10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

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

For the fiscal year ended December 31, 2022

or

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

For the transition period from to .

Commission File Number: 0-19961

 

ORTHOFIX MEDICAL INC.

(Exact name of registrant as specified in its charter)

Delaware	98-1340767
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3451 Plano Parkway, Lewisville, Texas	75056
(Address of principal executive offices)	(Zip Code)

(214) 937-2000

(Registrant’s telephone number, including area code)

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

Common Stock, $0.10 par value	OFIX	Nasdaq Global Select Market
(Title of Class)	(Trading Symbol)	(Name of Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☒	Emerging Growth Company	☐
Non-accelerated filer	☐	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. §7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of registrant’s common stock held by non-affiliates, based upon the closing price of the common stock on the last business day of the fiscal quarter ended June 30, 2022, as reported by the Nasdaq Global Select Market, was approximately $470.8 million.

As of March 1, 2023, 36,455,564 shares of common stock were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain sections of the registrant’s definitive proxy statement to be filed with the Commission in connection with the Orthofix Medical Inc. 2022 Annual Meeting of Shareholders are incorporated by reference in Part III of this Annual Report.

Orthofix Medical Inc.

Form 10-K for the Year Ended December 31, 2022

Table of Contents

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	26
Item 1B.	Unresolved Staff Comments	58
Item 2.	Properties	58
Item 3.	Legal Proceedings	58
Item 4.	Mine Safety Disclosure	58
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	59
Item 6.	Reserved	60
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	61
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	74
Item 8.	Financial Statements and Supplementary Data	75
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	75
Item 9A.	Controls and Procedures	75
Item 9B.	Other Information	78
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	78
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	79
Item 11.	Executive Compensation	79
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	79
Item 13.	Certain Relationships and Related Transactions, and Director Independence	79
Item 14.	Principal Accountant Fees and Services	79
PART IV
Item 15.	Exhibits and Financial Statement Schedules	80
Item 16.	Form 10-K Summary	85

Forward-Looking Statements

This Annual Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts, and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. Forward-looking statements include, but are not limited to, statements about:

•our intentions, beliefs, and expectations regarding our operations, sales, expenses, and future financial performance;

•our operating results;

•our intentions, beliefs, and expectations regarding the anticipated benefits of the recent merger with SeaSpine Holdings Corporation, including the anticipated synergies and cost-savings from the merger;

•our plans for future products and enhancements of existing products;

•anticipated growth and trends in our business;

•the timing of and our ability to maintain and obtain regulatory clearances or approvals;

•our belief that our cash and cash equivalents, investments, and access to our revolving line of credit will be sufficient to satisfy our anticipated cash requirements;

•our expectations regarding our revenues, customers, and distributors;

•our expectations regarding our costs, suppliers, and manufacturing abilities;

•our beliefs and expectations regarding our market penetration and expansion efforts;

•our expectations regarding the benefits and integration of acquired businesses and/or products (including in connection with our merger with SeaSpine Holdings Corporation in January 2023) and our ability to make future acquisitions and successfully integrate any such future-acquired businesses;

•our anticipated trends and challenges in the markets in which we operate; and

•our expectations and beliefs regarding and the impact of investigations, claims and litigation.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, estimates, and assumptions that are difficult to predict. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise) and our actual outcomes and results may differ materially from those expressed in these forward-looking statements. Potential risks and uncertainties that could cause actual results to differ materially include, but are not limited to, those set forth in Part I, Item 1A under the heading “Risk Factors”, Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere throughout this Annual Report and in any other documents incorporated by reference to this Annual Report. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise.

Trademarks

Solely for convenience, our trademarks and trade names in this Annual Report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

PART I

Item 1. Business

In this Annual Report, the terms “we,” “us,” “our,” “Orthofix,” and “the Company” refer to the combined operations of Orthofix Medical Inc. and its consolidated subsidiaries and affiliates, unless the context requires otherwise.

Company Overview

Following our recent merger with SeaSpine Holdings Corporation ("SeaSpine"), the newly merged Orthofix-SeaSpine organization is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions and a leading surgical navigation system. Our products are distributed in approximately 68 countries worldwide through a combination of direct and indirect sales representatives and stocking distributors.

We are headquartered in Lewisville, Texas and have primary offices in Carlsbad, CA, with a focus on spine and biologics product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. Our combined global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France and Sao Paulo, Brazil.

The Company originally was formed in 1987 in Curaçao as “Orthofix International N.V.” In 2018, we completed a change in our jurisdiction of organization from Curaçao to the State of Delaware (the “Domestication”) and changed our name to “Orthofix Medical Inc.” As a result, we are a corporation existing under the laws of the State of Delaware.

Our merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. Orthofix, as the corporate parent entity in the combined company structure, continues to trade on NASDAQ under the symbol “OFIX.” The parent company will be renamed at a later date, and until then, will continue to be known as Orthofix Medical Inc. The disclosures in this Item 1 of this Annual Report under the heading “Business” speak to the combined company subsequent to the merger unless otherwise noted. However, the financial results described herein relate, except as otherwise expressly noted herein, to Orthofix on a standalone basis without to giving effect to merger and, accordingly, do not include the results of SeaSpine. Future filings, beginning with our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2023, will reflect the results of the combined Orthofix-SeaSpine organization.

Available Information and Orthofix Website

Our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements for Meetings of Shareholders, any registration statements, and amendments to those reports, are available free of charge on our website as soon as reasonably practicable after they are filed with, or furnished to, the SEC. Information contained in our website or connected to our website is not incorporated by reference into this Annual Report. Our website is located at www.orthofix.com. Our SEC filings are also available on the SEC website at www.sec.gov.

Business Segments

Historically, Orthofix has managed the business by two reporting segments, Global Spine and Global Orthopedics, which account for 77% and 23%, respectively, of Orthofix's total net sales in 2022. The chart below presents Orthofix's net sales, which includes product sales and marketing service fees, by reporting segment for each of the years ended December 31, 2022, 2021, and 2020. As noted above, these amounts do not include the net sales of SeaSpine.

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SeaSpine has historically managed its business as one operating segment, but with revenue reported in two product categories: (i) Biologics (formerly recognized as Orthobiologics) and (ii) Spinal Implants and Enabling Technologies. For purposes of this Annual Report, SeaSpine's historical business description is included within this discussion of Business Segments as a separate segment. Following the merger with SeaSpine, which was completed on January 5, 2023, we expect to reassess our reporting segments in the first quarter of 2023 based on how the operations of the newly combined company will be managed.

Financial information regarding our reportable business segments and certain geographic information is included in Part II, Item 7 of this Annual Report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 16 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.
 

Global Spine

Within the Global Spine segment, we provide implantable medical devices, biologics, and other regenerative solutions which aim to restore the quality of life of patients suffering from diseases and traumas of the spine. We offer a variety of treatment solutions that uniquely incorporate multiple treatment modalities, such as mechanical, biological, and electromagnetic modes, to achieve desired clinical outcomes.

Global Spine Strategy

Our strategy for the Global Spine segment is to drive business growth through organic and inorganic innovation, physician collaboration, and partnerships with dedicated and high-performing commercial sales channels. Growth initiatives include:

•Continued expansion of our presence in the U.S cervical disc replacement market through surgeon training, publication of clinical evidence to include long-term real world evidence, patient education, and sales channel support

•A regular cadence of new product launches supporting our spine implant, biologics, and bone growth therapies portfolios

•Ongoing, global sales channel optimization

•Reinforcement of our bone growth stimulation business through the collection and dissemination of clinical evidence, and the delivery of new and novel value-added services

•Conducting clinical research to support and broaden our spine implant, biologics, and bone growth stimulation portfolios

•Acquiring or licensing products, technologies, and companies to further expand the spine portfolio

•Attracting, developing, and retaining key talent

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Global Spine Principal Products

The Global Spine reporting segment is largely represented by three principal product categories, i) Bone Growth Therapies, ii) Spinal Implants, and iii) Biologics. Each of these product categories are further described below:

Bone Growth Therapies

Within the Bone Growth Therapies product category, we manufacture, distribute, and provide support services for market-leading bone growth stimulation devices that enhance bone fusion. These class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spinal, appendicular fractures that have not healed ("nonunions"). Several devices in our portfolio utilize our patented pulsed electromagnetic field (“PEMF”) technology, the safety and efficacy of which is supported by basic mechanism of action data in the scientific literature, as well as published data from level one randomized controlled clinical trials. A new addition to our stimulation portfolio utilizes our low intensity pulsed ultrasound ("LIPUS"), a technology also supported by strong basic science and published clinical literature. Orthofix is the only manufacturer which offers both PEMF and LIPUS technologies. We sell these products almost exclusively in the U.S. using distributors and direct sales representatives to provide our devices to healthcare providers and their patients.

Spinal Implants

Within the Spinal Implants product category, we design, develop, and market a portfolio of motion preservation and fixation implant products used in surgical procedures of the spine. We distribute these products globally through a network of distributors and sales representatives to sell spine products to facilities that conduct spine care, including hospitals, ambulatory surgery centers, and out-patient hospitals.

Biologics

Within the Biologics product category, we offer a portfolio of products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. We market tissue forms provided by MTF Biologics (“MTF”) to spine care facilities and surgeons, primarily in the U.S., through a network of independent distributors and sales representatives. Our partnership with MTF allows us to exclusively market the Virtuos Lyograph, Trinity ELITE, FiberFuse Advanced, FiberFuse Strip, and certain other tissue forms for musculoskeletal defects to enhance bony fusion. In addition, we market regenerative non-tissue biologic solutions derived from synthetic materials. Opus BA, and Opus MG Set represent our current synthetic, biologic offering.

The following table and discussion identify our principal Global Spine products by trade name and describe their primary applications:

Product	Primary Application
Bone Growth Therapies Products
CervicalStim Spinal Fusion Therapy	PEMF non-invasive cervical spinal fusion therapy used to enhance bone growth
SpinalStim Spinal Fusion Therapy	PEMF non-invasive lumbar spinal fusion therapy used to enhance bone growth
PhysioStim Bone Healing Therapy	PEMF non-invasive appendicular skeleton healing therapy used to enhance bone growth in nonunion fractures
AccelStim	LIPUS healing therapy used to enhance bone growth in certain fresh, distal radius and tibial diaphysis fractures
Spinal Implants Products
M6-C Artificial Cervical Disc	A next-generation artificial disc developed to replace an intervertebral disc damaged by cervical disc degeneration; the only artificial cervical disc that mimics the anatomic structure of a natural disc by incorporating an artificial viscoelastic nucleus and fiber annulus into its design
M6-L Artificial Lumbar Disc	A next-generation artificial disc developed to replace an intervertebral disc damaged by lumbar disc degeneration; the only artificial lumbar disc that

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	mimics the anatomic structure of a natural disc by incorporating an artificial viscoelastic nucleus and fiber annulus into its design (Not available in the U.S.)
FIREBIRD / FIREBIRD NXG Spinal Fixation System	A system of rods, crossbars, and modular pedicle screws designed to be implanted during a posterior lumbar spine fusion procedure
FORZA XP Expandable Spacer System	A titanium expandable spacer system for posterior lumbar interbody fusion (“PLIF”) and transforaminal lumbar interbody fusion (“TLIF”) procedures featuring a large graft window with the ability to pack post expansion in situ
FORZA PEEK / Titanium Composite (“PTC”) Spacer System	A posterior lumbar interbody with 3D printed porous titanium end plates that may promote bone ingrowth and a polyetheretherketones (“PEEK”) core to maintain imaging characteristics
FORZA Spacer System	PEEK interbody devices for PLIF and TLIF procedures
FORZA Ti Spacer System	Fully 3D printed titanium devices for PLIF and TLIF procedures
CENTURION Posterior Occipital Cervico-Thoracic (“POCT”) System	A multiple component system comprised of a variety of non-sterile, single use components made of titanium alloy or cobalt chrome that allow the surgeon to build a spinal implant construct
PHOENIX Minimally Invasive Spinal Fixation System	A multi-axial extended reduction screw body used with the Firebird Spinal Fixation System designed to be implanted during a posterior thoracolumbar spine fusion procedure
CONSTRUX Mini PTC Spacer System	An anterior cervical interbody with 3D printed porous titanium end plates that may promote bone ingrowth and a PEEK core to maintain imaging characteristics
CONSTRUX Mini Ti Spacer System	Fully 3D printed titanium anterior cervical interbody spacer system
CETRA Anterior Cervical Plate System	An anterior cervical plate system offering a low profile plate with an intuitive locking mechanism, large graft windows, a high degree of screw angulation, and simplified instrumentation
JANUS Midline Fixation Screw	An addition to the Firebird Spinal Fixation System designed to achieve more cortical bone purchase in the medial to lateral trajectory, when compared to traditional pedicle screws, and that provides surgeons with the option of a midline approach
LONESTAR Cervical Stand Alone	A stand-alone spacer system designed to provide the biomechanical strength to a traditional or minimal invasive anterior cervical discectomy and fusion procedure with less disruption of patient anatomy and to preserve the anatomical profile
PILLAR SA PTC PEEK Spacer System	A standalone anterior lumbar interbody fusion ("ALIF") interbody with 3D printed porous titanium end plates that may promote bone ingrowth and a PEEK core to maintain imaging characteristics
SKYHAWK Lateral Interbody Fusion System & Lateral Plate System	Provides a complete solution for the surgeon to perform a lateral lumbar interbody fusion, an approach to spinal fusion in which the surgeon accesses the intervertebral disc space using a surgical approach from the patient’s side that disturbs fewer structures and tissues
FIREBIRD SI	A minimally invasive screw system that is intended for fixation of sacroiliac joint disruptions in skeletally mature patients

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Biologics Technologies
Virtuos Lyograft	A first-of-its-kind, shelf-stable and complete autograft substitute for spine and orthopedic procedures provided in a room-temperature, ready-to-use, moldable form
Trinity ELITE	A fully moldable allograft with viable cells used during surgery that is designed to aid in the success of a spinal fusion or bone fusion procedure
FiberFuse Advanced	An allograft comprised of a mixture of cancellous bone and demineralized cortical bone fibers that creates a natural scaffold for revascularization, cellular ingrowth, and new bone formation
FiberFuse Strip	A preformed allograft that consists of mineralized cancellous bone and demineralized cortical fibers, providing an ideal matrix for bone healing
O-Genesis Graft Delivery	A bone graft delivery system, which is provided in a sterile, single-use form
Opus Mg Set	An injectable, moldable, and biocompatible bone void filler that will harden in-situ at the defect site
Opus BA	A synthetic osteoconductive scaffold that is compression resistant, fully resorbable, and easily customizable for a range of clinical applications
Legacy Demineralized Bone Matrix ("DBM")	A ready-to-use, flowable DBM putty

Bone Growth Therapies — Spinal Therapy

Our bone growth therapy devices used in spinal applications are designed to enhance bone growth and improve the success rate of certain spinal fusion procedures by stimulating the body’s own natural healing mechanism post-surgically. These non-invasive portable devices are intended to be used as part of a home treatment program prescribed by a physician.

We offer two spinal fusion therapy devices: the SpinalStim and CervicalStim devices. Our stimulation products use a PEMF technology designed to enhance the growth of bone tissue following surgery and are placed externally over the site to be healed. Research data shows that our PEMF signal induces mineralization and results in a process that stimulates new regeneration at the spinal fusion site. Some spine fusion patients are at greater risk of not achieving a solid fusion of new bone around the fusion site. These patients typically have one or more risk factors, such as smoking, obesity, or diabetes, or their surgery involves the revision of a failed fusion or the fusion of multiple levels of vertebrae in one procedure. For these patients, post-surgical bone growth therapy has been shown to significantly increase the probability of fusion success.

The SpinalStim device is a non-invasive spinal fusion stimulator system designed for the treatment of the lumbar region of the spine. The device uses proprietary technology and a wavelength to generate a PEMF signal. The U.S. Food and Drug Administration (the “FDA”) has approved the SpinalStim system as a spinal fusion adjunct to increase the probability of fusion success and as a non-operative treatment for salvage of failed spinal fusion at least nine months post-operatively.

Our CervicalStim product remains the only FDA-approved bone growth stimulator on the market indicated for use as an adjunct to cervical spine fusion surgery. It is indicated for patients at high-risk for non-fusion.

The SpinalStim and CervicalStim systems are accompanied by an application for mobile devices called STIM onTrack. The mobile app includes a first-to-market feature that enables physicians to remotely view patient adherence to prescribed treatment protocols and patient reported outcome measures. Designed for use with smartphones and other mobile devices, the STIM onTrack tool helps patients follow their prescription with daily treatment reminders and a device usage calendar. The app is free and available through the Android and Apple App Stores.

Bone Growth Therapies — Orthopedic Therapy

Our PhysioStim bone healing therapy products use PEMF technology similar to that used in our spine stimulators. The primary difference is that the PhysioStim devices are designed for use on the appendicular skeleton.

A bone’s regenerative power results in most fractures healing naturally within a few months. However, in the presence of certain risk factors, some fractures do not heal or heal slowly, resulting in “nonunions.” Traditionally, orthopedists have treated such nonunion conditions surgically, often by means of a bone graft with fracture fixation devices, such as bone plates, screws, or

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intramedullary rods. These are examples of “invasive” treatments. Our patented PhysioStim bone healing therapy products are designed to use a low level of PEMF signals to noninvasively activate the body’s natural healing process. The devices are anatomically designed, allowing ease of placement, patient mobility, and the ability to cover a large treatment area.

Similar to our SpinalStim and CervicalStim systems, the PhysioStim device is also accompanied by the STIM onTrack mobile app, enabling physicians treating patients with nonunion fractures to remotely view and assess patient adherence to prescribed treatment protocols and patient reported outcome measures.

The AccelStim device provides a safe and effective nonsurgical treatment to improve nonunion fracture healing and accelerate the healing of indicated fresh fractures. The device stimulates the bone’s natural healing process through LIPUS waves to the fracture site.

Spinal Implants — Motion Preservation Solutions

Our M6-C cervical and M6-L lumbar artificial discs are used to treat patients suffering from degenerative disc disease of the spine. The M6 discs are the only FDA-approved artificial discs that mimic the anatomic structure of a natural disc by incorporating an artificial viscoelastic nucleus and fiber annulus into their design. Like a natural disc, this unique construct allows for shock absorption at the implanted level, as well as provides a controlled range of motion when the spine transitions in its combined complex movements. Both discs have European Commission CE mark approval and in February 2019, we received FDA approval of the M6-C artificial cervical disc to treat patients with a single-level cervical disc degeneration. We released the M6-C artificial cervical disc in the U.S. in 2019 through a controlled market launch accompanied by an extensive training and education curriculum for surgeons. The M6-C disc has become our leading spinal implant device and has contributed significantly to our growth in recent years. In addition, we have initiated a U.S. 2-level investigational device exemption (“IDE”) study for the M6-C artificial cervical disc, which is currently enrolling.

Spinal Implants — Spinal Fixation Solutions

We provide a wide array of implants designed for use primarily in cervical, thoracic, and lumbar fusion surgeries. These implants are made of either metal or a thermoplastic compound called PEEK. The majority of the implants that we offer are made of titanium metal. The Firebird Spinal Fixation System, the Phoenix Minimally Invasive Spinal Fixation System, and the Centurion POCT Systems are sets of rods, cross connectors, and screws that are implanted during posterior fusion procedures. The Firebird Modular and pre-assembled Spinal Fixation Systems are designed to be used in either open or minimally-invasive posterior lumbar fusion procedures. To complement our plates, rods, and screw fixation options, we offer an entire portfolio of cervical and thoracolumbar Titanium and PEEK interbody devices within our Pillar and Forza product lines. We have recently introduced two, new 3D printed interbody solutions, Construx Mini Ti for cervical and Forza Ti for posterior lumbar implantation. This interbody portfolio includes two stand-alone devices, Lonestar and Pillar SA, as well as the Construx Mini PTC system, a novel titanium composite spacer, which offers a superior alternative to other plasma spray coated options currently available on the market. We also offer specialty plates and screws that are used in less common procedures.

Biologics — Regenerative Solutions

The premium biologics tissues we market include the Virtuos Lyograft and Trinity ELITE tissue forms, which are cortico-cancellous allografts that retain the inherent growth factors and viable cells found in bone. They are used during surgery in the treatment of musculoskeletal defects for bone reconstruction and repair. These allografts are intended to offer a viable alternative to an autograft procedure, as harvesting autograft has been shown to add risk of an additional surgical procedure and related patient discomfort in conjunction with a repair surgery. Virtuos Lyograft is particularly unique in that it is a first-of-its-kind, shelf-stable and complete autograft substitute for spine and orthopedic procedures provided in a room-temperature, ready-to-use, moldable form.

The FiberFuse Advanced tissue is a tissue form with handling characteristics analogous to the Trinity ELITE product without compromising bone content. It provides an advanced demineralized bone offering that leverages fiber technology with the advantages of ingrowth that cancellous bone provides and expands the offering to address a broader scope of surgical applications. FiberFuse Strip is a preformed allograft form of FiberFuse Advanced that consists of mineralized cancellous bone and demineralized cortical fibers, providing an ideal matrix for bone healing. Legacy DBM is a ready-to-use, flowable, demineralized bone putty and provides a cost-effective option without compromising clinical experience.

We receive marketing fees through our collaboration with MTF for the Virtuos, Trinity ELITE, FiberFuse Advanced, FiberFuse Strip, Legacy DBM and certain other tissues. MTF processes the tissues, maintains inventory, and invoices hospitals, surgery centers, and other points of care for service fees, which are submitted by customers via purchase orders. We have exclusive worldwide rights to market the Virtuos and Trinity ELITE and exclusive rights to market the FiberFuse Advanced and FiberFuse Strip tissues in the U.S.

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Regarding synthetic, biologic solutions, we offer Opus BA and Opus Mg Set. Opus BA is a synthetic bioactive solution that is easily hydrated and flexible. A carefully selected trifecta of components creates an ideal environment for bone growth building on the earlier generations of synthetic bone grafts. Opus Mg Set is an injectable, moldable, and biocompatible bone void filler that will harden in-situ at the defect site.

To date, our Biologics products are offered primarily in the U.S. market due in part to restrictions on providing U.S. human donor tissue in other countries.

Global Spine Future Product Applications

We remain very active with multiple internal developments to support future, new technology commercialization efforts. These new technologies will apply to both the cervical and thoracolumbar spinal anatomy. In addition, we remain active in evaluating external licensing and acquisition opportunities to add implant, biologics, and other emerging technologies to our spine portfolio. We expect that the contribution of new, internally developed technologies and undefined external acquisitions will be the primary driver of future growth.

Regarding our Bone Growth Therapy business, we have participated in research at the Wake Forest University Health Sciences, Chinese University of Hong Kong, and University of California San Francisco, where scientists conducted animal and cellular studies to identify the mechanisms of action of our PEMF signals on bone, cartilage, meniscus, nerve, and efficacy of healing. From these efforts, some studies have been published in peer-reviewed journals. Among other insights, the studies illustrate positive effects of PEMF on callus formation and bone strength, meniscus and nerve injury repair, as well as proliferation and differentiation of cells involved in tissue regeneration and healing. Furthermore, we believe that the previous research work with Cleveland Clinic, the Chinese University of Hong Kong, and the University of Pennsylvania, allowing for characterization and demonstration of the Orthofix new PEMF waveform, is paving the way for signal optimization for a variety of new applications and indications. This collection of pre-clinical data, along with additional clinical data, could represent new clinical indication opportunities for our regenerative stimulation solutions. In addition, we also have initiated a U.S. 2-Level IDE study for the M6-C artificial cervical disc.

Global Orthopedics

The Global Orthopedics reporting segment offers products and solutions for limb deformity correction and complex limb reconstruction with a focus on use in trauma, pediatrics, and foot and ankle procedures. This reporting segment specializes in the design, development, and marketing of external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. We sell these products through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers.

Global Orthopedics Strategy

Our strategy for the Global Orthopedics reporting segment is to continue to offer pioneering limb reconstruction and deformity correction procedural solutions that address the entire patient treatment pathway.

Our key strategies in this segment are:

•Expand our position as the worldwide leader in complex deformity and limb reconstruction, including both internal and external solutions, through a patient-centric approach and digital treatment journey

•Promote the advantages of our expansive pediatric product portfolio and support tools

•Leverage our cross-product OrthoNext digital platform, a uniquely developed pre and post planning digital platform, that allows our clinicians to pre-plan surgery for patients so they can start surgeries with a greater degree of confidence, reduce surgical times, enable better outcomes and follow up post operatively to evaluate their chosen surgical plan success

•Expand our foot and ankle portfolio by building on our historical position as a company highly focused on addressing complex and challenging conditions and remaining at the forefront of innovation in helping surgeons and patients alike in the management of Charcot foot and ankle

•Promote and invest in our Fitbone intermedullary limb lengthening platform, which together with our external fixation products, offers surgeons internal and external solutions for limb lengthening and deformity correction

•Within the orthopedic trauma segment, continue to focus on open and complex fracture management

•Collaborate with physicians and healthcare partners to improve patients’ lives through technology, digital transformation, clinical evidence, and our industry-leading medical education programs, such as Orthofix Academy

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•Continue the strong pace of new product launches

•Acquire or license products, technologies, and companies to support these market opportunities.

Global Orthopedics Focus Products

Global Orthopedics offers a comprehensive line of limb reconstruction and complex deformity correction technologies. We provide innovative and minimally invasive extremity solutions to help surgeons improve their patients' quality of life, which are designed to address the lifelong bone and joint health needs of patients of all ages. In addition, our well-rounded product lines offer internal and external fixation solutions for pediatrics, limb reconstruction, trauma, and foot and ankle specialties.

Our fracture repair solutions comprise a wide range of devices designed for specific anatomical areas. The philosophy underlying these devices is to provide adequate stability and to allow for early functional recovery, thereby improving patients’ quality of life. Our goal is to offer devices that enable a simple, standardized approach for reproducible results.

Our trauma products consist of a comprehensive portfolio of ready-to-use, sterile, dedicated implant kits designed for a wide range of anatomical sites.

The following table and discussion identifies the principal Global Orthopedics products by trade name and describes their primary applications:

Product	Primary Application
TrueLok	A surgeon-designed, lightweight external fixation system for trauma, limb lengthening, and deformity correction, which consists of circular rings and semi-circular external supports centered on the patient’s limb and secured to the bone by crossed, tensioned wires, and half pins
TrueLok Hexapod System (“TL-HEX”)	A hexapod external fixation system for trauma and deformity correction with associated software, designed as a three-dimensional bone segment reposition module to augment the previously developed TrueLok frame. The system consists of circular and semi-circular external supports, secured to the bones by wires and half pins and interconnected by six struts, which allows multi-planar adjustment of the external supports. The rings’ positions are adjusted either rapidly or gradually in precise increments to perform bone segment repositioning in three-dimensional space
TrueLok EVO	A modular circular external fixation system that features both radiolucent rings and struts to enable clear radiographic visualization to allow physicians to better assess bone anatomy both during surgery and post-operative care
FITBONE Intramedullary Limb-Lengthening System	An intramedullary lengthening system intended for limb lengthening of the femur and tibia, surgically implanted in the bone through a minimally invasive procedure; it includes an external telemetry control set that manages the distraction process, and is the only intramedullary limb lengthening system with an FDA-cleared pediatric indication
Pediatric Portfolio	Our pediatric solutions include a range of products and resources dedicated to pediatrics and young adults with bone fractures and deformities. With our 360° approach to the patient journey we provide dedicated tools to treat all stages of the healing process: collaterals, educational games, software applications, and patient apps for post-operative management Our pediatric solutions portfolio includes, among the others: - A complete line of nailing systems for trauma and limb reconstruction, including our elastic nail, MJ-FLEX, and our rigid intramedullary nail for adolescents, Agile Nail; - The Galaxy Fixation Pediatric System;

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	- The eight-Plate Guided Growth System (“eight-Plate”) and the eight-Plate Guided Growth System+ (“eight-Plate Plus”); - The JuniOrtho Plating System
Galaxy Fixation System	A pin-to-bar system for temporary and definitive fracture fixation, in the upper and lower limbs. The system incorporates a streamlined combination of clamps, with both pin-to-bar and bar-to-bar coupling capabilities, offering a complete range of applications, including specific anatomic units for the shoulder, elbow and wrist. The latest version, Galaxy Gemini, includes a universal clamp and other updates to better streamline surgical procedures
Galaxy Fixation Shoulder	A unique solution for the treatment of proximal humeral fractures
Ankle Hindfoot Nail (“AHN”)	A differentiated solution for hindfoot fusions that includes a revision option to address more large bone defects and more complex hindfoot pathologies
G-BEAM Fusion Beaming System	A system designed to address the specific demands of advanced deformity and trauma reconstructions of foot and ankle applications, such as Charcot, requiring fusion of the medial and/or lateral columns, with or without corrective osteotomies as well as for joint fusions within the mid- and hindfoot
OSCAR	An ultrasonic powered surgical system for revision arthroplasty
External Fixators	External fixation, including our limb-lengthening systems, ProCallus, XCaliber, Pennig, Radiolucent Wrist Fixators, and Calcaneal Fixator
eight-Plate and eight-Plate Plus	The first and still market-leading system for gradual correction of the growth plate in pediatric patients
LRS advanced Limb Reconstruction System	An external fixation solution for limb lengthening and corrections of deformity, which uses callus distraction to lengthen bone in a variety of procedures, including monofocal lengthening and corrections of deformity; its multifocal procedures include bone transport, simultaneous compression and distraction at different sites, bifocal lengthening, and correction of deformities with shortening
OrthoNext Digital Platform	A digital platform software developed specifically for use with the JuniOrtho Plating System and Fitbone Intramedullary Limb Lengthening System, which enables the surgeon to accurately plan the deformity correction and osteotomy position as well as visualize the implant in relation to the anatomy

We provide internal and external fixation solutions for extremity repair and deformity correction, both for adults and children. Our fracture repair products consist of fixation devices designed to stabilize a broken bone until it can heal. With these devices, we can treat simple and complex fracture patterns, along with achieving deformity corrections.

External Fixation

External fixation devices are used to stabilize fractures and offer an ideal treatment for complex fractures, fractures near the joints, and in patients with known risk factors or co-morbidities. The treatment is minimally invasive and allows external manipulation of the bone to obtain and maintain final bone alignment (reduction). The bone is fixed in this way until healing occurs. External fixation allows small degrees of micromotion (dynamization), which promotes blood flow at the fracture site, and accelerates the bone healing process. External fixation devices may also be used temporarily in complex trauma cases to stabilize the fracture prior to treating it definitively. In these situations, the device offers rapid fracture stabilization, which is important in life-saving as well as limb salvage procedures.

We offer most of our products in sterile packaging, which fulfills the need of a streamlined and ready-to-use set of products, particularly in trauma applications where timing is crucial.

Examples of our external fixation devices include the TrueLok, TL-HEX, TrueLok Evo, the Galaxy and Galaxy Gemini Fixation Systems, and the LRS Advanced Limb Reconstruction System.

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Internal Fixation

Internal fixation devices consist of either long rods, commonly referred to as nails, or plates that are attached to the bone with the use of screws. Nails and plates come in various sizes, depending on the bone that requires treatment. A nail is inserted into the medullary canal of a fractured long bone of the human arm or leg (e.g., humerus, femur, or tibia). Alternatively, a plate is attached by screws to an area such as a broken wrist, hip, or foot. Examples of our internal fixation devices include Chimaera, AHN, and the G-BEAM Fusion Beaming System.

Acquired in March 2020, the FITBONE Intramedullary Limb Lengthening System provides an internal option for limb lengthening of the femur and tibia and provides Orthofix with the most complete limb reconstruction portfolio on the market. We are continuing to invest in the FITBONE technology platform in order to offer surgeons more solutions for deformity correction.

In addition to treating bone fractures, we also design, manufacture, and distribute devices intended to treat congenital bone conditions, such as angular deformities (e.g., bowed legs in children), degenerative diseases, and conditions resulting from a previous trauma. An example of a product offered in this area is the eight-Plate Plus Guided Growth System.

SeaSpine

SeaSpine's business focuses on the design, development, and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. We have a comprehensive portfolio of biologics and spinal implant solutions, as well as a surgical navigation system, to meet the varying combinations of products that neurosurgeons and orthopedic spine surgeons need to perform fusion procedures in the lumbar, thoracic, and cervical spine. We believe this broad combined portfolio is essential to meet the “complete solution” requirements of these surgeons.

SeaSpine has historically reported revenue in two product categories: (i) Biologics (formerly recognized as Orthobiologics) and (ii) Spinal Implants and Enabling Technologies. Our Biologics products consist of a broad range of advanced and traditional bone graft substitutes designed to improve bone fusion rates following a wide range of orthopedic surgeries, including spine, hip, and extremities procedures. Our Spinal Implants and Enabling Technologies portfolio consists of an extensive line of products and image-guided surgical solutions to facilitate spinal fusion in degenerative, minimally invasive surgery ("MIS"), and complex spinal deformity procedures. Expertise in biologic sciences and spinal implants, software and advanced optics product development allows SeaSpine to offer surgeon customers a differentiated portfolio and a complete solution to meet their patients' fusion requirements.

SeaSpine Strategy

Our goal in the SeaSpine business is to continue to scale our business in order to enhance our market position in biologics and become a leader in the spinal implant and image guided surgery market. To achieve our goal, we are investing in these strategies:

•Continue to increase our research and development activities to bring new products and techniques to market

•Continue to increase the quality, size, exclusivity, and geographic breadth of our network of independent sales agents in the U.S.

•Invest in the further development of our pre-clinical and clinical programs designed to generate peer-reviewed scientific evidence in support of our products

•Continue to pursue strategic alliances and acquisition opportunities to enhance our product offerings

SeaSpine Principal Products

SeaSpine is largely represented by two principal product categories, i) Biologics and ii) Spinal Implants and Enabling Technologies. Each of these product categories are further described below:

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Biologics

Our Biologics products are used in orthopedic and dental procedures and consist of a broad range of bone graft substitutes intended to address the key elements of bone regeneration. Bone graft substitutes are composed of natural biologic proteins and synthetic materials. They are designed to reduce the amount of autologous bone grafts needed for spinal fusion procedures. Bone graft substitutes, depending on their design, can be used entirely in place of the patient’s own bone tissue, called an autograft, or by extending the volume of bone graft material from the patient by combining it with the bone graft substitute. Our Biologics portfolio includes fibers-based and particulate DBM, collagen ceramic matrices, demineralized cancellous allograft bone and synthetic bone void fillers. We offer our Biologics products in the form of fibers, putties, pastes, strips and DBM in a resorbable mesh for a range of surgical applications.

Spinal Implants and Enabling Technologies

Our Spinal Implants and Enabling Technology portfolio consists of an extensive line of products for spinal decompression, alignment, stabilization and image-guided surgical solutions as well as a surgical navigation system designed for broad spectrum use throughout the entire spinal column. Such products are typically used to facilitate fusion in degenerative, minimally invasive, and complex spinal deformity procedures throughout the lumbar, thoracic and cervical regions of the spine. Our products are increasingly focused on restoring adequate spinal balance and profile in the sagittal (front to back) plane, which we believe is widely recognized as an important factor to improve the quality of life in patients undergoing surgery for spinal degeneration or deformity.

The following table and discussion identifies our SeaSpine principal products by trade name and describes their primary applications:

Product	Primary Application
Biologics Products
Accell Bone Matrix	An open structured, dispersed form of DBM, which increases the bioavailability of bone proteins at an earlier time in the healing cascade; when combined with traditional DBM, both fibers and particulate forms, provides a biphasic release of growth factors to promote healing
OsteoStrand Plus / OsteoStrand	100% Demineralized Bone Fibers product lines designed to facilitate and aid in fusion by maximizing osteoinductive content while providing an improved conductive matrix; OsteoStrand Plus incorporates our proprietary Accell Bone Matrix
Evo3/Evo3c DBM Putties	Advanced DBM putties that combine traditional DBMs with Accell, with and without cancellous chips.
OsteoTorrent/OsteoTorrent C	Advanced DBM putties that combine Accell Bone Matrix and particulate DBM, with and without cancellous chips; packaged and sterilized in a dry state to improve product’s osteoinductive potential, shelf-life stability, and shelf-life
OsteoBallast and Ballast DBM in Resorbable Mesh	A resorbable mesh containing 100% DBM without a carrier, designed to simplify graft placement and help prevent graft migration while maximizing DBM content
OsteoStrux and Mozaik	Blend of collagen and β-TCP to create an osteoconductive material for bone regeneration; available in both putty and strip configurations
Spinal Implants and Enabling Technologies Products
Reef-TO, Reef-TA and Reef-TH interbody devices	PEEK interbody devices featuring NanoMetalene surface technology for PLIF and TLIF procedures
Vu a∙POD Prime NanoMetalene and Reef-A interbody devices	PEEK interbody devices featuring NanoMetalene surface technology for ALIF procedures

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Regatta NanoMetalene Lateral System	A comprehensive lateral lumbar interbody system that can be used to fuse the spine through a lateral approach
Cambria NanoMetalene interbody device	Interbody device used to fuse the cervical spine through an anterior approach
Shoreline Anterior Cervical Standalone System, featuring the NanoMetalene with Reef Topography	A modular plate and interbody device designed to maximize intraoperative flexibility to address a wide range of anatomy, surgical situations or bone in anterior cervical fusions
Waveform	3D-printed interbody fusion devices for anterior cervical, transforaminal lumbar, lateral lumbar and articulating transforaminal lumbar interbody fusion
Explorer TO expandable interbody device system	An expandable interbody device system with complementary lordotic and parallel expanding implant options
NorthStar OCT Posterior Cervical Fixation System	Spinal fixation system with novel instrumentation and anatomically designed implants to provide a safe and effective solution designed to improve surgical flow when navigating through complex cervical procedures
Admiral Anterior Cervical Plating System ("ACP")	A comprehensive and complete anterior cervical plating system designed to strike the optimal balance between strength, profile, and construct rigidity
Mariner Posterior Fixation System	Pedicle screw system for open and MIS procedures and adult deformity procedures featuring modular threaded technology and accompanying instrumentation designed to reduce the number of trays needed for surgery and that provides surgeons with multiple intra-operative options to facilitate posterior lumbar fixation
NewPort MIS System	MIS system with extended tabs for a small incision profile that offers two rod delivery options for both mini-open and percutaneous approaches
Mariner MIS Posterior Fixation System	MIS system with low-profile, robust towers for rod introduction and reduction as well as ultra-tough modular extended tab heads, capable of providing powerful instrumented compression and distraction of the spine
Daytona Deformity System	Complex spinal deformity procedure system that uses extended tab uniplanar and polyaxial screws with multiple rod options and intuitive instrumentation to create a versatile system adaptable to surgeon preference
Daytona Small Stature System	System designed to address standard to complex deformity cases in smaller-sized patients who need a lower profile construct due to anatomy constraints
Mariner Outrigger Revision System	An adjunct to the Mariner Posterior Fixation System designed to effectively revise and extend previous fusions
FLASH Navigation with 7D Technology (Spine)	A machine-vision navigation platform for use in open and mini-open posterior spinal procedures that uses proprietary visible light technology coupled with advanced software algorithms to deliver a fast, efficient, cost-effective, and radiation free solution for spine surgery
FLASH Navigation with 7D Technology (Percutaneous)	A valuable enhancement to the FLASH Navigation platform to address percutaneous spinal procedures; the camera-based technology coupled with 7D Machine Vision algorithms maintain the same fast, accurate, and efficient surgical workflow as the Spine platform, while also providing an imaging agnostic solution to percutaneous posterior spine surgery
FLASH Navigation with 7D Technology (Cranial)	A module on the FLASH Navigation platform that utilizes 7D Machine Vision Technology for cranial surgery; the visible light technology allows for a completely contactless workflow, acquires hundreds of thousands of virtual fiducials using the patient’s own anatomy, and results in nearly instantaneous cranial registrations to the skin or skull in almost any surgical position

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Enabling Technologies

Our machine vision FLASH navigation platform is used in a variety of posterior spinal procedures, including degenerative, deformity, tumor, trauma, and revision surgery. The platform can be utilized in MIS/Percutaneous, Mini-Open, or Open techniques. The technology also offers a comprehensive cranial platform for use in cranial neurosurgery.

Our innovative FLASH Navigation System with 7D Technology delivers a comprehensive navigation platform that utilizes visible light, machine-vision cameras, and intelligent software algorithms to create a 3D image within seconds for surgical navigation. The novel technology allows for a fast image reconstruction for surgical navigation with no disruption to surgeon workflow and eliminates radiation exposure during the procedure to the patient, surgeon, and operating room staff.

Our Spine Module is our leading product in the FLASH Navigation Portfolio with over 104 installations globally. In 2022, we further enhanced the Spine Module by adding preplanning features, as well as fully integrating the Mariner Posterior Fixation System, Mariner MIS Posterior Fixation System, and the Northstar OCT Posterior Cervical Fixation System into the platform with both hardware and software enhancements. We also released our commercial FLASH Percutaneous Spine Module in 2022 for the navigation of minimally invasive spinal procedures. This application, accompanied by new instrumentation, addresses an important part of the spine navigation market to round out the FLASH Navigation Platform and is a valuable enhancement for both hospitals and ambulatory surgery centers. Further enhancements and new features to the Spine Module and Percutaneous Module are in development and are expected to launch in 2023.

In addition to these new products focused on spine, the FLASH Navigation Portfolio also consists of our Cranial Module for use in cranial surgeries. The technology uses a completely contactless workflow, acquiring hundreds of thousands of virtual fiducials using the patient’s own anatomy, and results in nearly instantaneous cranial registrations to the skin or skull in almost any surgical position. New developments are also underway and expected to launch in 2023 which leverage the 7D Technology to further expand cranial applications and enter the neurocritical care market with the launch of FLASH EVD ("Extra Ventricular Drainage"), a mobile bed-side navigational system designed for fast and reliable EVD placement.

SeaSpine Future Product Applications and Development

We believe that our future success and ability to continue to drive revenue growth depends on our ability to sustain a similar cadence of launching new and next-generation products as we have demonstrated over the last few years. We continue to aggressively develop differentiated new products that we believe will allow the entrance into new markets and be even more competitive in markets in which we are underrepresented.

We expect to launch the next iteration of the FLASH Percutaneous Module and FLASH Spine Module with additional enhancements to our preplanning software as well as developing the framework for navigating interbody procedures. We also plan to launch FLASH EVD, a small mobile bed-side navigational system designed for fast and reliable EVD placement that will expand our total addressable market with this first entry into the neurocritical care market.

Product Development

Our primary research and development facilities are located in Lewisville, Texas, Carlsbad, California, Toronto, Canada, and Verona, Italy.

We have a research and development organization dedicated to advancing our portfolio of spinal implants, biologics, orthopedic implants and external fixation devices, and machine vision image guidance innovations through product development and clinical affairs programs. Our product development efforts employ an integrated team approach that involves collaboration between surgeons, our engineers, our machinists, as well as our regulatory personnel. We also work with leading hospital research institutions and certain non-profit organization, such as MTF Biologics, surgeons, and other consultants, on the long-term scientific planning and evolution of our products and therapies. Several of the products that we market have been developed through these collaborations. In addition, we periodically receive suggestions for new products and product enhancements from the scientific and medical community, some of which result in us entering into assignment or license agreements with physicians and third parties.

For our spine and orthopedics products, our product development teams, in consultation with design surgeons, formulate a design for the product and then our machinists build prototypes for testing our prototyping development and testing operation at our facilities. We use a broad scope of technologies designed to allow us to meet the complex engineering requirements of customers. As part of the development process, surgeons test the implantation of the products in our in-house cadaveric laboratories, which helps us design new products intended to meet the needs of both the surgeon and the patient. Our team refines or redesigns the prototype as necessary based on the results of the product testing, allowing us to perform rapid iterations of the design-prototype-test development cycle. Our clinical and regulatory personnel work in parallel with our product engineering personnel to facilitate

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regulatory clearances of our products. We believe that these product development efforts allow us to provide solutions that respond to the needs of our surgeon customers and their patients.
 

Similar to the spine and orthopedics product development process, our software engineers, product managers and design surgeons are working towards the full integration of our spinal implants and biologics product lines with our machine vision FLASH navigation system. This includes the design of specific software modules, features and tracked instruments designed to meet the needs of a wide range of procedures including, degenerative, complex, revision, and deformity spine procedures. In addition, we are also exploring opportunities to integrate the 7D Technology into a variety of adult and pediatric orthopedic applications.

For biologics, we plan to develop line extensions for our innovative biologics technologies that will continue to improve bone forming potential while addressing specific procedural requirements both in the spine field and in general orthopedic applications. We are investigating new product formulations in the traditional DBM and Ceramic Matrix product categories. Our Biologics research and development team has experience in biomaterial sciences and bringing next generation technologies to market.

In 2022, 2021, and 2020, we incurred research and development expenses of $49.1 million, $49.6 million, and $39.1 million, respectively.

Patents, Trade Secrets, Assignments and Licenses

We rely on a combination of patents, trade secrets, assignment and license agreements, and non-disclosure agreements to protect our proprietary intellectual property. We possess numerous U.S. and foreign patents, have numerous pending patent applications, and have license rights under patents held by third parties. Our primary products are patented in the major markets in which they are sold. We do not believe that the expiration of any single patent is likely to significantly affect our intellectual property position. The medical device industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. Patent litigation can involve complex factual and legal questions and its outcome is uncertain. Our success is dependent, in part, on us not infringing upon patents issued to others, including our competitors and potential competitors. While we make extensive efforts to ensure that our products do not infringe other parties’ patents and proprietary rights, our products and methods may be covered by patents held by our competitors. For a further discussion of these risks, please see Item 1A of this Annual Report under the heading “Risk Factors.”

We rely on confidentiality and non-disclosure agreements with employees, consultants, and other parties to protect, in part, trade secrets and other proprietary technology.

We obtain assignments or licenses of varying durations for certain of our products from third parties. We typically acquire rights under such assignments or licenses in exchange for lump-sum payments or arrangements under which we pay a percentage of sales to the licensor. However, while assignments or licenses to us generally are irrevocable, no assurance can be given that these arrangements will continue to be made available to us on terms that are acceptable to us, or at all. The terms of our license and assignment agreements vary in length from a specified number of years, to the life of product patents, or for the economic life of the product. These agreements generally provide for royalty payments and termination rights in the event of a material breach.

Compliance and Ethics Program

It is our fundamental policy to conduct business in accordance with the highest ethical and legal standards. We have a comprehensive compliance and ethics program, which is overseen by a Chief Ethics and Compliance Officer, who reports directly to our Chief Executive Officer and the Compliance Committee of the Board of Directors. The program is intended to promote lawful and ethical business practices throughout our domestic and international businesses. It is designed to prevent and detect violations of applicable federal, state, and local laws in accordance with the standards set forth in guidance issued by the U.S. Department of Justice (“U.S. DOJ”) (“Evaluation of Corporate Compliance Programs” (updated June 2020)), the Office of Inspector General (HCCA-OIG “Measuring Compliance Program Effectiveness: A Resource Guide” (March 2017)), and the U.S. Sentencing Commission (“Effective Compliance and Ethics Programs” (November 2014)). Key elements of the program include:

Organizational oversight by senior-level personnel responsible for the compliance function within the Company

Written standards and procedures, including a Corporate Code of Conduct

Methods for communicating compliance concerns, including anonymous reporting mechanisms

Investigation and remediation measures to ensure a prompt response to reported matters and timely corrective action

Compliance education and training for employees and contracted business associates

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Auditing and monitoring controls to promote compliance with applicable laws and to assess program effectiveness

Disciplinary guidelines to enforce compliance and address violations

Due diligence reviews of high risk intermediaries and exclusion lists screening of employees and contracted business associates

Risk assessments to identify areas of compliance risk.

Government Regulation

Classification and Approval of Products by the FDA and other Regulatory Authorities

Our research, development, and clinical programs, and our manufacturing and marketing operations, are subject to extensive regulation in the U.S. and other countries. Most notably, all of our products sold in the U.S. are subject to the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the Public Health Services Act as implemented and enforced by the FDA. The regulations that cover our products and facilities vary widely from country to country. The amount of time required to obtain approvals or clearances from regulatory authorities also differs from country to country.

Unless an exemption applies, each medical device we commercially distribute in the U.S. is covered by premarket notification (“510(k)”) clearance, letter to file, approval of a premarket approval application (“PMA”), or some other approval from the FDA. The FDA classifies medical devices into one of three classes, which generally determine the type of FDA approval required. Devices deemed to pose low risk are placed in class I, devices deemed to pose moderate risk are placed in class II, and devices deemed to pose the greatest risks, requiring more regulatory controls to provide a reasonable assurance of safety and effectiveness, or devices deemed not substantially equivalent to a device that previously received 510(k) clearance (as described below), are placed in class III. Our Spinal Implants and Global Orthopedics products are, for the most part, classified as class II devices and the instruments used with these products are generally classified as class I. Our 7D FLASH navigation system is classified as class II and certain accessories thereto are classified as class I. Our Bone Growth Therapies products and the M6-C artificial cervical disc are currently classified as class III, and have been approved for commercial distribution in the U.S. through the PMA process. However, an FDA panel recommended that bone growth stimulator devices be reclassified by the FDA from class III to class II devices with special controls. For additional discussion of this development, see Item 1A of this Annual Report under the heading “Risk Factors.”

The medical devices we develop, manufacture, distribute, and market are subject to rigorous regulation by the FDA and numerous other federal, state, and foreign governmental authorities. The process of obtaining FDA clearance and other regulatory approvals to develop and market a medical device, particularly from the FDA, can be costly and time-consuming, and there can be no assurance such approvals will be granted on a timely basis, if at all. While we believe we have obtained all necessary clearances and approvals for the manufacture and sale of our products and that they are in material compliance with applicable FDA and other material regulatory requirements, there can be no assurance that we will be able to continue such compliance.

In 2017, the European Union (“E.U.”) adopted the E.U. Medical Device Regulation (“MDR”) (Council Regulations 2017/745), which imposes strict requirements for the marketing and sale of medical devices, including new quality system and post-market surveillance requirements. The regulation, as amended in March 2023, provides a transition period for all currently-approved medical devices prior to May 2021 (under the European Medical Device Directive) to meet the additional requirements, and for certain devices, this transition period was extended until December 2027 for higher risk devices and until December 2028 for medium-and-lower risk devices. After this transition period, all medical devices marketed in the E.U. will require certification according to these new requirements. This regulation has required us to incur, and we expect to continue to incur, significant costs through the transition period and beyond to maintain compliance with the additional requirements. Failure to meet the requirements of the regulation could adversely impact our business in the E.U. and other countries that utilize or rely on E.U. requirements for medical device registrations.

In the E.U., our products that contain human-derived tissue, including demineralized bone material, are not medical devices as defined in the MDR. They are also not medicinal products as defined in Directive 2001/83/EC of the European Parliament and of the Council of the E.U. Today, the regulations in the E.U. governing products that contain human-derived tissue, if applicable, vary from one E.U. member state to the next. Because of the absence of a harmonized regulatory framework and the proposed regulation for advanced therapy medicinal products in the E.U., the approval process for human-derived cell or tissue-based medical products in the E.U. may be extensive, lengthy, expensive, and unpredictable.

Certain countries, as well as the E.U., have issued regulations that govern products that contain materials derived from animal sources. Regulatory authorities are particularly concerned with materials infected with the agent that causes bovine spongiform encephalopathy ("BSE"). These regulations affect our biomaterial products for the spine, which contain material derived from bovine

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tissue. Although we take steps designed to provide that our products are safe and free of agents that can cause disease, products that contain materials derived from animals, including our products, may become subject to additional regulation, or even be banned in certain countries, because of concern over the potential for prion transmission. Significant new regulations, a ban of our products, or a movement away from bovine-derived products because of an outbreak of BSE could have a material and adverse effect on our business or our ability to expand our business. See “Risk Factors-Risks Related to Non-Compliance with Laws and Regulations - Certain of our products contain materials derived from animal sources and may become subject to additional regulation.”

Within our Biologics product category, we market tissue for bone repair and reconstruction under the brand name Trinity ELITE, our allogeneic bone matrix comprised of cancellous bone containing viable cells and a demineralized cortical bone component. In addition, we provide demineralized cortical fiber technologies under the brand name FiberFuse, structural allografts for spinal fusion, and an amniotic membrane, which is a natural tissue barrier. These allografts are regulated under the FDA’s Human Cell, Tissues and Cellular and Tissue-Based Products ("HCT/P") regulatory paradigm and not as a medical device, biologic, or a drug. These tissues are regulated by the FDA as minimally-manipulated tissue and are covered by the FDA’s “Good Tissues Practices” regulations, which cover all stages of allograft processing. There can be no assurance our suppliers will continue to meet applicable regulatory requirements or that those requirements will not be changed in ways that could adversely affect our business. Further, there can be no assurance these products will continue to be made available to us or that applicable regulatory standards will be met or remain unchanged. Moreover, products derived from human tissue or bones are from time to time subject to recall for certain administrative or safety reasons and we may be affected by one or more such recalls.

In addition to our allograft solutions (HCT/Ps), we market and distribute additional biologics products that are synthetic in nature and are regulated by the FDA as medical devices, specifically Opus BA and the Opus MG lines of synthetic grafts. We also provide ancillary technologies regulated by the FDA as medical devices that aid in the delivery of our bone grafting options clinically. These products are sourced from third party manufacturers, which we believe maintain an adequate inventory to avoid disruptions in product supply.

We also manufacture products derived from human tissue (demineralized bone tissue). Internally produced HCT/Ps may fall within the definition of a biological product, medical device, or drug regulated under the FDCA. These biologic, device or drug HCT/Ps must comply both with the requirements exclusively applicable to HCT/Ps and with requirements applicable to biologics, devices or drugs, including premarket clearance or approval from the FDA.

Section 361 of the Public Health Service Act authorizes the FDA to issue regulations to prevent the introduction, transmission, or spread of communicable disease. HCT/Ps regulated as 361 HCT/Ps are subject to requirements relating to registering facilities and listing products with the FDA, screening and testing for tissue donor eligibility, Good Tissue Practice when processing, storing, labeling, and distributing HCT/Ps, including required labeling information, stringent record keeping, and adverse event reporting.

The American Association of Tissue Banks ("AATB") has issued operating standards for tissue banking. Accreditation is voluntary, but compliance with these standards is a requirement to become an AATB-accredited tissue establishment. In addition, some states in the U.S. have their own tissue banking regulations. We are AATB-accredited and licensed or have permits for tissue banking in California, Florida, New York, Maryland, and other states that require specific licensing or registration.

Procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act (NOTA), which prohibits the transfer of certain human organs, including skin and related tissue for valuable consideration, but permits the reasonable payment associated with the removal, transportation, implantation, processing, preservation, quality control and storage of human tissue and skin. We reimburse tissue banks for their expenses associated with the recovery, storage and transportation of donated human tissue they provide to us for processing. We include in our pricing structure amounts paid to tissue banks to reimburse them for their expenses associated with the recovery and transportation of the tissue, in addition to certain costs associated with the processing, preservation, quality control and storage of the tissue, marketing and medical education expenses, and costs associated with development of tissue processing technologies. NOTA payment allowances may be interpreted to limit the amount of costs and expenses that we may recover in our pricing for our products, thereby reducing our future revenue and profitability.

For a further description of some of the risks associated with matters described above, see Item 1A of this Annual Report under the heading “Risk Factors.”

Certain Other Product and Manufacturing Regulations

After a device is placed in the market, numerous regulatory requirements continue to apply. These regulatory requirements include: product listing and establishment registration; Quality System Regulation (“QSR”), which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the manufacturing process; labeling regulations and governmental prohibitions against the promotion of products for

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uncleared, unapproved, or off-label uses or indications; clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices; approval of product modifications that affect the safety or effectiveness of one of our PMA approved devices; Medical Device Adverse Event Reporting regulations, which require that manufacturers report to the FDA and other foreign governmental agencies if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur; post-approval restrictions or conditions, including post-approval study commitments; post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; the FDA’s recall authority, whereby it can ask, or under certain conditions, order device manufacturers to recall a product from the market that is in violation of governing laws and regulations; regulations pertaining to voluntary recalls; and notices of corrections or removals.

We and certain of our suppliers also are subject to announced and unannounced inspections by the FDA and European Notified Bodies to determine our compliance with the FDA’s QSR and other international regulations. If the FDA were to find that we or certain of our suppliers have failed to comply with applicable regulations, the agency could institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions, such as: fines and civil penalties against us, our officers, our employees, or our suppliers; delays in clearing or approving, or refusal to clear or approve our products; withdrawal or suspension of approval of our products or those of our third-party suppliers by the FDA or other regulatory bodies; product recall or seizure; interruption of production; operating restrictions; injunctions; and criminal prosecution. In addition to FDA inspections, all of our manufacturing facilities are subject to annual Notified Body inspections.

Moreover, governmental authorities outside the U.S. have become increasingly stringent in their regulation of medical devices. Our products may become subject to more rigorous regulation by non-U.S. governmental authorities in the future. Additional regulation, whether in the U.S. or internationally, may have a material adverse effect on our business and operations. For a description of some of the risks associated with the regulatory requirements described above, see Item 1A of this Annual Report under the heading “Risk Factors.”

Accreditation Requirements

Our subsidiary, Orthofix US LLC, has been accredited by the Accreditation Commission for Health Care, Inc. (“ACHC”), for medical supply provider services with respect to durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”). ACHC, a private, not-for-profit corporation, which is certified to ISO 9001:2000 standards, was developed by home care and community-based providers to help companies improve business operations and quality of patient care. Although accreditation is generally a voluntary activity, where healthcare organizations submit to peer review their internal policies, processes, and patient care delivery against national standards, the Centers for Medicare and Medicaid Services (“CMS”) required DMEPOS suppliers to become accredited. We believe that by attaining accreditation, Orthofix US LLC has demonstrated its commitment to maintain a higher level of competency and a willingness to strive for excellence in its products, services, and customer satisfaction.

Third-Party Payor Requirements

Our products may be reimbursed by third-party payors, such as government programs, including Medicare, Medicaid, and Tricare, or private insurance plans and healthcare networks. Third-party payors may deny reimbursement if they determine that a device provided to a patient or used in a procedure does not meet applicable payment criteria or if the policyholder’s healthcare insurance benefits are limited. Also, non-government third-party payors are increasingly challenging the medical necessity and prices paid for our products and services. The Medicare program is expected to continue to implement a new payment mechanism for certain DMEPOS items via the implementation of its competitive bidding program. Bone growth therapy devices are currently exempt from this competitive bidding process.

Laws Regulating Healthcare Fraud and Abuse; State Healthcare Laws

Our sales and marketing practices are also subject to a number of U.S. laws regulating healthcare fraud and abuse, such as the federal Anti-Kickback Statute and the federal Physician Self-Referral Law (known as the “Stark Law”), the Civil False Claims Act, and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as well as numerous state laws regulating healthcare and insurance. These laws are enforced by the Office of Inspector General within the U.S. Department of Health and Human Services (“HHS”), the U.S. DOJ, and other federal, state, and local agencies. Among other things, these laws and others generally (i) prohibit the provision of anything of value in exchange for the referral of patients or for the purchase, order, or recommendation of any item or service reimbursed by a federal healthcare program (including Medicare and Medicaid); (ii) require that claims for payment submitted to federal healthcare programs be truthful; (iii) prohibit the transmission of protected healthcare information to persons not authorized to receive that information; and (iv) require the maintenance of certain government licenses and permits.

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Laws Protecting the Confidentiality of Health Information

U.S. federal and state laws protect the confidentiality of certain health information, in particular individually identifiable information such as medical records, and restrict the use and disclosure of that protected information. At the federal level, the HHS promulgates health information privacy and security rules under HIPAA. These rules protect health information by regulating its use and disclosure, including for research and other purposes. Failure of a HIPAA “covered entity” to comply with HIPAA regarding such “protected health information” could constitute a violation of federal law, subject to civil and criminal penalties. Covered entities include healthcare providers (including certain of those that sell devices or equipment) that engage in particular electronic transactions, including, as we do, the transmission of claims to health plans. Consequently, health information that we access, collect, analyze, and otherwise use and/or disclose includes protected health information that is subject to HIPAA. As noted above, many state laws also pertain to the confidentiality of health information. Such laws are not necessarily preempted by HIPAA, in particular those state laws that afford greater privacy protection to the individual than HIPAA. These state laws typically have their own penalty provisions, which could be applied in the event of an unlawful action affecting health information.

In the E.U., the General Data Protection Regulation (“GDPR”), includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance. Internationally, some countries have also passed laws that require individually identifiable data on their citizens to be maintained on local servers and that may restrict transfer or processing of that data.

These laws and regulations impact the ways in which we use and manage personal data, protected health information, and our information technology systems. They also impact our ability to move, store, and access data across geographic boundaries. Compliance with these requirements may require changes in business practices, complicate our operations, and add complexity and additional management and oversight needs. They also may complicate our clinical research activities, as well as product offerings that involve transmission or use of clinical data.

Physician Payments Sunshine Provision of the Affordable Care Act

The Physician Payments Sunshine Provision of the Affordable Care Act (Section 6002) (the “Sunshine Act”), requires public disclosure to the U.S. government of payments to physicians and teaching hospitals, including in-kind transfers of value, such as gifts or meals. The Sunshine Act also provides penalties for non-compliance. The Sunshine Act requires that we file an annual report on March 31st of a calendar year for the transfers of value incurred for the prior calendar year.

In 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the “SUPPORT Act”) was signed into law. The SUPPORT Act expands the reporting obligation under the Sunshine Act to include payments and other transfers of value made to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives. These expanded reporting obligations were effective for payments reported in 2022, with payment tracking beginning in 2021. Non-compliance with the Sunshine Act or SUPPORT Act is subject to civil monetary penalties.

In addition to the Sunshine Act, as expanded by the SUPPORT Act, we seek to comply with other international and individual state transparency laws, such as the transparency laws of Massachusetts and Vermont.

Sales, Marketing and Distribution

We have a broad sales network comprised of direct sales representatives, sales agents, and distributors. This established sales network provides us with a platform to introduce new products and expand sales of existing products. Our products are distributed in approximately 68 countries worldwide.

Reporting Segments and Product Categories

Historically, Orthofix has managed the business by two reporting segments, Global Spine and Global Orthopedics, which account for 77% and 23%, respectively, of our total net sales in 2022. Comparatively, SeaSpine has historically managed its business as one operating segment, but with revenue reported in two product categories: (i) Biologics (formerly recognized as Orthobiologics) and (ii) Spinal Implants and Enabling Technologies. Following the merger with SeaSpine, which was completed on January 5, 2023, we

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expect to reassess our reporting segments in the first quarter of 2023 based on how the operations of the newly combined company will be managed.

