EXHIBIT 10.2

 

AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT

 

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

 

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

 

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

 

1.                                       Amendments.

 

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

 

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

 

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

 

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

 

“(A)                            MILESTONES; MILESTONE PAYMENTS.  FROM AND AFTER
THE TECHNOLOGY CLOSING DATE, IN ADDITION TO THE CONSIDERATION SET FORTH IN
SECTION 1.4 ABOVE, PURCHASER SHALL, WITH RESPECT TO SECTIONS 1.5(A)(I) AND
1.5(A)(VI) BELOW, SUBJECT TO, AND CONTINGENT UPON ACHIEVEMENT OF THE
POST-TECHNOLOGY CLOSING PERFORMANCE MILESTONES OF THE BUSINESS SET FORTH IN
SECTIONS 1.5(A)(I) AND 1.5(A)(VI) BELOW, AND, WITH RESPECT TO SECTIONS
1.5(A)(II), 1.5(A)(III) AND 1.5(A)(IV) BELOW, ON THE DATES SET FORTH IN SECTIONS
1.5(A)(II), 1.5(A)(III) AND 1.5(A)(IV) BELOW (EACH, A “MILESTONE”) NOT LATER
THAN THE APPLICABLE DATE FOR SATISFACTION OF EACH MILESTONE SET FORTH BELOW
(EACH A

 

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“MILESTONE EXPIRATION DATE”), PAY TO SELLER AN AMOUNT OF CASH (IN UNITED STATES
DOLLARS OF IMMEDIATELY AVAILABLE FUNDS) OR COMMON STOCK, PAR VALUE $0.001 PER
SHARE, OF PURCHASER (“PURCHASER COMMON STOCK”) (THE FORM OF PAYMENT OF WHICH IS
TO BE DETERMINED IN THE SOLE DISCRETION OF PURCHASER), EQUAL TO THE FIRST
MILESTONE PAYMENT, SECOND MILESTONE PAYMENT, THIRD MILESTONE PAYMENT, FOURTH
MILESTONE PAYMENT, FIFTH MILESTONE PAYMENT AND/OR SIXTH MILESTONE PAYMENT, AS
APPLICABLE (THE “APPLICABLE MILESTONE PAYMENT”) AND EACH MILESTONE SHALL BE
INDEPENDENT OF EACH OTHER MILESTONE AND MAY BE SATISFIED AND PAYMENT BECOME DUE
THEREFORE REGARDLESS OF NON-SATISFACTION OF ANY OTHER MILESTONE; PROVIDED,
HOWEVER, THAT (I) IF PURCHASER ELECTS TO ISSUE SHARES OF PURCHASER COMMON STOCK
IN RESPECT OF ANY APPLICABLE MILESTONE PAYMENT, THEN PRIOR TO SUCH ISSUANCE AND
UPON REQUEST BY THE PURCHASER, SELLER SHALL DELIVER TO PURCHASER SUCH
REPRESENTATIONS AND WARRANTIES AS PURCHASER SHALL REASONABLY REQUEST FOR
PURPOSES OF EXEMPTING THE ISSUANCE OF SUCH SHARES FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND (II) IF PURCHASER ELECTS TO ISSUE SHARES
OF PURCHASER COMMON STOCK IN RESPECT OF ANY APPLICABLE MILESTONE PAYMENT, THE
NUMBER OF SHARES OF PURCHASER COMMON STOCK TO BE ISSUED SHALL BE EQUAL TO THE
APPLICABLE MILESTONE PAYMENT DIVIDED BY THE PURCHASER COMMON STOCK VALUE.  THE
OBLIGATIONS OF PURCHASER UNDER THIS SECTION 1.5(A) ARE SUBJECT TO THE PROVISIONS
OF SECTION 1.5(C) BELOW (REGARDING PURCHASER’S RIGHTS OF SET-OFF).  FOR
AVOIDANCE OF DOUBT, IN NO EVENT SHALL THE SUM OF ALL APPLICABLE MILESTONE
PAYMENTS MADE BY PURCHASER TO SELLER UNDER THIS SECTION 1.5 EXCEED FIFTY MILLION
DOLLARS ($50,000,000) (THE “MAXIMUM MILESTONE AMOUNT.

 

(I)                                     IF AT ANY TIME FOLLOWING THE TECHNOLOGY
CLOSING DATE BUT AT OR PRIOR TO APRIL 15, 2009, SELLER SHALL HAVE DELIVERED TO
PURCHASER AN AGGREGATE OF 75,000 CUBIC CENTIMETERS OF PRODUCT (THE “FIRST
DELIVERY THRESHOLD”) IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF, AND SUBJECT
TO THE SPECIFICATIONS SET FORTH IN, THE MANUFACTURING AGREEMENT, PURCHASER SHALL
PAY TO SELLER FIVE MILLION DOLLARS ($5,000,000) (THE “FIRST MILESTONE
PAYMENT”).  THE PARTIES ACKNOWLEDGE AND AGREE THAT THE FIRST MILESTONE PAYMENT
WAS PREVIOUSLY MADE BY PURCHASER AND THAT NO FURTHER AMOUNT SHALL BE DUE OR
OWING WITH RESPECT THERETO.

 

(II)                                  PURCHASER SHALL PAY TO SELLER FIVE MILLION
DOLLARS ($5,000,000) ON THE DATE THAT PURCHASER EXECUTES THE SECOND AMENDMENT
(THE “SECOND MILESTONE PAYMENT”).

 

(III)                               PURCHASER SHALL PAY TO SELLER TWELVE MILLION
FIVE HUNDRED THOUSAND DOLLARS ($12,500,000) ON JUNE 30, 2009 (THE “THIRD
MILESTONE PAYMENT”).

 

(IV)                              PURCHASER SHALL PAY TO SELLER TWELVE MILLION
FIVE HUNDRED THOUSAND DOLLARS ($12,500,000) ON SEPTEMBER 30, 2009 (THE “FOURTH
MILESTONE PAYMENT”).

 

(V)                                 [INTENTIONALLY OMITTED].

 

(VI)                              IF AT ANY TIME FOLLOWING THE TECHNOLOGY
CLOSING DATE THE BUSINESS SHALL GENERATE THIRTY-FIVE MILLION DOLLARS
($35,000,000) IN CUMULATIVE NET SALES (THE “NET SALES THRESHOLD”), PURCHASER
SHALL PAY TO SELLER FIFTEEN MILLION DOLLARS ($15,000,000) (THE “SIXTH MILESTONE
PAYMENT”).

 

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

 

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

 

(D)                                 SECTIONS 6.1 (A), (B), AND (D-I) OF THE
AGREEMENT SHALL BE DELETED IN THEIR ENTIRETY, AND SELLER HEREBY SPECIFICALLY
AFFIRMS THAT THE REPRESENTATIONS AND WARRANTIES IN SECTION 6.1(C) THEREOF ARE
TRUE AND CORRECT AS OF THE DATE HEREOF.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature Page to Follow]

 

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

 

 

SELLER:

 

 

 

OSIRIS THERAPEUTICS, INC.

 

 

 

 

By:

/s/ Richard W. Hunt

 

 

 

 

Name:

Richard W. Hunt

 

 

 

 

Title:

Chief Financial Officer

 

 

 

 

PURCHASER:

 

 

 

NUVASIVE, INC.

 

 

 

 

By:

/s/ Jason Hannon

 

 

 

 

Name:

Jason Hannon

 

 

 

 

Title:

Senior Vice President, General Counsel and Secretary

 

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