Document:

ofix-ex103_34.htm

Exhibit 10.3

 

Execution Version

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT (the "Amendment and Limited Consent"), dated as of December 8, 2017 (the "Second Amendment and Limited Consent Effective Date"), is among ORTHOFIX HOLDINGS, INC., a Delaware corporation ("U.S. Borrower"), VICTORY MEDICAL LIMITED, a company formed under the laws of England and Wales ("Victory"), ORTHOFIX INTERNATIONAL B.V., a company incorporated under the laws of the Netherlands ("Orthofix B.V." and together with U.S. Borrower and Victory, each a "Borrower" and collectively, the "Borrowers"), the other Loan Parties party hereto, each of the banks or other lending institutions which is a party hereto (individually a "Lender" and collectively the "Lenders") and JPMORGAN CHASE BANK, N.A. individually as a Lender and as Administrative Agent, Swingline Lender and Issuing Bank and JPMORGAN CHASE BANK, N.A. and BBVA COMPASS as Joint Lead Arrangers and Joint Bookrunners.

RECITALS:

 

WHEREAS, the U.S. Borrower, Victory, the other Loan Parties listed on the signature pages thereto, the Administrative Agent, and the lenders listed on the signature pages thereto have entered into the Credit Agreement dated as of August 31, 2015, as amended by the First Amendment to Credit Agreement dated as of March 7, 2016 and consented to by the Limited Consent to Credit Agreement dated as of December 22, 2016 (as the same may hereafter be amended or otherwise modified, the "Agreement").

WHEREAS, the U.S. Borrower, Victory and the other Loan Parties have requested that certain provisions of the Agreement be amended to, among other things, (a) add Orthofix B.V. as a Borrower, a Guarantor and a Loan Party and (b) add each of Orthofix Limited, a company formed under the laws of England and Wales, and Orthofix II B.V., a company incorporated under the laws of the Netherlands, as Guarantors and Loan Parties.

WHEREAS, the Borrowers and the other Loan Parties have advised the Administrative Agent and the Lenders that the Company and its Subsidiaries desire to:

(a)consummate a series of internal transactions to repay certain intercompany payables and other assets, which will be effected over a period of time and in certain definitive steps as outlined in the step plan titled "Intercompany Payable Settlements and Initial BD Funding" and posted to the Lenders on November 11, 2017 and delivered to the Administrative Agent and the Lenders prior to the date hereof (such description, the "Plan of Restructuring" and the steps described therein, collectively, the "Proposed Restructuring");

(b)cause Orthofix Inc. and AMEI Technologies Inc. to sell and assign to Orthofix-Italy the intellectual property listed and described on Exhibit A (the "OI/AMEI Intellectual Property"), which relates to the Company's external fixation product lines.  The sale and assignment of the OI/AMEI Intellectual Property will be accomplished through (i) a Borrowing by Orthofix B.V. in a Dollar Amount equal to approximately $25,000,000, (ii) an intercompany loan or advance by Orthofix B.V. to Orthofix-Italy in the same amount as described in the preceding clause (b)(i) and (iii) a sale of the OI/AMEI Intellectual Property by Orthofix Inc. and AMEI Technologies Inc. to Orthofix-Italy for cash consideration in a Dollar Amount equal to approximately $25,000,000 on or before January 31, 2018 (collectively, the "Proposed IP Sale"); and

(c)consummate an Acquisition of all of the Equity Interests of Wittenstein intens GmbH, a company organized under the laws of Germany ("FitBone").  Such Acquisition of FitBone will be accomplished through (i) a Borrowing by Orthofix B.V. in a Dollar Amount equal to approximately $35,000,000, and (ii) (x)(I) an intercompany loan or advance or capital contribution by Orthofix B.V. to Orthofix GmbH in the same amount as described in clause (c)(i) and (II) the purchase by Orthofix GmbH of all of the Equity Interests of FitBone for a purchase price of a Dollar Amount equal to approximately $35,000,000 or (y) the purchase by Orthofix B.V. of all of the Equity Interests of FitBone for a purchase price of a Dollar Amount equal to approximately $35,000,000 (collectively, the "Proposed Acquisition").

WHEREAS, (i) steps 26, 27, 28, 31, 32, 33, 35 and 38 as outlined in the Plan of Restructuring are either not expressly permitted by Sections 6.04, 6.05, 6.08 and 6.09 of the Agreement or are permitted but would use an existing permissive basket (each a "Permissive Basket"), (ii) the Proposed IP Sale is either not expressly permitted by Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement or are permitted but would use a Permissive Basket and (iii) the Proposed Acquisition is either not expressly permitted by Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement or are permitted but would use a Permissive Basket and, as a result, the Borrowers and the other Loan Parties have requested that the Administrative Agent and the Lenders consent to waive the restrictions contained in (x) Sections 6.04, 6.05, 6.08 and 6.09 of the Agreement in order to permit steps 26, 27, 28, 31, 32, 33, 35 and 38 as outlined in the Plan of Restructuring, (y) Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement in order to permit the Proposed IP Sale and (z) Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement in order to permit the Proposed Acquisition (collectively, the "Proposed Consents").

WHEREAS, subject in each case to all of the terms hereof, the Borrowers, the other Loan Parties, the Administrative Agent and the Lenders now desire to amend the Agreement as herein set forth.

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows effective as of the Second Amendment and Limited Consent Effective Date unless otherwise indicated:

ARTICLE 1.

Definitions

Section 1.1.Definitions.  Capitalized terms used in this Amendment and Limited Consent, to the extent not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby.

ARTICLE 2.

Amendments

Section 2.1.Agreement.  The Agreement is, effective on the Second Amendment and Limited Consent Effective Date, hereby amended and restated in its entirety to read as set forth in the attached Annex I.  The Schedules and Exhibits to the Agreement remain unmodified except to the extent amended, modified or added below.

Section 2.2.Schedules 3.06 and 6.01(a).  Schedules 3.06 and 6.01(a) of the Agreement are, effective on the Second Amendment and Limited Consent Effective Date, hereby amended and restated in their entirety to read as set forth in the attached Schedules 3.06 and 6.01(a).

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Section 2.3.Schedule 6.01(a).  Schedule 6.01(a) of the Agreement shall be, effective on the date such Schedule 6.01(a) is delivered in accordance with Section 3.2(a)(iii)(A) of this Amendment and Limited Consent, amended and restated in its entirety to read as set forth in such Schedule 6.01(a).

ARTICLE 3.

Limited Consent

Section 3.1.Limited Consent.  Subject to the terms of this Amendment and Limited Consent, including, but not limited to, compliance by the Borrowers and each other Loan Party with each of the terms of this Article 3, the Lenders hereby:

(a)consent to waive the restrictions contained in Sections 6.04, 6.05, 6.08 and 6.09 of the Agreement to the extent steps 26, 27, 28, 31, 32, 33, 35 and 38 contained in the Plan of Restructuring would be prohibited by such Sections or would be permitted under such Sections only by using a Permissive Basket, but in each case only to the extent that steps 26, 27, 28, 31, 32, 33, 35 and 38 contained in the Plan of Restructuring are consummated in connection with the Proposed Restructuring and subject to the terms and conditions contained in this Amendment and Limited Consent.  For the avoidance of doubt, each of steps 26, 27, 28, 31, 32, 33, 35 and 38 contained in the Plan of Restructuring that is consummated by the Company or any of its Subsidiaries in accordance with the Plan of Restructuring will (i) be deemed not to have used a Permissive Basket and (ii) not result in a Default due to any failure to comply with Sections 6.04, 6.05, 6.08 and 6.09 of the Agreement;

(b)consent to waive the restrictions contained in Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement to the extent that the Proposed IP Sale would be prohibited by such Sections or would be permitted under such Sections only by using a Permissive Basket, but only with respect to the Proposed IP Sale, which must be consummated on or before January 31, 2018 (or such later date agreed to in writing by the Administrative Agent) and shall be subject to the terms and conditions contained in this Amendment and Limited Consent.  For the avoidance of doubt, the Proposed IP Sale when consummated by the Company or any of its Subsidiaries in accordance with the terms and conditions contained in this Amendment and Limited Consent will (i) be deemed not to have used a Permissive Basket and (ii) not result in a Default due to any failure to comply with Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement;

(c)irrevocably authorize the Administrative Agent to (i) release the Lien on the OI/AMEI Intellectual Property, (ii) file any UCC-3 termination statements or releases with the United States Patent and Trademark Office requested by the Loan Parties that are necessary to effect the Proposed IP Sale and (iii) take any other action necessary or reasonably requested by the Borrower Representative to effect the Proposed IP Sale, in each case subject to the terms and conditions contained in this Amendment and Limited Consent; and

(d)consent to waive the restrictions contained in Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement to the extent that the Proposed Acquisition would be prohibited by such Sections or would be permitted under such Sections only by using a Permissive Basket, but only with respect to the Proposed Acquisition, which must be consummated within 120 days of the Second Amendment and Limited Consent Effective Date (or such later date agreed to in writing by the Administrative Agent) and shall be subject to the terms and conditions contained in this Amendment and Limited Consent.  For the avoidance of doubt, the Proposed Acquisition when consummated by the Company or any of its Subsidiaries in accordance with the terms and conditions contained in this Amendment and Limited Consent will (i) be deemed not to have used a Permissive Basket and (ii) not result in a Default due to any failure to comply with Sections 6.01, 6.04, 6.05 and 6.09 of the Agreement.