 

Sales Network

Our U.S. sales network is generally comprised of a mix of direct sales representatives and independent distributors, dependent upon each product category. An increasing number of these independent distributors sell products for more than one product category. Our Bone Growth Therapies product category is largely supported by a hybrid distribution network of direct sales representatives and independent distributors, whereas our Spinal Implants, Biologics, and Orthopedics sales organizations primarily consist of regional and territory business managers who oversee a broad network of independent distributors and sales agents.

We market our Enabling Technologies portfolio through a direct sales force in the U.S. that works together with our independent sales agents to generate either a capital sale or to place systems and components in an account in a capital efficient manner in return for a long-term revenue commitment for our spine and/or biologics products.

In the U.S., we typically consign our Biologics products and consign or loan our Spinal Implants and Orthopedics implant sets to hospitals and independent sales agents, who in turn deliver them to the hospital for a single surgical procedure or leave them with hospitals that are high volume users for use in multiple procedures. These sets typically contain the instruments, including disposables, and implants required to complete a surgery.

We focus on entering distribution relationships in territories with a high potential for growth, where our partner will carry our products exclusively, except with respect to clinical markets that our products do not address. We believe these more exclusive relationships allow us to grow faster and more cost effectively in these territories over the long term. We also plan to continue to invest in additional instrument sets and marketing and education efforts to support the expansion of our independent sales agent footprint.

Outside the U.S., we employ direct sales representatives in certain markets and also contract with independent stocking distributors, who purchase our products directly from us and independently sell them. In order to provide support to our independent sales network, we have sales and product specialists who regularly visit independent distributors to provide training and product support.

Marketing and Product Education

We market and sell our products principally to physicians, hospitals, ambulatory surgery centers, integrated health delivery systems, and other purchasing organizations.

We support our sales force and sales expansion efforts through comprehensive and specialized training workshops for physicians and sales specialists consistent with the AdvaMed Code of Ethics (“AdvaMed Code”) and the MedTech Europe Code of Ethical Business Practice (“MedTech Code”). We organize regular multilingual teaching seminars in multiple locations and also virtually. To this end, we leverage the capacity of our hands-on cadaveric training laboratories located at our Lewisville, Texas, Carlsbad, California, and Wayne, Pennsylvania facilities to increase the number of training opportunities for surgeons and sales agents. In-person trainings are also held at our facility in Verona, Italy, and in various locations in Latin America. We believe training and education will help surgeons become adept with our products and techniques, thereby improving outcomes for their patients. In recent years, thousands of surgeons from around the world have attended these in person and virtual product education seminars, which have included a variety of lectures from specialists, as well as demonstrations and hands-on workshops.

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We also produce marketing and training materials, including materials outlining surgical procedures, for our customers, sales force, and distributors in a variety of languages using printed, video, and multimedia formats. We require all of our sales force, direct and independent, to undergo extensive product, policy, and compliance training to ensure adherence to our standards, policies, and applicable law.

Competition

The global spine, biologics, orthopedics, and image guided surgery markets are highly competitive. We face significant competition in these markets from the spine and orthopedic divisions of large multinational medical device companies, established companies focused solely or primarily on spine and orthopedics, and from smaller, emerging companies focused on product innovation. These competitors are focused on bringing new technologies to market and acquiring technologies and technology licenses that directly compete with our products or that have potential product advantages that could render our products obsolete or noncompetitive.

Our Bone Growth Therapies product category competes principally with similar products marketed by Zimmer Biomet, DJO Global, and Bioventus. Our primary competitors in the Biologics, Enabling Technologies, and Spinal Implants markets include Alphatec Spine, Baxter, B. Braun, Brainlab, Bioventus, Cerapedics, DePuy Synthes Spine (a Johnson & Johnson company), Globus Medical, Medtronic, NuVasive, Stryker, Surgalign, XTANT Medical, ZimVie and various smaller public and private companies. For Global Orthopedics devices, our principal competitors include DePuy Synthes, Zimmer Biomet, Stryker, Smith & Nephew, and OrthoPediatrics.

We believe that we enhance our competitive position by focusing on product features such as ease of use, versatility, cost, and patient acceptability, together with value-added services, such as the STIM onTrack mobile app, HEX RAY software, OrthoNext preoperative planning, and our medical education services. We attempt to avoid competing based solely on price. Overall cost and medical effectiveness, innovation, reliability, value-added service, and training are the most prevalent methods of competition in the markets for our products, and we believe we compete effectively.

Manufacturing and Sources of Supply

In general, raw materials essential to our businesses are readily available from multiple sources. For reasons of quality assurance, availability or cost effectiveness, certain components and raw materials are available only from one supplier. Our relationships with suppliers that cannot be replaced without a material expense or delay are governed by written contracts, which are generally supply agreements. These agreements set forth the process by which we order components or raw materials, as applicable, from such suppliers (which process is either on a purchase order basis or based on quarterly or annual forecasts and in some cases require us to purchase minimum amounts) and the related fees for purchasing such components or raw materials. These agreements outline the rights of each party with respect to quality assurance, inspection and compliance with applicable law and contain what we believe to be customary indemnification provisions for commercial agreements. Each of these agreements is entered into in the ordinary course of our business, is immaterial in amount and significance, and not a contract upon which our business is substantially dependent. In addition, we endeavor to maintain sufficient inventory of components and raw materials so that our production will not be significantly disrupted even if a particular component or material is not available for a period of time.

Spine and Orthopedic Products

We generally design, develop, assemble, test, and package our bone growth stimulation, spinal implant, and orthopedic products, and subcontract the manufacturing of a substantial portion of the component parts and instruments. Although certain of our key raw materials are obtained from a single source, we believe alternate sources for these materials are available. Further, we believe an adequate inventory supply is maintained to avoid product flow interruptions. Historically, we have not experienced difficulty in obtaining the materials necessary to meet our production schedules.

Our products are currently manufactured and assembled in the U.S., Canada, and Italy. We believe our plants comply in all material respects with the requirements of the FDA and all relevant regulatory authorities outside the U.S. For a description of the laws to which we are subject, see Item 1, “Business”, under the subheadings “Corporate Compliance and Ethics Program” and “Government Regulation.” We actively monitor each of our subcontractors in order to maintain manufacturing and quality standards and product specification conformity.

Biologics

Most of our Biologics products contain material derived from human or bovine tissue. We only source our raw materials from tissue banks registered with the FDA and accredited by the AATB. The donors are screened, tested and processed by the tissue banks in accordance with FDA and AATB requirements. Additionally, each donor must pass FDA-specified bacterial and viral testing before

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raw material is distributed to us for further processing. We receive with each donor lot a certification of the safety of the raw material from the tissue bank’s medical director. As an added safety assurance, each lot of bone is released into the manufacturing process only after our quality assurance microbiologists screen the incoming bone and serology test records. During our manufacturing process, the bone particles are subjected to our proprietary process and terminally sterilized. This process is designed to support the safety and effectiveness of our DBM products.

The collagen used in our collagen ceramic matrix products is derived only from the deep flexor tendon of cattle less than 24 months old from New Zealand. The World Health Organization classifies different types of cattle tissue for relative risk of BSE transmission. Deep flexor tendon is in the lowest-risk category for BSE transmission (the same category as milk, for example) and is therefore considered to have a negligible risk of containing the agent that causes BSE (an improperly folded protein known as a prion).

We also partner with MTF Biologics to provide our customers allograft solutions (HCT/Ps) for various spine, orthopedic and other bone repair needs. MTF Biologics provides donor screening, processing, and quality standards that are expected by our customers. Our partnership with MTF allows us to exclusively market the Virtuos Lyograph, Trinity ELITE, FiberFuse and FiberFuse Strip, and certain other tissue forms and we have a non-exclusive marketing rights for our Opus BA and Opus MG Set synthetic, biologic offerings.

Human Capital Resources

Our key human capital objectives in managing our business include attracting, developing, and retaining top talent while integrating diversity, equity, and inclusion principles and practices into our core values.

Employees

At December 31, 2022, we had 1,092 employees worldwide. Of these, 786 were employed in the U.S. and 306 were employed at other non-U.S. locations. Our relations with our Italian employees, who numbered 227 at December 31, 2022, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. We are not a party to any other collective bargaining agreement.

Subsequent to the merger with SeaSpine, which was completed on January 5, 2023, we have approximately 1,734 employees worldwide, with 1,371 employed in the U.S. and 363 employed at other non-U.S. locations.

Compensation and Benefits

Because attracting, developing, and retaining high-level talent is a key component of our human capital objectives, we seek to provide competitive compensation and benefits packages, and to prioritize the health and wellness our employees. In addition to the comprehensive and competitive health plans that we offer, our employees receive access to the following benefits: a 401(k) retirement plan with a Company match, an employee stock purchase plan, virtual physician consults, an employee health advocate, a Company-provided basic life insurance and disability benefits corporate wellness program, an onsite fitness center for certain locations, paid parental leave, an employee assistance program, a flexible spending account, health savings accounts, and local employee discounts programs. Through our Innovator and Above and Beyond Award programs we recognize and reward our employees that exemplify our mission of providing transformative solutions that improve patients' lives.

Talent Development

We believe that success comes from investing in our people and ensuring our workforce is aligned with our mission and values. To achieve this goal, we devote time and resources to assist our employees in being familiar with our business, industry, and product offerings. We have developed a robust onboarding program for our newly hired associates that provides a comprehensive overview of our product portfolio and company history. We put an emphasis on training our employees and sales representatives to understand our business, including the underlying medical conditions that our products treat. In addition, we strive to support our teams in the areas of development, mentoring, engagement, and health and wellness, enabling them to do their best work as they grow their careers. In 2022, we successfully completed our second annual summer internship program with 80% of participating interns meeting a diversity criteria. Additionally, in 2022 we matched interns hired from our 2021 program to employee mentors, continued our 2021 Leadership Excellence and Acceleration Program (“LEAP”) inaugural cohort, and prepared for a second cohort to launch in 2023, which will include a minimum of 25% minority participation.

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Diversity and Inclusion

We are committed to fostering, cultivating, and preserving a culture that promotes diversity, equity, and inclusion. We seek to demonstrate our commitment to providing equal and equitable opportunities to all employees through programs such as our Moving 4ward initiative, a program created to embrace the value of diversity and reflect the communities where we live and work. Additionally, we proudly support the Orthofix Women’s Network, a program that provides opportunities for women to learn from each other and grow within our company and our industry. Throughout the year, we promote a variety of diverse voices to our employees by recognizing events such as Black History Month, Martin Luther King Jr. Day, Women’s History Month, Asian Pacific American Heritage Month, LGBTQ Pride Month, Juneteenth, and Hispanic Heritage Month. We seek to embrace and encourage our employees’ differences and know that diversity, equity and inclusion help build a truly global, transformative business and will continue to be a source of our strength. Building on this belief, we launched companywide, and incorporated into our new hire orientation, a training titled, “Hiring, Leading and Fostering Diverse and Inclusive Teams”. We intend that by end of 2023, all hiring managers, leaders, and interviewers will have completed this training.

Health and Safety

Promoting and protecting the safety of our workforce is a top priority. Health and safety matters are responsibilities that we share throughout our organization. We evolved in these matters during the last few years to meet the needs of our workforce during the COVID-19 pandemic. Employees’ safety risks vary depending on the roles they perform, and we seek to tailor our safety efforts accordingly. We periodically measure the sentiment of our employees through an employee engagement survey and share the results and action items identified from the survey with our employees.

Community

We support a variety of charitable organizations through donations, fundraising efforts, educational partnerships with colleges and universities, and local community development. Over the years, we have raised funds and awareness for veteran support groups, food and homebuilding organizations, and health-related institutions. In 2022, we added a corporate objective to our annual incentive program to encourage community volunteerism. Under this program, our employees contributed 1,988 hours to community outreach programs, which exceeded our communicated goal. We proudly supported Donate Life, relief efforts for Ukraine, Texas Scottish Rite Hospital for Children, blood drives, food pantries and other charitable initiatives in the communities we live and work in around the world.

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Item 1A. Risk Factors

In addition to the other information contained in this Annual Report and the exhibits hereto, you should carefully consider the risks described below. These risks are not the only ones that we may face. Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below or elsewhere in this Annual Report. Investing in our common stock involves a high degree of risk and if any of these risks or uncertainties occur, the trading price of our common stock could decline and you could lose part or all of your investment. The disclosures in this Item 1A of this Annual Report under the heading “Risk Factors” relate to the combined company subsequent to the merger unless otherwise noted.

Summary of Risk Factors

The section provides a summary of many of the risks we are exposed to in the normal course of our business activities. The summary does not contain all of the information that may be important to you, and you should read the summary together with the more detailed discussion of risks set forth following this section as well as elsewhere in this report.
 

•The merger of Orthofix and SeaSpine may trigger change in control or other provisions in certain distributor, customer and other agreements, any of which may have an adverse impact on the combined company’s business and results of operations .

•Uncertainties associated with the merger may cause a loss of management personnel and other key employees.

•Stockholder litigation related to the merger could negatively affect our business and operations.

•Integration of the Orthofix and SeaSpine businesses is expected to be expensive and time-intensive and we may not be able to successfully integrate the businesses and/or realize anticipated synergies and benefits in a timely manner, if at all.

•We are subject to a wide range of requirements, regulations, and laws due to our international operations and related to the medical device industry in which we operate, the violation of any of which could subject us to adverse consequences.

•Ongoing healthcare reform initiatives and changes in third-party reimbursement policies and in the healthcare industry aimed at cost containment may adversely impact our business.

•We and certain of our suppliers are subject to extensive government regulation that increases our costs and could limit our ability to market or sell our products.

•Oversight of the medical device industry might affect the way we sell medical devices and compete in the marketplace.

•An FDA panel recommended that bone growth stimulator devices be reclassified by the FDA from Class III to Class II devices, which could increase future competition for us in this product category and negatively affect our future sales of such products.

•We are subject to requirements relating to hazardous materials which may impose significant compliance or other costs on us.

•The COVID-19 pandemic, and the related effects thereof, has materially adversely affected, and could continue to materially adversely affect, our operations, supply chain, manufacturing, product demand, product distribution, customers and other business activities.

•The ongoing conflict between Russia and Ukraine, and the global response to it, could adversely impact our global operations.

•Our business may be adversely affected if consolidation in the healthcare industry leads to demand for price concessions or if a group purchasing organization (“GPO”) or similar entity excludes us from being a supplier.

•The industry in which we operate is highly competitive. New product developments and improvements by our competitors could make our products or technologies non-competitive or obsolete. Similarly, unless clinical studies demonstrate the safety and efficacy of our products, alone and relative to competitive products, our sales may be adversely affected.

•Our ability to market products successfully depends, in part, upon the acceptance of the products not only by consumers, but also by independent third parties, including physicians, hospitals, and third party payors.

•Clinical development is a lengthy and expensive process with an inherently uncertain outcome. Failure to successfully complete clinical trials and obtain regulatory approval for our product candidates on our anticipated timelines at

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reasonable costs to us, or at all, could have a material adverse effect on our business, operating results and financial condition.

•If the third parties on which we rely to conduct our clinical studies do not perform as contractually required or expected, we may not obtain required approvals for or commercialize our products.

•Certain of our products are derived from human tissue or contain materials derived from animal sources and are or could be subject to additional regulations.

•Unfavorable negative publicity concerning both alleged improper methods of tissue recovery from donors and disease transmission from donated tissue could limit widespread acceptance of some of our products.

•We may not be able to successfully introduce new products to the market and, if we do, market acceptance or the market size for our products may not be as we expect.

•There is no guarantee that regulatory authorities, U.S. or foreign, will grant clearance or premarket approval of our future products.

•Our success depends on our ability to successfully educate and train surgeons and their staff on the benefits, safety, cost-effectiveness, and proper use of our products.

•Security breaches, cyber-attacks, loss of data, and other disruptions to our information technology systems could compromise sensitive information and/or adversely affect our business.

•Our business could be harmed if any of our manufacturing, development or research facilities are damaged and/or our manufacturing processes are interrupted.

•We depend on a limited number of third-party manufacturers and suppliers for manufacturing and processing activities, components, and raw materials. Failure of these third parties to perform as expected could result in substantial delays, increased costs or failures of our product development programs, or delayed or unsuccessful commercialization of our products.

•We may not maintain or grow our revenue if we are unable to maintain and expand our network of independent sales representatives and distributors.

•Our success depends on the services of key members of our senior management and other key employees.

•Our business is subject to economic, political, regulatory, and other risks associated with international sales and operations.

•Our failure to adequately protect or enforce our intellectual property rights could harm our position in the marketplace or prevent or impede the commercial protection of our products.

•We may be subject to third parties claims for infringement or misappropriation of their intellectual property.

•There have been substantial intellectual property disputes in our industry, which are inherently costly, divert significant time and other resources, and have unpredictable outcomes.

•We may have significant product or other liability exposure, some of which may not be covered by insurance, and if covered by insurance, such coverage may not cover all claims, which could require us to pay substantial sums.

•Our efforts to identify, pursue, and implement new business opportunities (including acquisitions) may be unsuccessful.

•We have invested in and provided loans to privately-held companies and if they are unsuccessful, we may lose all of our investment and our loans may not be repaid.

•Our sales volumes and our operating results may fluctuate.

•Our goodwill, intangible assets and fixed assets are subject to potential impairment which could adversely affect our future financial results.

•We maintain a $300.0 million secured revolving credit facility secured by a pledge of substantially all of our property. Our failure to comply with the facility’s covenants could result in an event of default, which could adversely affect our future.

•We must maintain high levels of inventory, which could consume a significant amount of our resources and reduce our cash flows.

•Our future capital needs are uncertain and we may need to raise additional funds in the future, and such funds may not be available on acceptable terms or at all.

•Our business could be negatively impacted by corporate citizenship and environmental, social, and governance ("ESG") matters and/or our reporting of such matters.
 

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Risks Related to our Recently Completed Merger with SeaSpine

The merger may trigger change in control or other provisions in certain distributor, customer and other agreements to which Orthofix or SeaSpine is a party, which may have an adverse impact on the combined company’s business and results of operations following completion of the merger.

The merger may trigger change in control and other provisions in certain agreements to which Orthofix or SeaSpine is a party. If Orthofix or SeaSpine is unable to negotiate waivers of those provisions, counterparties may exercise their rights and remedies under the agreements, including terminating the agreements or seeking monetary damages or equitable remedies. Even if Orthofix and SeaSpine are able to negotiate consents or waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to Orthofix or SeaSpine. Any of the foregoing or similar developments may have an adverse impact on the combined company’s business and results of operations following the completion of the merger.

Uncertainties associated with the merger may cause a loss of management personnel and other key employees, which could adversely affect the future business and operations of the combined company following completion of the merger.

We are dependent on the experience and industry knowledge of our officers and other key employees to execute our business plans. The combined company’s success after the completion of the merger will depend in part upon the ability of the combined company to retain certain key management personnel and employees of Orthofix and SeaSpine. As a result of the merger, current and prospective employees may experience uncertainty about their roles following the completion of the transactions, which may have an adverse effect on our ability to attract or retain key management and other key personnel. In addition, no assurance can be given that the combined company will be able to attract or retain key management personnel and other key employees to the same extent that Orthofix and SeaSpine have previously been able to attract or retain their own employees.

Stockholder litigation could negatively affect our business and operations.

On each of November 17, 2022, November 21, 2022, and December 13, 2022, purported then-stockholders of SeaSpine filed a complaint against SeaSpine and the then-members of SeaSpine’s board of directors in the United States District Court for the Southern District of New York and in the United States District Court for the District of Delaware. In addition, on December 13, 2022, a purported then-stockholder of Orthofix filed a complaint against Orthofix and the then-members of Orthofix’s board of directors in the United States District Court for the Southern District of New York. The complaints assert claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act for allegedly causing a materially incomplete and misleading registration statement on Form S-4 filed with the SEC on November 8, 2022, or for allegedly causing a materially incomplete and misleading Schedule 14A definitive proxy statement filed with the SEC on November 23, 2022. Among other remedies, the plaintiffs sought to enjoin the merger. All four of these actions have now been voluntarily dismissed by the plaintiffs. On November 19, 2022, counsel to two different purported then-stockholders of SeaSpine sent demand letters making similar assertions. On November 23, 2022, counsel to another purported then-stockholder of SeaSpine sent a draft federal court complaint containing similar allegations, making similar claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act, and also seeking to enjoin the merger. In addition, on November 15, 2022 and December 20, 2022, counsel to two different purported then-stockholders of Orthofix sent demand letters to Orthofix’s counsel attaching draft federal court complaints against Orthofix and the then-members of the Orthofix board making similar claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act, and also sought to enjoin the merger. On December 14, 2022, and December 22, 2022, counsel to two additional purported then-stockholders of Orthofix sent demand letters to Orthofix’s counsel containing similar allegations. Although the ultimate outcome of these lawsuits cannot be predicted with certainty, Orthofix and SeaSpine believe the claims are without merit and intend to defend against these actions vigorously.

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements. Additional lawsuits against Orthofix, SeaSpine, Merger Sub and/or the directors and officers of Orthofix and/or SeaSpine in connection with the merger may be filed in the future. Neither Orthofix nor SeaSpine can give assurance as to the outcome of any lawsuit that has been or may be filed, including the amount of costs associated with defending claims or any other liabilities that may be incurred in connection with such litigation. Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and divert management’s attention and resources, which could adversely affect the operation of Orthofix’s and SeaSpine’s business.

The combined company may be unable to successfully integrate the Orthofix and SeaSpine businesses and realize the anticipated benefits of the merger.

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The success of the merger will depend, in part, on the combined company’s ability to successfully combine and integrate the Orthofix and SeaSpine businesses, and realize the anticipated benefits, including synergies, cost savings, innovation and technological opportunities and operational efficiencies from the merger in a manner that does not materially disrupt existing customer, supplier, and employee relations and does not result in decreased revenues due to losses of, or decreases in orders by, customers. If the combined company is unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, and the value of the combined company common stock may decline. Integration may result in additional and unforeseen expenses, and the combined company may fail to realize some or all of the anticipated benefits of the merger on a timely basis or at all.

While we have successfully completed a number of integration activities since the closing of merger, the remainder of our integration activities may not be completed smoothly or successfully. The integration of the two companies may result in material challenges, including, without limitation:

•managing a larger, more complex combined medical device business;

•maintaining employee morale and retaining key management and other employees;

•retaining existing business and operational relationships, including customers, suppliers and employees and other counterparties, as may be impacted by contracts containing consent and/or other provisions that may be triggered by the merger, and attracting new business and operational relationships;

•unanticipated issues in integrating the numerous systems involved in operating our businesses, including information technology, communications, purchasing, accounting and finance, including integrating different accounting policies, sales, billing, payroll, employee benefits, regulatory compliance and other systems;
 

•successfully addressing inconsistencies in standards, controls, procedures or policies that could affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the merger;

•consolidating corporate and administrative infrastructures and eliminating duplicative operations;

•coordinating geographically separate organizations, systems, and facilities and addressing possible differences in business backgrounds, corporate cultures, and management philosophies; and

•unforeseen expenses or delays associated with the merger.

Many of these factors will be outside of our control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and other adverse impacts, which could materially affect the combined company’s financial position, results of operations and cash flows. In addition, the integration of certain operations requires the dedication of significant management resources, which may temporarily distract management’s attention from our day-to-day business. Employee uncertainty and lack of focus during the integration process may also disrupt our business.

In addition, SeaSpine completed its merger with 7D Surgical, Inc. in May 2021, and the integration of the SeaSpine business and 7D Surgical remains in process and remains subject to certain risks, including that (a) the benefits expected to be received from the acquisition may not be realized in their entirety, (b) there could be unanticipated adverse impacts on our or 7D Surgical’s business, and/or we may otherwise not realize the expected return on our investment, (c) we may be subject to claims or liabilities related to 7D Surgical’s business arising after the merger was completed and SeaSpine may have failed to identify or assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring 7D Surgical; and (d) 7D Surgical was not required to maintain an internal control infrastructure that would meet the standards of a U.S. public company, and we may incur substantial costs to implement such controls and procedures and we could encounter unexpected delays and challenges in this implementation. The ongoing integration of 7D Surgical may increase the complexity of, and challenges associated with, the integration of the Orthofix and SeaSpine businesses, which may make it more difficult for Orthofix and SeaSpine to achieve the anticipated benefits of the merger fully or at all, or within the anticipated time frame.

The future results of the combined company may be adversely impacted if the combined company does not effectively manage its complex operations following the completion of the merger.

Following the completion of the merger, the size of the combined company’s business will be significantly larger than the current size of either SeaSpine’s business or Orthofix’s business. The combined company’s ability to successfully manage this expanded business will depend, in part, upon management’s ability to design and implement strategic initiatives that address not only the integration of the Orthofix and SeaSpine businesses, but also the increased scale and scope of the combined business with its

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associated increased costs and complexity. There can be no assurances that the combined company will be successful in integrating the businesses or that it will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the merger.

We expect to incur substantial expenses related to the completion of the merger and the integration of the Orthofix and SeaSpine businesses.

We will incur substantial expenses in connection with the completion of the merger to integrate a large number of processes, policies, procedures, operations, technologies and systems of Orthofix and SeaSpine in connection with the merger. The substantial majority of these costs will be non-recurring expenses related to the transactions and facilities and systems consolidation costs. The combined company may incur additional costs or suffer loss of business under third-party contracts that are terminated or that contain change in control or other provisions that may be triggered by the completion of the transactions, and/or losses of, or decreases in orders by, customers, and may also incur costs to retain certain key management personnel and employees. Orthofix and SeaSpine will also incur transaction fees and costs related to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs and time delays. These incremental transaction-related costs may exceed the savings the combined company expects to achieve from the elimination of duplicative costs and the realization of other efficiencies related to the integration of the businesses, particularly in the near term and in the event there are material unanticipated costs. Factors beyond the parties’ control could affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately.

The market price of the combined company common stock after the merger is completed may be affected by factors different from those affecting the price of Orthofix common stock or SeaSpine common stock before the merger is completed.

Upon completion of the merger, previous holders of Orthofix common stock and previous holders of SeaSpine common stock are now holders of common stock of the combined company. As the businesses of Orthofix and SeaSpine are different, the results of operations, as well as the price of the combined company common stock, may, in the future, be affected by factors different from those factors affecting each of Orthofix and SeaSpine as an independent stand-alone company. The combined company will face additional risks and uncertainties to which each of Orthofix and SeaSpine may not have previously been exposed. As a result, the market price of the combined company’s shares may fluctuate significantly following completion of the merger.

The market price of the combined company common stock may decline as a result of the merger, including as a result of some Orthofix and/or SeaSpine stockholders adjusting their portfolios.

The market price of the combined company common stock may decline as a result of the merger if, among other things, the operational cost savings estimates in connection with the integration of the Orthofix and SeaSpine businesses are not realized, there are unanticipated negative impacts on Orthofix’s financial position, or if the transaction costs related to the merger are greater than expected. The market price also may decline if the combined company does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the transactions on the combined company’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.
 

In addition, sales of combined company common stock after the completion of the merger may cause the market price of such common stock to decrease. Based on the number of shares of SeaSpine common stock outstanding immediately prior to the close of the merger, Orthofix issued an aggregate of approximately 16.0 million shares of Orthofix common stock to holders of SeaSpine common stock in the merger. Historical SeaSpine stockholders may decide not to hold the shares of combined company common stock they will receive in the merger. In addition, certain Orthofix stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell their shares of common stock following completion of the merger. Such sales of combined company common stock could have the effect of depressing the market price for the combined company common stock.

Any of these events may (i) make it more difficult for the combined company to sell equity or equity-related securities, (ii) dilute your ownership interest in the combined company, and/or (iii) have an adverse impact on the price of the combined company common stock.

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Risks Related to our Legal and Regulatory Environment

If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal control over financial reporting, we may not be able to report our financial results accurately or detect fraud, which could harm our business and the trading price of our common stock.

Effective internal controls are necessary for us to produce reliable financial reports and are important in our effort to prevent financial fraud. We are required to periodically evaluate the effectiveness of the design and operation of our internal controls. As has occurred in several years prior, these evaluations may result in the conclusion that enhancements, modifications, or changes to our internal controls are necessary or desirable. While management evaluates the effectiveness of our internal controls on a regular basis, these controls may not always be effective. There are inherent limitations on the effectiveness of internal controls, including collusion, management override, and failure of human judgment. Because of this, control procedures are designed to reduce rather than eliminate business risks. Also, previously effective internal controls may become inadequate over time because of changes in our business or operating structure, and we may fail to take measures to evaluate the adequacy of and update these controls, as necessary. If we fail to maintain an effective system of internal controls or if management or our independent registered public accounting firm were to discover material weaknesses in our internal controls, we may be unable to produce reliable financial reports or prevent fraud, which could harm our financial condition and operating results, and could result in a loss of investor confidence and a decline in our stock price.

We are subject to the Foreign Corrupt Practices Act (the “FCPA”) and other similar anti-bribery laws and any violations of such laws could subject us to adverse consequences.

The FCPA and similar anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. The FCPA also imposes accounting standards and requirements on U.S. publicly traded entities and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments. Because of the predominance of government-sponsored healthcare systems around the world, many of our customer relationships outside of the U.S. are with governmental entities and are therefore subject to such anti-bribery laws.

In recent years, both the U.S. and non-U.S. regulators have increased regulation, enforcement, inspections, and governmental investigations of the medical device industry, including increased U.S. government oversight and enforcement of the FCPA. Despite implementation of a comprehensive global healthcare compliance program, we may be subject to more regulation, enforcement, inspections, and investigations by governmental authorities in the future.

Any failure to comply with applicable legal and regulatory obligations in the U.S. or abroad could adversely affect us in a variety of ways that include, but are not limited to, significant criminal, civil, and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, suspension or withdrawal of CE Certificates of Conformity, seizure of shipments, restrictions on certain business activities, disgorgement and other remedial measures, disruptions of our operations, and significant management distraction. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities. Any reduction in international sales, or our failure to further develop our international markets, could have a material adverse effect on our business, results of operations, and financial condition.

We are subject to federal and state healthcare fraud, abuse, and anti-self-referral laws, and could face substantial penalties if we are determined not to have fully complied with such laws.

Healthcare fraud and abuse regulations by federal and state governments impact our business. Healthcare fraud and abuse laws potentially applicable to our operations include:

The federal Anti-Kickback Statute, which prohibits knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, in exchange for or to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program (such as the Medicare or Medicaid programs);

The federal Stark law, which prohibits physician self-referral, specifically a referral by a physician of a Medicare or Medicaid patient to an entity providing designated health services if the physician or an immediate family member has a financial relationship with that entity;

Federal false claims laws, which prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other federal government payors that are false or fraudulent; and

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State and non-U.S. laws analogous to each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by non-governmental or non-U.S. governmental third-party payors, including commercial insurers.

Federal and state government agencies, as well as private whistleblowers, have significantly increased investigations and enforcement activity under these laws. Violations of these laws are punishable by civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, or the exclusion from participation in federal, non-U.S., or state healthcare programs. Although we exercise care in structuring our sales and marketing practices, customer discount arrangements, and interactions with healthcare professionals to comply with these laws and regulations, we cannot provide assurance that government officials will not assert that our practices are not in compliance or that government regulators or courts will interpret those laws or regulations in a manner consistent with our interpretation. Even if an investigation is unsuccessful or is not fully pursued, we may spend considerable time and resources defending ourselves and the adverse publicity surrounding any assertion that we may have engaged in violative conduct could have a material and adverse effect on our reputation with existing and potential customers and on our business, financial condition, and results of operations.

Reimbursement policies of third parties, cost containment measures, and healthcare reform could adversely affect the demand for our products and limit our ability to sell our products.

Maintaining and growing sales of our products depends on the availability of adequate coverage and reimbursement from third-party payors, both within and outside the U.S. Our products are sold either directly by us or by independent sales representatives to customers or to our independent distributors and purchased by hospitals, healthcare providers, and patients. These products may be reimbursed by third-party payors, such as government programs, including Medicare, Medicaid, and Tricare, or private insurance plans, managed care organizations, and healthcare networks. Major third-party payors for medical services in the U.S. and internationally continue to work to contain health care costs, are increasingly challenging the policies and the prices charged for medical products and services, and have or may implement initiatives to limit the growth of healthcare costs, including price regulation, competitive pricing, coverage and payment policies, comparative effectiveness of therapies, technology assessments, and managed-care arrangements. Any medical policy developments that eliminate, reduce, or materially modify coverage of our reimbursement rates for our products could have an impact on our ability to sell our products. In addition, third-party payors continually review and revise their coverage and reimbursement policies for procedures involving the use of our products and can, without notice, eliminate or reduce coverage or reimbursement if they determine that a device or product provided to a patient or used in a procedure does not meet applicable payment criteria or if the policyholder’s healthcare insurance benefits are limited.

For example, in the past, a major national third-party insurer in the U.S. reduced coverage (from all or most cases to limited indications) for biomechanical devices (e.g., spine cages) used in cervical fusion procedures, stating that the devices had not been shown to be more effective than bone graft. In addition, certain insurers have limited coverage for vertebral fusions in the lumbar spine and other insurers may adopt similar coverage decisions in the future. Limits put on reimbursement could make it more difficult to buy our products and substantially reduce, or possibly eliminate, patient access to our products. In addition, should governmental authorities continue to enact legislation or adopt regulations that affect third-party coverage and reimbursement, access to our products and coverage by private or public insurers may be reduced with a consequential material adverse effect on our sales and profitability.

CMS, in its ongoing implementation of the Medicare program, periodically reviews medical study literature to determine how the literature addresses certain procedures and therapies in the Medicare population. The impact that this information could have on Medicare coverage policy for our products is currently unknown, but we cannot provide assurances that the resulting actions will not restrict Medicare coverage for our products. There can be no assurance that we or our distributors will not experience significant reimbursement problems in the future related to these or other proceedings.

As required by law, CMS has continued efforts to implement a competitive bidding program for selected DMEPOS items paid for by the Medicare program. In this program, Medicare rates are based on bid amounts for certain products in designated geographic areas, rather than the Medicare fee schedule amount. Bone growth stimulation products are currently exempt from this competitive bidding process. We cannot predict which products from any of our businesses may ultimately be affected or whether or when the competitive bidding process may be extended to our businesses. There can be no assurance that the implementation of the competitive bidding program will not have an adverse impact on the sales of some of our products.

With respect to international sales, market acceptance may depend, in part, upon the availability of coverage and reimbursement within prevailing healthcare payment systems. Reimbursement and healthcare payment systems in international markets vary significantly by country. As in the U.S., our products may not obtain coverage and reimbursement approvals in a timely manner, if at all, in a particular international market. In addition, even if we obtain country-specific coverage and reimbursement approvals, we could incur considerable expense to do so. Our failure to obtain such coverage and approvals would negatively affect market acceptance of our products in the international markets in which such failure occurs and the expenses incurred in connection with obtaining such coverage and approvals could outweigh the benefits of obtaining them.

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Globally, our products are sold in many countries, such as the U.K., Germany, France, and Italy, which have publicly funded healthcare systems. The ability of hospitals supported by such systems to purchase our products is dependent, in part, upon public budgetary constraints. Any increase in such constraints may have a material adverse effect on our sales and collection of accounts receivable from such sales.

If the trend by governmental agencies and other third-party payors to reduce coverage of and/or reimbursement for procedures using our products continues, our business, results of operations, and financial condition could be materially and adversely affected. Further, we cannot be certain that, under current and future payment systems, the cost of our products will be adequately incorporated into the overall cost of the procedure and, accordingly, we cannot be certain that the procedures performed with our products will be reimbursed at a cost-effective level, or at all.

We and certain of our suppliers may be subject to extensive government regulation that increases our costs and could limit our ability to market or sell our products.

The medical devices we manufacture and market are subject to rigorous regulation by the FDA and numerous other federal, state, and foreign governmental authorities. These authorities regulate the development, approval, classification, testing, manufacturing, labeling, marketing, and sale of medical devices. Likewise, our use and disclosure of certain categories of health information may be subject to federal and state laws, implemented and enforced by governmental authorities that protect health information privacy and security. For a description of these regulations, see Item 1, “Business,” under the subheading “Government Regulation.”

The approval or clearance by governmental authorities, including the FDA in the U.S., is generally required before any medical devices may be marketed in the U.S. or other countries. We cannot predict whether, in the future, the U.S. or foreign governments may impose regulations that have a material adverse effect on our business, financial condition, results of operations, or cash flows.

The process of obtaining FDA clearance and approvals to develop and market a medical device can be costly, time-consuming, and subject to the risk that such clearances or approvals will not be granted on a timely basis, if at all. The regulatory process may delay or prohibit the marketing of new products and impose substantial additional costs if the FDA lengthens review times for new devices. Further, the FDA has the ability to change the regulatory classification of a cleared or approved device from a higher to a lower regulatory classification, or to reclassify an HCT/P, either of which could materially adversely impact our ability to market or sell our devices.

In addition, we must engage in extensive recordkeeping and reporting. For example, the Federal Medical Device Reporting regulation requires us to provide information to the FDA whenever there is evidence that reasonably suggests that a device may have caused or contributed to a death or serious injury or that a malfunction occurred that would be likely to cause or contribute to a death or serious injury upon recurrence.

We and certain of our suppliers also are subject to announced and unannounced inspections by the FDA to determine our compliance with FDA’s QSR and other regulations. Allegations may be made against us or against our suppliers, including donor recovery groups or tissue banks, claiming that the acquisition or processing of biomaterials products does not comply with applicable FDA regulations or other relevant statutes and regulations. Allegations like these could cause regulators or other authorities to investigate or take other action against us or our suppliers, or could cause negative publicity for us or our industry generally. If the FDA were to investigate us, because of an allegation or otherwise, and if the FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the agency could institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions such as fines and civil penalties against us, our officers, our employees, or our suppliers; unanticipated expenditures to address or defend such actions; delays in clearing or approving, or refusal to clear or approve, our products; withdrawal or suspension of approval of our products or those of our third-party suppliers by the FDA or other regulatory bodies; product recall or seizure; interruption of production; operating restrictions; injunctions; and criminal prosecution. The FDA also has the authority to request repair, replacement, or refund of the cost of any medical device manufactured or distributed by us. The FDA may also recommend prosecution to the U.S. Department of Justice. Any notice or communication from the FDA regarding a failure to comply with applicable requirements, or negative publicity or product liability claims resulting from any adverse regulatory action, could have a material adverse effect on our development of new laboratory tests, business strategy, financial condition, results of operations, or cash flows.

We have little control over the ongoing compliance of our suppliers with applicable regulations. Their failure to comply may expose us to regulatory action and other liability, including fines and civil penalties, suspension of production, suspension or delay in new product approval or clearance, product seizure or recall, or withdrawal of product approval or clearance.

Moreover, governmental authorities outside the U.S. have become increasingly stringent in their regulation of medical devices, and our products may become subject to more rigorous regulation by non-U.S. governmental authorities in the future. U.S. or non-U.S.

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government regulations may be imposed in the future that may have a material adverse effect on our business and operations. The European Commission (“EC”) has harmonized national regulations for the control of medical devices through European Medical Device Directives with which manufacturers must comply. Under these new regulations, manufacturing plants must have received a full Quality Assurance Certification from a “Notified Body” in order to be able to sell products within the member states of the E.U. This Certification allows manufacturers to stamp the products of certified plants with a “CE” mark. Products covered by the EC regulations that do not bear the CE mark cannot be sold or distributed within the E.U. We have received certification for all currently existing manufacturing facilities.

In addition, until a completed mutual recognition agreement exists between Switzerland and the E.U., Switzerland will be considered a Third Country. The company has, however, pursued registration of certain key products in Switzerland under their new laws. Similar activities have been pursued in the United Kingdom in relation to Brexit.

Oversight of the medical device industry might affect the way we sell medical devices and compete in the marketplace.

The FDA, the U.S. Office of the Inspector General for the U.S. Department of Health and Human Services, the U.S. Department of Justice and other regulatory agencies actively enforce regulations prohibiting the promotion of a medical device for a use that has not been cleared or approved by the FDA. Use of a device outside its cleared or approved indications is known as “off-label” use. Physicians may prescribe our products for off-label uses, as the FDA does not restrict or regulate a physician’s choice of treatment within the practice of medicine. However, if a regulatory agency determines that our promotional materials, training or activities constitute improper promotion of an off-label use, the regulatory agency could request that we modify our promotional materials, training or activities, or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and/or criminal penalties. Although our policy is to refrain from statements and activities that could be considered off-label promotion of our products, any regulatory agency could disagree and conclude that we have engaged in off-label promotion and, potentially, caused the submission of false claims. Moreover, the off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims. In addition, we may be subject to compliance actions, penalties, or injunctions if the FDA challenges one or more of our determinations that a product modification did not require new approval or clearance by the FDA.

An FDA panel recommended that bone growth stimulator devices be reclassified by the FDA from Class III to Class II devices, which could increase future competition for us in this product category and negatively affect our future sales of such products.

We have the market-leading bone growth stimulation platform with the only cervical spine indication granted by the FDA, and the only mobile device app accessory designed to help patients adhere to their prescriptions and improve their clinical outcomes, STIM onTrack 2.1. We also are investing in IDE studies to expand indications for use in areas such as rotator cuff tears. Our bone growth therapy products currently are designated as Class III devices. Class III devices are subject to the FDA’s most rigorous pathway to approval for medical devices in the U.S. The FDA may change classification of a device only if the proposed new class has sufficient regulatory controls to provide reasonable assurances of safety and effectiveness.

In September 2020, the FDA’s Orthopedic and Rehabilitation Devices Panel recommended that bone growth stimulator devices be reclassified from Class III to Class II devices with “special controls” to ensure patient safety and therapy efficacy. These proposed special controls include the condition that such devices be subject to rigorous clinical studies and post market surveillance for any new products. This would be in addition to other special controls and the Class II general requirement that any new products show “substantial equivalence” to already-cleared or approved devices.

We believe that the panel’s recommendation correctly recognizes the importance of PMA-like clinical data for these devices, so that manufacturers will continue to be required to submit robust clinical data under the approval or clearance process to ensure the safety and efficacy of these devices for patients. We, along with other bone growth stimulation manufacturers, submitted comments in response to the FDA’s proposed rulemaking to underscore the panel’s recommendation of the need for robust clinical data prior to approval or clearance of bone growth stimulator products, together with post market surveillance requirements.

In the long-term, the recommended reclassification could enhance the ability of competitors to enter the market if they are able to create technologies with comparable efficacy to our devices, which could result in our products facing additional competition, thereby negatively affecting our future sales of these products.

We continue to be affected by U.S. healthcare reform initiatives.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (or collectively the “ACA”), has caused a number of substantial changes to occur in recent years in the way healthcare is financed by both governmental

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and private insurers. The ACA is far-reaching and is intended to expand access to health insurance coverage, improve quality, and reduce costs over time. Among other things, the ACA:

Established a Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and

Implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians, and other providers to improve the coordination, quality, and efficiency of certain healthcare services through bundled payment models.

U.S. government agencies continue efforts to modify provisions of the ACA. For example, CMS began permitting states to impose work requirements on persons covered by Medicaid expansion plans, certain federal subsidies to insurers have ended, and certain short-term insurance plans not offering the full array of ACA benefits have been allowed to extend in duration. Some of these changes are being challenged in U.S. courts and so their long-term impact remains uncertain. This changing federal landscape has both positive and negative impacts on the U.S. healthcare industry, with much remaining uncertain as to how various provisions of federal law, and potential modification or repeal of these laws, will ultimately affect the industry. Persisting uncertainty with respect to the scope and effect of certain provisions of the ACA have made compliance costly. Any future changes to the ACA or other such legislation, depending on their nature, could affect rebates, prices, or the rate of price increases for health care products and services, or required reporting and disclosure, and could have an adverse effect on our ability to maintain or increase sales of any of our products and achieve profitability. We cannot predict the timing or impact of any future rulemaking or changes in the law. However, any changes that have the effect of reducing reimbursements for our products or reducing medical procedure volumes could have a material and adverse effect on our business, financial condition, and results of operations.

We are subject to differing customs and import/export rules in several jurisdictions in which we operate.

We import and export our products to and from a number of different countries around the world. Foreign governmental regulations have become increasingly stringent and more common, and we may become subject to even more rigorous regulation by foreign governmental authorities. Numerous laws restrict, and in some cases prohibit, U.S. companies from directly or indirectly selling goods, technology or services to people or entities in certain countries. In addition, these laws require that we exercise care in structuring our sales and marketing practices and effecting product registrations in foreign countries. Compliance with these regulations is costly.

The import and export of our products involve subsidiaries and third parties operating in jurisdictions with different customs and import/export rules and regulations. Customs authorities in such jurisdictions may challenge our treatment of customs and import/export rules relating to product shipments under aspects of their respective customs laws and treaties. If we are unsuccessful in defending our treatment of customs and import/export classifications, we may be subject to additional customs duties, fines, or penalties that could adversely affect our profitability.

In addition, changes in U.S. or foreign policies regarding international trade could also negatively impact our business. The enactment of or increases in tariffs, or other such charges, on specific products that we sell or with which our products compete, may have an adverse effect on our business or on our results of operations.

The sales and marketing practices of our industry have been the subject of increased scrutiny from federal and state government agencies.

AdvaMed (U.S.), EucoMed (Europe), MEDEC (Canada) and MTAA (Australia), some of the principal trade associations for the medical device industry, have promulgated model codes of ethics that set forth standards by which its members should (and non-member companies may) abide in the promotion of their products in various regions. We have implemented policies and procedures for compliance consistent with those promulgated by these associations, and we train our sales and marketing personnel on our policies regarding sales and marketing practices. Nevertheless, the sales and marketing practices of our industry have been the subject of increased scrutiny from federal and state government agencies, we believe this trend will continue and that it could affect our ability to retain customers and other relationships important to our business.

For example, prosecutorial scrutiny and governmental oversight, at both the state and federal levels, over some major device companies regarding the retention of healthcare professionals have limited how medical device companies may retain healthcare professionals as consultants. Various hospital organizations, medical societies and trade associations are establishing their own practices that may require detailed disclosures of relationships between healthcare professionals and medical device companies or ban or restrict certain marketing and sales practices, such as gifts and business meals. In addition, the ACA, as well as certain state laws, require detailed disclosure of certain financial relationships, gifts and other remuneration made to certain healthcare professionals and teaching hospitals, the publicity surrounding which could have a negative impact on our relationships with our

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customers and ability to seek input on product design or involvement in research. As a result of laws, rules and regulations or our own or third-party policies that prohibit or restrict interactions, or the growing perception that any interaction between healthcare professionals and industry are tainted, we may be unable to engage with our healthcare professional customers in the same manner or to the same degree, or at all, as would otherwise be the case, which may adversely affect our ability to understand our customer’s needs and to incorporate into our development programs feedback that addresses these needs. If we are unable to develop and commercialize new products that address the needs of our physician customers and their patients, our products may not be broadly accepted in the marketplace, or at all, which would have a negative effect on our business, results of operations and financial condition.

We are subject to requirements relating to hazardous materials which may impose significant compliance or other costs on us.

Our research, development and manufacturing processes involve the controlled use of certain hazardous materials. For example, our allograft bone tissue processing may generate waste materials that in the U.S. are classified as medical waste. In addition, we lease facilities at which hazardous materials could have been used. Because of the foregoing, we are subject to federal, state, foreign and local laws and regulations governing the use, manufacture, storage, handling, treatment, remediation and disposal of hazardous materials and certain waste products.

Although we believe that our procedures for handling and disposing of hazardous materials comply with applicable laws as currently in effect, we cannot eliminate the risk of accidental contamination or injury from these materials. In addition, under some environmental laws and regulations, we could also be held responsible for all of the costs relating to any contamination at our past or present facilities and at third-party waste disposal sites, even if such contamination was not caused by us. If an accident occurs, state or federal or other applicable authorities may curtail our use of these materials and interrupt our business operations. In addition, if an accident or environmental discharge occurs, or if we discover contamination caused by prior operations, including by prior owners and operators of properties we acquire, we could be liable for cleanup obligations, damages and fines any related liability could exceed our resources. If such unexpected costs are substantial, this could significantly harm our financial condition and results of operations. We carry no insurance specifically covering environmental claims relating to the use of hazardous materials.

Risks Related to our Business and Industry

The COVID-19 pandemic has materially adversely affected, and could continue to materially adversely affect, our operations, supply chain, manufacturing, product demand, product distribution, customers and other business activities.

The novel coronavirus discovered in late 2019, and the disease it causes, known as COVID-19, has led to significant disruptions in the healthcare market and the United States and international economies that may continue for a prolonged duration. The rapid spread of the coronavirus in 2020 and variants of the virus in 2021, the persistence of the resulting pandemic, the measures governments and private parties have implemented in order to stem the spread of this pandemic, and the general concern about the virus, have had, and could continue to have, a negative effect on the demand for many of our products compared to historical levels, and consequently upon our business. In particular, many of our products are particularly sensitive to reductions in elective medical procedures. Elective medical procedures were suspended or reduced at various times in 2020, 2021, and portions of 2022, in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations.

Deferrals of elective surgeries could result in delayed product launches if it takes longer than anticipated to collect feedback following an alpha launch. Further, facilities at which our products typically are used may not reopen or, even if they reopen, patients may elect to have procedures performed at facilities that are, or are perceived to be, lower-risk, such as ambulatory surgery centers, and our products may not be approved at such facilities, and we may be unable to have our products approved for use at such facilities on a timely basis, or at all.

The future trajectory of the COVID-19 pandemic remains uncertain, both in the U.S. and in other markets, particularly due to the uncertainty as to the nature of future variants, and whether vaccines will protect against severe illness with respect to such future variants.

Given these various uncertainties, it is unclear the extent to which lingering slowdowns in elective procedures will continue to affect our business in 2023 and beyond. We expect that the effects of COVID-19 on our business will depend on various factors including (i) the magnitude, length and virulence of additional case waves and future variants, (ii) the continued distribution, efficacy, refinement, and public acceptance of COVID-19 vaccines, (iii) the comfort level of patients in visiting clinics and hospitals, and (iv) the extent to which further elective surgery slowdowns occur during periods when hospital capacity is stretched because of the need to treat COVID-19 patients.

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In addition to its effect on elective surgeries, the pandemic could also negatively affect our ability, and the ability of our third-party suppliers, manufacturers, distributors, and customers, to retain key employees and ensure the continued service and availability of skilled personnel necessary to run our, and their, complex operations. To the extent our management or other personnel, or the management or other personnel of our third-party suppliers, manufacturers, distributors, and customers, are negatively affected by the pandemic and are not available to perform their job duties, we could experience delays in, or the suspension of, our manufacturing operations, sales activities, research and product development activities, regulatory work streams, clinical development programs and other important commercial and corporate functions. Moreover, our relationships with our employees may be disrupted due to measures implemented in response to the COVID-19 pandemic. We have observed an overall tightening and increasingly competitive labor market due to labor shortages caused in part by the COVID-19 pandemic and responsive measures, which has included increased wages offered by other employers and voluntary attrition of employees in the industry, including at third-party suppliers, manufacturers, distributors and customers.

All of these factors, collectively, could materially adversely affect our business, financial condition and results of operations.

The COVID-19 pandemic and related supply chain and raw material disruptions, and the ongoing conflict between Russia and Ukraine, and the global response to it, could have a continuing material impact on our global operations and the operations of our supply chain, which could adversely impact our business results and financial condition.

We rely on a limited number of suppliers to manufacture or supply certain products or components. In the event of interruption within our supply chain, or global shortages of key supplies or components, we may not be able to increase capacity from other sources or develop alternative or secondary sources without incurring significant additional costs and/or substantial delays. For example, the COVID-19 pandemic has led to a global shortage of semiconductor chips, which are used in certain of our products. This shortage appears primarily to have been caused by manufacturers experiencing shutdowns or slowdowns during the pandemic, and it may take several fiscal quarters or longer for normalized capacity to return. In addition, limitations in key raw material supplies could also cause semiconductor chip and other component shortages to continue. To the extent it continues, or more shortages are experienced, particularly on a longer term basis, this could adversely affect our ability to procure such components and manufacture certain of our products or it could require us to redesign any affected products in order to incorporate more readily available components, which may require additional regulatory testing and approvals. Thus, our business could be adversely affected in a significant manner if one or more of our suppliers are impacted by any interruption at a particular location or in relation to a particular material or component.

The ongoing conflict between Russia and Ukraine has resulted in the implementation of sanctions by the United States and other governments against Russia and has caused significant volatility and disruptions to the global markets. It is not possible to predict the short- or long-term implications of this conflict, which could include but are not limited to further sanctions, uncertainty about economic and political stability, increases in inflation rate and energy prices, supply chain challenges and adverse effects on currency exchange rates and financial markets. In addition, the United States government reported that United States sanctions against Russia in response to the conflict could lead to an increased threat of cyberattacks against United States companies. These increased threats could pose risks to the security of our information technology systems and networks, as well as the confidentiality, availability and integrity of our data. A significant escalation or further expansion of the conflict's current scope or related disruptions to the global markets could have a material adverse effect on our results of operations.

Our business may be adversely affected if consolidation in the healthcare industry leads to demand for price concessions or if a group purchasing organization (“GPO”) or similar entity excludes us from being a supplier.

Because healthcare costs have risen significantly over the past decade, numerous initiatives and reforms have been launched by legislators, regulators, and third-party payors to curb these costs. As a result, there has been a trend toward healthcare cost containment through aggregating purchasing decisions and industry consolidation, along with the growth of managed care organizations, all of which has placed increased emphasis on the delivery of more cost-effective medical therapies. For example:

•There has been consolidation among healthcare facilities and purchasers of medical devices, particularly in the U.S. One of the results of such consolidation is that GPOs, integrated delivery networks and large single accounts use their market power to consolidate purchasing decisions, which intensifies competition to provide products and services to healthcare providers and other industry participants, resulting in greater pricing pressures and the exclusion of certain suppliers from important market segments. For example, some GPOs negotiate pricing for its member hospitals and require us to discount, or limit our ability to increase, prices for certain of our products. In particular, certain of our demineralized bone matrix (“DBM”) products are priced at a premium to competitors' DBM products and a significant price reduction could result in a material adverse effect on our profitability.

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•Physicians increasingly have moved from independent, out-patient practice settings toward employment by hospitals and other larger healthcare organizations, which align physicians’ product choices with their employers’ price sensitivities and adds to pricing pressures. Hospitals have introduced and may continue to introduce new pricing structures into their contracts to contain healthcare costs, including fixed price formulas and capitated and construct pricing.

•Certain hospitals provide financial incentives to doctors for reducing hospital costs (known as gainsharing), rewarding physician efficiency (known as physician profiling) and encouraging partnerships with healthcare service and goods providers to reduce prices.

•Existing and proposed laws, regulations, and industry policies, in both domestic and international markets, regulate or seek to increase regulation of sales and marketing practices and the pricing and profitability of companies in the healthcare industry.

As the healthcare industry consolidates, competition to provide products and services to industry participants has become and may continue to become more intense. This has resulted and may continue to result in greater pricing pressures and the exclusion of certain suppliers from important markets as GPOs, independent delivery networks, and large single accounts continue to use their market power to consolidate purchasing decisions and as larger manufacturers use their broad offerings to secure exclusive arrangements. If a GPO were to exclude us from their supplier list, our net sales could be adversely impacted. We expect that market demand, government regulation, third-party reimbursement policies, and societal pressures will continue to change the worldwide healthcare industry, which may exert further downward pressure on the prices of our products.

In addition, the largest device companies with multiple product franchises have increased their effort to leverage and contract broadly with customers across franchises by providing volume discounts and multi-year arrangements that could prevent our access to these customers or make it difficult (or impossible) to compete on price.

The industry in which we operate is highly competitive. New developments by others could make our products or technologies non-competitive or obsolete.

The medical devices industry is highly competitive. We compete with a large number of companies, many of which have significantly greater financial, manufacturing, marketing, distribution, and technical resources than we do. Many of our competitors may be able to develop products and processes competitive with, or superior to, our own. Our competitors may also have: stronger intellectual property portfolios; broader spine surgery product offerings and products supported by more extensive clinical data; more established distribution networks; entrenched relationships with physicians; significantly greater name recognition and more recognizable trademarks for products similar to the products we sell; more established relationships with healthcare providers and payors; greater experience in obtaining and maintaining FDA and other regulatory clearances or approvals for products and product enhancement; and greater experience in launching, marketing and selling products than we do. Many of our competitors specialize in a specific product or focus on a particular market segment, making it more difficult for us to increase our overall market position. The frequent introduction by competitors of products that are, or claim to be, superior to our products, or that are alternatives to our existing or planned products may also create market confusion that may make it difficult to differentiate the benefits of our products over competing products. In addition, the entry of multiple new products and competitors may lead some of our competitors to employ pricing strategies that could adversely affect the pricing of our products and pricing in the spine market generally.

Furthermore, we may not be able to successfully develop or introduce new products that are less costly or offer better performance than those of our competitors, or offer purchasers of our products payment and other commercial terms as favorable as those offered by our competitors. For more information regarding our competitors, see Item 1, “Business,” under the subheading “Competition.”

In addition, the spine and orthopedic medical device industry in which we compete is undergoing, and is characterized by, rapid and significant technological change. We expect competition to intensify as technological advances are made. New technologies and products developed by other companies are regularly introduced into the market, which may render our products or technologies non-competitive or obsolete.

Our ability to market products successfully depends, in part, upon the acceptance of the products not only by consumers, but also by independent third parties.

Our ability to market our products successfully depends, in part, on the acceptance of the products by independent third parties (including hospitals, physicians, other healthcare providers, and third-party payors) as well as patients. Market acceptance for any of our products requires, among other things, that we timely secure regulatory clearance and/or approval; demonstrate the value of

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our products, both to our physician customers and payors, which may require that we collect clinical data and/or conduct clinical studies; effectively educate and train our physician customers and their staff on the proper use of our products; obtain and maintain coverage and adequate reimbursement for our products, both within and outside the U.S., including under Medicare and Medicaid and from private payors; attract and retain a network of independent sales agents and stocking distributors focused on neurophysicians and orthopedic spine physicians; develop and execute an effective marketing strategy; protect the proprietary positions of our products, including through patent protection; and consistently produce quality products in sufficient quantities to meet demand. Significant risks are associated with each of these activities and other activities required to achieve market acceptance of both our current and future products, including risks inherent in collaborations, or use of nascent manufacturing or imaging techniques, such as additive processing (more commonly known as 3D printing) or advanced optical technologies and machine version-based registration algorithms. Unanticipated side effects or unfavorable publicity concerning any of our products could have an adverse effect on our ability to maintain hospital approvals or achieve acceptance by prescribing physicians, managed care providers and other retailers, customers, and patients.

Clinical studies are expensive and subject to extensive regulation and their results may not support our product candidate claims or may result in the discovery of adverse effects.

In developing new products or new indications for, or modifications to, existing products, we may conduct or sponsor pre-clinical testing, clinical studies or other clinical research. We are conducting post-market clinical studies of some of our products to gather information about their performance or optimal use. The data collected from these clinical studies may ultimately be used to support additional market clearance or approval for these products or future products. If any of our new products require premarket clinical studies, these studies are expensive, the outcomes are inherently uncertain and they are subject to extensive regulation and review by numerous governmental authorities both in the U.S. and abroad, including by the FDA and, if federal funds are involved or if an investigator or site has signed a federal assurance, are subject to further regulation by the Office for Human Research Protections and the National Institutes of Health. For example, clinical studies must be conducted in compliance with FDA regulations, local regulations, and according to principles and standards collectively called “Good Clinical Practices.” Failure to comply with applicable regulations could result in regulatory and legal enforcement action, including fines, penalties, suspension of studies, and also could invalidate the data and make it unusable to support an FDA submission.
 

Even if any of our future premarket clinical studies are completed as planned, we cannot be certain that their results will support our product candidates and/or proposed claims or that the FDA or foreign authorities and Notified Bodies will agree with our interpretation and conclusions regarding the data they generate. Success in pre-clinical studies and early clinical studies does not ensure that later clinical studies will succeed, and we cannot be sure that the results of later studies will replicate those of earlier or prior studies. The clinical study process may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others. Any delay or termination of our clinical studies will delay the filing of our product submissions and, ultimately, our ability to commercialize our product candidates and generate revenues. It is also possible that patient subjects enrolled in our clinical studies of our marketed products will experience adverse side effects that are not currently part of the product candidate’s profile and, if so, these findings may result in lower market acceptance, which could have a material and adverse effect on our business, results of operations and financial condition.

Further, the COVID-19 pandemic could limit or restrict our ability or the ability of others on which we rely to initiate, conduct, or continue our clinical studies of some of our products. Delays and disruption in such studies could result in delays for expanded FDA and other regulatory clearance or approval of our products.

If the third parties on which we rely to conduct our clinical studies and to assist us with pre-clinical development do not perform as contractually required or expected, we may not obtain regulatory clearance, approval or a CE Certificate of Conformity for or commercialize our products.

We often must rely on third parties, such as contract research organizations, medical institutions, clinical investigators, and contract laboratories, to assist in conducting our clinical studies and other development activities. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory obligations or meet expected deadlines, or if these third parties need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to failing to adhere to clinical protocols, to applicable regulatory requirements or otherwise, our pre-clinical development activities and clinical studies may be extended, delayed, suspended or terminated. Under these circumstances, we may not be able to obtain regulatory clearance/approval or a CE Certificate of Conformity for, or successfully commercialize, our products on a timely basis, if at all, and our business, operating results and prospects may be materially and adversely affected.

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Our allograft and cellular bone allografts could expose us to certain risks that could disrupt our business.

Our Biologics business markets allograft tissues that are derived from human cadaveric donors, and our ability to market the tissues depends on our supplier continuing to have access to donated human cadaveric tissue, as well as the maintenance of high standards by the supplier in its processing methodology. The supply of such donors is inherently unpredictable and can fluctuate over time. The allograft tissues are regulated under the FDA’s HCT/P regulatory paradigm and not as a medical device, biologic, or drug. There can be no assurance that the FDA will not at some future date re-classify the allograft tissues, and the reclassification of this product from a human tissue to a medical device could have adverse consequences for us or for the supplier of this product and make it more difficult or expensive for us to conduct this business by requiring premarket clearance or approval, as well as compliance with additional post-market regulatory requirements.

In addition, procurement of certain human organs and tissue for transplantation is subject to the National Organ Transplant Act (the “NOTA”), which prohibits the transfer of certain human organs, including skin and related tissue, for valuable consideration, but permits the reasonable payment associated with the removal, transportation, implantation, processing, preservation, quality control and storage of human tissue and skin. If we were to be found to have violated NOTA’s prohibition on the sale or transfer of human tissue for valuable consideration, we would potentially be subject to criminal enforcement sanctions, which could materially and adversely affect our results of operations.

