limitation Section 5.1(i) of the Preferred Stock Purchase Agreement, Lender hereby expressly consents to any utilization request submitted by the Borrower hereunder.
4.	INTEREST
4.1	Interest shall accrue on any Loan at an interest rate of 6% per annum commencing on the applicable Utilization Date. Such interest will be paid by the Borrower on the date the Loan is due and payable.
4.2	Interest shall accrue from day to day and will be calculated on the basis of a year consisting of 360 days and payable for the actual number of days elapsed.
4.3	If the Borrower fails to pay any amount payable by it under this Agreement on its due date, default interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the aggregate of the rate specified in Clause 4.1 and 2% per annum.
5.	REPAYMENT
5.1	The Borrower shall repay the Loan in its entirety within ten Business Days of the earlier of (i) an Event of Default, or (ii) nine (9) months after the earlier of the expiration or termination of the Option Period (as defined in the Option Purchase Agreement) (the “Repayment Date”).
5.2	No amount repaid may subsequently be re-borrowed.

5.3	The Borrower may not prepay the Loan until after the earlier of the expiration or termination of the Option Period at which time the Loan may be prepaid without penalty.
6.	SECURITY INTEREST
6.1	The Borrower and the Lender hereby agree that the Borrower shall grant to the Lender a first ranking right of pledge, encumbrance, collateral or any other security right over all of the assets (including Borrower’s Proprietary Rights) as specified in Schedule 1 as security for the repayment of any amount under the Loan.
6.2	The security interest will be created by means of the Parties entering into documents substantially in the forms as set out in Schedule 2 to this Agreement (Form of Security Documents).
7.	REPRESENTATIONS AND WARRANTIES
7.1	The representations set out in this Clause 7 are:

(a)	made by the Borrower on the date of this Agreement; and
(b)	deemed to be repeated by the Borrower by reference to the facts and circumstances then existing on each subsequent day for so long as the Loan or other amount is or may become outstanding under this Agreement.

7.2 The Borrower represents and warrants that :

(a)	It is a private limited liability company corporation (besloten vennootschap met beperkte aansprakelijkheid), duly incorporated and validly existing under the laws of the Netherlands;
(b)	It has the power to own its assets and carry on its business as it is being conducted;
(c)	The obligations expressed to be assumed by it in this Agreement are legal, valid, binding and enforceable obligations;
(d)	No Event of Default is outstanding or likely to result from the making of the Loan;
(e)	It has not taken any corporate action nor have any other steps been taken or legal proceedings been started or threatened against it for its bankruptcy, insolvency, reorganization, moratorium, or other law affecting the rights of creditors generally, or the appointment of a bankruptcy or moratorium administrator, trustee, receiver or similar officer;
(f)	No litigation or administrative proceeding of or before any court or agency has been started or is threatened against the Borrower which could reasonably be expected to have a material adverse effect on the business, assets or financial condition of the Borrower;
(g)	Its entry into and performance of this Agreement and the transactions contemplated by this Agreement do not conflict with any law or judicial or official regulation applicable to it, with its constitutional documents or with any agreement or document binding on it;

(h)	No attachments are made or seizures have been levied or enforced upon or sued out against (A) any material portion of its revenues or (B) against its assets; and
(i)	All information supplied by it is true, complete and accurate in all material respects as of the date it was given and is not misleading in any material respect.

7.3	The Borrower acknowledges that in connection with entering into this Facility agreement, the Borrower entered into the Option Purchase Agreement and Preferred Stock Purchase Agreement with Lender. Subject to the disclosure schedules to the Option Purchase Agreement and Preferred Stock Purchase Agreement, including any Updated Seller Parties Disclosure Schedule delivered hereunder, the representations and warranties of Borrower set forth in the Option Purchase Agreement and Preferred Stock Purchase Agreement that are qualified as to materiality are correct and complete in all respects, and all other representations and warranties of Borrower set forth in the Option Purchase Agreement and Preferred Stock Purchase Agreement are correct and complete in all material respects. Notwithstanding the foregoing, each representation and warranty set forth in the Option Purchase Agreement which refers to the “Effective Date” shall be true and correct as of the date of any Updated Seller Parties Disclosure Schedule 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 Borrower obtained the approval of the Supervisory Board of Directors of the Borrower (including the director designated by the Lender) 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 Borrower which directly caused such material change.
8.	UNDERTAKINGS
8.1	The undertakings in this Clause 8 will remain effective from the date of this Agreement until all amounts to be paid by the Borrower under this Agreement have been irrevocably paid.
8.2	The Borrower shall promptly inform the Lender if an Event of Default has occurred or is likely to occur.
8.3	The Borrower shall ensure that at all times the claims of the Lender against it under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred by any laws of general application and with the exception of any rights of set-off or counterclaims that may be asserted against it.
8.4	The Borrower shall not sell, transfer or otherwise dispose of its assets or revenues with the exception of disposals of trading assets or the expenditure of cash, in each case on normal commercial terms and in the ordinary course of business unless and until the Loan is repaid by Borrower in its entirety.
9.	EVENTS OF DEFAULT
9.1	Each event described in this Clause 9 is an Event of Default:

(a)	The Borrower does not pay (or evidences an intention not to pay) any amount payable under this Agreement at the time and in the manner as provided for in this Agreement;
(b)	Any representation or statement made or deemed to be made by the Borrower in this Agreement or any other document delivered by it or on its behalf under or in connection with this Agreement is or proves to have been untrue, inaccurate or misleading in any material respect when made or deemed to be made;
(c)	The Borrower fails to duly perform any other obligation under this Agreement, which non-performance if capable of remedy is not remedied within 21 days after the Lender’s relevant notice to the Borrower;
(d)	An attachment or seizure affects any assets of the Borrower and is not discharged within 21 days or any steps are taken to enforce any security interest over any assets of the Borrower;
(e)	Any of the following events or circumstances affects the Borrower:

(i)	It is unable or shall admit in writing its inability to pay its debts as they fall due or, by reason of actual or anticipated financial difficulties, it suspends making payments on any of its debts or commences negotiations with any of its creditors with a view to rescheduling any of its indebtedness;
(ii)	It becomes subject to a winding-up;
(iii)	It proposes or takes any corporate action, or any person commences any litigation or administrative proceedings or other formal procedure, in relation to its winding-up which in the case of an involuntary action is not dismissed within 30 days;

(f)	The Borrower is declared bankrupt, insolvent, subject to reorganization, moratorium, or to any other law affecting the rights of creditors generally;
(g)	The Borrower is dissolved, a resolution for its dissolution is passed or a request for its dissolution is filed;
(h)	The Borrower terminates all or a substantial part of its business;
(i)	At any time it is unlawful for the Borrower to perform any or all of its obligations under this Agreement or any obligation of the Borrower under this Agreement is illegal, invalid or unenforceable;
(j)	The Borrower breaches any of its representations, warranties or covenants in the Option Purchase Agreement, the Preferred Stock Purchase Agreement, the IP Pledge Agreement or impairs any of the Lender’s rights set forth in the Borrower’s articles of association; or
(k)	Any event or circumstance occurs that, in the opinion of the Lender, might have, directly or indirectly, a material adverse effect on the Borrower’s ability to perform any of its obligations under this Agreement.

9.2	If an Event of Default has occurred, the Loan together with accrued interest and all other amounts owing under this Agreement will immediately be due and payable without any default notice or court intervention being required.
10.	COSTS AND EXPENSES
	The Lender and the Borrower shall each bear their own costs and expenses incurred in connection with this Agreement.
11.	INDEMNITY
	The Borrower undertakes to indemnify the Lender against any loss or liability incurred by the Lender (including any loss of margin or other loss or expense on account of funds borrowed, contracted for or utilised to fund any amount payable under this Agreement) as a result of:

(a)	any payment of principal of or interest on the Loan or of an overdue amount being received otherwise than on its due date; or
(b)	an Event of Default.

12.	TAXES
12.1	All payments to be made by the Borrower under this Agreement shall be made free and clear of and without deduction for or on account of tax, except to the extent the Borrower is required to make such a payment subject to tax. If any tax must be deducted or withheld from any amount payable or paid by the Borrower, then the Borrower shall pay such additional amounts as are necessary to ensure that the Lender receives a net amount equal to the amount which it would have received if no such deduction or withholding had been made or required to be made. The Borrower shall promptly notify the Lender if it is required to make a deduction or withholding.
12.2	If the Lender is required to pay any amount in respect of tax on any payment due from the Borrower under this Agreement, the Borrower shall promptly reimburse the Lender for that payment at its first request.
13.	PAYMENTS
13.1	All payments payable by the Borrower shall be made and calculated without reference to any set-off or counterclaim. Each payment by the Borrower under this Agreement shall be made for value on its due date, without any notice from the Lender being required, by deposit of immediately available funds to the account designated by the Lender.
13.2	All payments pursuant to this Agreement shall be made in United States Dollars (USD).
13.3	All payments to be made by the Borrower under this Agreement shall be calculated and be made:

(a)	without, and clear of any deduction for, set-off or counterclaim; and
(b)	clear of any deduction or withholding for, or on account of, any tax, levy, impost, duty or other charge of a similar nature, other than any such deduction or withholding required by law.

13.4	If the Borrower is required to make a deduction or withholding as referred to in Subclause 13.3 (b), the amount of the payment due from it shall be increased to an amount which, after making the deduction or withholding, leaves an amount equal to the payment which would have been due if no deduction or withholding had been required.
14.	SET-OFF
	The Lender may set off any obligation due and payable by the Borrower under this Agreement against any obligation (whether or not under this Agreement and whether or not due and payable) owed by the Lender to the Borrower. If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
15.	CHANGES TO THE PARTIES
	All covenants and agreements of the Parties contained in this Agreement shall be binding and inure to the benefit of their respective successors and permitted assigns. Each of the Parties may assign any rights or obligations under this Agreement.
16.	COUNTERPARTS
	This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute only one instrument.
17.	NOTICES
	Any notice or other communications provided under this Agreement shall be in writing in the English language and addressed or delivered, to the applicable person at the address set forth in the header of this Agreement, or such other address of which such Party has specified in any written notice to the other Party hereto.
18.	TERMINATION, SUSPENSION, AMENDMENTS, WAIVERS AND REMEDIES CUMULATIVE
18.1	The Borrower cannot rescind (ontbinden) this Agreement in whole or in part.
18.2	The Borrower shall bear the risk of any error (dwaling) made by it in relation to this Agreement.
18.3	The Borrower may not suspend (opschorten) compliance with its obligations under or in connection with this Agreement on whatever grounds.
18.4	This Agreement may be amended, supplemented or waived only by a written agreement between the parties.
18.5	The rights of the Lender under this Agreement may be exercised as often as necessary, are cumulative and not exclusive of its rights under general law. No failure or delay on the part of the Lender in exercising any right shall operate as a waiver or impair that right. No waiver of any such right shall be effective unless given in writing.

19.	CHANGES TO PARTIES
19.1	The Lender may:

(a)	assign (overdragen) its rights under this Agreement (in whole or in part); or
(b)	transfer its legal relationship (rechtsverhouding) under this Agreement (in whole or in part) to another person.

19.2	Any transfer as referred to in this Clause 19 shall be made by a deed of transfer governed by Dutch law. The Borrower hereby cooperates with any transfer in anticipation. Any transfer shall take effect by notice to the Borrower (whether prior to or after the signing of the deed of transfer).
19.3	The Borrower may not assign, transfer or encumber any of its rights or obligations under or in connection with this Agreement.
20.	EVIDENCE
	The entries made in the accounts maintained by the Lender; and any certification or determination by the Lender of an amount or rate under this Agreement; are conclusive evidence (dwingend bewijs) of the matters to which they relate.
21.	SEVERABILITY
	If a provision of this Agreement is invalid or unenforceable in any jurisdiction that shall not affect the validity or enforceability of any other provision of this Agreement and the validity or enforceability in other jurisdictions of that or of any other provision of this Agreement.
22.	GOVERNING LAW AND JURISDICTION
22.1	This Agreement is governed by the law of the Netherlands.
22.2	The competent courts of Amsterdam, the Netherlands shall have exclusive jurisdiction with regard to disputes in connection with this Agreement.

THUS AGREED

NUVASIVE, INC.
by:
its:

PROGENTIX ORTHOBIOLOGY B.V.
by:
its: Director

Schedule 1

Patents

***

Trademarks

***

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

Schedule 2

INTELLECTUAL PROPERTY SECURITY AGREEMENT

     This Intellectual Property Security Agreement is entered into as of the Effective Date by and between NuVasive, Inc., a company incorporated under the laws of Delaware (“Lender”) and Progentix Orthobiology B.V., a private company with limited liability organized and existing under the laws of the Netherlands (“Borrower”).

RECITALS

     A. Lender has agreed to make certain advances of money and to extend certain financial accommodation to Borrower (the “Loans”) in the amounts and manner set forth in that certain Senior Secured Facility Agreement by and between Lender and Borrower dated the Effective Date (as the same may be amended, modified or supplemented from time to time, the “Loan Agreement”; capitalized terms used herein are used as defined in the Loan Agreement). Lender is willing to make the Loans to Borrower, but only upon the condition, among others, that Borrower shall grant to Lender a security interest in the Borrower’s Proprietary Rights to secure the obligations of Borrower under the Loan Agreement.

     B. Pursuant to the terms of the Loan Agreement, Borrower has granted to Lender a security interest in all of Borrower’s right, title and interest to and under all of the Borrower’s assets, including its Proprietary Rights.

     NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound, as collateral security for the prompt and complete payment when due of its obligations under the Loan Agreement, Borrower hereby represents, warrants, covenants and agrees as follows:

AGREEMENT

     To secure its obligations under the Loan Agreement, Borrower grants and pledges to Lender a security interest in all of Borrower’s right, title and interest in, to and under its assets, including without limitation its Proprietary Rights listed on ExhibitA hereto, and including without limitation all proceeds thereof (such as, by way of example but not by way of limitation, license royalties and proceeds of infringement suits), the right to sue for past, present and future infringements, all rights corresponding thereto throughout the world and all re-issues, divisions continuations, renewals, extensions and continuations-in-part thereof.

     This security interest is granted in conjunction with the security interest granted to Lender under the Loan Agreement. The rights and remedies of Lender with respect to the security interest granted hereby are in addition to those set forth in the Loan Agreement and the IP Pledge Agreement, and those which are now or hereafter available to Lender as a matter of law or equity. Each right, power and remedy of Lender provided for herein or in the Loan Agreement or the IP Pledge Agreement, or now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to every right, power or remedy provided for herein and the exercise by Lender of any one or more of the rights, powers or remedies provided for in this Intellectual Property Security Agreement, the Loan Agreement or the IP Pledge Agreement, or now or hereafter existing at law or in equity, shall not preclude the simultaneous or later exercise by any person, including Lender, of any or all other rights, powers or remedies.

This Agreement is governed by the laws of the state of New York without regard to conflicts of law principles.

IN WITNESS WHEREOF, the parties have caused this Intellectual Property Security Agreement to be duly executed by its officers thereunto duly authorized as of the first date written above.

	BORROWER:
Address of Borrower:	PROGENTIX ORTHOBIOLOGY B.V.
Professor Bronkhorstlaan	By: JD de Bruijn Holding BV, its solely
10 D, (3723 MB) Bilthoven, the Netherlands	authorized statutory director
Attn:	Title:
	Name: Joost D de Bruijn
	Title: General Director
	LENDER:
Address of Lender:	NUVASIVE, INC.
7475 Lusk Boulevard	By:
San Diego, CA 92121	Title:
Attn:

EXHIBIT A

Patents

***

Trademarks

***

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

Schedule 3

Form of Utilisation Request

From:	Progentix Orthobiology B.V.
To:	NuVasive, Inc.

Dated:

Dear Sirs

Progentix Orthobiology B.V. — U.S.$5,000,000 Senior Secured Facility Agreement
dated January 8, 2009 (the “Agreement”)

1.	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2.	We wish to borrow a Loan on the following terms:

Proposed Utilisation Date:	[                    ] or, if that is not a
	Business Day, the next Business Day)
Amount:	[                    ]
Interest Period:	[                    ]
Purpose:	[                    ]

3.	We confirm that no Event of Default is continuing or would result from the proposed Loan on the date of this Utilisation Request.
4.	The proceeds of this Loan should be credited to [account].
5.	This Utilisation Request is irrevocable.

Yours faithfully

authorised signatory for

Progentix Orthobiology B.V.

EXHIBIT C

AMENDMENT OF THE ARTICLES OF ASSOCIATION
PROGENTIX ORTHOBIOLOGY B.V.

On the       day of       two thousand and nine, appeared before me, Alexander Joannes Wiggers, civil law notary in Amsterdam:
     .

The person appearing declared as follows:

I.

The Articles of Association of Progentix Orthobiology B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), with corporate seat in Bilthoven and office address at      , registered with the Trade Register under number       (hereinafter referred to as: the “Company”), were lastly established by a deed of amendment executed on       two thousand and       before      , civil law notary in       (declaration of no objections dated       two thousand and      , number B.V.:      ).

II.

By written resolution of the Company’s general meeting of shareholders dated       two thousand and      , it has been resolved:

a.	to amend the Articles of Association of the Company as mentioned below, and
b.	to authorize the person appearing to apply for the declaration of no objections and to execute the notarial deed amending the Articles of Association of the Company.

The shareholders’ resolution has been attached to this deed.

III. On behalf of the Minister of Justice a declaration of no objections, number B.V.       has been issued in accordance with Article 2:235 Dutch Civil Code on       two thousand and      .

The declaration of no objections has been attached to this deed.
The person appearing, acting in said capacity, declared hereby to partially amend the Articles of Association of the Company, laying them down as follows:

I.	Article 3.1 is hereby amended and will read as follows:
3.1	The authorised capital of the company amounts to ninety thousand euro (EUR 90,000), divided into three million (3,000,000) cumulative preference shares A, three million (3,000,000) cumulative preference shares B and three million (3,000,000) (3,000,000) ordinary shares, each share of the value of one euro cent (EUR 0.01).
II.	Article 3.2 is hereby amended and will read as follows:

- 1 -

3.2	Everywhere where mention is made in these articles of association of ‘cumulative preference shares’ and ‘cumulative preference shareholders’ those terms shall be deemed to include both the cumulative preference shares A and the cumulative preference shares B, and the holders of cumulative preference shares A and cumulative preference shares B, unless the contrary is explicitly clear. Everywhere where mention is made in these articles of association of ‘shares’ and ‘shareholders’ those terms shall be deemed to include both the ordinary shares and the cumulative preference shares, and the holders of ordinary shares as well as the holders of cumulative preference shares, unless the contrary is explicitly clear.
III.	Article 16.5 is hereby deleted and 16.6 through 16.8 are renumbered 16.5 through 16.7.
IV.	Article 21.6 is hereby deleted and 21.8 through 21.10 are renumbered 21.6 through 21.8
V.	Article 26.2 is hereby amended and will read as follows:
26.2	All resolutions of the general meeting need to be passed by an absolute majority of the votes cast, except where a larger majority is required by law or by these articles of association, and with due observance of the provisions of Article 28.1.
VI.	Article 28.2 is hereby deleted.

Finally, the person appearing, acting in said capacity, declared the following.

(i)	Immediately prior to the execution of this deed the Company’s issued share capital amounts to twenty-thousand euro (EUR 22,000), divided into eighteen thousand (18,000) ordinary shares and four thousand (4,000) preferred shares, each share with a nominal value of one euro (EUR 1).
(ii)	The ordinary shares, numbered       through       as well as the preferred shares, numbered CP 2,401 through CP 4,000 are herewith converted into eight hundred eighty thousand (880,000) preferred shares B with a nominal value of one Euroe cent (EUR 0.01), renumbered CPB1 through CPB 880,000 [note: further data to be derived from deed of transfer to NuVa].
(iii)	The two thousand four hundred (2,400) preferred shares, numbered CP 1 through CP 2400 are herewith converted into 240,000 preferred shares A with a nominal value of one Euro cent (EUR 0.01) and renumbered CPA 1 through CPA 240,000.
(iv)	Upon the execution of this deed the Company’s issued share capital amounts to twenty-two thousand euro (EUR 22,000) divided into:

(a.)	one million eighty thousand (1,080,000) ordinary shares, numbered 1 through 1,080,000;
(b.)	twohundred forty thousand (240,000) preferred shares A, numbered CPA1 through CPA 240,000;
(c.)	eight hundred eighty thousand (880,000) preferred shares B, numbered CPB 1 through CPB 880,000;

- 2 -

     all shares with each with a nominal value of one euro cent (EUR 0.01).

The person appearing is known to me, civil law notary, and the identity of the person appearing mentioned in this deed has been determined by me, civil law notary, by means of the relevant document mentioned hereinbefore.

This deed has been executed at Amsterdam on the date mentioned at the head of this deed.

The contents of this deed have been stated and explained to the person appearing by me, civil law notary.

Furthermore the consequences of this deed have been pointed out to the person appearing. The person appearing declared to have in good time taken cognisance of the contents of this deed and to agree with the contents.

Thereupon, after a limited part of this deed had been read out, it has been signed by the person appearing and by me, civil law notary.

- 3 -

articles of association for a private limited liability company

Name and registered office

1.1.	The name of the company is: Progentix Orthobiology B.V.:
1.2.	The company has its registered office in the Municipality of Bilthoven.

Object

2. The object of the company is:

(a)	to develop and to sell products which has to do with biotechnology.
(b)	to establish and acquire, participate in, cooperate with, manage and finance (or cause to be financed) other enterprises of any legal form whatever;
(c)	to provide and enter into loans of money, to manage and dispose of registered property and to furnish security, including security for the debts of other parties;
(d)	to perform all other activities which are connected with or conductive to the above in the broadest sense of the word.

Capital and shares

3.1.	The authorised capital of the company amounts to € 90,000.00 (ninety thousand euros) divided into 30,000 (thirty thousand) cumulative preference shares and 60,000 (sixty thousand) ordinary shares, each of the value of €1.00 (one euro).
3.2.	Everywhere where mention is made in these articles of association of ‘shares’ and ‘shareholders’ those terms shall be deemed to include both the ordinary shares and the cumulative preference shares, and the holders of ordinary shares as well as the holders of cumulative preference shares, unless the contrary is explicitly clear.

Registered shares

4.1.	The shares shall be in name and shall have been numbered for each kind of shares separately consecutively starting from the number 1.
4.2.	No share certificates can be issued.

The issue of shares

5.1.	(a)	The issue of shares (including the granting of rights to subscribe for shares) shall be effectuated by a resolution of the general meeting of shareholders, referred to below as: ‘the general meeting’.
	(b)	The general meeting shall also determine the price and the terms and conditions of

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	issue, with due observance of these articles of association. Upon the resolution to issue it can be determined that a share premium created by payment(s) above par shall be formed exclusively for the benefit of holders of the kind of shares to which the payment(s) relate.
(c)	The issue price may not be below par value.
(d)	The general meeting may delegate its power to pass the resolutions referred to at (a) and (b) to another organ of the company and may revoke this delegated power.
(e)	The issue of a share also requires an instrument intended for this purpose and executed before a civil-law notary practising in the Netherlands, to which the persons concerned are parties.

5.2 Upon the issue of shares each shareholder shall have a pre-emptive right in proportion to the joint amount of his shares, except where the law provides otherwise. Upon exercising their pre-emptive right holders of the kind of shares to be issued shall have priority in proportion to the Joint amount of the kind of shares in question they are holding, in relation to holders of shares of the other kind. That pre-emptive right can not be assigned. The pre-emptive right may, each time for a single issue, be limited or excluded by the body authorised to issue.

Payment on shares

6.1	The nominal amount must be paid up when subscribing for a share. It may be stipulated that a part of the nominal amount, not exceeding three-quarters, need be paid up only when the Board of Managing Directors requests such payment
6.2	Payment for shares shall be made in Dutch currency in so far as no other form of contribution has been agreed upon. Payment may be made in a foreign currency only with the permission of the Board of Managing Directors.

Register of shareholders

7.1 The Board of Managing Directors shall keep a register containing the names and addresses of all shareholders, the number of shares held by them and the kind of shares, together with the date on which they acquired the shares, the date of acknowledgement or service, and the amount paid up on each share. The register shall also contain the names and addresses of those who have a right of usufruct or pledge in respect of the shares, together with the date on which they acquired the right, the date of acknowledgement or service, and specification of the rights attached to the shares to which they are entitled in accordance with Article 8, together with the names and addresses of the holders of depositary receipts issued for shares with the cooperation of the company.

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7.2.	The register shall be regularly updated, subject to the proviso that every change to the particulars referred to in paragraph 1 should be noted in the register as quickly as possible. The register shall also contain a note of every discharge from liability granted in respect of payments not yet made, together with the date on which the discharge is granted.
7.3.	Each shareholder and any person having a right of usufruct or pledge in respect of shares and each holder of depositary receipts issued for shares with the cooperation of the company shall be obliged to notify the company in writing of their address.
7.4.	The Board of Managing Directors shall, upon request, issue to the person referred to above in paragraph 1 an extract from the register relating to his right to a share free of charge. If the share is subject to a usufruct or a pledge, the extract shall specify who is entitled to the rights referred to in Article 8.
7.5.	The Board of Managing Directors shall deposit the register at the office of the company for inspection by the shareholders and by the usufructuaries and pledgees entitled to the rights referred to in Article 8, paragraph 2, and by the holders of depositary receipts issued for shares with the cooperation of the company. The particulars contained in the register in respect of shares that have not been paid up in full shall be available for public inspection; a copy or extract of such particulars shall be issued at no more than cost price.

Usufruct/pledge

8.1. A usufruct may be created on shares. The voting right on shares subject to a usufruct is vested in the shareholder. Notwithstanding this provision, the usufructuary shall have the voting right

- if it is a usufruct as referred to in Articles 4:19 and 4:21 of the Dutch Civil Code (Burgerlijk Wetboek), unless provided otherwise by the parties or by the cantonal section of the court pursuant to Article 4:23, paragraph 4, of the Dutch Civil Code (Burgerlijk Wetboek) when the usufruct is created, or

- if this is stipulated when the usufruct is created, provided that both this provision and (in the event of transfer of the usufruct) the transmission of the voting right have been approved by the organ of the company designated by the articles of association for granting approval of a proposed transfer of shares or, in the absence of such a designation, by the general meeting.

8.2. A shareholder who has no voting rights and a usufructuary who has voting rights shall have the rights conferred by law on the holders of depositary receipts issued for shares with the cooperation of the company. A usufructuary who does not have voting rights shall have the

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	rights conferred by law if no provision to the contrary is made when the usufruct is created or transferred.
8.3.	Shares may be pledged. The provisions of paragraph 1 and 2 of this Article shall apply mutatis mutandis upon the occasion of creation of the pledge and if another person exercises the rights of the pledgee.

Depositary receipts

9.1.	A resolution of the Board of Managing Directors to cooperate in the issue of depositary receipts for shares in the company shall require the prior approval of the general meeting.
9.2.	Depositary receipts for shares may not be issued to bearer. If this provision has been breached, the rights attached to the relevant shares may not be exercised as long as the bearer receipts are outstanding.
9.3.	For the purposes of these articles of association, depositary receipt holders shall be deemed to mean the holders of a depositary receipts issued for shares with the cooperation of the company as well as persons who, pursuant to Article 8, have the rights conferred by law on depositary receipt holders.
9.4.	For the purposes of these articles of association depositary receipts are deemed to mean depositary receipts issued for shares with or without the cooperation of the company.

Joint property

10. If shares, restrictive rights on shares or depositary receipts issued for shares are held jointly, the persons jointly entitled may be represented in dealings with the company only by one person notified to the company in writing.

Acquisition of shares in its own capital / Reduction of capital

11.1.	The acquisition by the company of shares in its own capital that have not been fully paid up shall be void.
11.2.	Fully paid-up shares in the company may be acquired by the company only free of charge or if all the following provisions have been fulfilled:

(a)	the net assets of the company, less the acquisition price, is not less than the aggregate of the paid-up and called-up part of the capital and the reserves that must be kept by law;
(b)	the aggregate of the nominal value of the shares to be acquired and already held in the capital of the company by the company and its subsidiaries does not exceed one-half of the issued capital;
(c)	authorisation to acquire has been granted by the general meeting or by another

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	organ of the company designated by the general meeting for this purpose.
11.3.	For the purposes of the validity of any acquisition, the deciding factor shall be the amount of the net assets of the company according to the last approved balance sheet, less the acquisition price for shares in the company’s capital and payments from profits or reserves to third parties for which the company and its subsidiaries became liable after the date of the balance sheet. If a period of more than six months has elapsed since the start of the financial year, without the annual accounts having been adopted, acquisition in accordance with the provisions of paragraph 2 shall not be permitted.
11.4.	The preceding paragraphs shall not apply to shares acquired by the company by universal succession.
11.5.	For the purposes of this Article, the term share shall be deemed to include any depositary receipt issued for such a share.
11.6.	The general meeting may decide to reduce the issued capital by cancelling shares or by reducing the amount of shares by amending the articles of association, subject to the relevant provisions of the law.
11.7.	Partial repayment on shares or exemption from the obligation to pay shall only be possible by way of execution of a resolution to reduce the nominal amount of the shares. Such a repayment or exemption may occur pro rata with respect to all shares or exclusively with respect to the shares of a certain kind; the requirement of proportionality applies to those shares. The requirement of proportionality may be deviated from only with the consent of all shareholders involved.