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The consents and waivers contained in this Section 3.1 are strictly limited as provided herein and shall not be deemed to constitute a waiver of, or any consent to noncompliance with, any term or provision of the Agreement (including, without limitation, Sections 6.01, 6.04, 6.05, 6.08 and 6.09 of the Agreement), except as specified in this Section 3.1.

Section 3.2.Limited and Conditional Consent; Requirements.  Each Borrower and each other Loan Party agrees that the foregoing consents are subject to, and conditioned upon, the Borrowers' and each other Loan Party's compliance with the each of following:

(a)Proposed Restructuring.  The Proposed Restructuring shall satisfy each of the following conditions:

(i)each step of the Proposed Restructuring shall have been consummated on or before July 31, 2018 (or such later date agreed to in writing by the Administrative Agent);

(ii)during the period commencing on the Second Amendment and Limited Consent Effective Date and ending on the date of the consummation of the last step outlined in the Plan of Restructuring, no Event of Default shall have occurred and be continuing after giving effect to this Amendment and Limited Consent.  For the avoidance of doubt, at the time of and immediately after giving effect to any Borrowing consummated in connection with the Proposed Restructuring, no Default shall have occurred and be continuing; and

(iii)concurrently with the consummation of the last step outlined in the Plan of Restructuring (or such later date as agreed to in writing by the Administrative Agent), the Administrative Agent (or its counsel, Winstead PC) shall have received, on terms and conditions, and subject to documentation in form and substance reasonably satisfactory to the Administrative Agent the following items:

A.(i) an amended and restated Schedule 6.01(a) of the Agreement and (ii) an amendment to the Security Agreement described in clause (a) of the definition of "Security Agreement" amending and restating the list of Intercompany Notes on Exhibit F of such Security Agreement, each of which shall be certified by the Borrower Representative as being complete, true and accurate as of the date of delivery, and

B.a certificate signed by a Financial Officer certifying that the conditions set forth in Section 3.2(a) of this Amendment and Limited Consent have been satisfied.

(b)Intellectual Property Purchase.  The Proposed IP Sale shall satisfy each of the following conditions:

(i)the Proposed IP Sale shall have a cash purchase price of not more than the Dollar Amount of $25,000,000, which cash purchase price the Company shall have reasonably determined in good faith to equal the fair market value of the OI/AMEI Intellectual Property;

(ii)each loan or advance from Orthofix B.V. to Orthofix-Italy shall be evidenced by a promissory note in form and substance satisfactory to the Administrative Agent pledged pursuant to the Security Agreement and such note and a duly executed allonge thereto in form and substance satisfactory to the Administrative Agent shall be delivered to the Administrative Agent within three Business Days (or such longer period agreed to in writing by the Administrative Agent) after the making of each such loan or advance;

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(iii)during the period commencing on the Second Amendment and Limited Consent Effective Date and ending on the date of the consummation of the Proposed IP Sale, no Event of Default shall have occurred and be continuing after giving effect to this Amendment and Limited Consent.  For the avoidance of doubt, at the time of and immediately after giving effect to any Borrowing consummated in connection with the Proposed IP Sale, no Default shall have occurred and be continuing;

(iv)the Proposed IP Sale shall have been consummated on or before January 31, 2018 (or such later date agreed to in writing by the Administrative Agent); and

(v)concurrently with the consummation of the Proposed IP Sale (or such later date as agreed to in writing by the Administrative Agent), the Administrative Agent (or its counsel, Winstead PC) shall have received, on terms and conditions, and subject to documentation in form and substance reasonably satisfactory to the Administrative Agent a certificate signed by a Financial Officer certifying that the conditions set forth in Section 3.2(b) of this Amendment and Limited Consent have been satisfied.

(c)Repayment of Borrowing.  On or before March 31, 2018 (or such later date agreed to in writing by the Administrative Agent), the Borrowers shall prepay the principal amount of any outstanding Loans to the Administrative Agent in Dollars for the account of each Revolving Lender in a principal amount equal to the Dollar Amount of the Borrowing made by Orthofix B.V. in connection with, and as contemplated by clause (i) of the definition of, the Proposed IP Sale (or such lesser principal amount that is then outstanding).

(d)German Acquisition.  The Proposed Acquisition shall satisfy each of the following conditions:

(i)at the time of either Orthofix B.V. or Orthofix GmbH, as applicable, entering into a definitive purchase and sale agreement with respect to the Proposed Acquisition and immediately after giving effect thereto and to this Amendment and Limited Consent, (x) no Default shall have occurred and be continuing or would result therefrom and (y) all representations and warranties contained in the Loan Documents shall be true and correct in all material respects with the same force and effect as through made on and as of such date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects);

(ii)the Proposed Acquisition shall not be a hostile or contested acquisition;

(iii)as soon as possible, but not less than fifteen (15) days prior to such Acquisition (or such shorter period as may be agreed to by the Administrative Agent in its discretion), the Borrower Representative shall have provided the Administrative Agent with notice of whether Orthofix B.V. or Orthofix GmbH will be consummating the Proposed Acquisition;

(iv)as soon as possible, but not less than ten (10) Business Days prior to such Acquisition (or such shorter period as may be agreed to by the Administrative Agent in its discretion), the Borrower Representative shall have provided the Administrative Agent notice of such Acquisition together with a reasonably detailed description of the material terms of such Acquisition (including, without limitation, the purchase price and method and structure of payment) and of FitBone;

(v)the total consideration (including without limitation, cash, assumed Indebtedness, earnout payments and any other deferred payment but excluding any consideration in the form of Equity Interests of the Company) paid for the Proposed Acquisition, shall not exceed the Dollar Amount of $40,000,000;

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(vi)the Borrowers shall certify to the Administrative Agent (and provide the Administrative Agent with a pro forma calculation in form and substance reasonably satisfactory to the Administrative Agent) that, after giving pro-forma effect to the completion of such Acquisition the Total Leverage Ratio shall be less than 2.5 to 1.00 for the most recently completed four fiscal quarter period for which financial statements have been required to be delivered pursuant to the Agreement;

(vii)if requested by the Administrative Agent, the Borrower Representative shall have delivered to the Administrative Agent an executed copy of the acquisition agreement (including all schedules and exhibits thereto) and all other material agreements (together with a list, prepared in good faith by the Borrower Representative, of all other executed agreements among an Orthofix Entity, the sellers of FitBone, FitBone, or an Affiliate of FitBone) and material instruments executed by any Orthofix Entity relating to such Acquisition, no later than five (5) Business Days after such Acquisition is consummated;

(viii)each loan or advance from Orthofix B.V. to Orthofix GmbH shall be evidenced by a promissory note in form and substance satisfactory to the Administrative Agent pledged pursuant to the Security Agreement and such note and a duly executed allonge thereto in form and substance satisfactory to the Administrative Agent shall be delivered to the Administrative Agent within three Business Days (or such longer period agreed to in writing by the Administrative Agent) after the making of each such loan or advance;

(ix)the Proposed Acquisition shall have been consummated on or before the date that is 120 days following the Second Amendment and Limited Consent Effective Date (or such later date agreed to in writing by the Administrative Agent); and

(x)within five (5) Business Days of  the consummation of the Proposed Acquisition (or such later date as agreed to in writing by the Administrative Agent), the Administrative Agent (or its counsel, Winstead PC) shall have received, on terms and conditions, and subject to documentation in form and substance reasonably satisfactory to the Administrative Agent a certificate signed by a Financial Officer certifying that the conditions set forth in Section 3.2(d) of this Amendment and Limited Consent have been satisfied.

Section 3.3.Representations and Warranties.  Each Loan Party represents and warrants to the Administrative Agent and the Lenders that, one Business Day following the consummation of the last step outlined in the Plan of Restructuring (such date, the "Post-Restructuring Test Date") the aggregate amount of Indebtedness of the Loan Parties (including Orthofix B.V., Orthofix II B.V. and Orthofix Limited) on the Post-Restructuring Test Date owed to Subsidiaries of the Company that are not Guarantors and Loan Parties on the Post-Restructuring Test Date (such Subsidiaries, the "Non-Loan Parties") will not be, as of the Post-Restructuring Test Date, greater than the aggregate amount of all such Indebtedness of the Loan Parties owed to Non-Loan Parties that existed on the date immediately preceding the commencement of the Proposed Restructuring.

ARTICLE 4.

Conditions Precedent

Section 4.1.Conditions.  The effectiveness of Articles 2 and 3 of this Amendment and Limited Consent are subject to the satisfaction of the following conditions precedent:

(a)The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Amendment and Limited Consent signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or other 

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electronic transmission of a signed signature page of this Amendment and Limited Consent) that such party has signed a counterpart of this Amendment and Limited Consent, (ii) to the extent certificated, certificates representing the Equity Interests of the Borrowers and any other entity pledged pursuant to any Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor and (iii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Amendment and Limited Consent and the other Loan Documents executed in connection therewith, and written opinions addressed to the Administrative Agent, the Issuing Bank and the Lenders of Dutch counsel, U.K. counsel, U.S. counsel, and Curacao counsel, in each case in form and substance and pursuant to documentation acceptable to the Administrative Agent.