Because of the absence of a harmonized regulatory framework and the proposed regulation for advanced therapy medicinal products in the E.U., as well as for other countries, the approval process in the E.U. for human-derived cell or tissue-based medical products could be extensive, lengthy, expensive and unpredictable. Among others, some of our Biologics products are subject to E.U. member states’ regulations that govern the donation, procurement, testing, coding, traceability, processing, preservation, storage and distribution of HCT/Ps. These E.U. member states’ regulations include requirements for registration, listing, labeling, adverse-event reporting and inspection and enforcement. Some E.U. member states have their own tissue banking regulations, including new requirements related to COVID-19 and donor screening. Non-compliance with various regulations governing our products in any E.U. member state could result in the banning of our products in such member state or enforcement actions being brought against us, which could have a material and adverse effect on our business, results of operations and financial condition.

Unfavorable media reports or other negative publicity concerning both alleged improper methods of tissue recovery from donors and disease transmission from donated tissue could limit widespread acceptance of some of our products.

Unfavorable reports of improper or illegal tissue recovery practices, both in the U.S. and internationally, as well as incidents of improperly processed tissue leading to the transmission of disease, may affect the rate of future tissue donation and market acceptance of technologies incorporating human tissue. In addition, negative publicity could cause the families of potential donors to become reluctant to donate tissue to for-profit tissue processors. For example, the media has reported examples of alleged illegal harvesting of body parts from cadavers and resulting recalls conducted by certain companies selling human tissue-based products affected by the alleged illegal harvesting. These reports and others could have a negative effect on our tissue regeneration business.

Certain of our products contain materials derived from animal sources and may become subject to additional regulation.

Certain of our products contain material derived from bovine tissue. Products that contain materials derived from animal sources, including food, pharmaceuticals and medical devices, are subject to scrutiny in the media and by regulatory authorities. Regulatory authorities are concerned about the potential for the transmission of disease from animals to humans via those materials. In past years, public scrutiny was particularly acute in Western Europe with respect to products derived from animal sources, largely due to concern that materials infected with the agent that causes BSE otherwise known as mad cow disease, may, if ingested or implanted, cause a variant of the human Creutzfeldt-Jakob disease, an ultimately fatal disease with no known cure. Cases of BSE in cattle discovered in Canada and the U.S. increased awareness in North America.

Products that contain materials derived from animals, including our products, could become subject to additional regulation, or even be banned in certain countries, because of concern over the potential for the transmission of infectious or other agents. Significant new regulation, or a ban of our products, could have a material and adverse effect on our business or our ability to expand our business.

Certain countries, such as Japan, China, Taiwan, and Argentina, have issued regulations that require our collagen products be processed from bovine tendon sourced from countries where no cases of BSE have occurred. The collagen raw material we use in our products is sourced from New Zealand. Our supplier has obtained approval from certain countries, including the U.S., the E.U., Japan, Taiwan, China, and Argentina, for the use of such collagen raw material in products sold in those countries. If we cannot continue to obtain collagen raw material from a qualified source of tendon from a country that has never had a case of BSE, we will

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not be permitted to sell our collagen products in certain countries, which could have a material and adverse effect on our business, results of operations and financial condition.

We may not be able to successfully introduce new products to the market and market opportunities that we expect to develop for our products may not be as large as we expect.

To be and remain competitive, we need to continue to make improvements in our products, develop new products, introduce our products into new markets, and successfully respond to technological advances. Doing so is technologically challenging and involves significant risks and uncertainty. Despite our planning, the process of developing and introducing new products (including product enhancements) is inherently complex and uncertain, and involves risks. The success of any of our new product offerings or enhancement or modification to our existing products will depend on several factors, including our ability to:

•properly identify and anticipate physician and patient needs;

•develop new products or enhancements or modifications in a timely manner;

•obtain regulatory clearance and/or approvals for new products or product enhancements or modifications in a timely manner;

•achieve timely alpha and/or full commercial launches of new products;
 

•provide adequate training to potential users of new products and product enhancements or modifications;
 

•receive adequate reimbursement approval of third-party payors such as Medicaid, Medicare and private insurers;
 

•gain broad market acceptance (including by physicians);

•and
develop an effective marketing and distribution network.
 

In addition, competitors could develop products that are more effective, are less expensive to manufacture, are priced more competitively or are ready for commercial introduction before our products. The introduction of new products by our competitors may lead us to reduce the prices of our products, may lead to reduced margins or loss of market share, and may render our products obsolete or noncompetitive.

These risks make it inherently difficult to forecast and predict the future net sales of our products. If we cannot develop technically and commercially viable new products and enhancements or modifications to our existing products on a consistent basis and before our competitors, our prospects could be materially and adversely affected. In addition, if the market opportunities that we expect to develop for our products, including new products, are not as large as we expect, it could adversely affect our ability to grow our business.

It is also important that we carefully manage our introduction of new products and enhancements or modifications to our existing products. If potential customers delay purchases until new or enhanced or modified products are available, it could negatively impact our sales. In addition, to the extent we have excess or obsolete inventory as we transition to new or enhanced or modified products, it would result in margin reducing write-offs for obsolete inventory, and our results of operations may suffer.

There is no guarantee that the FDA will grant 510(k) clearance or premarket approval, or that equivalent foreign regulatory authorities will grant the foreign equivalent, of our future products, and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business.

In general, unless an exemption applies, a medical device and modifications to the device or its indications must receive either premarket approval or premarket clearance from the FDA before it can be marketed in the U.S. While in the past we have received such clearances, we may not succeed in the future in receiving approvals and clearances in a timely manner, or at all. The process of obtaining approval or clearance from the FDA and comparable foreign regulatory agencies for new products, or for enhancements or modifications to existing products, could:

•take significant time;

•require the expenditure of substantial resources;

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•involve rigorous and expensive pre-clinical and clinical testing, as well as post-market surveillance;

•involve modifications, repairs, or replacements of our products; and

•result in limitations on the indicated uses of our products.

Some of our new products will require FDA 510(k) clearance or approval of a premarket approval application, or PMA, prior to being marketed. Any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, including significant design and manufacturing changes, or that would constitute a major change in its intended use, design or manufacture, requires a new 510(k) clearance or, possibly, approval of a PMA. Similarly, modifications to PMA-approved products may require submission and approval of a PMA supplement. The FDA requires every manufacturer to determine whether a new 510(k) or PMA is needed in the first instance, and the FDA has issued guidance on assessing modifications to 510(k)-cleared and PMA-approved devices to assist manufacturers with making these determinations. However, the FDA may review any such determination and the FDA may not agree with our determinations regarding whether new clearances or approvals are necessary. We have modified some of our 510(k)-cleared products and have determined, based on our understanding of FDA guidance, that certain changes did not require new 510(k) clearances. If the FDA disagrees with our determination and requires us to seek new 510(k) clearances, or PMA approval, for modifications to our cleared products, we may have to stop marketing or distributing our products, we may need to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties. Significant delays in receiving clearance or approval, or failing to receive clearance or approval for our new products would have a material and adverse effect on our ability to expand our business.

Outside the U.S., clearance or approval procedures can vary among countries and can involve additional product testing and validation and additional administrative review periods. The time required to obtain clearance or approval in other countries might differ from that required to obtain FDA clearance or approval. The regulatory process in other countries may include all of the risks to which we are exposed in the U.S., as well as other risks. Favorable regulatory action in one country does not ensure favorable regulatory action in another, but a failure or delay in obtaining regulatory clearance or approval in one country may have a negative effect on the regulatory process in others. Failure to obtain clearance or approval in other countries or any delay or setback in obtaining such clearance or approval have a material and adverse effect on our business, including that our products may not be cleared or approved for all indications requested, which could limit the uses of our products and have an adverse effect on product sales.

In the European Economic Area (“EEA”), we must inform the Notified Body that carried out the conformity assessment of the medical devices we market or sell in the EEA of any planned substantial change to our quality system or any significant change to our devices. The Notified Body will then assess the change and verify whether it affects the products’ conformity with the Essential Requirements or the conditions for the use of the device. If the assessment is favorable, the Notified Body may issue a new CE Certificate of Conformity or an addendum to the existing CE Certificate of Conformity. If it is not, we may not be able to continue to market and sell the applicable product in the EEA, which could have a material and adverse effect on our business, results of operations and financial condition.

We cannot be certain that we will receive required approval or clearance from the FDA and foreign regulatory agencies for new products, including modifications to existing products, on a timely basis, or at all. Failing to receive approval or clearance for new products on a timely basis would have a material and adverse effect on our financial condition and results of operations.

Growing our business requires that we properly educate and train physicians regarding the distinctive characteristics, benefits, safety, clinical efficacy, and cost-effectiveness of our products.

Acceptance of our products depends in part on our ability to (i) educate the medical community as to the distinctive characteristics, benefits, safety, clinical efficacy, and cost-effectiveness of our products compared to alternative products, procedures, and therapies, and (ii) train physicians in the proper use and implementation of our products. This is particularly true in instances of newly launched products or in the introduction of a product into a new market, such as our launch of the M6-C artificial cervical disc within the U.S. We support our sales force and distributors through specialized training workshops in which physicians and sales specialists participate. We also produce marketing materials, including materials outlining surgical procedures, for our sales force and distributors in a variety of languages using printed, video, and multimedia formats. To provide additional advanced training for physicians, consistent with the AdvaMed Code and the MedTech Code, we organize regular multilingual teaching seminars in multiple locations. However, convincing physicians to dedicate the time and energy necessary for adequate training is challenging, and we may not be successful in our efforts to educate the medical community and properly train physicians. Physicians who do not use our products may be hesitant to do so for the following or other reasons:

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•lack of experience with our products, techniques, or technologies, or with the equipment necessary to use any of the foregoing;

•existing relationships with those who sell competitive products;

•the time required for physician and medical staff education and training on new products, techniques and equipment and technologies;

•lack or perceived lack of clinical evidence supporting patient benefit relative to competing products;

•our products not being included on hospital formularies, in integrated delivery networks or on group purchasing organization preferred vendor lists;

•less attractive coverage and/or reimbursement within healthcare payment systems for our products and procedures compared to other products and procedures;

•other costs associated with introducing new products and the equipment necessary to use new products; and

•perceived risk of liability that could be associated with the use of new products, techniques, or technologies.

If physicians are not properly trained, they may misuse or ineffectively use our products, which may result in unsatisfactory patient outcomes, patient injury, negative publicity, or lawsuits against us. In addition, a failure to educate the medical community regarding our products may impair our ability to achieve market acceptance of our products.

In addition, we believe recommendations and support of our products by influential physicians are essential for market acceptance and adoption. If we do not receive support from such physicians or long-term data does not show the benefits of using our products, physicians may not use our products. If we are not successful in convincing physicians of the merits of our products, we may not maintain or grow our sales or achieve or sustain profitability.

Relatedly, although we believe our training methods for physicians are conducted in compliance with FDA and other applicable regulations developed both nationally and in third countries, if the FDA or other regulatory agency determines that our training constitutes promotion of an unapproved use or promotion of an intended purpose not covered by the CE mark affixed to our products or FDA approved labeling, they could request that we modify our training or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalty.

Sales of, or the price at which we sell, our products may be adversely affected unless the safety and efficacy of our products, alone and relative to competitive products, is demonstrated in clinical studies.

Generally, we have obtained 510(k) clearance to manufacture, market and sell the products we market in the U.S. and the right to affix the CE mark to the products we market in the EEA. To date, we have not been required to generate new clinical data to support our 510(k) clearances, CE marks, or product registrations in other countries. However, the EU Medical Device Regulations, which replaced the prior medical device directives in May 2021, require submission of certain pre- and post-market data to maintain our CE marks. Additionally, we recently completed an analysis of which of our product systems will require submission of clinical data pursuant to MEDDEV 2.7.1 rev 4, which sets forth the European Commission’s guidance on the clinical evaluation of medical devices. Accordingly, and in line with our vision to deliver clinical value, we have commenced clinical data collection activities for certain of our marketed products as more fully described elsewhere in this "Risk Factors" section.

In part due to the increased emphasis on the delivery of more cost-effective treatments, purchasing decisions of our customers increasingly will be based on clinical data that demonstrates the value of our products or the effectiveness of our products relative to others. Conducting clinical studies is expensive and time-consuming and outcomes are uncertain. See “Clinical studies are expensive and subject to extensive regulation and their results may not support our product candidate claims or may result in the discovery of adverse effects,” above. We may elect not to, or may be unable to, fund the clinical studies necessary to generate the data required for all of our products to compete effectively, in part due to the breadth of our product portfolio. Currently, we do not expect to undertake such clinical studies for all of our products and only expect to do so where we anticipate the benefits will outweigh the costs on a risk-adjusted basis. However, even when we elect and are able to fund such clinical studies on one or more of our products, such studies may not succeed. Data we generate may not be consistent with our existing data and may demonstrate less favorable safety or efficacy, which could reduce demand for our products and negatively impact future sales. Neurophysicians and orthopedic spine physicians may be less likely to use our products if more robust, or any, clinical data supporting the safety and efficacy of competing products is available. If we are unable to or unwilling to generate clinical data supporting the safety and effectiveness of our products, our business, results of operations and financial condition could be materially and adversely affected.
 

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Further, future patient studies or clinical experience may indicate that treatment with our products does not improve patient outcomes.
 

With the passage of the American Recovery and Reinvestment Act of 2009, funds have been appropriated for the U.S. Department of Health and Human Services’ Healthcare Research and Quality to conduct comparative effectiveness research to determine the effectiveness of different drugs, medical devices, and procedures in treating certain conditions and diseases. Some of our products or procedures performed with our products could become the subject of such research. It is unknown what effect, if any, this research may have on our business. Further, future research or experience may indicate that treatment with our products does not improve patient outcomes or improves patient outcomes less than we initially expected. Such results would reduce demand for our products, affect sustainable reimbursement from third-party payers, significantly reduce our ability to achieve expected revenue, and could cause us to withdraw our products from the market and could prevent us from sustaining or increasing profitability. Moreover, if future results and experience indicate that our products cause unexpected or serious complications or other unforeseen negative effects, we could be subject to significant legal liability, negative publicity, and damage to our reputation, and we could experience a dramatic reduction in sales of our products, all of which would have a material adverse effect on our business, financial condition, and results of operations. The spine medical device market has been particularly prone to potential product liability claims that are inherent in the testing, manufacture, and sale of medical devices and products for spine surgery procedures.

We may be adversely affected by any disruption in our information technology systems, which could adversely affect our cash flows, operating results, and financial condition.

Our operations are dependent upon our information technology systems, which encompass all of our major business functions. We rely upon such information technology systems to manage and replenish inventory, fill and ship customer orders on a timely basis, coordinate our sales activities across all of our products and services, and coordinate our administrative activities. A substantial disruption in our information technology systems for any prolonged time period (arising from, for example, system capacity limits from unexpected increases in our volume of business, outages, or delays in service) could result in delays in receiving inventory and supplies or filling customer orders and adversely affect our customer service and relationships. Our systems might be damaged or interrupted by natural or man-made events, or by computer viruses, physical or electronic break-ins, and similar disruptions affecting the internet. There can be no assurance that such delays, problems, or costs will not have a material adverse effect on our cash flows, operating results, and financial condition.

As our operations grow in both size and scope, we will continuously need to improve and upgrade our information technology systems and infrastructure while maintaining the reliability and integrity of our information technology systems and infrastructure. An expansion of our information technology systems and infrastructure may require us to commit substantial financial, operational, and technical resources before the volume of our business increases, with no assurance that the volume of business will increase. Any such upgrades to our information technology systems and information technology, or new technology, now and in the future, require that our management and resources be diverted from our core business to assist in integrating such upgrades or new technology. There can be no assurance that the time and resources our management will need to devote to these upgrades, service outages, or delays due to the installation of any new or upgraded technology (and customer issues therewith), or the impact on the reliability of our data from any new or upgraded technology, will not have a material adverse effect on our cash flows, operating results, and financial condition.

A significant portion of our operations run on a single Enterprise Resource Planning (“ERP”) platform. To manage our international operations efficiently and effectively, we rely heavily on our ERP system, internal electronic information and communications systems, and on systems or support services from third parties. Any of these systems are subject to electrical or telecommunications outages, computer hacking, or other general system failure. It is also possible that future acquisitions will operate on different ERP systems and that we could face difficulties in integrating operational and accounting functions of new acquisitions. Difficulties in upgrading or expanding our ERP system or system-wide or local failures that affect our information processing could adversely affect our cash flows, operating results, and financial condition.

We may be adversely affected by a failure or compromise from a cyber-attack, data breach or ransomware attack, which could have an adverse effect on our business.

We rely on information technology systems to perform our business operations, including processing, transmitting, and storing electronic information, and interacting with customers, suppliers, healthcare payors, and other third parties. Like other medical device companies, the size and complexity of our information technology systems make them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, ransomware attack, or other significant disruption. Our information systems

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require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the increasing need to protect financial or personal information related to patients and customers, and changing customer patterns.

For example, third parties may attempt to hack into our products to obtain data relating to patients, disrupt the performance of our products, or access our proprietary information. We could also be subject to a ransomware attack, which is a type of malicious software that infects a computer and restricts users' access to it until a ransom is paid to unlock it. Any failure by us to maintain or protect our information technology systems and data integrity, including from cyber-attacks, intrusions, or other breaches, could result in the unauthorized access to patient data and personally identifiable information, theft of intellectual property, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations and could have a material adverse effect on our business, financial condition, and results of operations.

In the U.S., Federal and State privacy and security laws require certain of our operations to protect the confidentiality of personal information including patient medical records and other health information. In Europe, the Data Protection Directive requires us to manage individually identifiable information in the E.U. and, the GDPR may impose fines of up to four percent of our global revenue in the event of violations. Internationally, some countries have also passed laws that require individually identifiable data on their citizens to be maintained on local servers and that may restrict the transfer or processing of that data. We are also subject to the California Consumer Privacy Act (the “CCPA”), which went into effect in January 2020. In November 2020, California passed the California Privacy Rights Act (the “CPRA”), which builds on the CCPA and expands consumer privacy rights to more closely align with the GDPR. The CPRA went into effect on January 1, 2023, and applies to information collected on or after January 1, 2022. The CCPA and CPRA, among other things, create new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also created a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. It remains unclear what, if any, additional modifications will be made to the CPRA by the California legislature or how it will be interpreted. We believe that we meet the expectations of applicable regulations and that the ongoing costs of compliance with such rules are not material to our business but could become material due to new regulations. There is no guarantee that we will be able to comply with these regulations, or otherwise avoid the negative reputational and other effects that might ensue from a significant data breach or failure to comply with applicable data privacy regulations, each of which could have significant adverse effects on our business, financial condition, or results of operations.

In recent years, companies around the world have seen a surge in wire transfer “phishing” attacks that attempt to trick employees into wiring money from company bank accounts to criminals’ bank accounts. In some cases, companies have lost millions of dollars to such relatively simple attacks, and these funds often are not recovered. While we take efforts to train employees to be cognizant of these types of attacks and take appropriate precautions, the level of technological sophistication used by attackers has increased in recent years, and a successful attack against us could lead to the loss of significant funds.

Although we possess insurance against the risk of cyber-attacks, there can be no assurance that the liability related to any such events will not exceed or insurance coverage limits or that such insurance will continue to be available on reasonable, commercially acceptable terms, or at all. If the costs of maintaining adequate insurance coverage should increase significantly in the future, our operating results could be materially adversely impacted.

The physical effects of climate change or legal, regulatory or market measures intended to address climate change could adversely affect our operations and operating results.

Shifts in weather patterns caused by climate change are expected over time to increase the frequency, severity, or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures or flooding, each of which could cause more significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of hospitals, medical care facilities and other customers, reduced workforce availability, and increased costs of raw materials and components. While we do not expect climate change to materially affect the demand for our products, or the amount of persons with medical conditions we treat, climate change could also contribute to collateral effects such as increased transmission of viruses or airborne illnesses, which could contribute to unpredictable events, such as putting stress on hospital and other medical facilities and/or supply chains, and thus disrupting the elective surgery market in which we do business. In addition, increased public concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change, which could include the adoption of more stringent environmental laws and regulations or stricter enforcement of existing laws and regulations. Such developments could result in increased compliance costs and adverse impacts on raw material sourcing, manufacturing operations and the distribution of our products, which could adversely affect our operations and operating results.

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If any of our manufacturing, development or research facilities are damaged and/or our manufacturing processes are interrupted, we could experience supply disruptions, lost revenues and our business could be seriously harmed.

Damage to our manufacturing, development or research facilities or disruption to our business operations for any reason, including due to natural disaster (such as earthquake, wildfires and other fires or extreme weather), power loss, communications failure, unauthorized entry or other events, such as a flu or other health epidemic (such as the result of the COVID-19 pandemic), could cause us to discontinue development and/or manufacturing of some or all of our products for an undetermined period of time. The property damage and business interruption insurance coverage on these facilities that we maintain might not cover all losses under such circumstances, and we may not be able to renew or obtain such insurance in the future on acceptable terms with adequate coverage or at reasonable costs. If our facilities were damaged, they could be difficult to replace and could require substantial lead time to repair or replace. In particular, we manufacture certain of our biologics products in one facility in Irvine, California and any damage to that facility could adversely affect our ability to timely satisfy demand for those products. Out of an abundance of caution, in October 2020, we relocated part of our Biologics finished goods inventory from our Irvine facility to our Carlsbad office due to the threat of the Silverado Fire that was causing evacuations throughout Orange County, California. Disruptions to our business operations may result from damage to the facilities of, or disruption to the business operations of, our suppliers. For example, if we are unable to obtain disposables or other materials required to maintain “clean room” sterility in our Irvine facility, we may be unable to continue to manufacture products at that facility, which products accounts for a significant amount of our total revenue. Any significant disruption to our manufacturing operations and to our ability to meet market demand likely would have an adverse impact on our sales and revenues as key stakeholders, including our independent sales agents and stocking distributors and physician customers, transition to what they perceive as more reliable sources of products.

We depend on third-party manufacturers for many of our products.

We contract with third-party manufacturers to produce many of our products like many other companies in the medical device industry. If we or any such manufacturer fail to meet production and delivery schedules, it can have an adverse impact on our ability to sell such products. Further, whether we directly manufacture a product or utilize a third-party manufacturer, shortages and spoilage of materials, labor stoppages, product recalls, manufacturing defects, and other similar events can delay production and inhibit our ability to bring a new product to market in timely fashion. For example, the supply of the Trinity ELITE and Trinity Evolution allografts are derived from human cadaveric donors, and our ability to market the tissues depends on MTF continuing to have access to donated human cadaveric tissue and their continued maintenance of high standards in their processing methodology.

We depend on a limited number of third-party suppliers for processing activities, components and raw materials and losing any of these suppliers, or their inability to provide us with an adequate supply of materials that meet our quality and other requirements, could harm our business.

Outside suppliers, some of whom are sole-source suppliers, provide us with products and raw materials and components used in manufacturing our biologics and spinal implant products. We strive to maintain sufficient inventory of products, raw materials and components so that our production will not be significantly disrupted if a particular product, raw material or component is not available to us for a period of time, including as a result of a supplier's loss of its ISO or other certification or as a result of any of the disruptions described below under the risk factor titled “If any of our manufacturing, development or research facilities are damaged and/or our manufacturing processes are interrupted, we could experience supply disruptions, lost revenues and our business could be seriously harmed.” For example, a certain number of our products require titanium, which is sourced from third party suppliers. While the titanium required for such products is not directly sourced from Russia, the current geopolitical events involving Russia and Ukraine is negatively impacting the wider titanium supply chain and such geopolitical events and factors relating thereto or resulting therefrom, including the imposition of sanctions, may negatively impact the ability of our local supply sources to timely supply titanium to us. In addition, some of our suppliers may choose to discontinue making their products available in the EU rather than follow MDR, which would require us to identify alternate supply sources for those products. Any such disruption in our production could harm our reputation, business, financial condition and results of operations.

Although we believe there are alternative supply sources, replacing our suppliers may be impractical or difficult in many instances. For example, we could have difficulty obtaining similar services or products from other suppliers that are acceptable to the FDA or other foreign regulatory authorities and who are able to provide the appropriate supply volumes at an acceptable cost. In addition, if we are required to transition to new suppliers for certain services or components of our products, the use of services, components, or materials furnished by these alternative suppliers could require us to alter our operations, and if we are required to change the manufacturer of a critical component of our products, we will have to verify that the new manufacturer maintains facilities, procedures and operations that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our products in a timely manner. Transitioning to a new supplier could be time-consuming and expensive,

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may result in interruptions in our operations and product delivery, could affect the performance specifications of our products, or could require that we modify the design of those systems.

If we are unable to obtain sufficient quantities of spinal implant products, raw materials or components that meet our quality and other requirements on a timely basis for any reason, we may not produce sufficient quantities of our products to meet market demand until a new or alternative supply source is identified and qualified and, as a result, we could lose customers, our reputation could be harmed and our business could suffer. Furthermore, an uncorrected defect or supplier’s variation in a component or raw material that is incompatible with our manufacturing, or unknown to us, could harm our ability to manufacture products.

Further, under the FDASIA, which includes the Medical Device User Fee Amendments of 2012, as well as other medical device provisions, all U.S. and foreign manufacturers must have a FDA Establishment Registration and complete Medical Device listings for sales in the U.S. While we believe that our facilities materially comply with these requirements, we also source products from foreign contract manufacturers. It is possible that some of our foreign contract manufacturers will not comply with applicable requirements and choose not to register with the FDA. In such an event, we will need to determine if there are alternative foreign contract manufacturers who comply with the applicable requirements. If such a foreign contract manufacturer is a sole supplier of one of our products, there is a risk that we may not be able to source another supplier.

Furthermore, we rely on a small number of tissue banks accredited by the American Association of Tissue Banks for the supply of human tissue, a crucial component of our biologics products that serve as bone graft substitutes. Any failure to obtain tissue from these sources or to have the tissue processed by these sources for us in a timely manner will interfere with our ability to meet demand for our biologics products effectively. The processing of human tissue into biologics products is labor intensive and maintaining a steady supply stream is challenging. In addition, due to seasonal changes in mortality rates, some scarce tissues used for our biologics products are at times in particularly short supply. If governments require additional donor testing due to COVID-19, this could also strain the supply of tissue. We cannot be certain that our supply of human tissue from our suppliers will be available at current levels or will meet our needs or that we will be able to successfully negotiate commercially reasonable terms with other accredited tissue banks.

If we are unable to maintain and expand our network of independent sales representatives and distributors, we may not maintain or grow our revenue.

We sell our products in many countries through independent sales representatives and distributors. Frequently, our independent sales representatives and our distributors have the exclusive right to sell our products in their respective territories. If any of our independent sales representatives or distributors fail to adequately promote, market and sell our products, our sales could significantly decrease. The terms of our agreements with our independent sales representatives and distributors vary in length, generally from one to ten years. Under the terms of our standard distribution agreements, each party has the right to terminate in the event of a material breach by the other party and we generally have the right to terminate if the distributor does not meet agreed sales targets or fails to make payments on time. Any termination of our existing relationships with independent sales representatives or distributors could have an adverse effect on our business unless and until commercially acceptable alternative distribution arrangements are put in place. In addition, we operate in areas of the world that have been or may be disproportionately affected by recessions or disasters and we bear risk that existing or future accounts receivable may be uncollected if these distributors or hospitals experience disruptions to their business that cause them to discontinue paying ongoing accounts payable or become insolvent.

Further, we face significant challenges and risks in managing our geographically dispersed distribution network and retaining the independent sales representatives and distributors who make up that network, and as we launch new products and increase our marketing efforts with respect to existing products, we plan to expand the reach of our marketing and sales efforts and may need to hire new independent sales representatives and distributors. Independent sales representatives and distributors require significant technical expertise in various areas such as spinal care practices, spine injuries and disease, and spinal health and they require training and time to achieve full productivity. We may not attract or retain qualified independent sales representatives and distributors or enter into agreements with them on favorable or commercially reasonable terms, if at all. This could be due to a number of factors, including, but not limited to, perceived deficiencies, or gaps, in our existing product portfolio, intense competition for services of independent sales representatives and distributors, or because of the disruption associated with restrictive covenants to which representatives or distributors may be subject and potential litigation and expense associated therewith. We may also experience unforeseen disengagement from independent sales representatives and distributors who have worked with us for many years. Even if we enter into agreements with additional qualified independent sales representatives or distributors, it often takes 6 to 12 months for new sales representatives or distributors to reach full operational effectiveness and they may not generate revenue as quickly as we expect them to, commit the necessary resources to effectively market and sell our products, or ultimately succeed in selling our products. Our success will depend largely on our ability to continue to hire, train, retain

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and motivate qualified independent sales representatives and distributors. If we cannot expand our sales and marketing capabilities domestically and internationally, if we fail to train new independent sales representatives and distributors adequately, or if we experience high turnover in our sales network, we may not commercialize our products adequately, or at all, which would adversely affect our business, results of operations and financial condition.

Moreover, because our independent sales representatives and distributors are not our employees, we have limited control over their activities and, generally, we do not enter into exclusive relationships with them. If one or more of them were to be retained by a competitor, whether or an exclusive or non-exclusive basis, they may divert business from us to our competitor, which could materially and adversely affect our sales.

We depend on our senior management team.

Our success depends upon the skill, experience, and performance of members of our senior management team, who have been critical to the management of our operations and the implementation of our business strategy. We do not have key man insurance on our senior management team, and the loss of one or more key executive officers could have a material adverse effect on our operations. Further, any turnover in our senior management team could adversely affect our operating results and cash flows.

In order to compete, we must attract, retain, and motivate key employees, and our failure to do so could have an adverse effect on our results of operations.

In order to compete, we must attract, retain, and motivate executives and other key employees, including those in managerial, technical, sales, marketing, research, development, finance, information and technology, and other support positions representing diverse backgrounds, experiences, and skill sets. Hiring and retaining qualified executives, engineers, technical staff, and sales representatives is critical to our business, and competition for experienced employees in the medical device industry can be intense. Maintaining our brand and reputation, as well as a diverse and inclusive work environment that enables all our employees to thrive, are important to our ability to recruit and retain employees. If we are less successful in our recruiting efforts, or if we cannot retain highly skilled workers and key leaders, our ability to develop and deliver successful products and services may be adversely affected.

Moreover, replacing key employees may be a difficult, costly, and protracted process, and we may not have other personnel with the capacity to assume all of the responsibilities of a departing employee. Competition for qualified personnel, particularly for key positions, is intense among companies in our industry, and many of the organizations against which we compete for qualified personnel have greater financial and other resources and different risk profiles than our company, which may make them more attractive employers. All of our employees, including our management personnel, may terminate their employment with us at any time without notice. If we cannot attract and retain highly qualified personnel, as needed, we may not achieve our financial and other goals.

To attract, retain, and motivate qualified executives and key employees, we utilize stock-based incentive awards, such as employee stock options, and restricted stock units. Certain awards vest based upon the passage of time while others vest upon the achievement of certain performance-based or market-based conditions. If the value of such stock awards does not appreciate, as measured by the performance of the price of our common stock, and ceases to be viewed as a valuable benefit, our ability to attract, retain, and motivate our employees could be adversely impacted, which could negatively affect our results of operations and/or require us to increase the amount we expend on cash and other forms of compensation.

In addition, future internal growth could impose significant added responsibilities on our management, and we will need to identify, recruit, maintain, motivate, and integrate additional employees to manage growth effectively. If we do not effectively manage such growth, our expenses may increase more than expected, we may not achieve our goals, and our ability to generate and/or grow revenue could be diminished.

Our business is subject to economic, political, regulatory, and other risks associated with international sales and operations.

Because we sell our products in many different countries, our business is subject to risks associated with conducting business internationally. We anticipate that net sales from international operations will continue to represent a substantial portion of our total net sales. In addition, certain of our manufacturing facilities and suppliers are located outside the U.S. Accordingly, our future results could be harmed by a variety of factors, including:

•changes in a specific country’s or region’s political, social, or economic conditions;

•difficulties in staffing and managing widespread operations;

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•having to comply with export control laws, including, but not limited to, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the Department of the Treasury, as well as the laws and regulations administered by the Department of Commerce;

•complex data privacy requirements, including, but not limited to, the GDPR;

•differing regulatory requirements for obtaining clearances or approvals to market our products, and unexpected changes in regulatory requirements;

•changes in, or uncertainties relating to, foreign rules and regulations that may impact our ability to sell our products, perform services or repatriate profits to the U.S.;

•tariffs, trade barriers and export regulations that adversely impact, and other regulatory and contractual limitations on, our ability to sell our products in certain foreign markets, the scope and consequences of which are subject to changing agendas of political, business and environmental groups;

•consequences from changes in tax or customs laws;

•fluctuations in foreign currency exchange rates;

•limitations on or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures;

•differing multiple payer reimbursement regimes, government payers or patient self-pay systems;

•differing labor laws and standards;

•an inability, or reduced ability, to protect our intellectual property, including any effect of compulsory licensing imposed by government action;

•availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; and

•having to comply with various U.S. and international laws, including the FCPA and anti-money laundering laws, and violation by our independent sales representatives or distributors of such laws.

Risks Related to our Intellectual Property

We depend on our ability to protect our intellectual property and proprietary rights, but we may not be able to maintain the confidentiality of these assets or assure their protection.

Our success depends, in large part, on our ability to protect our current and future technologies and products and to defend our intellectual property rights. If we fail to protect our intellectual property adequately, competitors may manufacture and market products that are similar to, or that compete directly with, our products. Numerous patents covering our technologies have been issued to us and we have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and products in various countries, including the U.S. Some patent applications in the U.S. are maintained in secrecy until the patent is issued. Because the publication of discoveries tends to follow their actual discovery by several months, we may not be the first to invent or file patent applications on any of our discoveries. Further, there is a substantial backlog of patent applications at the U.S. Patent and Trademark Office, and the approval or rejection of patent applications may take several years. Patents may not be issued with respect to any of our patent applications and existing or future patents issued to or licensed by us and may not provide adequate protection or competitive advantages for our products. Patents that are issued may be challenged, invalidated, or circumvented by our competitors. Furthermore, our patent rights may not prevent our competitors from developing, using, or commercializing products that are similar or functionally equivalent to our products. Moreover, if patents are not issued with respect to our products arising from research, we may not be able to maintain the confidentiality of information relating to these products. In addition, if a patent relating to any of our products lapses or is invalidated, we may experience greater competition arising from new market entrants.

We also rely on trade secrets, unpatented proprietary expertise, and continuing technological innovation that we protect, in part, by entering into confidentiality agreements with assignors, licensees, suppliers, employees, and consultants. These agreements may be breached and there may not be adequate remedies in the event of a breach. Disputes may arise concerning the ownership of intellectual property or the applicability or enforceability of confidentiality agreements. Moreover, our trade secrets and proprietary technology may otherwise become known or be independently developed by our competitors.

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In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, adequately protect our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time-consuming, and the outcome is unpredictable.

We may face claims by third parties that our agreements with employees, consultants or advisors obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to resolve an ownership dispute, and if we are unsuccessful, we may be precluded from using certain intellectual property or may lose our exclusive rights in that intellectual property. Either outcome could harm our business and competitive position.

Furthermore, the laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S., if at all. Since certain of our issued patents and pending patent applications are for the U.S. only, we lack a corresponding scope of patent protection in other countries. Thus, we may not be able to stop a competitor from marketing products in other countries that are similar to some of our products.

If we are unable to obtain, protect and enforce patents on our technology and to protect our trade secrets, such inability could have a material and adverse effect on our business, results of operations, and financial condition.

Third parties may claim that we infringe on their proprietary rights and may prevent us from manufacturing and selling certain of our products.

Our success will depend in part on our ability, both in the U.S. and in foreign countries, to operate without infringing upon the patents and proprietary rights of others, and to obtain appropriate licenses to patents or proprietary rights held by third parties if infringement would otherwise occur.

There has been substantial litigation in the medical device industry with respect to the manufacture, use, and sale of new products. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. We may be required to defend against allegations relating to the infringement of patent or proprietary rights of third parties. Any such litigation could, among other things:

•Require us to incur substantial expense, even if we are successful in the litigation;

•Require us to divert significant time and effort of our technical and management personnel;

•Result in the loss of our rights to develop or make certain products; and

•Require us to pay substantial monetary damages or royalties in order to license proprietary rights from third parties or to satisfy judgments or to settle actual or threatened litigation.

Although patent and intellectual property disputes within the medical devices industry have often been settled through assignments, licensing, or similar arrangements, costs associated with these arrangements may be substantial and could include the long-term payment of royalties. Accordingly, an adverse determination in a judicial or administrative proceeding, or a failure to obtain necessary assignments or licenses, could result in us having to pay substantial damages (which may be increased up to three times of awarded damages) and/or substantial royalties, and could prevent us from manufacturing or selling some products or increase our costs to market these products unless we obtain a license or are able to redesign our products to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe the intellectual property rights of others. If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products, all of which could have a material adverse effect on our business, results of operations and financial condition.

In addition, we generally indemnify our customers and sales representatives with respect to infringement by our products of the proprietary rights of third parties. Third parties may assert infringement claims against our customers or sales representatives. These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers or sales representatives, regardless of the merits of these claims. If any of these claims succeed, we may be forced to indemnify, or pay damages on behalf of,

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our customers or sales representatives or may have to obtain licenses for the products they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products.

If we seek to protect or enforce our intellectual property rights through litigation or other proceedings, it could require us to spend significant time and money, the results of which are uncertain.

To protect or enforce our intellectual property rights, we may have to initiate or defend litigation against or by third parties, such as infringement suits, opposition proceedings, or seeking a court declaration that we do not infringe the proprietary rights of others or that their rights are invalid or unenforceable. We may not have sufficient resources to enforce our intellectual property rights or to defend our intellectual property rights against a challenge. Even if we prevail, the cost of litigation, including the diversion of management and other resources, could affect our profitability and could place a significant strain on our financial resources.

Our ability to enforce our intellectual property rights depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components used in their products. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product. The medical device industry is characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. It is not unusual for parties to exchange letters surrounding allegations of intellectual property infringement and licensing arrangements. In addition, the patent positions of medical device companies, including our patent position, may involve complex legal and factual questions, and, therefore, the scope, validity and enforceability of any patent claims we have or may obtain cannot be predicted with certainty.

We may be subject to claims that we, our employees, or our independent sales agents or stocking distributors have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors.

Many of our employees were employed at other medical device companies, including our competitors or potential competitors, in some cases immediately prior to joining us. In addition, many of our independent sales representatives and distributors sell, or in the past have sold, products of our competitors. We may be subject to claims that we, our employees or our independent sales representatives or distributors intentionally, inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers or competitors. In addition, we have been and may in the future be subject to claims that we caused an employee, or encouraged/assisted an independent sales agent, to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these claims. Litigation is expensive and time-consuming, and could divert management attention and resources away from our business. Even if we prevail, the cost of litigation could affect our profitability. If we do not prevail, in addition to any damages we might have to pay, we may lose valuable intellectual property rights or employees, independent sales representatives or distributors. There can be no assurance that this type of litigation or the threat thereof will not adversely affect our ability to engage and retain key employees, sales representatives or distributors.

Risks Related to Litigation and Product Liability Matters

We may be subject to product and other liability claims that may not be covered by insurance and could require us to pay substantial sums.

We are subject to an inherent risk of, and adverse publicity associated with, product liability and other liability claims, whether or not such claims are valid. Spine surgery involves significant risk of serious complications, including bleeding, nerve injury, paralysis and even death. In addition, if neurosurgeons and orthopedic spine surgeons are not sufficiently trained in the use of our products, they may misuse or ineffectively use our products, which may result in unsatisfactory patient outcomes or patient injury. We could become the subject of product liability lawsuits alleging that component failures, malfunctions, manufacturing flaws, design defects, or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients. In addition, the development of allograft implants and technologies for human tissue repair and treatment may entail particular risk of transmitting diseases to human recipients, and any such transmission could result in the assertion of product liability claims against us.

Product liability claims are expensive to defend, divert our management’s attention and, if we are not successful in defending the claim, can result in substantial monetary awards against us or costly settlements. Further, successful product liability claims made against one or more of our competitors could cause claims to be made against us or expose us to a perception that we are vulnerable to similar claims. Any product liability claim brought against us, with or without merit and regardless of the outcome or whether it is fully pursued, may result in: decreased demand for our products; injury to our reputation; significant litigation costs; product recalls; loss of revenue; the inability to commercialize new products or product candidates; and adverse publicity regarding our products. Any of these may have a material and adverse effect on our reputation with existing and potential customers and on

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our business, financial condition, and results of operations. In addition, a recall of some of our products, whether or not the result of a product liability claim, could result in significant costs and loss of customers.

We maintain product liability insurance coverage in amounts and scope that we believe are reasonable and adequate. There can be no assurance, however, that product liability or other claims will not exceed our insurance coverage limits or that such insurance will continue to be available on reasonable, commercially acceptable terms, or at all. A successful product liability claim that exceeds our insurance coverage limits could require us to pay substantial sums and could have a material adverse effect on our financial condition. In addition, a recall of some of our products, whether or not the result of a product liability claim, could result in significant costs and loss of customers.

Our insurance policies are expensive and protect us only from some risks, which will leave us exposed to significant uninsured liabilities.

We do not carry insurance for all categories of risk to which our business is or may be exposed. Some of the policies we maintain include product liability insurance, directors’ and officers’ liability insurance, property insurance, and workers’ compensation insurance. We do not know, however, if we will be able to maintain insurance coverage at a reasonable cost or in sufficient amounts or scope to protect us against losses. If the costs of maintaining adequate insurance coverage should increase significantly in the future, our operating results could be materially adversely impacted. Even if we have insurance, a claim could exceed the amount of our insurance coverage or it may be excluded from coverage under the terms of the policy. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.

Risks Related to Potential Acquisitions, Investments, and Divestitures

Our efforts to identify, pursue, and implement new business opportunities (including acquisitions) may be unsuccessful and may have an adverse effect on our business.

Our growth depends, in large part, on our ability to identify, pursue, and implement new business opportunities that expand our product offerings, capabilities, and geographic presence, and we compete with other medical device companies for these opportunities. Our efforts to identify such opportunities focus primarily on potential acquisitions of new businesses, products or technologies, licensing arrangements, commercialization arrangements, and other transactions with third parties. We may not be able to identify business opportunities that meet our strategic criteria or that are acceptable to us or our stockholders. Even if we are able to identify acceptable business opportunities, we may not be able to pursue or implement such business opportunities (or, in the case of acquisitions or other transactions, complete such acquisitions or other transactions) in a timely manner or on a cost-effective basis (or at all), and we may not realize the expected benefits of such business opportunities. If we are not able to identify, pursue, and implement new business opportunities, it will adversely affect our ability to grow our business.

In addition, pursuing and implementing new business opportunities (particularly acquisitions) may involve significant costs and entail risks, uncertainties, and disruptions to our business, especially where we have limited experience as a company developing or marketing a particular product or technology or operating in a particular geographic region. We may be unable to integrate a new business, product, or technology effectively, or we may incur significant charges related to an acquisition or other business opportunity (for example, amortization of acquired assets or asset impairment charges), which may adversely affect our business, financial condition, and results of operations. Newly acquired technology or products may require additional development efforts prior to commercial sale, including clinical testing and approval by the FDA and applicable foreign regulatory authorities; such additional development efforts may involve significant expense and ultimately be unsuccessful. Any cross-border acquisitions or transactions may involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries. To the extent we issue additional equity in connection with acquisitions, this may dilute our existing stockholders.

Furthermore, as a result of acquisitions of other healthcare businesses, we may be subject to the risk of unanticipated business uncertainties, regulatory and other compliance matters or legal liabilities relating to those acquired businesses for which the sellers of the acquired businesses may not indemnify us, for which we may not be able to obtain insurance (or adequate insurance) or for which the indemnification may not be sufficient to cover the ultimate liabilities.

We have provided over $10.0 million in investments and loans to a privately-held company in Switzerland and may not be able to recoup our investment.

In October 2020, we entered into agreements with Neo Medical SA, a privately-held Swiss-based medical technology company developing a new generation of products for spinal surgery (“Neo Medical”). Our collaboration with Neo Medical focuses on co-developing with them a cervical platform and deploying single-use, sterile-packed procedure solutions designed to increase

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operating room efficiencies, reduce procedural times and costs, improve patient outcomes through novel device designs and techniques, and reduce infection rates. These instruments are designed for surgical settings including acute care hospitals, outpatient hospitals, and also ambulatory surgery centers. Under our agreements with Neo Medical, we will also exclusively distribute Neo Medical’s thoracolumbar procedure solutions to certain U.S. accounts.

In connection with these arrangements, we purchased $5.0 million of Neo Medical’s preferred stock, and loaned CHF 4.6 million ($5.0 million as of the issuance date) to Neo Medical pursuant to a convertible loan agreement. The loan accrues interest at an annual rate of 8% and is convertible by either party into additional shares of Neo Medical’s preferred stock. If not otherwise converted to preferred stock in the interim, the loan and all accrued interest become due and payable in October 2024. In October 2021, the Company entered into an additional Convertible Loan Agreement (the “Additional Convertible Loan”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million ($0.7 million as of the issuance date). In January 2022, the Company elected to convert the Additional Convertible Loan into shares of Neo Medical’s preferred stock.

Neo Medical is using the proceeds of our preferred stock purchase and loans to fund its ongoing operations. However, no assurance can be made that Neo Medical’s business ultimately will be successful. As such, we could ultimately be unable to recoup any value for the preferred stock that we purchased and/or unable to recoup the amount of our loan.

We may incur significant costs or retain liabilities associated with disposition activity.

We may from time to time sell, license, assign, or otherwise dispose of or divest assets, the stock of subsidiaries, or individual products, product lines, or technologies, which we determine are no longer desirable for us to own, some of which may be material. Any such activity could result in us incurring costs and expenses from these efforts, some of which could be significant. This may also result in us retaining liabilities related to the assets or properties disposed of even though, for instance, the income-generating assets have been disposed. These costs and expenses may be incurred at any time and may have a material impact on our results of operations.

Risks Related to Our Financial Results and Need for Financing

Our quarterly operating results may fluctuate.

Our quarterly operating results have fluctuated significantly in the past. Our future quarterly operating results may fluctuate significantly and we may experience losses depending on a number of factors, many of which are outside our control. Such factors include:

•economic conditions worldwide, including arising from or relating to the effects of the COVID-19 pandemic, which could affect the ability of hospitals and other customers to purchase our products and could result in a reduction in elective and non-reimbursed operative procedures;

•increased competition;

•market acceptance of our existing products, as well as products in development, and the demand for, and pricing of, our products and the products of our competitors;

•costs, benefits and timing of new product introductions;

•the timing of or failure to obtain regulatory clearances or approvals for new products;

•lost sales and other expenses resulting from stoppages in our or third parties’ production, including as a result of product recalls or field corrective actions;

•the availability and cost of components and materials, including raw materials such as human tissue;

•accurate predictions of product demand and production capabilities sufficient to meet that demand;

•our ability to realize expected yield improvements and scrap reduction initiatives that we have undertaken at our Irvine facility;

•higher than anticipated independent sales representatives and distributors commissions;

•our ability to purchase or manufacture and ship our products efficiently and in sufficient quantities to meet sales demands;

•the timing of our research and development expenditures;

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•expenditures for major initiatives;

•the timing and level of reimbursement, changes in reimbursement or denials in coverage for our products by third-party payors, such as Medicare, Medicaid, private and public health insurers and foreign governmental health systems;

•the ability of our independent sales representatives and distributors to achieve expected sales targets and for new agents and stocking distributors to become familiar with our products in a timely manner;

•peer-reviewed publications discussing the clinical effectiveness of our products;

•inspections of our manufacturing facilities for compliance with the FDA's Quality System Regulations (Good Manufacturing Practices), which could result in Form 483 observations, warning letters, injunctions or other adverse findings from the FDA or equivalent foreign regulatory bodies, and corrective actions, procedural changes and other actions, including product recalls, that we determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products;

•the costs to comply with new regulations from the FDA or equivalent foreign regulatory bodies, such as the requirements to establish a unique device identification system to adequately identify medical devices through their distribution and use;

•the increased regulatory scrutiny of certain of our products, including products we manufacture for others, which could result in their being removed from the market;

•fluctuations in foreign currency exchange rates; and

•the impact of acquisitions, including the impact of goodwill and intangible asset impairment charges, if future operating results of the acquired businesses are significantly less than the results anticipated at the time of the acquisitions.

In addition, we may experience meaningful variability in our sales and gross profit among quarters, as well as within each quarter, as a result of several factors, including but not limited to (and in addition to those listed above):

•the number of products sold in the quarter;

•the unpredictability of sales of full sets of spinal implants and instruments to our international stocking distributors; and

•the number of selling days in the quarter.

Our goodwill, intangible assets and fixed assets are subject to potential impairment; we have recorded significant goodwill impairment charges and may be required to record additional charges to future earnings if our remaining goodwill or intangible assets become impaired.

A significant portion of our assets consists of goodwill, intangible assets and fixed assets. The carrying value of these assets may be reduced if we determine that those assets are impaired, including intangible assets from recent acquisitions.

Most of our intangible and fixed assets have finite useful lives and are amortized or depreciated over their useful lives on a straight-line basis. The underlying assumptions regarding the estimated useful lives of these intangible assets are analyzed on at least an annual basis and more often if an event or circumstance occurs making it likely that the carrying value of the assets may not be recoverable. Any such changes are adjusted through accelerated amortization, if necessary. Whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable, we test intangible assets for impairment based on estimates of future cash flows. Factors that may be considered a change in circumstances indicating that the carrying value of our intangible assets and/or goodwill may not be recoverable include a decline in stock price and market capitalization, slower growth rates in our industry, the introduction of newer technology or competing products that may cannibalize future sales, or other materially adverse events that have implications on the profitability of our business. When testing for impairment of finite-lived intangible assets held for use, we group assets at the lowest level for which cash flows are separately identifiable. If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.

Goodwill is required to be tested for impairment at least annually. We review our two reporting units for potential goodwill impairment in the fourth fiscal quarter of each year as part of our annual goodwill impairment testing, and more often if an event or circumstance occurs making it likely that impairment exists. During the fourth quarter of 2021, we recorded a full impairment of the Global Orthopedics goodwill. This resulted in an impairment charge of $11.8 million, which is reflected within acquisition-related amortization and remeasurement on the Consolidated Statement of Operations. If actual results differ from the assumptions and

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estimates used in the goodwill and intangible asset calculations, we could incur future impairment or amortization charges, which could negatively impact our financial condition and results of operations.

We face risks related to foreign currency exchange rates.

Because some of our revenue, operating expenses, assets, and liabilities are denominated in foreign currencies, we are subject to foreign exchange risks that could adversely affect our operations and reported results. To the extent that we incur expenses or recognize net sales in currencies other than the U.S. Dollar, any change in the values of those foreign currencies relative to the U.S. Dollar could cause our profits to decrease or our products to be less competitive against those of our competitors. To the extent that our current assets denominated in foreign currency are greater or less than our current liabilities denominated in foreign currencies, we have potential foreign exchange exposure. The fluctuations of foreign exchange rates during 2022 had an unfavorable impact of $10.5 million on net sales outside of the U.S. Although we seek to manage our foreign currency exposure by matching non-dollar revenues and expenses, exchange rate fluctuations could have a material adverse effect on our results of operations in the future. To minimize such exposures, we may enter into currency hedges from time to time.

In addition, for those foreign customers who purchase our products in U.S. Dollars, currency exchange rate fluctuations between the U.S. Dollar and the currencies in which those customers do business may have a negative effect on the demand for our products in foreign countries where the U.S. Dollar has increased in value compared to the local currency. Converting our earnings from international operations to U.S. Dollars for use in the U.S. can also raise challenges, including problems moving funds out of the countries in which the funds were earned and difficulties in collecting accounts receivable in foreign countries where the usual accounts receivable payment cycle is longer.

Our global operations may expose us to tax risks.

We are subject to taxes in the U.S. and numerous foreign jurisdictions. Significant judgment and interpretation of tax laws are required to estimate our tax liabilities. Tax laws and rates in various jurisdictions may be subject to significant change as a result of political and economic conditions. Our effective income tax rate could be adversely affected by changes in those tax laws, changes in the mix of earnings among tax jurisdictions, changes in the valuation of our deferred tax assets and liabilities, vesting of equity awards at a price below the original valuation, historical entity classification elections, and the resolution of matters arising from tax audits.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to amortize such expenditures over five years, or 15 years for such expenditures incurred outside of the U.S. This requirement may have a significant impact on our cash tax liability and our effective tax rate as we perform research and development in the U.S., Italy, and Canada.

Certain of our subsidiaries sell products directly to other Orthofix subsidiaries or provide marketing and support services to other Orthofix subsidiaries. These intercompany sales and support services involve subsidiaries operating in jurisdictions with differing tax rates and we must determine the appropriate allocation of income to each jurisdiction based on current interpretations of complex income tax regulations. Tax authorities in these jurisdictions may challenge our treatment of such intercompany transactions. If we are unsuccessful in defending our treatment of intercompany transactions, we may be subject to additional tax liability, interest, or penalty, which could adversely affect our profitability.

We maintain a $300.0 million secured revolving credit facility secured by a pledge of substantially all of our property.

In October 2019, we and certain of our wholly-owned subsidiaries (collectively, the “Borrowers”) entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $300.0 million secured revolving credit facility maturing on October 25, 2024, and amends and restates the previous $125.0 million secured revolving credit facility. No amount is currently outstanding on the credit facility as of December 31, 2022, or as of the date hereof, but we may draw on this facility in the future.

Certain of our subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of any obligations under the Amended Credit Agreement. The obligations with respect to the Amended Credit Agreement are secured by a pledge of substantially all of the personal property assets of the Borrowers and each of the Guarantors, including accounts receivables, deposit accounts, intellectual property, investment property, and inventory, equipment, and equity interests in their respective subsidiaries.

The Amended Credit Agreement contains customary affirmative and negative covenants, including limitations on our ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness, and enter into affiliate transactions. In addition, the Amended Credit Agreement contains financial covenants requiring us to maintain, on a consolidated basis as of the last day of any

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fiscal quarter, a total net leverage ratio of not more than 3.5 to 1.0 (which ratio can be permitted to increase to 4.0 to 1.0 for no more than 4 fiscal quarters following a material acquisition) and an interest coverage ratio of at least 3.0 to 1.0. The Amended Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the facility may be accelerated and/or the lenders’ commitments terminated.

We believe that we are in compliance with the covenants, and there were no events of default, at December 31, 2022 (and in prior periods). However, there can be no assurance that we will be able to meet such financial covenants in future fiscal quarters. The failure to do so could result in an event of default under such agreement, which could have a material adverse effect on our financial position in the event that we have significant amounts drawn under the facility at such time.

We must maintain high levels of inventory, which could consume a significant amount of our resources and reduce our cash flows.

Because we maintain substantial inventory levels to meet the needs of our customers, we are subject to the risk of inventory excess, obsolescence and shelf-life expiration. Many of our spinal implant products come in sets. Each set includes a significant number of components in various sizes so that the physician may select the appropriate spinal implant based on the patient’s needs. In a typical surgery, not all of the implants in the set are used, and therefore certain sizes of implants placed in the set or that we purchase for replenishment inventory may become obsolete before they can be used. In addition, to market our products effectively, we often must provide hospitals and independent sales agents with consigned sets that typically consist of spinal implants and instruments, including products to ensure redundancy and products of different sizes. Further, our biologics products have expiration dates, which range from one to five years, and these products may expire before they can be used. If a substantial portion of our inventory is deemed excess, becomes obsolete, or expires, it could have a material adverse effect on our earnings and cash flows due to the resulting costs associated with the inventory impairment charges and costs required to replace such inventory. Further, as we increasingly launch new products and product systems, we may cannibalize older products and product systems, which could exacerbate excess and obsolete charges.

We may need additional financing in the future to meet our capital needs or to make opportunistic acquisitions, and such financing may not be available on favorable terms, if at all.

We may need additional financing in the future to meet our capital needs or to make opportunistic acquisitions. The capital and credit markets may experience extreme volatility and disruption, which may lead to uncertainty and liquidity issues for both borrowers and investors, and we may be unable to obtain any desired additional financing on favorable terms, if at all. If adequate funds are not available to us on acceptable terms, we may be unable to successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect our business, results of operations and financial condition. If we raise capital by issuing debt or entering into credit facilities, we may be subject to limitations on our operations due to restrictive covenants.

General Risks

Our stock price has fluctuated and may continue to fluctuate, which may make future prices of our stock difficult to predict.

Investors should not rely on recent or historical trends to predict future stock prices, financial condition, results of operations, or cash flows. Our stock price, like that of other medical device companies, can be volatile and can be affected by, among other things: speculation, coverage, or sentiment in the media or the investment community; the announcement of new, planned or contemplated products, services, technological innovations, acquisitions, divestitures, or other significant transactions by us or our competitors; our quarterly financial results and comparisons to estimates by the investment community or financial outlook provided by us; the financial results and business strategies of our competitors; publication of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts; changes in laws or regulations affecting our business, including tax legislation; changes in accounting standards, policies, guidance, interpretations or principles; threatened or actual litigation or governmental investigations; and inflation; market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics. General or industry specific market conditions or stock market performance or domestic or international macroeconomic and geopolitical factors unrelated to our performance also may affect the price of our stock.

In addition, the stock market in general, and the stocks of medical device companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. This could limit or prevent investors from readily selling their shares and may otherwise negatively affect the liquidity of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall

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market and in the market price of a company’s securities. This litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources, and harm our business, financial condition and results of operation.

We expend substantial resources to comply with laws and regulations relating to public companies, and any failure to maintain compliance could subject us to regulatory scrutiny and cause investors to lose confidence in our company, which could harm our business and have a material adverse effect on our stock price.

Laws and regulations affecting public companies, including provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes-Oxley Act of 2002, and the related rules and regulations adopted by the SEC, and by the Nasdaq Stock Market increase our accounting, legal and financial compliance costs and make some activities more time-consuming and costly. We cannot predict or estimate with any reasonable accuracy the total amount or timing of the costs we may incur to comply with these laws and regulations.

We are also subject to SEC regulations that require us to determine whether our products contain certain specified minerals, referred to under the regulations as “conflict minerals,” and, if so, to perform an extensive inquiry into our supply chain, to determine whether such conflict minerals originate from the Democratic Republic of Congo or an adjoining country. Compliance with these regulations has increased our costs and has been time-consuming for our management and our supply chain personnel (and time-consuming for our suppliers), and we expect that continued compliance will continue to require significant money and time. In addition, to the extent any of our disclosures are perceived by the market to be “negative,” it may cause customers to refuse to purchase our products. Further, if we determine to make any changes to products, processes, or sources of supply, it may result in additional costs, which may adversely affect our business, financial condition and results of operations.

Our amended and restated bylaws designates certain courts as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our amended and restated bylaws provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law: (A) the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, the Superior Court of the State of Delaware, or, if both the Court of Chancery of the State of Delaware and the Superior Court of the State of Delaware lack subject matter jurisdiction, the United States District Court for the District of Delaware) and any state (or, if applicable, federal) appellate court therefrom shall be the sole and exclusive forum for (i) any derivative action, suit, or proceeding brought on behalf of our company, (ii) any action, suit, or proceeding asserting a claim of breach of fiduciary duty owed by any current or former director, officer, or other employee, or stockholder of ours to our company or our stockholders or any action asserting a claim for aiding and abetting any such breach of fiduciary duty, (iii ) any action, suit, or proceeding asserting a claim against us or any of our directors, officers, or other employees arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the General Corporation Law of Delaware (the “DGCL”) or our (certificate of incorporation or bylaws, (iv) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit, or proceeding asserting a claim against us or our current or former directors, officers, employees, or stockholders governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants (including personal jurisdiction by reason of any such indispensable party’s consent to personal jurisdiction in the State of Delaware or such court); and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. These provisions may limit a stockholder’s ability to obtain a judicial forum that such stockholder may prefer for disputes governed by these provisions.

Environmental, social, and corporate governance (“ESG”) regulations, policies and provisions may make our supply chain more complex and may adversely affect our relationships with customers.

There is an increasing focus on the governance of environmental and social risks. A number of our customers who are payors or distributors have adopted, or may adopt, procurement policies that include ESG provisions that their suppliers or manufacturers must comply with, or they may seek to include such provisions in their terms and conditions. An increasing number of participants in the medical device industry are also joining voluntary ESG groups or organizations, such as the Responsible Business Alliance. These ESG provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and the outsourced manufacturing of certain components of our products. If we are unable to comply, or are unable to cause our suppliers to comply, with such policies or provisions, a customer may stop purchasing products from us, and may take legal action against us, which could harm our reputation, revenue, and results of operations.

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Our business could be negatively impacted by corporate citizenship and ESG matters and/or our reporting of such matters.

There is an increasing focus from certain investors, customers, consumers, and other stakeholders concerning corporate citizenship and sustainability matters. We could be perceived as not acting responsibly in connection with these matters. Our business could be negatively impacted by such matters. Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease or own real property to support our business. The following lists those properties that we believe are material to our business. We believe that our facilities meet our current needs and that we will be able to renew any such leases when needed on acceptable terms or find alternative facilities.

Facility	Location	Approx. Square Feet		Ownership
Manufacturing, warehousing, distribution, research and development, location    of a cadaveric training laboratory, and administrative facility for Corporate    and allreporting segments	Lewisville, TX		140,000	Leased
Design, development, marketing, and inspection for biologics and spinal implant    products and distribution of certain spinal implant products; location of a    cadaveric training laboratory, and administrative facility	Carlsbad, CA		82,000	Leased
Manufacturing and distribution for certain Biologics products	Irvine, CA		70,000	Leased
Manufacturing, warehousing, distribution, research and development, and    administrative facility for Motion Preservation	Sunnyvale, CA		25,000	Leased
Design of Spinal Implants and location of a cadaveric training laboratory	Wayne, PA		3,700	Leased
Design, development, and marketing for Enabling Technologies products	Toronto, CA		9,200	Leased
Research and development, component manufacturing, quality control and    training facility for orthopedics products and sales management, distribution    and administrative facility for Italy	Verona, Italy		38,000	Owned
International distribution center for Orthofix products	Verona, Italy		18,000	Leased
Mechanical workshop for Orthofix products	Verona, Italy		9,000	Leased
Sales management, distribution and administrative facility for United Kingdom	Maidenhead, England		5,580	Leased
Sales management, distribution and administrative facility for Brazil	São Paulo, Brazil		22,000	Leased
Sales management, distribution and administrative facility for France	Arcueil, France		8,500	Leased
Sales management, distribution and administrative facility for Germany	Ottobrunn, Germany		18,300	Leased

Our manufacturing facilities are registered with the FDA. Our facilities are subject to FDA inspection to ensure compliance with its Quality System Regulations. For further information regarding the status of FDA inspections, see the "Item 1. Business - Government Regulation."