No support for the acquisition of shares in the company

12.1.	The company may not, with a view to the subscription for or acquisition by other persons of shares in its capital or depositary receipts for such shares, provide any security, guarantee the share price, otherwise act as surety for other persons or undertake to be jointly and severally liable as co-debtor or in any other manner bind itself with or for any other party. This prohibition applies equally to the company’s subsidiaries.
12.2.	Loans may be granted by the company for the purpose of subscribing for or acquiring shares in its capital or depositary receipts for such shares only up to a maximum of the amount of the distributable reserves and with the authorisation of the general meeting.
12.3.	The company shall keep a non-distributable reserve equal to the outstanding amount of the loans referred to in the preceding paragraph.

Transfer of Shares

13.1. A transfer of shares or of a restrictive right on shares requires an instrument of transfer to

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which the persons concerned are party and which is executed for this purpose before a civil-law notary practising in the Netherlands.

13.2.

The transfer of a share has effect by law against the company. Except where the company is also party to the juristic act, the rights attaching to the shares may be exercised only after the company has acknowledged the juristic act or the instrument has been served on it in accordance with the relevant statutory provisions or after the company has acknowledged the transfer by registration in the register of shareholders referred to in Article 7.

Restrictions on transfer / General obligation to offer

14.1.	Shares may be transferred only after they have first been offered for sale to the co-shareholders in the manner referred to below.
14.2.	A shareholder need not offer his shares for sale if the transfer occurs with the written consent of the co-shareholders within three months of the date on which they give their consent.
14.3.	A shareholder who wishes to transfer one or more shares, referred to below as the offeror, shall notify the Board of Managing Directors which shares he wishes to transfer. Such notification shall constitute an offer to sell the shares to his co-shareholders. If the company holds shares in its own capital it may be deemed to be a co-shareholder for this purpose only if this has been agreed by the offeror in his offer.
	The share price shall, unless the shareholders unanimously agree otherwise, be determined by one or more independent experts to be appointed by the shareholders by mutual agreement. If the shareholders fail to reach agreement on this matter within two weeks of receipt of notice of the offer referred to in paragraph 5 below, any party may apply to the cantonal section of the court (kantonrechter van de rechtbank) in whose district the company has its registered office for the appointment of three independent experts.
14.4.	The experts referred to in the preceding paragraph shall be entitled to inspect all books and documents of the company and to obtain any information which may assist them in their valuation.
14.5.	The Board of Managing Directors shall, within two weeks of receipt of the notification referred to in paragraph 3, notify the co-shareholders of the offer made by the offeror and notify each shareholder of the share price within two weeks of the date on which it is fixed by the experts or agreed by the shareholders.
14.6.	Notwithstanding the provisions of paragraph 8, the Board of Managing Directors shall, if notified to this effect by all co-shareholders within the period stipulated in that paragraph,

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	inform the offeror without delay that the offer has not been taken up or has not been taken up in full.
14.7.	Shareholders who wish to buy the shares offered for sale shall notify the Board of Managing Directors accordingly within two weeks of receiving notification of the share price in accordance with paragraph 5.
14.8.	The Board of Managing Directors board shall then allot the offered shares to the applicants and shall notify the offeror and all shareholders of the allotment within two weeks of the expiry of the period specified in paragraph 7.
	In so far as the shares have not been allotted the Board of Managing Directors shall also notify the offeror and all shareholders of that fact within the specified period.
14.9.	The shares shall be allotted by the Board of Managing Directors to the applicants as follows;

(a)	in proportion to the nominal value of the shares held by the applicants;
(b)	in so far as proportionate allotment is not possible, the allotment shall be decided by the drawing of lots;

	Shares may be allotted to the company only if no application for such shares has been made by the other co-shareholders.
	No one may be offered more shares than he has applied for.
14.10.	The offeror may withdraw his offer provided he does so within one month after he has been notified to which shareholders he may sell all the shares to which the offer relates and at what price.
14.11.	The shares purchased shall be delivered, in consideration of simultaneous payment of the purchase price, within eight days of the expiry of the period during which the offer may be withdrawn.
14.12.	If the offeror has not withdrawn his offer, he may freely transfer the offered shares within a period of three months following the notification referred to in paragraph 6 or 8 that the offer has not been taken up or not taken up in full.
14.13.	When determining the price, the experts referred to in paragraph 3 shall decide fairly who will bear the costs of the valuation. They may indicate that one of the determinants is whether or not the offeror withdraws his offer,
14.14.	The provisions of this Article shall, as far as possible, apply mutatis mutandis to the disposal by the company of shares purchased or otherwise acquired by it.
14.15.	The provisions of this Article shall not apply if the shareholder is obliged by law to transfer a share to a former shareholder.

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Special obligation to offer

15.1.  a. If a shareholder dies or loses the unfettered control of his assets or if a matrimonial community of property or a community of property under a registered partnership of a shareholder is dissolved, his shares must be offered for sale In accordance with the provisions of the following paragraphs.

b.	The same obligation to offer shares for sale exists if the voting right in respect of shares is no longer vested in the usufructuary and the usufruct has been created on the basis of Article 4:19 or 4:21 of the Dutch Civil Code (Burgerlijk Wetboek), or at the end of a usufruct of this kind.
c.	Again, the same obligation to offer shares for sale exists if a shareholder/legal entity is dissolved or if the shares of a shareholder/legal entity are transferred under universal title as a result of a merger or division

15.2. If an obligation to offer shares for sale exists, the provisions of Article 14 shall apply mutatis mutandis, subject to the proviso that the offeror:

(a)	does not have the right to withdraw his offer in accordance with paragraph 10 of that Article;
(b)	may retain the shares where the offer has not been taken up or not fully taken up.

15.3.	Persons under an obligation to offer for sale one or more shares shall, within thirty days of the obligation arising — or, in the case referred to in paragraph 6 (b), upon expiration of the period referred to in that paragraph — notify the Board of Managing Directors of their offer. In the absence of notification, the Board of Managing Directors shall inform the persons obliged to offer the shares for sale of their failure to notify and bring the terms of the preceding sentence to their attention. If they still fail to notify the company within eight days, the company shall offer the shares for sale on behalf of the shareholders(s) concerned and, if the offer for sale is taken up in full, deliver the shares to the purchasers(s) in consideration of simultaneous payment of the purchase price; the company has an irrevocable power to act in this way.
15.4.	The company shall, in the event of a transfer of shares pursuant to the provisions of the preceding paragraph, pay to the person or persons on whose behalf the offer was made the net balance of the purchase price after deduction of any costs incurred in the transaction.
15.5.	The voting right attached to the shares, the right to participate in the general meeting and the right to distributions shall be suspended during the period in which the shareholder fails to discharge the obligation to offer the shares for sale on the basis of the provisions of this article.

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15.6. The obligation under paragraph 1 shall not apply:

(a)	if all co-shareholders have given notice in writing within three months of the obligation arising that they agree to the new shareholder or shareholders;
(b)	if the shares form part of a community of property to which not only the person who has contributed the shares to the community but also one or more other persons are entitled, in so far as the shares are transferred within one year of the dissolution of the community of property to the person who contributed the shares to the community.

Management

16.1. The Executive Board, consisting of a number of one or more managing directors to be determined by the general meeting, under the supervision of a Supervisory Board, consisting of one or more supervisory directors, shall be charged with the management of the company.

16.2.	Managing directors shall be appointed by the general meeting and may be suspended and discharged by the general meeting at all times. The Supervisory Board, too, shall be authorized to suspend managing directors. The general meeting may grant and deprive one or more managing directors of the title of general manager at all times.
16.3.	The Executive Board can determine a set of rules about its decision-making and about the particular task(s) of each of the managing directors. All resolutions of the Executive Board with respect to which the rules do not prescribe a larger majority, shall be adopted by an absolute majority of the votes cast.

16.4. All resolutions of the Executive Board with respect to the following subjects shall require the prior approval of the Supervisory Board, or, for as long as that Board is not yet functioning, the meeting of holders of cumulative preference shares:

a.	the adoption of an annual budget, comprising an investment plan and a financial plan, that must be drawn up by the Executive Board each year;
b.	the carrying out of legal acts as a consequence of which the annual plan of the company is exceeded upon by 10% (ten percent) or more;
c.	the entering into settlement agreements;
d.	the conducting and stopping of legal proceedings (inclusive of mediation and arbitration proceedings) with the exception of interim injunction proceedings that can not suffer delay;
e.	the granting of bonuses or result-dependent remunerations to the Executive Board,

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	the management team or the other employees of the company;
f.	the entering into any share option agreement and the granting of individual share options on the basis of such a plan;
g.	the adoption of (a) pension scheme(s) and the granting of pension rights apart from those that result from existing pension commitments;
h.	the entering into contracts, transactions or obligations the amount of which exceeds €;100,000.00 (one hundred thousand euros).
i.	the entering into and amending of employment contracts in which a gross annual remuneration is granted of €50,000.00 (fifty thousand euros) or more;
j.	the entering into an agreement or arrangement with a (person affiliated with a) shareholder, managing director or supervisory director of the company or of a subsidiary of the company;
k.	the appointment of attorneys-in-fact or, as the case may be, empowered persons and terminating their authorisation and title.

16.5. All resolutions of the Executive Board with respect to the following subjects shall require the prior approval of the meeting of cumulative preference shareholders:

a.	the opening or closing of branch establishments, taking or terminating a direct or indirect participating interest in other companies or the termination or changing of the extent of such a participating interest, in the home country or abroad.
b.	the granting of money loans as well as the entering into money loans as a borrower and into credit arrangements (including also lending to or borrowing from affiliated companies) that do not exceed an amount of 10% (ten percent) of the total nominal amount paid on preference shares increased by the share premium;
c.	binding the company as a guarantor or several co-debtor or binding the company in another way for obligations of third parties not exceeding an amount of 10% (ten percent) of the total nominal amount paid on preference shares increased by the share premium;
d.	the acquisition, alienation, encumbrance, renting, letting out for rent of, or acquiring in any other manner or granting of the use or enjoyment of, immovable and/or movable property and/or property rights;
e.	The entering into agreements in which a credit is granted to the company that exceeds an amount of 10% (ten percent) of the total nominal amount paid on the preference shares increased by the share premium.

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f.	long term direct or indirect collaboration with other enterprises and the termination of such collaboration;
g.	legal acts that do not fall under the normal conduct of business of the company;
h.	initiating investments or disinvestments or acquiring or divesting (a) company activity(ties);
i.	the application for a moratorium or bankruptcy of the company;
j.	the granting of registration rights or comparable rights;
k.	the entering into, terminating or amending of (license) agreements with respect to intellectual property rights of the company;
l.	the exercising of voting rights on shares of a company in which the company participates.

16.6. For the application of the paragraphs 16.4 and 16.5 a resolution of the Executive Board to carry out a legal act shall be equated with a resolution of the Executive Board to adopt or approve of a resolution of any body of a company in which the company has a participating interest, provided that the latter resolution requires approval as referred to in the paragraphs 16.4 and 16.5.

The absence of approval as referred to in this paragraph shall not affect the representative authority of the Executive Board or of the managing directors.

16.7. In the event of the absence or inability to act of one of the managing directors, the other managing directors shall continue to be charged with the management. In the event of the absence or inability to act of all managing directors, one person designated for that purpose by the Supervisory Board whether or not from amongst its members shall be charged temporarily with the management of the company.

The Supervisory Board shall have the right to designate a person as referred to in the preceding sentence also in the event of the absence or inability to act or one or more, but not all, managing directors, which person than shall be co-charged with the management.

16.8. The remuneration and further terms and conditions of employment shall be determined by the general meeting for each managing director separately.

Representation

17.1. The Executive Board shall represent the company. Two managing directors acting jointly shall also have that representative authority. A managing director with the title ‘general manager’ shall be authorized to represent the company independently.

17.2. In all situations in which there is a conflict of interests between the company and one or

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more managing directors, the company shall nevertheless be represented in the manner mentioned above.

A resolution of the Executive Board to carry out a legal act involving a conflict of interests as referred to above, shall require the prior approval of the Supervisory Board.

Supervisory Board

18.1. There shall be a Supervisory Board if a resolution of the general meeting to that end has been deposited at the office of the Commercial Register, for as long as no resolution of the general meeting, to abolish the Supervisory Board has been deposited there. A Supervisory Board-shall consist of one or more natural persons. The number of supervising directors shall be determined by the general meeting. The supervising directors shall be appointed, suspended and dismissed by the general meeting. If no Supervisory Board has been established, the powers granted in these articles of association to the Supervisory Board shall be the powers of the general meeting to the extent to which that is possible.

18.2. The Supervisory Board shall be charged with supervising the policy conducted by the Executive Board and the general run of affairs in the company and the enterprise linked to it and in addition with the tasks imposed on it in these articles of association or in the law. The Supervisory Board shall give advice to the Executive Board and to the general meeting each time when this is requested to do so or it deems such advice desirable.

The supervising directors, both jointly and each director individually shall at all times have access to the offices and properties of the company and shall have the right to inspect the books, records and correspondence and to check the cash money of the company at all times.

The Supervisory Board shall have the right to have itself assisted by one or more experts for the account of the company.

The Supervisory Board may designate one or more delegates from amongst its members, which delegates shall be charged in particular with the day-to-day supervision of the Executive Board.

18.3. The Supervisory Board shall elect a President, a Vice-President and a Secretary from amongst its members, but it shall also be allowed to elect one of the managing directors as Secretary.

18.4. The Supervisory Board shall meet at least twice a year and in addition as often as it is requested to do so by one supervising director or one managing director.

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18.5.	The Supervisory Board may adopt a set of rules about its decision-making process. All resolutions of the Executive Board with respect to which the rules do no prescribe a larger majority, shall be adopted by an absolute majority of the votes cast.
18.6.	Each managing director shall be obliged to attend the meetings of the Supervisory Board if invited to do so and to give all information there with respect to the business of the company.
18.7.	Records shall be kept of the resolutions of the Supervisory Board. Those records shall be kept by the Supervisory Board.

Annual accounts

19.1.	The financial year of the company coincides with the calendar year.
19.2.	Every year within five months after the expiration of the financial year of the company, except where that term is extended by the general meeting by six months at the most in view of special circumstances, the Executive Board shall draw up annual accounts that shall be deposited at the office of the company for inspection by the shareholders. Within that term the Executive Board shall also deposit the annual report for inspection, unless section 2:396, paragraph 6, first sentence or section 2:403 of the Dutch Civil Code applies.
	The annual accounts shall be signed by all managing directors and all supervising directors.
	If any signature is missing, that shall be reported with mentioning of the reason(s) for this. The annual accounts shall be accompanied by an opinion from the Supervisory Board.

19.3.	a.	The company shall commission an audit of the annual accounts. The general meeting shall be authorised to commission the audit. If it fails to do so, the Supervisory Board shall be entitled to do so and if the latter also fails to do this, the Executive Board.
		The assignment may at all times be withdrawn by the general meeting and by the commissioning party.

b.	The assignment shall be granted to an accountant. The designation of an accountant shall not be limited by any recommendation. If the appointment of an accountant is not required by law, the general meeting shall be entitled to grant such an assignment also to another party.
c.	The person to whom the assignment is granted shall report to the Supervisory

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Board and the Executive Board in writing.

19.4. The company shall ensure that the annual accounts that have been drawn up, the annual report, the opinion of the Supervisory Board and the information to be added under section 2:392 paragraph 1 of the Dutch Civil Code shall be present at the office of the company from the day of the convocation of the general meeting intended for the discussion of those documents. The shareholders and the depositary receipt holders can inspect the documents there and obtain a copy of them free of charge.

Adoption of the annual report and accounts

20.1. The annual accounts shall be adopted by the general meeting.

The annual report shall be adopted by the Executive Board.

20.2. After the proposal to adopt the annual accounts will have been discussed, a proposal shall be made to the general meeting to grant discharge to the managing directors for the policy conducted by them in the financial year in question, in as far as such policy is evident from the annual account or has been notified to the general meeting, and discharge to the supervisory directors for their supervision.

Profit appropriation

21.1	The profit shall be at the free disposal of the general meeting.
21.2	The company can only make payments to the shareholders and other parties entitled to the profit susceptible for distribution in as far as the equity is larger than the part of the capital paid up and called for, increased by the reserves that must, be maintained under the law or the articles of association.
21.3	Distribution of profit shall occur after the adoption of the annual accounts that evidence that such distribution is permitted.
21.4	If the general meeting of shareholders resolves to distribute profit over the financial year most recently expired, then first of all, a payment shall occur, where possible; on cumulative preference shares of a percentage of eight percent (8%) of the nominal amount of each share.
21.5	If the distribution referred to above under 4 has not occurred in any year, then a payment shall occur, if the general meeting resolves to distribute profit in any subsequent year, first of all. if and to the extent to which this is possible, on the cumulative preference shares of the amount of the preference dividend that has not been paid to the cumulative preference shares in the years preceding.
21.6	In the event of:

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• liquidation or sale of all or almost all assets of the company;

• the granting of exclusive rights of use with respect to all or nearly all assets of the company;

• a merger of the company;

• the transfer of the enterprise of the company;

• the receipt of a dividend payment from a subsidiary of the company as a consequence of one of the contingencies referred to above in this paragraph;

• the sale of more than 80% (eighty percent) of the shares of the subscribed share capital, with the exception of the situation in which an initial Public Offering (IPO) of he shares of the company occurs at a recognised stock exchange;

the company shall be obliged to distribute the proceeds generated as a result thereof (liquid means, shares or other assets) as follows:

I. (i)   if the relevant proceeds generated represent an amount smaller than € 15,000,000.00 (fifteen million euros) the holders of cumulative preference shares shall be entitled

• to twice the amount of the nominal value of the cumulative preference shares;

• to the premium reserve paid on those preference shares; and

• to any preference of eight percent (8%) in arrears as referred to above, it being understood that if the remaining amount is too small for such a distribution, that remaining amount shall be made available to the holders of cumulative preference shares in proportion to the number of shares in the subscribed capital of the company held by each of them;

 (ii) any amount remaining from those proceeds generated after full payment to the holders of cumulative preference shares in conformity with the provisions under 1 shall be paid to the holders of cumulative preference shares and the holders of ordinary shares, this in proportion to the total number of shares in the subscribed capital of the company held by each of them;

II. if the aforementioned proceeds that are generated represent an amount larger than € 15,000,000.00 (fifteen million euros) the generated proceeds shall be divided between the shareholders in proportion to the total amount of shares in the sub-scribed capital of the company held by each shareholder.

21.8. In calculating the profit division shares held by the company in its own capital shall not

15

^vanGrafhorst^notarissen

	count, unless those shares have been encumbered with a right of usufruct or pledge or if depositary receipts have been issued for them; as a consequence of which the usufructuary, the pledge or the holder of those depositary receipts is entitled to the right to receive profit.
21.9.	Shares for which the company is holding depositary receipts or with respect to which the company has a restrictive right on the basis of which it is entitled to profit distribution, shall not count in the calculation of the profit division either.
21.10.	The company shall only be allowed to make interim distributions if the requirement of paragraph 2 has been complied with and with due observance of the fact that the provisions of the fourth and fifth paragraph of this article with respect to cumulative preference shares shall apply to the payment of interim dividend on cumulative preference sharers.

Dividend

22.	The dividend may be claimed by the shareholders one month after its declaration, unless the general meeting determines another period. Such claims shall be barred after five years.
	A dividend not claimed within five years of the date on which it is declared shall revert to the company.

General meeting

23.1 General meetings of shareholders shall be held in the Netherlands in the municipality

	where the company has its registered office.
23.2.	A general meeting (referred to hereinafter as the annual meeting) shall be held annually no later than six months after the end of the company’s financial year.

The agenda shall contain the following items:

(a)	the annual accounts;
(b)	the annual report, unless Article 2:396, paragraph 6, or Article 2:403 of the Dutch Civil Code (Burgerlijk Wetboek) applies to the company;
(c)	the resolution to discharge the executive directors from liability for their management during the relevant financial year, in so far as such management is evident from the annual accounts or has been made known to the general meeting
(d)	resolutions tabled by the Board of Managing Directors;
(e)	resolutions, the discussion of which has been requested in writing by one or more shareholders and/or depositary receipt holders solely or jointly representing at least

16

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one hundredth of the issued capital, if the company has received such request not later than on the thirtieth day before the day of the meeting and provided that no important interest of the company dictates otherwise, which resolutions shall be included in the notice calling the meeting or shall be announced in the same manner as the resolutions mentioned above at (d);

(f)

any other business, subject to the proviso that no legally valid resolutions may be passed in respect of business not specified in the notice calling the meeting or in any supplementary notice sent within the period prescribed for giving notice of the meeting, unless the resolution is passed unanimously at a meeting at which all shareholders and depositary receipt holders for shares are present or represented.

23.3.

Where a resolution providing for an extension as referred to in Article 18, paragraph 2, is passed, the annual meeting at which the annual accounts and annual report are to be dealt with shall be postponed in accordance with that resolution.

23.4.

Other general meetings shall be held as frequently as the Board of Managing Directors or the Supervisory Board calls them. The Board of Managing Directors shall be obliged to call a general meeting if it receives a written request to this effect, accurately specifying the items to be dealt with, from one or more shareholders and/or depositary receipt holders representing at least one tenth of the issued capital. If the Board of Managing Directors does not call a meeting within four weeks, in such a way that the meeting can be held within six weeks of the request, the persons making the request shall themselves be entitled to call the meeting

Calling general meetings

24.1.	Each shareholder and each depositary receipt holder is entitled to attend general meetings, either in person or represented by proxy appointed in writing, and to address the meeting.
	Shares which by law carry no voting rights shall not be taken into account in determining to what extent a shareholder is present or represented.
24.2.	The notice calling a general meeting shall be sent to the addresses of the shareholders and depositary receipt holders as listed in the register of shareholders. Notice shall be given no later than on the fifteenth day before the meeting.
24.3.	The notices calling the meeting shall specify the items to be dealt with, without prejudice to the statutory provisions governing special decisions such as those governing legal merger, division, amendment of the articles of association and reduction of capital.
24.4.	if the notice calling the meeting was not sent, or was not sent within the period prescribed

17

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	for notice of such meeting, no legally valid resolutions may be passed, unless they are passed unanimously at a meeting at which all shareholders and depositary receipt holders are present or represented and the views of the Managing Directors and the Supervisory Board have been heard.
24.5.	Each Managing Director and Supervising Director shall be entitled to attend the general meeting and act there in an advisory capacity.

Chairing the general meeting

25.1.	The general meeting shall be chaired by the President of the Supervisory Board. In the absence of the President or if there is no Supervisory Board, the meeting shall elect its own chairman. The general meeting shall itself appoint a chair. Until that moment the meeting shall be chaired temporarily by the oldest Managing Director (in age) present at the meeting or, in the absence of any such director, by the oldest person present at the meeting. The minutes of the meeting shall be kept by a secretary appointed by the chair.
25.2.	Both the chair and the Supervisory Board and the person who has called the general meeting may direct that a notarised record of the proceedings at the meeting be drawn up. The notarised record shall be countersigned by the chair. The costs thereof shall be borne by the company.
25.3.	If a notarised record is not drawn up, the minutes of the general meeting shall be adopted by the chair and the secretary at that meeting and signed by them in confirmation thereof.
25.4.	The Board of Managing Directors shall keep a record of the resolutions passed by the general meeting. If the Board of Managing Directors is not represented at the general meeting, a copy of the resolutions passed shall be supplied to the Board of Managing Directors by or on behalf of the chair of the meeting as soon as possible after the meeting. Such record shall be kept at the office of the company for inspection by the shareholders and depositary receipt holders. Each of them shall be issued, on request, with a copy of or extract from such record at not more than cost price.

Passing of resolutions

26.1.	Each share shall carry one vote.
26.2.	All resolutions of the general meeting need to be passed by an absolute majority of the votes cast, except where a larger majority is required by law or by these articles of association.
26.3.	Votes shall be cast orally in respect of business other than elections and shall be cast by unsigned ballot papers in the case of elections. If an absolute majority is not obtained in an election ballot, a second ballot shall be held between the two persons for whom the

18

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	most votes were cast in the first ballot.
26.4	In the case of a tied vote on business other than elections, the resolution shall be deemed to have been defeated.
	In the case of a tied vote on elections, the matter shall be decided by lot.
26.5.	Blank votes shall be deemed not to have been cast.
26.6.	No vote may be cast at a general meeting for a share belonging to the company or a subsidiary thereof, nor for a share for which the company or a subsidiary thereof holds the depositary receipts. Usufructuaries and pledgees of shares belonging to the company or its subsidiaries are, however, not precluded from exercising their right to vote if the usufruct or pledge was created before the share belonged to the company or a subsidiary thereof.
	The company or a subsidiary thereof may not cast a vote for a share in respect of which it possesses a right of usufruct or pledge.
	Shares for which no voting rights may be exercised pursuant to the above shall not be taken into account in determining to what extent capital is represented at the general meeting.

Passing of resolutions other than in a general meeting

27.    All resolutions that may be passed in a general meeting may also be passed other than at such a meeting, unless there are depositary receipt holders, provided that all shareholders have indicated in writing, whether by means of telecommunication or otherwise, that they are in favour of the resolution and provided that the views of the Managing Directors have been heard. The provisions of Article 23, paragraph 5, and Article 24, paragraph 4, shall apply mutatis mutandis.

Special resolutions

28.1.	Resolutions to amend these articles of association or to wind up the company may be passed only at a general meeting at which not less than two thirds of the issued capital is represented and by a majority of at least three quarters of the votes cast.
28.2.	If this capital is not represented, another meeting shall be called and held within one month of - but no earlier than fifteen days after - the first meeting. At this second meeting a resolution as referred to in paragraph l may be passed by a majority of not less than three quarters of the votes cast, irrespective of the proportion of capital represented at such meeting.
	The notice calling this new meeting shall state that it is a second meeting for the purposes of Article 2:230, paragraph 3, of the Dutch Civil Code (Burgerlijk Wetboek).

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Notices and notifications

29.1.

Notices and other notifications sent by or to the company shall be in writing and may be sent by means of telecommunication or otherwise. Notices intended for shareholders, usufructuaries, pledgees and depositary - receipt holders shall be sent to the addresses referred to in the register of shareholders. Notices intended for the Board of Managing Directors shall be sent to the address of the company.

29.2.

Notifications which must, by law or pursuant to the articles of association, be addressed to the general meeting may be sent by inclusion in the notices calling a meeting.

dissolution

30.1	After dissolution of the company the liquidation shall be done by the managing directors, unless the general meeting determines otherwise. The liquidation shall be done under the supervision of the supervising directors, unless no supervising directors are functioning at the time of the adoption of the resolution to dissolve the company.
30.2	During the liquidation the provisions of these articles of association shall continue to be of effect to the largest extent possible. The provisions in those articles about managing directors then shall apply to the liquidators.
30.3	The provisions of article 21 paragraph 6 shall apply, mutatis mutandis, to the division of the remaining amount after the liquidation to the largest extent possible.
30.4	After its liquidation the company shall continue to exist in as far as required for the liquidation of its assets.

conversion

31. Cumulative preference shares can always be converted (one into one, without any additional payment being required) into ordinary shares, this at the request of each holder of cumulative preference shares. A written notification of the holder of cumulative preference shares in question to the company shall be required for such a conversion, after which that conversion must be laid down in a notarial deed. By the execution of that request all cumulative preference shares in question shall, without any other legal act than the aforementioned notarial deed being required, be converted in just as many ordinary shares of the same nominal amount, and they shall be numbered consecutively to the ordinary shares that have already been subscribed at that time. The Executive Board shall be obliged to record the aforementioned conversion of the cumulative preference shares into ordinary shares in the Commercial Register and in the shareholders’ register. In as far as the authorised capital of the company would contain insufficient ordinary shares to

20

^vanGrafhorst^notarissen

realize this conversion without an amendment of the articles of association, the shareholders shall be obliged to adopt a resolution to amend the articles of association as is required for that purpose. By subscribing for a share in the capital of the company each shareholder authorizes the company irrevocably to do all that is necessary for realising this amendment of the articles of association.

Final provision

32. Any powers not conferred on other persons shall, within the limits of the law and these articles of association, be vested in the general meeting.

21

EXHIBIT D

SWl\SWl\20048970\158596

TRANSFER OF SHARES
PROGENTIX ORTHOBIOLOGY B.V.

