exv10w3






EXECUTION COPY




EXHIBIT 10.3




OPTION PURCHASE AGREEMENT




among




NUVASIVE, INC.,




PROGENTIX ORTHOBIOLOGY, B.V.




and




The Sellers listed on Schedule A attached hereto




January 13, 2009




 









 








TABLE OF CONTENTS




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






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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.




-iii-









 










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







-iv-











 





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.




1









 









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.



6









 





     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:



7









 





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



                    (A) ***;



                    (B) ***; and



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



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



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



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



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



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



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



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





 




			
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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.




9









 









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



10









 







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



11









 







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.




12









 









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’



13









 







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




14









 











     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



15









 







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



16









 







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.




17









 








     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.



18









 





     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.



20









 





          (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.



21









 





          (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


22









 






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;



23









 





          (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;



24









 





          (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;



25









 





               (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.



26









 





               (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;



27









 





               (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



28









 







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



29









 







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



30









 






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



31









 







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



32









 







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



33









 







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.



34









 





          (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,



35









 







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.



36









 





     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.



37









 





          (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



38









 







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:



39









 





               (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



40









 







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



41









 







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-



42









 







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



43









 







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



44









 







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



45









 







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.




46









 









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.




47









 









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.




48











 





     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.




49









 









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




50









 







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




51









 







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.




52









 










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.




53









 








          (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.




54









 








          (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.



55









 





          (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).




56









 








          (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




57









 







          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



59









 







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



63









 







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).



65









 





     “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



67









 







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.




70









 










     “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.



71









 





     “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.



72









 





          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






73









 






	 	 	 
	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)






74









 






	 	 	 
	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.




75









 










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



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PURCHASER:	 	 	 	ACQUIRED COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NUVASIVE, INC.	 	 	 	PROGENTIX ORTHOBIOLOGY B.V.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By JD de Bruijn Holding BV, its	 	 
	 	 	 	 	 	 	 	 	solely authorized statutory director	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Alexis V. Lukianov	 	 	 	By:	 	/s/ Joost D de Bruijn	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Alexis V. Lukianov
	 	 	 	 	 	Name:
	 	Joost D de Bruijn	 	 
	 

	 	Title:
	 	Chief Executive Officer
	 	 	 	 	 	Title:
	 	General Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SELLERS’ REPRESENTATIVE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	EDWARD VAN WEZEL	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	/s/ Edward Van Wezel	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	JOOST D DE BRUIJN	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	/s/ Joost D de Bruijn	 	 
	 	 	 	 	 	 	 	 	 	 	 





Signature Page to Option Purchase Agreement




 









 








	 	 	 	 	 
	 	SELLERS:



JD DE BRUIJN HOLDING BV

 	 
	 	By:  	/s/ Joost D de Bruijn
 	 
	 	 	Name:  	Joost D de Bruijn 	 
	 	 	Title:  	General Director 	 
	 
	 	INCUBATION BV

 	 
	 	By:  	/s/ Clemens van Blitterswijk
 	 
	 	 	Clemens van Blitterswijk 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                 /s/ FrankJan van der Velden
 	 
	 	 	FrankJan van der Velden 	 
	 	 	 	 
	 
	 	BIOGENERATION VENTURES BV

 	 
	 	By:  	/s/ Edward van Wezel
 	 
	 	 	Edward van Wezel 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                 /s/ Willem Hazenberg
 	 
	 	 	Willem Hazenberg 	 
	 	 	 	 
	 
	 	HUIPIN YUAN

 	 
	 	/s/ Huipin Yuan
 	 
	 	 	 
	 	 	 
	 



Signature Page to Option Purchase Agreement




 









 








SCHEDULE A




Sellers Schedule




	 	 	 	 	 
	 	 	Seller Shares Owned by	 	 
	Seller	 	Seller	 	Proceeds Allocation
	Incubation BV
	 	9,918 ordinary shares	 	45.08%
	JD de Bruijn Holding BV
	 	7,200 ordinary shares	 	32.73%
	BioGeneration Ventures
BV
	 	4,000 preference shares	 	18.18%
	Huipin Yuan
	 	882 ordinary shares	 	4.01%






 









 






EXHIBIT A




Notarial Deed




 









 





EXHIBIT B




Purchase Election Notice




 









 





EXHIBIT C




Milestone Completion Notice




 









 





EXHIBIT D




Form of True-Up Agreement




 









 





EXHIBIT E




Manufacturing Specifications




 









 





EXHIBIT F




Pre-Clinical Model




 









 





EXHIBIT G




Study Model




 









 





EXHIBIT H




Patent Claims




 









 





EXHIBIT I




Sales Run Rate Amounts





	 	1.	 	***
	 
	 	2.	 	***







 




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




 









 










EXHIBIT J




Form of Legal Opinion




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



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



 









 





EXHIBIT K




Form of Escrow Agreement




 









 





EXHIBIT L




Founders’ Non-Competition Agreement (Bruijn)




 









 





EXHIBIT M




Founders’ Non-Competition Agreement (Blitterswijk)




 









 





EXHIBIT N




Investor Non-Competition Agreement