Item 3. Legal Proceedings

For a description of material pending legal proceedings, refer to Note 13 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

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

Market for Our Common Stock

Our common stock is traded on the Nasdaq Global Select Market under the symbol “OFIX.” As of March 1, 2023, we had 493 holders of record of our common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions. The closing price of our common stock on March 1, 2023 was $20.18. The following table shows the high and low sales prices for our common stock for each of the two most recent fiscal years.

	High		Low
2021
First Quarter	$	48.50	$	39.34
Second Quarter		45.96		39.23
Third Quarter		43.30		36.35
Fourth Quarter		39.98		28.65
2022
First Quarter	$	35.83	$	29.75
Second Quarter		34.89		23.54
Third Quarter		25.93		19.11
Fourth Quarter		20.87		14.33

Dividends

We have not paid dividends to holders of our common stock in the past and have no present intention to pay dividends in the foreseeable future. Additionally, we have restrictions on our ability to pay dividends in certain circumstances pursuant to our Amended Credit Agreement. We currently intend to retain all of our consolidated earnings to finance the continued growth of our business.

In the event that we decide to pay a dividend to holders of our common stock in the future with dividends received from our subsidiaries, we may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts.

Equity Compensation Plan Information

Information about our equity compensation plan is incorporated herein by reference to Part III, Item 12 of this report.

Recent Sales of Unregistered Securities

During the fourth quarter of 2022, we did not issue any securities that were not registered under the Securities Act of 1933, as amended (the "Securities Act").

Performance Graph

The following performance graph is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act. This information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate this information by reference.

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The following graph compares our annual percentage change in cumulative total return on common shares over the past five years with the cumulative total return of companies comprising the NASDAQ Composite Index and the NASDAQ Stocks (SIC 3840-3849 US & Foreign) Surgical, Medical, and Dental Instruments and Supplies Index. This presentation assumes that $100 was invested in shares of the relevant issuers on December 31, 2017, and that dividends received were immediately invested in additional shares. The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown. The NASDAQ Composite Index replaces the CRSP NASDAQ Stock Market (US and Foreign Companies) Index in this analysis and going forward, as the CRSP Index data is no longer accessible. The CRSP index has been included with data through 2022.

 

Item 6. Reserved

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

The following discussion and analysis of our financial condition and result of operations should be read in conjunction with “Forward-Looking Statements” and our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report. The discussion and analysis below is focused on our 2022 and 2021 financial results, including comparisons of our year-over-year performance between these years. Discussion and analysis of our 2020 fiscal year specifically, as well as the year-over-year comparison of our 2021 financial performance to 2020, is located in Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 25, 2022, which is available on our website at www.orthofix.com and the SEC’s website at www.sec.gov.

Merger with SeaSpine

On October 10, 2022, we entered into an Agreement and Plan of Merger with SeaSpine Holdings Corporation ("SeaSpine"), a global medical technology company focused on surgical solutions for the treatment of spinal disorders. On January 5, 2023, the transaction was completed, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. As the merger was completed in 2023, SeaSpine's historical financial results for the year ended December 31, 2022, are not included within results of operations. As such, the information presented under the title "Results of Operations" below speaks only to the financial results of Orthofix on a stand-alone basis. However, the merger will have a significant impact on our future results of operations and financial condition. For example, the merger is expected to result in significant costs to achieve ongoing synergies, which could be associated with product line rationalization, employee severance and retention costs, professional fees for integration of processes and information technology systems, and other expenses. Future filings, beginning with our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2023, will reflect the results of the combined Orthofix-SeaSpine organization. For additional discussion related to the merger, see Note 22 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

Executive Summary

The newly merged Orthofix-SeaSpine organization is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. Its products are distributed in approximately 68 countries worldwide.
 

We are headquartered in Lewisville, Texas and have primary offices in Carlsbad, CA, with a focus on spine and biologics product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. Our combined global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France and Sao Paulo, Brazil.

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Notable financial results in 2022 include the following:

•Net sales were $460.7 million, a decrease of 0.8% on a reported basis and 1.5% on a constant currency basis

•Global Orthopedics net sales growth of 1.9% on a reported basis and 11.0% on a constant currency basis driven by strategic investments in our commercial channels and momentum from new product introductions

•FDA granted PMA approval for AccelStim LIPUS bone growth stimulator, expanding our indications into fresh fracture care

•Executed partnership with CGBio to commercialize Novosis rhBMP-2 growth factor in the U.S. and Canada

•Orthofix and MTF Biologics recognized with the 2022 Spine Technology Award from Orthopedics This Week for Virtuos Lyograft

Results of Operations

The following table presents certain items in our consolidated statements of operations as a percent of net sales:

	Year ended December 31,
	2022 (%)			2021 (%)			2020 (%)
Net sales		100.0			100.0			100.0
Cost of sales		26.8			24.7			25.1
Gross profit		73.2			75.3			74.9
Sales and marketing		49.7			47.6			50.3
General and administrative		17.4			14.9			16.7
Research and development		10.6			10.7			9.6
Acquisition-related amortization and remeasurement		(1.6	)		3.9			(0.2	)
Operating income (loss)		(2.9	)		(1.8	)		(1.5	)
Net income (loss)		(4.3	)		(8.3	)		0.6

Net Sales by Reporting Segment

The following table provides net sales by major product category by reporting segment:

							Percentage Change
							2022/2021			2022/2021			2021/2020			2021/2020
(U.S. Dollars, in thousands)	2022		2021		2020		Reported			Constant Currency			Reported			Constant Currency
Bone Growth Therapies	$	187,247	$	187,448	$	171,396		-0.1	%		-0.1	%		9.4	%		9.4	%
Spinal Implants		109,546		115,094		94,857		-4.8	%		-4.0	%		21.3	%		20.8	%
Biologics		56,381		56,421		55,482		-0.1	%		-0.1	%		1.7	%		1.7	%
Global Spine		353,174		358,963		321,735		-1.6	%		-1.4	%		11.6	%		11.4	%
Global Orthopedics		107,539		105,516		84,827		1.9	%		11.0	%		24.4	%		21.3	%
Net sales	$	460,713	$	464,479	$	406,562		-0.8	%		1.5	%		14.2	%		13.5	%

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Global Spine

Global Spine offers the following products categories:

-Bone Growth Therapies, which manufactures, distributes, sells, and provides support services for market leading devices that enhance bone fusion. Bone Growth Therapies uses distributors and sales representatives to sell its devices and provide associated services to hospitals, healthcare providers, and patients.

-Spinal Implants, which designs, develops, and markets a broad portfolio of motion preservation and fixation implant products used in surgical procedures of the spine. Spinal Implants distributes its products globally through a network of distributors and sales representatives to sell spine products to hospitals and healthcare providers.

-Biologics, which provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. Biologics markets its tissues to hospitals and healthcare providers, primarily in the U.S., through a network of employed and independent sales representatives.

2022 Compared to 2021

Net sales decreased $5.8 million or 1.6%

•Bone Growth Therapies net sales were relatively flat, primarily driven by a continued slowdown in complex procedure volumes early in the year, which are typically paired with our CervicalStim and Spinalstim devices, largely offset by the successful commercial roll-out of our AccelStim Bone Healing Therapy in 2022 and growth in our PhysioStim product line from an expanding sales force and increased market share

•Spinal Implants net sales decreased $5.5 million or 4.8%, primarily due to lower complex procedures case volumes in Spine Fixation as well as global competitive pressures in Motion Preservation

•Biologics net sales were relatively flat, primarily driven by a decrease in volume from our cellular allograft offerings, which were largely offset by the impact of successful new product introductions, such as FiberFuse, FiberFuse Strip, Virtuos, and Legacy DBM

Global Orthopedics

Global Orthopedics offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions specifically related to limb reconstruction and deformity correction unrelated to the spine. Global Orthopedics distributes its products world-wide through a network of distributors and sales representatives to sell orthopedic products to hospitals and healthcare providers.

2022 Compared to 2021

Net sales increased $2.0 million, or 1.9% on a reported basis and 11.0% on a constant currency basis

•Double-digit growth internationally on a constant currency basis paired with solid growth in the U.S. from strategic investments in our commercial channels and momentum from new product introductions

•Partially offset by a decrease of $9.6 million due to movement in foreign currency exchange rates

Gross Profit

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Net sales	$	460,713		$	464,479		$	406,562			-0.8	%		14.2	%
Cost of sales		123,544			114,914			101,889			7.5	%		12.8	%
Gross profit	$	337,169		$	349,565		$	304,673			-3.5	%		14.7	%
Gross margin		73.2	%		75.3	%		74.9	%		-2.1	%		0.4	%

2022 Compared to 2021

Gross profit decreased $12.4 million, or 3.5%

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•Decrease in gross profit driven primarily by changes in our sales mix as well as increased inventory reserves related to set builds for an expanding sales force and increased safety stock requirements early in the year driven by the risk of global supply chain disruption

•Decrease also driven by unfavorable changes in shipping costs, increased manufacturing overhead costs, and unfavorable movements in foreign currency exchange rates

Sales and Marketing Expense

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Sales and marketing	$	228,810		$	221,318		$	204,434			3.4	%		8.3	%
As a percentage of net sales		49.7	%		47.6	%		50.3	%		2.1	%		-2.7	%

2022 Compared to 2021

Sales and marketing expense increased $7.5 million

•Increases in travel, sales events, and surgeon and sales education trainings as in-person events largely resumed in 2022

•Increase also attributable to the hiring of additional sales and marketing headcount to support growth initiatives across both Spine and Orthopedics

•Increase of $2.4 million related to our estimated Italian Medical Device Payback liability, largely as a result of temporary relief provided by the Italian National Healthcare System in 2021 in response to the COVID-19 pandemic

General and Administrative Expense

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
General and administrative	$	79,966		$	69,353		$	67,948			15.3	%		2.1	%
As a percentage of net sales		17.4	%		14.9	%		16.7	%		2.5	%		-1.8	%

2022 Compared to 2021

General and administrative expense increased $10.6 million

•Increase of $12.0 million associated with due diligence, legal fees, and other acquisition-related costs incurred in order to close the merger with SeaSpine, and certain integration costs to prepare for the merging of activities on a combined company basis

•Partially offset by a decrease in certain compensation costs, partly stemming from the departure of certain former executives and from macroeconomic pressures on certain variable compensation expenses

Research and Development Expense

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Research and development	$	49,065		$	49,621		$	39,056			-1.1	%		27.1	%
As a percentage of net sales		10.6	%		10.7	%		9.6	%		-0.1	%		1.1	%

2022 Compared to 2021

Research and development expense decreased $0.6 million

•Decrease of $0.8 million related to the attainment of a development milestone with MTF Biologics achieved in 2021 that did not recur in 2022

•Decrease in integration activities attributable to certain recent asset acquisitions

•Partially offset by an increase of $2.3 million related directly to our European Union medical device regulation implementation efforts

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Acquisition-related Amortization and Remeasurement

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Acquisition-related amortization and remeasurement	$	(7,404	)	$	17,588		$	(499	)		-142.1	%		-3624.6	%
As a percentage of net sales		-1.6	%		3.9	%		-0.2	%		-5.5	%		4.1	%

2022 Compared to 2021

Acquisition-related amortization and remeasurement decreased $25.0 million

•Decrease of $14.0 million related to the remeasurement of potential revenue-based milestone payments associated with the Spinal Kinetics acquisition, as we do not expect to achieve the remaining revenue-based milestone prior to April 30, 2023, based on current net sales trends

•Decrease of $11.8 million attributable to the impairment of our Global Orthopedics goodwill in 2021

Non-operating Income (Expense)

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Interest expense, net	$	(1,288	)	$	(1,837	)	$	(2,483	)		-29.9	%		-26.0	%
Other income (expense)		(3,150	)		(3,343	)		8,381			-5.8	%		-139.9	%

Non-operating income and expense largely consists of interest income and expense, transaction gains and losses from changes in foreign currency exchange rates, changes in fair value related to our equity holdings in certain privately-held companies, and credit losses recognized on certain convertible debt investments. Foreign exchange gains and losses are primarily a result of several of our foreign subsidiaries holding trade and intercompany payables or receivables in currencies (most notably the U.S. Dollar) other than their functional currency.

2022 Compared to 2021

Interest expense, net, decreased $0.5 million

•Change primarily the result of increased interest income on money market funds as a result of increases in yield driven by domestic monetary policy

•Change also a result of increased interest income earned on certain investment securities

Other income (expense), net, increased $0.2 million

•Increase of $0.7 million associated with changes in foreign currency exchange rates, as we recorded a non-cash remeasurement loss of $3.3 million in 2022 compared to a loss of $4.0 million in 2021

•Partially offset by gains recognized in 2021 in total of $0.6 million associated with our equity investments in Neo Medical and Bone Biologics

Income Tax Expense

										Percentage Change
(U.S. Dollars, in thousands)	2022			2021			2020			2022/2021			2021/2020
Income tax expense (benefit)	$	2,043		$	24,884		$	(2,885	)		-91.8	%		-962.5	%
Effective tax rate		-11.5	%		-184.4	%		784.0	%		172.9	%		-968.4	%

2022 Compared to 2021

Net income tax expense decreased by $22.8 million

•Decrease of $20.2 million related to changes in valuation allowances recorded in 2021 versus 2022

•Decrease of $2.7 million related to the change in fair value of contingent consideration

•Partially offset by $1.0 million US tax expense on foreign income inclusion

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A reconciliation of the effective tax rate for each year is reported in Note 20 to the Notes to the Consolidated Financial Statements contained in Item 8 of this Annual Report.

Segment Review

Historically, our business was managed through two reporting segments: Global Spine and Global Orthopedics. The primary metric used in managing the business by segment is EBITDA (which is described further in Note 16 to the Notes to the Consolidated Financial Statements contained in Item 8 of this Annual Report).

Following the merger with SeaSpine, which was completed on January 5, 2023, we expect to reassess our reporting segments in the first quarter of 2023 based on how the operations of the newly combined company will be managed. We will also reassess our identified segment profitability metric at that time. Accordingly, the reporting segment information below has been prepared based on our two historical reporting segments, which were utilized in managing operations for the year ended December 31, 2022.

The following table reconciles EBITDA to loss before income taxes:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Global Spine	$	60,649		$	58,014		$	63,036
Global Orthopedics		(4,037	)		3,374			(4,993	)
Corporate		(44,011	)		(31,691	)		(25,382	)
Total EBITDA		12,601			29,697			32,661
Depreciation and amortization		(29,019	)		(29,599	)		(30,546	)
Goodwill impairment		—			(11,756	)		—
Interest expense, net		(1,288	)		(1,837	)		(2,483	)
Loss before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

Liquidity and Capital Resources

Cash, cash equivalents, and restricted cash at December 31, 2022, was $50.7 million compared to $87.8 million at December 31, 2021.

	Year Ended December, 31,
(U.S. Dollars, in thousands)	2022			2021			Change
Net cash from operating activities	$	(11,538	)	$	18,475		$	(30,013	)
Net cash from investing activities		(24,534	)		(23,013	)		(1,521	)
Net cash from financing activities		(78	)		(3,621	)		3,543
Effect of exchange rate changes on cash and restricted cash		(997	)		(815	)		(182	)
Net change in cash, cash equivalents, and restricted cash	$	(37,147	)	$	(8,974	)	$	(28,173	)

The following table presents free cash flow, a non-GAAP financial measure, which is calculated by subtracting capital expenditures from net cash from operating activities.

	Year Ended December, 31,
(U.S. Dollars, in thousands)	2022			2021			Change
Net cash from operating activities	$	(11,538	)	$	18,475		$	(30,013	)
Capital expenditures		(23,160	)		(19,592	)		(3,568	)
Free cash flow	$	(34,698	)	$	(1,117	)	$	(33,581	)

Operating Activities

Cash flows from operating activities decreased $30.0 million

•Decrease in net loss of $18.6 million

•Net decrease of $44.1 million in non-cash gains and losses, largely related to our impairment of Global Orthopedics goodwill in 2021, changes in deferred income taxes, and changes in fair value of contingent consideration

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•Net decrease of $4.5 million relating to changes in working capital accounts, primarily attributable to changes in inventory levels, our contract liability associated with the CMS Accelerated and Advance Payment Program, the payment of contingent consideration in 2021, and from changes in other long-term assets and liabilities

Two of our primary working capital accounts are accounts receivable and inventory. Day’s sales in receivables were 62 days at December 31, 2022, compared to 58 days at December 31, 2021 (calculated using fourth quarter net sales and ending accounts receivable). Inventory turns were 1.2 times as of December 31, 2022, compared to 1.4 times at December 31, 2021.

Investing Activities

Cash flows from investing activities decreased $1.5 million

•Decrease of $3.6 million associated with capital expenditures compared to the prior year period

•Partially offset by an increase of $2.2million due to cash paid for purchases of investment securities in 2021

Financing Activities

Cash flows from financing activities increased $3.5 million

•Increase of $8.4 million associated with cash paid in 2021 for the achievement of a revenue-based milestone associated with the Spinal Kinetics acquisition; the milestone payment totaled $15.0 million with a portion of the payment reflected in both operating and financing activities

•Decrease in net proceeds of $3.7 million from the issuance of common shares, primarily related to the exercise of stock options in the prior year period

•Decrease of $2.0 million related to the conclusion of the FITBONE Contract Manufacturing and Supply Agreement with Wittenstein, resulting in a $2.0 million payment in 2022

•Increase of $0.9 million attributable to other financing activities

Credit Facilities

On October 25, 2019, we entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”), which provides for a five year $300 million secured revolving credit facility. The Amended Credit Agreement has a maturity date of October 25, 2024, and amends and restates the previous $125 million secured revolving credit facility.

Borrowings under the Amended Credit Agreement may be used for, among other things, working capital and other general corporate purposes (including share repurchases, permitted acquisitions and permitted payments of dividends and other distributions). Borrowings under the Amended Credit Agreement may be limited based on EBITDA levels recognized over the preceding 12 months.

As of December 31, 2022, we have no outstanding borrowings under the Amended Credit Agreement. However, on January 3, 2023, we borrowed $30.0 million under the $300.0 million secured revolving credit facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023. For additional information regarding the credit facility, see Note 11 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

In addition, we have no outstanding borrowings on our Italian line of credit of €5.5 million ($6.3 million) as of December 31, 2022. This unsecured line of credit provides us the option to borrow amounts in Italy at rates which are determined at the time of borrowing.

As of December 31, 2022, SeaSpine had a $30.0 million credit facility with Wells Fargo Bank, National Association which was scheduled to mature in July 2025. Immediately prior to the closing date of the merger, SeaSpine had $27.0 million of outstanding borrowings under the credit facility. In connection with the merger, on January 5, 2023, all of the outstanding obligations in respect of principal, interest, and fees under the credit agreement were repaid and all applicable commitments under the credit agreement were terminated.

Other

For information regarding Contingencies, see Note 13 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

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Legion Innovations, LLC Asset Acquisition

On December 29, 2022, we entered into a technology assignment and royalty agreement with Legion Innovations, LLC, a U.S.-based medical device technology company, whereby we acquired intellectual property rights to certain assets. As consideration, we paid $0.2 million in January 2023, with additional payments contingent upon reaching future commercialization and revenue-based milestones.

CGBio Co. Ltd. License and Distribution Agreement
 

On July 30, 2022, we entered into an exclusive License and Distribution Agreement with CGBio Co., Ltd. (“CGBio”), a developer of innovative, synthetic bone grafts. The agreement grants us the exclusive right to conduct pre-clinical and clinical studies, commercialize, promote, market, and sell the Novosis recombinant human bone morphogenetic protein-2 (rhBMP-2) bone growth materials and other future tissue regenerative solutions in the U.S. and Canada. As consideration, we paid CGBio an upfront payment of $1.4 million with additional payments contingent upon the achievement of specified development milestones.
 

Spinal Kinetics Acquisition and Contingent Consideration

As part of the consideration for the Spinal Kinetics acquisition, we agreed to make contingent milestone payments of up to $60.0 million. One milestone payment, which was for $15.0 million, became due upon FDA approval of Spinal Kinetics’ M6-C artificial cervical disc, which was achieved and paid in 2019. A revenue-based milestone payment, totaling $15.0 million, was achieved and paid in 2021 upon meeting certain net sales targets.

The remaining milestone payment is a revenue-based milestone payment of $30.0 million in connection with future sales of the acquired artificial discs. The fair value of this contingent consideration liability was concluded to be zero as of December 31, 2022, as we do not expect to achieve the milestone prior to the deadline of April 30, 2023. For additional discussion of this matter, see Note 12 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

IGEA S.p.A Exclusive License and Distribution Agreement

In April 2021, we entered into an Exclusive License and Distribution Agreement (the “License Agreement”) with IGEA S.p.A (“IGEA”), an Italian manufacturer and distributor of bone and cartilage stimulation systems. Per the terms of the License Agreement, we have the exclusive right to sell IGEA products in the U.S. and Canada. As consideration for the License Agreement, we agreed to pay up to $4.0 million, of which $0.5 million was paid in 2021, with certain payments contingent upon achieving an FDA milestone.

In May 2022, the Company achieved FDA approval pertaining to the acquired technology, triggering a contingent consideration milestone obligation of $3.5 million. Of this amount, $1.5 million was paid in 2022, $1.0 million was accrued within other current liabilities, and $1.0 million was accrued within other long-term liabilities as of December 31, 2022.

Related Party Transaction

In February 2021, we entered into a technology assignment and royalty agreement with a medical device technology company partially owned and controlled by the wife of our Executive Chairman, and former President and Chief Executive Officer, Jon Serbousek, whereby we acquired the intellectual property rights to certain assets for consideration of up to $10.0 million. Consideration was comprised of $1.0 million, which was paid at signing, and $9.0 million in contingent consideration, dependent upon multiple milestones, such as receipt of 510(k) clearance or the attainment of certain net sales targets. For additional discussion of this transaction, see Note 17 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report.

Neo Medical Investment and Convertible Loan

In October 2020, we entered into a Convertible Loan Agreement (the “Convertible Loan”) with Neo Medical SA, a privately held Swiss-based Medtech company (“Neo Medical”), whereby we loaned CHF 4.6 million to Neo Medical ($5.0 million as of the issuance date). The loan bears interest at 8.0%, with interest due semi-annually. The Convertible Loan matures in October 2024; however, if a change in control of Neo Medical occurs prior to maturity, the Convertible Loan shall become immediately due upon such event.

Impact of COVID-19 and the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") on Liquidity and Capital Resources

In April 2020, we received $13.9 million in funds from the CMS Accelerated and Advance Payment Program as part of the CARES Act to increase cash flow to providers of services and suppliers impacted by the COVID-19 pandemic. In April 2021, Medicare began to recoup 25% of Medicare payments otherwise owed to the provider or supplier for submitted claims. Recoupment then increased to 50% of Medicare payments in March 2022. Thus, during these time periods, rather than receiving the full amount of payment for

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newly submitted claims, our outstanding balance under the Accelerated and Advance Payment Program was reduced by the recoupment amount until the full balance had been repaid, which was completed in 2022.

Disclosures Relating to Potential Obligations Resulting from our Merger with SeaSpine

On December 1, 2022, SeaSpine entered into an exclusive license and distribution agreement with Lattus Spine LLC. (“Lattus”) to acquire a perpetual license to certain surgical instrumentation. As consideration, SeaSpine paid an upfront licensing fee and purchased initial sets of instrumentation. Additional payments are contingent upon the subsequent net sales of the acquired assets, most of which are based upon future net sales of the acquired assets, with the company having the option to fund a portion of these payments via the issuance of common stock.

Pursuant to a distributor agreement between SeaSpine and one of its distributors, the Company could be obligated to purchase certain assets of the distributor, at the option of the distributor, as a result of the merger. If this were to occur, the purchase price of the transaction would be the greater of (i) $4.2 million or (ii) 100% of the commissions earned by the distributor over a specified period prior to the change in control, with such purchase price paid in stock.

Unremitted Foreign Earnings

Unremitted foreign earnings were $27.0 million as of December 31, 2022. The Company’s investment in foreign subsidiaries continues to be indefinite in nature; however, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur significant additional tax liability.

Contractual Obligations

As a result of our operations, we are subject to certain contractual obligations with material cash requirements. Our material contractual obligations include, but are not limited to i) our contingent consideration arrangement associated with the Spinal Kinetics acquisition, ii) contingent consideration arrangements associated with certain asset acquisitions, of which material obligations are described above, iii) operating lease and finance lease obligations, and iv) uncertain tax positions.

Refer to the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report for a further description of our contingent consideration arrangements (Notes 12 and 17), lease obligations (Note 9), and uncertain tax positions (Note 20).

Off-balance Sheet Arrangements

As of December 31, 2022, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, cash flows, liquidity, capital expenditures, or capital resources that are material to investors. In addition, we do not consider the backlog of firm orders to be material.

Critical Accounting Estimates

Our discussion of operating results is based upon the consolidated financial statements and accompanying notes. The preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, which are based on historical experience and various other assumptions that management believe to be reasonable under the circumstances at that point in time. Actual results may differ, significantly at times, from these estimates.

We believe the estimates described below are the most critical in preparing our consolidated financial statements. We have reviewed these critical accounting estimates with the Audit Committee of the Board of Directors.

Revenue Recognition

The process for recognizing revenue involves significant assumptions and judgments for certain of our revenue streams. Revenue recognition policies are “critical accounting estimates” because changes in the assumptions used to develop the estimates could materially affect key financial measures, including net sales, gross margin, operating income, EBITDA, and net income.

Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue.

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For revenue derived from third-party payors, including commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare, in connection with the sale of our stimulation products, we recognize revenue when the stimulation product is fitted to and accepted by the patient and all applicable documents that are required by the third-party payor have been obtained. Amounts paid by these third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment.

Wholesale revenue is related to the sale of our bone growth stimulators directly to physicians and other healthcare providers. Wholesale revenues are recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods.

Biologics revenue is largely attributable to the U.S. and is primarily related to a collaborative arrangement with MTF. We have exclusive global marketing rights and receive marketing fees from MTF based on products distributed by MTF. MTF is considered the principal in these arrangements; therefore, we recognize these marketing service fees on a net basis upon shipment of the product to the customer and receipt of a confirming purchase order.

Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial revenue and international sales derived from commercial sales and through stocking distributor arrangements.

Commercial revenue is largely related to the sale of our Spinal Implants and Global Orthopedics products to hospital customers. Commercial revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital.

Stocking distributors purchase our products and then re-sell them directly to customers, such as hospitals. Revenue derived from stocking distributor arrangements is recognized upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price is estimated based upon our historical collection experience with the stocking distributor. This percentage, which is specific to each stocking distributor, is then used to calculate the transaction price. Cost of sales is also recorded upon transfer of control of the product to the customer, which is when our performance obligation has been satisfied.

Allowance for Expected Credit Losses and Contractual Allowances

The process for estimating the ultimate collection of accounts receivable involves significant assumptions and judgments. The determination of the contractual life of accounts receivable, the aging of outstanding receivables, as well as the historical collections, write-offs, and payor reimbursement experience over the estimated contractual lives of such receivables, are integral parts of the estimation process related to reserves for expected credit losses and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for expected credit losses and contractual allowances. Revisions in allowances for expected credit loss estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses. Revisions to contractual allowances are recorded as an adjustment to net sales. These estimates are periodically tested against actual collection experience. In addition, we analyze our receivables by geography and by customer type, where appropriate, in developing estimates for expected credit losses.

We believe our allowance for credit losses is sufficient to cover customer credit risks; however, a 10% change in our allowance for credit losses as of December 31, 2022, would result in an increase or decrease to sales and marketing expense of $0.6 million. Additionally, we believe our estimate to establish contractual allowances is sufficient to cover customer credit risks; however, a 10% change in our reserve for contractual allowances as of December 31, 2022, would result in an increase or decrease to net sales of $0.3 million. Our allowance for credit losses and estimation of contractual allowances are “critical accounting estimates” because changes in the assumptions used to develop the estimates could materially affect key financial measures, including net sales, gross margin, operating income, EBITDA, net income, and accounts receivable.

Inventory Allowances

Reserves for excess, slow moving, and obsolete inventory are calculated as the difference between the cost of inventory and market value, and are based on assumptions and judgments about new product launch periods, overall product life cycles, forecasted demand, and market conditions. In the event of a decrease in demand for our products, excess product production, or a higher

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incidence of inventory obsolescence, we could be required to increase our inventory reserves, which would increase cost of sales and decrease gross profit. We regularly evaluate our exposure for inventory write-downs. If conditions or assumptions used in determining the market value or forecasted demand change, additional inventory adjustments in the future may be necessary. Our inventory allowance is a “critical accounting estimate” because changes in the assumptions used to develop the estimate could materially affect key financial measures, including gross profit, operating income, EBITDA, net income, and inventory.

Valuation of Intangible Assets

Our intangible assets are comprised primarily of patents, acquired or developed technology, in-process research and development (“IPR&D”), customer relationships, trade names, trademarks, and licensing arrangements. We make significant judgments in relation to the valuation of intangible assets resulting from business combinations or asset acquisitions. Intangible assets acquired in a business combination that are used for IPR&D activities are considered to have indefinite lives until the completion or abandonment of the associated project. Upon reaching the end of the relevant project, we will either amortize the acquired IPR&D over its estimated useful life or expense the acquired IPR&D should the project be unsuccessful with no future alternative use.

Significant judgment is required related to the forecasting of future operating results within our discounted cash flow valuation models to determine the valuation of intangible assets. Key assumptions include the anticipated useful lives of acquired intangibles, the projected cash flows associated with each intangible asset, the estimated probability of success for acquired IPR&D projects, and projected growth rates and discount rates. It is possible that significant changes in plans or assumptions may affect the recoverability of these assets and could potentially result in impairment. Our valuation of intangible assets is a “critical accounting estimate” because changes in the assumptions used to develop these estimates could materially affect key financial measures, including operating income, EBITDA, and net income.

Goodwill

Our goodwill represents the excess of cost over fair value of net assets acquired from business combinations. The determination of the value of goodwill and intangible assets arising from business combinations requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired.

We test goodwill at least annually for impairment, and between annual tests if indicators of potential impairment exist. These indicators include, among others, significant declines in sales, earnings, or cash flows, or the development of a material adverse change in the business climate. Assessing goodwill impairment involves a high degree of judgment due to the estimates and assumptions used. We believe the estimates and assumptions involved in the impairment assessment to be critical because significant changes in such estimates and assumptions could materially affect key financial measures, including operating income, EBITDA, and net income.

In the fourth quarter of 2021, we performed a quantitative assessment of goodwill as part of our annual goodwill impairment analysis. Upon estimating the fair value of each of its reporting units, we determined the Global Orthopedics reporting unit’s fair value was less than its carrying value of net assets. This resulted in recording a full impairment of the Global Orthopedics goodwill of $11.8 million, which is reflected within Acquisition-related amortization and remeasurement. The assessment concluded there were no indicators of impairment for the Global Spine goodwill.

In the fourth quarter of 2022, we performed a qualitative assessment for our annual goodwill impairment analysis, which did not result in an impairment charge. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events. As part of our qualitative assessment, we included quantitative factors to assess the likelihood of an impairment and concluded it more likely that not that an impairment has not occurred.

We estimate the fair value of each reporting unit using a weighted average of fair value derived from both an income approach and a market approach. The fair value measurements are based on significant inputs that are unobservable in the market, with key assumptions including, but not limited to, our forecasted future net sales and expenses, terminal growth rates, discount rates applied, and allocation of corporate-level expenses to each reporting unit. Significant changes in these assumptions could result in a significantly higher or lower fair value, which in turn can affect the ultimate conclusion regarding if goodwill is impaired.

Fair Value Measurements

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Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The two most significant items that are or were recorded at fair value as of December 31, 2022, and 2021, include (i) contingent consideration attributable to the Spinal Kinetics acquisition and (ii) our convertible loan agreements with Neo Medical.

The contingent consideration consists of potential future milestone payments of up to $60.0 million in cash associated with the Spinal Kinetics acquisition, which must be achieved before April 30, 2023, to be paid. The milestone payments include (i) up to $15.0 million for meeting the FDA Milestone and (ii) revenue-based milestone payments of up to $45.0 million in connection with future sales of the M6-C artificial cervical disc and the M6-L artificial lumbar disc. The FDA milestone was achieved and paid in 2019 and one of the revenue-based milestones, resulting in a payment of $15.0 million, was achieved and paid in 2021.

As of December 31, 2022, we estimated the fair value of the remaining revenue-based milestone based on a probability-weighted cash flow analysis, based upon a combination of our historical net sales of artificial cervical discs and projected net sales of such discs through April 30, 2023. The estimated fair value of the remaining milestone was concluded to be zero as of December 31, 2022, as we considered the probability of achieving the milestone by April 30, 2023, to be remote.

In previous periods, we estimated the fair value of the remaining revenue-based milestone payment using a Monte Carlo simulation. This fair value measurement was based on significant inputs that were unobservable in the market, with key assumptions including our forecasted future net sales of Motion Preservation products, discount rates applied, and assumptions for potential volatility of the forecasted revenue. Significant changes in these assumptions could have resulted in a significantly higher or lower fair value as of each period.

We estimate the fair value of our convertible loan agreements with Neo Medical using option-pricing models and a probability-weighted discounted cash flow model. The fair value measurement is based on significant inputs that are unobservable in the market, with significant unobservable inputs including applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, and projected cash flows in support of the estimated enterprise value of Neo Medical. Significant changes in these assumptions could result in a significantly higher or lower fair value. Holding other inputs constant, an increase in the assumed cost of equity discount rate by 2% would have resulted in a decrease in the fair value of the convertible loan of $0.1 million, whereas a decrease the cost of equity discount rate by 2% would have resulted in an increase in the fair value of the convertible loan by $0.2 million.

Our fair value measurements are a “critical accounting estimate” because changes in the assumptions used to develop the estimate could materially affect key financial measures, including operating income, EBITDA, and net income.

Litigation and Contingent Liabilities

From time to time, we are parties to or targets of lawsuits, investigations, and proceedings, including product liability, personal injury, patent and intellectual property, health and safety, and employment and healthcare regulatory matters, which are handled and defended in the ordinary course of business. These lawsuits, investigations, or proceedings could involve a substantial number of claims and could also have an adverse impact on our reputation and customer base. Although we maintain various liability insurance programs for liabilities that could result from such lawsuits, investigations, or proceedings, we are self-insured for a significant portion of such liabilities.

We accrue for such claims when it is probable that a liability has been incurred and the amount can be reasonably estimated. The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that we consider in this assessment are the nature of existing legal proceedings, investigations, and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, the involvement of the U.S. Government and its agencies in such proceedings, our experience in similar matters and the experience of other companies, the facts available to us at the time of assessment, and how we intend to respond, or have responded, to the proceeding, investigation or claim. Our assessment of these factors may change over time as individual proceedings, investigations or claims progress. For matters where we are not currently able to reasonably estimate the range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate, or an investigation has not manifested itself in a filed civil or criminal complaint, (ii) the matters are in the early stages, (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties, and/or (iv) discussions with the government or other parties in matters that may be expected ultimately to be resolved through negotiation and settlement have not reached the point where we believe a reasonable estimate of loss, or range of loss, can be made. In such instances, we

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believe that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any.

Changes in the facts and circumstances associated with a claim could have a material impact on our results of operations and cash flows in the period that reserve estimates are recorded or revised. We believe our insurance coverage and reserves are sufficient to cover currently estimated exposures, but we cannot give any assurance that we will not incur liabilities in excess of recorded reserves or our present insurance coverage. Litigation and contingent liabilities are “critical accounting estimates” because changes in the assumptions used to develop the estimates could materially affect key financial measures, including operating income, EBITDA, and net income.

Tax Matters

We and each of our subsidiaries are taxed at the rates applicable within each of their respective jurisdictions. Our income tax expense, effective tax rate, deferred tax assets, and deferred tax liabilities will vary according to the jurisdiction in which profits arise. Further, certain of our subsidiaries sell products directly to our other subsidiaries or provide administrative, marketing, and support services to our other subsidiaries. These intercompany sales and support services involve subsidiaries operating in jurisdictions with differing tax rates. The tax authorities in such jurisdictions may challenge our treatment under residency criteria, transfer pricing provisions, or other aspects of their respective tax laws, which could affect our composite tax rate and provisions.

We sometimes engage in transactions in which tax consequences may be subject to uncertainty. We account for these uncertain tax positions in accordance with applicable accounting guidance, which requires significant judgment in assessing the estimated tax consequences of a transaction. We evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. We measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We re-evaluate our income tax positions periodically to consider factors such as changes in facts or circumstances, changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in recognition of a tax benefit or an additional charge to the tax provision, which could have a material impact to the financial statements.

We establish a valuation allowance when measuring deferred tax assets if it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future. This process requires significant judgment as we must project the current tax liability and estimate the deferred tax assets and liabilities into future periods, including net operating loss and tax credit carry forwards. In assessing the need for a valuation allowance, we consider recent operating results, availability of taxable income in carryback years, future reversals of taxable temporary differences, future taxable income projections (exclusive of reversing temporary differences), and all prudent and feasible tax planning strategies.

Tax matters are “critical accounting estimates” because changes in the assumptions used to develop the estimates could materially affect key financial measures, including net income.

Share-based compensation

We use the Black-Scholes valuation model to calculate the fair value of service-based stock options. The value is recognized as expense over the service period net of actual forfeitures. The expected term of options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, the historical volatility of our common stock, and an employee’s average length of service. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option award. We estimate expected volatility based on the historical volatility of our stock.

We use the Monte Carlo valuation methodology to calculate the fair value of market-based restricted stock units. The value is recognized as expense over the requisite service period and adjusted for forfeitures as they occur. The Monte Carlo methodology that we use to estimate the fair value of the awards incorporates the possibility that the market condition may not be satisfied.

The fair value of performance-based restricted stock units is calculated based upon (i) the closing stock price at the date of grant and (ii) the number of stock units expected to vest at the conclusion of the performance period. The value is recognized as expense over

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the derived requisite service period beginning in the period in which the grants are deemed probable to vest. Vesting probability is assessed based upon forecasted financial results and requires significant judgment.

Determining the appropriate fair value model and calculating the fair value of employee stock awards requires estimates and judgments. Our share-based compensation is a “critical accounting estimate” because changes in the assumptions used to develop estimates of fair value or the requisite service period could materially affect key financial measures, including gross profit, operating income, EBITDA, and net income.

Non-GAAP Financial Measures

We believe that providing non-GAAP financial measures that exclude certain items provides investors with greater transparency to the information used by senior management in its financial and operational decision-making. We believe it is important to provide investors with the same non-GAAP metrics that senior management uses to supplement information regarding the performance and underlying trends of our business operations in order to facilitate comparisons to historical operating results and internally evaluate the effectiveness of our operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of our underlying operating performance with other companies in the industry that also supplement their GAAP results with non-GAAP financial measures.

The non-GAAP financial measures used in this Annual Report may have limitations as analytical tools and should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are that they exclude items that reflect an economic cost that can have a material effect on cash flows. Similarly, certain non-cash expenses, such as equity compensation expense, do not directly impact cash flows, but are part of total compensation costs accounted for under GAAP.

Constant Currency

Constant currency is a non-GAAP measure, which is calculated by using foreign currency rates from the comparable, prior-year period, to present net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze net sales without the impact of changes in foreign currency rates.

EBITDA

EBITDA is defined as earnings before interest income (expense), net, income taxes, depreciation, and amortization (including the impacts of any goodwill impairment). EBITDA is the primary metric used by our Chief Operating Decision Maker in managing the business.

Free Cash Flow

Free cash flow is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from net cash from operating activities. Free cash flow is an important indicator of how much cash is generated or used by our normal business operations, including capital expenditures. Management uses free cash flow as a measure of progress on its capital efficiency and cash flow initiatives.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks as part of our ongoing business operations. Primary exposures include changes in interest rates and foreign currency fluctuations. These exposures can impact sales, cost of sales, costs of operations, and the cost of financing and yields on cash and short-term investments. We may use derivative financial instruments, where appropriate, to manage these risks. However, our risk management policy does not allow us to hedge positions we do not hold nor do we enter into derivative or other financial investments for trading or speculative purposes.

We are exposed to interest rate risk in connection with our Revolving Credit Facility, which bears interest at floating rates based on the Secured Overnight Financing Rate, or SOFR, plus an applicable borrowing margin or at a base rate (as defined in the Amended Credit Agreement) plus an applicable borrowing margin. Therefore, interest rate changes generally do not affect the fair market value of the debt, but do impact future earnings and cash flows, assuming other factors are held constant. As we do not have any balance outstanding associated with the Amended Credit Agreement as of December 31, 2022, this risk is currently minimal.

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However, on January 3, 2023, we borrowed $30.0 million under Revolving Credit Facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023.

We believe that a concentration of credit risk related to our accounts receivable is limited because our customers are geographically dispersed and the end users are diversified across several industries. It is reasonably possible that changes in global economic conditions and/or local operating and economic conditions in the regions these customers operate, or other factors, could affect the future realization of these accounts receivable balances.

Our foreign currency exposure results from fluctuating currency exchange rates, primarily the U.S. Dollar against the Euro, Brazilian Real, Australian Dollar, Swiss Franc, or British Pound. We are subject to transactional currency exposures when our subsidiaries (or the Company itself) enter into transactions denominated in a currency other than their functional currency. For the year ended December 31, 2022, we recorded a foreign currency loss of $3.3 million on the statement of operations and comprehensive income (loss) resulting from gains and losses in foreign currency transactions.

We are also subject to currency exposure from translating the results of our global operations into the U.S. Dollar at exchange rates that fluctuate during the period. The U.S. Dollar equivalent of international sales denominated in foreign currencies was unfavorably impacted during the year ended December 31, 2022, and favorably impacted during the year ended December 31, 2021, by monthly foreign currency exchange rate fluctuations of the U.S. Dollar against all of the foreign functional currencies for our international operations. As we continue to distribute and manufacture our products in selected foreign countries, we expect that future sales and costs associated with our activities in these markets will continue to be denominated in the applicable foreign currencies, which could cause currency fluctuations to materially impact our operating results. An analysis was performed to determine the sensitivity of our current year net sales and operating income to changes in foreign currency exchange rates. We determined that if the U.S. Dollar decreased in value by 10% relative to all foreign currencies of our international operations it would result in an increase in net sales of $9.0 million and an increase in operating income of $0.8 million. If the U.S. Dollar increased in value by 10% relative to all foreign currencies of our international operations it would result in a decrease in net sales of $9.0 million and a decrease in operating income of $0.8 million.

Item 8. Financial Statements and Supplementary Data

See “Index to Consolidated Financial Statements” on page F-1 of this Annual Report.

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

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this Annual Report, under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our President and Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in the Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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Internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation of reliable financial statements for external purposes in accordance with U.S. GAAP. Because of the inherent limitations in any internal control, no matter how well designed, misstatements may occur and not be prevented or detected. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies and procedures may decline.

In connection with the preparation and filing of this Annual Report, the Company’s management, including our President and Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the framework set forth in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Based on its evaluation, the Company’s management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting is effective based on the specified criteria.

Ernst & Young has issued an audit report on the effectiveness of our internal control over financial reporting, which follows this report.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting during the fourth quarter of 2022 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Orthofix Medical Inc.

Opinion on Internal Control over Financial Reporting

We have audited Orthofix Medical Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Orthofix Medical Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022, and 2021, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated March 6, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

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

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

/s/ Ernst & Young LLP

Dallas, Texas

March 6, 2023

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Item 9B. Other Information

On March 3, 2023, Company entered into transition agreements with each of Jon Serbousek and Douglas Rice. Mr. Serbousek currently serves as the Company’s Executive Chairman and, prior to the completion on January 5, 2023 of the Company’s merger with SeaSpine Holdings Corporation, served as the Company’s President and Chief Executive Officer. Mr. Rice is currently providing assistance with integration activities, after previously having served as the Company’s Chief Financial Officer prior to the merger.
 

Under the transition agreement with Mr. Serbousek, the parties have agreed that Mr. Serbousek will not stand for re-election as a director at the Company’s 2023 annual meeting of stockholders (currently anticipated to be held in June 2023), at which point his service as Executive Chairman and a board member will cease, and he will remain employed in a non-officer capacity until July 5, 2023. The agreement provides that Mr. Serbousek will continue to receive his current annual base salary, and a pro-rated cash bonus for the 2023 calendar year equal to 105% of his annual base salary, for the portion of the 2023 calendar year he is employed. The agreement memorializes that as a result of the merger, Mr. Serbousek possesses “CiC Period Good Reason” under the terms of the change in control and severance agreement between Mr. Serbousek and the Company, and that Mr. Serbousek’s termination of employment on July 5, 2023 will be treated as a termination by Mr. Serbousek for “CiC Period Good Reason” under such change in control and severance agreement. The agreement also provides that the period for Mr. Serbousek to exercise outstanding stock options will be extended from 24 months to 48 months following such termination.

Under the transition agreement with Mr. Rice, the parties have agreed that Mr. Rice will continue to provide transition services as an employee until June 30, 2023, at which time his employment with the Company will cease. The agreement provides that in lieu of receiving an annual base salary and annual cash incentive program bonus opportunity for the 2023 calendar year, Mr. Rice will be paid a monthly fee of $65,000 through June 30, 2023. The agreement memorializes that as a result of the merger, Mr. Rice possesses “CiC Period Good Reason” under the terms of the change in control and severance agreement between Mr. Rice and the Company, and that if Mr. Rice serves through June 30, 2023, his termination of employment on such date will be treated as a termination by the Company without cause during a “CiC Period” under such change in control and severance agreement. The agreement also provides that the period for Mr. Rice to exercise outstanding stock options will be extended from 24 months to 48 months following such termination.

The foregoing descriptions of the transition agreements with Mr. Serbousek and Mr. Rice do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, which are filed respectively as Exhibits 10.70 and 10.71 hereto and incorporated herein by reference.

 

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

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PART III

Information required by Items 10, 11, 12, 13 and 14 of Form 10-K is omitted from this Annual Report and will be filed in a definitive proxy statement or by an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report.

Item 10. Directors, Executive Officers and Corporate Governance

We will provide information that is responsive to this Item 10 regarding executive compensation in our definitive proxy statement or in an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report, in either case under the caption “Information About Directors,” “Section 16 (a) Beneficial Ownership Reporting Compliance” and others possibly elsewhere therein. That information is incorporated in this Item 10 by reference.

Item 11. Executive Compensation

We will provide information that is responsive to this Item 11 regarding executive compensation in our definitive proxy statement or in an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report, in either case under the caption “Executive Compensation,” and possibly elsewhere therein. That information is incorporated in this Item 11 by reference.

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

We will provide information that is responsive to this Item 12 regarding ownership of our securities by certain beneficial owners and our directors and executive officers, as well as information with respect to our equity compensation plans, in our definitive proxy statement or in an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report, in either case under the captions “Security Ownership of Certain Beneficial Owners and Management and Related Stockholders” and “Equity Compensation Plan Information,” and possibly elsewhere therein. That information is incorporated in this Item 12 by reference.

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

We will provide information that is responsive to this Item 13 regarding transactions with related parties and director independence in our definitive proxy statement or in an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report, in either case under the caption “Certain Relationships and Related Transactions,” and “Director Independence” and possibly elsewhere therein. That information is incorporated in this Item 13 by reference.

Item 14. Principal Accountant Fees and Services

We will provide information that is responsive to this Item 14 regarding principal accountant fees and services in our definitive proxy statement or in an amendment to this Annual Report not later than 120 days after the end of the fiscal year covered by this Annual Report, in either case under the caption “Principal Accountant Fees and Services,” and possibly elsewhere therein. That information is incorporated in this Item 14 by reference.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) Documents filed as part of report on Form 10-K

The following documents are filed as part of this Annual Report on Form 10-K:

1.Financial Statements

See “Index to Consolidated Financial Statements” on page F-1 of this Form 10-K.

2.Financial Statement Schedules

No schedules are required because either the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.

3.Exhibits

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of October 10, 2022, by and among Orthofix Medical Inc., Orca Merger Sub Inc. and SeaSpine Holdings Corporation (filed as an Exhibit to the Company's Current Report on Form 8-K dated October 11, 2022 and incorporated herein by reference).
2.2	Agreement and Plan of Merger, entered into March 15, 2018, by and among Blackstone Medical, Inc., Summit Development, Inc., and Spinal Kinetics, Inc. (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 and incorporated herein by reference).
3.1	Orthofix Medical Inc. Certificate of Incorporation (filed as an exhibit to the Company’s Current Report on Form 8-K dated August 1, 2018 and incorporated herein by reference).
3.2	Amended and Restated Bylaws of Orthofix Medical Inc., as amended and restated effective October 10, 2022 (filed as an exhibit to the Company's Current Report on Form 8-K dated October 11, 2022 and incorporated herein by reference).
4.1	Form of Stock Certificate (filed as an exhibit to the Company’s Current Report on Form 8-K dated August 1, 2018 and incorporated herein by reference).
4.2	Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).
10.1	Second Amended and Restated Credit Agreement, dated October 25, 2019, among Orthofix Medical Inc., Orthofix Inc., Orthofix Spinal Implants Inc., Orthofix International B.V., Orthofix III B.V., and certain subsidiaries of Orthofix Medical Inc. as guarantors, the several banks and other financial institutions as may from time to time become parties thereunder as lenders, and JPMorgan Chase, N.A., as administrative agent (filed as an exhibit to the Company’s Current Report on Form 8-K filed on November 1, 2019 and incorporated herein by reference).
10.2*	First Amendment to Second Amended and Restated Credit Agreement, dated March 1, 2023, among Orthofix Medical Inc., Orthofix US LLC, Orthofix Netherlands B.V., and certain subsidiaries of Orthofix Medical Inc. as guarantors, the several banks and other financial institutions as may from time to time become parties thereunder as lenders, and JPMorgan Chase, N.A., as administrative agent.
10.3†	Amended and Restated Matrix Commercialization Collaboration Agreement, entered into as of February 7, 2022, by and between Orthofix US LLC and Muscoloskeletal Transplant Foundation Inc. (filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and incorporated herein by reference.
10.4†	Supply Agreement between SeaSpine Orthopedics Corporation and PcoMed, LLC, dated March 1, 2021 (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 by SeaSpine Holdings Corporation and incorporated herein by reference).

80

10.5*	Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated February 10, 2009.
10.6*	First Amendment to the Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated April 13, 2009.
10.7*	Second Amendment to the Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated May 12, 2010.
10.8*	Third Amendment to the Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated December 21, 2017.
10.9*	Fourth Amendment to the Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated March 13, 2018.
10.10*	Fifth Amendment to the Lease Agreement between AR Industrial No. 1 Ltd. and Orthofix Inc. dated January 3, 2019.
10.11*	Standard Lease Agreement between Lake Midas LLC and Spinal Kinetics, Inc. dated April 16, 2015.
10.12*	First Amendment to the Standard Lease Agreement between Lake Midas LLC and Spinal Kinetics LLC (formerly known as Spinal Kinetics, Inc.) dated March 4, 2022.
10.13	Sublease Agreement between SeaSpine Orthopedics Corporation and SkinMedica, Inc., dated July 8, 2015 (filed as an exhibit to the Current Report on Form 8-K dated September 8, 2015 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.14	Standard Industrial/Commercial Single-Tenant Lease–NET between Monarch RRC Properties, LP and Isotis Orthobiologics, Inc., dated June 1, 2022 (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.15	Orthofix Medical Inc. Second Amended and Restated Stock Purchase Plan, as amended by Amendment No. 1 thereto (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and incorporated herein by reference).
10.16	Amendment No. 2 to the Orthofix Medical Inc. Second Amended and Restated Stock Purchase Plan (filed as an exhibit to the Company's Current Report on Form 8-K filed June 21, 2021 and incorporated by reference).
10.17	Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and incorporated herein by reference).
10.18	Amendment No. 1 to Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Current Report on Form 8-K dated June 8, 2020 and incorporated herein by reference).
10.19	Amendment No. 2 to Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company's Current Report on Form 8-K filed June 21, 2021 and incorporated by reference).
10.20	Amendment No. 3 to the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company's Current Report on Form 8-K filed June 7, 2022 and incorporated by reference).
10.21	Form of Employee Performance Stock Unit Agreement (2022 grant) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and incorporated herein by reference).
10.22	Form of Employee Performance Stock Unit Agreement (2016 – 2021 grants) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).
10.23*	Form of Time-Based Vesting Employee Restricted Stock Unit Grant Agreement (2023 grant) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan.
10.24	Form of Time-Based Vesting Employee Restricted Stock Unit Grant Agreement (2018 – 2022 grants) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and incorporated herein by reference).
10.25*	Form of Time-Based Vesting Employee Non-Qualified Stock Option Agreement (2023 grant) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan.

81

10.26	Form of Time-Based Vesting Employee Non-Qualified Stock Option Agreement under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Current Report on Form 8-K filed July 8, 2016 and incorporated here by reference).
10.27	Form of Employee Non-Qualified Stock Option Agreement under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan – July 2014-June 2016 (Time-Based Vesting) (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference).
10.28	Form of Employee Non-Qualified Stock Option Agreement under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (pre-2014 grants) (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and incorporated herein by reference).
10.29*	Form on Non-Employee Director Restricted Stock Unit Agreement (2023 grant) under the Orthofix Medical Inc. Amended and Restated 2023 Long-Term Incentive Plan.
10.30	Form of Non-Employee Director Restricted Stock Unit Agreement (2017 - 2022 grants) under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Form 10-Q filed on August 7, 2017 and incorporated herein by reference).
10.31	Form of Time-Based Vesting Non-Employee Director Non-Qualified Stock Option Agreement under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (initial grant) (filed as an exhibit to the Company’s Current Report on Form 8-K filed July 8, 2016 and incorporated here by reference).
10.32	Form of Non-Employee Director Non-Qualified Stock Option Agreement under the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and incorporated herein by reference).
10.33	Employee Inducement Restricted Stock Unit Agreement for Jon Serbousek (filed as an exhibit to the Company’s Form S-8 filed on August 5, 2019 and incorporated herein by reference).
10.34	Employee Inducement Non-Qualified Stock Option Agreement for Jon Serbousek (filed as an exhibit to the Company’s Form S-8 filed on August 5, 2019 and incorporated herein by reference).
10.35	Inducement Grant Non-Qualified Stock Option Agreement, dated March 13, 2013, between Orthofix International N.V. and Bradley R. Mason (filed as an exhibit to the Company’s Current Report on Form 8-K filed March 13, 2013 and incorporated herein by reference).
10.36	Orthofix Medical Inc. Inducement Plan for SeaSpine Employees (filed as Exhibit 4.3 to the Company's Registration Statement on Form S-8 (Registration No. 333-269116) filed January 4, 2023 and incorporated herein by reference).
10.37	Orthofix Medical Inc. Inducement Plan for SeaSpine Employees – Stock Unit Grant Agreement (filed as Exhibit 4.4 to the Company's Registration Statement on Form S-8 (Registration No. 333-269116) filed January 4, 2023 and incorporated herein by reference).
10.38	Orthofix Medical Inc. Inducement Plan for SeaSpine Employees – Nonqualified Stock Option Grant Agreement (filed as Exhibit 4.5 to the Company's Registration Statement on Form S-8 (Registration No. 333-269116) filed January 4, 2023 and incorporated herein by reference).
10.39	SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan (As Amended and Restated as of March 30, 2016) (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).
10.40	First Amendment to the SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).
10.41	Second Amendment to the SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).
10.42	Amendment to the SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).

82

10.43	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (three-month exercise period post-termination) (filed as an exhibit to the Registration Statement on Form S-8 filed with the Commission on June 7, 2016 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.44	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (one-year exercise period post-termination) (filed as an exhibit to Amendment No. 2 to Form 10 filed with the Commission on June 1, 2015 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.45	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (filed as an exhibit to the Registration Statement on Form S-8 filed with the Commission on June 7, 2016 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.46	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2016 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.47	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (grants awarded after February 1, 2018) (filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2017 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.48	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (grants awarded after January 1, 2020) (filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2019 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.49	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (grants to Senior Leadership Team Members awarded after June 6, 2018) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.50	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2015 Incentive Award Plan (grants to Non-Senior Leadership Team Members awarded after June 6, 2018) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.51	Annual Incentive Program under SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan, dated January 1, 2019 (filed as an exhibit to the Current Report on Form 8-K dated January 28, 2021 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.52	SeaSpine Holdings Corporation 2018 Employment Inducement Incentive Award Plan (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).
10.53	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under SeaSpine Holdings Corporation 2018 Employment Inducement Incentive Award Plan (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.54	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2018 Employment Inducement Incentive Award Plan (grants to Senior Leadership Team Members) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.55	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2018 Employment Inducement Incentive Award Plan (grants to Non-Senior Leadership Team Members) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.56	SeaSpine Holdings Corporation 2020 Employment Inducement Incentive Award Plan (filed as an exhibit to the Company’s Form S-8 filed on January 10, 2023 and incorporated herein by reference).

83

10.57	Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under SeaSpine Holdings Corporation 2020 Employment Inducement Incentive Award Plan (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.58	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2020 Employment Inducement Incentive Award Plan (grants to Senior Leadership Team Members) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.59	Form of Stock Option Grant Notice and Stock Option Agreement under SeaSpine Holdings Corporation 2020 Employment Inducement Incentive Award Plan (grants to Non-Senior Leadership Team Members) (filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 by SeaSpine Holdings Corporation and incorporated herein by reference).
10.60	Form of Indemnification Agreement between Orthofix Medical Inc. and its directors and officers (filed as an exhibit to the Company's Current Report on Form 8-K filed January 5, 2023 and incorporated herein by reference).
10.61	Form of Indemnification Agreement between Orthofix Medical Inc. and its directors and officers (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-4 (Registration No. 333-224407) filed April 23, 2018).
10.62	Transition and Retirement Agreement, dated February 25, 2019, between Bradley R. Mason and Orthofix Medical Inc. (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and incorporated herein by reference).
10.63	Change in Control and Severance Agreement, dated November 1, 2019, between Orthofix Medical Inc. and Jon Serbousek (filed as an Exhibit to the Company’s Current Report on Form 8-K filed November 1, 2019 and incorporated herein by reference).
10.64	Change in Control and Severance Agreement, dated November 1, 2019, between Orthofix Medical Inc. and Kevin Kenny (filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference).
10.65	Amended Change in Control and Severance Agreement, dated November 1, 2016, between Orthofix International N.V. and Doug Rice (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and incorporated herein by reference).
10.66	Change in Control and Severance Agreement, dated November 1, 2016, between Orthofix International N.V. and Kimberley Elting (filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and incorporated herein by reference).
10.67	Offer Letter between the Company and Keith C. Valentine (filed as an exhibit to the Company's Current Report on Form 8-K filed on January 5, 2023 and incorporated herein by reference).
10.68	Offer Letter between the Company and John J. Bostjancic (filed as an exhibit to the Company's Current Report on Form 8-K filed on January 5, 2023 and incorporated herein by reference).
10.69	Offer Letter between the Company and Patrick L. Keran (filed as an exhibit to the Company's Current Report on Form 8-K filed on January 5, 2023 and incorporated herein by reference).
10.70*	Transition Agreement, dated March 3, 2023, between Orthofix Medical Inc. and Jon Serbousek.
10.71*	Transition Agreement, dated March 3, 2023, between Orthofix Medical Inc. and Doug Rice.
21.1*	List of Subsidiaries.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1*	Section 1350 Certification of Chief Executive Officer and Certification of Chief Financial Officer.

84

101.INS	Inline XBRL Instance Document – the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed with this Form 10-K.

† Certain private or confidential portions of this exhibit that are not material were omitted by means of redacting a portion of the text and replacing it with a bracketed asterisk.

Item 16. Form 10-K Summary

None

85

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ORTHOFIX MEDICAL INC.
Dated: March 6, 2023	By:	/s/ KEITH VALENTINE
	Name:	Keith Valentine
	Title:	President and Chief Executive Officer, Director
Dated: March 6, 2023	By:	/s/ JOHN BOSTJANCIC
	Name:	John Bostjancic
	Title:	Chief Financial Officer

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

Name	Title	Date
/s/ KEITH VALENTINE Keith Valentine	President and Chief Executive Officer, Director (Principal Executive Officer)	March 6, 2023
/s/ JOHN BOSTJANCIC John Bostjancic	Chief Financial Officer (Principal Financial and Accounting Officer)	March 6, 2023
/s/ CATHERINE BURZIK Catherine Burzik	Lead Independent Director of the Board	March 6, 2023
/s/ JON SERBOUSEK Jon Serbousek	Director, Executive Chairman of the Board	March 6, 2023
/s/ STUART ESSIG Stuart Essig	Director	March 6, 2023
/s/ JASON HANNON Jason Hannon	Director	March 6, 2023
/s/ JOHN HENNEMAN, III John Henneman, III	Director	March 6, 2023
/s/ JAMES HINRICHS	Director	March 6, 2023
James Hinrichs
/s/ SHWETA SINGH MANIAR	Director	March 6, 2023
Shweta Singh Maniar
/s/ MICHAEL PAOLUCCI	Director	March 6, 2023
Michael Paolucci

86

ORTHOFIX MEDICAL INC.

Statement of Management’s Responsibility for Financial Statements

To the Shareholders of Orthofix Medical Inc.:

Management is responsible for the preparation of the consolidated financial statements and related information that are presented in this Annual Report. The consolidated financial statements, which include amounts based on management’s estimates and judgments, have been prepared in conformity with accounting principles generally accepted in the United States. Other financial information in the report to shareholders is consistent with that in the consolidated financial statements.

The Company maintains accounting and internal control systems to provide reasonable assurance at a reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets. These systems are augmented by written policies, an organizational structure providing division of responsibilities, and careful selection and training of qualified personnel.

The Company engaged Ernst & Young LLP, independent registered public accountants, to audit and render an opinion on the consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). These standards include an assessment of the systems of internal controls and tests of transactions to the extent considered necessary by them to support their opinion.

The Board of Directors, through its Audit Committee, consisting solely of outside directors of the Company, meets periodically with management and our independent registered public accountants to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. Ernst & Young LLP has full and free access to the Audit Committee.

James Hinrichs

Chairman of the Audit Committee

Keith Valentine

President and Chief Executive Officer, Director

John Bostjancic

Chief Financial Officer

87

ORTHOFIX MEDICAL INC.