On the fourteenth day of January two thousand and nine, appeared before me, Johan Hendrik Bennebroek Gravenhorst, candidate civil law notary, hereinafter referred to as: “civil Law notary”, as a substitute of Alexander Joannes Wiggers, civil law notary in Amsterdam:

Floris David van der Velde, holding offices at Amstelveenseweg 638,1081 JJ Amsterdam, born in Haarlem on the twenty-eighth day of January nineteen hundred and seventy-nine, holder of a driving licence with number 3170900441. unmarried and not registered as a partner,

acting pursuant to a written power of attomey from:

1.	J.D. de Bruijn Holding B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Amersfoort. The Netherlands and with office address at Pasteurstraat 16,3817 JL Amersfoort, the Netherlands, registered with the Trade Register under number 32112279, hereinafter referred to as: “Seller 2”;
2.	Incubation B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Bilthoven, the Netherlands and with office address at Professor Bronkhorstlaan 10 D, 3723 MB Bilthoven, the Netherlands, registered with the Trade Register under number 30194071, hereinafter referred to as: “Seller 2”;
3.	Huipin Yuan, born in Sichuan, China, on the nineteenth day of April nineteen hundred sixty-six, residing at Nijenheim 2424,3704 VK Zeist, the Netherlands, holder of a Chinees passport with number Gl9596325, married, hereinafter referred to as: “Seller 3”;
4.	Biogeneration Ventures B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Leiden, the Netherlands and with office address at Gooimeer 2-35, 1411 DC Naarden, the Netherlands, registered with the Trade Register under number 32119447, hereinafter referred to as: “Seller 4”,
	the Seller 1, the Seller 2, the Seller 3 and the Seller 4 hereinafter also collectively

- 1 -

	referred to as: the “Sellers”;
5.	NuVasive, Inc, a company organised under the laws of the state of Delaware, United States of America, with registered seat and office address at 7473 Lusk Boulevard, San Diego, CA 92121, United States of America, registered with the Delaware Division of Corporations under number 2775617, hereinafter referred to as: the “Purchaser”;
6.	Progentix Orthobiology B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Bilthoven, the Netherlands and with office address at Professor Bronkhorstlaan 10 D, 3723 MB Bilthoven, the Netherlands, registered with the Trade Register under number 30234249, hereinafter referred to as: the “Company”

The person appearing, acting in said capacity, declared hereby as follows:

PREFERRED STOCK PURCHASE AGREEMENT AND SHARES

By written preferred stock purchase agreement dated the thirteenth day of January two thousand and nine (hereinafter referred to as: the “Preferred Stock Purchase Agreement”):

• the Seller 1 sold to the Purchaser and the Purchaser purchased from the Seller 1 two thousand eight hundred eighty (2,880) ordinary shares in the capital of the Company, each share with a nominal value of one euro (EUR 1). numbered 14,239 up to and including 17,118 (hereinafter referred to as: the “Shares 1”);

• the Seller 2 sold to the Purchaser and the Purchaser purchased from the Seller 2 three thousand nine hundred sixty-seven (3,967) ordinary shares in the capital of the Company, each share with a nominal value of one euro (EUR 1). numbered 5,952 up to and Including 9,918 (hereinafter referred to as: the “Shares 2”);

• the Seller 3 sold to the Purchaser and the Purchaser purchased from the Seller 3 three hundred fifty-three (353) ordinary shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 17,648 up to and including 18,000 (hereinafter referred to as; the “Shares 3”);

• the Seller 4 sold to the Purchaser and the Purchaser purchased from the Seller 4 one thousand six hundred (1,600) cumulative preference shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 2,401 up to and including 4,000 (hereinafter referred to as: the “Shares 4”),
the Shares 1, the Shares 2, the Shares 3 and the Shares 4 hereinafter also collectively referred to as the “Shares”.

A copy of the Preferred Stock Purchase Agreement is attached to this deed.

The provisions of the Preferred Stock Purchase Agreement which are still applicable at this time shall remain in force insofar as not inconsistent with this deed.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 1

The Shares 1 have been issued by the Company to the Seller 1 by virtue of the Company’s

- 2 -

Deed of Incorporation executed before N. van Buitenen, civil law notary in Utrecht, the Netherlands on the thirty-first day of December two thousand and seven,

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 2

The Shares 2 have been acquired by the Seller 2 pursuant to a purchase agreement, by a deed of transfer executed before a deputy of N. van Buitenen, aforementioned, on the twenty-ninth day of September two thousand and eight,

The transfer was acknowledged by the Company on the same day, as is evidenced by the abovementioned notarial deed.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 3

The Shares 3 have been issued by the Company to the Seller 3 by virtue of the Company’s Deed of Incorporation executed before N. van Buitenen, aforementioned, on the thirty-first day of December two thousand and seven.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 4

The Shares 4 have been issued by the Company to the Seller 4 by virtue of a deed of issue executed before N. van Buitenen, aforementioned, on the fourteenth day of January two thousand and eight.

PAYMENT OF THE PURCHASE PRICE

• The purchase price for the Shares 1 amounts to two million seven hundred fifty-nine thousand six hundred thiry-five United States Dollars and ninety-one cents (USD 2,759,635.91) (hereinafter referred to as: the “Purchase Price 1”).

• The purchase price for the Shares 2 amounts to three million eight hundred thousand nine hundred twenty-eight United States Dollars and forty-one cents (USD 3,800,928.41) (hereinafter referred to as: the “Purchase Price 2”).

• The purchase price for the Shares 3 amounts to three hundred thirty-eight thousand one hundred three United States Dollars and eighty-eight cents (USD 338,103,88) (hereinafter referred to as: the “Purchase Price 3”).

• The purchase price for the Shares 4 amounts to two million eight hundred thirty-two thousand two hundred forty-seven United States Dollars and ninety cents (USD 2,832,247.90) (hereinafter referred to as: the “Purchase Price 4”), the Purchase Price 1, the Purchase Price 2, the Purchase Price 3 and the Purchase Price 4 hereinafter also collectively referred to as: the “Purchase Price”.

The Purchaser has paid a part of the Purchase Price, being a total amount of nine million seven hundred thirty thousand nine hundred sixteen United States Dollars and ten cents (USD 9,730,916.10), by payment into the bank account of the civil law notaries of DLA Piper Nederland N.V. with ING Bank, account number 0020031300.

The undersigned civil law notary is hereby irrevocably instructed to pay:

• The Purchase Price 1, upon the execution of this deed into a bank account in the name of the Seller 1 with number 0227287436. Therefore, the Seller 1 hereby grants a discharge to the Purchaser for the payment of the Purchase Price 1.

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• The Purchase Price 2, upon the execution of this deed into a bank account in the name of the Sellers 2 with number 0227168216. Therefore, the Seller 2 hereby grants a discharge to the Purchaser for the payment of the Purchase Price 2.

• The Purchase Price 3, upon the execution of this deed into a bank account in the name of the Seller 3 with number 7733949. Therefore, the Seller 3 hereby grants a discharge to the Purchaser for the payment of the Purchase Price 3.

• The Purchase Price 4, upon the execution of this deed into a bank account in the name of the Seller 4 with number 0498622800. Therefore, the Seller 4 hereby grants a discharge to the Purchaser for the payment of the Purchase Price 4.

TRANSFER

Pursuant to the Preferred Stock Purchase Agreement:

• the Seller 1 hereby transfers the Shares 1 to the Purchaser, who accepts this transfer;

• the Seller 2 hereby transfers the Shares 2 to the Purchaser, who accepts this transfer;

• the Seller 3 hereby transfers the Shares 3 to the Purchaser, who accepts this transfer;

• the Seller 4 hereby transfers the Shares 4 to the Purchaser, who accepts this transfer;

FURTHER CONDITIONS

The guarantees and warranties as laid down in the Preferred Stock Purchase Agreement remain applicable to this transfer. Furthermore parties declare that they will ensure that the Shares will be converted into cumulative preference shares B in the capital of the Company as provided in the Recitals of the Preferred Stock Purchase Agreement.

Article 2.

All proceeds from and costs related to the Shares shall, as from this day, accrue to or, as the case may be, be borne by the Purchaser.

Article 3.

The costs incidental to this deed and the execution thereof shall be borne by the Purchaser.

Article 4.

The Preferred Stock Purchase Agreement does not contain any conditions subsequent and/or conditions precedent which can be invoked by the Sellers or the Purchaser with respect to the sale, purchase and transfer of the Shares.

SHARE TRANSFER RESTRICTIONS

The share transfer restrictions In the Company’s articles of association, which consist of an offering system, have In respect of the transfer of the Shares by this deed been duly observed, since all shareholders of the Company are a party to this deed and hereby waive their right pursuant to the share transfer restrictions to acquire the Shares.

ACKNOWLEDGEMENT

The Company declares that it has taken cognisance of and hereby acknowledges the above transfer of the Shares.

The Company shall immediately enter this transfer in its shareholders’ register.

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NON-APPLICABILITY OF ARTICLE 2:204C OF THE CIVIL CODE

The provisions laid down in Article 2:204c of the Dutch Civil Code do not apply to this transfer to the Purchaser.

INTERDISCIPLINARY COOPERATION

ADVISOR PURCHASER

With reference to the Rules of Professional Conduct (Verordening beroeps-en gedragsregels) of the Royal Dutch Organisation of Civil Law Notaries (Koninklljke Notariele Beroepsorganisatie) all parties declared expressly to agree that:

a.	DLA Piper Nederland N.V. acts as counsel to the Purchaser in connection with this deed or any related agreement, or acts as counsel for or on behalf of the Purchaser in the event of any dispute relating to this deed or any related agreement; and
b.	the undersigned civil law notary executes this deed of transfer even though he is affiliated with DLA Piper Nederland N.V. as civil law notary.

POWER OF ATTORNEY:

The person appearing has been authorized by six (6) written powers of attorney, (copies of) which Have been attached to this deed.

The person appearing is known to me, civil law notary, and the identity of the person appearing mentioned in this deed has been determined by me civil law notary, by means of the relevant document mentioned hereinbefore.

This deed is executed at Amsterdam on the date mentioned at the head of this deed. The contents of this deed have been stated and explained to the person appearing by me, civil law notary. Furthermore the consequences of this deed have been pointed out to the person appearing.

The person appearing declares to have in good time taken cognisance of the contents of this deed and to agree with the contents.

Thereupon, after a limited part of this deed has been read out, it is signed by the person appearing and by me, civil law notary at fifteen hundred hours and forty minutes (15:40). Signed.

ISSUED FOR TRUE COPY
By Johan Hendrik Bennebroek
Gravenhorst, candidate civil law notary, as
substitute of Alexander Joannes
Wiggers, civil law notary at Amsterdam
on 14 January 2009 at 15:50 hours.

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EXHIBIT E
Form of Proprietary Inventions Agreement

***

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

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

Filed separately as Exhibit 10.4 to our Quarterly Report on Form 10-Q filed May 8, 2009.

EXHIBIT H

EXCLUSIVE LICENSE AGREEMENT

     THIS EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is made as of January 13, 2009, by and between RevisiOs B.V., a corporation organized under the laws of Holland (“RevisiOs”) and 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”).

RECITALS

     NuVasive and RevisiOs entered into that certain Exclusive Distribution Agreement of even date herewith (the “Distribution Agreement”). NuVasive, RevisiOs and Progentix shareholders entered into that certain Option Purchase Agreement (the “Option Purchase Agreement”).

     In connection with the Distribution Agreement and the Option Purchase Agreement, Progentix desires to grant an exclusive license to NuVasive to certain patent rights owned by Progentix.

AGREEMENT

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

1. DEFINITIONS

     “Field” shall mean all spine-related applications.

     “Improvements” shall mean any invention or discovery conceived and/or reduced to practice by or on behalf of any employee, agent or other representative of RevisiOs that (a) constitutes an improvement or modification to an invention claimed by or disclosed in the Patent Rights, or (b) the practice of which would necessarily infringe one or more of the Patent Rights, and in each case of subparts (a) and (b), is conceived or reduced to practice at any time prior to fourth (4th) anniversary of the Effective Date.

     “Patent Rights” shall mean (a) the patents and patent applications listed on Exhibit A, together with all patents that have issued or in the future may issue from any patent application on Exhibit A, (b) any patents or patent applications, together with all patents that have issued or in the future may issue from such patent applications, owned or controlled by RevisiOs to the extent claiming an Improvement, (c) any continuations, divisionals, and continuations-in-part, to the extent the claims of any such patent application or patents issuing thereon are directed to subject matter specifically described in the patent applications listed in subparts (a) or (b) hereto, and (d) any reissues, re-examinations, or extensions thereof, or substitutes therefore; and the relevant international equivalents of any of the foregoing.

1

     “Product” shall mean any product the making, using, selling, offering for sale or importation of which would, absent the license granted herein, infringe one or more of the Patent Rights.

2. LICENSE GRANT

     2.1 On the terms and subject to the conditions of this Agreement, RevisiOs hereby grants to NuVasive an exclusive, worldwide, perpetual (unless terminated in accordance with Section 4.2), royalty-free, fully-paid license (with the right to grant sublicenses) under the Patent Rights to use, offer for sale, sell and import Products for use solely in the Field. NuVasive shall not have the right to make or have made any such Products, it being agreed that the manufacture of any such Products would need to be the subject of a mutually agreeable manufacturing agreement between the parties.

     2.2 Progentix shall promptly disclose to NuVasive all Improvements.

     2.3 During the term of this Agreement, NuVasive shall not sell, transfer or otherwise provide, directly or indirectly, to any third party any Product for use outside the Field. To the extent not prohibited by applicable law, NuVasive shall restrict (through contracts and/or purchase orders, marketing literature, shipping documents, or similar documents used when a supply, distribution or similar agreement is not in place) its customers and distributors and require similar restrictions throughout the supply chain, from selling any Product for use outside the Field. NuVasive shall use commercially reasonable efforts to enforce such restrictions, including without limitation by (i) notifying such customer or distributor in writing of such alleged violation, (ii) conducting an investigation of such alleged violation reasonably appropriate under the circumstances, and (iii) suspending shipments of Product to a customer or distributor if NuVasive becomes aware that such customer or distributor is selling such Product for use outside the Field.

     2.4 Only licenses and rights granted expressly herein shall be of legal force and effect. No license or other right shall be created hereunder by implication, estoppel or otherwise.

3. REPORTING; RECALLS

     3.1 Each party shall immediately notify the other in writing if any Product is, or is threatened to be, the subject of a recall, market withdrawal or correction.

     3.2 Prior to NuVasive selling a Product, the parties shall negotiate and enter into a pharmacovigilance agreement that is intended to enable the parties to satisfy their respective adverse event reporting requirements throughout the world.

4. TERMINATION

     4.1 Unless terminated earlier pursuant to Section 4.2 below, this Agreement shall expire on the expiration of the last to expire patent under the Patent Rights.

2

     4.2 This Agreement shall automatically terminate upon expiration or termination of the Distribution Agreement. RevisiOs may also terminate this Agreement by written notice to NuVasive if NuVasive has not cured a material breach of this Agreement within sixty (60) days after written notice thereof from RevisiOs.

     4.3 The provisions of Sections 2.2, 5 and 6 shall survive the expiration or any termination of this Agreement.

5. NO WARRANTIES

The Patent Rights and technology described therein are provided “AS IS” and neither party makes any warranties, written, oral, express or implied, with respect to the Patent Rights or Products, including without limitation third party infringement or the commercialization success of the Products. ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE DISCLAIMED. NuVasive accepts the license granted hereunder subject to the terms hereof. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR LOSS OF USE OR PROFITS OR OTHER COLLATERAL, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, WHETHER SUCH CLAIMS ARE FOUNDED IN TORT OR CONTRACT.

6. GENERAL PROVISIONS

     6.1 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 RevisiOs, addressed to:

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

With a copy to:

Goodwin Procter LLP
Exchange Place
53 State Street

3

Boston, MA 02109
Attn: Michael H. Bison, Esq.
Fax: (617) 570-1231

and

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

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

     6.2 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.

     6.3 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.

     6.4 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

4

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.

     6.5 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.

     6.6 Assignments, Successors, and No Third-Party Rights. NuVasive may not assign any of its rights under this Agreement (whether by operation of law or otherwise) without the prior consent of RevisiOs in each case; provided, however, that NuVasive may, without such consent, assign this Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business or assets related to this Agreement, or in the event of its merger, consolidation, change in control or other similar transaction. 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. For the avoidance of doubt, this Agreement shall be freely assignable by RevisiOs in connection with the transfer or sale of all or substantially all of its business or assets related to this Agreement, or in the event of its merger, consolidation, change in control or other similar transaction. 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.

     6.7 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.

     6.8 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.

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

     6.10 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.

5

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement effective as of the Effective Date.

REVISIOS B.V.		NUVASIVE, INC.
By:		By:
	Name:		Name:
	Title:		Title:

6

EXHIBIT A

Patent Rights

***

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

7

EXHIBIT I

DATED     JANUARY 13, 2009

(1) PROGENTIX ORTHOBIOLOGY B.V.

as Pledgor

- and -

(2) NUVASIVE, INC.
as Pledgee

PLEDGE AGREEMENT OF

INTELLECTUAL PROPERTY RIGHTS

DLA Piper Nederland N.V.
Finance & Projects
Amsterdam

PLEDGE AGREEMENT OF INTELLECTUAL PROPERTY RIGHTS

THIS DEED OF PLEDGE has been entered into on January 13, 2009,

BETWEEN

(1)	PROGENTIX ORTHOBIOLOGY B.V. a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organised and existing under the laws of the Netherlands, registered with the chamber of commerce under file number 30234249 and having its registered office at Professor Bronkhorstlaan 10 D, (3723 MB) Bilthoven, the Netherlands (the “Pledgor”); and
(2)	NUVASIVE, INC., a company incorporated under the laws of Delaware, having its registered office at 7475 Lusk Boulevard, San Diego CA 92121, United States (“Pledgee”).
	The Pledgor and the Pledgee shall hereinafter each individually be referred to as a “Party”, and jointly as “Parties”.

RECITALS

(A)	The Lender has made available to the Borrower the Loan under the Loan Agreement.
(B)	Pursuant to Clause 6 of the Loan Agreement, the Pledgor (as Borrower) has agreed to grant to the Pledgee (as Lender), by means of a first ranking right of pledge, encumbrance, collateral or any other security right over all of its Intellectual Property Rights on the terms and conditions set out in this Deed of Pledge.
(C)	Parties accordingly agree as further set forth herein.

IT IS HEREBY AGREED AS FOLLOWS

1.    DEFINITIONS AND INTERPRETATION

1.1	Words and expressions defined in the Loan Agreement shall have the same meaning when used herein (including the recitals hereto) unless otherwise defined in this Deed of Pledge.
1.2	In this Deed of Pledge, unless the context requires otherwise, the following words and expressions shall have the following meanings:
	“Business Day” means a day other than a Saturday or Sunday on which banks are open for business in Amsterdam, the Netherlands;
	“Deed of Pledge” means this pledge agreement of Intellectual Property Rights by and between the Pledgor and the Pledgee, including the recitals and Schedules thereto, or any Supplemental Deed of IP Pledge, as amended from time to time;
	“Enforcement Event” means the occurrence of an Event of Default that is continuing, constituting a default (verzuim) within the meaning of Article 6:81 and Article 3:248 of the Dutch Civil Code with respect to the proper performance of the Secured Obligations;

“Intellectual Property Rights” means all of the present and future intellectual property rights of which the Pledgor is or may be the owner at any time, including (but not limited to) (a) the Patents on the works set out in Schedule 1 hereto and (b) the Other IP Rights as set out in Schedule 2 hereto;

“IP Registers” means any appropriate register or authority in any jurisdiction in which any of the Intellectual Property Rights are or can be registered;

“Loan Agreement” means the USD 5,000,000 loan agreement (including an obligation on the part of the Pledgee to pledge the Intellectual Property Rights), which is dated January 8, 2009, and signed by and between (1) the Pledgee (as Lender) and (2) the Pledgor (as Borrower), as amended from time to time;

“Other IP Rights” means all other intellectual property rights set out in Schedule 2 hereto, not being Patents, which shall include, but not be limited to, trade marks, trade names, and any and all rights of a similar nature, including trade secrets and know-how, and including any and all rights in connection with applications for, or rights to apply for or acquire any and all of such rights described; where Other IP Rights in a certain work are owned jointly with one or more third parties, or where a licence has been granted to a group of two or more licensees, the word Other IP Rights shall refer to the Pledgor’s share in such Other IP Right or in such licence and which also includes any and all receivables which the Pledgor has or may have at any time under any license to use, exploit or enjoy Intellectual Property Rights;

“Patent” means (a) all present and future patent rights over new discoveries and inventions in the field of technology or other industries which are related to either the manufacturing process or to the final product, in works or objects wholly or partly owned by the Pledgor as set out in Schedule 1 hereto, (b) all present and future licences on any of the aforementioned rights granted by third party patent owners to the Pledgor and (c) all other rights to exploit works protected by any of the aforementioned rights; where the aforementioned rights in a certain work are owned jointly by the Pledgor in combination with one or more third parties, or where a licence has been granted to a group of two or more licensees, the word “Patent” shall refer to the Pledgor’s share in such right or in such licence;

“Right of Pledge” or “Pledge” means a first ranking right of pledge (pandrecht eerste in rang) over the Intellectual Property Rights created hereunder or under any Supplemental Deed of IP Pledge;

“Security Period” means the period beginning on the date of the Deed of Pledge and ending on the date on which either all the Secured Obligations have been unconditionally and irrevocably paid and discharged in full, or the rights and obligations pursuant to this Deed of Pledge have otherwise been terminated to the satisfaction of the Pledgee, whichever event being the sooner. If the Pledgee considers that an amount paid to it is capable of being avoided or otherwise set aside in the event of the bankruptcy of the payer or otherwise, then the amount will not be considered to have been irrevocably paid for the purposes of this Deed of Pledge; and

“Secured Obligations” means all present and future obligations and liabilities (whether actual or contingent, and whether owed jointly, severally or alone or in any other capacity whatsoever) for the payment of an amount of money by the Pledgor towards the Pledgee under or pursuant to the Loan Agreement (as amended or restated from time to time) together with all costs, charges and expenses incurred by the Pledgee in connection with the protection,

	preservation or enforcement of its rights under the Loan Agreement or any other document evidencing or securing any such liabilities;
	“Supplemental Deed of IP Pledge” means the supplemental deed of pledge to be drawn up substantially in accordance with the form attached as Schedule 3 (Form of Supplemental Deed of IP Pledge).
1.3	Descriptive headings used in this Deed of Pledge are for convenience only and shall not affect the meaning or construction of any provision of this Deed of Pledge.
2.	AGREEMENT TO PLEDGE
2.1	The Pledgor and the Pledgee hereby agree that the Pledgor shall grant to the Pledgee a first ranking right of pledge, encumbrance, collateral or any other security right over the Intellectual Property Rights purported to be granted under or pursuant to this Deed of Pledge.
2.2	Parties acknowledge and agree that if, and to the extent that, the Intellectual Property Rights are subject to any right of pledge or other encumbrance that takes priority over the Right of Pledge, the Right of Pledge will have been created with the highest possible ranking (rangorde) available at such time of creation.
3.	CREATION OF THE PLEDGE
3.1	The Pledgor hereby grants and creates, whether or not in advance, for the benefit of the Pledgee and to the extent permissible by applicable law, a Right of Pledge in favour of the Pledgee over its Intellectual Property Rights in the following manner: in respect of patents, in accordance with Article 3:236 paragraph 2 jo. Article 3:95 of the Dutch Civil Code jo. Article 67 of the Patents Act 1995 (Rijksoctrooiwet 1995); in respect of trademarks, in accordance with Article 3:236 paragraph 2 of the Dutch Civil Code jo. Article 11A of the Uniform Benelux Act on Marks (Eenvormige Beneluxwet op de merken); in respect of trade names, in accordance with Article 3:236 paragraph 2 jo. Article 3:95 of the Dutch Civil Code; and/or in respect of receivables in accordance with 3:239 of the Dutch Civil Code, for the entirety of the Security Period, as security for the full and proper fulfilment of the Secured Obligations. The Pledgee hereby accepts the creation of the Right of Pledge on the terms and conditions set forth herein.
3.2	The Pledge is a separate Right of Pledge on each Intellectual Property Right and in relation to licenses and royalty receivables, is an undisclosed right of pledge and, following notification, a disclosed right of pledge.
3.3	The Pledgee, or its representative, is, notwithstanding the Pledgor’s obligations pursuant to this Clause, entitled to register the Deed of Pledge. The Pledgor must at its own cost and expense ensure that any Deed of Pledge is submitted for registration with the competent IP Registers (for those Intellectual Property Rights which can be registered) and the competent Dutch tax authorities (Inspectie der Registratie en Successie) for evidence purposes only. Registration with the Dutch tax authorities should not be construed to mean that the Deed of Pledge to be registered concerns a disclosed right of pledge within the meaning of Article 3:236 of the Dutch Civil Code.

3.4	The Right of Pledge will include all rights of action, dependent rights (afhankelijke rechten) and ancillary rights (nevenrechten), privileges and other rights inherent and/or attached to the Intellectual Property Rights.
3.5	The Pledgor undertakes, in respect of Intellectual Property Rights which were not effectively pledged under the Deed of Pledge, or in respect of newly acquired Intellectual Property Rights, to prepare on a monthly basis a Supplemental Deed of IP Pledge, no later than ten Business Days after the preceding month, to execute the same, and forthwith upon execution of any Supplemental Deed of IP Pledge to register such Supplemental Deed of IP Pledge and any ancillary or supporting document with the competent IP Registers (for those Intellectual Property Rights which can be registered) and with the Dutch tax authorities (Inspectie der Registratie en Successie) (for those Intellectual Property Rights which cannot be registered). Notwithstanding the Pledgor’s obligations pursuant to this Clause, the Pledgor hereby unconditionally and irrevocably authorises the Pledgee to sign the Supplemental Deed of IP Pledge on its behalf and to subsequently register it (as envisaged in Clause 3.3).
4.	GENERAL
4.1	The Pledgor undertakes, immediately upon the execution thereof, or otherwise immediately upon the Pledgee’s written request, to register any Deed of Pledge or Supplemental Deed of IP Pledge with the IP Registers for the Netherlands, the Benelux (as a whole), the European Community (as a whole), and in any other Registration Countries the Pledgee deems to be relevant. The Pledgee is entitled to present this Deed of Pledge and any Supplemental Deed of IP Pledge for registration with the IP Registers in any of the Registration Countries.
4.2	The Pledgor undertakes to provide the Pledgee forthwith with (i) a copy of an executed Deed of Pledge and any Supplemental Deed of IP Pledge and (ii) any evidence of registration of such Deed of Pledge and Supplemental Deed of IP Pledge in any of the Registration Countries.
5.	COMPLETION OF THE PLEDGE
	The Pledgor undertakes, promptly following a request, to take any action and sign any document that the Pledgee reasonably requires in order to give full effect to this Deed of Pledge and the enforcement thereof.
6.	REPRESENTATIONS AND WARRANTIES
6.1	In addition to the Pledgor’s representations and warranties made under or pursuant to the Loan Agreement, the Pledgor hereby represents and warrants that:

(a) the right of pledge created hereby is a first ranking right of pledge, and that the Intellectual Property Rights (i) have not been pledged, encumbered with limited rights (beperkte rechten) or otherwise, (ii) are not subject to any attachments (beslag), seizures or arrests, or any comparable levies by which the Intellectual Property Rights would be placed out of the free disposition by the Pledgor, (iii) have not been transferred in advance (bij voorbaat) to any third party, (iv) are capable of being assigned and encumbered with limited rights (beperkte rechten), and (v) are not subject to any option or similar right, except to the extent permitted under the Loan Agreement. Licence(s) or sub-licence(s) granted to one or more third parties in the normal course of business shall not be regarded as such a restriction;

(b)	it is entitled, and has full power, to enter into this Deed of Pledge and to create the Right of Pledge;
(c)	it is not aware of any infringement (inbreuk) by any third party of any of the Intellectual Property Rights;
(d)	it holds full and exclusive title (titel) to the Intellectual Property Rights, free and clear of any and all liens or claims of others, and that furthermore it is entitled and has the authority and full power (beschikkingsbevoegdheid) to create the Right of Pledge and to enter into this Deed of Pledge;
(e)	it is a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) duly incorporated and validly existing under the law of the Netherlands; and
(f)	Schedule 1 contains a complete list of Patents capable of being pledged at the date of signing this Deed of Pledge, and that Schedule 2 contains a complete list of Other IP Rights capable of being pledged at the date of this Deed of Pledge.

6.2	The representations and warranties set out in Clause 6.1 are deemed to be made by the Pledgor on each date of the registration of a Deed of Pledge or a Supplemental Deed of IP Pledge, whether with the Dutch tax authorities (Inspectie der Registratie en Successie) or with any other competent IP Registers.
7.	COVENANTS
7.1	The Pledgor covenants that:

(a)	it will not without the prior written consent of the Pledgee waive any dependent rights (afhankelijke rechten) or ancillary rights (nevenrechten) attached to the Intellectual Property Rights;
(b)	it will not without the Pledgee’s prior written consent sell, assign, transfer, pledge or otherwise encumber, release (kwijtschelden) or waive (afstand doen van) any rights over its Intellectual Property Rights to any third party, whether or not as a matter of court composition or out-of-court composition (gerechtelijk of buitengerechtelijk akkoord);
(c)	as soon as it becomes aware that any of the representations and warranties as set forth in Clause 6 are or prove to have been incorrect or incomplete or misleading, it will inform the Pledgee promptly;
(d)	it will supply to the Pledgee all information in respect of the debtors of the receivables (referred to in the definition of other Other IP Rights) that is necessary to enforce the Right of Pledge over such receivables and to enable notification against such debtors;
(e)	it will use its best endeavours to ensure the confidential nature of trade secrets and know-how; and

(f) in general, it will do all that is necessary to maintain the Intellectual Property Rights and the value embedded in them.