(b)The Administrative Agent shall have received (i) a certificate of each of the Company, Orthofix B.V., Orthofix II B.V., Orthofix Limited, Colgate, Victory and the U.S. Borrower, which shall be in form and substance acceptable to the Administrative Agent, dated the Second Amendment and Limited Consent Effective Date and executed by any officer, director, manager or member of such Loan Party (or directors in the case of a Loan Party incorporated in England and Wales or the Netherlands), which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the U.S. Borrower, its Financial Officers, and in the case of the UK Borrower or Dutch Borrower, its directors or managing directors, (C) contain appropriate attachments, including the charter, articles or certificate or deed of organization or incorporation of each Loan Party certified, where applicable, by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents (or in the case of the Company, Colgate, Victory and the U.S. Borrower, certifying as to no change with any of the attachments described in subclause (C) since the Effective Date or, in the case of the U.S. Borrower, November 8, 2016, and (D) (in the case of Orthofix Limited, only) that the PSC register (within the meaning of section 790C(10) of the Companies Act 2006) of Orthofix Limited is correct, complete and not amended or superseded as at the date of this Amendment and Limited Consent and the no warning notices or restriction notices have been issued in relation to those shares and (ii) a good standing certificate or comparable instrument for each Loan Party from its jurisdiction of organization.

(c)The Administrative Agent shall have received a certificate, signed by a Financial Officer, in the case of the U.S. Borrower, and a director or managing director, in the case of each of the UK Borrower and the Dutch Borrower, dated as of the Second Amendment and Limited Consent Effective Date, which shall be in form and substance acceptable to the Administrative Agent, (i) stating that no Default has occurred and is continuing after giving effect to this Amendment and Limited Consent, (ii) stating that after giving effect to this Amendment and Limited Consent the representations and warranties contained in the Loan Documents are true and correct as of such date in all material respects as of such date, except that any representation and warranty which by its terms is made as of a specified date shall be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be true and correct in all respects, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

(d)The Administrative Agent shall have received, on behalf of each Lender (including JPMorgan Chase Bank, N.A., as a Lender) that delivers a signature page to this Amendment and Limited Consent, a working fee of $7,500 for each such Lender on such date.

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(e)The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Second Amendment and Limited Consent Effective Date, including, reimbursement or payment of all reasonable and invoiced out-of-pocket expenses (including the reasonable and invoiced fees, charges and disbursements of counsel) incurred by the Administrative Agent in connection with this Amendment and Limited Consent, or required to be reimbursed or paid by the Borrowers by this Amendment and Limited Consent, the Agreement or under any other Loan Document for which invoices have been presented on or before the date hereof.

(f)The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization, if applicable, and the jurisdiction of foreign qualification in the United States of Orthofix B.V., Orthofix II B.V. and Orthofix Limited reasonably requested by the Administrative Agent, and each other jurisdiction reasonably requested by the Administrative Agent where assets of the Loan Parties, or such Loan Parties are located, and such searches shall reveal no Liens on any of the assets of the Loan Parties except as permitted by Section 6.02 of the Agreement.

(g)The Administrative Agent shall have received a solvency certificate signed by a Financial Officer, in the case of the U.S. Borrower, and a director or managing director, in the case of each of the UK Borrower and the Dutch Borrower, dated the Second Amendment and Limited Consent Effective Date in form and substance reasonably satisfactory to the Administrative Agent.

(h)The Administrative Agent shall have received evidence of insurance coverage for each of the Orthofix B.V., Orthofix II B.V. and Orthofix Limited in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of this Agreement and the Security Agreement.

(i)The Administrative Agent and its counsel, including without limitation, U.S., Dutch and UK counsel, shall have completed all legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.

(j)The Administrative Agent and Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including USA PATRIOT Act, and a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(k)The representations and warranties of the Loan Parties set forth in this Amendment and Limited Consent, the Agreement and the other Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the Second Amendment and Limited Consent Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

(l)At the time of and immediately after giving effect to the consummation of this Amendment and Limited Consent, no Default shall have occurred and be continuing.

(m)No event shall have occurred and no condition shall exist which has or could be reasonably expected to have a Material Adverse Effect.

(n)The Administrative Agent shall have received such additional documentation and information as the Administrative Agent or its counsel, Winstead PC, may have reasonably requested on or prior to the date hereof.

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ARTICLE 5.

Ratifications, Representations and Warranties

Section 5.1.Ratifications.  The terms and provisions set forth in this Amendment and Limited Consent shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment and Limited Consent, the terms and provisions of the Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect.  The Borrowers, each other Loan Party, the Administrative Agent, and the Lenders party hereto agree that the Agreement as amended hereby and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.  For all matters arising prior to the Second Amendment and Limited Consent Effective Date of this Amendment and Limited Consent (including, without limitation, the accrual and payment of interest and fees and compliance with financial covenants), the terms of the Agreement (as unmodified by this Amendment and Limited Consent) shall control and are hereby ratified and confirmed.

Section 5.2.Representations and Warranties.  Each Borrower and each other Loan Party hereby represents and warrants to the Administrative Agent and the Lenders as follows:  (a) after giving effect to this Amendment and Limited Consent, no Default or Event of Default has occurred and is continuing; (b) after giving effect to this Amendment and Limited Consent, the representations and warranties set forth in the Loan Documents are true and correct in all material respects with the same effect as though made on and as of the Second Amendment and Limited Consent Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects); (c) the execution, delivery and performance of this Amendment and Limited Consent and the transactions contemplated hereby have been duly authorized by all necessary action on the part of each Borrower and each other Loan Party and does not and will not:  (1) violate any provision of law applicable to any Borrower or any other Loan Party, the certificate of incorporation, bylaws, partnership agreement, membership agreement, or other applicable governing document of any Borrower or any other Loan Party or any order, judgment, or decree of any court or agency of government binding upon any Borrower or any other Loan Party; (2) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of any Borrower or any other Loan Party; (3) result in or require the creation or imposition of any material lien upon any of the assets of any Borrower or any other Loan Party; or (4) require any approval or consent of any Person under any material contractual obligation of any Borrower or any other Loan Party; and (d) the articles of incorporation, bylaws, partnership agreement, certificate of limited partnership, membership agreement, articles of organization or other applicable governing document of each Loan Party (other than the Company, Orthofix B.V., Orthofix II B.V., Orthofix Limited, Colgate, Victory and the U.S. Borrower) attached as exhibits to the Secretary's Certificate or Director's Certificate, as applicable, of each such Loan Party (other than the Company, Orthofix B.V., Orthofix II B.V., Orthofix Limited, Colgate, Victory and the U.S. Borrower) dated as of August 31, 2015 have not been modified or rescinded and remain in full force and effect.

IN ADDITION, TO INDUCE THE ADMINISTRATIVE AGENT AND THE LENDERS TO AGREE TO THE TERMS OF THIS AMENDMENT AND LIMITED CONSENT, EACH BORROWER AND EACH OTHER LOAN PARTY (BY IT EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT AND LIMITED CONSENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH IT:

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(a)WAIVER.  WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE OF ITS EXECUTION OF THIS AMENDMENT AND LIMITED CONSENT AND

(b)RELEASE.  RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT AND THE LENDERS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH ANY BORROWER OR ANY OTHER LOAN PARTY EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

ARTICLE 6.

Miscellaneous

Section 6.1.Survival of Representations and Warranties.  All representations and warranties made in this Amendment and Limited Consent or any other Loan Document including any Loan Document furnished in connection with this Amendment and Limited Consent shall survive the execution and delivery of this Amendment and Limited Consent and the other Loan Documents, and no investigation by the Administrative Agent or any Lender or any closing shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.

Section 6.2.Reference to Agreement.  Each of the Loan Documents, including the Agreement, this Amendment and Limited Consent and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement as amended hereby.

Section 6.3.Expenses of Lender.  As provided in the Agreement, the Loan Parties, jointly and severally, agree to pay all reasonable and invoiced out‐of‐pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of one counsel and one local counsel in each specialty and relevant jurisdiction for the Administrative Agent, in connection with the preparation and administration of this Amendment and Limited Consent and the other Loan Documents executed pursuant hereto.

Section 6.4.Severability.  Any provision of this Amendment and Limited Consent held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 6.5.Applicable Law.  This Amendment and Limited Consent and all other Loan Documents executed pursuant hereto (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the State of New York, but giving effect to federal laws applicable to national banks.

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Page 10

Section 6.6.Successors and Assigns.  The provisions of this Amendment and Limited Consent are binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (a) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Borrower without such consent shall be null and void) and (b) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with Section 9.04 of the Agreement.

Section 6.7.Counterparts.  This Amendment and Limited Consent may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Amendment and Limited Consent by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment and Limited Consent.

Section 6.8.Effect of Waiver.  No consent or waiver, express or implied, by the Administrative Agent or any Lender to or for any breach of or deviation from any covenant, condition or duty by any Borrower or any other Loan Party shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

Section 6.9.Headings.  Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and Limited Consent and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment and Limited Consent.

Section 6.10.ENTIRE AGREEMENT.  THIS AMENDMENT AND LIMITED CONSENT AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT AND LIMITED CONSENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Section 6.11.Joinder.  

(a)By execution of this Amendment and Limited Consent, Orthofix B.V. (the "New Borrower") hereby acknowledges, agrees and confirms that, by its execution of this Amendment and Limited Consent, the New Borrower will be deemed to be (i) a Borrower under the Agreement and each other Loan Document, (ii) a Loan Party under the Agreement and each other Loan Document and (iii) a Loan Guarantor for all purposes of the Agreement and each other Loan Document and shall have all of the obligations of a Borrower, a Loan Party and a Loan Guarantor thereunder as if it had executed the Agreement on the Effective Date.  The New Borrower hereby ratifies, as of the Second Amendment and Limited Consent Effective Date, and agrees to be bound by, all of the terms, provisions and conditions contained in the Agreement, including without limitation (w) any and all payment, indemnification or other reimbursement obligations set forth in the Agreement or any other Loan Document, (x) all of the representations and warranties of the Loan Parties set forth in Article III of the Agreement, (y) all of the covenants set forth in Articles V and VI of the Agreement and (z) all of the guaranty obligations set forth in Article X of the Agreement.  Without limiting the generality of the foregoing terms of this paragraph (a), the New Borrower, subject to the limitations set forth in Sections 10.10 and 10.13 of the Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Page 11

Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Borrower will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.  Orthofix Holdings, Inc. is hereby appointed by the New Borrower as its contractual representative hereunder, under the Agreement and under each other Loan Document, and the New Borrower irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein, in the Agreement and in the other Loan Documents.