Index to Consolidated Financial Statements

	Page
Index to Consolidated Financial Statements		F-1
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)		F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021		F-4
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2022, 2021, and 2020		F-5
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2022, 2021, and 2020		F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020		F-7
Notes to the Consolidated Financial Statements		F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Orthofix Medical Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Orthofix Medical Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 6, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

F-2

Inventory Excess and Obsolescence Reserves
Description of the Matter	At December 31, 2022, the Company’s inventory balance is $100.2 million, which is net of management’s estimate of inventory excess and obsolescence reserves. As described in Note 5 to the consolidated financial statements, management adjusts the value of its inventory to net realizable value to the extent it determines inventory cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management estimates future demand to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or net realizable value. Auditing management’s estimate of the inventory excess and obsolescence reserves involved a high degree of subjectivity because the estimate was sensitive to changes in assumptions, including estimated product demand, length of product life cycles, and the period required to evaluate the level of market acceptance for new products. These assumptions have a significant effect on the measurement of inventory excess and obsolescence reserves.
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the measurement and valuation of inventory excess and obsolescence reserves. For example, we tested controls over the Company’s processes to estimate the inventory excess and obsolescence reserves, management’s review and approval of the model used to estimate the inventory excess and obsolescence reserve, including the data inputs and outputs of such model and management’s qualitative adjustments to the model. To test the inventory excess and obsolescence reserve balance, we performed audit procedures that included, among others, evaluating the significant assumptions and qualitative adjustments described above and the underlying data used by the Company in its analysis. Our audit procedures included testing the completeness and accuracy of the underlying data used in the model and evaluating whether such data was representative of current circumstances. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the inventory excess and obsolescence reserves that would result from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Dallas, Texas

March 6, 2023

F-3

ORTHOFIX MEDICAL INC.

Consolidated Balance Sheets as of December 31, 2022 and 2021

(U.S. Dollars, in thousands, except par value data)	2022			2021
Assets
Current assets
Cash and cash equivalents	$	50,700		$	87,847
Accounts receivable, net of allowances of $6,419 and $4,944, respectively		82,857			78,560
Inventories		100,150			82,974
Prepaid expenses and other current assets		22,283			20,141
Total current assets		255,990			269,522
Property, plant and equipment, net		58,229			59,252
Intangible assets, net		47,388			52,666
Goodwill		71,317			71,317
Other long-term assets		25,705			23,866
Total assets	$	458,629		$	476,623
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	27,598		$	26,459
Current portion of finance lease liability		652			2,590
Other current liabilities		55,374			76,781
Total current liabilities		83,624			105,830
Long-term portion of finance lease liability		19,239			19,890
Other long-term liabilities		18,906			13,969
Total liabilities		121,769			139,689
Contingencies (Note 13)
Shareholders’ equity
Common shares $0.10 par value; 50,000 shares authorized;    20,162 and 19,837 issued and outstanding as of December 31,    2022 and 2021, respectively		2,016			1,983
Additional paid-in capital		334,969			313,951
Retained earnings		1,251			21,000
Accumulated other comprehensive loss		(1,376	)		—
Total shareholders’ equity		336,860			336,934
Total liabilities and shareholders’ equity	$	458,629		$	476,623

The accompanying notes form an integral part of these consolidated financial statements.

F-4

ORTHOFIX MEDICAL INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

For the years ended December 31, 2022, 2021, and 2020

(U.S. Dollars, in thousands, except share and per share data)	2022			2021			2020
Net sales	$	460,713		$	464,479		$	406,562
Cost of sales		123,544			114,914			101,889
Gross profit		337,169			349,565			304,673
Sales and marketing		228,810			221,318			204,434
General and administrative		79,966			69,353			67,948
Research and development		49,065			49,621			39,056
Acquisition-related amortization and remeasurement		(7,404	)		17,588			(499	)
Operating (loss)		(13,268	)		(8,315	)		(6,266	)
Interest expense, net		(1,288	)		(1,837	)		(2,483	)
Other income (expense), net		(3,150	)		(3,343	)		8,381
(Loss) before income taxes		(17,706	)		(13,495	)		(368	)
Income tax benefit (expense)		(2,043	)		(24,884	)		2,885
Net income (loss)	$	(19,749	)	$	(38,379	)	$	2,517
Net income (loss) per common share:
Basic	$	(0.98	)	$	(1.95	)	$	0.13
Diluted		(0.98	)		(1.95	)		0.13
Weighted average number of common shares:
Basic		20,053,548			19,690,593			19,267,920
Diluted		20,053,548			19,690,593			19,391,718
Other comprehensive income (loss), before tax
Unrealized gain (loss) on debt securities		395			(942	)		1,881
Currency translation adjustment		(1,771	)		(2,544	)		4,872
Other comprehensive income (loss), before tax		(1,376	)		(3,486	)		6,753
Income tax benefit (expense) related to items of other comprehensive income (loss)		—			234			(462	)
Other comprehensive income (loss), net of tax		(1,376	)		(3,252	)		6,291
Comprehensive income (loss)	$	(21,125	)	$	(41,631	)	$	8,808

The accompanying notes form an integral part of these consolidated financial statements.

F-5

ORTHOFIX MEDICAL INC.

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2022, 2021, and 2020

(U.S. Dollars, in thousands)	Number of Common Shares Outstanding		Common Shares		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
At December 31, 2019		19,023	$	1,902	$	271,019	$	57,749		$	(3,039	)	$	327,631
Cumulative effect adjustment from adoption     of ASU 2016-13		—		—		—		(887	)		—			(887	)
Net income		—		—		—		2,517			—			2,517
Other comprehensive income, net of tax		—		—		—		—			6,291			6,291
Share-based compensation expense		—		—		16,207		—			—			16,207
Common shares issued, net		401		40		5,065		—			—			5,105
At December 31, 2020		19,424	$	1,942	$	292,291	$	59,379		$	3,252		$	356,864
Net loss		—		—		—		(38,379	)		—			(38,379	)
Other comprehensive loss, net of tax		—		—		—		—			(3,252	)		(3,252	)
Share-based compensation expense		—		—		15,432		—			—			15,432
Common shares issued, net		413		41		6,228		—			—			6,269
At December 31, 2021		19,837	$	1,983	$	313,951	$	21,000		$	-		$	336,934
Net loss		—		—		—		(19,749	)		—			(19,749	)
Other comprehensive loss, net of tax		—		—		—		—			(1,376	)		(1,376	)
Share-based compensation expense		—		—		18,443		—			—			18,443
Common shares issued, net		325		33		2,575		—			—			2,608
At December 31, 2022		20,162	$	2,016	$	334,969	$	1,251		$	(1,376	)	$	336,860

The accompanying notes form an integral part of these consolidated financial statements.

F-6

ORTHOFIX MEDICAL INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2022, 2021, and 2020

(U.S. Dollars, in thousands)	2022			2021			2020
Cash flows from operating activities
Net income (loss)	$	(19,749	)	$	(38,379	)	$	2,517
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation and amortization		29,019			29,599			30,546
Impairment of goodwill		—			11,756			—
Amortization of operating lease assets, debt costs, and other assets		3,056			3,496			3,730
Provision for expected credit losses		2,095			444			199
Deferred income taxes		314			24,482			10,787
Share-based compensation expense		18,443			15,432			16,207
Interest and (gain) loss on the valuation of investment securities		(308	)		(1,146	)		116
Change in fair value of contingent consideration		(17,200	)		(3,575	)		(7,300	)
Other		2,027			1,064			(2,228	)
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable		(6,735	)		(7,049	)		13,283
Inventories		(18,133	)		619			(873	)
Prepaid expenses and other current assets		(874	)		(2,834	)		4,526
Accounts payable		2,282			4,253			2,532
Other current liabilities		627			1,013			5,975
Contract liability (Note 15)		(4,791	)		(9,060	)		13,851
Payment of contingent consideration		—			(6,595	)		—
Other long-term assets and liabilities		(1,611	)		(5,045	)		(19,596	)
Net cash from operating activities		(11,538	)		18,475			74,272
Cash flows from investing activities
Acquisition of a business		—			—			(18,000	)
Capital expenditures for property, plant and equipment		(21,364	)		(17,785	)		(15,485	)
Capital expenditures for intangible assets		(1,796	)		(1,807	)		(1,609	)
Purchase of investment securities		—			(2,171	)		(10,000	)
Asset acquisitions and other investments		(1,374	)		(1,250	)		(7,240	)
Net cash from investing activities		(24,534	)		(23,013	)		(52,334	)
Cash flows from financing activities
Proceeds from revolving credit facility		—			—			100,000
Repayment of revolving credit facility		—			—			(100,000	)
Proceeds from issuance of common shares		4,337			8,824			7,598
Payments related to withholdings for share-based compensation		(1,729	)		(2,555	)		(2,493	)
Payment of contingent consideration		—			(8,405	)		—
Payments related to finance lease obligation		(2,594	)		(537	)		(323	)
Payment of debt issuance costs and other financing activities		(92	)		(948	)		(1,537	)
Net cash from financing activities		(78	)		(3,621	)		3,245
Effect of exchange rate changes on cash and restricted cash		(997	)		(815	)		1,235
Net change in cash, cash equivalents, and restricted cash		(37,147	)		(8,974	)		26,418
Cash, cash equivalents, and restricted cash at the beginning of the year		87,847			96,821			70,403
Cash, cash equivalents, and restricted cash at the end of the year	$	50,700		$	87,847		$	96,821
Components of cash, cash equivalents, and restricted cash at the end of the year
Cash and cash equivalents	$	50,700		$	87,847		$	96,291
Restricted cash		—			—			530
Cash, cash equivalents, and restricted cash at the end of the year	$	50,700		$	87,847		$	96,821

The accompanying notes form an integral part of these consolidated financial statements

F-7

ORTHOFIX MEDICAL INC.

Notes to the Consolidated Financial Statements

1. Business and basis of presentation

Description of the Business

Orthofix Medical Inc. and its subsidiaries (the “Company”), following its recent merger with SeaSpine Holdings Corporation ("SeaSpine"), is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions and a leading surgical navigation system. Its products are distributed in 68 countries worldwide.
 

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, CA, with a focus on spinal product innovation and surgeon education, and in Verona, Italy, with an emphasis on product innovation, production, and medical education for Orthopedics. The combined Company’s global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France and Sao Paulo, Brazil.

The merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. For additional discussion of the merger with SeaSpine, see Note 22. Orthofix, as the corporate parent entity in the combined company structure, will continue to trade on NASDAQ under the symbol “OFIX.” The combined company will be renamed at a later date and until then will continue to be known as Orthofix Medical Inc. The financial statements of the Company for the period ended as of December 31, 2022, do not include the financial position or operations of SeaSpine since the merger occurred subsequent to the end of the reporting period.

Basis of Presentation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Information on our accounting policies and methods used in the preparation of our consolidated financial statements are included, where applicable, in the respective footnotes that follow.

Footnote	Footnote Reference
Business and basis of presentation	1
Significant accounting policies	2
Recently adopted accounting standards, recently issued accounting pronouncements, and recent law changes	3
Acquisitions	4
Inventories	5
Property, plant, and equipment	6
Intangible assets	7
Goodwill	8
Leases	9
Other current liabilities	10
Long-term debt	11
Fair value measurements and investments	12
Commitments and contingencies	13
Shareholders' equity	14
Revenue recognition and accounts receivable	15
Business segment information	16
Acquisition-related amortization and remeasurement	17
Share-based compensation	18
Defined contribution plans and deferred compensation	19
Income taxes	20
Earnings per share	21
Subsequent events	22

F-8

2. Significant accounting policies

The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, allowances for expected credit losses, inventories, valuation of intangible assets, goodwill, fair value measurements, litigation and contingent liabilities, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations, and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The following is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes.

Market risk

In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures.

The financial statements for operations outside the U.S. are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other expense, net and were a loss of $3.3 million, a loss of $4.0 million, and a gain of $3.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Financial instruments and concentration of credit risk

Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified.

Cash, cash equivalents, and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

In September 2019, approximately $0.5 million (based upon foreign exchange rates as of December 31, 2020) of the Company’s cash in Brazil was frozen upon request to satisfy a judgment related to an ongoing legal dispute with a former Brazilian distributor. In December 2021, the dispute was settled and the cash was disbursed to the former distributor.

Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2022, 2021, and 2020 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows:

(U.S. Dollars, in thousands)	2022		2021		2020
Supplemental disclosure of cash flow information:
Noncash investing activities:
Intangible assets acquired in asset acquisitions	$	2,000	$	—	$	1,575
Contingent consideration recognized at acquisition date		—		—		375

F-9

Advertising costs

Advertising costs are expensed as incurred. Advertising costs are included within sales and marketing expense and totaled $0.5 million, $0.5 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Research and development costs, including collaborative arrangements

Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. The Company recognized $0.0 million, $0.8 million and $0.8 million in research and development expense for the years ended December 31, 2022, 2021, and 2020, respectively.

In October 2020, the Company and Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery (“Neo Medical”), entered into a co-development agreement covering the parties’ joint development of single use instruments for cervical spine procedures. In connection with this agreement, the Company is responsible for the payment of variable costs associated with the development of the specified products. Research and development expenses incurred under this collaborative arrangement totaled $0.5 million, $0.6 million, and less than $0.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.

3. Recently adopted accounting standards, recently issued accounting pronouncements, and recent law changes

Recently Adopted Accounting Standards

Adoption of Accounting Standards Update (“ASU”) 2021-10—Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, which aims to increase the transparency of government assistance by requiring entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. The Company voluntarily elected to early adopt this standard for the year ended December 31, 2021, on a prospective basis. Adoption of this standard did not have a significant impact to the existing disclosures made in relation to government assistance received by the Company in 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").

Adoption of ASU 2019-12, Simplifying the accounting for income taxes

In December 2019, the FASB issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes. Additionally, the ASU simplifies U.S. GAAP by amending the requirements related to the accounting for "hybrid" tax regimes and also adding the requirement to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination and when it should be considered a separate transaction. The Company adopted this ASU effective January 1, 2021, with certain provisions applied retrospectively and other provisions applied prospectively. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Adoption of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and Subsequent Amendments

In June 2016, the FASB issued ASU 2016-13 (which was then further clarified in subsequent ASUs), which required that credit losses for certain types of financial instruments, including accounts receivable, be estimated based on expected credit losses among other changes. The Company adopted this ASU effective as of January 1, 2020, using a modified retrospective approach. See Note 15 for additional discussion of the Company’s adoption of Topic 326 and its resulting accounting policies.

Adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, which eliminated Step 2 of the previous goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under ASU 2017-04, a goodwill impairment loss is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The Company adopted this ASU effective January 1, 2020, on a prospective basis and followed this guidance to measure the goodwill impairment of $11.8 million recorded in the year ended December 31, 2021.

F-10

Adoption of ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, which eliminated certain disclosures, such as the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and added new disclosure requirements for Level 3 measurements. The Company adopted this ASU effective January 1, 2020, with certain provisions of the ASU applied retrospectively and other provisions provided prospectively. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of operations, or cash flows; however, adoption of the ASU did result in modified disclosures in Note 12.

Adoption of ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued ASU 2018-15, which aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract was not affected by the amendments in this update. The Company adopted this ASU effective January 1, 2020, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows, but is expected to impact future cloud computing arrangements.

Adoption of ASU 2020-04, Reference Rate Reform (Topic 848)

In March 2020, the FASB issued ASU 2020-04, which provided temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from the London Inter-Bank Offered Rate. The new guidance provided optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedge accounting, and other transactions affected by reference rate reform if certain criteria are met through December 31, 2022. The Company adopted this ASU effective March 12, 2020, the effective date of the ASU, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08)	Requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606, which governs the accounting for revenue contracts with customers. The guidance is to be applied prospectively to acquisitions occurring on or after the effective date, with early adoption permitted.	January 1, 2023	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Recent Law Changes

COVID-19 and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

In March 2020, the CARES Act entered into federal law, which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the Coronavirus Disease 2019 ("COVID-19") pandemic and to provide general support to the U.S. economy. The CARES Act, among other things, included provisions relating to the deferment of employer side social security payments and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act had no impact to the Company’s income tax expense/benefit reported within the consolidated statements of operations for each of

F-11

the years ended December 31, 2021 and 2020. The CARES Act also provided financial relief to the Company through other various programs, each of which are described in further detail below.

In April 2020, the Company received $13.9 million in funds from the Centers for Medicare & Medicaid Services (“CMS”) Accelerated and Advance Payment Program. For discussion of the Company’s accounting for these funds, see Note 15.

In April 2020, the Company also automatically received $4.7 million in funds from the U.S. Department of Health and Human Services as part of the Provider Relief Fund. The Company recognized this in-substance grant within other income for the year ended December 31, 2020.

In addition, as part of the CARES Act, the Company was permitted to defer all employer social security payroll tax payments for the remainder of the 2020 calendar year subsequent to the CARES Act being signed into federal law, such that 50% of the taxes could be deferred until December 31, 2021, with the remaining 50% deferred until December 31, 2022. As of December 31, 2020, the Company had deferred $0.6 million associated with this program, which was then voluntarily repaid, in full, in 2021.

Consolidated Appropriations Act of 2021 (the “Consolidated Appropriations Act”)

On December 27, 2020, the Consolidated Appropriations Act entered into federal law. The Consolidated Appropriations Act did not have a material impact to the Company’s income tax provision for the year ended December 31, 2021.

American Rescue Plan Act of 2021 (“the American Rescue Plan”)

On March 11, 2021, the American Rescue Plan entered into federal law. The American Rescue Plan, among other things, included provisions related to the deduction of executive compensation beginning in 2027. The American Rescue Plan had no impact to the Company’s condensed consolidated financial statement for the year ended December 31, 2021.

4. Acquisitions

FITBONE Asset Purchase Agreement

In March 2020, the Company completed an Asset Purchase Agreement (the “Purchase Agreement”) with Wittenstein SE (“Wittenstein”), a privately-held German-based company, to acquire assets associated with the FITBONE intramedullary lengthening system for limb lengthening of the femur and tibia bones for $18.0 million in cash consideration. The Company also entered into a Contract Manufacturing and Supply Agreement (“CMSA”) with Wittenstein, which was accounted for as a finance lease.

Distributor Acquisition

In July 2020, the Company acquired certain assets of a medical device distributor for consideration of up to $7.6 million.

Purchase Price Allocations for Completed Acquisitions Discussed Above

(U.S. Dollars, in thousands)	FITBONE		Assigned Useful Life	Distributor Acquisition		Assigned Useful Life
Assets acquired
Inventories	$	528		$	—
Other long-term assets		—			—
Intangible assets
Customer relationships		800	15 years		7,340	5 years
Developed technology		4,500	8 years		—	N/A
In-process research and development ("IPR&D")		300	Indefinite		—	N/A
Trade name		600	15 years		—	N/A
Assembled workforce		—	N/A		235	5 years
Total identifiable assets acquired	$	6,728		$	7,575
Liabilities assumed		—			—
Goodwill		11,272			—
Total fair value of consideration transferred	$	18,000		$	7,575

F-12

5. Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred.

Work-in-process and finished products include material, labor, and production overhead costs. Field and consignment inventory, which represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third-party customers, such as distributors and hospitals, is included within finished products. Inventory previously reported as field/consignment inventory has been reclassified to finished products to conform with current period presentation.

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Raw materials	$	17,035	$	9,589
Work-in-process		19,243		15,096
Finished products		63,872		58,289
Inventories	$	100,150	$	82,974

The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or estimated net realizable value.

6. Property, plant, and equipment

Property, plant, and equipment is stated at cost or estimated fair value when acquired as part of a business combination, less accumulated depreciation. Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant, and equipment includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products.

The useful lives of these assets are generally as follows:

	Years
Buildings	25 to 33
Plant and equipment	1 to 10
Instrumentation	3 to 4
Computer software	3 to 7
Furniture and fixtures	4 to 8

The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $19.6 million, $20.2 million, and $19.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service.

F-13

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Cost
Buildings	$	3,867		$	3,925
Plant and equipment		48,358			50,275
Instrumentation		92,607			100,515
Computer software		40,685			53,200
Furniture and fixtures		7,917			8,307
Construction in progress		4,515			2,597
Finance lease assets		23,276			23,397
Property, plant, and equipment, gross		221,225			242,216
Accumulated depreciation		(162,996	)		(182,964	)
Property, plant, and equipment, net	$	58,229		$	59,252

The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which generally ranges from three to seven years.

Long-lived assets are evaluated for impairment annually or whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to fair value in the period identified.

The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment.

7. Intangible assets

Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets.

		December 31,
(U.S. Dollars, in thousands)	Weighted Average Amortization Period	2022			2021
Cost
Patents	10.0 years	$	40,108		$	44,561
Developed technology	9.8 years		43,699			43,979
IPR&D	Indefinite		300			300
Customer relationships	7.8 years		15,572			15,621
License and other	9.3 years		23,295			18,924
Trademarks—finite lived	10.0 years		1,875			1,839
	9.3 years		124,849			125,224
Accumulated amortization
Patents		$	(37,506	)	$	(41,408	)
Developed technology			(17,830	)		(13,409	)
Customer relationships			(6,938	)		(4,520	)
License and other			(14,386	)		(12,528	)
Trademarks—finite lived			(801	)		(693	)
			(77,461	)		(72,558	)
Intangible assets, net		$	47,388		$	52,666

F-14

Acquired IPR&D represents the fair value assigned to acquired research and development assets that have not reached technological feasibility. In a business combination, the fair value assigned to acquired IPR&D is determined by estimating the remaining costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects, and discounting the net cash flows to present value. The revenue and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the asset. Additionally, estimated revenues consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the project and uncertainties in the economic estimates used in the projections. Any future costs to further develop the IPR&D subsequent to acquisition are recorded to research and development expense as incurred.

IPR&D assets are considered to be indefinite-lived assets until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they are not amortized but tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are reclassified to developed technology and are amortized over an assigned useful life that best reflects the economic benefits provided by these assets.

Amortization expense for intangible assets was $9.4 million, $9.4 million, and $11.2 million for the years ended December 31, 2022, December 31, 2021, and 2020, respectively. Future amortization expense for intangible assets is estimated as follows:

(U.S. Dollars, in thousands)	Amortization
2023	$	9,250
2024		8,705
2025		7,692
2026		6,658
2027		6,470
Thereafter		8,313
Total finite-lived intangible assets, net	$	47,088
Indefinite-lived intangible assets, net		300
Intangible assets, net	$	47,388

8. Goodwill

The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

The following table presents the net carrying value of goodwill as of December 31, 2022, and 2021, and a rollforward of such balances from December 31, 2021, by reportable segment:

(U.S. Dollars, in thousands)	December 31, 2021			Impairment		Currency Translation Adjustment			December 31, 2022
Global Spine	$	71,317		$	—	$	—		$	71,317
Global Orthopedics		11,822					(692	)		11,130
Goodwill, gross	$	83,139		$	—	$	(692	)	$	82,447
Accumulated impairment loss		(11,822	)		—		692			(11,130	)
Goodwill, net of accumulated impairment losses	$	71,317		$	—	$	—		$	71,317

In the fourth quarter of 2021, the Company performed a quantitative assessment of its goodwill. The Company estimated the fair value of each reporting unit using a weighted average of fair value derived from both an income approach and a market approach (all Level 3 fair value measurements). Upon estimating the fair value of each of its reporting units, the Company determined its Global Orthopedics reporting unit’s fair value was less than its carrying value of net assets. This resulted in recording a full impairment of the Global Orthopedics goodwill of $11.8 million, which was reflected within Acquisition-related amortization and

F-15

remeasurement. This amount also represents the total of the Company’s accumulated goodwill impairment losses as of December 31, 2022, and 2021, respectively. The assessment concluded there were no indicators of impairment for the Global Spine goodwill.

In the fourth quarter of 2022, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in impairment. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events.

9. Leases

The Company determines if a contractual arrangement qualifies as a lease at inception. The Company’s leases primarily relate to facilities, vehicles, equipment, and certain contract manufacturing agreements. Lease assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used as a discount rate, based on the information available at the commencement date, in determining the present value of lease payments. Lease assets also include the impact of any prepayments made and are reduced by the impact of any lease incentives.

The Company does not recognize lease liabilities or lease assets on the balance sheet for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The current period short-term lease expense reasonably reflects our short-term lease commitments.

For all classifications of leases, the Company combines lease and non-lease components to account for them as a single lease component. Variable lease payments are excluded from the lease liability and recognized in the period in which the obligation is incurred. Additionally, lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

A summary of the Company’s lease portfolio as of December 31, 2022, and 2021, is presented in the table below:

(U.S. Dollars, in thousands, except lease term and discount rate)	Classification	December 31, 2022			December 31, 2021
Assets
Operating leases	Other long-term assets	$	6,788		$	3,155
Finance leases	Property, plant and equipment, net		17,360			18,600
Total lease assets		$	24,148		$	21,755
Liabilities
Current
Operating leases	Other current liabilities	$	1,638		$	1,834
Finance leases	Current portion of finance lease liability		652			2,590
Long-term
Operating leases	Other long-term liabilities		5,376			1,443
Finance leases	Long-term portion of finance lease liability		19,239			19,890
Total lease liabilities		$	26,905		$	25,757
Weighted Average Remaining Lease Term
Operating leases		4.5 years			3.3 years
Finance leases		17.6 years			17.0 years
Weighted Average Discount Rate
Operating leases			4.0	%		2.6	%
Finance leases			4.4	%		4.2	%

F-16

The components of lease costs were as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Finance lease costs:
Amortization of right-of-use assets	$	1,238	$	2,049	$	1,766
Interest on finance lease liabilities		890		933		940
Operating lease costs		2,126		2,234		2,235
Short-term lease costs		152		213		230
Variable lease costs		932		815		673
Total lease costs	$	5,338	$	6,244	$	5,844

Supplemental cash flow information related to leases was as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,805	$	4,627	$	4,299
Operating cash flows from finance leases		885		907		689
Financing cash flows from finance leases		2,594		537		323
Right-of-use assets obtained in exchange for lease obligations
Operating leases		5,603		589		959
Finance leases		—		149		1,949

A summary of the Company’s remaining lease liabilities as of December 31, 2022, is included below:

(U.S. Dollars, in thousands)	Operating Leases			Finance Leases
2023	$	1,821		$	1,508
2024		1,587			1,538
2025		1,497			1,543
2026		1,411			1,562
2027		1,211			1,593
Thereafter		129			21,021
Total undiscounted value of lease liabilities		7,656			28,765
Less: Interest		(642	)		(8,874	)
Present value of lease liabilities	$	7,014		$	19,891
Current portion of lease liabilities	$	1,638		$	652
Long-term portion of lease liabilities		5,376			19,239
Total lease liabilities	$	7,014		$	19,891

F-17

10. Other current liabilities

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Accrued expenses	$	9,611	$	7,151
Salaries, bonuses, commissions, and related taxes payable		18,531		23,552
Accrued distributor commissions		10,483		10,787
Accrued legal and settlement expenses		3,891		3,794
Contingent consideration liability		1,000		17,200
Short-term operating lease liability		1,638		1,834
Non-income taxes payable		6,586		4,655
Accelerated and advance payment program		—		4,791
Other payables		3,634		3,017
Other current liabilities	$	55,374	$	76,781

11. Long-term debt

On October 25, 2019, the Company, and certain of its wholly-owned subsidiaries (collectively with the Company, the “Borrowers”), as borrowers, and certain material subsidiaries of the Company as guarantors, entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, and certain lender parties thereto. The Amended Credit Agreement provides for a $300.0 million secured revolving credit facility (the “Facility”) amending and restating the $125.0 million secured revolving credit facility that previously existed with such lenders. The Credit Agreement has a maturity date of October 25, 2024. On March 1, 2023, the Amended Credit Agreement and the Facility were amended to replace London Inter-Bank Offered Rate ("LIBOR")-based pricing with Secured Overnight Financing Rate ("SOFR")-based pricing.

In April 2020, as a precautionary measure to increase the Company’s cash position and to preserve financial flexibility during the initial uncertainty resulting from the COVID-19 pandemic, the Company completed a borrowing of $100.0 million under the Facility, which the Company then paid back in full later that year. The Company had no borrowings outstanding under the Facility at December 31, 2022, and 2021, respectively. However, on January 3, 2023, the Company borrowed $30.0 million under the Facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023.

Borrowings under the Amended Credit Agreement may be used for, among other things, working capital and other general corporate purposes of the Company and its subsidiaries (including permitted acquisitions and permitted payments of dividends and other distributions). The Facility is available in U.S. Dollars with up to $150.0 million of the Facility available to be borrowed in Euros or Pound Sterling (the “Agreed Currencies”). The Facility further permits up to $50.0 million of the Facility to be utilized for the issuance of letters of credit in the Agreed Currencies. The Borrowers have the ability to increase the amount of the Facility, which increases may take the form of increases to the revolving credit commitments or the issuance of new term A loans, by an aggregate amount of up to the greater of $150.0 million or an incremental amount such that the total amount of the Facility does not exceed 350% of consolidated EBITDA of the Company (as determined for the four fiscal quarter period most recently ended for which financial statements are available), upon satisfaction of customary conditions precedent for such increases or incremental loans and receipt of additional commitments by one or more existing or new lenders.

Borrowings under the Facility bear interest at a floating rate, which is, at the Borrowers’ option, either SOFR, plus an applicable margin ranging from 1.25% to 2.25% or a base rate plus an applicable margin ranging from 0.25% to 1.25% (in each case subject to adjustment based on the Company’s total leverage ratio). An unused fee ranging from 0.15% to 0.25% (subject to adjustment based on the Company’s total leverage ratio) is payable quarterly in arrears based on the daily amount of the undrawn portion of each lender’s revolving credit commitment under the Facility. Fees are payable on outstanding letters of credit at a rate equal to the applicable margin for SOFR loans, plus certain customary fees payable solely to the issuer of the letter of credit.

Certain of the Company’s existing and future material subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of the Borrowers’ obligations under the Amended Credit Agreement. The obligations of the Borrowers and each of the Guarantors with respect to the Amended Credit Agreement are secured by a pledge of substantially all of the personal property

F-18

assets of the Borrowers and each of the Guarantors, including accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment, and equity interests in their respective subsidiaries.

The Amended Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness, and enter into affiliate transactions. In addition, the Amended Credit Agreement contains financial covenants requiring the Company on a consolidated basis to maintain, as of the last day of any fiscal quarter, a total net leverage ratio of not more than 3.5 to 1.0 (which ratio can be permitted to increase to 4.0 to 1.0 for no more than 4 fiscal quarters following a material acquisition) and an interest coverage ratio of at least 3.0 to 1.0. The Amended Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Facility may be accelerated and/or the lenders’ commitments terminated. The Company is in compliance with all required financial covenants as of December 31, 2022.

In conjunction with obtaining the Facility, the Company paid $1.5 million in debt issuance costs and capitalized a total of $1.8 million associated with the Facility (inclusive of certain capitalized costs prior to the most recent amendment). These costs are being amortized over the life of the Facility. Capitalized debt issuance costs are included in other long-term assets, net of accumulated amortization. As of December 31, 2022, and December 31, 2021, debt issuance costs, net of accumulated amortization, were $0.7 million and $1.0 million, respectively. Debt issuance costs amortized or expensed totaled $0.4 million for each of the years ended December 31, 2022, 2021, and 2020, respectively.

The Company has an unused available Italian line of credit of €5.5 million ($5.9 million and $6.3 million) at December 31, 2022, and 2021, respectively. This unsecured line of credit provides the Company the option to borrow amounts in Italy at interest rates determined at the time of borrowing.

The Company paid cash related to interest of $1.4 million, $1.5 million, and $1.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

12. Fair value measurements and investments

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets that are impaired in a currently reported period or equity securities measured at observable prices in orderly transactions. The authoritative guidance also describes three levels of inputs that may be used to measure fair value:

Level 1:	quoted prices in active markets for identical assets and liabilities
Level 2:	observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3:	unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions

The Company’s financial instruments include cash equivalents, accounts receivable, accounts payable, long-term secured debt, available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities. The carrying value of cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s secured revolving credit facility carries a floating rate of interest; therefore, the carrying value of long-term debt is considered to approximate the fair value.

F-19

The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows:

(U.S. Dollars, in thousands)	Balance December 31, 2022			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreement	$	7,140		$	—	$	—		$	7,140
Neo Medical preferred equity securities		6,084			—		6,084			—
Bone Biologics equity securities		—			—		—			—
Other investments		1,726			—		—			1,726
Total	$	14,950		$	—	$	6,084		$	8,866
Liabilities
Spinal Kinetics contingent consideration		—		$	—	$	—		$	—
Deferred compensation plan		(1,515	)		—		(1,515	)		—
Total	$	(1,515	)	$	—	$	(1,515	)	$	—

(U.S. Dollars, in thousands)	Balance December 31, 2021			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreements	$	7,148		$	—	$	—		$	7,148
Neo Medical preferred equity securities		5,413			—		5,413			—
Bone Biologics equity securities		309			309		—			—
Other Investments		1,505			—		—			1,505
Total	$	14,375		$	309	$	5,413		$	7,148
Liabilities
Spinal Kinetics contingent consideration	$	(17,200	)	$	—	$	—		$	(17,200	)
Deferred compensation plan		(1,314	)		—		(1,314	)		—
Total	$	(18,514	)	$	—	$	(1,314	)	$	(17,200	)

The fair value of the Company’s deferred compensation plan liabilities are determined based on inputs that are readily available in public markets or that can be derived from information available in publicly quoted markets; therefore, the Company has categorized this liability as a Level 2 financial instrument.

Neo Medical Convertible Loan Agreements and Equity Investment

On October 1, 2020, the Company purchased shares of Neo Medical’s preferred stock for consideration of $5.0 million and entered into a Convertible Loan Agreement pursuant to which Orthofix loaned Neo Medical CHF 4.6 million, or $5.0 million at the date of issuance (the “Convertible Loan”). The loan bears interest at 8.0%, with interest due semi-annually. At each interest payment date, the borrower may elect to capitalize any interest due to the then outstanding principal balance of the loan. The Convertible Loan matures on October 1, 2024. If a change in control of Neo Medical occurs prior to the maturity date, the Convertible Loan shall become immediately due upon such event. The Convertible Loan may be convertible by either party into shares of Neo Medical’s preferred stock. The Company may convert the loan at its own election at any time prior to the full repayment or settlement of the Convertible Loan. Neo Medical may elect to convert the loan only in the event of a qualified financing event, as defined within the agreement. The price per share at which the loan converts is dependent upon i) the party electing conversion and ii) Neo Medical’s price per share in its most recent fundraising activities at the time of conversion, as specified within the agreement.

In October 2021, the Company entered into an additional Convertible Loan Agreement (the “Additional Convertible Loan”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million ($0.7 million as of the issuance date). In January 2022, the Company elected to convert the Additional Convertible Loan into shares of Neo Medical’s preferred stock.

The equity securities are recorded in other long-term assets and are considered an investment that does not have a readily determinable fair value. As such, the Company measures this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2022, and 2021:

F-20

(U.S. Dollars, in thousands)	2022		2021
Fair value of Neo Medical preferred equity securities at January 1	$	5,413	$	5,000
Conversion of loan into preferred equity securities		671		—
Foreign currency remeasurement recognized in other income, net		—		77
Unrealized gain recognized in other income (expense), net		—		336
Fair value of Neo Medical preferred equity securities at December 31		6,084		5,413
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

The remaining Convertible Loan is recorded in other long-term assets as an available for sale debt security as of December 31, 2022. The Convertible Loan is recorded at fair value, with applicable interest recorded in interest income. The fair value of the Convertible Loan is based upon significant unobservable inputs, including the use of option-pricing models, Monte Carlo simulations for certain periods, and a probability-weighted discounted cash flows model, requiring the Company to develop its own assumptions. Therefore, the Company has categorized this asset as a Level 3 financial asset.

Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, and projected cash flows in support of the estimated enterprise value of Neo Medical. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the Convertible Loan. If the amortized cost of the Convertible Loan exceeds its estimated fair value, the security is deemed to be impaired, and must be evaluated for the recognition of credit losses. Impairment resulting from credit losses is recognized within the statement of income, while impairment resulting from other factors is recognized within other comprehensive income (loss). As of December 31, 2022, the Company has not recognized any credit losses related to the Convertible Loan.

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan(s), measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Fair value of Neo Medical Convertible Loans at January 1	$	7,148		$	7,160
Additions		—			671
Interest recognized in interest income, net		436			421
Foreign currency remeasurement recognized in other income (expense), net		(67	)		(162	)
Unrealized gain (loss) recognized in other comprehensive income (loss)		294			(942	)
Conversion of Additional Convertible Loan into preferred equity securities		(671	)		—
Fair value of Neo Medical Convertible Loan(s) at December 31		7,140			7,148
Amortized cost basis of Neo Medical Convertible Loan(s) at December 31		5,907			6,209

The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loan as of December 31, 2022:

(U.S. Dollars, in thousands)	Fair Value as of December 31, 2022		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,140	Cost of equity discount rate		18.0	%
			Implied volatility		73.9	%

F-21

Bone Biologics Equity Securities

Until August of 2022, the Company held an investment in common stock of Bone Biologics Inc. (“Bone Biologics”), a developer of orthobiologic products. Prior to 2021, the equity securities were considered an investment that did not have a readily determinable fair value as Bone Biologics had very limited trading volumes. As such, the Company measured the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

In 2021, Bone Biologics completed a public offering of units, with each unit consisting of one share of common stock and one warrant to purchase common shares. As a result, Bone Biologics’ common stock became actively traded on the NASDAQ (ticker BBLG). The Company concluded the investment represented a Level 1 fair value measurement subsequent to the public offering as the common shares subsequently had quoted prices in active markets for identical assets. As such, the Company recorded the investment at fair value, with changes in fair value recorded within other income (expense), net, subsequent to the public offering.

The following table presents the changes in fair value recognized for each of the years ended December 31, 2022, 2021, and 2020:

(U.S. Dollars, in thousands)	2022			2021		2020
Bone Biologics equity securities at January 1	$	309		$	—	$	219
Fair value adjustments and impairments recognized in other income (expense), net		(183	)		309		(219	)
Proceeds from the disposition of equity securities		(126	)		—		—
Bone Biologics equity securities at December 31	$	—		$	309		—

Other investments

Other investments represent other assets and investments recorded at fair value that are not deemed to be material for disclosure on an individual basis. The fair value of these assets is based upon significant unobservable inputs, such as probability-weighted discounted cash flows models, requiring the Company to develop its own assumptions. Therefore, the Company has categorized these assets as Level 3 financial assets. As of December 31, 2022, this balance was classified within other current assets, while as of December 31, 2021, this balance was classified within other long-term assets.

Contingent Consideration

The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The Spinal Kinetics contingent consideration consists of potential future milestone payments of up to $60.0 million in cash. The milestone payments included (i) $15.0 million upon U.S. Food and Drug Administration (“FDA”) approval of the M6-C artificial cervical disc (the “FDA Milestone”) and (ii) revenue-based milestone payments of up to $45.0 million in connection with future sales of the acquired artificial discs. To trigger applicable payments, milestones must be achieved by April 30, 2023. The FDA Milestone was achieved and paid in 2019. A second milestone payment, totaling $15.0 million, was achieved and paid in 2021 upon meeting certain net sales targets.

The estimated fair value of the remaining Spinal Kinetics contingent consideration, attributable to a revenue-based milestone, was concluded to be zero as of December 31, 2022, as the Company does not expect to achieve the milestone by April 30, 2023. The estimated fair value reflects assumptions made by management as of December 31, 2022, such as the expected timing and volume of elective procedures and the impact of these procedures on future revenues. Any changes in fair value are recorded as an operating expense within acquisition-related amortization and remeasurement.

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Spinal Kinetics contingent consideration at January 1	$	17,200		$	35,400
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(17,200	)		(3,200	)
Payment made		—			(15,000	)
Spinal Kinetics contingent consideration at December 31		—		$	17,200

F-22

13. Commitments and Contingencies

Contingencies policy

The Company records accruals for certain outstanding legal proceedings, investigations, or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates developments in legal proceedings, investigations, and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable on a quarterly basis. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred.

In addition to the matters described in the paragraphs below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss.

Italian Medical Device Payback (“IMDP”)

In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. A key provision of the law is a ‘payback’ measure, requiring medical device companies in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps.

In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the years ended December 31, 2015, through December 31, 2018. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures.

The Company accounts for the estimated cost of the IMDP as sales and marketing expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded expense of $1.2 million for the year ended December 31, 2022, a benefit of $1.2 million for the year ended December 31, 2021, as a result of certain temporary relief provided by the Italian National Healthcare System in response to the COVID-19 pandemic, and expense of $1.5 million for the year ended December 31, 2020. As of December 31, 2022, the Company has accrued $5.9 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities for more recent fiscal years.

14. Shareholders’ equity

Dividends

The Company has not historically paid dividends to holders of its common stock. Certain subsidiaries of the Company have restrictions on their ability to pay dividends in certain circumstances pursuant to the Amended Credit Agreement. In the event that the Company decides to pay a dividend to holders of its common stock in the future with dividends received from its subsidiaries, the Company may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts received from its subsidiaries.

F-23

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments and unrealized gains (losses) on available for sale debt securities. The Company’s policy is to release income tax effects related to items recognized within accumulated other comprehensive income (loss) using a portfolio approach. The components of and changes in accumulated other comprehensive income (loss) are as follows:

(U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans			Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(3,039	)	$	—		$	—	$	(3,039	)
Other comprehensive income		4,872			1,881			—		6,753
Income taxes		—			(462	)		—		(462	)
Balance at December 31, 2020	$	1,833		$	1,419		$	—	$	3,252
Other comprehensive loss		(2,544	)		(942	)		—		(3,486	)
Income taxes		—			234			—		234
Balance at December 31, 2021	$	(711	)	$	711		$	—	$	—
Other comprehensive income (loss)		(1,771	)		294			101		(1,376	)
Income taxes		—			—			—		—
Balance at December 31, 2022	$	(2,482	)	$	1,005		$	101	$	(1,376	)

15. Revenue recognition and accounts receivable

Revenue Recognition

The Company accounts for a contract when there is (i) approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, (v) and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the promised goods or services. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The following sections discuss the Company’s revenue recognition policies by significant product category:

Bone Growth Therapies

Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue.

The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare. Revenue is recognized when the product is fitted to and accepted by the patient and all applicable documents required by the third-party payor have been obtained. Amounts paid by third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment.

Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods.

F-24

Biologics

Biologics revenue is largely attributable to the U.S. and is primarily related to a collaborative arrangement with MTF, which extends through December 31, 2032. Under this arrangement, the Company markets tissue for bone repair and reconstruction under the brand names Trinity Evolution and Trinity ELITE. Per the terms of the agreement, MTF sources the tissue, processes it to create the allografts, packages, and delivers the tissue to the customer. The Company has exclusive global marketing rights for the Virtuos Lyograft and Trinity ELITE tissue forms, exclusive rights to market FiberFuse Advanced, FiberFuse Strip, and certain other tissues in the U.S., non-exclusive marketing rights for certain other products, and receives marketing fees from MTF based on total sales. MTF is considered the primary obligor in these arrangements; therefore, the Company recognizes marketing service fees on a net basis within net sales upon shipment of the product to the customer and receipt of a confirming purchase order.

Spinal Implants and Global Orthopedics

Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from both commercial sales and stocking distributor arrangements.

Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Global Orthopedics products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital.

Other revenues within the Spinal Implants and Global Orthopedics product categories are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For stocking distributor arrangements, it is the Company’s policy to recognize revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price for revenue recognition is estimated based upon the Company’s historical collection experience with the stocking distributor.

Product Sales and Marketing Service Fees

The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2022, 2021, and 2020.

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Product sales	$	405,437	$	409,554	$	353,087
Marketing service fees		55,276		54,925		53,475
Net sales	$	460,713	$	464,479	$	406,562

Product sales primarily consists of the sale of Bone Growth Therapies, Spinal Implants, and Global Orthopedics products. Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics product category within the Global Spine reporting segment. Marketing service fees received from MTF were $55.3 million, or approximately 98% of total Biologics revenues, for the year ended December 31, 2022. As MTF is the single supplier for certain allografts in the Company’s Biologics portfolio, derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF’s continued access to donors or the Company’s ability to market these tissues may adversely impact the Company’s financial results.

Revenues exclude any value added or other local taxes, intercompany sales, and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were $4.2 million, $3.5 million, and $2.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Accounts receivable and related allowances

Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant.

The Company’s allowance for expected credit losses represents the portion of the receivable’s amortized cost basis that an entity does not expect to collect over the receivable’s contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

F-25

The process for estimating the ultimate collection of accounts receivable involves certain assumptions and judgments. The determination of the contractual life of accounts receivable, the aging of outstanding receivables, as well as the historical collections, write-offs, and payor reimbursement experience over the estimated contractual lives of such receivables, are integral parts of the estimation process related to reserves for expected credit losses and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for expected credit losses and contractual allowances. Revisions in allowances for expected credit loss estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses. Revisions to contractual allowances are recorded as an adjustment to net sales. These estimates are periodically tested against actual collection experience. In addition, the Company analyzes its receivables by geography and by customer type, where appropriate, in developing estimates for expected credit losses.

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the years ended December 31, 2022, and 2021:

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Allowance for expected credit losses beginning balance	$	4,944		$	4,848
Current period provision for expected credit losses		2,095			444
Write-offs charged against the allowance and other		(450	)		(126	)
Effect of changes in foreign exchange rates		(170	)		(222	)
Allowance for expected credit losses ending balance	$	6,419		$	4,944

The Company will generally sell receivables from certain Italian public hospitals each year to accelerate cash collections. During 2022, 2021, and 2020, the Company sold €9.2 million, €8.4 million, and €8.3 million ($9.6 million, $9.9 million, and $9.6 million) of receivables, respectively. The related fees for 2022, 2021, and 2020, were $0.3 million, $0.2 million, and $0.3 million, respectively, which were recorded as interest expense. Accounts receivables sold without recourse are removed from the balance sheet at the time of sale.

Contract Liabilities

The Company’s contract liabilities largely relate to a prepayment of $13.9 million received in 2020 from the CMS as part of the Accelerated and Advance Payment Program of the CARES Act.

On October 1, 2020, the President of the United States signed the “Continuing Appropriations Act, 2021 and Other Extensions Act,” which relaxed a number of the Medicare Accelerated and Advance Payment Program’s recoupment terms for providers and suppliers that received funds from the program. In April 2021, Medicare began to recoup 25% of Medicare payments otherwise owed to the provider or supplier for submitted claims. Recoupment then increased to 50% of Medicare payments in March 2022. Thus, during these time periods, rather than receiving the full amount of payment for newly submitted claims, the Company’s outstanding balance under the Accelerated and Advance Payment Program was reduced by the recoupment amount until the full balance had been repaid.

The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the years ended December 31, 2022, and 2021:

	For the Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Contract liability beginning balance	$	4,791		$	13,851
Recoupment recognized in net sales		(4,791	)		(9,060	)
Contract liability ending balance	$	—		$	4,791

Other Contract Assets

The Company’s contract assets, excluding accounts receivable (“Other Contract Assets”), largely consist of payments made to certain distributors to obtain contracts, gain access to customers in certain territories, and to provide the benefit of the exclusive distribution of the Company’s products. Other Contract Assets are included in other long-term assets and totaled $1.1 million and $1.4 million as of December 31, 2022, and 2021, respectively.

F-26

Other Contract Assets are amortized on a straight-line basis over the term of the related contract. No impairments were incurred for other contract assets in 2022 or 2021. Further, the Company applies the practical expedient to expense sales commissions when incurred, as the applicable amortization period would be for one year or less.

16. Business segment information

As of December 31, 2022, the Company's operations were managed through two reporting segments: Global Spine and Global Orthopedics. These reporting segments represent the operating segments for which the Chief Executive Officer, who is also Chief Operating Decision Maker (the “CODM”), reviews financial information and makes resource allocation decisions among businesses. As of December 31, 2022, the primary metric used by the CODM in managing the Company is earnings before interest, tax, depreciation, and amortization (“EBITDA”). The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information.

Following the merger with SeaSpine, which was completed on January 5, 2023, the Company expects to reassess its reporting segments in the first quarter of 2023 based on how the operations of the newly combined company will be managed The Company will also reassess its identified segment profitability metric at that time. Accordingly, the reporting segment information below has been prepared based on the Company's two historical reporting segments, which were utilized in managing operations for the year ended December 31, 2022.

Global Spine

The Global Spine reporting segment offers three primary product categories: Bone Growth Therapies, Spinal Implants, and Biologics.

The Bone Growth Therapies product category manufactures, distributes, and provides support services of market leading bone growth stimulator devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This product category uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S.

The Spinal Implants product category designs, develops, and markets a broad portfolio of motion preservation and fixation implant products used in surgical procedures of the spine. Spinal Implants distributes its products through a global network of distributors and sales representatives to sell spine products to hospitals and healthcare providers.

The Biologics product category provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This product category specializes in the marketing of the Company’s regeneration tissue forms and distributes its tissues to hospitals and healthcare providers, primarily in the U.S., through a network of independent distributors and sales representatives. The partnership with MTF allows the Company to exclusively market the Virtuos Lyograph, Trinity Evolution, FiberFuse Advanced, FiberFuse Strip, and certain other tissue forms for musculoskeletal defects to enhance bony fusion.

Global Orthopedics

The Global Orthopedics reporting segment offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions unrelated to the spine. This reporting segment specializes in the design, development, and marketing of the Company’s orthopedic products used in fracture repair, deformity correction, and bone reconstruction procedures. Global Orthopedics distributes its products through a global network of distributors and sales representatives to sell orthopedic products to hospitals, and healthcare providers.

Corporate

Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments.

The table below presents net sales by major product category by reporting segment:

F-27

	Year Ended December 31,
	2022					2021					2020
(U.S. Dollars, in thousands)	Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales
Bone Growth Therapies	$	187,247		40.7	%	$	187,448		40.4	%	$	171,396		42.2	%
Spinal Implants		109,546		23.8	%		115,094		24.8	%		94,857		23.3	%
Biologics		56,381		12.2	%		56,421		12.1	%		55,482		13.6	%
Global Spine		353,174		76.7	%		358,963		77.3	%		321,735		79.1	%
Global Orthopedics		107,539		23.3	%		105,516		22.7	%		84,827		20.9	%
Net sales	$	460,713		100.0	%	$	464,479		100.0	%	$	406,562		100.0	%

The following table presents EBITDA, the primary metric used in managing the Company, by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Global Spine	$	60,649		$	58,014		$	63,036
Global Orthopedics		(4,037	)		3,374			(4,993	)
Corporate		(44,011	)		(31,691	)		(25,382	)
Total EBITDA		12,601			29,697			32,661
Depreciation and amortization		(29,019	)		(29,599	)		(30,546	)
Goodwill impairment		—			(11,756	)		—
Interest expense, net		(1,288	)		(1,837	)		(2,483	)
Loss before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine	$	18,213	$	17,548	$	18,362
Global Orthopedics		6,696		8,233		7,896
Corporate		4,110		3,818		4,288
Total	$	29,019	$	29,599	$	30,546

Geographical information

The following data includes net sales by geographic destination:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
U.S.	$	358,843	$	361,945	$	327,280
Italy		19,098		20,187		18,733
Germany		11,569		13,716		11,940
United Kingdom		10,171		10,552		7,147
France		10,377		10,475		8,354
Brazil		5,668		5,108		2,347
Others		44,987		42,496		30,761
Net sales	$	460,713	$	464,479	$	406,562

F-28

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine
U.S.	$	332,846	$	337,455	$	304,595
International		20,328		21,508		17,140
Total Global Spine		353,174		358,963		321,735
Global Orthopedics
U.S.	$	25,997		24,490		22,685
International		81,542		81,026		62,142
Total Global Orthopedics		107,539		105,516		84,827
Consolidated
U.S.		358,843		361,945		327,280
International		101,870		102,534		79,282
Net sales	$	460,713	$	464,479	$	406,562

The following data includes property, plant, and equipment by geographic area:

(U.S. Dollars, in thousands)	2022		2021
U.S.	$	44,802	$	45,090
Italy		8,535		9,412
Germany		3,115		2,544
United Kingdom		1,149		1,193
Brazil		85		91
Others		543		922
Total	$	58,229	$	59,252

17. Acquisition-related amortization and remeasurement

Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions, (ii) the remeasurement of any related contingent consideration arrangement, (iii) recognized costs associated with acquired IPR&D assets, which are recognized immediately upon acquisition, and (iv) impairments of goodwill related to previously recognized business combinations. Components of acquisition-related amortization and remeasurement for the years ended December 31, 2022, 2021, and 2020, respectively, are as follows:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Changes in fair value of contingent consideration	$	(17,200	)	$	(3,575	)	$	(7,300	)
Amortization of acquired intangibles		8,196			7,907			6,801
Acquired IPR&D		1,600			1,500			—
Impairment of Global Orthopedics goodwill		—			11,756			—
Total	$	(7,404	)	$	17,588		$	(499	)

CGBio Co. Ltd. License and Distribution Agreement

On July 30, 2022, the Company entered into an exclusive License and Distribution Agreement (the "License Agreement") with CGBio Co., Ltd. (“CGBio”), a developer of innovative, synthetic bone grafts. The Agreement grants the Company the exclusive right to conduct pre-clinical and clinical studies, commercialize, promote, market, and sell the Novosis recombinant human bone morphogenetic protein-2 (rhBMP-2) bone growth materials and other future tissue regenerative solutions in the U.S. and Canada. As consideration, the Company agreed to pay CGBio an upfront payment of $1.4 million with additional payments contingent upon the achievement of specified development milestones. The Company accounted for this transaction as an asset acquisition. As the

F-29

transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The $1.4 million upfront payment was paid in the third quarter of 2022 and was recognized as acquired IPR&D costs, which was then immediately expensed.

Legion Innovations, LLC Asset Acquisition

On December 29, 2022, the Company entered into a technology assignment and royalty agreement with Legion Innovations, LLC, a U.S.-based medical device technology company, whereby the Company acquired intellectual property rights to certain assets. As consideration, the Company agreed to pay $0.2 million in January 2023, with additional payments contingent upon reaching future commercialization and revenue-based milestones. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The $0.2 million initial payment was accrued as of December 31, 2022, and was recognized as acquired IPR&D costs, which was then immediately expensed.

IGEA S.p.A Asset Acquisition

In April 2021, the Company entered into an Exclusive License and Distribution Agreement (the “License Agreement”) with IGEA S.p.A (“IGEA”), an Italian manufacturer and distributor of bone and cartilage stimulation systems. As consideration for the License Agreement, the Company agreed to pay up to $4.0 million, with certain payments contingent upon reaching an FDA milestone. Of this amount, $0.5 million was paid in 2021, which was recognized as acquired IPR&D costs within acquisition-related amortization and remeasurement. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The License Agreement also includes certain minimum purchase requirements.

In May 2022, the Company achieved FDA approval pertaining to the acquired technology, triggering a contingent consideration milestone obligation of $3.5 million. Of this amount, $1.5 million was paid in 2022, $1.0 million was accrued within other current liabilities, and $1.0 million was accrued within other long-term liabilities as of December 31, 2022.

Related Party Asset Acquisition

In February 2021, the Company entered into a technology assignment and royalty agreement with a medical device technology company partially owned and controlled by the wife of our Executive Chairman, and former President and Chief Executive Officer, Jon Serbousek, whereby the Company acquired the intellectual property rights to certain assets for consideration of up to $10.0 million.

Consideration was comprised of $1.0 million due at signing, which was recognized immediately as acquired IPR&D expense within acquisition-related amortization and remeasurement, and $9.0 million in contingent consideration. The contingent consideration is dependent upon multiple milestones, such as receipt of 510(k) clearance and the attainment of certain net sales targets. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. In addition, the Company is obligated to pay a royalty of 2% to 4% on net sales, commencing upon commercialization of the assets.

The transaction was approved by the Company’s Audit and Finance Committee, with the Audit and Finance Committee directly supervising the negotiations of the transaction. Mr. Serbousek was excluded from such discussions and did not participate in the negotiation or evaluation of the transaction. Mr. Serbousek also continues to be excluded from the oversight of the Company’s development and commercialization activities in relation to the acquired technology and all other matters relating to the relationship between the Company and the counterparty

F-30

18. Share-based compensation

At December 31, 2022, and 2021, the Company had stock option and award plans, and a stock purchase plan.

2012 Long Term Incentive Plan

The Board of Directors adopted the Amended and Restated 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 23, 2018, which was subsequently approved by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors, consultants, and advisors who perform services for the Company and its subsidiaries and affiliates may receive awards under the 2012 LTIP. Awards granted under the 2012 LTIP expire no later than ten years after the date of grant. At December 31, 2022, the Company reserves a total of 8,375,000 shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2022, there were 1,098,680 options outstanding under the 2012 LTIP, of which 852,490 were exercisable. In addition, there were 1,359,693 restricted stock units outstanding, some of which contain performance-based or market-based vesting conditions, under the 2012 LTIP as of December 31, 2022.

Inducement Plans

In 2013, the Company granted options to acquire up to 150,000 shares of common stock to a former Chief Executive Officer as an inducement to accept employment with the Company. As of December 31, 2022, there were 150,000 options outstanding under this inducement, all of which were exercisable.

In August 2019, the Company appointed a new President of Global Spine, who was then subsequently promoted to President and Chief Executive Officer. As an inducement to accept employment with the Company, the individual was awarded a grant of stock options to acquire up to 50,711 shares of common stock and an award of 14,743 restricted stock units. As of December 31, 2022, there were 50,711 options outstanding under this inducement, 38,033 of which were exercisable, and 3,686 unvested restricted stock units outstanding.

Stock Purchase Plan

The Second Amended and Restated Stock Purchase Plan, as Amended (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers).

During each purchase period, eligible employees may designate between 1% and 25% of their compensation to be deducted for the purchase of common stock under the plan (or such other percentage in order to comply with regulations applicable to employees domiciled in or resident of a member state of the European Union). For eligible directors, the designated percentage will be applied to an amount equal to his or her director compensation paid in cash for the current plan period. The purchase price of the shares under the plan is equal to 85% of the fair market value on the first day of the plan period or, if lower, on the last day of the plan period.

Due to the compensatory nature of such plan, the Company records the related share-based compensation expense in the consolidated statement of operations. Compensation expense is estimated using the Black-Scholes valuation model, with such value recognized as expense over the plan period. As of December 31, 2022, the aggregate number of shares reserved for issuance under the Stock Purchase Plan is 2,850,000. As of December 31, 2022, a total of 2,395,673 shares had been issued pursuant to the Stock Purchase Plan.

F-31

Share-Based Compensation Expense

Share-based compensation expense is recorded in the same line of the consolidated statements of operations as the employee’s cash compensation. The following tables present the detail of share-based compensation expense by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Cost of sales	$	826	$	779	$	705
Sales and marketing		3,865		3,385		3,620
General and administrative		12,917		10,289		10,624
Research and development		835		979		1,258
Total	$	18,443	$	15,432	$	16,207

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Stock options	$	1,114	$	1,893	$	2,571
Time-based restricted stock awards and stock units		9,452		7,437		8,485
Performance-based / Market-based restricted stock units		6,425		4,414		3,509
Stock purchase plan		1,452		1,688		1,642
Total	$	18,443	$	15,432	$	16,207

The income tax benefit related to this expense was $3.3 million, $3.1 million, and $3.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Stock Options

The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically four years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during each of the years ended December 31, 2022, 2021, and 2020, is shown in the following table. The Company did not grant any time-based stock options in 2022.

	Year Ended December 31,
	2022		2021		2020
Assumptions:
Expected term (in years)		—	6.0		5.5
Expected volatility		—	34.4% – 34.8%		30.2% – 35.1%
Risk free interest rate		—	0.83% – 1.25%		0.28% – 1.65%
Dividend yield		—		—		—
Weighted average grant date fair value		—	$	12.33	$	8.74

The expected term of the options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, and an employee’s average length of service. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option.

F-32

Summaries of the status of the Company’s stock option plans as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2021		1,397,054		$	39.20
Granted		—		$	-
Exercised		(575	)	$	21.78
Forfeited or expired		(97,088	)	$	38.14
Outstanding at December 31, 2022		1,299,391		$	39.29		3.77
Vested and expected to vest at December 31, 2022		1,299,391		$	39.29		3.77
Exercisable at December 31, 2022		1,040,523		$	40.70		3.13

As of December 31, 2022, the unamortized compensation expense relating to options granted and expected to be recognized was $0.8 million. This amount is expected to be recognized through December 2025 over a weighted average period of approximately 1.0 years. The total intrinsic value of options exercised was $0.0 million, $0.6 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. For the year ended December 31, 2022, we received $0.0 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $0.0 million. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2022, is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for options that had exercise prices lower than $20.53, the closing price of the Company’s stock on December 31, 2022. The aggregate intrinsic value of options outstanding was $0.0 million as of December 31, 2022. The aggregate intrinsic value of options exercisable was also $0.0 million as of that date.

Time-based Restricted Stock Awards and Stock Units

Compensation expense for time-based restricted stock awards and stock units, which represents the fair value of the stock measured at the market price at the date of grant, is recognized on a straight-line basis over the vesting period, which is typically four years, net of actual forfeitures.

Since 2017, the annual grant to non-employee directors has been made in the form of one-year vesting restricted stock units with deferred delivery (“DSUs”), whereby shares are not settled until after the director ceases service as a director. As of December 31, 2022, there were 86,542 DSUs outstanding that are vested but not settled.

The aggregate fair value of time-based restricted stock awards and stock units that vested during the years ended December 31, 2022, 2021, and 2020, was $5.2 million, $9.0 million, and $6.5 million, respectively. Unamortized compensation expense related to time-based restricted stock awards and stock units amounted to $18.6 million at December 31, 2022. This amount is expected to be recognized through October 2026 over a weighted average period of approximately 2.5 years. The aggregate intrinsic value of time-based restricted stock awards and stock units outstanding was $17.4 million as of December 31, 2022.

Performance-based and Market-based Restricted Stock Units

Certain of the Company's outstanding restricted stock units contain performance-based vested conditions or market-based vesting conditions.

The fair value of performance-based restricted stock units is calculated based upon the closing stock price at the date of grant. Such value is recognized as expense over the requisite service period beginning in the period in which they are deemed probable to vest, net of actual forfeitures. Vesting probability is assessed based upon forecasted earnings and financial results.

The fair value of market-based restricted stock units is determined at the date of the grant using the Monte Carlo valuation methodology, with any discounts for post-vesting restrictions estimated using the Chaffe Model. The Monte Carlo methodology incorporates into the valuation the possibility that the market condition may not be satisfied. Such value is recognized on a straight-line basis over the vesting period, net of actual forfeitures.

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The fair value of performance-based and/or market-based restricted stock units that vested and settled during the years ended December 31, 2022, 2021, and 2020, totaled $0.0 million, $0.0 million, and $1.4 million, respectively. Unamortized compensation expense for performance-based and/or market-based restricted stock units totaled $9.3 million at December 31, 2022, and is expected to be recognized over a weighted average period of approximately 1.4 years. The aggregate intrinsic value of market-based restricted stock units outstanding was $10.6 million as of December 31, 2022.