7.2	In the case of an Event of Default, and notwithstanding any of the obligations of the Pledgor under Clause 8.1, the Pledgee can take, and is hereby authorised to take, all necessary judicial and extra-judicial measures. If the Pledgee takes measures as mentioned in the previous sentence, the Pledgor will offer any and all such support required, including but not limited to supplying all necessary documents and information regarding the Intellectual Property Rights.
8.	ENFORCEMENT
8.1	Upon the occurrence of an Enforcement Event:

(a)

the Pledgee may enforce its Right of Pledge and have recourse to the proceeds obtained from such enforcement, and furthermore the Pledgee may take, and is hereby authorised to take, all necessary judicial and extra-judicial measures in relation to the enforcement of its Right of Pledge, including, but not limited to, a sale as envisaged in Clause 9.4. If the Pledgee takes such measures, the Pledgor will offer any and all required support, including but not limited to providing all necessary documents and information with regard to the relevant Intellectual Property Rights.

(b)

at its own costs, the Pledgor will promptly notify in writing of the existence of this Deed of Pledge to:

(i)	a third party or the court process server (deurwaarder) acting on behalf of such third party making an attachment (beslag) on its Intellectual Property Rights; or
(ii)	its bankruptcy trustee (curator), administrator (bewindvoerder) or similar officer in any jurisdiction; or
(iii)	any other relevant person, as the case may be.

8.2	Any failure by the Pledgor to satisfy the Secured Obligations when due shall constitute a default (verzuim) in the performance of the Secured Obligations, without any reminder letter (sommatie) or notice of default (ingebrekestelling) being required.
8.3	The Pledgor is not entitled to request the President of the competent court (rechtbank) to order that the Intellectual Property Rights pledged be sold in a manner deviating from the provisions of Article 3:250 of the Dutch Civil Code.
8.4	The Pledgee shall not be obliged to give notice to the Pledgor of any intention to sell the pledged Intellectual Property Rights (as provided in Article 3:249 of the Dutch Civil Code) or, if applicable, of the fact that it has sold the same Intellectual Property Rights (as provided in Article 3:252 of the Dutch Civil Code).
8.5	All monies received or realised by the Pledgee in connection with the Intellectual Property Rights shall be applied by the Pledgee in accordance with the relevant provisions of this Agreement and the Loan Agreement, subject to the mandatory provisions of Netherlands law on enforcement (uitwinning).

8.6	The Pledgor hereby irrevocably and unconditionally waives (doet afstand van) any rights granted to the Pledgor under or pursuant to Netherlands law from time to time which aim at protecting grantors of security for the debts of third parties, including any right it may have pursuant to Articles 3:233 and 6:139 of the Dutch Civil Code.
8.7	In the event that any action is taken under Clause 8.1, the documented costs for the measures taken by the Pledgee, including but not limited to the costs for the legal counsel and the legal proceedings (which, for the avoidance of doubt, are part of the Secured Obligations), will be borne by the Pledgor, and the Pledgor will indemnify (vrijwaren) the Pledgee for any such costs.
9	APPLICATION OF PROCEEDS The Parties hereto agree that upon the enforcement of the Right of Pledge, all monies collected by the Pledgee will be applied towards the fulfilment of the Secured Obligations in accordance with, and pursuant to, the relevant provisions of this Agreement and the Loan Agreement, subject to the applicable mandatory provisions of the law of the Netherlands.
10	WAIVERS No delay or omission by the Pledgee in exercising any right, power or privilege provided, hereunder or by law, shall operate to impair such right, power or privilege or be construed as a waiver thereof and any single or partial exercise of such right, power or privilege shall not preclude any future exercise thereof or the exercise of any other right, power or privilege.
11	ASSIGNMENT AND TRANSFER
	To the fullest extent permitted under the law of the Netherlands, subject always to the relevant provisions of any of the Loan Agreement, the Pledgee shall be entitled to assign and/or transfer together with the Secured Obligations all or part of its rights and obligations under this Deed of Pledge to any assignee and/or transferee, and the Pledgor hereby in advance gives its irrevocable consent to (geeft onherroepelijk toestemming bij voorbaat), or, if applicable, irrevocably cooperates with, within the meaning of Article 6:159 of the Dutch Civil Code, an assumption of contract (contractsoverneming). The Pledgee shall be entitled to impart any information concerning the Pledgor to any successor or proposed successor as far as necessary for such assignment and/or transfer. The Pledgor may not assign any of its rights or obligations under or in connection with this Deed of Pledge.
12	DISSOLUTION; ANNULMENT; SUSPENSION; SET-OFF
	The Pledgor hereby waives to the fullest extent permitted by law its right to dissolve (ontbinden) or annul (vernietigen) the legal acts (rechtshandelingen) represented by this Deed of Pledge, and such waiver is hereby accepted by the Pledgee. The Pledgor may not suspend (opschorten) compliance with its obligations under or in connection with this Deed of Pledge on whatever grounds. All payments to be made by the Pledgor under this Agreement shall be made without set-off.
13	NOTIFICATION
13.	At the Pledgee’s request, the Pledgor will offer any and all required information, including a list containing details of all Intellectual Property Rights, which the Pledgee may need, in order

	to determine and/or exercise its rights arising out of this Deed of Pledge and it will allow the Pledgee to gather all information from and examine its books so that the Pledgee may determine and/or exercise its rights arising out of this Deed of Pledge. Notwithstanding this obligation, the Pledgor will promptly notify the Pledgee during the year of any material changes to the Intellectual Property Rights.
13.2	The Pledgor will notify the Pledgee immediately of all circumstances likely to materially impair the value of the Intellectual Property Rights. Such circumstances include, but are not limited to, an application for the filing of or declaration of the Pledgor’s bankruptcy (faillissement) or moratorium of payments (surséance van betaling), the dissolution (ontbinding) of the Pledgor, the cessation of the Pledgor’s business, any levy or attachment to the Intellectual Property Rights, or any material litigation pending in relation to the Intellectual Property Rights.
13.3	If the bankruptcy of the Pledgor is filed for, or if an attachment is made of Intellectual Property Rights, the Pledgor will immediately notify the levying bailiffs (beslagleggende deurwaarders), the trustees in bankruptcy (curatoren) or the administrator (bewindvoerder) of this Deed of Pledge.
13.4	In case of a levy or attachment of Intellectual Property Rights that has a material adverse effect, the Pledgor is obliged to immediately notify the Pledgee once it becomes aware of such levy or attachment, and to take all necessary measures to ensure that the Pledgee is authorised to take all appropriate action as referred to in Clause 8 of this Deed of Pledge. The Pledgor will pay or reimburse all documented expenses related to these measures.
14.	TERMINATION
14.1	This Deed of Pledge and the Pledgee’s security interests constituted hereunder or pursuant hereto shall terminate by operation of law when all the Secured Obligations have been unconditionally and irrevocably satisfied in full or the Loan Agreement has terminated, whichever event being the sooner. At the request and cost of the Pledgor, the Pledgee shall deliver to the Pledgor a proper instrument or instruments acknowledging the satisfaction of the Secured Obligations and/or the termination of this Deed of Pledge and do all other acts necessary or required by the Pledgee to give effect to the provisions of this Clause.
14.2	Without prejudice to the provisions of Article 3:81 of the Dutch Civil Code, the Right of Pledge may be terminated:

(a)	through cancellation (opzegging) by means of a written declaration from the Pledgee to the Pledgor; or
(b)	through renunciation (afstand) on the grounds of Article 3:258 paragraph 2 of the Dutch Civil Code.

15.

POWER OF ATTORNEY

The Pledgor hereby unconditionally and irrevocably authorises the Pledgee, with the power of substitution at any time and from time to time, following the occurrence of an Enforcement Event, to sign, seal, deliver, execute, register and complete all proxies, mandates, assignments, deeds and documents and to do all acts which are necessary for the enforcement of the Pledge and to give proper effect to the intent and purposes of this Deed of Pledge.

16.	NOTICES
	Any notice or other communication to be given hereunder shall be made in accordance with Clause 17 of the Loan Agreement.
17.	BINDING NATURE
17.1	This Deed of Pledge and all of the provisions of this agreement shall be binding upon and be to the benefit of the Pledgor and the Pledgee and their respective successors and permitted assigns.
17.2	This Deed of Pledge is only legally binding on the Pledgor insofar as the same will not be in violation of the prohibition on financial assistance as contained in Article 2:207 (c) of the Dutch Civil Code. One of the consequences of this provision is that no obligations shall be secured by the Right of Pledge to the extent that, if included, the security interest granted pursuant to this Deed of Pledge or any part thereof would constitute a violation of Article 2:207 (c) of the Dutch Civil Code.
18.	ENTIRE AGREEMENT
18.1	This Deed of Pledge, and any agreements resulting from this Deed of Pledge, represents the entire understanding and agreement between the Parties in connection with the subject matter hereof and supersedes all prior agreements in respect of the subject matter hereof.
18.2	If there is any conflict or inconsistency between any provisions of this Deed of Pledge and any provisions of the Loan Agreement, the provisions of the Loan Agreement shall prevail.
19.	AMENDMENT
	No amendment, modification or waiver of any provision of this Deed of Pledge, and no consent with respect to any departure by the Pledgor therefrom, shall be effective unless the same shall be in writing and signed by the Pledgor and the Pledgee.
20.	SEVERABILITY
	If a provision of this Deed of Pledge is invalid or unenforceable in any jurisdiction that shall not affect the validity or enforceability of any other provision of this Deed of Pledge and the validity or enforceability in other jurisdictions of that or of any other provision of this Deed of Pledge.
21.	GOVERNING LAW AND JURISDICTION
21.1	This Deed of Pledge will be governed by and construed in accordance with the laws of the Netherlands.
21.2	The competent courts of Amsterdam, the Netherlands shall have exclusive jurisdiction with regard to disputes in connection with this Deed of Pledge.

THIS DEED OF PLEDGE has been entered into on the date stated above.

PROGENTIX ORTHOBIOLOGY B.V., as Pledgor

Name:

Title:
 

NUVASIVE, INC., as Pledgee

Name:

Title:
 

SCHEDULE 1

Patents

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

SCHEDULE 2

Trademarks

***

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

SCHEDULE 3

Form of Supplemental Deed of IP Pledge

From:	Progentix Orthobiology B.V.
To:	NuVasive, Inc. Attn: Jason Hannon

Dear Sir

RE:  PLEDGE OF INTELLECTUAL PROPERTY RIGHTS

We refer to the deed of pledge of Intellectual Property Rights, dated January 8, 2009, by and between Progentix Orthobiology B.V. (as Pledgor) and Nuvasive, Inc. (as Pledgee)(the “Deed of Pledge”). Capitalised terms used in this Supplemental Deed of IP Pledge shall have the same meaning given to them in the Deed of Pledge.

Under the terms of the Deed of Pledge, we undertook to pledge to you at your first request the Intellectual Property Rights which were not effectively pledged under the Deed of Pledge (or subsequent pledges).

In fulfilment of our above-mentioned obligations we herewith pledge to you all our Intellectual Property Rights that are capable of being pledged on the date when this Supplemental Deed of IP Pledge is registered.

In order to effectuate the creation of the right of pledge over the Intellectual Property Rights described in the previous paragraph, we will promptly register this deed and its attachment in accordance with the provisions of Clause 3 of the Deed of Pledge.

Yours sincerely,

PROGENTIX ORTHOBIOLOGY B.V.
By:
	Name:

EXHIBIT J

DEED OF ADHERENCE

and

ADDENDUM

to the Subscription and Shareholders’ Agreement

of 13 January 2008

relating to

Progentix Orthobiology B.V.

by and among

Mr. J.D. de Bruijn

Mr. H. Yuan

J.D. de Bruijn Holding B.V.

BioGeneration Ventures B.V.

Incubation B.V.

NuVasive, Inc

and

Progentix Orthobiology B.V.

Dated 13 January 2008

DEED OF ADHERENCE

and

ADDENDUM

to the Subscription and Shareholders’ Agreement of 13 January 2008

THE UNDERSIGNED:

1.	Progentix Orthobiology B.V. (the “Company”), a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Bilthoven and its business address at Professor Bronkhorstlaan 10-d, 3723 MB Bilthoven, the Netherlands, represented by its statutory director J.D. de Bruijn Holding B.V. in its turn represented by Mr. J.D. de Bruijn;
2.	Mr. Huipin Yuan, (“Mr. Yuan”) currently residing at Laan van Vollenhove 168, 3706 AA, born in Nijiang (China) on the 19th of April 1966;
3.	Mr. Joost Dick de Bruijn, (“Mr. de Bruijn”)currently residing at Pasteurstraat 16, 3817 JL Amersfoort, born in Pijnacker on the 13th of February 1966;
4.	J.D. de Bruijn Holding B.V., (“De Bruijn Holding”) a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amersfoort and its business address at Pasteurstraat 16, 3817 JL Amersfoort, the Netherlands, represented by its statutory director Mr. J.D. de Bruijn;
5.	BioGeneration Ventures B.V., (“BioGeneration”) a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amsterdam and its business address at Gooimeer 2 — 35, 1411 DC Naarden, represented by its statutory director Mr. E.C.M. van Wezel;
6.	Incubation B.V. (“Incubation”) a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Bilthoven and its business address at Prof. Bronkhorstlaan 10, 3723 MB in Bilthoven represented by its statutory directors Dr. C.A. van Blitterswijk and Mr. F.J.W.E.B. van der Velden;

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7. NuVasive, Inc. (“NuVasive”), a company incorporated under the laws of Delaware (Unites States of America), with its business address at 7475 Lusk Boulevard, San Diego CA 92121, represented by [•].

Each party hereto individually referred to as “Party” and jointly as “Parties”.

WHEREAS:

A.	The Parties hereto, with the exception of Incubation and NuVasive, have entered into a Subscription and Shareholders’ Agreement dated 13 January 2008 (“Shareholders Agreement”).
B.	Incubation acceded to the Shareholders Agreement by signing a Deed of Adherence dated 22 September 2008. The shares previously held by Mr. Van Blitterswijk and Mr. Van der Velden were subsequently transferred to Incubation by notarial deed of transfer executed before a substitute of mr. N. van Buitenen, civil-law notary in Utrecht on 29 September 2008.
C.	NuVasive is a strategic party that will purchase or has purchased from the existing shareholders of the Company (the “Existing Shareholders”) 40% (forty percent) of the issued and outstanding share capital of the Company pursuant to a Preferred Stock Purchase Agreement dated [•] January 2009 (the “Preferred Stock Purchase Agreement”) and that will optionally acquire the remaining issued and outstanding share capital of the Company held by the Existing Shareholders upon the exercise of an option pursuant to an Option Purchase Agreement dated [•] January 2009 (the “Option Purchase Agreement”).
D.	In connection with the Preferred Stock Purchase Agreement, Incubation, De Bruijn Holding, Mr. Yuan and BioGeneration shall transfer a pro rata part of their shares to NuVasive through a notarial deed of transfer to be executed before mr. A.J. Wiggers, civil-law notary in Amsterdam (or his substitute) with DLA Piper Nederland N.V. (“Notary”), this deed hereinafter referred to as “Deed of Transfer” and the date of execution the “Transfer Date”.
E.	The Parties hereto wish to have their mutual relations and respective rights

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and obligations in respect of the Company to be governed by the provisions of the Shareholders Agreement and this Deed of Adherence and Addendum (“Deed of Adherence and Addendum”).

HAVE AGREED AS FOLLOWS:

Article 1. Accession

1.1	Solely to the extent provided herein, NuVasive hereby accedes to Articles 8 through 10, Article 16 and Articles 24 through 26 of the Shareholders Agreement and consequently agrees to be bound to the terms and conditions of the Shareholders Agreement, effective as per the Transfer Date.
1.2	To the extent this Deed of Adherence and Addendum does not explicitly stipulates otherwise, NuVasive shall qualify as a “Shareholder” as defined in the Shareholders Agreement and therefore NuVasive shall have the same rights and the same obligations as apply to any Shareholder. As set forth above, NuVasive shall not be considered a “Founder” or “Investor” within the meaning of the Shareholders Agreement.
1.3	In deviation of the definitions as defined in the Shareholders Agreement, Parties hereto agree that:

- The definition of “Preferred Shares” as referred to in article 8.3 through 8.6 (‘Conversion‘), shall mean both preferred shares A as well as preferred shares B.

- The definition of “Preferred Shares” as referred to in article Article 9 (‘Anti-Dilution Adjustments‘), shall mean both preferred shares A as well as preferred shares B. To the extent Article 9 stipulates an issuance price per preferred share, this price shall — with respect to any share held by NuVasive — be the acquisition price per share on the Transfer Date pursuant to the Preferred Stock Purchase Agreement.

Article 2. Deed of Transfer

The execution of the Deed of Transfer shall take place in conjunction with the signing of the Preferred Stock Purchase Agreement and the Option Purchase Agreement and this Deed of Adherence and Addendum shall be executed just prior to the Notary ex-

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ecuting the Deed of Transfer.

Article 3. Deed of Amendment

3.1

As soon as reasonably possible after the execution of the Deed of Transfer, a deed of Amendment to the Articles of Association of the Company (“Deed of Amendment”) in the form attached hereto as Exhibit A shall be executed whereby, amongst others, all shares transferred to NuVasive pursuant to the Deed of Transfer shall be converted into Preferred Shares B on a one-to-one basis. The Deed of Amendment shall be executed before the Notary.

3.2

During the period the shares in the Company that were acquired by NuVasive through the Deed of Transfer are not yet converted into Preferred Shares B, these shares shall, notwithstanding the fact the Deed of Amendment has not yet been executed, by all Parties be considered Preferred Shares B on an as if converted basis to the fullest possible economical extent.

Article 4. Overview of shares

As per the Transfer Date and upon the execution of (i) the Deed of Transfer as well as the (ii) the Deed of Amendment, the cap table of Article 2.6 of the Shareholders Agreement (‘Overview of Capital Commitments‘) shall read as follows:

	# Ordinary		# Preferred		# Preferred		approx Percent.
Party	Shares		Shares A		Shares B		Stake
Incubation		5,951		—		—		27.05	%
De Bruijn Holding		4,320		—		—		19.64	%
Mr. Yuan		529		—		—		2.41	%
BioGeneration		—		2,400		—		10.90	%
NuVasive		—		—		8,800		40.00	%
Total		10,800		2,400		8,800		100	%

Article 5. Preferred Share Rights

NuVasive shall have the protective rights and veto rights described in this Article 5.

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5.1	Budget.
	Prior to the earlier of the expiration or termination of the Option Period (as defined in the Option Purchase Agreement) NuVasive shall have the right to approve the Company’s operating budget (not to be unreasonably withheld or delayed) for the year to come before the budget is being formally presented for approval to the Investor and the general meeting of shareholders of the Company in accordance with the Shareholders Agreement. To the extent that NuVasive notifies the management board of the Company that it does not approve the operating budget as presented, then the management board of the Company shall (i) refrain from any actions aimed at or relating to the implementation of any and all of the items referred to in such budget, and (ii) submit to NuVasive an amended budget for approval.
5.2	Right of First Refusal.
	Parties hereto agree that Article 10.1 and Article 10.2 shall not be in force and effect during the Option Period. Parties hereto agree that from and after the earlier of the expiration or termination of the Option Period, NuVasive shall not be entitled to a right of first refusal pursuant to Article 10.4 through Article 10.7 of the Shareholders Agreement, but shall be subject to such right of refusal pursuant to Article 10.4 of the Shareholders Agreement.
5.3	Drag Along Right; Tag Along.
	Pursuant to Article 10.8 of the Shareholders Agreement, BioGeneration, being the Investor as defined in the Shareholders Agreement, has a drag along right, entitling BioGeneration to demand from its co-shareholders to mandatorily sell their shares to an Interested Purchaser and create a Liquidity Event. Parties hereto agree that from and after the earlier of the expiration or termination of the Option Period, NuVasive shall be subject to such drag along provision as a Shareholder. Parties hereto further agree that from and after the earlier of the expiration or termination of the Option Period, NuVasive shall be subject to the Tag Along provision included in Article 10.9 through Article 10.12 of the Shareholders Agreement as a Shareholder.

Article 6. Liquidity Event

Effective as of the Transfer Date, Article 8.1 and Article 8.2 of the Shareholders Agreement, entitling BioGeneration to a preferred return in case of a Liquidity Event

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(and a claw back in the event of certain Liquidity Events), is herewith cancelled. Hence, BioGeneration shall no longer have a preferred return upon the occurrence of a future Liquidity Event. For the avoidance of doubt, NuVasive and BioGeneration retain their separate classes of preferred shares entitling (or requiring) the holders thereof to convert into Ordinary Shares pursuant to Article 8.3 through Article 8.6 of the Shareholders Agreement. The cancellation of Article 8.1 and Article 8.2 of the Shareholders Agreement will survive the termination or expiration of the Option Period and will not be reversed unless explicitly agreed upon between the Parties.

Article 7. Supervisory Board

7.1 Article 16.1 and Article 16.2 of the Shareholders Agreement (appointment and nomination of members to the Supervisory Board), shall, until the earlier of the expiration or termination of the Option Period (as defined in the Option Purchase Agreement) read as follows:

Article 16. Supervisory Board

16.1	The Parties shall procure that the supervisory board of the Company (the “Supervisory Board”) shall be composed of 3 (three) members, to be appointed by the general meeting of shareholders:
-	1 (one) of whom shall be appointed upon a binding nomination of NuVasive; and,
-	1 (one) of whom shall be appointed upon a binding nomination of BioGeneration; and,
-	1 (one) of whom shall be appointed upon a binding nomination of the Founders.
16.2	At the Closing Date, the following persons shall be nominated by the following Parties:
•	*** as Supervisory Board member on behalf of ***;
•	*** as Supervisory Board member on behalf of ***;
•	*** as Supervisory Board member on behalf of ***.

7.2 Effective as of the earlier of the expiration or termination of the Option Period, as defined in the Option Purchase Agreement, Article 16 of the Shareholders Agreement as it read on 11 January 2008, will apply.

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

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7.3 The Shareholders have the right, but not the obligation, to dismiss the Supervisory Board member nominated by NuVasive as per the earlier date of the expiration or termination of the Option Period, without notice, cause or obligations to pay severance. NuVasive will fully cooperate with the adoption of the Shareholders’ resolution dismissing its Supervisory Board member and the appointment of a substitute Supervisory Board member following the expiration or termination of the Option Period.

Article 8. Financial Rights

The preferred shares B shall under no circumstances before and after the expiration or termination of the Option Period, have any seniority over the preferred shares A, unless the Parties hereto explicitly and in writing agree that the preferred shares A shall no longer share the economic rights attached to preferred shares on a pari passu basis. No Party hereto shall use its power or rights to amend the Articles (or any other document) in such a way that the financial rights of either class of preferred shares change.

Article 9. Transfer of Shares

Each of the parties agrees that if any person wishes to be registered as a holder of any shares (whether upon transfer or transmission or by issue) (“New Shareholder”), the New Shareholder must, unless he is already a party to this Agreement and the Option Purchase Agreement, become a party to this Agreement and the Option Purchase Agreement.

Notwithstanding anything to the contrary, each of the Founders and BioGeneration covenants with and undertakes to NuVasive and the Company that, prior to the expiration or termination of the Option Period, each will not, except for transfers required by the Articles, without the prior written consent of NuVasive, dispose or permit the disposal of any interest in or creation of any Encumbrance over the shares registered in his or its name.

Article 10. Governing Law

10.1 This Deed of Adherence and Addendum shall be governed by and construed in accordance with the laws of the Netherlands.

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10.2 The courts of Amsterdam shall have exclusive jurisdiction over a dispute arising out of or in connection with this Deed of Adherence and Addendum.

The remainder of this page is intentionally left blank: see signature page.

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IN WITNESS WHEREOF this Deed Adherence and Addendum has been signed and executed by all Parties hereto.

/s/ J.D. de Bruijn	/s/ Mr. H. Yuan
Mr. J.D. de Bruijn	Mr. H. Yuan
/s/ J.D. de Bruijn	/s/ J.D. de Bruijn
J.D. de Bruijn Holding B.V.	Progentix Orthobiology B.V.
By: J.D. de Bruijn	By: J.D. de Bruin Holding B.V.
	By: J.D. de Bruijn
Incubation B.V.	BioGeneration Ventures B.V.
/s/ Mr. F.J.W.E.B. van der Velden	/s/ Mr. E.C.M. van Wezel
By: Dagomar B.V.	By: BioGeneration Management B.V.
By: Mr. F.J.W.E.B. van der Velden	By: Mr. E.C.M. van Wezel
/s/ Mr. C.A. van Blitterswijk	/s/ Mr. W. Hazenberg
By: Mr. C.A. van Blitterswijk	By: Mr. W. Hazenberg
/s/ Alexis V. Lukianov
NuVasive, Inc
By: Chief Executive Officer

Signature Page to Deed of Adherence

SUBSCRIPTION AND SHAREHOLDERS’ AGREEMENT

relating to shareholdings in:

Progentix Orthobiology B.V.

by and among

Dr. C.A. van Blitterswijk

Mr. F.J.W.E.B. van der Velden

Mr. J.D. de Bruijn

Mr. H. Yuan

J.D. de Bruijn Holding B.V.

BioGeneration Ventures B.V.

and

Progentix Orthobiology B.V.

Execution Copy

TABLE OF CONTENTS

Article 1	Interpretation	6
Article 2	Issuance and Contribution	7
Article 3	Second Payment	8
Article 4	Application of funds	9
Article 5	Signing Date	9
Article 6	Closing. Conditions to Closing	10
Article 7	The Company’s operations and (future) subsidiaries	11
Article 8	Liquidation Preference and Conversion	11
Article 9	Anti-Dilution Adjustments	13
Article 10	Transfer of Shares	15
Article 11	Encumbrance	18
Article 12	Representations and Warranties	18
Article 13	Management Board	20
Article 14	General meeting of shareholders	22
Article 15	Consent of the Investor	23
Article 16	Supervisory Board	23
Article 17	Information	24
Article 18	Budget	26
Article 19	Non-Competition Agreements	26
Article 20	Future pre-emptive rights	27
Article 21	Assignments; Perpetual Covenant	28
Article 22	Costs and Expenses	28
Article 23	Confidentiality; Announcements	29
Article 24	Notices	29
Article 25	Entire Agreement	29
Article 26	General Provisions	30

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LIST OF EXHIBITS

Exhibit 1:	Notarial deed relating to the Issue
Exhibit 2:	Representations and warranties
Exhibit 3:	Notarial deed relating to the incorporation of the Articles
Exhibit 4:	Business Plan and Budget
Exhibit 5:	Shareholders’ resolution
Exhibit 6:	Powers of attorney relating to Issue
Exhibit 7:	Disclosure letter
Exhibit 8:	Spousal Consent
Exhibit 9:	Management Agreement J.D. de Bruijn
Exhibit 10:	List with IP-rights
Exhibit 11:	Template of Secondment Agreement
Exhibit 12:	List with Assets of TU Twente

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SUBSCRIPTION AND SHAREHOLDERS’ AGREEMENT

relating to shareholdings in

Progentix Orthobiology B.V.

The undersigned:

1.	Progentix Orthobiology B.V. (the “Company”), a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Bilthoven and its business address at Professor Bronkhorstlaan 10-d, 3723 MB Bilthoven, the Netherlands, represented by its statutory director (statutair bestuurder) J.D. de Bruijn Holding B.V. in its turn represented by Mr. J.D. de Bruijn;
2.	Mr. Dr. Clemens Antoni van Blitterswijk (“Mr. Van Blitterswijk”), currently residing at Coenderssingel 4, 8564 HE Ruigahuizen, born in The Hague on the 7th of July 1957;
3.	Mr. Franciscus Johannes Wilhelmus Ernest Bruno van der Velden (“Mr. Van der Velden”), currently residing at Waalbanddijk 68, 4054 MG Echteld, born in The Hague on the 19th of August 1959;
4.	Mr. Huipin Yuan (“Mr. Yuan”), currently residing at Laan van Vollenhove 168, 3706 AA, born in Nijiang (China) on the 19th of April 1966;
5.	Mr. Joost Dick de Bruijn (“Mr. De Bruijn”), currently residing at Pasteurstraat 16, 3817 JL Amersfoort, born in Pijnacker on the 13th of February 1966;
6.	J.D. de Bruijn Holding B.V. (“De Bruijn Holding”), a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amersfoort and its business address at Pasteurstraat 16, 3817 JL Amersfoort, the Netherlands, represented by its statutory director (statutair bestuurder) Mr. J.D. de Bruijn;

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7. BioGeneration Ventures B.V. (“BioGeneration”), a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amsterdam and its business address at Gooimeer 2 — 35, 1411 DC Naarden, represented by its statutory directors (statutair bestuurders) Mr. E.C.M. van Wezel and Mr. W.M. Hazenberg.