(b)By execution of this Amendment and Limited Consent, each of Orthofix II B.V. and Orthofix Limited (each a "New Loan Party") hereby acknowledges, agrees and confirms that, by its execution of this Amendment and Limited Consent, such New Loan Party will be deemed to be (i) a Loan Party under the Agreement and each other Loan Document and (ii) a Loan Guarantor for all purposes of the Agreement and each other Loan Document and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Agreement on the Effective Date.  Each New Loan Party hereby ratifies, as of the Second Amendment and Limited Consent Effective Date, and agrees to be bound by, all of the terms, provisions and conditions contained in the Agreement, including without limitation (x) all of the representations and warranties of the Loan Parties set forth in Article III of the Agreement, (y) all of the covenants set forth in Articles V and VI of the Agreement and (z) all of the guaranty obligations set forth in Article X of the Agreement.  Without limiting the generality of the foregoing terms of this paragraph (b), each New Loan Party, subject to the limitations set forth in Sections 10.10 and 10.13 of the Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), each New Loan Party will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

Section 6.12.Release of Collateral.  Subject to the terms set forth in Section 3.1 of this Limited Consent, the Administrative Agent will, at the Loan Parties joint and several expense, comply with the provisions of Section 9.02(d)(ii) of the Agreement (it being understood that by execution of this Amendment and Limited Consent Orthofix Inc. and AMEI Technologies Inc. are hereby certifying that the Proposed IP Sale is being made in compliance with the terms of the Agreement after giving effect to this Amendment and Limited Consent).

Executed as of the date first written above.

[Signatures on Following Pages.]

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Page 12

BORROWERS:

 

	
ORTHOFIX HOLDINGS, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:  
	
 
	
Chief Financial Officer and Treasurer

 

	
VICTORY MEDICAL LIMITED

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stacy Kohn 

	
Name:
	
 
	
Stacy Kohn

	
Title:
	
 
	
Director

 

	
ORTHOFIX INTERNATIONAL B.V.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stacy Kohn

	
Name:
	
 
	
Stacy Kohn

	
Title:
	
 
	
Authorized Signatory

 

GUARANTORS:

 

	
ORTHOFIX INTERNATIONAL N.V.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Chief Financial Officer

 

	
ORTHOFIX II B.V.

	
 
	
 
	
 

	
By:
	
 
	
Orthofix International B.V., its Director

 

	
By:
	
 
	
/s/ Stacy Kohn

	
Name:
	
 
	
Stacy Kohn

	
Title:
	
 
	
Authorized Signatory

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
ORTHOFIX LIMITED

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stacy Kohn

	
Name:
	
 
	
Stacy Kohn

	
Title:
	
 
	
Director

 

	
COLGATE MEDICAL LIMITED

	
 
	
 
	
 

	
By:
	
 
	
/s/ Stacy Kohn

	
Name:
	
 
	
Stacy Kohn

	
Title:
	
 
	
Director

 

	
ORTHOFIX INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Chief Financial Officer and Treasurer

 

	
BLACKSTONE MEDICAL, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Chief Financial Officer and Treasurer

 

	
OSTEOGENICS INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Treasurer

 

	
AMEI TECHNOLOGIES INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Treasurer

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
NEOMEDICS, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Douglas C. Rice

	
Name:
	
 
	
Douglas C. Rice

	
Title:
	
 
	
Treasurer

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent, Swingline Lender and Issuing Bank

 

	
By:
	
 
	
/s/ Gregory T. Martin

	
Name:
	
 
	
Gregory T. Martin

	
Title:
	
 
	
Executive Director

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
BBVA Compass

	
 
	
 
	
 

	
By:
	
 
	
/s/ Mark Dault

	
Name:
	
 
	
Mark Dault

	
Title:
	
 
	
SVP

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
SUNTRUST BANK

	
 
	
 
	
 

	
By:
	
 
	
/s/ Philip VanFossan

	
Name:
	
 
	
Philip VanFossan

	
Title:
	
 
	
Vice President

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
Bank of America, N.A.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Heath B. Lipson

	
Name:
	
 
	
Heath B. Lipson

	
Title:
	
 
	
Senior Vice President

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
Bank of the West

	
 
	
 
	
 

	
By:
	
 
	
/s/ William A. Burzysnki

	
Name:
	
 
	
William A. Burzysnki

	
Title:
	
 
	
Director

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

	
DNB Capital LLC

	
 
	
 
	
 

	
By:
	
 
	
/s/ Brigetta Perezic

	
Name:
	
 
	
Brigetta Perezic

	
Title:
	
 
	
First Vice President

 

	
By:
	
 
	
/s/ Kristi Birkeland Sorenson

	
Name:
	
 
	
Kristi Birkeland Sorenson

	
Title:
	
 
	
Senior Vice President

	
 
	
 
	
Head of Corporate Banking

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

 

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Signature Page

Exhibit A
OI/AMEI Intellectual Property

 

 

	
Application No.
	
Patent 
No.
	
Current Owner
	
Title
	
Country
	
Application Date
	
Grant Date
	
Status

	
11/115009
	
7582093
	
AMEI Technologies Inc.
	
AMEI - SCREW EXTRACTION AND INSERTION DEVICE
	
United States
	
26-Apr-05
	
1-Sep-09
	
Granted

	
11/567661
	
8398687
	
AMEI Technologies Inc.
	
AMEI - VOLAR PLATE FIXATION DEVICE
	
United States
	
6-Dec-06
	
19-Mar-13
	
Granted

	
12/618498
	
8377060
	
AMEI Technologies Inc.
	
AMEI - FIXATION DEVICE AND MULTIPLE-AXIS JOINT FOR A FIXATION DEVICE
	
United States
	
13-Nov-09
	
19-Feb-13
	
Granted

	
13/566758
	
8425512
	
AMEI Technologies Inc.
	
AMEI - FIXATION DEVICE AND MULTIPLE-AXIS JOINT FOR A FIXATION DEVICE
	
United States
	
3-Aug-12
	
23-Apr-13
	
Granted

	
12/618514
	
8430878
	
AMEI Technologies Inc.
	
AMEI - ADJUSTABLE ORTHOPEDIC FIXATION SYSTEM
	
United States
	
13-Nov-09
	
30-Apr-13
	
Granted

	
12/274199
	
8828063
	
AMEI Technologies Inc.
	
AMEI - FIXATION PLATE FOR USE IN THE LAPIDUS APPROACH
	
United States
	
19-Nov-08
	
9-Sep-14
	
Granted

 

 

	
Application No.
	
Registration No.
	
Owner
	
Trademark
	
Country
	
Application Date
	
Registration Date
	
Status

	
76559664
	
2991110
	
AMEI Technologies Inc.
	
I ISKD & Design
	
United States 
	
31-Oct-03
	
6-Sep-05
	
Registered

 

 

 

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Exhibit A, Page 1

Annex I

 

Credit Agreement

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Annex I, Cover Page

SCHEDULE 3.06

Disclosed Matters

None.

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Schedule 3.06, Solo Page

SCHEDULE 6.01(a)

Intercompany Loans

1.Orthofix Holdings. Inc.

Note issued by Orthofix Holdings, Inc. in favor of Victory Medical Limited in the principal amount of USD $153,467,400, dated as of October 1, 2016.

Note issued by Orthofix Holdings, Inc. in favor of Victory Medical Limited in the principal amount of USD $102,311,600, dated as of October 1, 2016.

2.Orthofix Australia Pty Limited

Note issued by Orthofix Australia Pty Limited in favor of Orthofix International N.V. in the principal amount of USD $3,000,000, dated as of July 10, 2013.

3.Colgate Medical Ltd

Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the principal amount of USD $5,887,770, dated as of December 28, 2016.

Note issued by Colgate Medical Ltd in favor of Orthofix International N.V. in the principal amount of USD $4,725,000, dated as of June 16, 2005.

Note issued by Colgate Medical Ltd in favor of Intavent Orthofix Limited (now known as Orthofix Limited) in the principal amount of USD $23,000,000, dated as of March 23, 2010.

4.Orthofix GmbH

Note issued by Orthofix GmbH in favor of Orthofix International B.V. in the principal amount of EUR €900,000, dated as of March 16, 2008.

5.Orthofix International B.V.

Note issued by Orthofix International B.V. in favor of Orthofix International N.V. in the principal amount of USD $168,000,000, dated as of December 29, 2003.

Note issued by Orthofix International B.V. in favor of Orthofix International N.V. in the principal amount of USD $12,000,000, dated as of December 17, 2004.

Note issued by Orthofix International B.V. in favor of Orthofix International N.V. in the principal amount of USD $30,000,000, dated as of December 22, 2005.

Note issued by Orthofix International B.V. in favor of Orthofix International N.V. in the principal amount of USD $19,000,000, dated as of March 23, 2010.

6.Orthofix II B.V.

Note issued by Orthofix II B.V. in favor of Orthofix International B.V. in the principal amount of USD $30,000,000, dated as of December 23, 2005.