A summary of the status of our time-based and performance-based and/or market-based restricted stock units as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Time-based Restricted Stock Awards and Stock Units					Performance-based and/or Market-based Restricted Stock Units
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021		559,368		$	40.03		323,081		$	48.56
Granted		500,222		$	29.81		255,327		$	33.57
Vested and settled		(152,735	)	$	41.03		—		$	—
Cancelled		(59,708	)	$	34.80		(62,176	)	$	55.70
Outstanding at December 31, 2022		847,147		$	34.18		516,232		$	40.29

19. Defined contribution plans and deferred compensation

Defined Contribution Plans

Orthofix US LLC sponsors a defined contribution plan (the “401(k) Plan”) covering substantially all full-time U.S. employees. The 401(k) Plan allows participants to contribute up to 80% of their pre-tax compensation, subject to certain limitations, with the Company matching 100% of the first 2% of the employee’s base compensation and 50% of the next 4% of the employee’s base compensation if contributed to the 401(k) Plan. During the years ended December 31, 2022, 2021, and 2020, expenses incurred relating to the 401(k) Plan, including matching contributions, were approximately $3.3 million, $2.8 million, and $1.1 million, respectively.

In April 2020, as a precautionary measure to increase the Company’s cash position and preserve financial flexibility in response to the initial uncertainty of the COVID-19 pandemic, the Company temporarily suspended the 401(k) match program through the remainder of fiscal year 2020. The 401(k) match program was reinstated in January 2021.

The Company also operates defined contribution plans for its international employees meeting minimum service requirements. The Company’s expenses for such contributions during each of the years ended December 31, 2022, 2021, and 2020, were $1.1 million, $1.2 million, and $1.1 million, respectively.

Deferred Compensation Plans

Under Italian Law, our Italian subsidiary accrues deferred compensation on behalf of its employees, which is paid on termination of employment. The accrual for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal, which is regulated by a national contract and is equal to approximately 4% of total commissions earned from the Company. The Company’s relations with its Italian employees, who represent 21% of total employees at December 31, 2022, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. The Company is not a party to any other collective bargaining agreement. The balance in other long-term liabilities as of December 31, 2022, and 2021 was $1.5 million and $1.3 million, respectively, and represents the amount that would be payable if all the employees and agents had terminated employment at that date.

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20. Income taxes

Income (loss) before provision for income taxes consisted of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
U.S.	$	(22,318	)	$	(5,987	)	$	5,556
Non-U.S.		4,612			(7,508	)		(5,924	)
Income (loss) before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

The provision for income taxes consists of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021			2020
U.S.
Current	$	1,151	$	(607	)	$	(15,054	)
Deferred		67		24,292			(29	)
		1,218		23,685			(15,083	)
Non-U.S.
Current		578		1,009			1,382
Deferred		247		190			10,816
		825		1,199			12,198
Income tax expense (benefit)	$	2,043	$	24,884		$	(2,885	)

The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2022, 2021, and 2020, consist of the following:

	2022						2021						2020
(U.S. Dollars, in thousands, except percentages)	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	(3,718	)		21.0	%	$	(2,834	)		21.0	%	$	(77	)		21.0	%
State taxes, net of U.S. federal benefit		(1,312	)		7.4			(24	)		0.2			1,151			(312.8	)
Foreign rate differential, including withholding taxes		475			(2.7	)		480			(3.6	)		(147	)		39.9
Valuation allowances, net		7,638			(43.1	)		27,819			(206.1	)		14,514			(3,944.0	)
Foreign income inclusions, net		1,018			(5.7	)		—			—			—			—
Research credits		(750	)		4.2			(537	)		4.0			(982	)		266.8
Unrecognized tax benefits, net of settlements		(599	)		3.4			(1,363	)		10.1			(17,321	)		4,706.8
Equity compensation		1,441			(8.1	)		1,091			(8.1	)		1,657			(450.3	)
Executive compensation		697			(3.9	)		456			(3.4	)		375			(101.9	)
Contingent consideration		(3,316	)		18.7			(640	)		4.7			(1,460	)		396.7
Other, net		469			(2.6	)		436			(3.2	)		(595	)		161.8
Income tax expense (benefit) /effective rate	$	2,043			(11.5	)%	$	24,884			(184.4	)%	$	(2,885	)		784.0	%

The Company paid (received or was refunded) cash relating to taxes totaling ($0.9) million, $4.8 million, and $0.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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The Company’s deferred tax assets and liabilities are as follows:

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Intangible assets and goodwill	$	5,807		$	5,245
Inventories and related reserves		17,819			17,097
Deferred revenue and cost of goods sold		3,642			3,888
Other accruals and reserves		2,756			3,082
Accrued compensation		8,795			7,784
Provision for expected credit losses		1,253			1,217
Net operating loss and tax credit carryforwards		40,676			42,546
R&D capitalization		4,353			—
Lease liabilities		6,440			5,691
Other, net		3,767			852
Total deferred tax assets		95,308			87,402
Valuation allowance		(83,797	)		(76,725	)
Deferred tax asset, net of valuation allowance	$	11,511		$	10,677
Withholding taxes		(10	)		(10	)
Property, plant, and equipment		(5,516	)		(4,809	)
Right-of-use lease assets		(5,771	)		(5,165	)
Deferred tax liability		(11,297	)		(9,984	)
Net deferred tax assets	$	214		$	693
Reported as:
Deferred income tax assets (classified within other long-term assets)		1,470			1,771
Deferred income tax liabilities (classified within other long-term liabilities)		(1,256	)		(1,078	)
Net deferred tax assets	$	214		$	693

The Company historically presented deferred income tax assets as a separate and discrete line item on its consolidated balance sheet; however, as the significance of the asset has decreased as a result of the recognition of valuation allowances, the Company has reclassified this balance to be included within other long-term assets. As such, the prior year balance has been reclassified to conform to current period presentation.

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future.

The valuation allowance is primarily attributable to net operating loss carryforwards and temporary differences in domestic and certain foreign jurisdictions. The net increase in the valuation allowance of $7.1 million during the year principally relates to recognizing a full valuation allowance against the net deferred tax asset within the Company’s U.S. operations as well as an increase in valuation allowance against deferred tax assets within the Company’s Italian manufacturing subsidiary. The Company considered many factors when assessing the likelihood of future realization of these deferred tax assets, including recent cumulative losses experienced by the subsidiary, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. That increase was partially offset by a decrease of valuation allowances on net operating loss carryforwards in other foreign jurisdictions due to expiration, statutory rate changes, and changes regarding the realizability of net deferred tax assets. It is reasonably possible that the valuation allowance will increase in 2023 due to further losses in certain jurisdictions, offset by decreases related to the expiration of foreign net operating losses.

The Company has federal net operating loss carryforwards of $13.3 million and research and development credits of $1.7 million, including amounts from the acquisition of Spinal Kinetics. These carryforwards are subject to limitation under the provisions of Section 382 and will begin to expire in 2026. The Company has state net operating loss carryforwards of approximately $31.1 million,

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of which $20.6 million relates to Spinal Kinetics and begins to expire in 2027. Additionally, the Company has net operating loss carryforwards in various foreign jurisdictions of approximately $120.4 million, the majority of which do not have an expiration, which mainly relate to the Company’s Italy, Netherlands, and Brazil operations.

Unremitted foreign earnings were $27.0 million as of December 31, 2022. The Company’s investment in foreign subsidiaries continues to be indefinite in nature; however, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur significant additional tax liability. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings of foreign subsidiaries is not practicable.

The Company records a benefit for uncertain tax positions when the weight of available evidence indicates that it is more likely than not, based on an evaluation of the technical merits, that the tax position will be sustained on audit. The tax benefit is measured as the largest amount that is more than 50% likely to be realized upon settlement. The Company re-evaluates income tax positions periodically to consider changes in facts or circumstances such as changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. The Company includes interest and any applicable penalties related to income tax issues as part of income tax expense in its consolidated financial statements.

The Company’s unrecognized tax benefit was $1.7 million and $3.5 million for the years ended December 31, 2022, and 2021, respectively. The Company recorded net interest and penalties expense (benefit) on unrecognized tax benefits of $0.1 million, $(0.4) million, and $(5.4) million for the years ended December 31, 2022, 2021, and 2020, respectively, and had approximately $0.9 million and $0.8 million accrued for payment of interest and penalties as of December 31, 2022, and 2021, respectively. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. The Company believes it is reasonably possible that, in the next 12 months, no unrecognized tax benefits, exclusive of interest and penalties, will be resolved by the closure of an audit or statute release.

A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2022, and 2021, is shown below:

(U.S. Dollars, in thousands)	2022			2021
Balance as of January 1,	$	3,462		$	4,629
Additions for current year tax positions		46			45
Increases for prior year tax positions		16			110
Settlements of prior year tax positions		(144	)		—
Expiration of statutes		(1,637	)		(1,322	)
Balance as of December 31,	$	1,743		$	3,462

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in certain state and foreign jurisdictions, including Italy, as well as other jurisdictions where the Company maintains operations. The statute of limitations with respect to federal and state tax filings is closed for years prior to 2019. The statute of limitations with respect to the major foreign tax filing jurisdictions is closed for years prior to 2018. The Company cannot reasonably determine if any state and local or foreign examinations will have a material impact on its financial statements and cannot predict the timing regarding the resolution of these tax examinations.

21. Earnings per share (EPS)

The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards in certain periods with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method. The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 18).

F-37

For each of the three years ended December 31, 2022, 2021, and 2020, no significant adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in the diluted EPS computations:

	Year Ended December 31,
	2022		2021		2020
Weighted average common shares-basic		20,053,548		19,690,593		19,267,920
Effect of diluted securities:
Unexercised stock options and employee stock purchase plan		—		—		51,951
Unvested time-based restricted stock units		—		—		71,847
Weighted average common shares-diluted		20,053,548		19,690,593		19,391,718

There were 2,313,226; 1,711,323; and 1,499,630 weighted average outstanding options, restricted stock, and market-based units not included in the diluted earnings per share computation for the years ended December 31, 2022, 2021, and 2020, respectively, because inclusion of these awards was anti-dilutive or, for market-based units, all necessary conditions had not been satisfied by the end of the respective period.

22. Subsequent Events

Merger with SeaSpine Holdings Corporation

On October 10, 2022, the Company and Orca Merger Sub Inc., a wholly-owned subsidiary of Orthofix (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SeaSpine, a global medical technology company focused on surgical solutions for the treatment of spinal disorders. On January 5, 2023, the transaction was completed and Merger Sub was merged with and into SeaSpine (the “Merger”), with SeaSpine continuing as the surviving company and a wholly-owned subsidiary of Orthofix following the transaction. For the year ended December 31, 2022, the Company incurred approximately $9.3 million in acquisition-related costs, substantially all of which was classified as general and administrative expenses.

As a result of the Merger, each share of common stock of SeaSpine issued and outstanding immediately prior to the closing date was converted into the right to receive 0.4163 shares of common stock of Orthofix. In addition, the Company assumed SeaSpine’s existing equity incentive plans in connection with the Merger, and outstanding SeaSpine equity awards were converted into Orthofix equity awards (on the same vesting schedule and other terms and conditions as existed prior to such conversion). The conversion of such equity awards occurred at the same exchange ratio as applied to SeaSpine common stock in the Merger, and the exercise price of converted SeaSpine stock options was also correspondingly adjusted.

The Merger is being accounted for as an acquisition of SeaSpine by Orthofix under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. Thus, Orthofix is treated as the acquirer for accounting purposes. In identifying the acquirer, Orthofix and SeaSpine considered the structure of the transaction and other actions contemplated by the Merger Agreement, relative outstanding share ownership, and market values, the composition of the combined company’s board of directors, and the relative size of Orthofix and SeaSpine.

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,104,854
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	366,546
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards		11,508
Total estimated fair value of consideration	$	378,054

Pursuant to the Merger Agreement, the outstanding equity awards of SeaSpine (including stock options and restricted stock units) were exchanged for awards of Orthofix. The Company issued 1,889,812 options to purchase shares of Orthofix common stock and 490,338 shares of time-based vesting restricted stock in the conversion of such awards. The estimated fair value of the portion of the SeaSpine awards for which the required service period had been completed at the time of the acquisition was treated as

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purchase consideration. The remaining estimated fair value will be recorded as compensation expense over the remainder of the service period associated with the awards.

As of the date the consolidated financial statements were available to be issued, the Company was in the process of determining a preliminary allocation of the total estimated fair value of consideration to the fair value of the net assets acquired and residual goodwill; however, such allocation has not yet been finalized. A preliminary allocation of the purchase price to assets acquired and liabilities assumed will be reported in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2023; however, such allocation will be subject to completion of the Company’s valuation of the assets acquired and liabilities assumed, which the Company expects to complete within one year from the acquisition date.

In connection with the Merger, immediately after the closing of the acquisition on January 5, 2023, Orthofix repaid on behalf of SeaSpine all of the outstanding obligations in respect of principal, interest and fees under an Amended and Restated Credit Agreement, dated July 27, 2018, among SeaSpine and Project Maple Leaf Holdings ULC, as guarantors, and SeaSpine Orthopedics Corporation, SeaSpine, Inc., ISOTIS, Inc., SeaSpine Sales LLC, ISOTIS Orthobiologics, Inc., Theken Spine, LLC, SeaSpine Orthopedics Intermediate Co, Inc., 7D Surgical USA Inc. and 7D Surgical ULC, as borrowers, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and terminated all applicable commitments under such agreement.

In addition, on January 3, 2023, the Company borrowed $30.0 million under its $300.0 million secured revolving credit facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023.

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EX-10

Exhibit 10.1

Execution Version

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of March 1, 2023 (the “Amendment Effective Date”), is among ORTHOFIX MEDICAL INC., a Delaware corporation (the “Company”), ORTHOFIX US LLC, a Delaware limited liability company (“Orthofix US” and together with the Company, each a “U.S. Borrower” and collectively, the “U.S. Borrowers”), ORTHOFIX NETHERLANDS B.V., a company incorporated under the laws of the Netherlands (the “Dutch Borrower”) (the U.S. Borrowers and the Dutch Borrower are each a “Borrower” and are collectively “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.

RECITALS:

Borrowers, the other Loan Parties listed on the signature pages thereto, Administrative Agent, and the lenders listed on the signature pages thereto have entered into the Second Amended and Restated Credit Agreement dated as of October 25, 2019 (as consented to by that certain Limited Consent to Second Amended and Restated Credit Agreement, dated as of December 21, 2020 and that certain Limited Consent to Second Amended and Restated Credit Agreement, dated as of March 1, 2023 (the “2023 Limited Consent”); such agreement, together with all amendments and restatements thereto, the “Agreement”).

Borrowers have requested that the Agreement be amended to, among other things, replace the LIBOR based pricing with SOFR based pricing as set forth herein.

AGREEMENT:

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 Amendment Effective Date unless otherwise indicated:

ARTICLE 1.

Definitions

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

ARTICLE 2.

Amendment

SECTION 2.1. Agreement. The Agreement is, effective as of the Amendment Effective Date, hereby amended 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.

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 1

ARTICLE 3.

Conditions Precedent

SECTION 3.1. Conditions. The effectiveness of Article 2 of this Amendment is subject to the satisfaction of the following conditions precedent:

(a) The Administrative Agent (or its counsel) shall have received from (i) each Loan Party either (A) a counterpart of this Amendment signed on behalf of such party, or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or other electronic transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment, and (ii) each Lender either (A) a counterpart of this Amendment signed on behalf of such party, or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or other electronic transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment.

(b) The Administrative Agent shall have received such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and the other Loan Documents to which such Loan Party is a party or is to be a party.

(c) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Amendment 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, or required to be reimbursed or paid by the Borrowers by this Amendment, the Agreement or under any other Loan Document for which invoices have been presented on or before the date hereof.

(d) The representations and warranties of the Loan Parties set forth in this Amendment, 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 Amendment 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).

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

ARTICLE 4.

Ratifications, Representations and Warranties

SECTION 4.1. Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect; provided that, notwithstanding anything to the contrary in this Amendment, the consent set forth in the 2023 Limited Consent shall not be deemed to be modified and superseded by this Amendment and the 2023 Limited Consent is 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

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 2

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 Amendment Effective Date of this Amendment (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) shall control and are hereby ratified and confirmed.

SECTION 4.2. Representations and Warranties. Each Borrower and each other Loan Party hereby represents and warrants to the Administrative Agent and the Lenders as follows: (a) both before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing; (b) both before and after giving effect to this Amendment, 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 Amendment 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 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: (i) 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; (ii) 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; (iii) 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 (iv) require any approval or consent of any Person under any material contractual obligation of any Borrower or any other Loan Party; (d) this Amendment constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law; and (e) the articles of incorporation, bylaws, partnership agreement, certificate of limited partnership, membership agreement, articles of organization or other applicable organization and governing document of each Loan Party attached as exhibits to the last Secretary’s Certificate or Director’s Certificate, as applicable, of each such Loan Party delivered to the Administrative Agent, 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, EACH BORROWER AND EACH OTHER LOAN PARTY (BY ITS EXECUTION BELOW):

(a) REPRESENTATIONS AND WARRANTIES. REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT 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:

(b) 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

(c) RELEASE. RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT AND THE LENDERS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 3

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 5.

Miscellaneous

SECTION 5.1. Survival of Representations and Warranties. All representations and warranties made in this Amendment or any other Loan Document, including any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment 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 5.2. Reference to Agreement. Each of the Loan Documents, including the Agreement, this Amendment 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 5.3. Loan Document. This Amendment is a Loan Document and is subject to the terms of the Agreement.

SECTION 5.4. Expenses of Administrative Agent. 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 the other Loan Documents executed pursuant hereto.

SECTION 5.5. Severability. Any provision of this Amendment 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 5.6. Applicable Law. This Amendment 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.

SECTION 5.7. Successors and Assigns. The provisions of this Amendment 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

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 4

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 5.8. Counterparts. This Amendment 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 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.

SECTION 5.9. 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 5.10. Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

SECTION 5.11. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT 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.

Executed as of the date first written above.

[Signatures on Following Pages.]

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Page 5

BORROWERS:

ORTHOFIX MEDICAL INC.


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer

ORTHOFIX NETHERLANDS B.V.


By: /s/ Stacy L. Kohn
Print Name: Stacy L. Kohn
Print Title: Managing director A

By: /s/ Leonardus Gijsbertus van Riet
Print Name: Leonardus Gijsbertus van Riet
Print Title: Managing director B

ORTHOFIX US LLC


By: /s/ Douglas C. Rice
Print Name: Douglas C. Rice
Print Title: Chief Financial Officer and Treasurer

GUARANTORS:

SPINAL KINETICS LLC


By: /s/ Douglas C. Rice
Print Name: Douglas C. Rice
Print Title: Chief Financial Officer and Treasurer

SEASPINE HOLDINGS CORPORATION


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

SEASPINE ORTHOPEDICS CORPORATION


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer and Secretary

SEASPINE, INC.


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer and Secretary

ISOTIS, INC.


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer, and Secretary

SEASPINE ORTHOPEDICS INTERMEDIATECO, INC.


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer

SEASPINE SALES LLC

By: SeaSpine, Inc., its sole member

By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer and Secretary

THEKEN SPINE, LLC

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

By: SeaSpine Orthopedics Corporation, its sole member

By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer and Secretary

ISOTIS ORTHOBIOLOGICS, INC.


By: /s/ John J. Bostjancic
Print Name: John J. Bostjancic
Print Title: Chief Financial Officer, Treasurer and Secretary

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

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


By: /s/ David Hyman
Print Name: David Hyman
Print Title: Authorized Officer

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

OTHER LENDERS:

BANK OF AMERICA, N.A.


By: /s/ Alexander L. Rody
Print Name: Alexander L. Rody
Print Title: Senior Vice President

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

BANK OF THE WEST


By: /s/ Susan Garner
Print Name: Susan Garner
Print Title: Managing Director

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

TRUIST BANK (successor by merger to SunTrust Bank)


By: /s/ Anton Brykalin
Print Name: Anton Brykalin
Print Title: Director

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

PNC BANK, NATIONAL ASSOCIATION, successor to BBVA USA


By: /s/ Khoa Duong
Print Name: Khoa Duong
Print Title: Senior Vice President

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

REGIONS BANK


By: /s/ John P Levesque
Print Name: John P. Levesque
Print Title: Managing Director

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – Signature Page

Execution Version

Annex I to First Amendment to Second Amended and Restated Credit Agreement

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of October 25, 2019,
as amended by the First Amendment to Second Amended and Restated Credit Agreement, dated as of March 1, 2023

among

ORTHOFIX MEDICAL INC.,
ORTHOFIX US LLC,

andORTHOFIX NETHERLANDS B.V.,

as Borrowers

CERTAIN OF THEIR SUBSIDIARIES PARTY HERETO

as Guarantors

THE LENDERS FROM TIME TO TIME PARTY HERETO

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Bank of America, N.A.,
Bank of the West, andTRUIST BANK,

as Syndication Agents

BBVA USA,

as Documentation Agent

________________________________________

JPMORGAN CHASE BANK, N.A.,

Bank of America, N.A.,
Bank of the West, andTRUIST SECURITIES, INC.

Joint Lead Arrangers and Joint Bookrunners

________________________________________

TABLE OF CONTENTS

Page

ARTICLE I Definitions		1
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Classification of Loans and Borrowings	50
SECTION 1.03.	Terms Generally	50
SECTION 1.04.	Accounting Terms; GAAP	51
SECTION 1.05.	Pro Forma Adjustments for Acquisitions and Dispositions	51
SECTION 1.06.	Status of Obligations	51
SECTION 1.07.	Interest Rates; Benchmark Notification	52
SECTION 1.08.	Limited Condition Acquisitions	52
SECTION 1.09.	Exchange Rates; Currency Equivalents	53
ARTICLE II The Credits		53
SECTION 2.01.	Commitments	53
SECTION 2.02.	Loans and Borrowings	53
SECTION 2.03.	Requests for Borrowings	54
SECTION 2.04.	Swingline Loans	55
SECTION 2.05.	Letters of Credit	56
SECTION 2.06.	Funding of Borrowings	62
SECTION 2.07.	Interest Elections; Existing LIBOR Loans	63
SECTION 2.08.	Termination and Reduction of Commitments; Increase in Commitments	65
SECTION 2.09.	Repayment of Loans; Evidence of Debt	68
SECTION 2.10.	Prepayment of Loans	68
SECTION 2.11.	Fees	69
SECTION 2.12.	Interest	70
SECTION 2.13.	Alternate Rate of Interest; Illegality	71
SECTION 2.14.	Increased Costs	74
SECTION 2.15.	Break Funding Payments	76
SECTION 2.16.	Taxes	76
SECTION 2.17.	Payments Generally; Allocation of Proceeds; Sharing of Set‑offs	81
SECTION 2.18.	Mitigation Obligations; Replacement of Lenders	84
SECTION 2.19.	Defaulting Lenders	84
SECTION 2.20.	Returned Payments	87
SECTION 2.21.	Banking Services and Swap Agreements	87
SECTION 2.22.	Determination of Dollar Amounts	87
SECTION 2.23.	Judgment Currency	87
SECTION 2.24.	Uncommitted Orthofix-Italy Non-Pro Rata Tranche Sub-Facility	88
SECTION 2.25.	Extension of Maturity Date	89
ARTICLE III Representations and Warranties		90
SECTION 3.01.	Organization; Powers	90
SECTION 3.02.	Authorization; Enforceability	90
SECTION 3.03.	Governmental Approvals; No Conflicts	91
SECTION 3.04.	Financial Condition; No Material Adverse Change	91
SECTION 3.05.	Properties, etc	91
SECTION 3.06.	Litigation, Health Care and Environmental Matters	92

i

SECTION 3.07.	Compliance with Laws and Agreements; No Default	92
SECTION 3.08.	Investment Company Status	95
SECTION 3.09.	Taxes	95
SECTION 3.10.	ERISA and Foreign Pension Plans	95
SECTION 3.11.	Disclosure	96
SECTION 3.12.	Other Agreements; Material Agreements	96
SECTION 3.13.	Solvency	96
SECTION 3.14.	Insurance	97
SECTION 3.15.	Capitalization; Subsidiaries; Intercompany Loans	97
SECTION 3.16.	Security Interest in Collateral	97
SECTION 3.17.	Employment Matters	98
SECTION 3.18.	Federal Reserve Regulations	98
SECTION 3.19.	Use of Proceeds	98
SECTION 3.20.	No Burdensome Restrictions	98
SECTION 3.21.	Anti-Corruption Laws and Sanctions	98
SECTION 3.22.	Fraud and Abuse	98
SECTION 3.23.	Licensing and Accreditation	99
SECTION 3.24.	Other Regulatory Protection	99
SECTION 3.25.	Reimbursement From Third Party Payors	99
SECTION 3.26.	Material Agreements	100
SECTION 3.27.	Affiliate Transactions	100
SECTION 3.28.	Common Enterprise	100
SECTION 3.29.	Foreign Loan Parties	100
SECTION 3.30.	Classification as Senior Indebtedness	101
SECTION 3.31.	Tax Shelter Regulations	101
SECTION 3.32.	EEA Financial Institutions	101
SECTION 3.33.	Existing ABN AMRO Credit Documents	101
SECTION 3.34.	Plan Assets; Prohibited Transactions	102
ARTICLE IV Conditions		102
SECTION 4.01.	Effective Date	102
SECTION 4.02.	Each Credit Event	105
ARTICLE V Affirmative Covenants		106
SECTION 5.01.	Financial Statements and Other Information	106
SECTION 5.02.	Notices of Material Events	108
SECTION 5.03.	Existence; Conduct of Business	109
SECTION 5.04.	Payment of Obligations	110
SECTION 5.05.	Maintenance of Properties	110
SECTION 5.06.	Books and Records; Inspection Rights	110
SECTION 5.07.	Compliance with Laws and Material Contractual Obligations	110
SECTION 5.08.	Use of Proceeds	111
SECTION 5.09.	Accuracy of Information	112
SECTION 5.10.	Insurance	112
SECTION 5.11.	Appraisals	112
SECTION 5.12.	Casualty and Condemnation	112
SECTION 5.13.	Additional Collateral; Further Assurances	112
SECTION 5.14.	Environmental Covenant	114
ARTICLE VI Negative Covenants		114
SECTION 6.01.	Indebtedness	114

ii

SECTION 6.02.	Liens	116
SECTION 6.03.	Fundamental Changes	118
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	119
SECTION 6.05.	Asset Sales	121
SECTION 6.06.	Sale and Leaseback Transactions	124
SECTION 6.07.	Swap Agreements	124
SECTION 6.08.	Restricted Payments; Certain Payments of Indebtedness	124
SECTION 6.09.	Transactions with Affiliates	125
SECTION 6.10.	Restrictive Agreements	125
SECTION 6.11.	Amendment of Material Documents	126
SECTION 6.12.	Financial Covenants	126
SECTION 6.13.	Accounts	127
SECTION 6.14.	Transfer of Assets and Properties of Orthofix Entities	128
ARTICLE VII Events of Default		128
ARTICLE VIII The Administrative Agent		132
SECTION 8.01.	Authorization and Action	132
SECTION 8.02.	Administrative Agent's Reliance, Indemnification, Etc	134
SECTION 8.03.	Posting of Communications	136
SECTION 8.04.	The Administrative Agent Individually	137
SECTION 8.05.	Successor Administrative Agent	137
SECTION 8.06.	Acknowledgements of Lenders and Issuing Banks	138
SECTION 8.07.	Collateral Matters	139
SECTION 8.08.	Credit Bidding	140
SECTION 8.09.	Certain ERISA Matters	140
SECTION 8.10.	Flood Laws	142
ARTICLE IX Miscellaneous		142
SECTION 9.01.	Notices	142
SECTION 9.02.	Waivers; Amendments	144
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	148
SECTION 9.04.	Successors and Assigns	150
SECTION 9.05.	Survival	154
SECTION 9.06.	Counterparts; Integration; Effectiveness; Electronic Execution	154
SECTION 9.07.	Severability	155
SECTION 9.08.	Right of Setoff	155
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	156
SECTION 9.10.	WAIVER OF JURY TRIAL	157
SECTION 9.11.	Headings	157
SECTION 9.12.	Confidentiality	157
SECTION 9.13.	Several Obligations; Nonreliance; Violation of Law	158
SECTION 9.14.	USA PATRIOT Act	158
SECTION 9.15.	Disclosure	158
SECTION 9.16.	Appointment for Perfection	159
SECTION 9.17.	Interest Rate Limitation	159
SECTION 9.18.	Marketing Consent	159
SECTION 9.19.	No Fiduciary Duty, etc	159
SECTION 9.20.	No Other Duties, Etc	160
SECTION 9.21.	Protected Health Information	160
SECTION 9.22.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	160

iii

SECTION 9.23.	Amendment and Restatement	161
SECTION 9.24.	Acknowledgement Regarding Any Supported QFCs	161
SECTION 9.25.	Release of UK Loan Parties on the Effective Date	162
ARTICLE X Loan Guaranty		162
SECTION 10.01.	Guaranty	162
SECTION 10.02.	Guaranty of Payment	162
SECTION 10.03.	No Discharge or Diminishment of Loan Guaranty	162
SECTION 10.04.	Defenses Waived	163
SECTION 10.05.	Rights of Subrogation	164
SECTION 10.06.	Reinstatement; Stay of Acceleration	164
SECTION 10.07.	Information	164
SECTION 10.08.	Termination	164
SECTION 10.09.	Taxes	164
SECTION 10.10.	Maximum Liability	165
SECTION 10.11.	Contribution	165
SECTION 10.12.	Liability Cumulative	166
SECTION 10.13.	Keepwell	166
ARTICLE XI The Borrower Representative.		166
SECTION 11.01.	Appointment; Nature of Relationship	166
SECTION 11.02.	Powers	167
SECTION 11.03.	Employment of Agents	167
SECTION 11.04.	Notices	167
SECTION 11.05.	Successor Borrower Representative	167
SECTION 11.06.	Execution of Loan Documents	167
SECTION 11.07.	Reporting	167

iv

SCHEDULES:

Commitment Schedule

Schedule 3.05 – Properties etc.
Schedule 3.06 – Disclosed Matters
Schedule 3.07 – Compliance with Health Care Laws
Schedule 3.12 – Material Agreements
Schedule 3.14 – Insurance
Schedule 3.15 – Capitalization and Subsidiaries

Schedule 3.21 – Anti-Corruption Laws and Sanctions
Schedule 3.27 – Affiliate Transactions
Schedule 6.01(a) – Intercompany Loans
Schedule 6.04 – Existing Investments
Schedule 6.10 – Existing Restrictions
Schedule 6.13 - Accounts

EXHIBITS:

Exhibit A – Assignment and Assumption

Exhibit B – Compliance Certificate

Exhibit C – Joinder Agreement

Exhibit D-1 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D-2 – U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D-3 – U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Exhibit D-4 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

v

SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 25, 2019 (as it may be amended or modified from time to time, this "Agreement"), among ORTHOFIX MEDICAL INC., a Delaware corporation (the "Company"), ORTHOFIX US LLC, a Delaware limited liability company ("Orthofix US" and together with the Company, each a "U.S. Borrower" and collectively, the "U.S. Borrowers"), ORTHOFIX NETHERLANDS B.V., a company incorporated under the laws of the Netherlands (the "Dutch Borrower"), as Borrowers, the other Loan Parties party hereto, the Lenders party hereto from time to time, JPMORGAN CHASE BANK, N.A., as Administrative Agent, Swingline Lender and an Issuing Bank and JPMorgan Chase Bank, N.A. and each of Bank of America, N.A., Bank of the West and Truist Securities, Inc.as a Joint Lead Arranger, Joint Bookrunner and an Issuing Bank.

The Borrowers, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, entered into a First Amended and Restated Credit Agreement dated as of July 31, 2018 (as amended or modified, the "Existing Agreement").

The Borrowers and the other parties hereto wish to amend and restate the Existing Agreement, to, among other things, reflect and accommodate the addition of each of the Company, Orthofix Inc., Orthofix Spinal and BVIII as a borrower, and extend the Maturity Date to October 25, 2024, subject to the terms and conditions set forth herein (as such terms were defined prior to giving effect to the First Amendment).

The Borrowers, the other Loan Parties, the Administrative Agent and the Required Lenders agree to amend and restate the Existing Agreement in its entirety as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

"ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the Alternate Base Rate. All ABR Loans shall be denominated in Dollars.

"Account" has the meaning assigned to such term in the Security Agreement.

"Account Debtor" means any Person obligated on an Account.

"Acquired Company Representations" means, with respect to any Limited Condition Acquisition, the representations and warranties made in the acquisition agreement with respect to such Limited Condition Acquisition that are material to the interests of the Lenders, but only to the extent that the Company or any of its Affiliates has the right under such acquisition agreement not to consummate such Limited Condition Acquisition, or to terminate the obligations of the Company or any of its Affiliates under such acquisition agreement, as a result of a breach of such representations and warranties.

"Acquisition" means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Orthofix Entity (a) acquires any division, line of business or other business unit of any Person (including the purchase of products or other intellectual property required to bring any product to market) or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person

Second Amended and Restated Credit Agreement (Orthofix), Page 1

(other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person (such Person or such division, line of business or other business unit of a Person the subject of the Acquisition referred to herein as the "Target").

"Additional Commitment Lender" has the meaning specified in Section 2.25(d).

"Adjusted Daily Simple RFR" means, (a) with respect to any RFR Borrowing denominated in Pounds Sterling, an interest rate per annum equal to (i) the Daily Simple RFR for Pounds Sterling, plus (ii) 0.0326%, and (b) with respect to any RFR Borrowing denominated in Dollars, an interest rate per annum equal to (i) the Daily Simple RFR for Dollars, plus (ii) 0.10%; provided that if the Adjusted Daily Simple RFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

"Adjusted EURIBOR Rate" means, with respect to any Term Benchmark Borrowing denominated in Euros for any Interest Period, an interest rate per annum equal to (a) the EURIBOR Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that if the Adjusted EURIBOR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

"Adjusted Term SOFR Rate" means, with respect to any Term Benchmark Borrowing denominated in Dollars for any Interest Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Interest Period, plus (b) 0.10%; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.

"Administrative Agent" means JPMorgan Chase Bank, N.A. (and its subsidiaries and Affiliates or any of its designated branch offices), in its capacity as administrative agent for the Lenders hereunder and any successor thereto appointed pursuant to Section 8.05.

"Administrative Agent's Office" means, with respect to any Agreed Currency, the Administrative Agent's address and, as appropriate, account as set forth in Section 9.01 with respect to such Agreed Currency, or such other address or account with respect to such Agreed Currency as the Administrative Agent may from time to time notify to the Company and the Lenders.

"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

"Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

"Agent Indemnitee" has the meaning assigned to it in Section 9.03(c).

"Aggregate Revolving Exposure" means, at any time, the aggregate Revolving Exposure of all the Lenders at such time (with the Swingline Exposure and the LC Exposure of each Lender calculated assuming that that all of the Lenders have funded their participations in all Swingline Loans and Letters of Credit outstanding at such time).

"Agreed Currencies" means (a) Dollars and (b) so long as such currency is freely transferable and convertible into Dollars (i) Euro and (ii) Pounds Sterling.

Second Amended and Restated Credit Agreement (Orthofix), Page 2

"Alternate Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1%, and (c) the Adjusted Term SOFR Rate for a one month Interest Period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S. Government Securities Business Day) plus 1%; provided that for the purpose of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.13 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 2.13(b)), then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.

"Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to any Orthofix Entity or any of their Affiliates from time to time concerning or relating to bribery or corruption.

"Applicable Foreign Loan Party Documents" has the meaning assigned to such term in Section 3.29.

"Applicable Parties" has the meaning assigned to it in Section 8.03(c).

"Applicable Percentage" means, at any time with respect to any Lender, a percentage equal to a fraction the numerator of which is such Lender's Commitment at such time and the denominator of which is the aggregate Commitments at such time (provided that, if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender's share of the Aggregate Revolving Exposure at such time); provided that, in accordance with Section 2.19, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender's Commitment shall be disregarded in the calculations above.

"Applicable Rate" means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "ABR Spread", "Term Benchmark Spread", "RFR Spread" or "Commitment Fee Rate", as the case may be, based upon the Company's Total Net Leverage Ratio as of the most recent determination date, provided that until the first fiscal quarter ending after the Effective Date, the "Applicable Rate" shall be the applicable rates per annum set forth below in Category 5:

Total Net Leverage Ratio	ABR Spread	Term Benchmark Spread	RFR Spread	Commitment Fee Rate
Category 1 > 3.50 to 1.00	1.25%	2.25%	2.25%	0.25%
Category 2	1.00%	2.00%	2.00%	0.20%

Second Amended and Restated Credit Agreement (Orthofix), Page 3

> 3.00 to 1.00 but < 3.50 to 1.00
Category 3 > 2.00 to 1.00 but < 3.00 to 1.00	0.75%	1.75%	1.75%	0.20%
Category 4 > 1.00 to 1.00 but < 2.00 to 1.00	0.50%	1.50%	1.50%	0.15%
Category 5 < 1.00 to 1.00	0.25%	1.25%	1.25%	0.15%

Notwithstanding the foregoing, if the Company or the Borrowers fail to deliver the annual or quarterly consolidated financial statements required to be delivered by them pursuant to Section 5.01, then the Total Net Leverage Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that (i) the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), or the Total Net Leverage Ratio in a Compliance Certificate or other certification was incorrectly calculated, relied on incorrect information or was otherwise not accurate, true or correct, and (ii) the correct information, or a proper calculation of the Total Net Leverage Ratio would have resulted in a higher percentage Applicable Rate for any period, then the Borrowers shall be required to retroactively pay any additional amount that the Borrowers would have been required to pay if such financial statements, Compliance Certificate or other information had been accurate and/or computed correctly at the time they were delivered.

"Approved Electronic Platform" has the meaning assigned to it in Section 8.03(a).

"Approved Fund" has the meaning assigned to the term in Section 9.04(b).

"Arrangers" means JPMorgan Chase Bank, N.A., Bank of America, N.A., Bank of the West and Truist Securities, Inc. (formerly known as SunTrust Robinson Humphrey, Inc.).

"Assignment and Assumption" means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form (including electronic records generated by use of an electronic platform) approved by the Administrative Agent.

"Availability" means, at any time, an amount equal to (a) the aggregate Commitments minus (b) the Aggregate Revolving Exposure (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).

Second Amended and Restated Credit Agreement (Orthofix), Page 4

"Availability Period" means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

"Available Tenor" means, as of any date of determination and with respect to the then-current Benchmark for any Agreed Currency, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of "Interest Period" pursuant to clause (e) of ‎Section 2.13.

"Bail-In Action" means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

"Bail-In Legislation" means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

"Bank Levy" means (a) the UK Bank Levy or (b) any bank levy of any jurisdiction other than the UK which does not differ materially from the proposals for the design of levies on financial institutions as set out by the International Monetary Fund in the paper "A fair and substantial contribution by the financial sector" published in June 2010 and which is charged wholly or mainly by reference to the balance sheet (including any consolidated balance sheet of any group of which the Administrative Agent or a Lender forms part) of the Administrative Agent or a Lender and/or any member of a group of which the Administrative Agent or a Lender forms part.

"Banking Services" means each and any of the following bank services provided to any of the Orthofix Entities by JPMorgan Chase Bank and/or any Lender and/or any of their Affiliates and/or any Person that at the time of entering into any agreement in respect of such bank services was a Lender or an Affiliate of a Lender: (a) credit cards for commercial customers (including, without limitation, "commercial credit cards" and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services and cash pooling services).

"Banking Services Obligations" means any and all obligations of the Orthofix Entities (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

"Bankruptcy Event" means, with respect to any Person, when such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver (including in respect of the Netherlands a curator), conservator, trustee, administrator (including in respect of the Netherlands a bewindvoerder or a stille bewindvoerder), custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, or has had any order for relief in such proceeding entered in respect thereof, or in respect of the Netherlands, bankruptcy (faillissement), dissolution (ontbinding) moratorium (surseance van betaling) and emergency regulation (noodregeling), provided that

Second Amended and Restated Credit Agreement (Orthofix), Page 5

a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person

"Benchmark" means, initially, with respect to any (i) RFR Loan in any Agreed Currency, the applicable Relevant Rate for such Agreed Currency or (ii) Term Benchmark Loan, the Relevant Rate for such Agreed Currency; provided that if a Benchmark Transition Event, and the related Benchmark Replacement Date have occurred with respect to the applicable Relevant Rate or the then-current Benchmark for such Agreed Currency, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of ‎Section 2.13.

"Benchmark Replacement" means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that, in the case of any Loan denominated in a Foreign Currency, "Benchmark Replacement" shall mean the alternative set forth in (2) below:

(1) in the case of any Loan denominated in Dollars, the Adjusted Daily Simple RFR for Dollars; or

(2) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for syndicated credit facilities denominated in the applicable Agreed Currency at such time in the United States and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Agreed Currency at such time.

"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement and/or any Term Benchmark Revolving Loan denominated in Dollars, any technical, administrative or operational changes (including changes to the definition of "Alternate Base Rate," the definition of "Business Day," the definition of "U.S. Government Securities Business Day," the definition

Second Amended and Restated Credit Agreement (Orthofix), Page 6

of "RFR Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

(1) in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2) in the case of clause (3) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

"Benchmark Transition Event" means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, the central bank for the Agreed Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over

Second Amended and Restated Credit Agreement (Orthofix), Page 7

the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

"Benchmark Unavailability Period" means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with ‎Section 2.13 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with ‎Section 2.13.

"Beneficial Ownership Certification" means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

"Beneficial Ownership Regulation" means 31 C.F.R. § 1010.230.

"Benefit Plan" means any of (a) an "employee benefit plan" (as defined in ERISA) that is subject to Title I of ERISA, (b) a "plan" as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such "employee benefit plan" or "plan".

"Board" means the Board of Governors of the Federal Reserve System of the U.S.

"Borrower" or "Borrowers" means, individually or collectively, each U.S. Borrower and each Dutch Borrower.

"Borrower DTTP Filing" means an HM Revenue & Customs' Form DTTP2, duly completed and filed by the relevant Borrower within the applicable time limit, which contains the scheme reference number and jurisdiction of tax residence provided by the Lender to such Borrower and the Administrative Agent.

"Borrowing" means (a) Revolving Borrowing, and (b) a Swingline Loan.

"Borrowing Request" means a request by the Company for a Borrowing in accordance with Section 2.03.

"Burdensome Restrictions" means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.10.

Second Amended and Restated Credit Agreement (Orthofix), Page 8

"Business Day" means any day (other than a Saturday or a Sunday) on which banks are open for business in New York City; provided that, in addition to the foregoing, a Business Day shall be (a) in relation to Loans denominated in Euros and in relation to the calculation or computation of EURIBOR, any day which is a TARGET Day, (b) in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings in the applicable Agreed Currency of such RFR Loan, any such day that is only a RFR Business Day and (c) in relation to Loans referencing the Adjusted Term SOFR Rate and any interest rate settings, fundings, disbursements, settlements or payments of any such Loans referencing the Adjusted Term SOFR Rate or any other dealings of such Loans referencing the Adjusted Term SOFR Rate, any such day that is a U.S. Government Securities Business Day.

"BVIII" means ORTHOFIX III B.V., a company incorporated under the laws of the Netherlands.

"Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

"CBR Loan" means a Loan that bears interest at a rate determined by reference to the Central Bank Rate.

"CBR Spread" means the Applicable Rate, applicable to such Loan that is replaced by a CBR Loan.

"Central Bank Rate" means, the greater of (I)(A) for any Loan denominated in (a) Pounds Sterling, the Bank of England (or any successor thereto)'s "Bank Rate" as published by the Bank of England (or any successor thereto) from time to time, (b) Euro, one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion: (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time, and (c) any other Foreign Currency determined after the First Amendment Effective Date, a central bank rate as determined by the Administrative Agent in its reasonable discretion; plus (B) the applicable Central Bank Rate Adjustment and (II) the Floor.

"Central Bank Rate Adjustment" means, for any day, for any Loan denominated in (a) Euro, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the Adjusted EURIBOR Rate for the five most recent Business Days preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest Adjusted EURIBOR Rate applicable during such period of five Business Days) minus (ii) the Central Bank Rate in respect of Euro in effect on the last Business Day in such period, (b) Pounds Sterling, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of Adjusted Daily Simple RFR for Pounds Sterling Borrowings for the five most recent RFR Business Days preceding such day for which Adjusted Daily Simple RFR for Pounds Sterling Borrowings was available (excluding, from such averaging, the highest and the lowest such Adjusted Daily Simple RFR applicable during such period of five RFR Business Days) minus (ii) the Central Bank Rate in respect of Pounds Sterling in effect on the last RFR Business Day in such period, and (c) any other Foreign Currency determined after the Effective Date, a Central Bank Rate Adjustment as determined by the Administrative Agent in its reasonable discretion. For purposes of

Second Amended and Restated Credit Agreement (Orthofix), Page 9

this definition, (x) the term Central Bank Rate shall be determined disregarding clause (B) of the definition of such term and (y) the EURIBOR Rate on any day shall be based on the EURIBOR Screen Rate, on such day at approximately the time referred to in the definition of such term for deposits in the applicable Agreed Currency for a maturity of one month.

"CFC" means a Subsidiary that is a "controlled foreign corporation" under Section 957 of the Code.

"CHAMPVA" means, collectively, the Civilian Health and Medical Program of the Department of Veterans Affairs, and all laws, rules, regulations, manuals, orders, guidelines or requirements (whether or not having the force of law) pertaining to such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.

"Change in Control" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Company; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (i) nominated or approved by the board of directors of the Company nor (ii) appointed by directors so nominated or approved; or (c) the Company shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances (other than Liens and encumbrances (x) arising under the Loan Documents or (y) described under clause (a) of the definition of Permitted Encumbrances), 100% of the outstanding voting Equity Interests of the Borrowers (other than the Company) on a fully diluted basis; or (d) except as permitted by Section 6.03 or Section 6.05, the Company shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances (other than Liens and encumbrances (x) arising under the Loan Documents or (y) described under clause (a) of the definition of Permitted Encumbrances), 100% of the outstanding voting Equity Interests of any of the Loan Parties (other than the Company).

"Change in Law" means the occurrence after the date of this Agreement (or, with respect to any Issuing Bank or Lender, such later date on which such Issuing Bank or Lender becomes a party to this Agreement) of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender's or the Issuing Bank's holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted, issued or implemented.

"Charges" has the meaning assigned to such term in Section 9.17.

"Class", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

Second Amended and Restated Credit Agreement (Orthofix), Page 10

"CME Term SOFR Administrator" means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).

"CMS" means The Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services, and any Governmental Authority successor thereto.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Collateral" means any and all property owned, leased or operated by a Person subject to a security interest or Lien pursuant to the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien to secure all or any portion of the Secured Obligations, but which in no event will include any Excluded Asset.

"Collateral Access Agreement" has the meaning assigned to such term in the Security Agreement.

"Collateral Documents" means, collectively, the Security Agreements and any other agreements, instruments and documents executed in connection with this Agreement that are intended to either create, perfect or evidence Liens to secure all or any portion of the Secured Obligations or intended to create or evidence Guarantees of all or any portion of the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, collateral assignments, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether theretofore, now or hereafter executed by any Loan Party or any Subsidiary and delivered to the Administrative Agent.

"Commitment" means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans in the Agreed Currencies and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted Dollar Amount of such Lender's Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.08 and (b) assignments by or to such Lender pursuant to Section 9.04. The initial Dollar Amount of each Lender's Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders' Commitments is the Dollar Amount of $300,000,000.

"Commitment Increase" has the meaning assigned to the term in Section 2.08(e).

"Commitment Schedule" means the Schedule attached hereto identified as such.

"Commodity Exchange Act" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"Communications" has the meaning assigned to such term in Section 8.03(c).

"Company" has the meaning assigned to such term in the preamble.

"Compliance Certificate" means a compliance certificate prepared in accordance with Section 5.01(c) in substantially the form of Exhibit B or any other form approved of by the Administrative Agent.

Second Amended and Restated Credit Agreement (Orthofix), Page 11

"Confidential Healthcare Information" has the meaning specified in Section 9.21.

"Connection Income Taxes" means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

"Corresponding Tenor"with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

"Covered Party" has the meaning assigned to it in Section 9.24.

"Credit Party" means the Administrative Agent, each Issuing Bank, each Swingline Lender or any other Lender; and "Credit Parties" means all or any combination of the foregoing as appropriate in the context used.

"CRR" means regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.

"Daily Simple RFR" means, for any day (an "RFR Interest Day"), an interest rate per annum equal to, for any RFR Loan denominated in (i) Pounds Sterling, SONIA for the day that is 5 RFR Business Days prior to (A) if such RFR Interest Day is an RFR Business Day, such RFR Interest Day or (B) if such RFR Interest Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Interest Day, and (ii) Dollars, Daily Simple SOFR.

"Daily Simple SOFR" means, for any day (a "SOFR Rate Day"), a rate per annum equal to SOFR for the day (such day "SOFR Determination Date") that is five (5) RFR Business Days prior to (i) if such SOFR Rate Day is an RFR Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator's Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.

"Debtor Relief Laws" means the Bankruptcy Code of the U.S., and all other liquidation, conservatorship, bankruptcy, debtor assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the U.S. or other applicable jurisdiction from time to time in effect.

"Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

"Default Right" has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"Defaulting Lender" means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to

Second Amended and Restated Credit Agreement (Orthofix), Page 12

be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified any Borrower or any Credit Party in writing, or has made a public statementto the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party or the Company, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (A) a Bankruptcy Event or (B) a Bail-In Action. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.19(e)) upon delivery of written notice of such determination to the Company, each Issuing Bank, the Swingline Lender and each Lender.

"Disclosed Matters" means the actions, suits, proceedings and environmental matters disclosed on Schedule 3.06.

"Disposition" or "Dispose" means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

"Disqualified Equity Interests" means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures (excluding any maturity that occurs as the result of an optional redemption or repurchase by the issuer thereof) or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Secured Obligations under the Loan Documents that are accrued and payable and the termination of the aggregate Commitments and all outstanding Letters of Credit), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part (except as a result of a change of control or asset sale, so long as in each case any and all rights of the holders thereof upon the occurrence of any such change of control or asset sale event shall be subject to the Payment in Full of all Obligations), (c) provides for the scheduled payments of dividends in cash (other than to the extent such dividends are equal to the amount of Taxes payable that are directly attributable to the operations of the business of such Person), or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Maturity Date.

"Dividing Person" has the meaning assigned to it in the definition of "Division."

Second Amended and Restated Credit Agreement (Orthofix), Page 13

"Division" means the division of the assets, liabilities and/or obligations of a Person (the "Dividing Person") among two or more Persons (whether pursuant to a "plan of division" or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

"Division Successor" means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

"Document" has the meaning assigned to such term in the Security Agreement.

"Dollar Amount", of any amount, means, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in a Foreign Currency, the equivalent of such amount in Dollars determined by using the rate of exchange for the purchase of Dollars with the Foreign Currency last provided (either by publication or otherwise provided to the Administrative Agent) by the applicable Reuters source on the Business Day (New York City time) immediately preceding the date of determination or if such service ceases to be available or ceases to provide a rate of exchange for the purchase of Dollars with the Foreign Currency, as provided by such other publicly available information service which provides that rate of exchange at such time in place of Reuters chosen by the Administrative Agent in its sole discretion (or if such service ceases to be available or ceases to provide such rate of exchange, the equivalent of such amount in Dollars as determined by the Administrative Agent using any method of determination it deems appropriate in its sole discretion) and (c) if such amount is denominated in any other currency, the equivalent of such amount in Dollars as determined by the Administrative Agent using any method of determination it deems appropriate in its sole discretion.

"Dollars", "USD" or "$" means the lawful money of the U.S.

"Domestic Non-Loan Party" means any Non-Loan Party that is organized under the laws of the U.S., or any state or commonwealth thereof or under the laws of the District of Columbia (other than any Subsidiary domiciled in Puerto Rico).

"Domestic Subsidiary" means any Subsidiary that is organized under the laws of the U.S., or any state or commonwealth thereof or under the laws of the District of Columbia (other than any Subsidiary domiciled in Puerto Rico).

"Dutch Borrower" or "Dutch Borrowers" have the meaning assigned to such terms in the preamble.

"Dutch Subsidiary" means any Subsidiary that is organized under the laws of the Netherlands.

"Dutch Treaty Lender" means a Lender which is entitled under a double taxation agreement with the Netherlands to claim a reduction of Dutch withholding tax.

"EBITDA" means, for any period, Net Income for such period

plus

(a) without duplication and to the extent deducted in determining Net Income for such period, the sum of, in each case, for such period:

Second Amended and Restated Credit Agreement (Orthofix), Page 14

(i) Interest Expense,

(ii) the aggregate amount of all income tax expense on the consolidated statements of income of the Company and its Subsidiaries,

(iii) all amounts attributable to depreciation and amortization expense,

(iv) any extraordinary, unusual or non-recurring non-cash charges, expenses or losses,

(v) non-cash stock option and other equity-based compensation expenses,

(vi) charges, losses, expenses or lost profits to the extent indemnified, insured or reimbursed by a third party, including expenses covered by indemnification provisions in connection with any Acquisition or disposition permitted by this Agreement and lost profits covered by business interruption insurance, in each case, in an amount not to exceed such amount actually reimbursed for such period,

(vii) letter of credit fees (except to the extent such amount is included in clause (i) above),

(viii) any non-cash non-recurring costs or charges associated with any modification or termination of pension and post-retirement employee benefit plans,

(ix) goodwill and other intangible impairment charges,

(x) any other non-cash charges, including any non-cash expense relating to the vesting of warrants, the granting of stock appreciation rights, stock options or restricted stock, or resulting from the application of purchase accounting associated with any future acquisitions or dispositions, non-cash losses under hedging agreements, and non-cash losses in such period due solely to fluctuations in currency values and any related tax effects (excluding any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a prior period),

(xi) amortization or write-off of deferred financing costs,

(xii) non-recurring out-of-pocket transaction fees, costs, charges and expenses incurred in connection with the Transactions, and, to the extent permitted hereunder, any acquisition or Disposition consummated by any Orthofix Entity during such period,

(xiii)

(A) the amount of "run-rate" cost savings, operating expense reductions, other operating improvements and costs and/or expense reductions and synergies (collectively, the "Cost Savings") projected by the Company in good faith to be realized as a result of, to the extent permitted hereunder, any acquisition consummated by any Orthofix Entity during such period, which Cost Savings shall be calculated on a Pro Forma Basis, net of the amount of actual benefits realized from such actions during such period and not otherwise added back to EBITDA; provided that the benefits resulting from

Second Amended and Restated Credit Agreement (Orthofix), Page 15

such actions are anticipated by the Borrowers to be realized within eighteen (18) months of such transaction or initiative consummated during the applicable period,

(B) internal (I) restructuring costs, integration costs, retention, recruiting, relocation and signing bonuses and expenses, and (II) severance costs, systems establishment costs, costs associated with the establishment of new information technology systems and costs associated with office and facility openings, closings and consolidations,

(C) out-of-pocket transaction fees, costs and expenses incurred, or amortization thereof, in connection with any acquisition or Disposition (that would have been permitted hereunder if consummated) that was not consummated or was otherwise abandoned by any Orthofix Entity during such period,

(D) any extraordinary, unusual or non-recurring cash charges, expenses or losses, and

(E) costs and expenses of outside legal counsel, accounting advisors and consultants and other professionals in each case related to (x) the Company's remediation of internal control weaknesses and deficiencies, (y) the investigation of the Division of Enforcement of the Securities and Exchange Commission into certain Company accounting matters (including the Company's prior restatement of prior period financial results and a related independent review by the Audit Committee of the Company's Board of Directors), and (z) the securities class action litigation currently pending in the United States District Court for the Southern District of New York arising out of the foregoing matters,

provided that, with respect to this clause (xiii):

(1) in addition to clause (2) below, the aggregate amount of all addbacks pursuant to all sub-clauses of this clause (xiii) shall not exceed 25.0% of LTM EBITDA (calculated before giving effect to all such addbacks); and

(2) the aggregate amount of all addbacks added pursuant to sub-clauses (C), (D) and (E) of clause (xiii) above shall not exceed 10.0% of the 25.0% cap described in the preceding clause (1) (for the avoidance of doubt, the amount described in this clause (2) is a sublimit of the 25.0% cap and is not additive thereto),

(xiv) any cash reimbursement payments received during such period in respect of items described in clause (b)(iii) taken in a prior period,

(xv) any out-of-pocket fees, costs, charges and expenses actually incurred prior to the Effective Date in connection with initiatives taken prior to the Effective Date and disclosed to the Administrative Agent; provided that the aggregate amount of all addbacks pursuant to this clause (xv) shall not exceed the Dollar Amount of $6,000,000, and

(xvi) cash charges for Settlement Amounts and on-cash reserve or accrual charges for expected future Settlement Amounts not to exceed $5,000,000 in the aggregate over the term of this Agreement;

Second Amended and Restated Credit Agreement (Orthofix), Page 16

provided that, (x) each of the forgoing clauses shall in each case exclude any non-cash charge that relates to the write-down or write-off of Inventory and (y) each of the addbacks in the foregoing clauses are reasonably identifiable, factually supported and reasonably attributable to the actions specified and reasonably anticipated to result from such actions,

minus

(b) without duplication and to the extent included in Net Income, in each case for such period:

(i) the aggregate amount of all income tax benefit on the consolidated statements of income of the Company and its Subsidiaries,

(ii) any cash payments made during such period in respect of non-cash charges described in clause (a)(x) taken in a prior period, and

(iii) any extraordinary, unusual or non-recurring gains and any non-cash items of income (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period), all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

Notwithstanding the foregoing or anything else to the contrary in this Agreement or in any of the other Loan Document, the aggregate amount of EBITDA attributable to Excluded Subsidiaries and Immaterial Subsidiaries (that are Non-Loan Parties) that may be included in the calculation of EBITDA shall not exceed, on any date of determination, an amount equal to 32.5% of LTM EBITDA (not more than 5.0% of which can be attributable to the LTM EBITDA of Immaterial Subsidiaries that are Non-Loan Parties) for the period of four consecutive fiscal quarters ended on or most recently prior to such date. For the avoidance of doubt, the 32.5% maximum percentage of LTM EBITDA is a cap on amounts included in the calculation of LTM EBITDA from Excluded Subsidiaries and Immaterial Subsidiaries (that are Non-Loan Parties) in the aggregate and includes a sub-cap of 5.0% for the LTM EBITDA of Immaterial Subsidiaries that are Non-Loan Parties, including pursuant to any addbacks attributable to such Excluded Subsidiaries and Immaterial Subsidiaries.

"ECP" means an "eligible contract participant" as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

"EEA Financial Institution" means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

"EEA Member Country" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway

"EEA Resolution Authority" means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"Effective Date" means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

Second Amended and Restated Credit Agreement (Orthofix), Page 17

"Electronic Signature" means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

"Electronic System" means any electronic system, including e-mail, e-fax, web portal access for the Borrowers and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

"Environmental Laws" means all foreign and domestic laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

"Environmental Liability" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Orthofix Entity directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

"Equipment" has the meaning assigned to such term in the Security Agreement.

"Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing, but excluding any debt securities convertible into any of the foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with the Company or any of its direct or indirect Subsidiaries, is treated as a single employer under Section 414(b) or (c) of the Code or, Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30‑day notice period is waived); (b) the failure to satisfy the "minimum funding standard" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Orthofix Entity or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Orthofix Entity or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Orthofix Entity or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of any Orthofix Entity or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by any Orthofix Entity or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Orthofix Entity or any ERISA Affiliate of any notice, concerning the imposition upon any Orthofix Entity or any ERISA

Second Amended and Restated Credit Agreement (Orthofix), Page 18

Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status, or in reorganization, within the meaning of Title IV of ERISA.

"EU Bail-In Legislation Schedule" means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

"EURIBOR Rate" means, with respect to any Term Benchmark Borrowing denominated in Euros and for any Interest Period, the EURIBOR Screen Rate, two TARGET Days prior to the commencement of such Interest Period.

"EURIBOR Screen Rate" means the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters as published at approximately 11:00 a.m. Brussels time two TARGET Days prior to the commencement of such Interest Period. If such page or service ceases to be available, the Administrative Agent may specify another page or service displaying the relevant rate after consultation with the Company.

"Euro", "euro" or "€" mean the single currency of the Participating Member States.

"Event of Default" has the meaning assigned to such term in Article VII.

"Excluded Assets" means, collectively:

(a) assets as to which the Administrative Agent and the Company agree in writing that the cost of creating or perfecting a pledge of, or a security interest in, such assets is excessive in relation to the value of the security to be afforded thereby;

(b) any fee owned real property and any leasehold rights and interests in real property (other than interests resulting from Collateral Access Agreements);

(c) any motor vehicles and other assets subject to certificates of title to the extent a Lien thereon cannot be perfected by the filing of a UCC financing statement or equivalent;

(d) any rights or interest in any lease, contract, license or license agreement covering personal property or real property and/or such assets subject thereto, so long as under the terms of such lease, contract, license or license agreement, or requirement of law with respect thereto, the grant of a security interest or Lien therein for the benefit of the Secured Parties (1) is prohibited, (2) would give any other party to such lease, contract, license or license agreement, instrument or indenture the right to terminate its obligations thereunder, or (3) is permitted only with the consent of another party (including, without limitation, any Governmental Authority) (or would render such lease, contract, license or license agreement cancelled, invalid or unenforceable) and such prohibition has not been or is not waived or the consent of the other party to such lease, contract, license or license agreement has not been or is not otherwise obtained; provided, that, this exclusion shall in no way be construed to apply if any such prohibition is unenforceable under the UCC or any other requirement of law (including any Debtor Relief Law) or so as to limit, impair or otherwise affect the unconditional continuing security interests in and Liens for the benefit of the Secured Parties upon any rights or interests in or to monies due or to become due under any such lease, contract, license or license agreement (including any receivables) and providedfurther that, with respect to any lease, contract, license or license agreement entered into after the Effective Date (except in each case, any such

Second Amended and Restated Credit Agreement (Orthofix), Page 19

lease, contract, license or license agreement that is a financing permitted by Section 6.01), the Loan Parties shall use commercially reasonable efforts to permit Liens for the benefit of the Secured Parties on each such lease, contract, license or license agreement and avoid prohibitions of the types described in clauses (1) through (3) above;

(e) any application for registration of a trademark filed in the United States Patent and Trademark Office on an intent to use basis to the extent that the grant of a security interest in any such trademark application would adversely affect the validity or enforceability or result in cancellation or voiding of such trademark application, provided, however, that such trademark applications shall no longer be considered Excluded Assets upon the filing of a Statement of Use or an Amendment to Allege Use has been filed and accepted in the United States Patent and Trademark Office;

(f) Excluded Deposit Accounts;

(g) any assets that are subject to a Lien permitted under Section 6.02(d) if the contract or other agreement in which the Lien is granted (or the documentation providing for the Indebtedness secured thereby) prohibits the creation of any other Lien on such assets; provided, that immediately upon the ineffectiveness, lapse or termination of any such Lien permitted under Section 6.02(d), such assets shall no longer be considered Excluded Assets and the Collateral shall include all such rights and interest in such assets as if such Lien permitted under Section 6.02(d) had never been in effect;

(h) voting Equity Interests in excess of 65% of the total voting Equity Interests in any Orthofix Entity that is also (i) a Foreign Subsidiary of a U.S. Loan Party, (ii) a CFC, (iii) a Domestic Subsidiary whose immediate parent is a CFC or (iv) any Subsidiary where all or substantially all of the assets of that Subsidiary (directly or through Subsidiaries) consists of Equity Interests of one or more Foreign Subsidiaries that are CFCs; provided, that the foregoing exclusions shall, with respect to any Foreign Subsidiary (or Domestic Subsidiary of a CFC) that is a CFC at the time of grant of such pledge or hypothecation, automatically cease to apply at any time such Foreign Subsidiary is not a CFC and provided that, (x) this exclusion will apply in each case only to the extent that the Company and the Administrative Agent have agreed in good faith that such pledge of Equity Interests would not result in a material adverse tax consequence to any Loan Party, and (y) in no case will this exclusion apply to any Foreign Subsidiary or CFC or other applicable entity described in clauses (i), (ii), (iii) and (iv) preceding that is Person organized under the laws of the Netherlands or the United Kingdom;

(i) any treasury stock of the Company or other margin stock (within the meaning of Regulation U of the Board), in each case, unless the Lenders have made any necessary filings with the Board in connection therewith;

(j) Equity Interests in partnerships, joint ventures and non-Wholly Owned Subsidiaries if and for so long as the terms of any applicable organizational document, joint venture agreement, partnership or shareholders' agreement of such Person existing on the Effective Date prohibit the creation of any other Lien on such Equity Interests (or with respect to any partnership, joint venture or non-Wholly Owned Subsidiary acquired after the Effective Date, as of the date of such acquisition; provided the terms of any such organizational document, joint venture agreement, partnership or shareholders' agreement was not entered into in connection with or anticipation of such acquisition); and

(k) any assets of an Excluded Subsidiary and, if agreed to in writing by the Administrative Agent, any Equity Interests in any Excluded Subsidiary (except as otherwise agreed to be provided by the Company and/or the applicable Subsidiary).