The parties hereinafter also collectively referred to as the “Parties” and individually as a “Party”;

The parties 2, 3, 4, 5 and 6 hereinafter also referred to as the “Founders” and individually as a “Founder”;

The party 7 hereinafter also referred to as the “investor”;

The parties 2, 3, 4, 6 and 7 hereinafter also collectively referred to as the “Shareholders” and individually as a “Shareholder”;

WHEREAS:

A.	Progentix B.V., a private company with limited liability seated in Bilthoven is a company that focuses on the development and exploitation of products in the field of bone decease and bone repair. The Company will acquire the Osteoinductive Bone Graft Material Technology from Progentix B.V. by means of a postclosing transfer and assignment of all assets and rights that are required to further develop and commercialise the Osteoinductive Bone Graft Material Technology of Progentix B.V.
B.	The ambition of Progentix B.V. and the Company is to acquire external funding in order to be able to market and make profit from the Osteoinductive Bone Graft Material Technology. For this purpose the Osteoinductive Bone Graft Material Technology will be carved out of Progentix B.V. thus separating Progentix’ other technology, other rights of intellectual property and subsidies from the assets and liabilities of the Company.
C.	The Founders hold the entire issued and outstanding share capital of the Company, which currently consists of 18,000 ordinary shares with a nominal value of EUR 1 (one euro) each (the “Ordinary Shares”).

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D.	The Investor is a private equity provider that invests in selected companies in the life sciences industry and other industries; the investment and involvement of the Investor in a company usually lasts for a period of approximately 3 (three) to 5 (five) years, after which period the Investor intend to liquidate the investment through an “exit”, for example by a trade sale or an initial public offering.
E.	The Company and the Founders have entered into negotiations with BioGeneration, regarding the investment by BioGeneration — and as the case may be by co-investors — through a new class of shares i.e. preferred shares in the share capital of the Company, the terms and conditions of which are set forth in this subscription and shareholders’ agreement (the “Agreement”).
F.	The Investor and the Founders have agreed to a fair value of the business of the Company of EUR 5,500,000 (five million five hundred thousand euro) after closing of the investment round (post money valuation).
G.	The Shareholders wish to have their mutual relations and their respective rights and obligations in respect of their shareholdings in the Company governed by the provisions of this Agreement and the articles of association of the Company (the “Articles”, as may be amended from time to time);

DECLARE TO HAVE AGREED AS FOLLOWS:

Article 1. Interpretation

1.1	The recitals, the exhibits (the “Exhibits”) and the schedules to this Agreement form an integral part of this Agreement and any reference to this Agreement includes such recitals, Exhibits and schedules. In this Agreement, reference to a recital, article. Exhibit or schedule is a reference to a recital, article of, or Exhibit or schedule to this Agreement, unless the context requires otherwise.
1.2	In this Agreement, unless the context indicates otherwise, references to the singular Shall include references to the plural and vice versa and references to any pronoun shall include the corresponding masculine, female or neuter, and references to persons shall include bodies and corporate and unincorporated associations of persons.

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1.3 In this Agreement a reference to a particular agreement, enactment, regulation or other document shall be construed as a reference to such agreement enactment, regulation or document as it may from time to time be binding, enforceable or in force, as such agreement, enactment, regulation or document may be novated, assigned, re-enacted (with or without modification), restated, consolidated, amended or supplemented from time to time hereafter.

1.4 In this Agreement a reference to a company or other legal entity shall be construed so as to include any legal entity or entities into which such company may during the continuance of this Agreement be merged by means of a statutory merger or into which it may be split up or demerged.

Article 2. Issuance and Contribution

2.1 The Investor shall subscribe for 4,000 (four thousand) cumulative preferred shares, with a nominal value of EUR 1 (one euro) each (the “Preferred Shares”) in the share capital of the Company, (the Ordinary Shares and the Preferred Sharers and any and all other (classes of) shares from time to time outstanding in the share capital of the Company hereinafter referred to as the “Shares”), against payment in two (2) tranches of an aggregate amount of EUR 1,000,000 (one million euro) (such amount hereinafter referred to as the “Contribution”).

2.2 The Founders shall procure that the Company issues on the Closing Date (as defined in Article 6 below) (such issue hereinafter referred to as the “Issue”) the Preferred Shares to the Investor, against payment of an aggregate amount of EUR 500,000 (five hundred thousand Euro) hereinafter (“Initial Payment”).

2.3 The Issue shall take place pursuant to a notarial deed, a copy of which is attached to this Agreement as Exhibit 1, as soon as mr. N. van Buitenen (or his substitute or successor) with Van Grafhorst & Van Buitenen Notarissen, in Utrecht (the: “Notary”), has received the Initial Payment on the third party account with number 55.59.05.519 with the ABN AMRO Bank in the name of Kwaliteitsrekening Van Buitenen & Van Grafhorst, on or before the Closing Date (as defined in Article 6 below) which shall ultimately be at 31^st of January 2008.

2.4 On the Closing Date, the Investor, in reliance on — inter alia — the representations

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and warranties as contained in Exhibit 2, hereby agrees to subscribe for the Preferred Shares which according to the previous sub-clauses shall be issued to the Investor and the Investor hereby agrees to contribute on the Closing Date on the Preferred Shares issued through the Issue, an aggregate amount of EUR 500,000 (five hundred thousand Euro).

2.5 The nominal value of each of the Preferred Shares is EUR 1 (one Euro) and the remainder of the Initial Payment shall be administered in the books of the Company as share premium (‘agio’).

2.6 For the purpose of illustration, the Parties observe that immediately following the Issue, the Shares in the Company shall be held as follows:

Party	# Ordinary Shares		# Preferred Shares		Percent Stake
Mr. Van Blitterswijk		4,959		—		22.55	%
Mr. Van der Velden		4,959		—		22.55	%
J.D. de Bruijn Holding		7,200		—		32.7	%
Mr. Yuan		882		—		4.0	%
BioGeneration		—		4,000		18.2	%
Total		18,000		4,000		100	%

Article 3. Second Payment

3.1 The Investor hereby agrees to procure that, subject to the terms and conditions of this Agreement, the remainder of the Contribution after payment of the Initial Payment in the amount of EUR 500,000 (five hundred thousand euro) (such amount hereinafter referred to as “Second Payment”, shall be provided to the Company on 1 April 2008 on the condition that the Investor has unconditionally approved the Budget and Business Plan for 2008.

3.2 The Investor is entitled, at its sole discretion, to cancel Second Payment if (i) the Company is engaged in any legal dispute relating to (a) any licensed or owned right of intellectual and/or industrial property or patents which is/are essential to the Company’s approved Business Plan and Budget or its ability to make profit or (b) any product developed or commercialised by the Company (or its future subsidiaries)

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which is essential to the Company’s approved Business Plan and Budget or its ability to make profit, or if (ii) any intellectual and/or industrial property rights or patents owned and/or licensed by the Company (or its future subsidiaries) become invalid or patent applications owned and/or licensed by the Company (or its future subsidiaries) are rejected by the European Patent Office and/or the United States Patent and Trademark Office and which is/are crucial to the Company’s approved Business Plan and Budget or its ability to make profit.

3.3 When due, the Second Payment will be transferred within 3 weeks to a bank account in the name of the Company to be provided to the Investor. The Second Payment will be administered in the books of the Company as share premium (‘agio’) on the Preferred Shares the Investor already holds, except where this Agreement provides otherwise.

Article 4. Application of funds.

4.1 The Company agrees to use the Investment provided by the Investor, subject to the terms and conditions of this Agreement; for no purposes other than the development of the Company’s business consistent with the approved Business Plan and Budget (jointly referred to as “Business Plan and Budget”), attached hereto as Exhibit 4.

Article 5. Signing Date

On or before the signing of this Agreement (the date of signing shall hereinafter be referred to as the “Signing Date” and such event the “Signing”), the Parties agree to perform the following acts:

• the Founders will execute such shareholders’ resolution as is set out in the minutes of the extraordinary shareholders’ meeting attached hereto as Exhibit 5, and thus resolve to issue the Preferred Shares in accordance with the draft deed of Issue attached hereto as Exhibit 1;

• the Company and the Investor will execute or cause to be executed such powers of attorney attached hereto as Exhibit 6, and grant power of attorney to each (deputy) civil-law notary of Van Grafhorst & Van Buitenen Notarissen in Utrecht, the Netherlands, in order to execute such the draft deed of Issue on the Closing Date.

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Article 6. Closing. Conditions to Closing

6.1 The Closing shall take place as soon as all conditions to Closing of Article 6.3 have either been fulfilled or waived by the Investor though ultimately on the 31^st of January 2008 unless the Founders and the Investor agree to a later date (such date hereinafter also referred to as the “Closing Date” and such event as the “Closing”). On the Closing Date, the notarial deed relating to the Issue (attached hereto as Exhibit 1) shall be executed by the Notary.

6.2 For the purpose of effecting the amendment of the Articles and the Issue, the Parties furthermore agree that they will execute such deeds, sign such documents, attend such meetings, exercise such votes, pass such resolutions, waive such rights (under the Articles or otherwise), give and/or obtain such consent and generally do and procure all things as may be necessary or convenient for the implementation and completion of this Agreement in accordance with its terms and conditions.

6.3 The obligation of the Investor to consummate the Closing are subject to the fulfilment — satisfactory to the Investor — of each of the following Conditions Precedent prior to the 31^st of January 2008, or the waiver thereof in writing by the Investor, at or prior to the Closing:

a.	the Company shall be the sole legal and beneficial owner of all IP-rights (which appear from the list attached hereto as Exhibit 10) relevant for the Company to further develop and commercialise the Osteoinductive Bone Graft Material Technology of Progentix B.V.;
b.	secondment agreements (substantially in the form as attached hereto as Exhibit 11) are concluded between the Company and Progentix B.V. relating to the following employees of Progentix B.V.: Joost de Bruijn, Riemke van Dijkhuizen, Huipin Yuan, Linda van Rijn, Jurren Koerts, Davide Barbieri, Paul van Bergen;
c.	all assets currently owned by the TU Twente (which appear from the list attached hereto as Exhibit 12) and relevant for the Company to further develop and commercialise the Osteoinductive Bone Graft Material Technology of Progentix B.V. shall have been transferred and assigned unconditionally to the Company.

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Article 7. The Company’s operations and future subsidiaries

7.1 The Parties agree to procure that the Company shall, for as long as the Investor holds Shares, remain the ultimate parent company for all of the Company’s operations, future subsidiaries or the operations of such subsidiaries.

7.2 The Company agrees to procure that the articles of association or similar instruments of any (future) subsidiaries of the Company shall contain such clauses in order to provide that prior approval of the shareholders’ meeting of such subsidiary shall be required for those resolutions of the management board of such subsidiary for which, if such resolution were to be taken by the management board of the Company, the management board of the Company would require the prior approval of the holders of the Preferred Shares or of the Supervisory Board. In addition, each of the Parties agrees to procure that until such time when the articles of association (or similar constitutional documents) of any of the Company’s (future) subsidiaries shall so have been amended, any rights and obligations of any of the Parties under the regime of governance clauses and approvals as pursuant to this Agreement shall be implemented for the Company, shall, mutatis mutandis, also apply to any such subsidiaries and as such be deemed to be part of this Agreement and agreed and enforceable between the Parties to this Agreement.

Article 8. Liquidation Preference and Conversion

Liquidity Event

8.1 In the event of:

(i)	the liquidation of the Company;
(ii)	the dissolution of the Company;
(iii)	the sale of all or substantially all of the Company’s assets;
(iv)	the licensing on an exclusive basis of all or substantially all of the Company’s assets;
(v)	a merger or consolidation of the Company with any other company; or
(vi)	the sale of more than 80% (eighty percent) of the then outstanding Shares (by trade sale or otherwise), except for an initial public offering of Shares of the Company on a recognised stock exchange (an “IPO”);

(any such event hereinafter a “Liquidity Event”), the Parties shall, irrespective of the liquidation distribution provisions provided for in the Articles, allocate and dis-

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tribute all proceeds of such event, be it cash, stock or surplus assets, amongst the Shareholders as follows:

A. in the event the Proceeds are less then EUR 15,000,000 (fifteen million euro)

(i)

first, on the Preferred Shares: to the holders of the preferred Shares an amount equal to twice the sum of the nominal value of these Preferred Shares, the share premium (agio) paid on these Preferred Shares, and the unpaid dividends of 8% (eight percent) compounded per annum, if any, whereby, if the balance is insufficient to make such distribution, the available balance will be distributed to the holders of the Preferred Shares proportional to the total value of their Preferred Shares shareholdings;

(ii)

the amount remaining after full payment to the Preferred Shareholders pursuant to the preceding subparagraph A. will be distributed to the holders of Preferred Shares and the holders of the Ordinary Shares, proportional to their individual shareholdings of Shares in the Company.

B. In the event the direct proceeds of the Liquidity Event are EUR 15,000,000 (fifteen million euro) or more, the proceeds will be allocated and distributed to the Shareholders pro rata parte the number of Shares each Shareholder holds on an as if converted basis.

Claw back

8.2 In the event a Liquidity Event consists of two or more separate events, whereby the proceeds initially are less then EUR 15,000,000 (fifteen million euro), the proceeds shall first be distributed pursuant to Article 8.1 sub A. Should it appear that on or before the 15^th of November 2012 the sum of all proceeds exceeds EUR 15,000,000 (fifteen million euro), all — and not part — of the past and future proceeds shall be distributed pursuant to Article 8.1 sub B. The Preferred Shareholders shall pay to the Ordinary Shareholders an amount equal to (i) the total proceeds the Ordinary Shareholders should have received if all proceeds were distributed pursuant to Article 8.1 sub B less (ii) the amount already received by the Ordinary Shareholders.

Conversion

8.3 The Parties agree that any of the Preferred Shares may be converted, at any time, into Ordinary Shares at a conversion rate of 1:1 (such conversion a “Conversion”), which conversion rate shall be adjusted so as to reflect this ratio after any amend-

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ment of the nominal value by means of any stock splits, combinations, recapitalisations or any other actions that have lead to a different capitalisation of the Company as if no such stock split, combination, recapitalisation or any such other action had taken place.

8.4 A Conversion will take place in accordance with the provisions of the Articles pursuant to a written request by the relevant holder of the Preferred Shares to be delivered at the Company’s address, stating that such holder of Preferred Shares wishes to convert all or part of the Preferred Shares held by such Shareholder into Ordinary Shares (a “Conversion Request”). Upon receipt of the Conversion Request the Company will immediately take action to effectuate such Conversion. To the extent necessary to achieve such Conversion (i) each of the Parties irrevocably agrees to take all actions and resolutions required to effectuate such Conversion and (ii) each of the Parties hereby unconditionally and irrevocably grants a power of attorney to each (deputy) civil-law notary practising in the Netherlands, to execute any deed of issuance of Shares or amendment to the Articles that may appear necessary to effectuate the Conversion.

8.5 The Parties agree to procure that, notwithstanding any previous Conversions, all (remaining) Preferred Shares shall be converted (i) upon the occurrence of an IPO and listing of Shares of the Company on a recognised stock exchange.

8.6 The Parties furthermore agree to procure that, not later than at the first closing date of an IPO, all outstanding depository receipts — if any — shall be cancelled (gedecer-tificeerd) in exchange for Ordinary Shares at an exchange rate of 1:1, which exchange rate shall be adjusted so as to reflect this ratio after any amendment of the nominal value by means of any stock splits, combinations, recapitalisations or any other actions that have lead to a different capitalisation of the Company as if no such stock split, combination, recapitalisation or any such other action had taken place.

Article 9. Anti-Dilution Adjustments

9.1 In the event of any issue of additional Shares (irrespective of the class of such shares) after the Closing Date (other than Shares issued pursuant to a stock option plan to employees or non-employees (such as members of the Scientific Advisory board) which are approved by the Supervisory Board), for a price per Share less

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than the per Preferred Share contribution on, or purchase price for, any of such Shares, which price per Shares (in case this event occurs prior to a new financing round of the Company) shall be increased with a deemed annual return of 20% (twenty percent) compounded per year — at any time held by the holders of such Shares that were issued or acquired in the context of this Agreement — taking into account any stock splits, recapitalisation, amendment of the nominal value of any of the Preferred Shares, earlier application of anti-dilution provisions or any other relevant transaction (each such issue a “Post-Closing Issue”) - then the Parties shall be obliged to procure that the Company issues to each of these holders of the Preferred Shares such number of Preferred Shares (or, at the option Of one or more holders of the Preferred Shares, any other class of Shares that may exist at such time) against a per share contribution equal to the nominal value thereof (such issue the “Compensating Issue”), as is necessary to achieve a situation in which the average price per Preferred Share — and as the case may be: increased with the deemed annual return of 20% (twenty percent) compounded per year -paid for or contributed on the aggregate number of the Preferred Shares held by each of the holders of such Shares immediately following the Compensating Issue, shall not be higher than the price per additional Share issued under the relevant Post-Closing Issue.

9.2 The contribution payable on the Shares issued through the Compensating Issue shall, if possible, be set off against the share premium (‘agio’) already paid on the class of shares to which the shares issued in the Compensating Issue should belong (so that the relevant holders of Preferred Shares shall hot be obliged to make any payment on the shares issued to it through the Compensating Issue), or, to the extent necessary under applicable law, be equal to the nominal value of the shares issued through the Compensating Issue. The Company and each of the Shareholders hereby unconditionally and irrevocably grant a power of attorney to each (deputy) civil-law notary practising in the Netherlands, to waive any pre-emptive rights and/or to execute a deed of issuance of Preferred Shares to effectuate this anti-dilution protection.

9.3 The Parties acknowledge that, in accordance with the Articles, each of the Company’s shareholders may have certain pre-emptive rights on newly to be issued Shares. To the extent any of the Parties should be a Shareholder of the Company at the time when the provisions of Article 9.1 are effectuated, each of the Parties hereby agrees to waive any pre-emptive rights such Party may have on any and all

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Shares to be issued to such holders of Preferred Shares through the Compensating Issue pursuant to the provisions of this Article 9.

Article 10. Transfer of Shares

IPO

10.1 The Investor, having obtained prior written approval from the Supervisory Board, ma give notice to the Company and the other Shareholder(s) that in its opinion the Company should strive to realize an IPO, then each of the Parties shall be obliged to use best efforts to effect the IPO within a reasonable timeframe. If to that effect, the Company should propose certain actions that may be necessary for an IPO, all Parties Will co-operate to complete such actions and will act in good faith in order to effect such IPO. The Parties agree that in that case they will — inter alia - comply with all applicable rules, regulations and requirements for such IPO including with- out limitation the relevant stock exchange regulations, and agree to enter into such underwriting-, listing-, lock-up- and other agreements as may be deemed reasonable and necessary.

10.2 The Company will bear all costs and expenses in connection with an IPO.

Sale to a strategic or financial purchaser

10.3 The Parties agree that any holder of Shares who/which intends to accept a bona fide offer in writing, received from one or more third parties (such party or parties hereinafter an “Interested Purchaser”), for all or part of the Shares held by such Party (such Party an “Offering Shareholder”), shall be obliged to give written notice thereof to the Company and all other Shareholders (the “Notice”). The Notice shall be given within 10 (ten) business days after receipt of the offer by the Interested Purchaser. In that case, the following provisions shall apply.

Right of First Refusal

10.4 Each of the holders of the Preferred Shares shall have the right (which right, in case more than one such Shareholder should exercise such right, shall be pro rata to their mutual shareholdings of Shares) to give written notice to the Company and the Offering Shareholder within a reasonable term (which shall be determined by the Offering Shareholder in the Notice but shall not be less than 15 (fifteen) busi- ness days from the date of receipt of the Notice) that such Shareholder wishes to purchase the Shares offered by the Offering Shareholder at the same price and

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conditions as offered by the Interested Purchaser.

10.5 For the purpose of Article 10.4, the Notice shall be deemed to constitute an offer to sell which offer may be accepted in the manner described in this sub-article. Subsequently, the accepting Shareholders(s) shall be obliged to procure that the Shares offered by the Offering Shareholder shall be transferred to the accepting Shareholders(s) within 20 (twenty) business days after acceptance.

10.6 To the extent (all or some of the) Shares offered by the Offering Shareholder are not purchased by the holders of the Preferred Shares pursuant to the previous subclauses, the holders of the Ordinary Shares shall have the right (which right, in case more than one such Shareholder should exercise such right, shall be pro rata to their mutual shareholdings of Shares) to give written notice to the Company and the Offering Shareholder within a reasonable term (which shall be determined by the Offering Shareholder in the Notice, but shall not be less than 15 (fifteen) business days from the date the Offering Shareholder has been informed by the holders of the Preferred Shares that they will not purchase all Shares offered by the Offering Shareholder) that such Shareholder wishes to purchase the Shares offered by the Offering Shareholder at the same price and conditions as offered by the Interested Purchaser.

10.7 To the extent one or more of the holders of Shares should not exercise their rights under the previous sub-clauses, each of them agrees to refrain from exercising any other relevant rights such Shareholder may have under the Articles and to give all reasonable co-operation which the Offering Shareholder may need to effect the sale and transfer of Shares to the Interested Purchaser or to those Parties that do exercise their rights under this sub-clause.

Drag Along

10.8 In the event that the Offering Shareholder is the Investors (for the purpose of this Article 10.8 being the Offering Shareholder) receives from an Interested Purchaser a bona fide offer in writing for more than 80% (eighty percent) of the then outstanding Shares (including an offer to purchase such Shares in tranches), and to the extent that the Shares offered by the Offering Shareholder(s) are not sold to the other Shareholders, in such manner as is described in the previous subclauses, the Offering Shareholder(s) shall have the right to oblige the other Shareholders to offer all of the Shares held by them to the Interested Purchaser at the

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same price and conditions as offered by the Interested Purchaser, provided, however, that the Investors shall not be obliged to provide any such Interested Purchaser with any indemnities and representations and warranties, other than representations and warranties to the title of the Shares held by it; as soon as the Offering Shareholder(s) reach an agreement with the Interested Purchaser, then the other Shareholders will also be bound by such agreement and be obliged to transfer the Shares held by them to the Interested Purchaser in such a manner as the Offering Shareholder(s) have agreed with the Interested Purchaser; provided however, that to the extent that the sum of the number of Shares that the Offering Shareholder(s) and the other Shareholders want to sell and/or are obliged to sell to the Interested Purchaser, should be higher than the aggregate number of Shares than the Interested Purchaser wishes to acquire (“supply exceeds demand”), both the Offering Shareholder(s) and the other Shareholders will reduce the number of Shares to be sold by them so that the aggregate number of Shares to be sold to the Interested Purchaser shall consist of Preferred Shares held by the Offering Shareholder(s) and any other Shares held by the other Shareholders pro rata to the size of their shareholdings of Shares in the Company, all this with due observance of Article 8.1 hereof.

Tag Along

10.9 In case the Offering Shareholder is a Shareholder, then the Offering Shareholder shall procure that either the Interested Purchaser or the Offering Shareholder offers to the other Shareholders to purchase all Shares that the holders of such Shares then would wish to make available for sale, at the same price and conditions per Share (or, if the Shares held by the Offering Shareholder are of a different class than (all or some of) the Shares held by any of the relevant other Shareholders, at such price per Share as reflects the difference between those classes) as offered by the Interested Purchaser to the Offering Shareholder, provided, however, that in that case, to the extent that the sum of the number of Shares that the Offering Shareholder wants to sell to the Interested Purchaser and the number of Shares that the other Shareholders would wish to make available for sale, should be higher than the aggregate number of Shares that the Interested Purchaser wishes to acquire (“supply exceeds demand”), both the Offering Shareholder and the other Shareholders will reduce the number of Shares to be sold by them so that the aggregate number of Shares to be sold to the Interested Purchaser shall consist of Shares held by the Offering Shareholder and the other Shareholders pro rata to the size of their shareholdings of Shares in the Company, all this with due

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	observance of Article 8.1 hereof. The Offering Shareholder shall procure that such offer to the other Shareholders shall be made in writing within 1 (one) month after the Offering Shareholder shall have given the Notice.
10.10	For the purpose of clarification, the Parties observe that in case of a bona fide offer in writing by an Interested Purchaser, then the provisions of the Articles 10.4 through 10.7 hereof (Right of First Refusal) will apply in preference to the provisions of Article 10.8 (Drag Along) or Article 10.9 (Tag Along).
10.11	The Parties acknowledge and agree that the arrangements included in the provisions of this Article 10 are different from the transfer restriction clauses in the Articles in the sense that they may result in the realisation of prices for Shares that are different than the prices that may result from the application of the provisions in the Articles relating to the determination of prices by experts. This deviation, however, is expressly agreed and accepted by the Parties in their mutual contractual relations as established through this Agreement.
10.12	Each of the Parties hereby undertakes towards the other Parties to act in accordance with the provisions of this article and to co-operate in the effectuation of any transaction in accordance with the provisions of this Article 10. In particular, each of the Parties hereby agrees to waive its rights under the Articles to the extent such waiver is necessary to procure that the provisions of this Article 10 may be applied in such manner as is described in this Article 10.

Article 11. Encumbrance

Each of the Shareholders undertakes towards the other Shareholders not to create, or suffer or cause any other person to create, any encumbrance with respect to any of the Shares held by them, without prior written Investor’s Consent.

Article 12. Representations and Warranties. Indemnification.

12.1 Each of the Founders hereby represents and warrants, severally and not jointly, towards the Investor that all of the Shares held by them are free from any liens, equities, charges, pledges, rights of usufruct (vruchtgebruik), adverse claims and encumbrances or interests in favour of, or claims made by or which could be made by, any other person.

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12.2	Each of Mr. Van Blitterswijk, Mr. Van der Velden, De Bruijn Holding, Mr. De Bruijn and Mr. Yuan hereby indemnifies the Investor and holds the Investor harmless for any claim or liability from any third party that originates from the business of Progentix B.V., aforementioned, in as far as the claim or liability does not — directly or indirectly - relate to the Osteoinductive Bone Graft Material Technology (e.g. claims with respect to non-related subsidies).
12.3	Each of the Company, Mr. Van Blitterswijk, Mr. Van der Velden, Mr. De Bruijn and Mr. Yuan (the “Representing Parties”) hereby represents and warrants towards the Investor that all of the representations and warranties stated in Exhibit 2 hereto pertaining to the Company and the business of the Company (the “Representations and Warranties”) are true, correct and not misleading on the Signing Date and on the Closing Date.
12.4	In the event of a breach or series of breaches of, or default or series of defaults under, any of the Representations and Warranties (such breach of or default under hereinafter a “Breach”), the Representing Parties shall, subject to the succeeding provisions of this Article 12, be severally liable (and not also jointly) and be obliged to place the Investor that should elect to exercise its rights under this Article 12 or, at the option of the Investor, the Company in the same position as the Investor or, as the case may be, the Company would have been if such Breach had not occurred. For the avoidance of doubt, the Parties agree that in the event of a Breach the Investor — unless the Investor should demand that not the Investor, but the Company shall be placed in the same position as the Company would have been if the Breach had not occurred — shall be entitled to receive from the Representing Parties such amount (the “Damage”) as may be calculated by multiplying the monetary value of the difference between, on the one hand, the position in which the Company would have been if the Breach had not occurred and, on the other hand, the actual position of the Company, by the percentage of the Company’s share capital that the Shares then directly or indirectly held by the Investor account for.
12.5	The Representing Parties shall not be liable under this Article 12 for as long as the amount of Damage per individual Breach does not exceed EUR 10,000 (ten thousand euro).

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12.6	Any and all liability of the Representing Parties in respect of the Representations and Warranties shall fully and, save for the condition set out herein, unconditionally expire at the third anniversary of the Closing Date or in the case of a tax claim as referred to under D. (‘tax warranties’) of Exhibit 2 (‘Representation and Warranties’) on the day the statutory limitations period in respect of tax claims expires, provided that any claim which would otherwise terminate pursuant to this Article 12 will continue to survive if a claim notice in writing shall have been timely sent to a Representing Party on or prior to the end of such term.
12.7	Any potential Breach that has been disclosed to the Investor in the disclosure letter (the “Disclosure Letter”), attached hereto as Exhibit 7, will prevent the Investor from claiming under the Representations and Warranties in the event that such potential Breach would materialize. At the Signing Date, the Investor has no knowledge of a Warranty being untrue, inaccurate or incomplete.
12.8	In the event that the Investor has or believes to have a claim in relation to a Breach, the Investor shall notify the Representing Parties thereof by service of a registered claim notification (aangetekende brief), stating the nature of the claim, whether or not the Investor chooses to have the Representing Parties hold harmless either the Investor or the Company in accordance with the provisions of the second sub-article of this Article 12, and the amount of the claim. If a claim of the Investor can reasonably be considered to be genuine, the Representing Parties shall forthwith remedy the Breach in accordance with the provisions of this Article 12,
12.9	The liability of each of the Representing Parties with respect to the Representations and Warranties shall be limited to the following amounts, which have been agreed in negotiations between the Parties:

Representing Party	Maximum liability amount
Company	EUR 1,000,000
Mr. Van Blitterswijk	EUR 50,000
Mr. Van der Velden	EUR 50,000
Mr. J.D. de Bruijn	EUR 50,000
Mr. Yuan	EUR 10,000

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provided, however, that the Company shall be entitled, if and to the extent (partial) payment of Damages would immediately result in bankruptcy of the Company (such amount of Damages that would result in bankruptcy of the Company hereinafter referred to as the “Excess Damages”), to pay the Excess Damages by means of an issuance of such a number of Preferred Shares, or at the option of the Investor, any other classes of Shares that may exist at that time, at their then current fair market value, to be calculated in accordance with the procedure described in the Articles, to the Investor as is equal to the Excess Damages.