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Schedule 6.01, Page 1

Note issued by Orthofix II B.V. in favor of Orthofix International B.V. in the principal amount of USD $19,000,000, dated as of March 23, 2010.

7.Orthofix International N.V.

Note issued by Orthofix International N.V. in favor of Orthofix Inc. in the principal amount of USD $50,000,000, dated as of November 30, 2016.

Note issued by Orthofix International N.V. in favor of Victory Medical Limited in the principal amount of USD $50,000,000, dated as of November 2, 2015.

8.Orthofix Limited

Note issued by Orthofix Limited (formerly known as Intavent Orthofix Limited) in favor of Orthofix II B.V. in the principal amount of USD $19,000,000, dated as of March 23, 2010.

Note issued by Orthofix Limited (formerly known as Intavent Orthofix Limited) in favor of Victory Medical Limited in the principal amount of USD $5,700,000, dated as of June 23, 2017.

9.AME Technologies, Inc.

Note issued by AMEI Technologies, Inc. in favor of Osteogenics, Inc. in the principal amount of USD $20,000,000, dated as of May 6, 1998.

10.Orthofix Inc.

Note issued by Orthofix Inc. in favor of AMEI Technologies, Inc. in the principal amount of USD $5,000,000, dated as of April 30, 1996.

Note issued by Orthofix Inc. in favor of AMEI Technologies, Inc. in the principal amount of USD $5,000,000, dated as of September 30, 1997.

Note issued by Orthofix Inc. in favor of AMEI Technologies, Inc. in the principal amount of USD $150,000,000, dated as of October 31, 1997.

Note issued by Orthofix Inc. in favor of Osteogenics, Inc. in the principal amount of USD $1,000,000, dated as of January 21, 2000.

11.Orthofix Spine GmbH

Note issued by Orthofix Spine GmbH in favor of Blackstone Medical, Inc. in the principal amount of EUR €10,850,771.31, dated as of December 31, 2016.

 

SECOND AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, Schedule 6.01, Page 2ofix-ex1010_422.htm

Exhibit 10.10

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.  THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY AN ASTERIK IN BRACKETS [*].  THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

AMENDMENT NO. 6 TO

MATRIX COMMERCIALIZATION COLLABORATION

AGREEMENT

 

THIS AMENDMENT NO. 6 TO MATRIX COMMERCIALIZATION COLLABORATION AGREEMENT (this “Amendment No. 6”) is dated as of December 29, 2017 (the “Amendment No. 6 Effective Date”) by and between Musculoskeletal Transplant Foundation, Inc., a non-profit corporation formed under the laws of the District of Columbia, and having a principal place of business at 125 May Street, Suite 300, Edison, New Jersey 08837 (“MTF”), and Orthofix Holdings, Inc., a corporation organized under the laws of the State of Delaware, and having a principal place of business at 3451 Plano Parkway, Lewisville, Texas 75056 (“Orthofix”) (each individually a “Party” and collectively the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Parties have entered into that certain Matrix Commercialization Collaboration Agreement dated as of July 28, 2008, as amended by that certain Amendment No. 1 to Matrix Commercialization Collaboration Agreement dated as of December 15, 2010, that certain Amendment No. 2 to Matrix Commercialization Collaboration Agreement dated as of January 9, 2012, that certain Amendment No. 3 to Matrix Commercialization Collaboration Agreement dated as of June 25, 2013, that certain Amendment No. 4 to Matrix Commercialization and Collaboration Agreement dated as of January 1, 2014, and that certain Amendment No. 5 to Matrix Commercialization and Collaboration Agreement dated as of March 10, 2016 (collectively, the “Matrix Agreement”), pursuant to which the Parties have collaborated on the commercialization of the Matrix; 

 

WHEREAS, the Parties desire to expand and extend their relationship under the Matrix Agreement concerning the development and commercialization of an additional allogeneic cancellous bone matrix containing viable mesenchymal stem cells and/or osteoprogenitor cells (hereinafter identified as the “Matrix IV”) and conforming to the Matrix IV Specifications (as defined herein); 

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

1

Exhibit 10.10

WHEREAS, neither Party currently makes the Matrix IV commercially available and the Parties believe that they can develop and commercialize the Matrix IV more effectively and efficiently together than on their own;

 

WHEREAS, to effectuate that collaboration, the Parties wish, subject to the terms and conditions of the Matrix Agreement, as amended hereby, to (a) give responsibility to (i) MTF to develop and improve the Matrix IV and (ii) provide specified funding to MTF for MTF’s development and improvement of the Matrix IV, and (b) share responsibility for contributing scientific or medical personnel, technical expertise and other resources to the development and improvement of the Matrix IV, communicating findings and discoveries to one another with respect to the Matrix IV and exchanging information related to such collaboration and (c) give exclusive responsibility, following the Matrix IV Commercialization Date (as defined herein), to (i) MTF to Process quantities of the Matrix IV using human tissue from deceased donors procured by MTF and fulfill orders for the Matrix IV solicited by Orthofix and (ii) Orthofix to exclusively market the Matrix IV; and 

 

WHEREAS, the Parties acknowledge that, although the Development Agreement has expired by its terms, the references to the Development Agreement herein and in the Matrix Agreement are nevertheless intentional;

 

NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants contained herein, the Parties agree as follows: 

 

ARTICLE I

 

SUPPLEMENTAL ARRANGEMENTS AND AMENDMENTS

 

A. Initial Matrix IV Forecast.  Section 2.2 of the Matrix Agreement is hereby amended by inserting the following at the end thereof: 

 

“Orthofix shall have submitted to MTF, not later than the thirty (30) days after the date on which the second Matrix IV Development Milestone has been achieved and MTF has delivered to Orthofix the Matrix IV Notice of Achievement with respect thereto, a Forecast setting forth the orders that Orthofix reasonably believes will be solicited by Orthofix during (a) the calendar quarter in which the third Matrix IV Development Milestone is achieved, which will be presented in two (2) individual, consecutive forty-five (45) day periods and (b) the three calendar quarters immediately succeeding (the “Initial Matrix IV Forecast”).  The Initial Matrix IV Forecast may be amended from time to time pursuant to the 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

2

Exhibit 10.10

terms of this Agreement and, as so amended, will be deemed incorporated into each Forecast as aforesaid pertaining to the same calendar quarters.”

 

B.Matrix IV Development Collaboration.  The Matrix Agreement is hereby amended by inserting the following new Article VI-C immediately following Article VI-B thereof:

 

“ARTICLE VI-C

 

MATRIX IV DEVELOPMENT COLLABORATION

 

6C.1 General.  MTF and Orthofix will engage in the Matrix IV Development Collaboration upon the terms and conditions set forth in this Agreement.  In furtherance of the foregoing, this Agreement will from time to time be deemed amended as hereinafter set forth to attach, respectively, the Matrix IV Specifications, the Matrix IV Release Criteria and the Matrix IV Development Plan if and to the extent determined pursuant to the provisions hereof and subject to revision if and to the extent applicable.

 

6C.2 MTF Obligations.  Subject to the terms and conditions of this Agreement, MTF will, during the Matrix IV Development Term, use Reasonable Commercial Efforts to develop the Matrix IV in a good scientific manner in accordance with applicable Law and the Matrix IV Development Plan so as to meet the Matrix IV Development Milestones, including, without limitation, so that the Matrix IV meets the Matrix IV Specifications and conforms to and complies with applicable Law.  In addition, MTF will, during the Matrix IV Development Term, provide consulting, medical and/or other expertise within the capability of MTF, as reasonably necessary and appropriate, in support of Orthofix’s obligations under this ARTICLE VI-C.

 

6C.3 Orthofix Obligations.  During the Matrix IV Development Term, Orthofix will timely disclose to MTF and provide information in Orthofix’s possession or within its control, as reasonably necessary or appropriate, for MTF to perform MTF’s obligations under this ARTICLE VI-C and will also provide consulting, medical and/or other expertise within the capability of Orthofix, as reasonably necessary and appropriate, in support of MTF’s performance of such obligations.  Orthofix may, if required, as mutually agreed by the Parties, use Reasonable Commercial Efforts to develop application tools and instruments in connection with the Matrix IV, including such application tools and instruments as may be proposed by MTF and reasonably acceptable to Orthofix, and MTF will, during the Matrix IV Development Term, provide consulting, medical and/or other expertise, in each case within the capability of MTF, as reasonably necessary or appropriate, in support of such activities.  Orthofix will be entitled to have a 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

3

Exhibit 10.10

representative present from time to time during normal business hours upon reasonable prior notice during the performance at any Facility of MTF of MTF’s development activities under this ARTICLE VI-C to monitor the performance of such activities, subject in all respects to all safety and security procedures reasonably adopted by MTF and communicated to Orthofix.

 

6C.4  Change Management Procedure.  Either Party may request a change to the Matrix IV Development Plan, the Matrix IV Specifications (including line extensions) or the Matrix IV Release Criteria at any time by giving a written request to the other Party.  Any change requested by MTF will describe the requested change and explain the anticipated impact of such change on MTF’s performance of its obligation to develop the Matrix IV in accordance with this Agreement, including the Matrix IV Development Milestones; and in response to any change requested by MTF, Orthofix will advise MTF, as promptly as practicable, of the anticipated impact of such change on Orthofix’s performance of its obligations hereunder.  Any change requested by Orthofix will describe the requested change and explain the anticipated impact of such change on Orthofix’s performance of its obligations in accordance with this Agreement; and in response to any change requested by Orthofix, MTF will advise Orthofix, as promptly as practicable, of the anticipated impact of such change on MTF’s performance of its obligation to develop the Matrix IV in accordance with this Agreement, including the Matrix IV Development Milestones.  No change to the Matrix IV Specifications, Matrix IV Development Plan or the Matrix IV Release Criteria will become effective unless and until approved by the Steering Committee. 