Second Amended and Restated Credit Agreement (Orthofix), Page 20

"Excluded Deposit Accounts" means any deposit account (a) held at any banking institution in a jurisdiction other than the U.S. or Netherlands, (b) established solely as a payroll account and other zero-balance disbursement account, (c) (i) held in a fiduciary capacity and established in connection with employee benefit plans in the ordinary course of business or pursuant to applicable legal requirements or (ii) established as a Segregated Governmental Account in compliance with applicable legal requirements, or (d) escrow accounts established in connection with Permitted Acquisitions or Investments.

"Excluded Sales" has the meaning assigned to such term in Section 6.14.

"Excluded Subsidiary" means (a) Orthofix-Italy and any Subsidiary organized under the laws of the Republic of Italy, (b) Subsidiaries in liquidation/dissolution (including, as of the Effective Date, Orthosonics Limited, Victory Medical Limited and Colgate Medical Limited) and (c) any direct or indirect Subsidiary of the Company that is (i) prohibited by applicable law, rule or regulation or by any contractual obligation (with an unaffiliated party) that is existing on (and not created in contemplation of) the Effective Date (or on the date such Subsidiary is acquired) from Guaranteeing the Secured Obligations or that would require governmental (including regulatory) or other third party consent, approval, license or authorization to provide a Guarantee unless such consent, approval, license or authorization has been received, (ii) a captive insurance Subsidiary, (iii) a Subsidiary, to the extent the provision of a Guarantee by such Subsidiary would result in material adverse tax consequences to the Orthofix Entities, taken as a whole, as reasonably determined by the Company and the Administrative Agent, each acting in good faith, (iv) a direct or indirect Subsidiary of an Excluded Subsidiary, and (v) a Subsidiary with respect to which the Administrative Agent and the Company, each acting in good faith, reasonably determine the cost and/or burden of obtaining the Guarantee outweigh the practical benefit to the Lenders afforded thereby. On the Effective Date, the Excluded Subsidiaries are Orthofix-Italy, Orthosonics Limited, Victory Medical Limited, Colgate Medical Limited and Orthofix do Brasil Ltda.

"Excluded Swap Obligation" means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor's failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

"Excluded Taxes" means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on, or calculated by reference to, or measured by net income (however denominated) received or receivable, franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, if different, being treated as resident for tax purposes, or in the case of any Lender, its applicable lending office located in, or having a permanent establishment and/or permanent representative to which income under this Agreement is attributed in respect of amounts received or receivable that are effectively attributable to such permanent establishment and/or permanent representative (within the meaning of the OECD Model Tax Convention), or under the laws of the Netherlands to the extent such Taxes becomes payable as a result of such Recipient having a substantial interest (aanmerkelijk belang) in a Dutch Subsidiary as laid down in the Netherlands Income Tax Act 2001 (Wet inkomstenbelasting 2001) or, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal, Dutch and United Kingdom withholding Taxes (excluding (x) the portion of United Kingdom withholding Taxes with respect to which

Second Amended and Restated Credit Agreement (Orthofix), Page 21

the applicable Lender is a UK Treaty Lender, (y) the portion of Dutch withholding Taxes with respect to which the applicable Lender is a Dutch Treaty Lender and (z) United Kingdom withholding Taxes on payments made by any guarantor under any guarantee of the obligations) imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrowers under Section 2.18(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.16, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient's failure to comply with Section 2.16(f) or (g)(i), (d) any U.S. federal withholding Taxes imposed under FATCA and (e) any Bank Levy.

"Existing Agreement" has the meaning given to it in the preamble of this Agreement.

"FATCA" means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

"FDA" means the Food and Drug Administration.

"Federal Funds Effective Rate" means, for any day, the rate calculated by the NYFRB based on such day's federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the Federal Reserve Bank of New York's Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

"Federal Reserve Bank of New York's Website" means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

"Financial Officer" means the chief financial officer, principal accounting officer, or treasurer, in each case of the Company or any other U.S. Borrower, or any other natural person designated and authorized by the Board of Directors of any U.S. Borrower to act as the representative of the Company, so long as in each case evidence of such appointment together with a duly completed and executed incumbency certificate with respect to such person, acceptable to the Administrative Agent in its reasonable discretion, is delivered to the Administrative Agent prior to such person's inclusion in this definition of "Financial Officer".

"Financial Statements" has the meaning assigned to such term in Section 5.01.

"First Amendment" means that certain First Amendment to Second Amended and Restated Credit Agreement, dated as of the First Amendment Effective Date, by and among the Borrowers, the other Loan Parties, the Lenders and the Administrative Agent.

"First Amendment Effective Date" means March 1, 2023.

"Flood Laws" has the meaning assigned to such term in Section 8.10.

Second Amended and Restated Credit Agreement (Orthofix), Page 22

"Floor" means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, each Adjusted Daily Simple RFR or the Central Bank Rate, as applicable. For the avoidance of doubt the initial Floor for each of Adjusted Term SOFR Rate, Adjusted EURIBOR Rate, each Adjusted Daily Simple RFR or the Central Bank Rate shall be zero.

"Foreign Currencies" means Agreed Currencies other than Dollars.

"Foreign Currency Payment Office" of the Administrative Agent means, for each Foreign Currency, the office, branch, affiliate or correspondent bank of the Administrative Agent for such currency as specified from time to time by it, in the case of the Administrative Agent by notice to the Company and each Lender.

"Foreign Lender" means (a) if a Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.

"Foreign Loan Party" means each Foreign Subsidiary that is a Loan Party.

"Foreign Pension Plan" means any plan, scheme, fund (including any superannuation fund) or other similar program established, sponsored or maintained outside the U.S. by any Orthofix Entity primarily for the benefit of employees of such Orthofix Entity residing outside the U.S., which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

"Foreign Perfected Subsidiary" means a Foreign Subsidiary which respect to which each component of both clauses (a) and (b) is true: (a) such Foreign Subsidiary is a Loan Party that has (i) become a Loan Guarantor, (ii) granted perfected Liens to the Administrative Agent on substantially all of its assets (other than Excluded Assets) in the jurisdiction of its incorporation or formation, which such Liens must be first priority Liens except as permitted by Section 6.02, and (iii) executed all Loan Documents and made such other filings, registrations, certifications and taken such other commercially reasonable actions (as determined by the Administrative Agent) to grant and/or perfect such Liens, or in connection with becoming a Loan Guarantor, including, but not limited to, Collateral Documents and other documents and instruments governed by the laws of its jurisdiction of incorporation or formation, or governed by the laws of the location of any of its assets and properties, in each case as deemed reasonably necessary or advisable by the Administrative Agent in order for such Foreign Subsidiary to grant and/or perfect such Liens, or in connection with becoming a Loan Guarantor, and other items as the Administrative Agent may reasonably request in connection therewith and taken all other commercially reasonable actions (as determined by the Administrative Agent) of the type contemplated by Section 5.13 (including opinions of counsel), and (b) the immediate parent of such Foreign Subsidiary has (i) pledged the Equity Interests of such Foreign Subsidiaries pursuant to Collateral Documents and other documents and instruments governed by, and perfected under the laws of both the U.S. and the jurisdiction of organization of such Foreign Subsidiary, (ii) executed all Loan Documents and made such other filings, registrations, certifications and taken such other commercially reasonable actions (as determined by the Administrative Agent) to grant/or perfect such Liens, including, but not limited to, Collateral Documents and other documents and instruments governed by the laws of both the U.S. and such Foreign Subsidiary's jurisdiction of incorporation or formation, and other items as the Administrative Agent may reasonably request in connection therewith and (iii) taken all other commercially reasonable actions (as determined by the Administrative Agent) of the type contemplated by Section 5.13 (including opinions of counsel).

Second Amended and Restated Credit Agreement (Orthofix), Page 23

"Foreign Subsidiary" means each Subsidiary other than a Domestic Subsidiary.

"Foreign Unperfected Subsidiary" means each Foreign Subsidiary that is not a Foreign Perfected Subsidiary.

"FTC" means the Federal Trade Commission.

"Funding Account" has the meaning assigned to such term in Section 4.01(h).

"GAAP" means generally accepted accounting principles in the U.S.

"Governmental Authority" means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supra national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision) or any successor or similar authority to any of the foregoing.

"Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

"Guaranteed Obligations" has the meaning assigned to such term in Section 10.01.

"Guarantors" means all Loan Guarantors and all other entities and Persons, including, without limitation, any Orthofix Entity not already a Loan Party, who have delivered an Obligation Guaranty, and the term "Guarantor" means each or any one of them individually.

"Hazardous Materials" means: (a) any substance, material, or waste that is included within the definitions of "hazardous substances," "hazardous materials," "hazardous waste," "toxic substances," "toxic materials," "toxic waste," or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the U.S. Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos‑containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

"Health Care Laws" means, collectively, any and all domestic and foreign, federal, state or local laws, rules, regulations, orders, administrative manuals, guidelines and requirements relating to any of the

Second Amended and Restated Credit Agreement (Orthofix), Page 24

following: (a) fraud and abuse (including the following statutes, as amended, modified or supplemented from time to time and any successor statutes thereto and regulations promulgated from time to time thereunder: the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn and §1395(q)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the federal health care program exclusion provisions (42 U.S.C. § 1320a-7), and the Civil Monetary Penalties Act (42 U.S.C. § 1320a-7a)); (b) any Medical Reimbursement Program; (c) the licensure or regulation of healthcare providers, suppliers, professionals, facilities or payors (including the DMEPOS Supplier Standards established by the Health Care Financing Administration, DMEPOS Quality Standards established by the Medicare Modernization Act of 2003 and all statutes and regulations administered by the FDA); (d) the provision of, or payment for, health care services, items or supplies; (e) quality, safety certification and accreditation standards and requirements administered by a Governmental Authority; (f) the billing, coding or submission of claims or collection of accounts receivable or refund of overpayments; (g) HIPAA; and (h) any and all other applicable domestic or foreign, federal, state or local health care laws, rules, codes, regulations, manuals, orders, ordinances, professional or ethical rules, administrative guidance and requirements applicable to any line of business of any Orthofix Entity, as the same may be amended, modified or supplemented from time to time.

"Health Care Permits" means any and all permits, licenses, authorizations, certificates, consents, registrations and accreditations that are (a) necessary to enable any Orthofix Entity to provide services, participate in and receive payment under any Medical Reimbursement Program or other Third Party Payor Arrangement, as applicable, or otherwise continue to conduct its business as it is conducted on the Effective Date, or (b) required under any Health Care Law.

"HHS" means the U.S. Department of Health and Human Services and any successor thereof.

"HIPAA" means (a) the Health Insurance Portability and Accountability Act of 1996; (b) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009); (c) the Omnibus Final Rule, and (d) any foreign or domestic, federal, state and local laws regulating the privacy and/or security of individually identifiable information, in each case as the same may be amended, modified or supplemented from time to time, any successor statutes thereto, and any and all rules or regulations promulgated from time to time thereunder.

"HMRC DT Treaty Passport scheme" means the Board of H.M. Revenue and Customs Double Taxation Treaty Passport scheme.

"Immaterial Subsidiary" means, as of any date of determination, any Subsidiary that, together with its Subsidiaries (calculated by reference to the most recently delivered set financial statements delivered pursuant to clauses (a) or (b) of Section 5.01), is both (x) designated by the Company to the Administrative Agent as an "Immaterial Subsidiary" and (y) has LTM EBITDA that accounts for less than five percent (5.00%) of the LTM EBITDA for the Company and its Subsidiaries on a consolidated basis; provided that, if at the end of any such most recent period of four consecutive fiscal quarters the combined LTM EBITDA of all Subsidiaries that constitute Immaterial Subsidiaries exceeds five percent (5.00%) of the consolidated LTM EBITDA of the Company and its Subsidiaries, then one or more of such Subsidiaries shall (A) for all purposes of this Agreement be designated by the Company as a Material Subsidiary (regardless of whether they meet the criteria set forth in clauses (x) and (y) above) until such excess shall have been eliminated and (B) comply with each of the terms and conditions set forth in Section 5.13. Notwithstanding the foregoing, in the event that any Immaterial Subsidiary shall make any Permitted Acquisition that would cause it to not meet the requirements set forth in the foregoing clauses (y) after giving effect to such Permitted Acquisition on a Pro Forma Basis, such Subsidiary shall cease to be an Immaterial Subsidiary as of the date of consummation of such Acquisition.

Second Amended and Restated Credit Agreement (Orthofix), Page 25

"Increase Period" has the meaning assigned to such term in Section 6.12.

"Incremental Amendment" has the meaning assigned to the term in Section 2.08(f).

"Incremental Commitments" has the meaning assigned to the term in Section 2.08(e).

"Incremental Lender" has the meaning assigned to the term in Section 2.08(f).

"Incremental Term A Loan" has the meaning assigned to the term in Section 2.08(e).

"Incremental Term A Loan Commitment" has the meaning assigned to the term in Section 2.08(e).

"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, including without limitation, intercompany advances, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) current accounts payable incurred in the ordinary course of business, (ii) deferred compensation funded into applicable trust arrangements and (iii) earnouts), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed (the amount of such Indebtedness being the lesser of (i) the principal amount of such Indebtedness and (ii) the book value of all assets subject to such Lien), (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances, (k) obligations under any earn‑out in connection with any Acquisition or other Investment permitted hereunder, provided such earnout has been earned and is due to be paid as of the date of determination, (l) any other Off‑Balance Sheet Liability, and (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. For the avoidance of doubt, "Indebtedness" of an Orthofix Entity will include, without duplication, all Intercompany Loans of such Orthofix Entity.

"Indemnified Taxes" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

"Indemnitee" has the meaning assigned to such term in Section 9.03(b).

"Ineligible Institution" has the meaning assigned to such term in Section 9.04(b).

"Information" has the meaning assigned to such term in Section 9.12.

Second Amended and Restated Credit Agreement (Orthofix), Page 26

"Intercompany Loans" means those intercompany loans between any Orthofix Entities and listed on Schedule 6.01(a) existing on the Effective Date and each subsequent intercompany loan between any Orthofix Entities permitted to be incurred under the terms of Section 6.01.

"Interest Coverage Ratio" means, for any period, the ratio of (a) LTM EBITDA for such period to (b) cash Interest Expense for such period.

"Interest Election Request" means a request by the Company to convert or continue a Borrowing in accordance with Section 2.07.

"Interest Expense" means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Company and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Company and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Company and its Subsidiaries on a consolidated basis for such period in accordance with GAAP, but excluding (a) deferred financing fees and (b) amendment fees.

"Interest Payment Date" means (a) with respect to any ABR Loan (other than a Swingline Loan), the last Business Day of each calendar quarterand the Maturity Date, (b) with respect to any RFR Loan, (1) each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month) and (2) the Maturity Date, (c) with respect to any Term Benchmark Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Term Benchmark Borrowing with an Interest Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period, and the Maturity Date, and (d) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

"Interest Period" means with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment for any Agreed Currency), as the Borrowers may elect; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (c) no tenor that has been removed from this definition pursuant to Section 2.13(e) shall be available for specification in such Borrowing Request or Interest Election Request. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

"Inventory" has the meaning assigned to such term in the Security Agreement.

"Investments" has the meaning assigned to such term in Section 6.04.

"IRS" means the U.S. Internal Revenue Service.

Second Amended and Restated Credit Agreement (Orthofix), Page 27

"Issuing Bank" means, individually and collectively, JPMorgan Chase Bank and each other Arranger, in its capacity as the issuer of Letters of Credit hereunder, and any other Revolving Lender from time to time designated by the Company as an Issuing Bank, with the consent of such Revolving Lender and the Administrative Agent, and their respective successors in such capacity as provided in Section 2.05(i). Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.05 with respect to such Letters of Credit). At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

"Issuing Bank Sublimit" means, as of the Effective Date, the Dollar Amount of (a) $12,500,000 in the case of JPMorgan Chase Bank, (b) $12,500,000 in the case of Bank of America, N.A., (c) $12,500,000 in the case of Bank of the West and (d) $12,500,000 in the case of Truist Bank; provided that any Issuing Bank shall be permitted at any time to increase or reduce its Issuing Bank Sublimit, subject to the consent of the Company, upon providing five (5) days' prior written notice thereof to the Administrative Agent and the Borrowers.

"Italy Sub-Facility Amendment Documentation" has the meaning assigned to such term in Section 2.24(c).

"Italy Sub-Facility Commitment" means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Italy Sub-Facility Loans in Euros to Orthofix-Italy, expressed as an amount representing the maximum aggregate permitted Dollar Amount of such Lender's Revolving Italy Sub-Facility Loans, as such commitment may be reduced or increased from time to time in accordance herewith and with the Italy Sub-Facility Amendment Documentation.

"Italy Sub-Facility Lenders" means Lenders with an Italy Sub-Facility Commitment.

"Italy Uncommitted Sub-Facility" has the meaning assigned to such term in Section 2.24(a).

"Joinder Agreement" means a Joinder Agreement in substantially the form of Exhibit C or any other form approved by the Administrative Agent.

"JPMorgan Chase Bank" means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

"LC Collateral Account" has the meaning assigned to such term in Section 2.05(j).

"LC Disbursement" means any payment made by an Issuing Bank pursuant to a Letter of Credit.

"LC Exposure" means, at any time, the Dollar Amount of the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of any Borrower. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

"Lenders" means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to Section 2.08 or an Assignment and Assumption, or an amendment to this Agreement, other than any such Person that ceases to be a Lender hereunder pursuant to

Second Amended and Restated Credit Agreement (Orthofix), Page 28

an Assignment and Assumption or an amendment to this Agreement. Unless the context otherwise requires, the term "Lenders" includes the Swingline Lender and the Issuing Bank.

"Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.

"Letter of Credit Agreement" has the meaning assigned to such term in Section 2.05(b).

"Letters of Credit" means standby letters of credit issued pursuant to this Agreement, and the term "Letter of Credit" means any one of them or each of them singularly, as the context may require. Letters of Credit may be issued in any Agreed Currency, subject to the Maximum Foreign Currency Amount.

"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, retention of title arrangement, right of retention, right to reclaim goods, and, in general, any right in rem, created for the purpose of granting security or any security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

"Limited Condition Acquisition" means an Acquisition that is a Permitted Acquisition, in each case only to the extent that (a) such Permitted Acquisition is made with the proceeds of an Incremental Term A Loan and (b) the consummation of such Permitted Acquisition by the Company or any Subsidiary is not conditioned on the availability of, or on obtaining, third party financing; provided that in the event the consummation of any such Permitted Acquisition shall not have occurred on or prior to the date that is 150 days following the signing of the applicable agreement for such Permitted Acquisition (or such longer period (x) as is reasonably necessary to obtain regulatory approvals from any Governmental Authority, or (y) as is agreed to in writing by the Administrative Agent), then such Permitted Acquisition shall no longer constitute a Limited Condition Acquisition.

"Loan Documents" means, collectively, (i) this Agreement, each amendment, consent, waiver and/or other modification to, consent to or waiver of, any of the terms of this Agreement, (ii) each promissory note issued pursuant to this Agreement, (iii) each Letter of Credit Agreement and any agreements between any Borrower and the Issuing Bank regarding the Issuing Bank's Issuing Bank Sublimit or the respective rights and obligations between such Borrower and the Issuing Bank in connection with the issuance of Letters of Credit, (iv) each Collateral Document, (v) each Compliance Certificate, (vi) the Loan Guaranty and each Obligation Guaranty, (vii) that certain Confidential Side Letter, dated October 25, 2019, delivered by Orthofix Medical, Inc. to each Lender on the Effective Date and the Administrative Agent, (viii) each other agreement, instrument, document and certificate identified in Section 4.01 executed by or on behalf of any Loan Party or any other Guarantor or any employee of a Loan Party or any employee of any Guarantor in favor of, the Administrative Agent or any Lender and including each other pledge, issued in connection with the other Loan Documents, (ix) any UCC filing, power of attorney, consent, assignment, contract, notice, letter of credit agreement and (x) each other agreement, instrument, document, certificate and other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party and/or any Guarantor (or any employee of any Loan Party and/or any other Guarantor), and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby (other than any Swap Agreement and any agreement entered into in respect of Banking Services). Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other

Second Amended and Restated Credit Agreement (Orthofix), Page 29

modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

"Loan Guarantor" means each Loan Party.

"Loan Guaranty" means Article X of this Agreement.

"Loan Parties" means, collectively, the Company, the Borrowers, the Subsidiary Guarantors and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their respective successors and assigns, and the term "Loan Party" shall mean any one of them or all of them individually, as the context may require.

"Loans" means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans.

"Local Time" means (a) in the case of a Loan, Borrowing or LC Disbursement denominated in Dollars, New York City time, and (b) in the case of a Loan, Borrowing or LC Disbursement denominated in a Foreign Currency, local time (it being understood that such local time shall mean London, England time unless otherwise notified by the Administrative Agent).

"LTM EBITDA" means consolidated EBITDA of the Company and its Subsidiaries as of the most recent four-quarter period most recently ended for which financial statements have been delivered in accordance with Section 5.01 or required to have been delivered by Section 5.01 (or if the context requires, the consolidated EBITDA of any Person and its Subsidiaries as of the most recent four-quarter period most recently ended for which financial statements have been delivered in accordance with Section 5.01 or required to have been delivered by Section 5.01).

"Material Acquisition" means any Permitted Acquisition or series of related Permitted Acquisitions having an aggregate cash and non-cash purchase price in excess of the Dollar Amount of $100,000,000; provided, that, for any such Acquisition or series of related Acquisitions to qualify as a Material Acquisition, a Responsible Officer of the Company shall have delivered to the Administrative Agent a certificate, Compliance Certificate or other written instrument agreed to in writing by the Administrative Agent (a) certifying that such Acquisition or series of related Acquisitions meet each of the criteria for a Material Acquisition and (b) notifying the Administrative Agent that the Company has elected to treat such Acquisition as a Material Acquisition.

"Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations or financial condition of the Orthofix Entities taken as a whole, (b) the ability of the Loan Parties (taken as a whole) to perform their material obligations under the Loan Documents, (c) any material portion of the Collateral, or the Administrative Agent's Liens (on behalf of itself and the other Secured Parties) on any material portion of the Collateral or the priority of such Liens, or (d) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Administrative Agent, the Issuing Bank or the Lenders under any of the Loan Documents (except with respect to clauses (c) and (d), Liens on Collateral perfected by possession, but only to the extent that the Administrative Agent has not obtained, or does not maintain, possession of such collateral).

"Material Agreement" means any contract or other arrangement, whether written or oral, to which any Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.

Second Amended and Restated Credit Agreement (Orthofix), Page 30

"Material Indebtedness" means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Company and its Subsidiaries in an aggregate principal amount exceeding $12,500,000 (or the Dollar Amount thereof in any Foreign Currency). For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Company or any of its Subsidiaries in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Company or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

"Material Intellectual Property" means any trademarks, tradenames, copyrights, patents and other intellectual property with a book value of the Dollar Amount of $1,000,000 or more.

"Material Subsidiary" means a Subsidiary of the Company that is not an Immaterial Subsidiary. Upon consummation of any Permitted Acquisition, the Company shall determine whether any Subsidiaries of the Company formed or acquired in connection with such Permitted Acquisition or the Subsidiary consummating such Permitted Acquisition (if not already a Material Subsidiary) would qualify as a Material Subsidiary pursuant to the criteria set forth above. If any of such Subsidiaries so qualifies as a Material Subsidiary, it shall be deemed to be a Material Subsidiary as of the date of consummation of such Permitted Acquisition. For the avoidance of doubt, there is no UK Subsidiary that is a Material Subsidiary on the Effective Date.

"Maturity Date" means October 25, 2024 (if the same is a Business Day, or if not then the immediately next succeeding Business Day), subject to extension in accordance with Section 2.25, or any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

"Maximum Foreign Currency Amount" means at any time of determination the Dollar Amount equal to $150,000,000 at such time of determination.

"Maximum Rate" has the meaning assigned to such term in Section 9.17.

"Maximum Total Net Leverage Ratio" has the meaning assigned to such term in Section 6.12(b).

"Medicaid" means that means-tested entitlement program under Title XIX, P.L. 89-87, of the Social Security Act, which provides Federal grants to States for medical assistance based on specific eligibility criteria, as set forth at Section 1396, et seq. of Title 42 of the U.S. Code, as amended, and any statute succeeding thereto.

"Medicaid Certification" means recognition by a state agency or other such entity administering a particular state's Medicaid program that a health care provider or supplier is in compliance with all the conditions of participation set forth in the appropriate state and federal Medicaid Regulations.

"Medicaid Provider Agreement" means an agreement entered into between a state agency or other such entity administering the Medicaid program and a health care provider or supplier under which the health care provider or supplier agrees to provide services for Medicaid patients in accordance with the terms of the agreement and Medicaid Regulations.

"Medicaid Regulations" means (a) all Federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statues succeeding thereto, (b) all applicable provisions of all Federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statues described in clause (a) above and all Federal administrative, reimbursement and other

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guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statues described in clause (a) above, (c) all state statutes and plans for medical assistance enacted in connection with the statutes and provisions described in clauses (a) and (b) above, and (d) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (c) above and all state administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (c) above, in each case as may be amended, supplemented or otherwise modified from time to time.

"Medical Reimbursement Programs" means (a) Medicare, (b) Medicaid, (c) the Federal Employees Health Benefit Program under 5 U.S.C. §§ 8902 et seq., (d) TRICARE, (e) CHAMPVA, (f) any other federal, state or foreign program that provides reimbursement for Medical Services or (g) if applicable within the context of this Agreement, any agent, administrator, administrative contractor, intermediary or carrier for any of the foregoing.

"Medical Services" means medical and health care items, services or supplies provided to a patient, including medical equipment, physician services, nurse and therapist services, dental services, hospital services, skilled nursing facility services, comprehensive outpatient rehabilitation services, home health care services, residential and out-patient behavioral healthcare services, and other medicine or health care equipment or items provided by an Orthofix Entity to a patient, hospital or other medical entity or Person for a valid and proper medical or health purpose.

"Medicare Certification" means recognition by CMS or an entity under contract with CMS that the health care provider or supplier is in compliance with all of the conditions of participation set forth in the Medicare Regulations.

"Medicare Provider Agreement" means an agreement entered into between CMS or other such entity administering the Medicare program on behalf of CMS, and a health care provider or supplier under which the health care provider or supplier agrees to provide services for Medicare patients in accordance with the terms of the agreement and Medicare Regulations.

"Medicare" means that government-sponsored entitlement program under Title XVIII, P.L. 89-87, of the Social Security Act, which provides for a health insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the U.S. Code, as amended, and any statute succeeding thereto.

"Medicare Regulations" means, collectively, all Federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any statutes succeeding thereto; together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all Governmental Authorities (including, without limitation, HHS, CMS, the OIG, or any person succeeding to the functions of any of the foregoing) promulgated pursuant to or in connection with any of the foregoing having the force of law, as each may be amended, supplemented or otherwise modified from time to time.

"Moody's" means Moody's Investors Service, Inc.

"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

"Net Income" means, for any period, the consolidated net income (or loss) from continuing operations determined for the Company and its Subsidiaries, on a consolidated basis in accordance with

Second Amended and Restated Credit Agreement (Orthofix), Page 32

GAAP; provided that there shall be excluded (a) except as provided in Section 1.05, the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Company or any of its Subsidiary, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Company or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of a Subsidiary, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary and (d) any purchase accounting effects including, but not limited to, adjustments to inventory, property and equipment, software and other intangible assets and deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to any Orthofix Entity), as a result of any consummated acquisition, or the amortization or write‑off of any amounts thereof (including any write‑off of in process research and development).

"Non-Consenting Lender" has the meaning assigned to such term in Section 9.02(h).

"Non-Extending Lender" has the meaning specified in Section 2.25(b).

"Non-Loan Party" means an Orthofix Entity that is not a Loan Party.

"Notice Date" has the meaning specified in Section 2.25(b).

"NYFRB" means the Federal Reserve Bank of New York.

"NYFRB Rate" means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term "NYFRB Rate" means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

"Obligated Party" has the meaning assigned to such term in Section 10.02.

"Obligation Guaranty" means any Guarantee of all or any portion of the Secured Obligations executed and delivered to the Administrative Agent for the benefit of the Secured Parties by a guarantor who is not a Loan Party.

"Obligations" means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties, or any of the other Orthofix Entities to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, in connection with this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred thereunder or any of the Letters of Credit or other instruments at any time evidencing any thereof.

"OFAC" means the Office of Foreign Assets Control of the U.S. Department of the Treasury.

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"Off-Balance Sheet Liability" of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called "synthetic lease" transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person (other than operating leases).

"OIG" means the Office of Inspector General of HHS and any successor thereof.

"Orthofix B.V." has the meaning assigned to such term in the preamble.

"Orthofix Entity" means on any date of determination, the Company and each of its direct and indirect domestic and foreign Subsidiaries, including, without limitation, each of the Borrowers and the other Loan Parties.

"Orthofix Inc." means Orthofix Inc., a Delaware corporation.

"Orthofix Limited" means Orthofix Limited, a company incorporated in England and Wales.

"Orthofix Spinal" Orthofix Spinal Implants Inc., a Delaware corporation.

"Orthofix-Italy" means Orthofix S.r.l., a company formed under the laws of Italy.

"OSHA" means the Occupational Safety and Health Administration.

"Other Available Funds" means, on any date of determination, the greater of (i) $30,000,000 and (ii) 30% of LTM EBITDA on the date of issuance minus the sum of (a) the aggregate Dollar Amount of all Investments (including intercompany Investments, loans, advances and Guarantees by Loan Parties of Indebtedness of Non-Loan Parties) by any Orthofix Entity made under Section 6.04(m) from the Effective Date through and including such date of determination, plus (b) the aggregate Dollar Amount of all sales, transfers and dispositions of assets where a Loan Party is the transferor and the transferee is a Non-Loan Party made under the proviso to Section 6.05(b)(iv) from the Effective Date through and including such date of determination, plus (c) the aggregate amount of all LC Exposure outstanding on such date of determination as a result of Letters of Credit issued under Section 2.05 to support the obligations of Non-Loan Parties, if such Letters of Credit were issued on a date when the Total Net Leverage Ratio was in excess of 3.00 to 1.00, plus (d) Indebtedness secured by Liens permitted by Section 6.02(d) on assets or properties of Loan Parties that would otherwise constitute Collateral.

"Other Connection Taxes" means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit, Commitment or any Loan Document).

"Other Taxes" means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.18).

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"Overnight Bank Funding Rate" means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the Federal Reserve Bank of New York's Website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

"Overnight Rate" means, for any day, (a) with respect to any amount denominated in Dollars, the NYFRB Rate and (b) with respect to any amount denominated in a Foreign Currency, an overnight rate determined by the Administrative Agent or the Issuing Bank, as the case may be, in accordance with banking industry rules on interbank compensation.

"Parent" means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

"Participant" has the meaning assigned to such term in Section 9.04(c).

"Participant Register" has the meaning assigned to such term in Section 9.04(c).

"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

"Payment in Full of all Obligations" means all Commitments shall have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document shall have been paid in full (other than contingent obligations with respect to which no claim has been asserted) and all Letters of Credit shall have expired or terminated (other than Letters of Credit as to which other arrangements with respect thereto satisfactory to Administrative Agent and the applicable Issuing Bank in their sole discretion shall have been made), in each case without any pending draw, and all LC Disbursements shall have been reimbursed.

"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

"Permitted Acquisition" means any Acquisition or any series of related Acquisitions by the Company, any other Loan Party, or any Subsidiary, in a transaction that satisfies each of the following requirements:

(a) there shall exist no Default both immediately before, and after giving effect to, such Acquisition; provided that, in the case of a Limited Condition Acquisition, except with respect to the requirement that there not have occurred and be continuing any Default under clause (a) or (b) of Article VII or any Default with respect to any Borrower under clause (h), (i) or (j) of Article VII (which must be true both immediately prior to and immediately after giving effect to such Acquisition), this clause (a) may, at the Company's option, be tested at the signing of the agreement to make such Limited Condition Acquisition;

(b) such Acquisition is not a hostile or contested acquisition;

(c) the Target is not engaged, directly or indirectly, in any line of business other than the businesses in which the Company and its Subsidiaries are engaged on the Effective Date and any business activities that are substantially similar, related, or incidental thereto;

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(d) both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects with the same effect as though made on and as of the date of such Acquisition or the making of such Loan (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); provided that, in the case of a Limited Condition Acquisition, only the Specified Representations and the Acquired Company Representations shall be required to be true and correct in all material respects with the same effect as though made on and as of the date of such Acquisition (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 such representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects);

(e) to the extent the total consideration of any Permitted Acquisition is in excess of the Dollar Amount of $10,000,000 or the proceeds of a Revolving Loan will be used to fund such Acquisition, as soon as available, 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 Company has provided the Administrative Agent (i) notice of such Acquisition together with a reasonably detailed description of the material terms of such Permitted Acquisition (including, without limitation, the purchase price and method and structure of payment) and of each Target, (ii) to the extent available, financial statements of the Target for the previous two years and year-to-date financial statements of the Target and (iii) a copy of all other business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

(f) the Borrowers shall be in compliance, on a Pro Forma Basis after giving effect to such Acquisition and all related borrowings and transactions, with the covenants contained in Section 6.12; provided that, in the case of a Limited Condition Acquisition, the condition set forth in this clause (f) may, at the Company's option, be tested at the signing of the agreement to make such Limited Condition Acquisition;

(g) if such Acquisition is an acquisition of assets, such Acquisition is structured so that a Borrower or another Loan Party or a Wholly Owned Subsidiary that will become a Loan Party upon consummation of the Acquisition shall acquire such assets, except to the extent such assets are Excluded Assets or are acquired under the cap in clause (j) below;

(h) if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U of the Board;

(i) if such Acquisition involves a merger or a consolidation involving (i) a Borrower or the Company, such Borrower or the Company, as applicable, shall be the surviving Person, (ii) a Subsidiary Guarantor, a Wholly Owned Subsidiary that is a Loan Party domiciled in the same country as such Subsidiary Guarantor shall be the surviving Person, or (iii) any other Loan Party (other than a Borrower, the Company or a Subsidiary Guarantor), the surviving Person shall be a Loan Party or become a Loan Party upon consummation of the Acquisition;

(j) the aggregate 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 all Acquisitions or portions of Acquisitions of a Target involving a Target or assets that is situated outside the U.S., including, but not limited to, foreign

Second Amended and Restated Credit Agreement (Orthofix), Page 36

subsidiaries of such Target, that will not become a Loan Party (or such assets will not be subject to a perfected Lien in favor of the Administrative Agent for the benefit of the Secured Parties) upon consummation of any such Acquisition, in each case in accordance with the terms of Section 5.13 shall not exceed the Dollar Amount of $75,000,000 in the aggregate over the term of this Agreement.

(k) in connection with an Acquisition of the Equity Interests of any Person, all Liens on property of such Person shall be terminated unless the Administrative Agent and the Required Lenders in their sole discretion consent otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated, except in each case to the extent permitted to exist under Section 6.02;

(l) all actions required to be taken with respect to any newly acquired or formed Wholly Owned Subsidiary of a Borrower or a Loan Party, as applicable, required under Section 5.13 shall have been taken; and

(m) the Company 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 Company, of all other executed agreements among an Orthofix Entity, the sellers of a Target, the Target, or an Affiliate of the Target) and material instruments executed by any Orthofix Entity relating to such Acquisition, no later than five (5) Business Days after such Acquisition is consummated.

"Permitted Encumbrances" means:

(a) Liens imposed by law for Taxes that are not yet due or as to which the period of grace, if any, related thereto has not expired or are being contested in compliance with Section 5.04;

(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than sixty (60) days or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Company or any of its Subsidiaries, as the case may be, in conformity with GAAP;

(c) pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e) judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII or Liens securing appeal or other surety bonds related to such judgments; and

(f) easements, zoning restrictions, rights-of-way, minor defects or irregularities in title and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of any Orthofix Entity;

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provided that the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness, except with respect to clause (e) above.

"Permitted Investments" means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency or instrumentality thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;

(b) readily marketable direct obligations issued by any state of the U.S. or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year from the date of acquisition thereof and having, at the time of the acquisition thereof, a rating of at least P-1 from Moody's or at least A-1 from S&P;

(c) investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, a rating of at least "Prime-1" (or the then equivalent grade) by Moody's or at least "A-1" (or the then equivalent grade) by S&P;

(d) investments in certificates of deposit, bankers' acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, a Lender or any domestic office of any commercial bank organized under the laws of the U.S. or any state thereof which has a combined capital and surplus and undivided profits of not less than the Dollar Amount of $500,000,000;

(e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (d) above;

(f) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of at least the Dollar Amount of $5,000,000,000; and

(g) with respect to investments made by any Foreign Subsidiary, foreign investments substantially comparable to any of the foregoing in connection with the managing of cash of any such Foreign Subsidiary.

"Permitted Lender" means: (i) until an interpretation of the term "public" as referred to in the CRR is published by the relevant Governmental Authority, an entity that qualifies as a professional market party as defined in Section 1:1 of the Dutch Act on Financial Supervision (Wet op het financieel toezicht); and (ii) following the publication of the interpretation of the term "public" as referred to in the CRR by the relevant Governmental Authority, an entity that does not qualify as forming part of the "public" as referred to in the CRR and the rules promulgated thereunder.

"Permitted Leverage Increase" has the meaning assigned to such term in Section 6.12.

"Permitted Priority Debt Cap" means, on any date of determination, in respect of the aggregate amount of all Priority Debt existing on such date (including all Priority Debt that is Refinance

Second Amended and Restated Credit Agreement (Orthofix), Page 38

Indebtedness), an amount equal to the greater of (i) $80,000,000 and (ii) 100% of LTM EBITDA on such date of determination.

"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

"Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Plan Asset Regulations" means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

"Pounds Sterling", "GBP" or "£" means the lawful money of the United Kingdom.

"Prime Rate" means the rate of interest last quoted by The Wall Street Journal as the "Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

"Priority Debt" means any Indebtedness (except Indebtedness only among the Orthofix Entities) that meets either of the following categories: (a) all Indebtedness of Non-Loan Parties (including all Indebtedness of Foreign Unperfected Subsidiaries), whether secured or unsecured and (b) all Indebtedness of any Orthofix Entity which is secured by a Lien (except the Secured Obligations); including, in each case, Refinance Indebtedness that meets either of the criteria in clause (a) or clause (b) preceding.

"Pro Forma Basis" means, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the four fiscal quarter period (or twelve month period, as applicable) ending as of the most recent quarter end (or month end, as applicable) preceding the date of such transaction for which financial statement information is available.

"Projections" has the meaning assigned to such term in Section 5.01(e).

"Protected Health Information" means "protected health information" as defined under 45 C.F.R. 160.103, as amended from time to time.

"PTE" means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

"QFC Credit Support" has the meaning assigned to it in Section 9.24.

"Qualified ECP Guarantor" means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding the Dollar Amount of $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an "eligible contract

Second Amended and Restated Credit Agreement (Orthofix), Page 39

participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

"Qualified Equity Interests" means any Equity Interests that are not Disqualified Equity Interests.

"RCP" has the meaning assigned to such term in Section 5.07.

"Real Property" means all real property that was, is now or may hereafter be owned, occupied or otherwise controlled by any Orthofix Entity pursuant to any contract of sale, lease or other conveyance of any legal interest in any real property to any Orthofix Entity.

"Recipient" means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

"Reference Time" with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two U.S. Government Securities Business Days preceding the date of such setting, (2) if such Benchmark is EURIBOR Rate, 11:00 a.m. Brussels time two TARGET Days preceding the date of such setting, (3) if the RFR for such Benchmark is SONIA, then four RFR Business Days prior to such setting, or (4) if such Benchmark is none of the Term SOFR Rate, the EURIBOR Rate or SONIA, the time determined by the Administrative Agent in its reasonable discretion.

"Refinance Indebtedness" has the meaning assigned to such term in Section 6.01(g).

"Register" has the meaning assigned to such term in Section 9.04.

"Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person's Affiliates.

"Release" means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.

"Relevant Governmental Body" means (i) with respect to a Benchmark Replacement in respect of Loans denominated in Dollars, the Federal Reserve Board and/or the NYFRB, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or, in each case, any successor thereto, (ii) with respect to a Benchmark Replacement in respect of Loans denominated in Pounds Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (iii) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto, and (iv) with respect to a Benchmark Replacement in respect of Loans denominated in any other currency, (a) the central bank for the currency in which such Benchmark Replacement is denominated or any central bank or other supervisor which is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark Replacement or (b) any working group or committee officially endorsed or convened by (1) the central bank for the currency in which such Benchmark Replacement is denominated, (2) any central bank or other supervisor that is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement, (3) a group of those central banks or other supervisors or (4) the Financial Stability Board or any part thereof.

Second Amended and Restated Credit Agreement (Orthofix), Page 40

"Relevant Rate" means (i) with respect to any Term Benchmark Borrowing denominated in Dollars, the Adjusted Term SOFR Rate, (ii) with respect to any Term Benchmark Borrowing denominated in Euros, the Adjusted EURIBOR Rate, (iii) with respect to any Borrowing denominated in Pounds Sterling, the Adjusted Daily Simple RFR, or (iv) with respect to any RFR Borrowing, the applicable Adjusted Daily Simple RFR, as applicable.

"Relevant Screen Rate" means (i) with respect to any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Reference Rate, or (ii) with respect to any Term Benchmark Borrowing denominated in Euros, the EURIBOR Screen Rate, as applicable.

"Report" means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Company and its Subsidiaries from information furnished by or on behalf of the Borrowers and the Company, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

"Required Lenders" means, subject to Section 2.19, (a) at any time prior to the earlier of the Loans becoming due and payable pursuant to Article VII or the Commitments terminating or expiring, Lenders having Revolving Exposures and Unfunded Commitments representing more than 50% of the sum of the Aggregate Revolving Exposure and Unfunded Commitments at such time, provided that, solely for purposes of declaring the Loans to be due and payable pursuant to Article VII, the Unfunded Commitment of each Lender shall be deemed to be zero; and (b) for all purposes after the Loans become due and payable pursuant to Article VII or the Commitments expire or terminate, Lenders having Revolving Exposures representing more than 50% of the sum of the Aggregate Revolving Exposure at such time; provided that, in the case of clauses (a) and (b) above, (x) the Revolving Exposure of any Lender that is a Swingline Lender shall be deemed to exclude any amount of its Swingline Exposure in excess of its Applicable Percentage of all outstanding Swingline Loans, adjusted to give effect to any reallocation under Section 2.19 of the Swingline Exposures of Defaulting Lenders in effect at such time, and the Unfunded Commitment of such Lender shall be determined on the basis of its Revolving Exposure excluding such excess amount and (y) for the purpose of determining the Required Lenders needed for any waiver, amendment, modification or consent of or under this Agreement or any other Loan Document, any Lender that is the Borrower or an Affiliate of the Borrower shall be disregarded.

"Requirement of Law" means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any domestic or foreign statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws and Health Care Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"Responsible Officer" means any executive officer or director of any Loan Party, including without limitation, any Financial Officer.

"Restricted Payment" means any of the following: (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest in any of the Orthofix Entities, (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests of any of the Orthofix Entities, (iii) any option, warrant or other right to acquire any Equity Interests in any of the Orthofix Entities, (iv) any payment with respect to any earnout obligations or (v) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement,

Second Amended and Restated Credit Agreement (Orthofix), Page 41

defeasance, sinking fund or similar payment with respect to, any Subordinated Indebtedness, including without limitation, Intercompany Loans owed by any Loan Party.

"Reuters" means, as applicable, Thomson Reuters Corp., Refinitiv, or any successor thereto.

"Revaluation Date" shall mean (a) with respect to any Loan denominated in any Foreign Currency, each of the following: (i) the date of the Borrowing of such Loan and (ii) (A) with respect to any Term Benchmark Loan, each date of a conversion into or continuation of such Loan pursuant to the terms of this Agreement and (B) with respect to any RFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month); (b) with respect to any Letter of Credit denominated in an Agreed Currency, each of the following: (i) the date on which such Letter of Credit is issued, (ii) the first Business Day of each calendar month and (iii) the date of any amendment of such Letter of Credit that has the effect of increasing the face amount thereof; and (c) any additional date as the Administrative Agent may reasonably determine.

"Revolving Borrowing" means Revolving Loans of the same Type and Agreed Currency, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect.

"Revolving Exposure" means, with respect to any Lender, at any time, the sum of the aggregate outstanding principal Dollar Amount of the sum of such Lender's Revolving Loans, its LC Exposure and Swingline Exposure at such time.

"Revolving Italy Sub-Facility Loans" means revolving loans made to Orthofix-Italy pursuant to the Italy Sub-Facility Amendment Documentation.

"Revolving Lender" means, as of any date of determination, a Lender with a Commitment or, if the aggregate Commitments have terminated or expired, a Lender with Revolving Exposure.

"Revolving Loan" means a Loan made pursuant to Section 2.01.

"RFR" means, for any RFR Loan denominated in (a) Pounds Sterling, SONIA and (b) Dollars, Daily Simple SOFR.

"RFR Borrowing" means, as to any Borrowing, the RFR Loans comprising such Borrowing.

"RFR Business Day" means, for any Loan denominated in (a) Pounds Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London, and (b) Dollars, a U.S. Government Securities Business Day.

"RFR Interest Day" has the meaning specified in the definition of "Daily Simple RFR".

"RFR Loan" means a Loan that bears interest at a rate based on the Adjusted Daily Simple RFR.

"S&P" S&P Global Ratings, a division of S&P Global Inc. and any successor thereto.

"Sanctioned Country" means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (as of the First Amendment Effective Date, the so-called Donetsk People's Republic, the so-called Luhansk People's Republic, the Crimea, Zaporizhzhia and KhersonRegions of Ukraine, Cuba, Iran, North Korea and Syria).

Second Amended and Restated Credit Agreement (Orthofix), Page 42

"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state, His Majesty's Treasury of the United Kingdom, or other relevant sanctions authority, (b) any Person operating (except as permissible under Sanctions), organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

"Sanctions" means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or His Majesty's Treasury of the United Kingdom, or other relevant sanctions authority.

"SEC" means the Securities and Exchange Commission of the U.S.

"Secured Obligations" means all Obligations, together with all (a) Banking Services Obligations and (b) Swap Agreement Obligations; provided, however, that the definition of "Secured Obligations" shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

"Secured Parties" means (a) the Administrative Agent, (b) the Lenders, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party or any other Person under any Loan Document, and (g) the successors and assigns of each of the foregoing.

"Security Agreement" means (a) that certain Second Amended and Restated Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among certain of the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, (b) that certain Omnibus Pledge Agreement, dated as of December 8, 2017, among Orthofix B.V. and Orthofix II B.V. and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, (c) that certain First Ranking Pledge Over Shares, dated December 8, 2017, by the Company, the Administrative Agent and Orthofix B.V., (d) that certain Second Ranking Pledge Over Shares, dated August 1, 2018, by the Company, the Administrative Agent and Orthofix B.V., (e) that certain First Ranking Pledge Over Shares, dated August 1, 2018, by the Company, the Administrative Agent and BVIII, (f) that certain Omnibus Deed of Pledge, dated July 31, 2018, among Orthofix B.V., Orthofix II B.V. BVIII and the Administrative Agent, (g) Share Charge, dated as of June 7, 2019 by Orthofix B.V. and the Administrative Agent, (h) that certain Omnibus Pledge Agreement, dated on or about the Effective Date, among Orthofix B.V., BVIII and the Administrative Agent, (i) that certain Third Ranking Pledge Over Shares, dated on or about the Effective Date, by the Company, the Administrative Agent and Orthofix B.V., (j) that certain Second Ranking Pledge Over Shares, dated on or about the Effective Date, by Orthofix B.V., BVIII and the Administrative Agent, and (k) any other charge, mortgage, security assignment, pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, in each case as may be amended, restated, supplemented or otherwise modified from time to time.

Second Amended and Restated Credit Agreement (Orthofix), Page 43

"Segregated Governmental Account" means a deposit account of a Loan Party maintained in accordance with the requirements of Section 6.13, the only funds on deposit in which constitute the direct proceeds of Medical Reimbursement Programs.

"Settlement Amounts" shall mean the amount of any civil or criminal fines, penalties, judgments, damages, forfeitures or other amounts payable (including attorney fees and expenses) in connection with the resolution and settlement of the any legal or regulatory matters by the Borrowers or Guarantors; provided that the resolution of the such matters shall not cause or result in a Material Adverse Effect.

"SOFR" means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

"SOFR Administrator" means the NYFRB (or a successor administrator of the secured overnight financing rate).

"SOFR Administrator's Website" means the NYFRB's website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

"SOFR Determination Date" has the meaning specified in the definition of "Daily Simple SOFR".

"SOFR Rate Day" has the meaning specified in the definition of "Daily Simple SOFR".

"SONIA" means, with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator's Website on the immediately succeeding Business Day.

"SONIA Administrator" means the Bank of England (or any successor administrator of the Sterling Overnight Index Average).

"SONIA Administrator's Website" means the Bank of England's website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.

"Specified Representations" means the representations and warranties set forth in Sections 3.01(a) (solely with respect to each Loan Party), 3.02 (other than 3.02(b)), 3.03(b), 3.03(c) (other than with regard to any agreements governing Indebtedness being repaid in connection with the Limited Condition Acquisition), 3.08, 3.13, 3.16, 3.18 and 3.19.

"Statement" has the meaning assigned to such term in Section 2.17(f).

"Statutory Reserve Rate" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Federal Reserve Board to which the Administrative Agent is subject with respect to the Adjusted EURIBOR Rate for eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D) or any other reserve ratio or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Loans. Such reserve percentage shall include those imposed pursuant to Regulation D. Term Benchmark Loans for which the associated Benchmark is adjusted by reference to the Statutory Reserve Rate (per the related definition of such Benchmark) shall be deemed to constitute eurocurrency funding and to be subject to such

Second Amended and Restated Credit Agreement (Orthofix), Page 44

reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

"Subordinated Indebtedness" of a Person means any Indebtedness of such Person, the payment of which is subordinated to payment of the Secured Obligations to the written reasonable satisfaction of the Administrative Agent.

"Subordination Provisions" has the meaning assigned to such term in clause (r) of Article VII.

"subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity, the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent, including in respect of any company or corporation incorporated in the Netherlands a 'dochtermaatschappij' within the meaning of Section 2:24a of the Dutch Civil Code (regardless of whether the shares or voting rights in the shares in such company are held directly or indirectly through another 'dochtermaatschappij').

"Subsidiary" means any direct or indirect subsidiary of the Company, a Borrower or a Loan Party, as applicable. In this Agreement and in each Loan Document, each reference to a Subsidiary that does not specify the applicable parent company is a reference to a Subsidiary of the Company.

"Subsidiary Guarantors" means each Subsidiary of the Company listed on Schedule 3.15 and each other Subsidiary of the Company that from time to time provides a Loan Guaranty or Obligation Guaranty.

"Supported QFC" has the meaning assigned to it in Section 9.24.

"Swap Agreement" means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Company or its Subsidiaries shall be a Swap Agreement.

"Swap Agreement Obligations" means any and all obligations of the Orthofix Entities (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Swap Agreement permitted hereunder with JPMorgan Chase Bank, any Lender or any Affiliate of JPMorgan Chase Bank or a Lender or any Person that was a Lender or an Affiliate of a Lender at the time such Swap Agreement was entered into, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with JPMorgan Chase Bank, any Lender or any Affiliate of JPMorgan Chase Bank or a Lender or any Person that was a Lender or an Affiliate of a Lender at the time such Swap Agreement was entered into.

Second Amended and Restated Credit Agreement (Orthofix), Page 45

"Swap Obligation" means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

"Swingline Commitment" means the obligation of the Swingline Lender to make Swingline Loans in an aggregate principal amount not to exceed $15,000,000.

"Swingline Exposure" means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving Lender at any time shall be the sum of (a) its Applicable Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender and (b) the principal amount of all Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).

"Swingline Lender" means JPMorgan Chase Bank, in its capacity as lender of Swingline Loans hereunder. Any consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by JPMorgan Chase Bank in its capacity as Administrative Agent or Issuing Bank shall be deemed given by JPMorgan Chase Bank in its capacity as Swingline Lender as well.

"Swingline Loan" means a Loan made pursuant to Section 2.04.

"Target" has the meaning assigned to such term in the definition of "Acquisition".

"TARGET2" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.

"TARGET Day" means any day on which TARGET2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.

"Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes (including value added tax as provided for in the Dutch Value Added Tax Act 1968 (Wet op de Omzetbelasting 1968)), or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"Term Benchmark" when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate.

"Term SOFR Determination Day" has the meaning assigned to it under the definition of Term SOFR Reference Rate.

"Term SOFR Rate" means, with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.

Second Amended and Restated Credit Agreement (Orthofix), Page 46

"Term SOFR Reference Rate" means, for any day and time (such day, the "Term SOFR Determination Day"), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum published by the CME Term SOFR Administrator and identified by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the "Term SOFR Reference Rate" for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then, so long as such day is otherwise a U.S. Government Securities Business Day, the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding U.S. Government Securities Business Day is not more than five (5) U.S. Government Securities Business Days prior to such Term SOFR Determination Day.

"the Netherlands" means the European part of the Kingdom of the Netherlands.

"Third Party Payor" means (a) a commercial medical insurance company, health maintenance organization, employer, professional provider organization or other third party payor that reimburses providers for Medical Services provided to individual patients, (b) a nonprofit medical insurance company (such as the Blue Cross, Blue Shield entities), (c) the U.S. government or a political subdivision thereof (including, without limitation, CMS), or any state, county or municipality or department, agency or instrumentality thereof, that is responsible for payment of an Account, chattel paper or general intangible under any Medical Reimbursement Program, or any agent, administrator, intermediary or carrier for the foregoing, making payments under a Medical Reimbursement Program and (d) any other domestic or foreign government or Governmental Authority, a political subdivision thereof or any municipality or department, agency or instrumentality thereof, that is responsible for payment of an Account, chattel paper or general intangible under any Medical Reimbursement Program, or any agent, administrator, intermediary or carrier for the foregoing, making payments under a Medical Reimbursement Program.

"Third Party Payor Arrangement" shall mean a written agreement or arrangement with a Third Party Payor pursuant to which the Third Party Payor pays all or a portion of the charges of any Orthofix Entity for providing Medical Services.

"Total Indebtedness" means, at any date, the aggregate principal amount of all Indebtedness (other than Indebtedness described in clauses (k) and (m) of the definition thereof unless (i) in the case of Indebtedness described in clause (k) thereof, the amount of such earnout has been earned, is due to be paid as of the date of determination and remains due and payable after the applicable date of payment or (ii) in the case of Indebtedness described in clause (m) thereof, such Indebtedness is reflected on the balance sheet of the Company as a liability in accordance with GAAP) determined for the Company and its Subsidiaries on a consolidated basis at such date, in accordance with GAAP.

"Total Net Leverage Ratio" means, on any date, the ratio of (a) Total Indebtedness on such date minus the excess, if any, of the amount of domestic Unrestricted Cash as of such date over the Dollar Amount of $20,000,000 to (b) LTM EBITDA.

"Transactions" means the execution, delivery and performance by the Borrowers and the other Loan Parties of this Agreement and the other Loan Documents, as applicable, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

"TRICARE" means, collectively, the program of medical benefits covering former and active members of the uniformed services and certain of their dependents (including TRICARE Prime, TRICARE

Second Amended and Restated Credit Agreement (Orthofix), Page 47

Extra and TRICARE Standard), financed and administered by the HHS, and all laws, rules, regulations, manuals, orders, guidelines or requirements (whether or not having the force of law) pertaining to such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.

"Type", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, the Alternate Base Rate or the Adjusted Daily Simple RFR.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.

"UK" and "United Kingdom" mean the United Kingdom of Great Britain and Northern Ireland.

"UK Bank Levy" means the bank levy provided for in Section 73 and Schedule 19 of the English law Finance Act 2011.

"UK Borrower" means any Borrower (a) that is organized or formed under the laws of the United Kingdom or (b) payments from which under this Agreement or any other Loan Document are subject to withholding Taxes imposed by the laws of the United Kingdom. For the avoidance of doubt, there is no UK Borrower on the Effective Date.

"UK Subsidiary" means any Subsidiary that is organized under the laws of the United Kingdom; provided, that, in this Agreement and in each Loan Document, each reference to a UK Subsidiary that does not specify the applicable parent company is a reference to a UK Subsidiary of Orthofix Limited.

"UK Treaty Lender" means a Lender which is entitled under a double taxation agreement with the United Kingdom to claim a reduction in United Kingdom withholding tax.

"Unadjusted Benchmark Replacement" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

"Unfunded Commitment" means, with respect to each Lender, the Commitment of such Lender less its Revolving Exposure.

"Unliquidated Obligations" means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

"Unrestricted Cash" means, at any time, cash on hand of the Company and the other U.S. Loan Parties, that meets each of the following requirements: such cash on hand is (a) denominated in Dollars, (b) not subject to any restriction as to its use, (c) located in a deposit account in the U.S. and subject to a deposit account control agreement in favor of, and in form and substance acceptable to, the Administrative Agent, (d) included in "cash" and not "restricted cash" on the consolidated balance sheet of the Company, and (e) not subject to any Lien, except (i) Permitted Encumbrances under clause (a) of such definition, (ii) a banker's Lien or right of setoff pursuant to customary deposit arrangements and (iii) Liens to secure the Secured Obligations (but not in a LC Collateral Account or otherwise specifically designated as cash collateral hereunder).

Second Amended and Restated Credit Agreement (Orthofix), Page 48

"U.S." means the United States of America.

"U.S. Borrower" or "U.S. Borrowers" have the meaning assigned to such terms in the preamble.

"U.S. Government Securities Business Day" means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"U.S. Loan Parties" means the Company, each other U.S. Borrower and each other Loan Party that is a Domestic Subsidiary.

"U.S. Person" means a "United States person" within the meaning of Section 7701(a)(30) of the Code.

"U.S. Security Agreement" means, collectively, the (a) security agreement described in clause (a) of the definition of "Security Agreement" and (b) any other charge, mortgage, security assignment, pledge or security agreement described in clause (k) of the definition of "Security Agreement", including, but not limited to, any trademark security agreement, patent security agreement or copyright security agreement that is in each case governed by the laws of the U.S.

"U.S. Special Resolution Regime" has the meaning assigned to it in Section 9.24.

"U.S. Tax Compliance Certificate" has the meaning assigned to such term in Section 2.16(f)(ii)(B)(3).

"USA PATRIOT Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

"Wholly Owned" means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person, provided that, notwithstanding the foregoing, up to five percent of any Foreign Subsidiary's Equity Interests may be owned by another Person to the extent such Equity Interests constitute qualifying shares required by the jurisdiction of such Foreign Subsidiary (but in each case, only to the extent required by applicable law), and still constitute a "Wholly Owned" Subsidiary for purposes of this definition.

"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

"Write-Down and Conversion Powers" means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving Loan") or by Type (e.g., a "Term Benchmark Loan") or by Class and Type (e.g., a "Term Benchmark Revolving Loan"). Borrowings also may be classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Term Benchmark Borrowing") or by Class and Type (e.g., a "Term Benchmark Revolving Borrowing").

Second Amended and Restated Credit Agreement (Orthofix), Page 49

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase "at any time" or "for any period" shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Except as otherwise specified in this Agreement or any other Document, whenever any performance obligation hereunder or under any other Loan Document (other than a payment obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day.

SECTION 1.04. Accounting Terms; GAAP.

(a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Company notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Company that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Company or any Subsidiary at "fair value", as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner

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as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

(b) Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of "Capital Lease Obligations," any change in accounting for leases pursuant to GAAP resulting from the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) ("FAS 842"), to the extent such adoption would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

SECTION 1.05. Pro Forma Adjustments for Acquisitions and Dispositions. To the extent a Borrower or any Subsidiary makes any Acquisition permitted pursuant to Section 6.04 or disposition of assets outside the ordinary course of business permitted by Section 6.05 during the period of four fiscal quarters of the Company most recently ended, the Total Net Leverage Ratio, Interest Coverage Ratio and EBITDA shall be calculated after giving effect thereto on a Pro Forma Basis (including pro forma adjustments arising out of events which are directly attributable to the Acquisition or the disposition of assets, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer of such Borrower), as if such Acquisition or such disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four-quarter period.