12.10

In view of the provisions of article 1:88 of the Dutch Civil Code Mr. De Bruijn and Mr. Yuan shall procure that the Investor shall have received on or prior to the Closing Date a duly signed declaration of spousal consent, in the form attached hereto as Exhibit 8.

Article 13. Management Board

13.1 The management board (statutair bestuur) of the Company shall require Investor’s Consent, to the extent not provided for in the budget approved in accordance with the provision of this Article 13.1 and Article 17 hereof, for resolutions relating to any of the following decisions, provided, however that each of such decisions has an aggregate value in excess of EUR 25,000 (twenty-five thousand euro):

(a)	opening or shutting down (branch)offices, direct or indirect participation in the capital of another company and terminating or changing the size of any such participation, whether or not abroad;
(b)	lending and borrowing money (including inter-company loans) in excess of 10% (ten percent) of the Contribution, with the exception of acquiring money under a credit already granted to the Company by a bank;
(c)	entering into agreements by which the Company binds itself as guarantor or as severally-liable co-debtor, or otherwise guarantees or agrees to bind itself as security for a debt of a third party in excess of 10% (ten percent) of the Contribution;
(d)	acquiring, alienating, encumbering, leasing, letting and in any other way obtaining and giving the use or benefit of (registered) property and assets;
(e)	entering into agreements, whereby the Company is granted credit by a bank in excess of 10% (ten percent) of the Contribution;
(f)	long term direct or indirect co-operation with another company and the termination of such co-operation;

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(g)	transactions outside the ordinary course of the business of the Company;
(h)	investments or divestitures, or otherwise acquiring or disposing of a business;
(i)	application for bankruptcy or the suspension of payments;
(j)	granting registration rights or similar rights, except as provided for in this Agreement;
(k)	preparation or direct or indirect enablement of a Liquidity Event;
(l)	concluding, terminating or amending any (licensing) agreement relating to licensed intellectual property rights of the Company; and
(m)	exercising the voting rights attributable to shares held by the Company.

13.2

The protective rights of the Investor as laid down in Article 13.1 shall automatically lapse in the event at least 75% (seventy-five percent) Of the Preferred Shares have been converted into Ordinary Shares.

13.3

The management board (statutaire bestuur) of the Company shall require, to the extent not provided for in the budget approved in accordance with the provision of Article 13.1 and Article 17 hereof, the prior written approval of the Supervisory Board (as defined below) for resolutions relating to the any of the following decisions provided, however that each of such decisions has an aggregate value in excess of EUR 10,000 (ten thousand euro):

(a)	the adoption of the annual budget, which shall include an investment plan and a financing plan, annually and obligatory to be drawn up by the management board;
(b)	any expenditure that exceeds the budget by 10% (ten percent) of the level in the Company’s budget as approved by the Investor;
(c)	making settlements;
(d)	being a party to legal proceedings, including conducting arbitration proceedings with the exception of taking legal measures that cannot be delayed;
(e)	granting bonuses or profit rights to the management board, management team or personnel of the Company;
(f)	adopting a share option plan and granting individual stock options under such plan;
(g)	establishing pension plans and granting pension rights in excess of those arising from existing arrangements;
(h)	entering into any contract, transaction or commitment exceeding an aggre- gate value of EUR 100,000 (one hundred thousand euro);

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(i)	entering into and changing employment agreements, whereby a gross remuneration is granted in excess of EUR 50,000 (fifty thousand euro) per annum;
(j)	entering into an arrangement or agreement with (an individual related to) a shareholder, a managing or supervisory director of the Company or of any of its subsidiaries;
(k)	appointing proxy holders (procuratiehouders c.q. gevolmachtigden) and determining their authority and title;
(l)	appointing advisors or investment bankers with respect to a sale, IPO or financing round.

Article 14. General meeting of shareholders

14.1 The following resolutions of the general meeting of shareholders of the Company shall be adopted by (i) a simple majority of the votes validly cast at a meeting of shareholders of the Company including (ii) Investor’s Consent:

(a)	issuance of Shares;
(b)	limitation or exclusion of pre-emptive rights in respect of an issuance of Shares;
(c)	transfer or revocation of the authority to issue Shares to another corporate body;
(d)	acquisition or transfer of Shares or depository receipts thereof by the Company or any of its subsidiaries;
(e)	reduction of the Company’s issued capital;
(f)	amendment of the Articles;
(g)	statutory merger or statutory demerger;
(h)	dissolution of the Company; and
(i)	the distribution of dividends.

14.2	A resolution to appoint, dismiss or suspend a statutory director (statutair bestuurder) shall be adopted by a 2/3 (two/thirds) majority of the votes validly cast at a meeting of shareholders of the Company in which at least 50% (fifty percent) of the issued and outstanding share capital of the Company is present.
14.3	The Parties hereby agree that the protective rights of the Investor set forth in Article 14.1 shall automatically lapse in the event at least 75% (seventy-five percent) of the Preferred Shares have been converted into Ordinary Shares.

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Article 15. Consent of the Investor

To the extent this Agreement prescribes the consent of the Investor this consent shall mean the explicit consent of the Investor, which consent shall either be in writing or somehow recorded for purposes of evidence (hereinafter referred to as: “Investor’s Consent”). In the event the Company has more investors then the Investor due the syndication of the investment, the definition of Investor’s Consent shall include the consent of at least 50% (fifty percent) of all outstanding Preferred Shares.

Article 16. Supervisory Board

16.1 The Parties shall procure that the supervisory board of the Company (the “Supervisory Board”) shall be composed of 3 (three) members, to be appointed by the general meeting of shareholders:

– 1(one) of whom shall be appointed upon a binding nomination of the Investor; and,

– 1(one) of whom shall be appointed upon a binding nomination of the Founders; and,

– 1(one) of whom shall be appointed as an independent member recognised as an industry expert upon a binding nomination of the Investor together with the Founders.

At the Closing Date, the following persons shall be nominated by the following Parties:

• Mr. E.C.M. van Wezel as Supervisory Board member on behalf of the Investor;

• Dr. C.A. Van Blitterswijk as Supervisory Board member on behalf of the Founders.

The third, independent Supervisory Board member, shall be nominated as soon as reasonably possible.

16.2 Each of the Shareholders hereby agrees to Vote at the relevant general meetings of shareholders in favour of any binding nominations made in accordance with this Article 16, unless any candidate nominated cannot reasonably be regarded as an appropriate member of the Supervisory Board. Likewise each of the Shareholders hereby agrees to vote at the relevant general meeting of shareholders in favour of

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any proposals to suspend or dismiss a Supervisory Board member if such proposal is made by the same Party which is entitled to nominate candidates for the seat then held by such Supervisory Board member.

16.3	The Parties shall procure that the Supervisory Board shall meet at regular intervals, but at least quarterly. Votes may be rendered by power of attorney given by one Supervisory Board member to another member. The Parties agree that the Supervisory Board will adopt resolutions by a simple majority of the votes of the members present.
16.4	The Supervisory Board members shall receive reimbursement of all reasonable expenses incurred for their membership of the Supervisory Board.
16.5	To the extent allowed under applicable law, the Company shall indemnify and keep indemnified the members of the Supervisory Board from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgements, suits, costs or expenses of any kind or nature whatsoever to which such member may become subject by reason of its/their status as member of the Supervisory Board, unless such liabilities, obligations, losses, damages, penalties, actions, judgements, suits, costs or expenses of any kind or nature whatsoever is/are caused by its/their gross negligence, wilful misconduct or fraud.
16.6	The Supervisory Board members shall have the benefit of directors’ insurance in amounts and covering risks as is determined by the management board (statutaire bestuur) of the Company, subject to Investor’s Consent.

Article 17. Information

17.1 The Company agrees to furnish to the Investor the following information in electronic format:

• Monthly financial- and management updates of the Company and its subsidiaries: within 15 (fifteen) days following the end of each month a report comprising updates on cash position and cash burn, actual versus budget;

• Quarterly financial- and management statements of the Company and its subsidiaries: within 30 (thirty) days following the end of each quarter a report comprising at least a profit and loss account for the prior quarter, actual versus budget updates on cash position and cash burn, updated sales and profit

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	and loss forecasts, estimates for the running quarter, a quarterly progress report, and other key performance indicators relating to the Company;
•	Annual reports: within 90 (ninety) days after the end of each financial year the audited financial statements according to generally accepted accounting principles in the Netherlands;
•	Annual budget: at least 60 (sixty) days before the end of each financial year, which budget will include a projected income statement, cash flow projections and a balance sheet of the Company and its subsidiaries on a monthly basis for the following financial year;
•	Any other information which the Investor may reasonably require to monitor the Company’s and its subsidiaries business strategy, major business developments and the financial and overall performance of the Company and its subsidiaries on a regular basis.

17.2 The Company and the Founders agree to allow the Investor and its external advisers for as long as the Investor is a Shareholder, to visit each and every office of the Company and/or any of its subsidiaries as often as the Investor should reasonably request (after having given a reasonable written notice) and to inspect and copy the Company’s and/or its subsidiaries’ books and records (including corporate and financial records) and discuss its business and financial matters with the Company’s management unless, either (i) after an IPO such visits and/or inspections cannot, under the regulations applicable to companies listed on the relevant stock exchange, be allowed to the investor or (ii) such visits and/or inspections cannot be allowed to the Investor due to non disclosure obligations of the Company in connection with its business. All costs and expenses in relation to the provisions in this sub-article, shall be borne by the Investor who incurred such costs and expenses. Should it appear from these inspections that the Company has not — or not timely—met its obligations pursuant to Article 17.1 all costs shall be borne by the Company.

Article 18. Budget

To the extent that the Investor should notify the Company that it does not approve the budget provided to them pursuant to Article 17.1, then the Company shall (i) refrain from any actions aimed at or relating to the implementation of any and all of the items referred to in such budget, and (ii) submit to the Investor an amended budget.

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Article 19. Non-Competition Agreements

19.1 Each of the Mr. De Bruijn and Mr. Yuan hereby undertakes and covenants with the Company and the Investor that he shall not, except with the prior written approval of the Company and each of the Investors:

a.

while he is (either directly or indirectly) a manager with or advisor to the Company or its (future) subsidiaries, be engaged or interested directly or indirectly (in any capacity whatsoever) in Osteoinductive Bone Graft Material Technology; or

b.

during a period commencing on the date he (either directly or indirectly) no longer is a holder of Shares in the capital of the Company, manager with or advisor to the Company or its (future) subsidiaries and ending two (2) years later or, if earlier, at the IPO: (i) carry on or be concerned, engaged or interested directly or indirectly in any capacity whatsoever in Osteoinductive Bone Graft Material Technology; or (ii) either on his own behalf or in any other capacity whatsoever directly or indirectly do or say anything which may lead to any person or entity ceasing to do business with the Company or its (future) subsidiaries on substantially the same terms as previously (or at all) or endeavour to entice away from the Company or its (future) subsidiaries or solicit any person, firm or company who at the date of cessation does business with the Company or its (future) subsidiaries or which has during such a period been a customer of the Company or its (future) subsidiaries; or (iii) either on his/its own behalf or in any other capacity whatsoever directly or indirectly employ, engage or induce, or seek to induce, to leave the service of the Company or its (future) subsidiaries, any person who at that date is employed by the Company or its (future) subsidiaries.

Article 20. Future pre-emptive rights

In the event of an issue of new Shares (irrespective of the class of such Shares) and notwithstanding any contrary provision in the Articles (as the Articles may read from time to time), all Shareholders (including the holders of Preferred Shares and/or any future classes of Preferred Shares) shall (in deviation Of section 2:206a subsection 2 of the Dutch Civil Code) have a first right to subscribe for any newly issued Shares in proportion to their individual shareholdings of Shares in the Company. In the event a Shareholder does not exercise its pre-emptive rights in respect of such newly issued Shares, the other Shareholders shall have pre-emptive rights in respect of those shares in proportion to

27/31

their individual shareholdings of Shares in the Company. For the purpose of clarification, the Parties observe that in case of an issue of new Shares, the provisions of Article 9 hereof (Anti-Dilution Adjustments) will apply in preference to the provisions of this Article 20 (Future Pre-emptive rights). The Investor is entitled to exercise any pre-emptive rights of any Shareholder that does not exercise its own pre-emptive rights, whereby BioGeneration is entitled to transfer or assign its pre-emptive rights to affiliates, to successor funds and/or to Forbion Capital Partners.

Article 21. Assignments; Perpetual Covenant

21.1 The Investor shall at all times have the right to transfer the Shares held by it along with their rights and obligations under this Agreement to any (other) company, for as long as such (other) company is controlled by the Investor, for as long as such (other) company (directly or indirectly) controls the relevant Investor, or for as long such company is an investment fund or similar entity managed by one or more investment managers of such Investor or managed by the same general partner or manager as such Investor or by any other general partner or manager within the same group as such Investor or its general partner, except for portfolio companies and provided that such transfer takes place in accordance with Article 21.2 hereof. Each of the other Parties hereby agrees to unconditionally co-operate to effect any such transfer.

21.2 Notwithstanding any other provisions of this Agreement, no Party shall transfer any Shares to any transferee which is not bound by the provisions of this Agreement without procuring that such transferee shall have agreed to become a party to this Agreement effective as from the moment that it shall be a shareholder of the Company, and by doing so shall have accepted the rights and obligations under this Agreement which apply to the transferor of the relevant Shares immediately prior to the transfer of such Shares.

Article 22. Costs and Expenses

22.1 All fees, costs and expenses, up to a maximum amount of EUR 30,000 (thirty thousand euro) charged by the advisor(s) of the Investor in relation to the drawing up and negotiation of this Agreement and the (notarial) execution thereof, shall, be borne by the Company. All fees, costs and expenses incurred in excess thereof and all fees, costs and expenses incurred by the other Parties shall be borne by

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each such Party.

22.2 Each of the Parties represents that he/it has not incurred and will not incur any brokerage fees, agent’s fees or any other commissions in connection with the transactions contemplated by this Agreement.

Article 23. Confidentiality; Announcements

23.1 Each of the Parties agrees to keep secret and strictly confidential and not to use, disclose or divulge to any third party or to enable or cause any person to become aware of (except for the purposes of the Company’s and/or its subsidiaries business) any confidential information relating to the Company and/or its subsidiaries including but not limited to intellectual property (whether owned or licensed by the Company and/or its subsidiaries), lists of customers, reports, notes, memoranda and all other documentary records pertaining to the Company and/or its subsidiaries, or its/their business affairs, finances, suppliers, customers or contractual or other arrangements but excluding any information which is in the public domain or which they are required to disclose by law or by the rules of any regulatory body to which the relevant Party is subject.

23.2 Notwithstanding the previous sub-clause, the Company and the Investor shall have the right to (i) make such announcements in connection with the participation of the Investor in the Company as is customary for such Party to make, for example through press releases or tombstone advertisements in newspapers, provided however that information made public reveals nothing more than (a) the name of the Investor (b) total invested amount, and (ii) use, disclose or divulge any such information to its (supervisory) board members, members of their investment committee or similar committees, other financial investors and financial institutions in their capacity as lenders to the Company.

Article 24. Notices

Any notices given in connection with this Agreement must be in writing and may be given by fax and registered mail to the addresses referred to in this Agreement or, in respect of any of such addresses, to such other address as the recipient may notify to the other Parties for such purpose.

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Article 25. Entire Agreement

This Agreement and its Exhibits, annexes and schedules sets out the entire agreement and understanding between the Parties with respect to the subject matter of this Agreement and supersedes and terminates all prior understandings, discussions and agreements with respect to the subject matter of this Agreement between the Parties.

Article 26. General Provisions

26.1 In accordance with the laws designated to combat money laundering, each Party including any Party acting on behalf of a fund, hereby certifies:

a.	that he/it has identified the underlying investors in all the funds for which he/it is acting; and
b.	that he/it is unaware of any activities on the part of such investors which lead it to suspect that anyone of such investors is or has been involved in criminal conduct or money laundering activities, and that in case of any suspicion of any such activity he/it will, subject to any legal constraints, inform the competent authorities of such suspicions and activities; and
c.	he/it will retain, until further notice, all documentation required to identify the underlying investors in the funds for which he/it is acting.

26.2 Amendments to this Agreement, in order to be effective, must be made in writing and be signed by all Parties to this Agreement

26.3 In the event of any discrepancies or contradictions between this Agreement and the Articles, this Agreement shall prevail to the extent permitted under the laws of the Netherlands.

26.4 Each of the Parties hereby waives its right to have this Agreement rescinded (ontbonden) or to claim the rescission (ontbinding) thereof, or to cancel or terminate (opzeggen) this Agreement.

26.5	Should any provision of this Agreement be or become partly or entirely invalid or impractical, then this shall not affect the validity of the remaining provisions.
26.6	This Agreement shall be governed by and construed in accordance with the laws of the Netherlands.

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26.7 The courts of Amsterdam, the Netherlands shall have exclusive jurisdiction over a dispute arising out of or in connection with this Agreement, as well as over any claims to demand performance under this Agreement.

In witness whereof this Agreement has been sighed and executed by the Parties hereto in singular on the 11^th of January 2008.

/s/ Dr. C.A. van Blitterswijk	/s/ Mr. F.J.W.E.B. van der Velden
Dr. C.A. van Blitterswijk	Mr. F.J.W.E.B. van der Velden
/s/ Mr. H. Yuan	/s/ Mr. J.D. de Bruijn
Mr. H. Yuan	Mr. J.D. de Bruijn
/s/ J.D. de Bruijn	/s/ J.D. de Bruijn
J.D. de Bruijn Holding B.V.	Progentix Orthobiology B.V.
By: J.D. de Bruijn	By: J.D. de Bruijn Holding B.V.
	By: J.D. de Bruijn
/s/ Mr. E.C.M. van Wezel /s/ Mr. W.M. Hazenberg
BioGeneration Ventures B.V. By: BioGeneration Management B.V.
By: Mr. E.C.M. van Wezel By: Mr. W.M. Hazenberg

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EXHIBIT K

FOUNDERS’ NON-COMPETITION AGREEMENT

     THIS FOUNDERS’ NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Joost D de Bruijn (“Bruijn”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Bruijn.

AGREEMENT

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

     1. PURPOSE. Bruijn understands that, solely to extent expressly set forth herein, he is prohibited from (i) engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”) and (ii) soliciting any person of the Purchaser’s Group to leave the latter.

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly, (i) engage in any commercial activity with any competitor of the Purchaser’s Group with respect to any of the Products in the Field (a “Competing Business”) if such activity is related to the commercialization of a biologic

(e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will compete with the Products and includes a use in spinal applications (“Competitive Services”), or (ii) provide Competitive Services to, any person (or any affiliate of any person) who or which is engaged in a Competing Business with respect to such Competing Business (whether directly or indirectly). Purchaser expressly acknowledges and agrees that Bruijn is or may become a member of a not-for-profit institution or association (collectively, the “Institutions”) and notwithstanding anything to the contrary contained herein, nothing in this Agreement shall preclude or in any way restrict Bruijn from providing educational services at any such Institution or conducting research at any such Institution. A complete list of the research activities of Bruijn relating to any biologic or other Product or compound intended to foster bone growth as of the date of this Agreement is attached hereto as Exhibit A.

     3. NON-SOLICITATION.

     (a) Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly, solicit, encourage or attempt to solicit or encourage any person who is at the time of such solicitation, encouragement, or attempted solicitation or encouragement an employee of the Company and who was immediately prior to the closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing”), an employee of the Company to leave the employment of the Company.

     (b) Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly solicit, encourage or attempt to solicit or encourage to cease to work with the Company, any employee of, or consultant then under contract with the Company who is or has been engaged in the business of the Company (the “Business”).

     (c) Bruijn agrees that he will not, directly or indirectly: (i) solicit, induce or attempt to induce any customer to cease doing business in whole or in part with the Purchaser’s Group; (ii) attempt to limit or interfere with any business agreement existing between the Purchaser’s Group and any third party; or (iii) disparage the business reputation or employees of the Purchaser’s Group or take any actions, knowingly, willfully or, recklessly, that are harmful to the Purchaser Group’s goodwill with their customers, clients, publishers, advertisers, marketers, vendors, employees, service providers, media or the public.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. BREACH. In the event of a breach by Bruijn of his obligations pursuant to this Agreement, Bruijn agrees that he shall forfeit to Purchaser, without any further notice or demand being required, an immediately payable penalty in the amount of fifty percent (50%) of any amounts received by Bruijn Holding B.V. under the Preferred Stock Purchase Agreement (the “Liquidated Damages”) for any such violation, without limiting or precluding the right of the Purchaser to claim from Bruijn specific performance or any damages which the Purchaser has incurred; provided, that any Liquidated Damages collected by Purchaser hereunder shall be offset against any Damages to which Purchaser is otherwise entitled under the Preferred Stock Purchase Agreement.

     8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Bruijn and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

JOOST D DE BRUIJN	NUVASIVE INC.
	By:
Joost D de Bruijn		Name:
		Title:

Exhibit A

***

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

EXHIBIT L

FOUNDERS’ NON-COMPETITION AGREEMENT

     THIS FOUNDERS’ NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Clemens van Blitterswijk (“Blitterswijk”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands, held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Blitterswijk.

AGREEMENT

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

     1. PURPOSE. Blitterswijk understands that, solely to extent expressly set forth herein, he is prohibited from (i) engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”) and (ii) soliciting any person of the Purchaser’s Group to leave the latter.

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly; (i) engage in any commercial activity with any competitor of the Purchaser’s Group with respect to any of the Products in the Field (a “Competing Business”) if such activity is related to the commercialization of a

1

biologic (e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will compete with the Products and includes a use in spinal applications (“Competitive Services”), or (ii) provide Competitive Services to, any person (or any affiliate of any person) who or which is engaged in a Competing Business. Purchaser expressly acknowledges and agrees that Blitterswijk is or may become a member of a not-for-profit institution or association (collectively, the “Institutions”) and notwithstanding anything to the contrary contained herein, nothing in this Agreement shall preclude or in any way restrict Blitterswijk from providing educational services at any such Institution or conducting research at any such Institution. A complete list of the research activities of Blitterswijk relating to any biologic or other Product or compound intended to foster bone growth as of the date of this Agreement is attached hereto as Exhibit A. Purchaser expressly acknowledges and agrees that Blitterswijk is or may in the future enter the business of venture capital investing and in such capacity may review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company and/or Purchaser Group. Nothing in this Agreement shall preclude or in any way restrict any venture capital firm or similar institutional investor with which Blitterswijk is affiliated from investing or participating in any particular enterprise, or any other general partner, member, officer or employee of any such venture capital firm or similar institutional investor from serving on the board of directors of any enterprise in which it makes an investment, whether or not such enterprise has products or services which compete with those of the Company and/or the Purchaser Group.

     3. NON-SOLICITATION.

     (a) Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly: solicit, encourage or attempt to solicit or encourage any person who is at the time of such solicitation, encouragement, or attempted solicitation or encouragement an employee of the Company and who was immediately prior to the closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing”), an employee of the Company to leave the employment of the Company.

     (b) Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly solicit, encourage or attempt to solicit or encourage to cease to work with the Company, any employee of, or consultant then under contract with the Company who is or has been engaged in the business of the Company (the “Business”).

     (c) Blitterswijk agrees that he will not, directly or indirectly: (i) solicit, induce or attempt to induce any customer to cease doing business in whole or in part with the Purchaser’s Group; (ii) attempt to limit or interfere with any business agreement existing between the Purchaser’s Group and any third party; or (iii) disparage the business reputation or employees of the Purchaser’s Group or take any actions, knowingly, willfully or, recklessly, that are harmful to the Purchaser Group’s goodwill with their

2

customers, clients, publishers, advertisers, marketers, vendors, employees, service providers, media or the public.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. BREACH. In the event of a breach by Blitterswijk of his obligations pursuant to this Agreement, Blitterswijk agrees that he shall forfeit to Purchaser, without any further notice or demand being required, an immediately payable penalty in the amount of fifty percent (50%) of any amounts received by Incubation B.V. under the Preferred Stock Purchase Agreement (the “Liquidated Damages”) for any such violation, without limiting or precluding the right of the Purchaser to claim from Blitterswijk specific performance or any damages which the Purchaser has incurred; provided, that any Liquidated Damages collected by Purchaser hereunder shall be offset against any Damages to which Purchaser is otherwise entitled under the Preferred Stock Purchase Agreement.

     8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Blitterswijk and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

CLEMENS VAN BLITTERSWIJK	NUVASIVE INC.
	By:
Clemens van Blitterswijk		Name:
		Title:

3

Exhibit A

***

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

4

EXHIBIT M

INVESTOR NON-COMPETITION AGREEMENT

     THIS INVESTOR NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Edward van Wezel (“Wezel”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Wezel.

AGREEMENT

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

     1. PURPOSE. Wezel understands that, solely to extent expressly set forth herein, he is prohibited from engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”).

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Wezel agrees that he will not personally serve as a member of the supervisory board (raad van comissarissen) of any party that is a competitor of the Purchaser’s Group with respect to any of the Products in the Field if such competitor is engaged in the business of commercializing a biologic (e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will

1

compete with the Products and includes a use in spinal applications (a “Competing Business”). Wezel further agrees that he will not personally serve as a member of the board of directors or a substantially equivalent governing body of any Competing Business, if BioGeneration Ventures BV makes an investment in any such Competing Business outside the Netherlands. Purchaser expressly acknowledges and agrees that Wezel is in the business of venture capital investing and therefore (a) Wezel reviews the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company and/or Purchaser Group, (b) Wezel monitors investments in Competing Businesses, including consulting with members of BioGeneration Ventures BV that serve on the board of directors, and (c) Wezel may take any and all actions on behalf of BioGeneration Ventures BV as a shareholder of a Competing Business (including, without limitation, the activities described in clauses (a) and (b) of this Section 2). Nothing in this Agreement shall preclude or in any way restrict any venture capital firm or similar institutional investor with which Wezel is affiliated from investing or participating in any particular enterprise, or any other general partner, member, officer or employee of any such venture capital firm or similar institutional investor from serving on the supervisory board (raad van comissarissen) or the board of directors or a substantially equivalent governing body of an entity in which it makes an investment, whether or not such entity has products or services which compete with those of the Company and/or the Purchaser Group.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Wezel and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

2

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

EDWARD VAN WEZEL	NUVASIVE INC.
	By:
Edward van Wezel		Name:
		Title:

3

EX-10.54

EXECUTION COPY

EXHIBIT 10.54

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

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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

2

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,

4

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’

5

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

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

8

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

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

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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.

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

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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

TRANSFER OF SHARES
PROGENTIX ORTHOBIOLOGY B.V.

On the       day of       two thousand and nine, appeared before me, Alexander Joannes Wiggers, civil law notary in Amsterdam:
     ,

acting pursuant to a written power of attorney from:

1.	J.D. de Bruijn Holding B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Amersfoort, the Netherlands and with office address at Pasteurstraat 16,3817 JL Amersfoort, the Netherlands, registered with the Trade Register under number 32112279, hereinafter referred to as: “Seller 1”;
2.	Incubation B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Bilthoven, the Netherlands and with office address at Professor Bronkhorstlaan 10 D, 3723 MB Bilthoven, the Netherlands, registered with the Trade Register under number 30194071, hereinafter referred to as: “Seller 2”;
3.	Huipin Yuan, born in Nijiang, China, on the nineteenth day of April nineteen hundred sixty-six, residing at Laan van Vollenhove 168, 3706 AA Zelst, the Netherlands, holder of a                      passport with number                      , married//unmarried//registered as partner, hereinafter referred to as: “Seller 3”;
4.	Biogeneration Ventures B.V., a private company with limited liability organized under the laws of the Netherlands, with statutory seat in Leiden, the Netherlands and with office address at Gooimeer 2-35, 1411 DC Naarden, the Netherlands, registered with the Trade Register under number 32119447, hereinafter referred to as: “Seller 4”, Seller 1, Seller 2, Seller 3 and Seller 4 hereinafter also collectively referred to as: “Sellers”;
5.	NuVasive, Inc. a company organised under the laws of the state of Delaware, United States of America, with registered seat and office address at 7473 Lusk Boulevard, San Diego, CA 92121, United States of America, registered with the Delaware Division of Corporations under number 2775617, hereinafter referred to as; the “Purchaser”.
6.	Progentix Orthobiology B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), with corporate seat in Bilthoven, the Netherlands and office address at Professor Bronkhorstlaan 10 D, 3723 MB

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Bilthoven, the Netherlands, registered with the Trade Register under number 30234249, hereinafter referred to as: the “Company”.

The person appearing, acting in said capacity, declared hereby as follows:

WHEREAS

A.	OPTION PURCHASE AGREEMENT
	By written option purchase agreement dated the       day of       two thousand and nine (hereinafter referred to as: the “Option Purchase Agreement”) in which:

- the Purchaser has received an exclusive option // obligation to acquire four thousand three hundred twenty (4,320) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 9,919 up to and including 14,238 (hereinafter referred to as: the “Option 1”);

- the Purchaser has received an exclusive option // obligation to acquire five thousand nine hundred fifty-one (5,951) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 1 up to and including 5,951 (hereinafter referred to as: the “Option 2”);

- the Purchaser has received an exclusive option // obligation to acquire five hundred twenty-nine (529) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 17,119 up to and including 17,647 (hereinafter referred to as: the “Option 3”);

- the Purchaser has received an exclusive option // obligation to acquire two thousand four hundred (2,400) cumulative preference shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 1 up to and including 2,400 (hereinafter referred to as: the “Option 4”).
the Option 1, the Option 2, the Option 3 and the Option 4 hereinafter also collectively referred to as the “Options”.