 

6C.5  Research Funding.  Subject to Orthofix’s obligations hereunder to make payments in respect of MTF’s achievement of the Matrix IV Development Milestones, each Party will pay its own costs and expenses associated with the technical expertise, scientific personnel, facilities, equipment, materials and other resources it provides in performing its obligations under this ARTICLE VI-C.

 

6C.6  Project Managers; Progress Reports; Steering Committee.  Each Party will appoint and maintain during the Matrix IV Development Term a project manager who will be primarily responsible to the other Party for all communications relating to the performance of the appointing Party’s obligations under this ARTICLE VI-C (“Matrix IV Project Manager”).  At each meeting of the Steering Committee during the Matrix IV Development Term, each Party will provide the other Party a report on the performance of its obligations under this ARTICLE VI-C so as to enable the Steering Committee to evaluate the progress of the Matrix IV Development Collaboration and the work performed in relation to the Matrix IV Development Plan.  In addition to its authority set forth in Section 3.3 hereof, the Steering Committee is authorized to take the 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

4

Exhibit 10.10

following actions: (i) review and evaluate data and progress of the activities under the Matrix IV Development Plan; subject to the terms and provisions of this Agreement, resolve any issues and questions that may arise with respect to the Matrix IV Development Plan or the Matrix IV Development Collaboration; (ii) ensure open communication between the Parties as related to the Matrix IV Development Collaboration and as provided under this Agreement; (iii) determine the initial Matrix IV Specifications (based on the requirements in Attachment 1 hereto) and approve any changes thereto (including any line extensions), and determine the initial Matrix IV Development Plan and the initial Matrix IV Release Criteria, and approve any changes thereto, in accordance with the change management procedures set forth in Section 6C.4 of this Agreement; and (v) manage and supervise the activities of the Parties under the Matrix IV Development Plan and the Matrix IV Development Collaboration.  

 

6C.7 Milestone Payments.  Orthofix will make the following one-time, non-refundable payments to MTF upon the completion of the applicable milestones described below (each a “Matrix IV Development Milestone” and collectively the “Matrix IV Development Milestones”) as confirmed by Orthofix pursuant to the procedures set forth in Section 6C.8.  The payment amount for each Matrix IV Development Milestone is paid only once. 

 

 

			
	
Development Milestones

	

No.
	
Description
	
Payment Amount

	
1
	
Execution of Amendment No. 6 by MTF and Orthofix
	
$[*]

	
2
	
Delivery of the [*] that (a) includes the deliverable requirements set forth in Exhibit B attached hereto; and (b) reasonably indicates that the Matrix IV meets the Matrix IV Specifications.
	
 

$[*]

	
3
	
Delivery of the [*] that (a) includes the deliverable requirements set forth in Exhibit B attached hereto; and (b) reasonably indicates that the Matrix II meets the Matrix II Specifications. 
	
 

$[*]

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

5

Exhibit 10.10

			
	
Development Milestones

	

No.
	
Description
	
Payment Amount

	
4
	
(a) Completion by MTF of the [*] that includes the deliverable requirements set forth in Exhibit B attached hereto, (b) creation by MTF of an inventory of a commercially-saleable quantity of the Matrix IV that is sufficient to satisfy Orthofix’s requirements for the Matrix IV for the first two (2) months as reflected in the Matrix IV Forecast, as may be amended pursuant to the terms of this Agreement; and (c) MTF’s demonstration that its work in process supports the ongoing release by MTF, on a [*] basis, of sufficient commercially-saleable quantities of the Matrix IV to satisfy Orthofix’s [*] requirements for the Matrix IV as reflected in the Initial Matrix IV Forecast, as may be amended pursuant to the terms of this Agreement.
	
$[*]

 

6C.8  Matrix IV Milestone Determination Procedures.  

 

(a)Payment Obligations.  MTF will, in each case, provide to Orthofix written notice (the “Matrix IV Notice of Achievement”) in the event it has achieved a Matrix IV Development Milestone (other than the first Matrix IV Development Milestone, which shall be deemed achieved upon execution and delivery of Amendment No. 6 by both Parties; and it being acknowledged and agreed that the Matrix IV Notice of Achievement with respect to the third and fourth Matrix IV Development Milestone may not be provided unless and until MTF has achieved the second and third Matrix IV Development Milestone, respectively, and provided to Orthofix the Matrix IV Notice of Achievement with respect thereto).  Subject to the foregoing, as soon as reasonably practicable following the date of the Matrix IV Notice of Achievement of each Matrix IV Development Milestone and in any event within ten (10) business days after the date of the Matrix IV Notice of Achievement of any such Matrix IV Development Milestone, Orthofix will pay to MTF the applicable payment amount for such Matrix IV Development Milestone set forth in Section 6C.7; provided, however, that each such payment shall be subject to Orthofix’s confirmation, as hereinafter set forth, that the Matrix IV Development Milestone covered by such Matrix IV Notice of Achievement has been achieved and in no event with Orthofix be liable for, and MTF will not be entitled to, the applicable payment amount for any Matrix IV Development Milestone that is not achieved.  The payment amounts for each Matrix IV Development Milestone 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

6

Exhibit 10.10

do not include expenses that MTF may incur, which are necessary for MTF to meet production capacity and related to capital equipment for MTF’s manufacturing of the Matrix IV in accordance with the Initial Matrix IV Forecast.  In the event any such expenses are anticipated by MTF, the Parties may agree to amend the applicable payment amounts to take into account such reasonable expenses that are actually and directly incurred by MTF. 

 

(b)Standards for Confirmation.  Orthofix shall have the right to withhold payment due in respect of a Matrix IV Notice of Achievement covering the second and third Matrix IV Development Milestones solely in the event that (i) MTF has not provided a Notice of Achievement with respect to the applicable Matrix Development Milestone thereto, or (ii) the initial Matrix IV Specifications for the applicable Matrix IV Development Milestone have not been determined by the Steering Committee or otherwise pursuant to ARTICLE XIX, or (iii) the data contained in the Matrix IV [*] or the [*], as applicable, does not include all the deliverable requirements set forth in Exhibit B attached hereto or otherwise fails reasonably to indicate that the Matrix IV meets the Matrix IV Specifications.  Orthofix shall have the right to withhold payment due in respect of a Matrix IV Notice of Achievement covering the fourth Matrix IV Development Milestone solely in the event that (x) MTF has not provided a Notice of Achievement with respect thereto or with respect to the second or third Matrix IV Development Milestones, (y) the [*] does not include all the deliverable requirements set forth in Exhibit B attached hereto or otherwise fails reasonably to indicate that the Matrix IV meets the Matrix Specifications, or (z) the results of a physical inventory of the Matrix IV and inspection of MTF’s books and records related to the production of the Matrix IV fail to reasonably demonstrate the existence of the required amount of inventory and work in process and the capacity to support ongoing release of the Matrix IV, as previously mutually agreed upon.

 

(c)Changes to Matrix IV Development Milestone Payment Amounts.  Upon the completion and confirmation of any Matrix IV Development Milestone, MTF may reasonably request a change to the applicable payment amount for a future Matrix IV Development Milestone (if any) in the event that MTF anticipates that it will be required to incur additional expenses in order to achieve such future Matrix IV Development Milestone that were not anticipated by the Parties in the original cost estimate.  Any such change requested by MTF will be submitted to Orthofix in writing, will describe the requested change and explain the reasons for such change.  No such change to the applicable payment amount for a future Matrix IV Development Milestone shall apply unless mutually agreed by the Parties in writing.     

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

7

Exhibit 10.10

(d)Cancellation by Orthofix.  Orthofix may cancel the Matrix IV Development Collaboration at any time, for any reason in Orthofix’s sole discretion.  In the event of any such cancellation by Orthofix, Orthofix shall be responsible to pay to MTF (i) the applicable payment amount for such Matrix IV Development Milestone for which MTF has provided Orthofix the Matrix IV Notice of Achievement and such Matrix IV Development Milestone has been confirmed in accordance with the terms of this ARTICLE 6C.8; and (ii) any early termination liability actually incurred by MTF to Third Parties as of the effective date of the cancellation for any non-cancellable obligations undertaken by MTF in furtherance of the applicable Matrix IV Development Milestone which are in excess of the applicable payment amount for the Matrix IV Development Milestone.  

 

(e)Cancellation by MTF.  MTF may cancel the Matrix IV Development Collaboration upon thirty (30) days’ written notice to Orthofix, in the event that Orthofix fails to pay MTF the applicable payment amount for a Matrix IV Development Milestone pursuant to Section 6C.8, and Orthofix fails to cure such non-payment within thirty (30) days’ of receipt of such written notice. 

 

(f)Dispute Resolution.  If Orthofix disagrees with MTF’s claim regarding the achievement of a Matrix IV Development Milestone as set forth in a Matrix IV Notice of Achievement, then Orthofix will refer the dispute to the Steering Committee as promptly as practicable and, in any event, prior to the date on which payment relating thereto is due, and will provide the Steering Committee with an explanation of the basis for Orthofix’s determination that the applicable Matrix IV Development Milestone was not achieved on the date claimed by MTF.  The Steering Committee will meet as promptly as practicable to resolve the dispute.  If the Steering Committee has not resolved the dispute within ten (10) business days after referral of the dispute by Orthofix, the dispute will be resolved in accordance with ARTICLE XIX.  In the event of any determination by the Steering Committee pursuant to ARTICLE XIX that a Matrix IV Development Milestone has not been achieved as set forth in a Matrix IV Notice of Achievement, MTF shall thereafter deliver to Orthofix a new Matrix IV Notice of Achievement in the event it has achieved such Development Milestone.” 