B.	EVIDENCE
	Purchaser has exercised the Options in accordance with the provisions of the Option Purchase Agreement as is evidenced by a declaration signed by all relevant parties which is attached, to this deed.
C.	SHARES

- the Seller 1 hereby sells to the Purchaser and the Purchaser hereby purchases from the Seller 1 four thousand three hundred twenty (4,320) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 9,919 up to and Including 14,238 (hereinafter referred to as: the “Shares 1”);

- the Seller 2 hereby sells to the Purchaser and the Purchaser hereby purchases from the Seller 2 five thousand nine hundred fifty-one (5,951) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 1 up to and including 5,951 (hereinafter referred to as: the “Shares 2”);

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- the Seller 3 hereby sells to the Purchaser and the Purchaser hereby purchases from the Seller 3 five hundred twenty-nine (529) shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 17,119 up to and including 17,647 (hereinafter referred to as: the “Shares 3”);

- the Seller 4 hereby sells to the Purchaser and the Purchaser hereby purchases from the Seller 4 two thousand four hundred (2,400) cumulative preference shares in the capital of the Company, each share with a nominal value of one euro (EUR 1), numbered 1 up to and including 2,400 (hereinafter referred to as: the “Shares 4”).

The Shares 1, the Shares 2, the Shares 3 and the Snares 4 hereinafter also collectively referred to as the “Shares”.

A copy of the Option Purchase Agreement is attached to this deed.

The provisions of the Option Purchase Agreement which are still applicable at this time shall remain in force insofar as not inconsistent with this deed.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 1

The Shares 1 have been issued by the Company to the Seller 1 by virtue of the Company’s Deed of Incorporation executed before N. van Buitenen, civil law notary in Utrecht, the Netherlands on the thirty-first day of December two thousand and seven.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 2

The Shares 2 have been acquired by the Seller 2 pursuant to a purchase agreement, by a deed of transfer executed before N. van Buitenen, aforementioned, on the twenty-ninth day of September two thousand and eight.

The transfer was acknowledged by the Company on the same day, as is evidenced by the abovementioned notarial deed.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 3

The Shares 3 have been issued by the Company to the Seller 3 by virtue of the Company’s Deed of Incorporation executed before N. van Buitenen, civil law notary in Utrecht, the Netherlands on the thirty-first day of December two thousand and seven.

PREVIOUS ACQUISITION OF SHARES BY THE SELLER 4

The Shares 4 have been issued by the Company to the Seller 4 by virtue of a deed of issue executed before N. van Buitenen, aforementioned, on the fourteenth day of January two thousand and eight.

PAYMENT OF THE PURCHASE PRICE

- The purchase price for the Shares 1 amounts to       euro (EUR    ) (hereinafter referred to as: the “Initial Purchase Price 1”).

- The purchase price for the Shares 2 amounts to       euro (EUR    ) (hereinafter referred to as: the “Initial Purchase Price 2”).

- The purchase price for the Shares 3 amounts to       euro (EUR    ) (hereinafter referred to as: the “Initial Purchase Price 3”).

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- The purchase price for the Shares 4 amounts to       euro (EUR    ) (hereinafter referred to as: the “Initial Purchase Price 4”).

The Initial Purchase Price 1, the Initial Purchase Price 2, the Initial Purchase Price 3 and the Initial Purchase Price 4 hereinafter also collectively referred to as: the “Initial Purchase Price”.

The Purchaser has paid the Initial Purchase Price (as defined in the Option Purchase Agreement) decreased with (i) the Escrow Amount (as defined in the Option Purchase Agreement), (ii) the Seller Funded Expenses (as defined in the Option Purchase Agreement) and (iii) the Loan Amount (as defined in the Option Purchase Agreement), being in total an amount of       United States Dollars (USD    ) hereinafter referred to as: the “Upfront Payment”, by payment into the bank account of the civil law notaries of DLA Piper Nederland N.V. with ING Bank, account number 672644428.

The undersigned civil law notary is hereby irrevocably instructed to pay a part of the Upfront Payment, being an amount of:

- [USD    ], upon the execution of this deed into a bank account in the name of the Seller 1 with number      . Therefore, the Seller 1. hereby grants a discharge to the Purchaser for this part of the Upfront Payment;

- [USD    ], upon the execution of this deed into a bank account in the name of the Seller 2 with number      . Therefore, the Seller 2 hereby grants a discharge to the Purchaser for this part of the Upfront Payment.

- [USD    ], upon the execution of this deed into a bank account in the name of the Seller 3 with number      . Therefore, the Seller 3 hereby grants a discharge to the Purchaser for this part of the Upfront Payment.

- [USD    ], upon the execution of this deed into a bank account in the name of the Seller 4 with number      . Therefore, the Seller 4 hereby grants a discharge to the Purchaser for this part of the Upfront Payment.

[DLA remark: to be completed upon receipt of the Proceeds Allocation, or — in the event- the Revised Proceeds Allocation.

In the event of payment of the purchase price in common stock of Purchaser, this payment section of the purchase price will be included accordingly.]

TRANSFER

Pursuant to the Option Purchase Agreement

- the Seller 1 hereby transfers the Shares 1 to the Purchaser, who accepts this transfer;

- the Seller 2 hereby transfers the Shares 2 to the Purchaser, who accepts this transfer;

- the Seller 3 hereby transfers the Shares 3 to the Purchaser, who accepts this transfer;

- the Seller 4 hereby transfers the Shares 4 to the Purchaser, who accepts this transfer.

FURTHER CONDITIONS

The guarantees and warranties as laid down in the Option Purchase Agreement remain

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applicable to this transfer.

Article 2.

All proceeds from and costs related to the Shares shall, as from this day, accrue to or, as the case may be, be borne by the Purchaser.

Article 3.

The costs Incidental to this deed and the execution thereof shall be borne by the Purchaser.

Article 4.

All conditions subsequent which have been agreed upon In the Option Purchase Agreement have now lapsed and are hereby rendered entirely devoid of legal effect Neither the Sellers nor the Purchaser may any longer claim the benefit of any condition subsequent in respect of this purchase and transfer of the Shares.
The conditions precedent as inserted in the Option Purchase Agreement, have been fulfilled, as a result whereof the transfer can be effected unconditionally.

SHARE TRANSFER RESTRICTIONS

The share transfer restrictions in the Company’s articles of association, which consist of an offering system, have in respect of the transfer of the Shares by this deed been duly observed, since all shareholders of the Company are a party to this deed and hereby waive their right pursuant to the share transfer restrictions to acquire the Shares.

ACKNOWLEDGEMENT

The Company declares that it has taken cognisance of and hereby acknowledges the above transfer of the Shares.

The Company shall immediately enter this transfer in its shareholders’ register.

NON—APPLICABILITY OF ARTICLE 2;204C OF THE CIVIL CODE

The provisions laid down in Article 2:204c of the Dutch Civil Code do not apply to this transfer to the Purchaser.

INTERDISCIPLINARY COOPERATION ADVISOR PURCHASER

With reference to the Rules of Professional Conduct (Verordening beroeps- en gedragsregels) of the Royal Dutch Organisation of Civil Law Notaries (Koninklijke Notariĕle Beroepsorganisatie) all parties declared expressly to agree that:

a.	DLA Piper Nederland N.V. acts as counsel to the Purchaser in connection with this deed or any related agreement, or acts as counsel for or on behalf of the Purchaser in the event of any dispute relating to this deed or any related agreement; and
b.	the undersigned civil law notary executes this deed of transfer even though he is affiliated with DLA Piper Nederland N.V. as civil law notary.

POWER OF ATTORNEY:

The person appearing has been authorized by six (6) written powers of attorney, (copies of) which have been attached to this deed.

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The person appearing is known to me, civil law notary, and the identity of the person appearing mentioned in this deed has been determined by me, civil law notary, by means of the relevant document mentioned hereinbefore.

This deed is executed at Amsterdam on the date mentioned at the head of this deed. The contents of this deed have been stated and explained to the person appearing by me, civil law notary. Furthermore the consequences of this deed have been pointed out to the person appearing.

The person appearing declares to have in good time taken cognisance of the contents of this deed and to agree with the contents.

Thereupon, after a limited part of this deed has been read out, it is signed by the person appearing and by me, civil law notary.

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EXHIBIT B

PURCHASER ELECTION NOTICE

(To be signed only upon exercise of Call Option)

Progentix Orthobiology BV
Professor Bronkhorstlaan 10, building 48
3723 MB Bilthoven
The Netherlands
Attn: Joost de Bruijn
Fax No.: +31 (0)30 229 7299

BioGeneration Ventures B.V.
Gooimeer 2 — 35
1411 DC Naarden
The Netherlands
Attention: Edwin van Wezel

Goodwin Procter LLP
Exchange Place
53 State Street
Boston, MA 02109
Attn: Michael H. Bison, Esq.
Fax No.: (617) 523-1231

CORP. advocaten
De Lairessestraat 137-143
1075 HJ Amsterdam
Attn: Edwin Renes
Fax No.: +31 (0)20 578 83 05

[Date]

Gentlemen:

     NuVasive, Inc., a Delaware corporation (“Purchaser”), hereby elects to exercise its call option (the “Call Option”) to acquire all of the issued and outstanding shares of capital stock of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands (the “Company”), pursuant to Section 1.1(b)(i) of the Option Purchase Agreement dated January 13, 2009 (the “Agreement”) by and among Purchaser, the Company and the shareholders of the Company (the “Sellers”). Pursuant to Section 1.6(c)(ii) of the Agreement, Purchaser shall purchase all of the Sellers’ issued and outstanding shares of the capital stock of the Company for an initial purchase price of $35,000,000. Purchaser proposes the closing of the acquisition to occur on [the Business Day immediately following the expiration of the Call Option Review Period]. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

NUVASIVE, INC.
 

Name:  

Title:  

Exhibit A

Purchasers Calculation

EXHIBIT C

MILESTONE COMPLETION NOTICE

(To be signed only upon exercise of Put Option)

NuVasive, Inc.
7473 Lusk Boulevard
San Diego, California 92121
Attn: General Counsel
Fax No.: (858) 909-2479

DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Attn: Michael Kagnoff
Fax No.: (858) 456-3075

[Date]

Attention General Counsel:

     Progentix Orthobiology B.V., a company organized under the laws of the Netherlands (the “Company”), has successfully completed the Base Milestones set forth in Section 1.6(c)(i) of the Option Purchase Agreement dated January 13, 2009 (the “Agreement”) by and among NuVasive, Inc., a Delaware corporation (“Purchaser”), the Company and the shareholders of the Company (the “Sellers”). Pursuant to Section 1.2 of the Agreement, the Sellers’ Representative hereby is exercising its put option (the “Put Option”) to cause Purchaser to purchase all of the Sellers’ issued and outstanding shares of capital stock of the Company at an initial purchase price of $ [___], as calculated pursuant to Exhibit A hereto. The Sellers’ Representative proposes the closing of the Put Option occur on [the Business Day immediately following the expiration of the Put Option Review Period]. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

SELLERS’ REPRESENTATIVE
 

Name:  

EXHIBIT A

EXHIBIT D

TRUE-UP AGREEMENT

     This True-Up Agreement is entered into as of ____________, 20___, by and among NuVasive, Inc., a Delaware corporation (“Purchaser”) and the undersigned Sellers (the “Sellers”) of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands (the “Acquired Company”). Capitalized terms not defined herein shall have the meanings set forth in the Option Purchase Agreement (as defined below).

     WHEREAS, the Purchaser is entering into an Option Purchase Agreement with the Acquired Company and the Sellers, dated as of January 8, 2009 (the “Option Purchase Agreement”), pursuant to which Purchaser may purchase from the Sellers all of the outstanding capital stock of the Acquired Company (the “Acquisition”).

     WHEREAS, pursuant to the terms of the Option Purchase Agreement, at the sole election of the Purchaser, all or a portion of the Initial Purchase Price or Milestone Payments (collectively, the “Aggregate Purchase Price”) may be paid by Purchaser to the Sellers in the form of shares of common stock (“Purchaser Common Stock”) of the Purchaser (the “Stock Consideration”), with the exact number of shares determined based on the closing price (the “Closing Price”) of the Purchaser Common Stock on the Qualified Stock Exchange on the Trading Day (as defined below) immediately prior to the date of each applicable payment (each, a “Payment Date”). For purposes of this Agreement, the term “Trading Day” shall mean any day when the Qualified Stock Exchange is open for trading.

     WHEREAS, pursuant to Section 1.6(b)(iii) of the Option Purchase Agreement, Purchaser has elected to cause each of the Sellers to execute this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

     Section 1. Appointment of Market Maker. In the event that the Purchaser elects to issue Stock Consideration as any portion of the Aggregate Purchase Price:

     (a) Each Seller agrees to engage ____________(the “Market Maker”) to serve as its sole broker for the sale of any Purchaser Common Stock issued by Purchaser as part of the Stock Consideration during the thirty (30) Trading Days immediately following a Payment Date (each such period, a “Trading Period”); and

     (b) Each Seller agrees to execute an irrevocable Letter of Instruction to the Market Maker in the form attached hereto as Exhibit A.

     Section 2. Adjustments to Stock Consideration.

     (a) If a Seller sells all or a portion of the Purchaser Common Stock issued at a Payment Date in a sale executed by the Market Maker prior to the expiration of the Trading Period associated with such Payment Date (the “Expiration Date”) at a price per

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share below the Closing Price, as adjusted for stock splits, stock dividends, reclassifications or similar events (any such sale price hereinafter referred to as the “Sale Price”), the Purchaser shall pay to the Seller in cash an amount equal to (i) the product of the Closing Price and the number of shares of Purchaser Common Stock sold by such Seller at such Sale Price during the relevant Trading Period, less (ii) the product of such Sale Price and the number of shares of Purchaser Common Stock sold by such Seller at such Sale Price during the relevant Trading Period (each of (i) and (ii) above as adjusted for stock splits, stock dividends, reclassifications or similar events). The increase in Stock Consideration payable to any Seller shall hereinafter be referred to as the “True-Up Amount.” As soon as practicable following determination of the True-Up Amount and receipt of evidence of the True-Up Amount reasonably satisfactory to Purchaser through the delivery of stock confirmation or account records, and subject to Section 2(c) herein, Purchaser shall pay the True-Up Amount to the Seller in cash.

     (b) If a Seller sells all or a portion of the Purchaser Common Stock issued at a Payment Date in a sale executed by the Market Maker prior to the Expiration Date associated with such Payment Date at a Sale Price above the Closing Price, as adjusted for stock splits, stock dividends, reclassifications or similar events, the Seller shall pay to Purchaser in cash (i) the product of the applicable Sale Price and the number of shares of Purchaser Common Stock sold by such Seller at such Sale Price during the relevant Trading Period, less (ii) the product of the Closing Price and the number of shares of Purchaser Common Stock sold by such Seller at such Sale Price during the relevant Trading Period (each of (i) and (ii) above as adjusted for stock splits, stock dividends, reclassifications or similar events). The decrease in Stock Consideration payable to any Seller shall hereinafter be referred to as the “Excess Amount.” Seller will cause the Market Maker to retain the Excess Amount, for and on behalf of the Purchaser, out of the Seller’s proceeds from the sale of Purchaser Common Stock. As soon as practicable following the Seller’s sale of Purchaser Common Stock, the Market Maker will remit the Excess Amount to the Purchaser in accordance with its routine business practices.

     (c) Notwithstanding the foregoing, in no event, without the written consent of the Purchaser, shall the aggregate number of all sales of the Purchaser Common Stock executed by the Market Maker on behalf of the Sellers, exceed 100,000 shares of Purchaser Common Stock on any Trading Day (the “Volume Limitation”). Each Seller hereby acknowledges and agrees that Purchaser will not be obligated to pay the True-Up Amount to such Seller in the event the Market Maker’s sales of Purchaser Common Stock exceed the Volume Limitation on any Trading Day.

     Section 3. Seller Acknowledgment. Each Seller hereby acknowledges that the Purchaser has not provided any advice, financial or otherwise, to such Seller with respect to the matters set forth herein, and each Seller hereby releases the Purchaser from any liability with respect to Seller’s sale of Purchaser Common Stock beyond, the obligation, if any, to pay the True-Up Amount.

     Section 4. Representations and Warranties of Sellers. Each Seller hereby represents and warrants to the Purchaser that (i) such 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, and (ii) this Agreement has been duly executed and delivered by such Seller and constitutes the

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legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms.

     Section 5. Consent to Jurisdiction and Service. Purchaser and each of the Sellers hereby absolutely and irrevocably consent and submit to the jurisdiction of the courts of the State of New York and of any Federal court located in the State of New York in connection with any actions or proceedings brought against Purchaser or the Sellers arising out of or relating to this Agreement. In any such action or proceeding, Purchaser and each of the Sellers hereby absolutely and irrevocably waive personal service of any summons, complaint, declaration or other process and hereby absolutely and irrevocably agree that the service thereof may be made by certified or registered first-class mail directed to Purchaser and each of the Sellers, as the case may be, at their respective addresses in accordance with Section 6 hereof.

     Section 6. Notices. Any notice permitted or required hereunder shall be deemed to have been duly given when delivered in accordance with Section 9.2 of the Option Purchase Agreement.

     Section 7. Binding Effect. This Agreement shall be binding upon the respective parties hereto and their heirs, executors, successors and assigns.

     Section 8. Modifications. This Agreement may not be altered or modified without a writing signed by all the parties hereto. Conduct or lack of conduct shall not constitute a waiver of any of the terms and conditions of this Agreement, and no waiver shall be valid unless such waiver is specified in writing by the party or parties against which such waiver is effective, and then only to the extent so specified. A waiver of any of the terms and conditions of this Agreement on one occasion shall not constitute a waiver of the other terms of this Agreement, or of such terms and conditions on any other occasion.

     Section 9. Governing Law. This Agreement shall be governed by and construed under the laws of the State of New York without giving effect to the conflict of laws provisions of the laws of the State of New York, and shall inure to the benefit of and the obligations created hereby shall be binding upon the successors and assigns of the parties hereto.

     Section 10. Counterparts. This Agreement may be executed in separate counterparts (including by facsimile or other electronic transmission), each of which when executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

     Section 11. Severability. If any provision of this Agreement shall be held invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

     Section 12. Merger of Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement between the parties hereto with respect to the subject matter hereof whether oral or written.

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     Section 13. Assignment. Neither this Agreement nor any rights or obligations hereunder may be assigned by any party without the prior written consent of the other parties hereto. Except as explicitly stated elsewhere in this Agreement, nothing under this Agreement shall be construed to give any rights or benefits in this Agreement to anyone other than Purchaser and the Sellers, and the duties and responsibilities undertaken pursuant to this Agreement shall be for the sole and exclusive benefit of the parties hereto; provided, that Purchaser shall be entitled to assign this Agreement in whole to any successor in.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this True-Up Agreement to be executed by their respective authorized persons, hereunto duly authorized, as of the day and year first above written.

PURCHASER:
NUVASIVE, INC.		SELLER:
By:		By:
	Name:		Name:
	Title:		Title:
		Address:

Exhibit A

IRREVOCABLE LETTER OF INSTRUCTION

_________ __, 200_

[BROKER NAME AND ADDRESS]

Ladies and Gentlemen:

     The undersigned has entered into a True-up Agreement with NuVasive, Inc., a Delaware corporation (“Purchaser”), dated as of ____________, 20___ (the “True-Up Agreement”), whereby the undersigned has agreed to execute this irrevocable letter of instructions to you. Capitalized terms not defined herein have the meanings set forth in the True-Up Agreement.

     Reference is made to that certain Option Purchase Agreement (the “Option Purchase Agreement”), dated as of January 8, 2008, by and among Purchaser, the Acquired Company and the Sellers, pursuant to which Purchaser has purchased all of the outstanding shares of capital stock of the Acquired Company from the Sellers (the “Acquisition”). In connection with the Acquisition, pursuant to the terms of the Option Purchase Agreement, Purchaser has elected to issue shares of common stock of the Purchaser (the “Purchaser Common Stock”) to the undersigned as consideration for the undersigned’s shares of capital stock of the Acquired Company.

     The undersigned now wishes to sell up to _________ shares of Purchaser Common Stock received in connection with the Acquisition subject to the plan set forth on Schedule A attached hereto. Please accept this letter as irrevocable authorization to (i) release the Excess Amount to the Purchaser out of the undersigned’s proceeds from the sale of Purchaser Common Stock and (ii) not sell more than 100,000 shares of Purchaser Common Stock on behalf of all of the Sellers on any Trading Day, unless otherwise directed by Purchaser.

     This Irrevocable Letter of Instruction shall not apply to any shares of Purchaser Common Stock received in connection with the Acquisition which remain unsold after the close of trading on the Expiration Date.

     The undersigned hereby acknowledges and agrees that Purchaser is intended to be, and shall be, a third party beneficiary of this Irrevocable Letter of Instruction.

Very truly yours,
 

Name:  

Schedule A

Plan of Sale

EXHIBIT E

Products and Specifications

***

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

EXHIBIT F

Pre-Clinical Model

***

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

EXHIBIT G

Pre-Clinical Primate Model

***

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

EXHIBIT H

***

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

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

     This Escrow Agreement (this “Agreement”) is made as of                     , 20         , by and among                                          (“Escrow Agent”), NuVasive, Inc., a Delaware corporation (“Purchaser”), Progentix Orthobiology, B.V., a company organized under the laws of the Netherlands (the “Company”), and Edward van Wezel and Joost D de Bruijn, solely in their capacity as the Sellers’ Representative under the Option Purchase Agreement (as defined below). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Option Purchase Agreement. If the terms of this Agreement conflict in any way with the provisions of the Option Purchase Agreement, then the provisions of the Option Purchase Agreement shall control.

RECITALS

          A. Purchaser has entered into an Option Purchase Agreement (the “Option Purchase Agreement”), dated as of January           , 2009, by and among Purchaser, Company and the shareholders of the Company (the “Sellers”), pursuant to which Purchaser may acquire all of the issued and outstanding shares of the capital stock of the Company (the “Seller Shares”) from the Sellers.

          B. Pursuant to Section 1.9(a) of the Option Purchase Agreement, an aggregate of ten percent (10%) of the Initial Purchase Price (as defined in the Option Purchase Agreement), plus an amount equal to $1,500,000 (the “General Escrow Cash”) is to be delivered to and deposited with the Escrow Agent, such deposit, together with any interest that may be earned thereon, to constitute and to be held in an escrow fund (the “General Escrow Fund”) and to be governed by the provisions set forth herein and in the Option Purchase Agreement.

          C. Pursuant to Section 1.9(b) of the Option Purchase Agreement, an aggregate of                                          (the “Special Escrow Cash” and, together with the General Escrow Cash, the "Escrow Cash”) is to be delivered to and deposited with the Escrow Agent, such deposit, together with any interest that may be earned thereon, to constitute and to be held in an escrow fund (the "Special Escrow Fund” and, together with the General Escrow Fund, the “Escrow Fund”) and to be governed by the provisions set forth herein and in the Option Purchase Agreement.

          D. The parties hereto desire to set forth additional terms and conditions relating to the operation of the Escrow Fund.

     NOW, THEREFORE, in consideration of the premises and the covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

     1. Escrow Fund.

          (a) Pursuant to Section 1.9 of the Option Purchase Agreement, as soon as reasonably practicable after the Closing Date, Purchaser shall cause the Escrow Cash to be deposited with the Escrow Agent. Escrow Agent agrees to accept delivery of the Escrow Cash and to hold such Escrow Cash in escrow subject to the terms and conditions of this Agreement and the Option Purchase Agreement.

          (b) As of any particular time, the Escrow Agent may assume without inquiry that the Escrow Cash that shall have been deposited with the Escrow Agent by Purchaser is all of the Escrow Cash required to be held in the Escrow Fund by the Escrow Agent.

          (c) The Escrow Cash shall be held and distributed by the Escrow Agent in accordance with the provisions of the Option Purchase Agreement and this Agreement.

          (d) No Escrow Cash or any beneficial interest therein may be pledged, encumbered, sold, assigned or transferred by the Sellers or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of the Sellers, prior to the distribution to the Sellers of such Escrow Cash by the Escrow Agent in accordance with this Agreement; provided that the Escrow Cash or any beneficial interest therein may be transferred by operation of law provided that each assignee or transferee thereof agrees in writing to be bound by all the terms and conditions of this Agreement and the Option Agreement as if he were an original party the respective agreements and further provided that the assignor provides the other parties to the respective agreements prior written notice of such assignment or transfer.

     2. Escrow Period. The period during which claims for Damages may be made (the “Claims Period”) shall commence at the Closing and terminate on (a) in case of the General Escrow Fund, the date that is eighteen (18) months after the Closing (the “General Escrow Period”) and (b) in the case of the Special Escrow Fund, the date that                                          after the Closing (or earlier pursuant to Part 3.20(c) of the Seller Parties Disclosure Schedule (as defined in the Option Agreement) in which case at such time Purchaser shall direct the Escrow Agent to release such portion of the remaining Special Escrow Fund to the Sellers in accordance with the Proceeds Allocation set forth on Schedule I) (the “Special Escrow Period”). Notwithstanding the foregoing, all or a portion of the General Escrow Fund may be retained beyond the General Escrow Period as provided in Section 5(a) of this Agreement.

     3. Rights and Obligations of the Parties.

          (a) The Escrow Agent shall be entitled to such rights and shall perform such duties as escrow agent as set forth herein and as set forth in the Option Purchase Agreement (collectively, the "Duties”), in accordance with the provisions of this Agreement and the Option Purchase Agreement. Such Duties shall include the following: (i) safeguarding and treating the Escrow Fund as a trust fund in accordance with the provisions of this Agreement and not as the property of Purchaser, and holding the Escrow Fund in a separate account, apart from any other funds or accounts of the Escrow Agent or any other Person and (ii) holding and disposing of the Escrow Fund only in accordance with the provisions of this Agreement. The Duties of the Escrow Agent with respect to the Escrow Cash may be altered, amended, modified or revoked only by a writing signed by Purchaser, the Escrow Agent and the Sellers’ Representative.

          (b) Purchaser and the Sellers’ Representative shall be entitled to their respective rights and shall perform their respective duties and obligations as set forth herein and in the Option Purchase Agreement, in accordance with the provisions of this Agreement and the Option Purchase Agreement.

     4. Claims Against the Escrow Fund.

          (a) On or before the last day of the General Escrow Period or the Special Escrow Period, as the case may be, Purchaser may deliver to the Escrow Agent a certificate signed by any officer of Purchaser (an “Officer’s Certificate”):

               (i) stating that a Purchaser Indemnified Person has incurred, paid, reserved or accrued, or reasonably anticipates that it may incur, pay, reserve or accrue, Damages (or that with respect to any Tax matters, that any Governmental Body may raise such matter in an audit of Purchaser or its subsidiaries, which are reasonably likely to give rise to Damages);

               (ii) stating the amount of such Damages (which, in the case of Damages not yet incurred, paid, reserved or accrued, may be the maximum amount reasonably anticipated by Purchaser to be incurred, paid, reserved or accrued);

               (iii) specifying in reasonable detail (based upon the information then possessed by Purchaser) the individual items of such Damages included in the amount so stated and the nature of the claim to which such Damages are related; and

               (iv) stating whether the claim is against the General Escrow Fund or the Special Escrow Fund.

No delay in providing such Officer’s Certificate within the General Escrow Period or Special Escrow Period, as the case may be, shall affect any Purchaser Indemnified Person’s rights hereunder, unless (and then only to the extent that) any Seller is materially prejudiced thereby.

          (b) At the time of delivery of any Officer’s Certificate to the Escrow Agent, a duplicate copy of such Officer’s Certificate shall be delivered to the Sellers’ Representative by or on behalf of Purchaser (on behalf of itself or any other Purchaser Indemnified Person) and, in the case of a claim against the General Escrow Fund, for a period of 30 days after such delivery to the Escrow Agent of such Officer’s Certificate, the Escrow Agent shall make no payment pursuant to this Section 4 unless the Escrow Agent shall have received written authorization from the Sellers’ Representative to make such delivery. After the expiration of such 30-day period, the Escrow Agent shall make delivery of cash in the amount of the maximum Damages set forth in such Officer’s Certificate from the General Escrow Fund to Purchaser in accordance with this Section 4; provided, however, that no such delivery may be made if and to the extent the Sellers’ Representative shall object in a written statement to any claim or claims made in the Officer’s Certificate, and such statement shall have been delivered to the Escrow Agent and to Purchaser prior to the expiration of such 30-day period. In the case of a claim against the Special Escrow Fund, upon delivery of any Officer’s Certificate to the Escrow Agent, the Escrow Agent shall immediately release the Special Escrow Cash to Purchaser, and in no event shall the Sellers’ Representative object to the release of such funds by the Escrow Agent.

          (c) If the Sellers’ Representative objects in writing to any claim or claims by Purchaser against the General Escrow Fund made in any Officer’s Certificate within such 30-day period, Purchaser and the Sellers’ Representative shall attempt in good faith for 30 days after Purchaser’s receipt of such written objection to resolve such objection. If Purchaser and the Sellers’ Representative shall so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties and delivered to the Escrow Agent. The Escrow Agent shall be entitled to conclusively rely on any such memorandum and the Escrow Agent shall distribute cash from the General Escrow Fund in accordance with the terms of such memorandum. If no such agreement can be reached during the 30-day period for good faith negotiation, then upon the expiration of such 30-day period, either Purchaser or the Sellers’ Representative may bring proceeding pursuant to the dispute resolution proceedings set forth in Section 9.4 of the Option Purchase Agreement to resolve the matter. The decision of the arbiter as to the validity and amount of any claim in such Officer’s Certificate shall be nonappealable, binding and conclusive upon the parties to this Agreement and the Escrow Agent shall be entitled to act in accordance with such decision and shall distribute cash from the General Escrow Fund in accordance therewith.

     5. Distribution of Escrow Fund Upon Expiration of the Escrow Periods.

          (a) Retention of Funds to Satisfy Pending Claims. Such portion of the General Escrow Fund at the conclusion of the General Escrow Period that may be necessary to satisfy any unresolved or unsatisfied claims made against the General Escrow Fund for Damages specified in any

Officer’s Certificate delivered to the Sellers’ Representative and Escrow Agent prior to expiration of the General Escrow Period (the “Reserve Amount”) shall remain in the General Escrow Fund until such claims for Damages have been resolved or satisfied pursuant to Section 6 of the Option Purchase Agreement and prior to such resolution or satisfaction of any such claim, none of the Reserve Amount shall be delivered or distributed to any Person; provided, that prior to any distribution to Sellers pursuant to this Section 5(b), the Escrow Agent shall first distribute to the Sellers’ Representative on behalf of the Sellers an amount in respect of the Sellers’ Representative Expenses actually incurred as set forth in a certificate delivered by the Sellers’ Representative to the Escrow Agent prior to such distribution. For purposes of determining at any particular time the amount of Escrow Cash in the General Escrow Fund that is necessary or sufficient to satisfy and/or provide for all such claims, Purchaser shall be assumed to be entitled to the full amount of Damages stated in good faith in such Officer’s Certificate(s). The amount retained in the General Escrow Fund after the expiration of the General Escrow Period with respect to a particular pending claim shall be available to Purchaser only with respect to such pending claim and shall not be available to Purchaser for any other pending claim. The General Escrow Amount shall be available to Purchaser only with respect to claims made under Section 6.2 of the Option Purchase Agreement and the Special Escrow Amount shall be available to Purchaser only with respect to claims made under Section 6.11 of the Option Purchase Agreement.

          (b) Distributions from Escrow Fund to the Sellers. Promptly after the expiration of the General Escrow Period or the Special Escrow Period, as the case may be, and in any event no later than thirty (30) days after such expiration, such portion of the then remaining General Escrow Fund in excess of any Reserve Amount and such portion of the then remaining Special Escrow Fund shall be paid to the Sellers in accordance with the Proceeds Allocation set forth on Schedule I hereto (the “Proceeds Allocation”); provided, however, that prior to any distribution to Sellers pursuant to this Section 5(b), the Escrow Agent shall first distribute to the Sellers’ Representative on behalf of the Sellers an amount in respect of the Sellers’ Representative Expenses actually incurred as set forth in a certificate delivered by the Sellers’ Representative to the Escrow Agent prior to such distribution. The Escrow Agent need not monitor or inquire into the Sellers’ tax treatment of funds distributed to them and shall allocate for income tax purposes the income earned on the Escrow Fund to Purchaser in accordance with Section 6(b).

          (c) Distributions of Reserve Amount. Promptly following the resolution or satisfaction of any claim for Damages relating to any portion of the Reserve Amount (and in any event no later than thirty (30) after such resolution and satisfaction), such portion of the Reserve Amount shall be paid to Purchaser and/or to the Sellers, as the case may be, in accordance with the terms of a memorandum setting forth an agreement between Purchaser and the Sellers’ Representative or the artbiter’s decision, as applicable. No Reserve Amount shall be subject to any claim or right of offset except with respect to the claim for which such Reserve Amount was retained following the expiration of the General Escrow Period.

     6. Investment of Escrow Cash.

          (a) The Escrow Agent shall hold the Escrow Cash in escrow and shall invest the Escrow Cash and any interest or income thereon only in Permitted Investments. “Permitted Investments” shall mean (i) such investments as may be specified from time to time by written instruction from the Purchaser or (ii) in the absence of written instructions to the contrary, investments in the Escrow Agent’s insured money market account as described in Annex A hereto (“IMMA”). Notwithstanding the foregoing, Permitted Investments shall be limited to the following (1) direct obligations of the United States government having maturities of 90 days or less, (2) money market funds that invest solely in direct obligations of the United States government, (3) repurchase obligations for underlying securities of the types described in clause (1) and (4) the IMMA. The Escrow Agent or any of its affiliates may receive compensation with respect to any investment directed hereunder. The Escrow Agent will act

upon investment instructions the day that such instructions are received, provided the requests are communicated within a sufficient amount of time to allow the Escrow Agent to make the specified investment. Instructions received after an applicable investment cutoff deadline will be treated as being received by the Escrow Agent on the next business day, and the Escrow Agent shall not be liable for any loss arising directly or indirectly, in whole or in part, from the inability to invest funds on the day the instructions are received. The Escrow Agent shall not be liable for any loss incurred by the actions of third parties or for any loss arising by error, failure or delay in the making of an investment or reinvestment, and the Escrow Agent shall not be liable for any loss of principal or income in connection therewith, unless such error, failure or delay results from the Escrow Agent’s gross negligence, willful misconduct, fraud or breach of this Agreement. As and when the Escrow Cash and any interest or income thereon is to be released under this Agreement, the Escrow Agent shall cause the Permitted Investments to be converted into cash in accordance with its customary procedures and shall not be liable for any loss of principal or income in connection therewith. The Escrow Agent shall not be liable for any loss of principal or income due to the choice of Permitted Investments in which the Escrow Cash is invested or the choice of Permitted Investments converted into cash pursuant to this Section 6.

          (b) All interest attributable to the Escrow Cash shall first be distributed to Purchaser up to any amount paid in fees to the Escrow Agent. Any remaining interest shall be added to the Escrow Cash and be part of the Escrow Fund for all purposes hereunder. At the time of delivery to the Sellers, the Escrow Agent shall deliver to the Sellers any accrued but unpaid interest on such amount of the Escrow Cash distributable to the Sellers hereunder (but not any accrued and unpaid interest on such amount of the Escrow Cash that is distributable to Purchaser hereunder, which shall instead be delivered to Purchaser, except to the extent the memorandum or arbiter’s decision relating to such amounts awarded to Purchaser specifically states that interest has already been taken to account and included in such awarded amount, in which case such interest shall be distributed to Sellers). The parties acknowledge that, for tax reporting purposes, all interest attributable to the Escrow Cash, and interest thereon, held in the Escrow Fund by the Escrow Agent pursuant to this Agreement shall be allocable to Purchaser.

     7. Exculpatory Provisions.

          (a) The Escrow Agent shall be obligated only for the performance of such Duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be liable for forgeries or false impersonations. The Escrow Agent shall not be liable for any act done or omitted hereunder as escrow agent except for gross negligence, willful misconduct or breach of this Agreement. The Escrow Agent shall in no case or event be liable for any representations or warranties of the Sellers, the Sellers’ Representative or Purchaser or for punitive, incidental or consequential damages. Any act done or omitted pursuant to the advice or opinion of counsel shall be conclusive evidence of the good faith of the Escrow Agent.

          (b) In the event of a dispute between the parties hereto, the Escrow Agent is hereby expressly authorized to disregard any and all notifications given by any of the parties hereto or by any other person, excepting only memoranda of agreement as provided in Section 9.4 of the Option Purchase Agreement and orders or process of courts of law as provided in Section 9.4 of the Option Purchase Agreement to which Escrow Agent shall be entitled to conclusively rely and shall distribute the Escrow Fund in accordance with the terms thereof, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or complies with any such order, judgment or decree of any court, the Escrow Agent shall not be liable to any of the parties hereto or to any other person by reason of such compliance, notwithstanding any such order, judgment, or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

          (c) In the event of any ambiguity or uncertainty hereunder or in any notice, instruction or other communication received by the Escrow Agent hereunder, the Escrow Agent may, in its sole discretion, refrain from taking any action other than retaining possession of the Escrow Fund, unless the Escrow Agent receives written instructions, signed by Purchaser and the Sellers’ Representative, which eliminates such ambiguity or uncertainty.

          (d) The Escrow Agent shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Option Purchase Agreement, this Agreement or any documents or papers deposited or called for thereunder or hereunder.

          (e) The Escrow Agent shall not be liable for the outlawing of any rights under any statute of limitations with respect to the Option Purchase Agreement, this Agreement or any documents deposited with the Escrow Agent.

     8. Resignation and Removal of the Escrow Agent. The Escrow Agent may resign as escrow agent of the Escrow Fund at any time, with or without cause, by giving at least thirty (30) days’ prior written notice to each of Purchaser and the Sellers’ Representative, such resignation to be effective thirty (30) days following the date such notice is given. In addition, Purchaser and the Sellers’ Representative may jointly remove the Escrow Agent as escrow agent at any time, with or without cause, by an instrument executed by Purchaser and the Sellers’ Representative (which may be executed in counterparts) given to the Escrow Agent, which instrument shall designate the effective date of such removal. In the event of any such resignation or removal, a successor escrow agent, which shall be 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, shall be appointed by Purchaser on the terms of this Agreement with the written approval of the Sellers’ Representative, which approval shall not be unreasonably withheld or delayed. In the event that a successor escrow agent has not been appointed within thirty (30) days after notice of the Escrow Agent’s resignation or removal the Escrow Agent shall be entitled to petition a court of competent jurisdiction to have a successor escrow agent appointed. Any such successor escrow agent shall deliver to Purchaser and the Sellers’ Representative, a written instrument accepting such appointment, and thereupon it shall succeed to all the rights and duties of the escrow agent hereunder and shall be entitled to receive possession of the Escrow Fund. Upon receipt of the identity of the successor escrow agent, the Escrow Agent shall deliver the Escrow Fund then held hereunder to the successor escrow agent.

     9. Sellers’ Representative. The Sellers’ Representative (and each successor as such, as of the time he, she or it becomes the Sellers’ Representative) represents and warrants to the Escrow Agent that he, she or it has the right, power and authority to enter into an perform this Agreement as agent of and on behalf of the Sellers, to give and receive all directions and notices hereunder and to make all determinations that may be required or that he, she or it deems appropriate under this Agreement. 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 (named therein) has been appointed, the Escrow Agent 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, and shall have no duty to inquire into the authority of any person reasonably believed by the Escrow Agent to be the Sellers’ Representative.

     10. Further Instruments. If the Escrow Agent reasonably requires other or further instruments in connection with its performance of the Duties, the necessary parties hereto shall join in furnishing such instruments.

     11. Disputes. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the cash and/or other property held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed to act in accordance with, and in reliance upon, the provisions of this Agreement and the Option Purchase Agreement. Section 9.4 of the Option Purchase Agreement insofar as it relates to submission to jurisdiction and dispute resolution procedures in the event of any dispute solely between Purchaser and the Sellers’ Representative under any section of this Agreement is hereby incorporated by reference.

     12. Escrow Fees and Expenses. Purchaser shall pay the Escrow Agent such fees and reimburse the Escrow Agent for such expenses as are established and contemplated by the Fee Schedule attached hereto as Annex B.

     13. Indemnification. In consideration of the Escrow Agent’s acceptance of this appointment, Purchaser and the Sellers’ Representative (on behalf of the Sellers), hereby jointly and severally, agree to indemnify and hold the Escrow Agent harmless as to any liability incurred by it to any person, firm or corporation by reason of its having accepted such appointment or in carrying out the provisions of this Agreement and the Option Purchase Agreement, and to reimburse the Escrow Agent for all its costs and expenses (including, without limitation, counsel fees and expenses) reasonably incurred by reason of any matter as to which such indemnity is paid pursuant to this Section 13; provided, however, that no indemnity need be paid in case of the Escrow Agent’s gross negligence, willful misconduct, fraud or breach of this Agreement.

     14. General.

          (a) Any notice given hereunder shall be in writing and shall be deemed effective upon the earlier of personal delivery, the third day after mailing by certified or registered mail, postage prepaid, or upon delivery via facsimile (with confirmation of receipt) as follows:

(i)	If to Purchaser, to:
	NuVasive, Inc. 7473 Lusk Boulevard San Diego, California 92121 Attention: General Counsel Facsimile No.: (858) 909-2479 Telephone No.: (858) 909-1979
	With a copy (which shall not constitute notice) to:
	DLA Piper LLP (US) 4365 Executive Drive, Suite 1100 San Diego, CA 92121 Attention: Michael Kagnoff Facsimile No.: (858) 456-3075 Telephone No.: (858) 638-6722
(ii)	If to the Sellers’ Representative, 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 (which shall not constitute notice) to:
	Goodwin Procter LLP     Exchange Place      53 State Street 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
(iii)	If to the Escrow Agent, to:
	Attention:                                                   Facsimile No.:                                            Telephone No.:

or to such other address as any party may have furnished in writing to the other parties in the manner provided above. Any notice addressed to the Escrow Agent shall be effective only upon receipt. If any Officer’s Certificate, any objection thereto or any other document of any kind is required to be delivered to the Escrow Agent and any other person, the Escrow Agent may assume without inquiry that such Officer’s Certificate, objection or other document was received by such other person on the date on which it was received by the Escrow Agent.

          (b) The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

          (c) This Agreement may be executed in any number of counterparts (including by facsimile or other electronic transmission), each of which when so executed shall constitute an original copy hereof, but all of which together shall constitute one instrument.

          (d) No party may, without the prior express written consent of each other party, assign this Agreement in whole or in part. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. This Agreement may only be amended in a writing signed by Purchaser, the Escrow Agent and the Sellers’ Representative (subject to the limitations set forth in the Option Purchase Agreement).

          (e) This Agreement shall be governed by and construed in accordance with the laws of the State of New York as applied to contracts made and to be performed entirely within the State of New York without reference to conflicts of laws principles. The parties to this Agreement hereby agree to submit to personal jurisdiction in the State of New York.

     15. Tax Reporting Matters. Purchaser and the Sellers’ Representative each agree to provide the Escrow Agent with certified tax identification numbers for Purchaser and the Sellers, respectively, by furnishing appropriate Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Escrow Agent may reasonably request (collectively, “Tax Reporting Documentation”) to the Escrow Agent within 30 days after the Closing Date. The parties hereto understand that, if such Tax Reporting Documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code of 1986 (the “Code”), as it may be amended from time to time, to withhold a portion of any payments made to Purchaser or the Sellers pursuant to this Agreement. If the date of a payment from the Escrow Fund occurs more than six months after the Closing Date, a portion of the payment will be treated by the Sellers as imputed interest to the extent required under the Code. The Escrow Agent need not monitor the Sellers’ tax treatment of any distributions made to them.

     16. Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity the Escrow Agent will ask for documentation to verify its formation and existence as a legal entity. The Escrow Agent may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. Purchaser and the Sellers’ Representative each agree to provide all such information and documentation as to Purchaser and the Sellers as requested by Escrow Agent to ensure compliance with federal law.

[Signature Page Follows]

In witness whereof, each of the parties hereto has executed this Escrow Agreement as of the date first above written.

ESCROW AGENT:
By:
	Name:
	Title:
PURCHASER: NUVASIVE, INC.
By:
	Name:
	Title:
COMPANY: PROGENTIX ORTHOBIOLOGY, B.V.
By:
	Name:
	Title:
SELLERS’ REPRESENTATIVE
Name:
Name:

Annex A

IMMA Description

Annex B

Fee Schedule

Schedule I

Proceeds Allocation

Seller	Allocation
BioGeneration Ventures BV		18.18	%
JD de Bruijn Holding BV		32.73	%
Incubation BV		45.08	%
Huipin Yuan		4.01	%

EXHIBIT L

FOUNDERS’ NON-COMPETITION AGREEMENT

     THIS FOUNDERS’ NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Joost D de Bruijn (“Bruijn”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Bruijn.

AGREEMENT

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

     1. PURPOSE. Bruijn understands that, solely to extent expressly set forth herein, he is prohibited from (i) engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”) and (ii) soliciting any person of the Purchaser’s Group to leave the latter.

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly, (i) engage in any commercial activity with any competitor of the Purchaser’s Group with respect to any of the Products in the Field (a “Competing Business”) if such activity is related to the commercialization of a biologic

(e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will compete with the Products and includes a use in spinal applications (“Competitive Services”), or (ii) provide Competitive Services to, any person (or any affiliate of any person) who or which is engaged in a Competing Business with respect to such Competing Business (whether directly or indirectly). Purchaser expressly acknowledges and agrees that Bruijn is or may become a member of a not-for-profit institution or association (collectively, the “Institutions”) and notwithstanding anything to the contrary contained herein, nothing in this Agreement shall preclude or in any way restrict Bruijn from providing educational services at any such Institution or conducting research at any such Institution. A complete list of the research activities of Bruijn relating to any biologic or other Product or compound intended to foster bone growth as of the date of this Agreement is attached hereto as Exhibit A.

     3. NON-SOLICITATION.

     (a) Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly, solicit, encourage or attempt to solicit or encourage any person who is at the time of such solicitation, encouragement, or attempted solicitation or encouragement an employee of the Company and who was immediately prior to the closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing”), an employee of the Company to leave the employment of the Company.

     (b) Bruijn agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly solicit, encourage or attempt to solicit or encourage to cease to work with the Company, any employee of, or consultant then under contract with the Company who is or has been engaged in the business of the Company (the “Business”).

     (c) Bruijn agrees that he will not, directly or indirectly: (i) solicit, induce or attempt to induce any customer to cease doing business in whole or in part with the Purchaser’s Group; (ii) attempt to limit or interfere with any business agreement existing between the Purchaser’s Group and any third party; or (iii) disparage the business reputation or employees of the Purchaser’s Group or take any actions, knowingly, willfully or, recklessly, that are harmful to the Purchaser Group’s goodwill with their customers, clients, publishers, advertisers, marketers, vendors, employees, service providers, media or the public.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. BREACH. In the event of a breach by Bruijn of his obligations pursuant to this Agreement, Bruijn agrees that he shall forfeit to Purchaser, without any further notice or demand being required, an immediately payable penalty in the amount of fifty percent (50%) of any amounts received by Bruijn Holding B.V. under the Preferred Stock Purchase Agreement (the “Liquidated Damages”) for any such violation, without limiting or precluding the right of the Purchaser to claim from Bruijn specific performance or any damages which the Purchaser has incurred; provided, that any Liquidated Damages collected by Purchaser hereunder shall be offset against any Damages to which Purchaser is otherwise entitled under the Preferred Stock Purchase Agreement.

     8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Bruijn and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

JOOST D DE BRUIJN	NUVASIVE INC.
	By:
Joost D de Bruijn		Name:
		Title:

Exhibit A

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

EXHIBIT M

FOUNDERS’ NON-COMPETITION AGREEMENT

     THIS FOUNDERS’ NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Clemens van Blitterswijk (“Blitterswijk”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands, held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Blitterswijk.

AGREEMENT

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

     1. PURPOSE. Blitterswijk understands that, solely to extent expressly set forth herein, he is prohibited from (i) engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”) and (ii) soliciting any person of the Purchaser’s Group to leave the latter.

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly; (i) engage in any commercial activity with any competitor of the Purchaser’s Group with respect to any of the Products in the Field (a “Competing Business”) if such activity is related to the commercialization of a

1

biologic (e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will compete with the Products and includes a use in spinal applications (“Competitive Services”), or (ii) provide Competitive Services to, any person (or any affiliate of any person) who or which is engaged in a Competing Business. Purchaser expressly acknowledges and agrees that Blitterswijk is or may become a member of a not-for-profit institution or association (collectively, the “Institutions”) and notwithstanding anything to the contrary contained herein, nothing in this Agreement shall preclude or in any way restrict Blitterswijk from providing educational services at any such Institution or conducting research at any such Institution. A complete list of the research activities of Blitterswijk relating to any biologic or other Product or compound intended to foster bone growth as of the date of this Agreement is attached hereto as Exhibit A. Purchaser expressly acknowledges and agrees that Blitterswijk is or may in the future enter the business of venture capital investing and in such capacity may review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company and/or Purchaser Group. Nothing in this Agreement shall preclude or in any way restrict any venture capital firm or similar institutional investor with which Blitterswijk is affiliated from investing or participating in any particular enterprise, or any other general partner, member, officer or employee of any such venture capital firm or similar institutional investor from serving on the board of directors of any enterprise in which it makes an investment, whether or not such enterprise has products or services which compete with those of the Company and/or the Purchaser Group.

     3. NON-SOLICITATION.

     (a) Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly: solicit, encourage or attempt to solicit or encourage any person who is at the time of such solicitation, encouragement, or attempted solicitation or encouragement an employee of the Company and who was immediately prior to the closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing”), an employee of the Company to leave the employment of the Company.

     (b) Blitterswijk agrees that he will not, whether on his own behalf or on behalf of or in conjunction with any person, directly or indirectly solicit, encourage or attempt to solicit or encourage to cease to work with the Company, any employee of, or consultant then under contract with the Company who is or has been engaged in the business of the Company (the “Business”).

     (c) Blitterswijk agrees that he will not, directly or indirectly: (i) solicit, induce or attempt to induce any customer to cease doing business in whole or in part with the Purchaser’s Group; (ii) attempt to limit or interfere with any business agreement existing between the Purchaser’s Group and any third party; or (iii) disparage the business reputation or employees of the Purchaser’s Group or take any actions, knowingly, willfully or, recklessly, that are harmful to the Purchaser Group’s goodwill with their

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customers, clients, publishers, advertisers, marketers, vendors, employees, service providers, media or the public.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. BREACH. In the event of a breach by Blitterswijk of his obligations pursuant to this Agreement, Blitterswijk agrees that he shall forfeit to Purchaser, without any further notice or demand being required, an immediately payable penalty in the amount of fifty percent (50%) of any amounts received by Incubation B.V. under the Preferred Stock Purchase Agreement (the “Liquidated Damages”) for any such violation, without limiting or precluding the right of the Purchaser to claim from Blitterswijk specific performance or any damages which the Purchaser has incurred; provided, that any Liquidated Damages collected by Purchaser hereunder shall be offset against any Damages to which Purchaser is otherwise entitled under the Preferred Stock Purchase Agreement.

     8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Blitterswijk and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

CLEMENS VAN BLITTERSWIJK	NUVASIVE INC.
	By:
Clemens van Blitterswijk		Name:
		Title:

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Exhibit A

***

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

4

EXHIBIT N

INVESTOR NON-COMPETITION AGREEMENT

     THIS INVESTOR NON-COMPETITION AGREEMENT (the “Agreement”) is made as of January 13, 2009, by on the one hand NuVasive, Inc., a Delaware corporation, whose registered office is at 7473 Lusk Boulevard, San Diego, California 92121 (the “Purchaser”) and on the other hand Edward van Wezel (“Wezel”). Terms not otherwise defined herein shall have the respective meanings ascribed to them in the Preferred Stock Purchase Agreement (as defined below).

RECITALS

     (i) Purchaser intends to purchase from the Sellers forty percent (40%) of the shares in the capital of Progentix Orthobiology B.V., a company organized under the laws of the Netherlands with Company No. 30234249, whose registered office is at Professor Bronkhorstlaan 10 D (3723 MB) Bilthoven, the Netherlands held by the Sellers (the “Company”).

     (ii) In connection with the transactions contemplated thereby, the Company has entered into a Distribution Agreement, dated January 13, 2009, with Purchaser (the “Distribution Agreement”) regarding the manufacture by the Company and distribution by Purchaser of certain products (the “Products”) set forth on Exhibit A attached thereto in the Field (as defined in the Distribution Agreement).

     (iii) As stipulated in the Preferred Stock Purchase Agreement, dated January 13, 2009, by and among Purchaser, the Company and the Sellers (the “Preferred Stock Purchase Agreement”), Purchaser has conditioned the closing of the transactions contemplated by the Preferred Stock Purchase Agreement on the execution of this Agreement by Wezel.

AGREEMENT

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

     1. PURPOSE. Wezel understands that, solely to extent expressly set forth herein, he is prohibited from engaging in any competition with the Purchaser’s group of companies, which group includes the Company (the “Purchaser’s Group”).

     2. NON-COMPETITION. Except with respect to RevOs, a synthetic polymer-Nano HA composite bone substitute intended to mimic cortical bone, Wezel agrees that he will not personally serve as a member of the supervisory board (raad van comissarissen) of any party that is a competitor of the Purchaser’s Group with respect to any of the Products in the Field if such competitor is engaged in the business of commercializing a biologic (e.g. bone graft material and/or biologically active compound) or other Product or compound intended to foster bone growth that will

1

compete with the Products and includes a use in spinal applications (a “Competing Business”). Wezel further agrees that he will not personally serve as a member of the board of directors or a substantially equivalent governing body of any Competing Business, if BioGeneration Ventures BV makes an investment in any such Competing Business outside the Netherlands. Purchaser expressly acknowledges and agrees that Wezel is in the business of venture capital investing and therefore (a) Wezel reviews the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company and/or Purchaser Group, (b) Wezel monitors investments in Competing Businesses, including consulting with members of BioGeneration Ventures BV that serve on the board of directors, and (c) Wezel may take any and all actions on behalf of BioGeneration Ventures BV as a shareholder of a Competing Business (including, without limitation, the activities described in clauses (a) and (b) of this Section 2). Nothing in this Agreement shall preclude or in any way restrict any venture capital firm or similar institutional investor with which Wezel is affiliated from investing or participating in any particular enterprise, or any other general partner, member, officer or employee of any such venture capital firm or similar institutional investor from serving on the supervisory board (raad van comissarissen) or the board of directors or a substantially equivalent governing body of an entity in which it makes an investment, whether or not such entity has products or services which compete with those of the Company and/or the Purchaser Group.

     4. RESTRICTED PERIOD. The prohibitions set forth above shall apply from the date of closing of the transactions contemplated by the Preferred Stock Purchase Agreement (the “Closing Date”) through the second anniversary of the Closing Date.

     5. TERRITORY. The prohibitions set forth above will globally apply, unless the Purchaser has in written form indicated differently.

     6. MISCELLANEOUS. This Agreement shall be binding upon and for the benefit of the undersigned parties. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term thereof. Any amendment to this Agreement must be in writing and signed by an authorized representative of each party. This Agreement may be signed in counterparts.

     7. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the Netherlands and shall be binding upon the parties hereto in the Netherlands and worldwide. Wezel and the Purchaser agree that any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the courts in the Netherlands, and each party agrees to submit to the personal and exclusive jurisdiction and venue of such courts.

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above.

EDWARD VAN WEZEL	NUVASIVE INC.
	By:
Edward van Wezel		Name:
		Title:

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EX-21.1

Exhibit 21.1

Subsidiaries of NuVasive, Inc.

Name	Jurisdiction of Incorporation
Cervitech, Inc.	Delaware
NuVasive Europe, GmbH	Germany
NuVasive UK Limited	United Kingdom
NuVasive PR, Inc.	Puerto Rico
NuVasive (AUST/NZ) Pty. Ltd.	Australia
NuVasive Japan KK	Japan
NuVasive Southeast Asia Pte. Ltd.	Singapore

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-3 Nos. 333-127634, 333-127842, 333-130354, 333-131472, 333-138047, 333-140432, 333-140432, 333-159098, and 333-1603356) of NuVasive, Inc.,

(2) Registration Statement (Form S-8 No. 333-116546) pertaining to the 1998 Stock Option/Stock Issuance Plan, 2004 Equity Incentive Plan, and 2004 Employee Stock Purchase Plan of NuVasive, Inc., and

(3) Registration Statement (Form S-8 No. 333-149478) pertaining to the 2004 Equity Incentive Plan and 2004 Employee Stock Purchase Plan of NuVasive, Inc.;

of our reports dated February 26, 2010, with respect to the consolidated financial statements and schedule of NuVasive, Inc. and with respect to the effectiveness of internal control over financial reporting of NuVasive, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2009.

/s/ ERNST & YOUNG LLP

San Diego, California
February 26, 2010

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 Annual Report on Form 10-K 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: February 26, 2010

/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, Michael J. Lambert, certify that:

1.	I have reviewed this Annual Report on Form 10-K 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: February 26, 2010

/s/ Michael J. Lambert

Michael J. Lambert

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE 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 Annual Report of NuVasive, Inc. (the Company) on Form 10-K for the annual period ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the Annual 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 Annual 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 Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 26, 2010

/s/ Alexis V. Lukianov

Alexis V. Lukianov

Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATIONS OF 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 Annual Report of NuVasive, Inc. (the Company) on Form 10-K for the annual period ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the Annual Report), I, Michael J. Lambert, 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 Annual 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 Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 26, 2010

/s/ Michael J. Lambert

Michael J. Lambert

Executive Vice President and Chief Financial Officer