 

C.Ownership of Fourth Phase Developed Technology.  Sections 7.2(a) and 7.2(b) of the Matrix Agreement shall not apply with respect to the Fourth Phase Developed Technology.  With respect to any Fourth Phase Developed Technology only, MTF shall own any and all Fourth Phase Developed Technology (subject to its express license grants to Orthofix set forth herein).  In furtherance of the foregoing Orthofix hereby assigns and agrees to assign to MTF, all right, title and interest, if any, Orthofix may have in all Fourth Phase Developed Technology, including all intellectual property rights therein, whether developed solely by MTF 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

8

Exhibit 10.10

or its employees, agents or subcontractors, or whether developed jointly by the Parties, their employees, agents, or subcontractors under this Agreement.  Orthofix will, upon request by MTF, execute specific assignments and take any action necessary to enable MTF to secure its interest in the Fourth Phase Developed Technology or any component thereof.  Notwithstanding the foregoing, during the Term, MTF shall not supply, distribute, or license the Matrix IV to or on behalf of any Third Party other than through Orthofix in accordance with the terms of the Agreement unless Orthofix declines to commercialize and promote the Matrix IV and provides written notice to MTF of such decision by Orthofix.  

 

	
 
	
(a)
	
Exclusive License Grant.  Without limiting the foregoing sentence in Article I.C above, MTF hereby grants to Orthofix, an exclusive, irrevocable, worldwide, royalty-free license, with the right to sublicense, for the Term, under the Fourth Phase Developed Technology, to market, sell, and offer to sell the Matrix IV.  

 

	
 
	
(b)
	
Non-Exclusive License Grant.  In addition, MTF hereby grants to Orthofix, (x) a non-exclusive, worldwide, royalty-free license, together with the right to sublicense, during the Term, under such Fourth Phase Developed Technology, to exercise any of Orthofix’s privileges and to perform any of Orthofix’s obligations under the Matrix Agreement in connection with the Collaboration, and to perform any of MTF’s obligations under the Matrix Agreement in the event that MTF fails to fulfill its obligations under the Matrix Agreement and (y) a non-exclusive, perpetual, irrevocable, worldwide, royalty-free license, together with the right to sublicense, under such Fourth Phase Developed Technology to make, use, sell, offer to sell and import bone-growth allograft products containing viable allogeneic stem cells derived from cadavers, which grant will be exercised by Orthofix only on and after any expiration of the Matrix Agreement or any termination of the Matrix Agreement (I) pursuant to Section 13.4 of the Matrix Agreement or (II) by Orthofix pursuant to Section 13.2 of the Matrix Agreement and a determination in a final non-appealable decision by a court of competent jurisdiction that MTF has committed, and failed to cure within the permitted cure period, a material breach or material default under the Matrix Agreement.  

 

D.Prosecution of Fourth Phase Developed Technology.  Fourth Phase Developed Technology will be treated as Existing MTF Technology, rather than Developed Technology for purposes of Section 7.4(c) of the Matrix Agreement.

 

E.Representations and Warranties of MTF.  The first paragraph of Article VIII of the Matrix Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof:

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

9

Exhibit 10.10

“Except for the representations and warranties in Section 8.7(a), Section 8.7 (b), Section 8.7(c) and Section 8.8, each of which will be given for the entire Term, MTF hereby represents and warrants to Orthofix as of the Effective Date, and again as of the Amendment No. 2 Effective Date and again as of the Amendment No. 3 Effective Date, and again as of the Amendment No 6. Effective Date, as follows:”

 

F.Representations and Warranties of Orthofix.  The first paragraph of Article IX of the Matrix Agreement is hereby deleted in its entirety, and the following is inserted in lieu thereof: 

 

“Orthofix hereby represents and warrants to MTF as of the Effective Date, and again as of the Amendment No. 2 Effective Date, and again as of the Amendment 3 Effective Date, and again as of the Amendment 6 Effective Date, as follows:”

 

G. Specifications.  Section 10.1 of the Matrix Agreement is hereby amended by inserting the following after the last sentence thereof: 

 

“The Matrix IV Specifications and the Matrix IV Release Criteria shall be added to Exhibits C and D, respectively, upon approval by the Steering Committee, and each of the foregoing may be subsequently amended in accordance with Section 6C.4 (if prior to the Matrix IV Commercialization Date) or in accordance with Section 10.4 (in all other cases).” 

 

H. Term.  The Parties hereby agree to extend the term of the Matrix Agreement as set forth in Section 13.1 of the Matrix Agreement by a period of two (2) years until July 28, 2027.  

 

I.Infringement Claims. (i) Section 14.1 of the Matrix Agreement is hereby amended by deleting Sub-paragraph (i) thereunder and inserting the following in lieu thereof:

 

“(i) the provisions of clause (d) immediately preceding shall not extend to, and Orthofix shall have no obligations to MTF under clause (d) immediately preceding with respect to, any Matrix II Infringement Claim, any Matrix III Infringement Claim, or any Matrix IV Infringement Claim; and”

 

(ii) Section 14.2 of the Matrix Agreement is hereby amended by deleting “and” immediately before clause (e) and inserting the following at the end thereof immediately prior to the period:

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

10

Exhibit 10.10

“and (f) any Matrix IV Infringement Claim; provided, however, that (i) in the event of a Matrix IV Infringement Claim or a reasonable determination by MTF that a Matrix IV Infringement Claim is likely to be initiated, MTF will have the right to direct Orthofix, by written notice, to cease marketing the Matrix IV during the period beginning upon Orthofix’s receipt of such notice and continuing until Orthofix’s receipt of written notice from MTF that the Matrix IV Infringement Claim has been satisfactorily resolved in MTF’s reasonable determination or is no longer expected to be initiated (the “Matrix IV Cessation Period”), (ii) MTF will have no obligation to indemnify or hold harmless Orthofix or any other Person otherwise indemnified hereunder from or against any Damages attributable to any development or marketing of the Matrix IV during the Matrix IV Cessation Period, and (iii) the foregoing obligation in (f) shall not be construed to limit Orthofix’s indemnification obligation with respect to Matrix I pursuant to Section 14.1(d).  ”

 

 

J.Reimbursement of Shipping Expenses.  The Parties agree that, from and after the Amendment No. 6 Effective Date, Orthofix shall reimburse MTF up to Two Hundred Thousand Dollars ($200,000) annually, for the actual, documented, out-of-pocket expenses incurred by MTF that arise solely and directly from MTF’s shipment, courier services, storage, fulfillment, and other logistics with respect to orders of the Matrix that originate from the western seaboard of the U.S. from Washington to California. MTF shall provide, with any request for reimbursement under this Section K, documentation that is consistent with industry standards and reasonably sufficient for Orthofix to verify the amount and nature of the expenses incurred. 

 

K.Non-Accountable R&D Charge.  The Parties agree that, from and after the Amendment No. 6 Effective Date, instead of the non-accountable annual charge of One Hundred Thousand Dollars paid to MTF pursuant to Amendment No. 4 to the Matrix Agreement, Orthofix shall be obligated to pay to MTF a non-accountable annual charge of Two Hundred Thousand Dollars ($200,000), to be used by MTF, in its sole discretion, to fund research and development activities by MTF with respect to bone growth allograft products containing viable allogeneic stem cells derived from cadavers (the “R&D Charge”).  Any and all products, technologies and discoveries, other than the Matrix, developed or discovered as a result of such activities shall constitute “Product Concepts” subject to Section 6.2(a) of the Matrix Agreement, and shall be subject to the right of first offer, right of first refusal and other terms and conditions set forth in Section 6.2 of the Matrix Agreement.  As requested by the Steering Committee from time to time, MTF shall provide a summary of and reasonable documentation regarding the activities conducted by MTF pursuant to this Paragraph K and the results of such activities.  Accordingly, contemporaneously with the Effective Date of this Amendment No. 6 and thereafter at the beginning of each calendar quarter during the Term of the Matrix Agreement, MTF shall submit 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

11

Exhibit 10.10

to Orthofix an invoice for a quarterly payment of Fifty Thousand Dollars ($50,000), and Orthofix shall pay such amount to MTF within forty-five (45) days after receipt of such invoice.  In the event Orthofix fails timely to pay any such amounts, MTF may, in addition to any other remedies available to it, assess interest at a rate of one percent (1%) per month on all such unpaid amounts.  In the event that MTF has not been able to achieve a Matrix IV Development Milestone due to technical challenges after using commercially reasonable efforts to do so and provided that MTF is without fault in causing such failure or delay in achieving such Matrix IV Development Milestone, MTF may submit a written request to Orthofix to request an increase in the R&D Charge.  The written request shall include a detailed review of MTF’s progress with respect to such Matrix IV Development Milestone and any increase in the R&D Charge shall be mutually agreed by the Parties in writing. 

 

L.Definitions.  (a) Addendum 1 of the Matrix Agreement is hereby amended by inserting the following definitions in appropriate alphabetical sequence, respectively:

 

“Amendment No. 6” means that certain Amendment No. 6 to Matrix Commercialization Collaboration Agreement dated December 29, 2017 entered into by the Parties.

 

“Amendment No. 2 Effective Date” has the meaning set forth in Amendment No. 6

 

“Fourth Phase Developed Technology” means all Technology, Inventions, Know-How arising during the Matrix IV Development Term under or in connection with the activities of the Parties pursuant to the Matrix IV Development Plan under ARTICLE VI-C hereof, and all Improvements after the beginning of the Matrix IV Development Term and during the remainder of the Term with respect thereto, including without limitation, all Patents relating to the foregoing.

 

“Initial Matrix IV Forecast” has the meaning set forth in Section 2.2

 

“Matrix IV” means the version of Trinity ELITE allograft [*] conforming to the Matrix IV Specifications.

 

“Matrix IV Cessation Period” has the meaning set forth in Section 14.2.

 

“Matrix IV Commercialization Date” means the date of completion of the last Matrix IV Development Milestone pursuant to the Matrix IV Development Plan.

 

“Matrix IV Development Collaboration” means the development of the Matrix IV undertaken by the Parties pursuant to the terms and conditions of ARTICLE VI-C of this Agreement.

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

12

Exhibit 10.10

 

“Matrix IV Development Milestones” has the meaning set forth in Section 6C.7.

 

“Matrix IV Development Plan” means the plan for development of the Matrix IV initially determined by the Steering Committee, as subsequently amended from time to time in accordance with the procedures set forth in this Agreement. 

 

“Matrix IV Development Term” means the period commencing on the Amendment No. 6 Effective Date and continuing under the completion of the last Matrix IV Development Milestone.

 

“Matrix IV Infringement Claim” means any Third Party claim that the exploitation of the Matrix IV Subject Intellectual Property in the development, Processing, supply or distribution under this Agreement and for purposes of the Collaboration of the Matrix IV in accordance with the Matrix IV Specifications violates the intellectual property rights of a Third Party and/or infringes the valid claim of an existing Patent of a Third Party; it being understood that a Third Party Claim regarding the development, Processing, supply or distribution of the Matrix IV independent of the Collaboration shall not be within the definition of Matrix IV Infringement Claim.

 

“Matrix IV Project Manager” has the meaning set forth in Section 6C.6.

 

“Matrix IV Release Criteria” means the procedures and release criteria for verification that each Lot of the Matrix IV complies with the Matrix IV Specifications to be determined initially by the Steering Committee and set forth in Exhibit D attached hereto, as subsequently amended from time to time in accordance with the procedures set forth in this Agreement.

 

“Matrix IV Specifications” means the specifications from the Matrix IV to be initially determined by the Steering Committee (based on the specifications set forth in Exhibit A to Amendment No. 6) and set forth in Exhibit C attached hereto, as subsequently amended from time to time in accordance with the procedures set forth in this Agreement. 

 

“Matrix IV Subject Intellectual Property” means any intellectual property exploited, in any manner, directly or indirectly, in whole or in part, in connection with the Matrix IV and not also exploited in any manner directly or indirectly, in whole or in part, in connection with the Matrix I, Matrix II, or Matrix III.  

 

“Notice of Achievement” has the meaning set forth in Section 6C.8(a). 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

13

Exhibit 10.10

 

(b)Addendum 1 of the Matrix Agreement is further amended by deleting the definitions of “Collaboration,” “Developed Technology,” “Existing MTF Technology,” “Existing Orthofix Technology,” “Matrix,” and “Minimum Service Fee” and inserting the following in lieu thereof respectively:

 

“Collaboration” means the Processing and Commercialization of the Matrix pursuant to the terms and conditions of this Agreement, and except for purposes of Section 2.7, the Matrix II Development Collaboration, the Matrix III Development Collaboration, and the Matrix IV Development Collaboration.

 

“Developed Technology” means the First Phase Developed Technology, the Second Phase Developed Technology, the Third Phase Developed Technology, and the Fourth Phase Developed Technology.

 

“Existing MTF Technology” means (a) for all purposes of this Agreement other than Section 7.1(a)(ii), such Technology, Inventions and Know-How Controlled by MTF (x) in existence as of the date of this Agreement (including without limitation, all Patents), in each case solely insofar as necessary or useful for making, using, selling, offering to sell and importing the Matrix and (y) in existence as of the beginning of the Matrix IV Development Term (including, without limitation, all Patents, but excluding First Phase Developed Technology, Second Phase Developed Technology, and Third Phase Developed Technology), in each case solely insofar as necessary or useful for making, using, selling, offering to sell and importing the Matrix, and (b) solely for purposes of Section 7.1(a)(ii), such Technology, Inventions and Know-How Controlled by MTF (x) in existence as of the Effective Date (including, without limitation, all Patents), in each case solely insofar as necessary for making, using, selling, offering to sell and importing the Matrix and (y) in existence as of the beginning of the Matrix IV Development Term (including, without limitation, all Patents, but excluding First Phase Developed Technology, Second Phase Developed Technology and Third Phase Developed Technology), in each case solely insofar as necessary for making, using, selling, offering to sell and importing the Matrix.

 

“Existing Orthofix Technology” means (a) for all purposes of this Agreement other than Section 7.1(b)(ii), such Technology, Inventions and Know-How Controlled by Orthofix (x) in existence as of the date of this Agreement (including without limitation, all Patents), in each case solely insofar as necessary or useful for making, using, selling, offering to sell and importing the Matrix and (y) in existence as of the beginning of the Matrix IV Development Term (including without limitation, all Patents, but excluding First Phase Developed Technology, Second Phase Developed Technology, and Third 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

14

Exhibit 10.10

Phase Developed Technology), in each case solely insofar as necessary or useful for making, using, selling, offering to sell and importing the Matrix, and (b) solely for purposes of Section 7.1(b)(ii), such Technology, Inventions and Know-How Controlled by Orthofix (x) in existence as of the Effective Date (including, without limitation, all Patents), in each case solely insofar as necessary for making, using, selling, offering to sell and importing the Matrix and (y) in existence as of the beginning of the Matrix IV Development Term (including, without limitation, all Patents, but excluding First Phase Developed Technology, Second Phase Developed Technology and Third Phase Developed Technology), in each case solely insofar as necessary for making, using, selling, offering to sell and importing the Matrix. 

 

“Matrix” means the Matrix I, Matrix II, Matrix III and the Matrix IV, and each of them; provided, however, that, prior to the Matrix IV Commercialization Date, each reference to “Matrix” under ARTICLE II (except for Section 2.9), IV, V, X and XII, and under Section 7.3, the proviso under Section 17.1 and under Section 17.3, means the Matrix I, the Matrix II, and the Matrix III.  

 

 “Minimum Service Fee” means $[*] per cc of the Matrix I, $[*] per cc of the Matrix II, $[*] per cc of the Matrix III, and $[*] per cc of the Matrix IV.

 

“Release Criteria” means the Matrix I Release Criteria, the Matrix II Release Criteria, the Matrix III Release Criteria and the Matrix IV Release Criteria, as the case may be; provided, however, that, prior to the Matrix IV Commercialization Date, each reference to “Release Criteria” under ARTICLE X means the Matrix I Release Criteria, the Matrix II Release Criteria and the Matrix III Release Criteria.  

 

“Specifications” means the Matrix I Specifications, the Matrix II Specifications, the Matrix III Specifications and the Matrix IV Specifications, as the case may be; provided, however, that, prior to the Matrix IV Commercialization Date, each reference to “Specifications under ARTICLE X means the Matrix I Specifications, the Matrix II Specifications and the Matrix III Specifications.

 

(c) Addendum 1 of the Matrix Agreement is further amended by adding the phrase “development of the Matrix IV and the” immediately following the phrase “development of the Matrix III” contained under the definition of “Reasonable Commercial Efforts.”

 

ARTICLE II

 

MISCELLANEOUS

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

15

Exhibit 10.10

 

A. The Parties each hereby acknowledge and agree that, by entering into this Amendment No. 6, they have satisfied any obligations under Section 6.2 of the Matrix Agreement with respect to the Matrix IV as a Product Concept thereunder.  In addition, and without limiting any provision of Article IX of the Matrix Agreement, as amended hereby, Orthofix hereby represents, warrants, and confirms to MTF that it has complied with the provisions of the NuVasive License (as defined in the Matrix Agreement), including without limitation, Section 3.2 thereof, with respect to this Agreement.

 

B.Except as amended hereby, the Matrix Agreement shall remain in full force and effect.

 

C.This Amendment No. 6 may be executed in counterparts, each of which shall be deemed to be an original, and all of which taken together will constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 6 to be executed and delivered as of the date first written above.

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

16

Exhibit 10.10

					
					
	
MUSCULOSKELETAL TRANSPLANT
FOUNDATION, INC.
	
 
	
ORTHOFIX HOLDINGS, INC.

 

	
By
	
/s/ Michael J. Kawas
	
 
	
By
	
/s/ Bradley R. Mason

	
Name
	
Michael J. Kawas
	
 
	
Name
	
Bradley R. Mason

	
Title
	
EVP / CFO
	
 
	
Title
	
President & Chief Executive Officer

	
Date
	
December 29, 2017
	
 
	
Date
	
December 29, 2017

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

17

Exhibit 10.10

Exhibit A: Matrix IV Project [*] Requirements

 

	
1.
	
Allogeneic cancellous bone matrix containing viable cancellous [*]

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

18

Exhibit 10.10

Exhibit B: Matrix IV Project Milestone Deliverables

 

[*]

 

 

 

 

 

 

 

	
[*]
	
Certain confidential information contained in this document, marked with an asterisk in brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 

 

19

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