SECTION 1.06. Status of Obligations. In the event that any Borrower, any other Loan Party or any other Orthofix Entity shall at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or cause such other Loan Party or Orthofix Entity to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as "senior indebtedness" and as "designated senior indebtedness" and words of similar import under and in respect of any indenture or other agreement or instrument under which any Subordinated Indebtedness of an Orthofix Entity is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

SECTION 1.07. Interest Rates; Benchmark Notification. The interest rate on a Loan denominated in Dollars or a Foreign Currency may be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 2.13(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark

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Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrowers, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

SECTION 1.08. Limited Condition Acquisitions. In the case of the incurrence of any Indebtedness (excluding, for the avoidance of doubt, Indebtedness constituting Revolving Loans and any Incremental Term A Loans) or Liens or the making of any Permitted Acquisitions or other Investments, Restricted Payments, prepayments of certain specified Indebtedness or Dispositions in connection with a Limited Condition Acquisition, at the Borrower's option, the relevant ratios, (excluding calculations of applicable ratios and determining other compliance with this Agreement with respect to (i) the definition of "Applicable Rate" and (ii) Section 6.12), baskets (specifically excluding the applicable reference period used to determine the maximum basket amount under Section 2.08(e)), representations and warranties (other than customary Specified Representations and Acquired Company Representations (which representations, notwithstanding anything herein to the contrary, shall be required to be accurate on the basis set forth in the acquisition agreement as of the date of the consummation of any Limited Condition Acquisition)) shall be determined, and any Default or Event of Default blocker shall be tested, as of the date the definitive acquisition agreements for such Limited Condition Acquisition are entered into and calculated as if the Limited Condition Acquisition and other pro forma events in connection therewith were consummated on such date; provided that if the Company has made such an election, in connection with the calculation of any ratio or basket with respect to the incurrence of Indebtedness (including any Incremental Term A Loans or increases to the aggregate amount of Commitments) or Liens, or the making of any Permitted Acquisition or other Investments, Restricted Payments, prepayments of certain specified Indebtedness or Dispositions or other basket or ratio determinations under this Agreement on or following such date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the definitive agreement for such Limited Condition Acquisition is terminated, any such ratio or basket shall be calculated on a Pro Forma Basis assuming such Limited Condition Acquisition and other pro forma events in connection therewith (including without limitation any incurrence of Indebtedness, granting of Liens (incurrence of Priority Debt) and/or Dispositions) have been consummated and/or incurred, as applicable.

SECTION 1.09. Exchange Rates; Currency Equivalents

(a) The Administrative Agent or the Issuing Bank, as applicable, shall determine the Dollar Amount amounts of Term Benchmark Borrowings or RFR Borrowings or Letter of Credit extensions denominated in Foreign Currencies on each Revaluation Date. Such Dollar Amount shall become effective as of such Revaluation Date and shall be the Dollar Amount of such amounts until the next Revaluation Date to occur. Except for purposes of financial statements delivered by the Company hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any Agreed Currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Amount amount as so determined by the Administrative Agent or the Issuing Bank, as applicable.

(b) Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of a Term Benchmark Loan or an RFR Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing, Loan or Letter of Credit is denominated in a Foreign Currency, such amount shall be the Dollar Amount of such amount (rounded to the nearest unit of such Foreign Currency, with 0.5

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of a unit being rounded upward), as determined by the Administrative Agent or the Issuing Bank, as the case may be.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans in Agreed Currencies to the Borrowers from time to time during the Availability Period in an aggregate principal amount that will not result (after giving effect to any application of proceeds of such Borrowing pursuant to Section 2.09(a)) in (a) such Lender's Revolving Exposure exceeding such Lender's Commitment, (b) the amount of the Aggregate Revolving Exposure denominated in Foreign Currencies exceeding the Maximum Foreign Currency Amount or (c) the Aggregate Revolving Exposure exceeding the aggregate Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings.

(a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. ABR Loans may only be borrowed by a U.S. Borrower and must be in Dollars. Swingline Loans (i) may only be borrowed by a U.S. Borrower, (ii) must be ABR Loans made in Dollars, and (iii) shall be made in accordance with the procedures set forth in Section 2.03.

(b) Subject to Section 2.13, each Revolving Borrowing shall be comprised (i) in the case of Borrowings in Dollars, entirely of ABR Loans or Term Benchmark Loans and (ii) in the case of Borrowings in any other Agreed Currency, entirely of Term Benchmark Loans or RFR Loans, as applicable, in each case of clauses (i) and (ii) of the same Agreed Currency, as the Company may request in accordance herewith, provided that all Revolving Borrowings made on the Effective Date must be made as ABR Borrowings but may be converted into Term Benchmark Borrowings in accordance with Section 2.07. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.13, 2.14, 2.15 and 2.16 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Term Benchmark Borrowing denominated in Dollars, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the commencement of each Interest Period for any Term Benchmark Borrowing denominated in Euros, such Borrowing shall be in an aggregate amount that is an integral multiple of €500,000 and not less than €1,000,000. At the commencement of each Interest Period for any RFR Borrowing denominated in Pounds Sterling, such Borrowing shall be in an aggregate amount that is an integral multiple of £500,000 and not less than £1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement

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of an LC Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $100,000, provided that a Swingline Loan may be in the aggregate amount that is required to finance the reimbursement of an LC Disbursement denominated in Dollars as contemplated by Section 2.05(e). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Term Benchmark Borrowings or RFR Borrowings outstanding in the aggregate.

(d) Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Company shall notify the Administrative Agent of such request at the appropriate office set forth in Section 9.01, either in writing (delivered by hand or fax) in any form approved by the Administrative Agent and signed by the Company or through Electronic Systems (a) in the case of a Term Benchmark Borrowing denominated in Dollars, not later than 12:00 noon Local Time, three U.S. Government Securities Business Days before the date of the proposed Borrowing,(b) in the case of a Term Benchmark Borrowing denominated in Euros, not later than 12:00 noon Local Time, three Business Days before the date of the proposed Borrowing, (c) in the case of an RFR Borrowing denominated in Pounds Sterling, that not later than 11:00 a.m. Local Time, five RFR Business Days before the date of the proposed Borrowing or (d) in the case of an ABR Borrowing, not later than noon, Local Time, on the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., Local Time, on the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and shall specify the following information in compliance with Section 2.01:

(i) the Class of Borrowing, the aggregate amount of the requested Borrowing, and a breakdown of the separate wires comprising such Borrowing;

(ii) name of the applicable Borrower(s);

(iii) the date of such Borrowing, which shall be a Business Day;

(iv) whether such Borrowing is to be an ABR Borrowing, a Term Benchmark Borrowing or a RFR Borrowing;

(v) in the case of a Term Benchmark Borrowing, the Agreed Currency applicable thereto;

(vi) in the case of a Term Benchmark Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period."

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing by the Company in Dollars. If no Interest Period is specified with respect to any requested Term Benchmark Borrowing, then the applicable Borrower(s) shall be deemed to have selected an Interest Period of one month's duration. If no Agreed Currency is specified with respect to any requested Term Benchmark Borrowing, then the applicable Borrower shall be deemed to have selected a Term Benchmark Borrowing in Dollars. If no Borrower is specified, then the requested Borrowing shall be deemed to be requested by the Company. Promptly following receipt of a Borrowing Request in accordance with this Section, the

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Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing.

SECTION 2.04. Swingline Loans.

(a) Subject to the terms and conditions set forth herein, from time to time during the Availability Period, the Swingline Lender agrees to make Swingline Loans denominated in Dollars to a U.S. Borrower, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Lender's Swingline Commitment, (ii) the Swingline Lender's Revolving Exposure exceeding its Commitment, or (iii) the Aggregate Revolving Exposures exceeding the aggregate Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the U.S. Borrowers may borrow, prepay and reborrow Swingline Loans. To request a Swingline Loan, the Company shall submit a written notice to the Administrative Agent by fax or through Electronic Systems, if arrangements for doing so have been approved by the Administrative Agent, not later than 2:00 p.m., Local Time, on the day of a proposed Swingline Loan. Each such notice shall be in a form approved by the Administrative Agent, shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Company. The Swingline Lender shall make each Swingline Loan available to a U.S. Borrower by means of (i) a credit to the Funding Account(s), (ii) a wire transfer of funds upon the written instruction of the Company and including specific wiring information required by the Swingline Lender with respect to making any such wire and (iii) in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank.

(b) The Swingline Lender may by written notice given to the Administrative Agent require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which the Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, promptly upon receipt of such notice from the Administrative Agent (and in any event, if such notice is received by 11:00 a.m., Local Time, on a Business Day no later than 4:00 p.m., Local Time on such Business Day and if received after 11:00 a.m., Local Time, "on a Business Day" shall mean no later than 9:00 a.m. Local Time on the immediately succeeding Business Day), to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatismutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Company of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent

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to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the applicable U.S. Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the payment thereof.

(c) Any Swingline Lender may be replaced at any time by written agreement among the Company, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of a Swingline Lender. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid interest accrued for the account of the replaced Swingline Lender pursuant to Section 2.12(a). From and after the effective date of any such replacement, (x) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans made thereafter and (y) references herein to the term "Swingline Lender" shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of a Swingline Lender hereunder, the replaced Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans made by it prior to its replacement, but shall not be required to make additional Swingline Loans.

SECTION 2.05. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Company, on behalf of a Borrower, may request the issuance of standby Letters of Credit denominated in an Agreed Currency as the applicant thereof for the support of the obligations of the Company or any Subsidiary thereof, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period; provided that if the Total Net Leverage Ratio is in excess of 3.00 to 1.00 on any date of issuance of a Letter of Credit, then Letters of Credit may only be issued to support the obligations of Non-Loan Parties in an amount not in excess of the amount of Other Available Funds on such date. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control. Notwithstanding anything herein to the contrary, the Issuing Bank shall have no obligation hereunder to issue, and shall not issue, any Letter of Credit (i) the proceeds of which would be made available to any Person (A) to fund any activity or business of or with any Sanctioned Person, or in any Sanctioned Country, or (B) in any manner that would result in a violation of any Sanctions by any party to this Agreement, (ii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Bank in good faith deems material to it, (iii) in the case of a request for a Letter of Credit to be denominated in a Foreign Currency, if such Issuing Bank is not able to issue Letters of Credit in such Foreign Currency, or (iv) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit generally; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules,

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guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed not to be in effect on the Effective Date for purposes of clause (ii) above, regardless of the date enacted, adopted, issued or implemented.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Company shall hand deliver or fax (or transmit by other electronic communication to which the Issuing Bank has agreed to in writing) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit (which such amount shall not be less than the Dollar Amount of $50,000.00), the Agreed Currency applicable thereto, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. In addition, as a condition to any such Letter of Credit issuance, the applicable Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the Issuing Bank and using the Issuing Bank's standard form (each a "Letter of Credit Agreement"). A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the sum of (x) the Dollar Amount of the aggregate undrawn amount of all outstanding Letters of Credit issued by the Issuing Bank at such time plus (y) the Dollar Amount of the aggregate amount of all LC Disbursements made by the Issuing Bank that have not yet been reimbursed by or on behalf of the applicable Borrower shall not exceed its Issuing Bank Sublimit; (ii) no Revolving Lender's Revolving Exposure shall exceed its Commitment; (iii) the aggregate LC Exposure shall not exceed the Dollar Amount of $50,000,000; (iv) the Aggregate Revolving Exposure shall not exceed the aggregate Commitments and (v) the aggregate outstanding principal Dollar Amount of the sum of all Term Benchmark Loans and RFR Loans in Foreign Currencies plus LC Exposures in Foreign Currencies shall not exceed the Maximum Foreign Currency Amount. The Borrowers may, at any time and from time to time, reduce the Issuing Bank Sublimit of any Issuing Bank with the consent of such Issuing Bank; provided that the Borrowers shall not reduce the Issuing Bank Sublimit of any Issuing Bank if, after giving effect to such reduction, the conditions set forth in clauses (i) through (iv) above shall not be satisfied. Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank's Issuing Bank Sublimit.

(c) Expiration Date. Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, including, without limitation, any automatic renewal provision, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided that any Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (ii) above) subject to no Default and customary restrictions and requirements of the applicable Issuing Bank; provided further that, notwithstanding the foregoing, a Letter of Credit may expire after the Maturity Date if the Borrowers provide cash collateral acceptable to the applicable Issuing Bank in its sole discretion in accordance with Section 2.05(j) no later than thirty (30) days prior to the Maturity Date. For the avoidance of doubt, if the

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Maturity Date shall be extended pursuant to Section 2.25, "Maturity Date" as referenced in this paragraph shall refer to the Maturity Date as extended pursuant to Section 2.25; provided that, notwithstanding anything in this Agreement (including Section 2.25) or any other Loan Document to the contrary, the Maturity Date, as such term is used in reference to the Issuing Bank or any Letter of Credit issued thereby, may not be extended with respect to an Issuing Bank without the prior written consent of such Issuing Bank.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, (i) the U.S. Borrowers shall reimburse such LC Disbursement and (ii) each Borrower other than the U.S. Borrowers shall reimburse such LC Disbursement, but only to the extent that such LC Disbursement is attributable to a Foreign Subsidiary of the Company, in each case by paying to the Administrative Agent an amount equal to such LC Disbursement in the applicable Agreed Currency not later than 11:00 a.m., Local Time, on (i) the Business Day that the Company receives notice of such LC Disbursement, if such notice is received prior to 9:00 a.m., Local time, on the day of receipt, or (ii) the Business Day immediately following the day that the Company receives such notice, if such notice is received after 9:00 a.m., Local time, on the day of receipt; provided that, if such LC Disbursement denominated in U.S. Dollars and is greater than or equal to $100,000, the U.S. Borrowers may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in the amount of such LC Disbursement and, to the extent so financed, the Borrowers' obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof, and such Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage in the applicable Agreed Currency of the payment then due from the Borrowers, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatismutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank, as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement. If the Borrowers' reimbursement of, or obligation to reimburse, any

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amounts in any Foreign Currency would subject a Credit Party to any stamp duty, ad valorem charge or similar tax that would not be payable if such reimbursement were made or required to be made in Dollars, the Borrowers shall, at their option, either (x) pay the amount of any such tax requested by such Credit Party or (y) reimburse each LC Disbursement made in such Foreign Currency in Dollars, in an amount equal to the Dollar Amount of such LC Disbursement on the date such LC Disbursement is made.

(f) Obligations Absolute. The Borrowers' obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers' obligations hereunder. None of the Administrative Agent, the Revolving Lenders or the Issuing Bank, or any of their respective Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct damages (as opposed to special, indirect, consequential or punitivedamages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by the Issuing Bank's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence, bad faith or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Company by telephone (confirmed by fax or through Electronic Systems) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans (or if such LC Disbursement is denominated

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in a Foreign Currency, the rate determined by the Administrative Agent in accordance with banking industry rules and conventions on interbank compensation for such Foreign Currency plus the then effective Applicable Rate with respect to Term Benchmark Loans or RFR Loans, as applicable) and such interest shall be due and payable on the date when such reimbursement is due; provided that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement and Resignation of the Issuing Bank.

(i) The Issuing Bank may be replaced at any time by written agreement among the Company, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(b). From and after the effective date of any such replacement, (x) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (y) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(ii) Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing Bank may resign as an Issuing Bank at any time upon thirty days' prior written notice to the Administrative Agent, the Company and the Lenders, in which case, such resigning Issuing Bank shall be replaced in accordance with Section 2.05(i)(i) above.

(j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Company receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the "LC Collateral Account"), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to any Borrower described in clause (h), (i) or (j) of Article VII. The Borrowers also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.10(b) or Section 2.19. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrowers hereby grant the Administrative Agent a security interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited thereto. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrowers' risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such

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account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3) Business Days after all such Events of Default have been cured or waived as confirmed in writing by the Administrative Agent.

(k) Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions, amendments and renewals, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the stated amount of the Letters of Credit issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which a Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement, and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank. All Letters of Credit issued in a Foreign Currency shall be reported in such Foreign Currency.

(l) LC Exposure Determination. For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.

(m) Letters of Credit Issued for Account of Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the "account party," "applicant," "customer," "instructing party," or the like of or for such Letter of Credit, and without derogating from any rights of the applicable Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrowers (i) shall reimburse, indemnify and compensate the applicable Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of such Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. Each Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of such Borrower, and that such Borrower's business derives substantial benefits from the businesses of such Subsidiaries.

SECTION 2.06. Funding of Borrowings.

(a) Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof by wire transfer of immediately available funds in the requested Agreed Currency by 1:00 p.m., Local Time, to the account of the Administrative Agent most recently designated by it for such

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purpose by notice to the Lenders in an amount equal to such Lender's Applicable Percentage; provided that and Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the Company by promptly crediting the amounts so received, in like funds, to the Funding Account(s); provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers each severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the applicable Overnight Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, the interest rate applicable to ABR Revolving Loans, or in the case of Foreign Currencies, in accordance with such market practice, in each case, as applicable. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing; provided, that any interest received from the Borrowers by the Administrative Agent during the period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount shall be solely for the account of the Administrative Agent.

SECTION 2.07. Interest Elections; Existing LIBOR Loans.

(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Term Benchmark Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Company may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Term Benchmark Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Company may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. Notwithstanding anything herein to the contrary, Term Benchmark Loans and RFR Loans in an Agreed Currency may be converted and/or continued only as Term Benchmark Loans or RFR Loans, as applicable, in the same Agreed Currency. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section, the Company shall notify the Administrative Agent of such election either in writing (delivered by hand or fax) or by delivering a written Interest Election Request in a form approved by the Administrative Agent and signed by the Company or through Electronic Systems, if arrangements for doing so have been approved by the Administrative Agent, by the time that a Borrowing Request would be required under Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable.

(c) Each Interest Election Request shall specify the following information in compliance with Section 2.02:

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(i) the name of the applicable Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing (in the case of Borrowings denominated in Dollars) or a Term Benchmark Borrowing or an RFR Borrowing, and if a Term Benchmark Borrowing, the applicable Agreed Currency; and

(iv) if the resulting Borrowing is a Term Benchmark Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period".

(v) If any such Interest Election Request requests a Term Benchmark Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month's duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of such Lender's portion of each resulting Borrowing.

(e) If the Company fails to deliver a timely Interest Election Request with respect to a Term Benchmark Revolving Borrowing in Dollars prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be deemed to have an Interest Period that is one month. If the Company fails to deliver a timely and complete Interest Election Request with respect to a Term Benchmark Borrowing in a Foreign Currency prior to the end of the Interest Period therefor, then, unless such Term Benchmark Borrowing is repaid as provided herein, the Company shall be deemed to have selected that such Term Benchmark Borrowing shall automatically be continued as a Term Benchmark Borrowing in its original Agreed Currency with an Interest Period of one month at the end of such Interest Period. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Company, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Term Benchmark Borrowing and (ii) unless repaid, (x) each Term Benchmark Borrowing and each RFR Borrowing, in each case denominated in Dollars shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto and (y) each Term Benchmark Borrowing and each RFR Borrowing, in each case denominated in a Foreign Currency shall bear interest at the Central Bank Rate for the applicable Agreed Currency plus the CBR Spread; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Agreed Currency cannot be determined, any outstanding affected Term Benchmark Loans denominated in any Agreed Currency other than Dollars shall either be (A) converted to an ABR Borrowing denominated in Dollars (in an amount equal to the Dollar Amount of such Foreign Currency) at the end of the Interest Period, as applicable, therefor or (B) prepaid at the end of the applicable Interest Period, as applicable, in full; provided that if no election is made by the Company by the earlier of (x) the date that is three Business Days after receipt by the Company of such notice and (y) the last day of the current Interest Period for the applicable Term Benchmark Loan, the Company shall be deemed to have elected clause (A) above.

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(f) Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, with respect to any Loan bearing interest at a rate determined by reference to the "Adjusted LIBO Rate" immediately prior to giving effect to the First Amendment (each such Loan, an "Existing LIBOR Loan"): (i) each suchExisting LIBOR Loan shall continue to bear interest based on the "Adjusted LIBO Rate" for the "Interest Period" in effect for such Existing LIBOR Loan (in each case as defined in this Agreement immediately prior to giving effect to the First Amendment) in the manner and with the rate and margins set forth in this Agreement immediately prior to giving effect to the First Amendment and (ii) at the end of the current "Interest Period" (as defined in this Agreement immediately prior to giving effect to the First Amendment) for each Existing LIBOR Loan (A) all accrued and unpaid interest on such Existing LIBOR Loan shall be paid in full and (B) such Existing LIBOR Loan shall be either paid in full or such Existing LIBOR Loan shall be converted to an ABR Borrowing or a Term Benchmark Borrowing, in each case in the manner set forth in this Agreement after giving effect to the First Amendment. The parties hereby agree that any rights, privileges and protections granted to the Administrative Agent or any other Secured Party pursuant to the terms and conditions of this Agreement (prior to giving effect to the First Amendment) or any other Loan Document in connection with any Existing LIBOR Loan (including, but not limited to, those provided in Section 2.02, 2.12, 2.13, 2.14, 2.15, 2.16, and 2.17) shall survive and remain in full force and effect with respect to each such Existing LIBOR Loan (x) until all such Existing LIBOR Loans have been repaid in full or converted to ABR Borrowings or Term Benchmark Borrowings under the terms of this Agreement or (y) to the extent set forth in Section 9.05, as applicable.

SECTION 2.08. Termination and Reduction of Commitments; Increase in Commitments.

(a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of all outstanding Revolving Loans and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit (or at the discretion of the Administrative Agent a backup standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank) in an amount equal to 105% of the LC Exposure as of such date), (iii) the payment in full of the accrued and unpaid fees, and (iv) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon (other than contingent obligations that have not yet been asserted); provided, that the Borrowers shall not terminate or reduce the Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Aggregate Revolving Exposure would exceed the aggregate Commitments.

(c) The Borrowers may from time to time reduce the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of the Dollar Amount of $100,000 and not less than the Dollar Amount of $5,000,000 and (ii) the Borrowers shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the Aggregate Revolving Exposure would exceed the aggregate Commitments.

(d) The Company shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Company pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Company may state that such notice is

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conditioned upon the effectiveness of other credit facilities or other transactions specified therein, in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

(e) The Borrowers shall have the right to request (i) one or more increases in the Commitments (each a "Commitment Increase") and/or (ii) one or more incremental term a loan commitments (each an "Incremental Term A Loan Commitment" and together with any Commitment Increase, the "Incremental Commitments") to make incremental term a loans (each an "Incremental Term A Loan") by obtaining (x) additional Commitments or (y) Incremental Term A Loan Commitments, either from one or more of the Lenders or another lending institution, provided that (A) any such request for an Incremental Commitment shall be in a minimum Dollar Amount of $5,000,000, (B) after giving effect thereto, the sum of the total of all such Commitment Increases and Incremental Term A Loan Commitments does not exceed the greater of (1) the Dollar Amount of $150,000,000 and (2) a Dollar Amount equal to (i) 350% of the Company's then LTM EBITDA minus (ii) the sum of the aggregate Commitments of all Lenders plus all outstanding Incremental Term A Loans (if any), (C) (x) the Administrative Agent and (y) in the case of any Commitment Increase, each Swingline Lender and each Issuing Bank have approved the identity of any such new Lender and consented to its becoming a Lender, (D) any such new Lender that will be a (x) Revolving Lender has agreed to, and is capable of, funding in each of the Agreed Currencies in accordance with the terms hereof and (y) Lender with an Incremental Term A Loan Commitment has agreed to, and is capable of, funding in the Agreed Currency of such Incremental Term A Loan in accordance with the terms of such Incremental Term A Loan, (E) any such new Lender assumes all of the rights and obligations of a Revolving Lender or a Lender with an Incremental Term A Loan Commitment, as applicable, hereunder and (F) the procedures described in Section 2.08(f) have been satisfied. Each Incremental Commitment shall constitute Obligations of the Borrowers and shall be guaranteed and treated the same in all other respects as the other extensions of credit on a pari passu basis. Nothing contained in this Section 2.08 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment or make an Incremental Term A Loan Commitment hereunder at any time.

(f) Any amendment hereto in connection with or to effectuate such Incremental Commitments (an "Incremental Amendment") shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrowers and each Lender with an Incremental Commitment (each, an "Incremental Lender"), subject only to the approval of Required Lenders if any Commitment Increase or addition of an Incremental Term A Loan Commitment would cause the aggregate Commitments, Incremental Term A Loan Commitments and Incremental Term A Loans (calculated for any Incremental Term A Loans based on the initial principal amount borrowed) to exceed the greater of (i) the Dollar Amount of $450,000,000 and (ii) an amount equal to 350% of the Company's then LTM EBITDA, in each case in the aggregate. As a condition precedent to the effectiveness of each such Incremental Amendment, the Borrowers shall deliver to the Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such Incremental Amendment, and (B) in the case of the Borrowers, certifying that, before and after giving effect to such Incremental Amendment (1) the representations and warranties contained in Article III and the other Loan Documents are true and correct in all material respects (provided, that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date; provided that, in the case of Incremental Term A Loan Commitments established to finance a Limited Condition Acquisition, the condition set forth in this clause (1) may, at the Company's option, be modified in a manner determined by the Company and the Incremental Lenders providing such Incremental Term A Loan Commitments, as set forth in the applicable Incremental

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Amendment, such that the only representations and warranties the accuracy of which is a condition to the effectiveness of such Incremental Term A Loan Commitments are the Specified Representations and the Acquired Company Representations, (2) no Default exists; provided that, in the case of Incremental Term A Loan Commitments established to finance a Limited Condition Acquisition, except with respect to the requirement that there not have occurred and be continuing any Default under clause (a) or (b) of Article VII or any Default with respect to any Borrower under clause (h), (i) or (j) of Article VII (which must be true both immediately prior to and immediately after giving effect to such Incremental Commitments and the making of Loans thereunder to be made on the date of effectiveness thereof), any condition set forth in this clause (2) may, at the Company's option, as set forth in the applicable Incremental Amendment, be tested at the signing of the agreement to make such Limited Condition Acquisition or on the date of effectiveness of such Incremental Term A Loan Commitments, and (3) the Borrowers are in compliance (assuming such Incremental Commitment is drawn in full and after giving effect to other pro forma adjustments events) with the covenants contained in Section 6.12 on a Pro Forma Basis as of the end of the most recent four consecutive fiscal quarter period ended on or prior to such date (as if the incurrence of such Incremental Commitment had occurred on the first day of such four fiscal quarter period); provided that, in the case of Incremental Term A Loan Commitments established to finance a Limited Condition Acquisition, the condition set forth in this clause (3) may, at the Company's option, as set forth in the applicable Incremental Amendment, be tested at the signing of the agreement to make such Limited Condition Acquisition or on the date of effectiveness of such Incremental Term A Loan Commitments, (ii) legal opinions and documents and instruments consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent, and (iii) such other items as reasonably requested by the Administrative Agent and its counsel (including counsel in foreign jurisdictions) in connection with any UK Borrower, any Dutch Borrower, any Foreign Currency or otherwise as reasonably deemed necessary or advisable by the Administrative Agent.

(g) In the case of each Incremental Term A Loan (the terms of which shall be set forth in the relevant Incremental Amendment):

(i) such Incremental Term A Loan will (x) mature in a manner reasonably acceptable to the Incremental Lenders making such Incremental Term A Loans and the Borrowers, but will not in any event have a maturity date that is earlier than the Maturity Date and (y) amortize in a manner reasonably acceptable to the Incremental Lenders making such Incremental Term A Loans and the Borrowers, provided that the resultant weighted average life of such Incremental Term A Loan shall be not be less than half of the remaining tenor of the revolving facility;

(ii) the Applicable Rate and pricing grid, if applicable, for such Incremental Term A Loan shall be determined by the applicable Incremental Lenders and the Borrowers and shall be consistent with then current market conditions;

(iii) the proceeds of such Incremental Term A Loan shall be used for general corporate purposes (including Permitted Acquisitions and Restricted Payments permitted pursuant to Section 6.08); and

(iv) except as provided above, all other terms and conditions applicable to any Incremental Term A Loan, to the extent not substantially consistent (taken as a whole) with the terms and conditions of this Agreement prior to giving effect thereto, shall be reasonably satisfactory to the Administrative Agent and the Borrowers (but in no event, except as provided above, shall such terms and conditions be more restrictive, taken as a whole, than those set forth in this Agreement and any other Loan Document);

Second Amended and Restated Credit Agreement (Orthofix), Page 66

(h) On the effective date of any such Incremental Amendment, (i) any Incremental Lender increasing (or, in the case of any newly added Incremental Lender, extending) its Commitment shall make available to the Administrative Agent such amounts in immediately available funds in such Agreed Currencies as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender's portion of the outstanding Revolving Loans in the various Agreed Currencies of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Loans in the various Agreed Currencies, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase (or addition) in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Company, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Term Benchmark Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.15 if the deemed payment occurs other than on the last day of the related Interest Periods. Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Company, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.

SECTION 2.09. Repayment of Loans; Evidence of Debt.

(a) The Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the fifth Business Day after such Swingline Loan is made; provided that on each date that a Revolving Loan is made in Dollars, the Borrowers shall repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding. All Borrowings shall be repaid and prepaid in the Agreed Currency in which they were originally denominated.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be conclusive absent manifest error of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or

Second Amended and Restated Credit Agreement (Orthofix), Page 67

any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.10. Prepayment of Loans.

(a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (c) of this Section and, if applicable, payment of any break funding expenses under Section 2.15. All Borrowings shall be repaid and prepaid in the Agreed Currency in which they were originally denominated.

(b) If at any time, (i) other than as a result of fluctuations in currency exchange rates, the sum of the aggregate principal amount of the Aggregate Revolving Exposure exceeds the aggregate Commitments, (ii) other than as a result of fluctuations in currency exchange rates, the aggregate Dollar Amount of all Term Benchmark Loans, RFR Loans and LC Exposures denominated in Foreign Currencies exceeds the Maximum Foreign Currency Amount, (iii) solely as a result of fluctuations in currency exchange rates, the aggregate principal amount of the Aggregate Revolving Exposure, as of the most recent Revaluation Date, exceeds one hundred five percent (105%) of the aggregate Commitments, (iv) solely as a result of fluctuations in currency exchange rates, the aggregate Dollar Amount of all Term Benchmark Loans and RFR Loans denominated in Foreign Currencies and LC Exposures denominated in Foreign Currencies exceeds 105% of the Maximum Foreign Currency Amount, or (v) solely as a result of fluctuations in currency exchange rates, the aggregate Dollar Amount of all LC Exposures exceeds 105% of the Dollar Amount of $50,000,000, the Borrowers shall immediately repay Borrowings or cash collateralize LC Exposure in accordance with the procedures set forth in Section 2.05(j) in an aggregate principal amount sufficient to cause (x) the amount of the Aggregate Revolving Exposure to be less than or equal to the aggregate Commitments, (y) the amount of the LC Exposure to be less than or equal to the Dollar Amount of $50,000,000 and (z) the aggregate Dollar Amount of all Term Benchmark Loans and RFR Loans denominated in Foreign Currencies and LC Exposure in Foreign Currencies to be less than or equal to the Maximum Foreign Currency Amount. In each case proceeding in this clause (b), the Dollar Amount of each such calculation shall be calculated, with respect to Loans and LC Exposure denominated in Foreign Currencies, as of the most recent Revaluation Date with respect to each such Loans and LC Exposure.

(c) The Company shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by fax or through Electronic Systems) of any prepayment under this Section (i)(w) in the case of prepayment of a Term Benchmark Borrowing denominated in Dollars, not later than 10:00 a.m., Local Time, three Business Days before the date of prepayment, (x) in the case of prepayment of a Term Benchmark Borrowing denominated in Euros, not later than 12:00 p.m., Local Time, three Business Days before the date of prepayment and (y) in the case of prepayment of an RFR Borrowing denominated in Pounds Sterling, not later than 11:00 a.m., Local Time, five RFR Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 10:00 a.m., Local Time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., Local Time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each

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Borrowing or portion thereof to be prepaid; provided that if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type and Agreed Currency as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the applicable Loans in the Agreed Currency included in the prepaid Borrowing, or the Dollar Amount thereof shall be applied or converted to a different Agreed Currency and applied ratably among Loans as determined by the Administrative Agent. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.12 and (ii) break funding payments to the extent required by Section 2.15.

SECTION 2.11. Fees.

(a) The Borrowers agree to pay to the Administrative Agent a commitment fee for the account of each Revolving Lender, which shall accrue at the Applicable Rate on the daily amount of the undrawn portion of the Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders' Commitments terminate; provided that, if such Lender continues to have any Revolving Exposure (excluding Revolving Loans) after its Commitment terminates, then such commitment fee shall continue to accrue on the daily amount of such Lender's Revolving Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Exposure; it being understood that the LC Exposure of a Lender shall be included and the Swingline Exposure of a Lender shall be excluded in the drawn portion of the Commitment of such Lender for purposes of calculating the commitment fee. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Term Benchmark Revolving Loans on the average daily Dollar Amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Banks a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily Dollar Amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the aggregate Commitments and the date on which there ceases to be any LC Exposure, as well as each Issuing Bank's standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the aggregate Commitments terminate and any such fees accruing after the date on which the aggregate Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Banks pursuant to this paragraph shall be payable within ten (10) days after written demand therefor. All participation fees and fronting fees shall be computed on

Second Amended and Restated Credit Agreement (Orthofix), Page 69

the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds in Dollars, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.12. Interest.

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Term Benchmark Borrowing shall bear interest at the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate, as applicable, for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Each RFR Loan shall bear interest at a rate per annum equal to the applicable Adjusted Daily Simple RFR plus the Applicable Rate.

(d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Company (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of "each Lender affected thereby" for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder, in each case, from and after the date of such declaration until such Event of Default is timely cured or waived in writing by the requisite Lenders hereunder in accordance with Section 9.02.

(e) Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the aggregate Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Term Benchmark Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(f) Interest computed by reference to the Term SOFR Rate, the EURIBOR Rate, and the Alternate Base Rate hereunder shall be computed on the basis of a year of 360 days. Interest computed by reference to the Daily Simple RFR with respect to Pounds Sterling or the Alternate Base Rate only at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year). In each case interest shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All interest hereunder on any Loan shall be

Second Amended and Restated Credit Agreement (Orthofix), Page 70

computed on a daily basis based upon the outstanding principal amount of such Loan as of the applicable date of determination. A determination of the applicable Alternate Base Rate, Adjusted Term SOFR Rate, Term SOFR Rate, Daily Simple SOFR, Adjusted EURIBOR Rate, EURIBOR Rate, Adjusted Daily Simple RFR or Daily Simple RFR shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(g) All interest in respect of any Loan or LC Disbursement shall, except as otherwise expressly provided herein, be made in the currency of such Loan or LC Disbursement.

SECTION 2.13. Alternate Rate of Interest; Illegality.

(a) Subject to clauses (b), (c), (d), (e) and (f) of this Section 2.13, if:

(i) the Administrative Agent determines (which determination shall be conclusive absent manifest error) (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate (including because the Relevant Screen Rate is not available or published on a current basis), for the applicable Agreed Currency and such Interest Period or (B) at any time, that adequate and reasonable means do not exist for ascertaining the applicable Adjusted Daily Simple RFR for the applicable Agreed Currency; or

(ii) the Administrative Agent is advised by the Required Lenders that (A) prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate for the applicable Agreed Currency and such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for the applicable Agreed Currency and such Interest Period or (B) at any time, the applicable Adjusted Daily Simple RFR for the applicable Agreed Currency will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for the applicable Agreed Currency;

then the Administrative Agent shall give notice thereof to the Company and the Lenders by telephone, telecopy or electronic mail as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Company delivers a new Interest Election Request in accordance with the terms of Section 2.07 or a new Borrowing Request in accordance with the terms of Section 2.03, (A) for Loans denominated in Dollars, any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Term Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Revolving Borrowing shall instead be deemed to be an Interest Election Request or a Borrowing Request, as applicable, for (x) an RFR Borrowing denominated in Dollars so long as the Adjusted Daily Simple RFR for Dollar Borrowings is not also the subject of Section 2.13(a)(i) or (ii) above or (y) an ABR Borrowing if the Adjusted Daily Simple RFR for Dollar Borrowings also is the subject of Section 2.13(a)(i) or (ii) above and (B) for Loans denominated in a Foreign Currency, any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Term Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Borrowing or an RFR Borrowing, in each case, for the relevant Benchmark, shall be ineffective; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan or RFR Loan in any Agreed Currency is outstanding on the date of the Company's receipt of the notice from the Administrative Agent referred to in this ‎Section 2.13(a) with respect to a Relevant Rate applicable to such Term Benchmark Loan or RFR Loan, then until

Second Amended and Restated Credit Agreement (Orthofix), Page 71

(x) the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Company delivers a new Interest Election Request in accordance with the terms of Section 2.07 or a new Borrowing Request in accordance with the terms of Section 2.03, (A) for Loans denominated in Dollars, any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan, be converted by the Administrative Agent to, and shall constitute, (x) an RFR Borrowing denominated in Dollars so long as the Adjusted Daily Simple RFR for Dollar Borrowings is not also the subject of Section 2.13(a)(i) or (ii) above or (y) an ABR Loan if the Adjusted Daily Simple RFR for Dollar Borrowings also is the subject of Section 2.13(a)(i) or (ii) above, on such day, and (B) for Loans denominated in a Foreign Currency, (1) any Term Benchmark Loan shall, on the last day of the Interest Period applicable to such Loan bear interest at the Central Bank Rate for the applicable Foreign Currency plus the CBR Spread; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Foreign Currency cannot be determined, any outstanding affected Term Benchmark Loans denominated in any Foreign Currency shall, at the Company's election prior to such day: (A) be prepaid by the Borrowers on such day or (B) solely for the purpose of calculating the interest rate applicable to such Term Benchmark Loan, such Term Benchmark Loan denominated in any Foreign Currency shall be deemed to be a Term Benchmark Loan denominated in Dollars and shall accrue interest at the same interest rate applicable to Term Benchmark Loans denominated in Dollars at such time and (2) any RFR Loan shall bear interest at the Central Bank Rate for the applicable Foreign Currency plus the CBR Spread; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Foreign Currency cannot be determined, any outstanding affected RFR Loans denominated in any Foreign Currency, at the Company's election, shall either (A) be converted into ABR Loans denominated in Dollars (in an amount equal to the Dollar Amount of such Foreign Currency) immediately or (B) be prepaid in full immediately.

(b) Notwithstanding anything to the contrary herein or in any other Loan Document (and any Swap Agreement shall be deemed not to be a "Loan Document" for purposes of this Section 2.13), if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of "Benchmark Replacement" with respect to Dollars for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of "Benchmark Replacement" with respect to any Agreed Currency for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders of each affected Class.

(c) Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document

Second Amended and Restated Credit Agreement (Orthofix), Page 72

(d) The Administrative Agent will promptly notify the Company and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.13, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.13.

(e) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (1) if the then-current Benchmark is a term rate (including the Term SOFR Rate, EURIBOR Rate) and either (a) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (b) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of "Interest Period" for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (2) if a tenor that was removed pursuant to clause (i) above either (a) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (b) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of "Interest Period" for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f) Upon the Company's receipt of notice of the commencement of a Benchmark Unavailability Period, the Company may revoke any request for a Term Benchmark Borrowing or RFR Borrowing of, conversion to or continuation of Term Benchmark Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, either (x) the Company will be deemed to have converted any request for a Term Benchmark Borrowing denominated in Dollars into a request for a Borrowing of or conversion to (A) an RFR Borrowing denominated in Dollars so long as the Adjusted Daily Simple RFR for Dollar Borrowings is not the subject of a Benchmark Transition Event or (B) an ABR Borrowing if the Adjusted Daily Simple RFR for Dollar Borrowings is the subject of a Benchmark Transition Event or (y) any Term Benchmark Borrowing or RFR Borrowing denominated in a Foreign Currency shall be ineffective. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of ABR. Furthermore, if any Term Benchmark Loan or RFR Loan in any Agreed Currency is outstanding on the date of the Company's receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a Relevant Rate applicable to such Term Benchmark Loan or RFR Loan, then until such time as a Benchmark Replacement for such Agreed Currency is implemented pursuant to this Section 2.13, (A) for Loans denominated in Dollars any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan be converted by the Administrative Agent to, and shall constitute, (x) an RFR Borrowing denominated in Dollars so long as the Adjusted Daily Simple RFR for Dollar Borrowings is not the subject of a Benchmark Transition Event or (y) an ABR Loan if the Adjusted Daily Simple RFR for Dollar Borrowings is the subject of a Benchmark Transition Event, on such day and (B) for Loans denominated in a Foreign Currency, (1) any Term Benchmark Loan shall, on the last day of the Interest Period applicable to such Loan bear interest at the Central Bank Rate for the applicable Foreign Currency plus the CBR Spread; provided that, if the Administrative Agent determines (which determination shall be

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conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Foreign Currency cannot be determined, any outstanding affected Term Benchmark Loans denominated in any Foreign Currency shall, at the Company's election prior to such day: (A) be prepaid by the Borrowers on such day or (B)solely for the purpose of calculating the interest rate applicable to such Term Benchmark Loan, such Term Benchmark Loan denominated in any Foreign Currency shall be deemed to be a Term Benchmark Loan denominated in Dollars and shall accrue interest at the same interest rate applicable to Term Benchmark Loans denominated in Dollars at such time and (2) any RFR Loan shall bear interest at the Central Bank Rate for the applicable Foreign Currency plus the CBR Spread; provided that, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that the Central Bank Rate for the applicable Foreign Currency cannot be determined, any outstanding affected RFR Loans denominated in any Foreign Currency, at the Company's election, shall either (A) be converted into ABR Loans denominated in Dollars (in an amount equal to the Dollar Amount of such Foreign Currency) immediately or (B) be prepaid in full immediately.

SECTION 2.14. Increased Costs.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted EURIBOR Rate) or the Issuing Bank; or

(ii) impose on any Lender or the Issuing Bank or the applicable offshore interbank market for the applicable Agreed Currency, any other condition, cost or expense (other than Taxes) affecting this Agreement or any of the Loans made by such Lender or any Letter of Credit or participation therein; or

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then, upon the request of such Lender, Issuing Bank or other Recipient, the Borrowers will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's holding company, if any, as a consequence of this Agreement, the Commitments of or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's holding company with

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respect to capital adequacy and liquidity), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Company and shall be conclusive absent manifest error; provided, however, notwithstanding anything to the contrary in this Section 2.14, in the case of any Change in Law, it shall be a condition to a Lender's or Issuing Bank's exercise of its rights, if any, under this Section 2.14, that such Lender or Issuing Bank shall generally be exercising similar rights with respect to other similarly situated borrowers under similar agreements to the extent contractually permitted to do so and allowed to do so under applicable law. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the Issuing Bank's right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefor; providedfurther that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.15. Break Funding Payments.

(a) With respect to Loans that are not RFR Loans, in the event of (i) the payment of any principal of any Term Benchmark Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or an optional or mandatory prepayment of Loans), (ii) the conversion of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto, (iii) the failure to borrow, convert, continue or prepay any Term Benchmark Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under ‎Section 2.10 and is revoked in accordance therewith), (iv) the assignment of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Company pursuant to Section 2.18 or Section 9.02 or (v) the failure by the Borrowers to make any payment of any Loan or drawing under any Letter of Credit (or interest due thereof) denominated in a Foreign Currency on its scheduled due date or any payment thereof in a different currency, then, in any such event, the Borrowers shall compensate each Lender for the loss (but not for lost profits), cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Company and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

(b) With respect to RFR Loans, in the event of (i) the payment of any principal of any RFR Loan other than on the Interest Payment Date applicable thereto (including as a result of an Event of Default or an optional or mandatory prepayment of Loans), (ii) the failure to borrow or prepay any RFR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under ‎Section 2.10(b) and is revoked in accordance therewith), (iii) the assignment of any RFR Loan other than on the Interest Payment Date applicable thereto as a result of a request by the Company pursuant to Section 2.18 or Section 9.02 or (iv) the failure by the Borrowers to make any payment of any

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Loan or drawing under any Letter of Credit (or interest due thereof) denominated in a Foreign Currency on its scheduled due date or any payment thereof in a different currency, then, in any such event, the Borrowers shall compensate each Lender for the loss (but not for lost profits), cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Company and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

SECTION 2.16. Taxes.

(a) Withholding Taxes; Gross-Up; Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.16), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Payment of Other Taxes by Loan Parties. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c) Evidence of Payment. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.16, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d) Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Company by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or

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legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Company and the Administrative Agent, at the time or times reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Company or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.16(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Company and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), an executed copy of IRS Form W‑9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party (x) with respect to payments of interest under any Loan Document, an executed copy of IRS Form W-8BEN-E or IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E or IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "business profits" or "other income" article of such tax treaty;

(2) in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed copy of IRS Form W‑8ECI;

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(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit D-1 or any other form approved by the Administrative Agent to the effect that such Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code (a "U.S. Tax Compliance Certificate") and (y) an executed copy IRS Form W‑8BEN-E or IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, an executed copy IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, IRS Form W‑8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit D‑2 or any other form approved by the Administrative Agent or Exhibit D‑3 or any other form approved by the Administrative Agent, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit D-4 or any other form approved by the Administrative Agent on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Company or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Company and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), "FATCA" shall include any amendments made to FATCA after the date of this Agreement. For purposes of determining withholding Taxes imposed under FATCA, from and after the Effective Date, the Borrowers and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a "grandfathered obligation" within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.

(g) Additional United Kingdom Withholding Tax Matters.

(i) Subject to clause (ii) below, each Lender and each UK Borrower which makes a payment to such Lender shall cooperate in completing any procedural formalities necessary for

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such UK Borrower to obtain authorization to make such payment without withholding or deduction for Taxes imposed under the laws of the United Kingdom.

(ii) (A) A Lender on the Effective Date that (x) holds a passport under the HMRC DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall provide its scheme reference number and its jurisdiction of tax residence to each UK Borrower and the Administrative Agent; (B) a Lender which becomes a Lender hereunder after the Effective Date that (x) holds a passport under the HMRC DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall provide its scheme reference number and its jurisdiction of tax residence to each UK Borrower and the Administrative Agent, and (C) upon satisfying either clause (A) or (B) above, such Lender shall have satisfied its obligation under paragraph (g)(i) above.

(iii) If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (g)(ii) above, the UK Borrower shall make a Borrower DTTP filing with respect to such Lender, and shall promptly provide such Lender with a copy of such filing; provided that, if:

(A) the UK Borrower making a payment to such Lender has not made a Borrower DTTP Filing in respect of such Lender; or

(B) the UK Borrower making a payment to such Lender has made a Borrower DTTP Filing in respect of such Lender but:

(1) such Borrower DTTP Filing has been rejected by HM Revenue & Customs; or

(2) HM Revenue & Customs has not given such UK Borrower authority to make payments to such Lender without a deduction for tax within 60 days of the date of such Borrower DTTP Filing;

and in each case, such UK Borrower has notified that Lender in writing of either (1) or (2) above, then such Lender and such UK Borrower shall co-operate in completing any additional procedural formalities necessary for such UK Borrower to obtain authorization to make that payment without withholding or deduction for Taxes imposed under the laws of the United Kingdom.

(iv) If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with paragraph (g)(ii) above, no UK Borrower shall make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan or other Revolving Exposure unless the Lender otherwise agrees.

(v) Each UK Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of such Borrower DTTP Filing to the Administrative Agent for delivery to the relevant Lender.

(vi) Each Lender shall notify each UK Borrower and the Administrative Agent whether it is (a) a UK Treaty Lender, (b) a Lender which is entitled to be paid without United Kingdom withholding tax for other reasons or (c) a lender which must be paid subject to United Kingdom withholding tax and will promptly notify each UK Borrower and the Administrative Agent if there is any

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change in such status (for example if it determines in its sole discretion that it has ceased to be entitled to claim the benefits of an income tax treaty to which the United Kingdom is a party with respect to payments made by any UK Borrower hereunder).

(h) Additional Dutch Withholding Tax Matters. Each Lender and each Dutch Subsidiary which makes a payment to such Lender shall cooperate in completing any procedural formalities necessary for such Dutch Subsidiary to obtain authorization to make such payment without withholding or deduction for Taxes imposed under the laws of the Netherlands.

(i) Obtaining Certain Refunds. If a Loan Party makes a deduction or withholds sums in relation to Taxes imposed under the laws of the United Kingdom or the Netherlands and Section 2.16(a) applies to increase the amount of the payment to a UK Treaty Lender or a Dutch Treaty Lender from that Loan Party, that Loan Party shall promptly provide that UK Treaty Lender or Dutch Treaty Lender, as applicable, with an executed original H.M. Revenue & Customs or Dutch tax authorities tax deduction certificates (if applicable) evidencing the relevant deduction or withholding of such Taxes. The UK Treaty Lender or Dutch Treaty Lender, as applicable, shall, within a reasonable period following receipt of such certificate, apply to H.M. Revenue & Customs or the Dutch tax authorities for a refund of the amount of that tax deduction and, upon receipt by the UK Treaty Lender or Dutch Treaty Lender, as applicable, of such amount from H.M. Revenue & Customs or the Dutch tax authorities, Section 2.16(j) below shall apply in relation thereto to the extent that such refund is attributable to the increase in the amount paid by the relevant Loan Party pursuant to Section 2.16(a) above.

(j) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.16 (including by the payment of additional amounts pursuant to this Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.16 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (j) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (j), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (j) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph (j) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(k) Survival. Each party's obligations under this Section 2.16 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

(l) Defined Terms. For purposes of this Section 2.16, the term "Lender" includes any Issuing Bank and the term "applicable law" includes FATCA.

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SECTION 2.17. Payments Generally; Allocation of Proceeds; Sharing of Set‑offs.

(a) The Borrowers shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 2.14, 2.15 or 2.16, or otherwise) (x) in the case of payments denominated in Dollars, at the Administrative Agent's Office and in immediately available funds, without set-off, recoupment or counterclaim, not later than 2:00 p.m. Local Time on the date specified herein or the date fixed for any prepayment hereunder and (y) in the case of payments denominated in a Foreign Currency, at its Foreign Currency Payment Office for such Foreign Currency, at the Administrative Agent's Office and in immediately available funds, without set-off or counterclaim, not later than 2:00 p.m. Local Time on the date specified herein; provided, that payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder of principal or interest in respect of any Loan or LC Disbursement shall, except as otherwise expressly provided herein, be made in the currency of such Loan or LC Disbursement, and all other payments hereunder and under each other Loan Document shall be made in Dollars. Notwithstanding the foregoing provisions of this Section, if, after the making of any Borrowing or LC Disbursement in any Foreign Currency, currency control or exchange regulations are imposed in the country which issues such Foreign Currency with the result that such Foreign Currency no longer exists or the Borrowers are not able to make payment to the Administrative Agent for the account of the Lenders in such Foreign Currency, then all payments to be made by the Borrowers hereunder in such Foreign Currency shall instead be made when due in an equivalent amount of the currency that replaced such Foreign Currency or, if no such replacement currency exists, in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrowers take all risks of the imposition of any such currency control or exchange regulations.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties (in the Dollar Amount of such funds received, if necessary). All payments and any proceeds of Collateral or payments from any of the Guarantors received by the Administrative Agent (i) not constituting a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrowers) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent, the Swingline Lender and the Issuing Bank from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), second, to pay any fees, indemnitees or expense reimbursements then due to the Lenders from the Borrowers (other than in connection with Banking Services Obligations or Swap Agreement Obligations), third, to pay interest then due and payable on the Loans and unreimbursed LC Disbursements ratably, fourth, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate LC Exposure, to be held as cash collateral for such Obligations,fifth to prepay principal on the Loans and unreimbursed LC

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Disbursements and to pay any amounts owing in respect of to Swap Agreement Obligations and Banking Services Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.21, ratably, andsixth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender from the Borrowers or any other Orthofix Entity in connection with the Transactions. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Company, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Term Benchmark Loan of a Class, except (i) on the expiration date of the Interest Period applicable thereto, or (ii) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any such event, the Borrowers shall pay the break funding payment required in accordance with Section 2.15. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

Notwithstanding the foregoing, (i) Secured Obligations arising under Banking Services Obligations or Swap Agreement Obligations shall be excluded from the application described above and paid in clause sixth if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may have reasonably requested from the applicable provider of such Banking Services or Swap Agreements and (ii) no amounts received by the Administrative Agent or any Lender from any Loan Party that is not a Qualified ECP Guarantor shall be applied in partial or complete satisfaction of any Excluded Swap Obligations.

(c) All payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder. The Borrowers, Lenders, Issuing Banks and Swingline Lenders hereby irrevocably authorize the Administrative Agent, in its sole discretion as of any date from time to time, to convert as of such date any payment received by it in any Agreed Currency or to be made by it in any Agreed Currency into the equivalent amount (using the methodology of the Dollar Amount) of any another Agreed Currency, in each case to effectuate any one or more of the provisions of this Agreement.

(d) If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

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(e) Unless the Administrative Agent shall have received, prior to any date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank pursuant to the terms hereof or any other Loan Document (including the date that is fixed for prepayment by notice from the Company to the Administrative Agent pursuant to Section 2.10(c)), notice from the Company, notice that the Borrowers will not make such payment or prepayment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the applicable Overnight Rate.

(f) The Administrative Agent may from time to time provide the Borrowers with account statements or invoices with respect to any of the Secured Obligations (the "Statements"). The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrowers' convenience. Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations. If the Borrowers pay the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrowers shall not be in default of payment with respect to the billing period indicated on such Statement; provided, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent's or the Lenders' right to receive payment in full at another time.

SECTION 2.18. Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.14, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.14, or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender gives a notice pursuant to Section 2.13, or if any Lender becomes a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.14 or 2.16) and obligations under this Agreement and the other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld or delayed, (ii) such Lender shall have received payment of an

Second Amended and Restated Credit Agreement (Orthofix), Page 83

amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. Each party hereto agrees that (i) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Company, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (ii) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

SECTION 2.19. Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.11(a);

(b) any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.17(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize the Issuing Banks' LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender's potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize the Issuing Banks' future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect

Second Amended and Restated Credit Agreement (Orthofix), Page 84

of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrowers' obligations corresponding to such Defaulting Lender's LC Exposure and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (d) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;

(c) such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder or under any other Loan Document; provided that, except as otherwise provided in Section 9.02, this clause (c) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

(d) if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender (other than the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender's Revolving Exposure to exceed its Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrowers' obligations corresponding to such Defaulting Lender's LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding;

(iii) if the Borrowers cash collateralize any portion of such Defaulting Lender's LC Exposure pursuant to clause (ii) above, the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b) with respect to such Defaulting Lender's LC Exposure during the period such Defaulting Lender's LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.11(a) and 2.11(b) shall be adjusted in accordance with such non-Defaulting Lenders' Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender's LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.11(b) with respect to such Defaulting Lender's LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

Second Amended and Restated Credit Agreement (Orthofix), Page 85

(e) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender's then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.19(d), and Swingline Exposure related to any such newly made Swingline Loan or LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non‑Defaulting Lenders in a manner consistent with Section 2.19(d)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrowers or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrowers, the Swingline Lender and the Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender's Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.20. Returned Payments. If, after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.20 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.20 shall survive the termination of this Agreement.

SECTION 2.21. Banking Services and Swap Agreements. Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Orthofix Entity, shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Orthofix Entity or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or contingent). In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations. The most recent information provided to the Administrative Agent shall be used in determining which tier of the waterfall, contained in Section 2.17(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed.

Second Amended and Restated Credit Agreement (Orthofix), Page 86

SECTION 2.22. Determination of Dollar Amounts. The Administrative Agent shall determine or redetermine the Dollar Amount of any Loan or Letter of Credit on each Revaluation Date, including the Dollar Amount of any Loan or Letter of Credit made or issued in a Foreign Currency, and a determination thereof by the Administrative Agent shall be conclusive absent manifest error. The Administrative Agent may, but shall not be obligated to, rely on any determination of any Dollar Amount by any Loan Party.

SECTION 2.23. Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due from the Borrowers hereunder in the currency expressed to be payable herein (the "specified currency") into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which the Administrative Agent could, in accordance with normal banking procedures applicable to arm's length transactions, purchase the specified currency with such other currency at the Administrative Agent's main New York City office on the Business Day immediately preceding that on which final, non-appealable judgment is given. The obligations of the Borrowers in respect of any sum due to any Credit Party hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Credit Party of any sum adjudged to be so due in such other currency such Credit Party may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Credit Party in the specified currency, the Borrowers agree, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Credit Party against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Credit Party in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 2.17, such Credit Party agrees to remit such excess to the Borrowers.

SECTION 2.24. Uncommitted Orthofix-Italy Non-Pro Rata Tranche Sub-Facility.

(a) The Borrowers may at any time, upon not less than 10 Business Days' notice from the Company to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), request that one or more of the Lenders or another lending institution provide Italy Sub-Facility Commitments to Orthofix-Italy in an maximum aggregate amount of up to the Dollar Amount of $10,000,000 (the "Italy Uncommitted Sub-Facility"); provided that (i) the Commitments will be reduced by the Dollar Amount of the Italy Uncommitted Sub‑Facility and (ii) the Maximum Foreign Currency Amount shall be reduced by the amount of the Italy Sub-Facility Commitments.

(b) Subject to the approval of the Administrative Agent, the Swingline Lender and the Issuing Bank, the Borrowers may invite additional lending institutions to become Lenders under the Italy Uncommitted Sub-Facility, provided that (i) any such new lender has agreed to, and is capable of, funding to Orthofix-Italy in Euros in accordance with the terms hereof and (ii) any such new lender assumes all of the rights and obligations of a "Lender" hereunder with respect to the Italy Uncommitted Sub-Facility. Nothing contained in this Section 2.24 shall (x) constitute, or otherwise be deemed to be, a commitment on the part of any Lender to provide an Italy Sub-Facility Commitment hereunder at any time or (y) require any Lender to purchase a participation in the Italy Uncommitted Sub-Facility at any time.

(c) To effectuate the Italy Uncommitted Sub-Facility, the Company, Orthofix-Italy, the Administrative Agent and the Italy Sub-Facility Lenders shall execute and deliver an amendment to this Agreement, and/or an intercreditor agreement, or equivalent documentation in form and substance reasonably satisfactory to the Administrative Agent (the "Italy Sub-Facility Amendment Documentation"). Notwithstanding anything set forth in Section 9.02 to the contrary, the Italy Sub‑Facility Amendment Documentation and any amendment to any other Loan Documents in connection with or to effectuate the

Second Amended and Restated Credit Agreement (Orthofix), Page 87

Italy Uncommitted Sub-Facility shall be in form and substance reasonably satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Company, Orthofix-Italy and each Italy Sub-Facility Lender. The Italy Sub-Facility Amendment Documentation shall provide that the obligations under the Italy Uncommitted Sub-Facility will be included in the Obligations and the Secured Obligations, and Guarantors will guaranty, and the Collateral will secure, all Secured Obligations (including all amounts under the Italy Uncommitted Sub-Facility) on a pari passu basis (including equivalent treatment in any proceeds waterfall). Each of the Lenders hereby authorize and direct the Administrative Agent to enter into, if deemed necessary or desirable by the Administrative Agent, in its discretion, an intercreditor agreement on behalf of all Lenders and the other holders of the Secured Obligations, and bind such Lenders and such holders to such intercreditor agreement providing for the pari passu treatment of the Italy Uncommitted Sub-Facility under the Guarantors' guaranties and the Collateral Documents. Except for the terms set forth in this Section 2.24 and mechanics and pricing applicable to the Italy Uncommitted Sub-Facility, provisions of the Revolving Italy Sub-Facility Loans will be substantially the same as the Revolving Loans.

(d) The parties hereto acknowledge and agree that prior to Orthofix-Italy becoming entitled to utilize the Italy Uncommitted Sub-Facility (i)(A) the Administrative Agent shall have received on behalf of the Italy Sub-Facility Lenders such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, content and scope reasonably satisfactory to the Administrative Agent, as may be required by the Administrative Agent and the Italy Sub-Facility Lenders in their sole discretion, (B) documentation and information required by regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act, to the extent such documentation or information is requested by the Administrative Agent on behalf of such Lenders and (C) notes signed by Orthofix-Italy to the extent any such Lenders so require, and (ii) each such Lender shall have met all necessary regulatory and licensing requirements and internal policy requirements and shall be legally permitted to make Revolving Italy Sub-Facility Loans in the jurisdiction in which Orthofix-Italy is organized.

SECTION 2.25. Extension of Maturity Date

(a) Request for Extension. Once during the term of this Agreement, the Company may, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 90 days and not later than 45 days prior to the Maturity Date as in effect on the date hereof, request that each Lender extend such Lender's Maturity Date for an additional 364 days from the Maturity Date.

(b) Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not earlier than 30 days prior to the Maturity Date and not later than the date (the "Notice Date") that is 20 days prior to the Maturity Date, advise the Administrative Agent whether or not such Lender agrees to such extension (and each Lender that determines not to so extend its Maturity Date, a "Non‑Extending Lender") shall notify the Administrative Agent of such fact promptly after such determination (but in any event no later than the Notice Date) and any Lender that does not so advise the Administrative Agent on or before the Notice Date shall be deemed to be a Non‑Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree.

(c) Notification by Administrative Agent. The Administrative Agent shall notify the Company of each Lender's determination under this Section no later than the date 15 days prior to the Maturity Date (or, if such date is not a Business Day, on the next preceding Business Day).

Second Amended and Restated Credit Agreement (Orthofix), Page 88

(d) Additional Commitment Lenders. The Borrowers shall have the right on or before the Maturity Date to replace each Non‑Extending Lender with, and add as "Lenders" under this Agreement in place thereof, one or more Persons that meets the requirements to be an assignee under Section 9.04 (each, an "Additional Commitment Lender") as provided in Section 9.04 each of which Additional Commitment Lenders shall have entered into an Assignment and Assumption pursuant to which such Additional Commitment Lender shall, effective as of the Maturity Date, undertake a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lender's Commitment hereunder on such date).

(e) Minimum Extension Requirement. If (and only if) the total of the Commitments of the Lenders that have agreed so to extend their Maturity Date and the additional Commitments of the Additional Commitment Lenders shall be more than 50% of the aggregate amount of the Commitments in effect immediately prior to the Maturity Date, the Maturity Date of each extending Lender and of each Additional Commitment Lender shall be extended to the date falling 364 days after the Maturity Date (except that, if such date is not a Business Day, such Maturity Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a "Lender" for all purposes of this Agreement.

(f) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the extension of the Maturity Date pursuant to this Section shall not be effective with respect to any Lender unless:

(i) no Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;

(ii) the representations and warranties contained in this Agreement are true and correct in all material respects with the same effect as though made on and as of the date of such extension (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); and

(iii) on or before the Maturity Date, (1) the Borrowers shall have paid in full the principal of and interest on all of the Loans made by each Non-Extending Lender to the Borrowers hereunder and (2) the Borrowers shall have paid in full all other amounts owing to such Non-Extending Lender hereunder.

(g) Amendment; Sharing of Payments. In connection with any extension of the Maturity Date, the Borrowers, the Administrative Agent and each extending Lender may make such amendments to this Agreement as the Administrative Agent determines to be reasonably necessary to evidence the extension. This Section shall supersede Sections 2.17(d) and 9.02.

Second Amended and Restated Credit Agreement (Orthofix), Page 89

ARTICLE III

Representations and Warranties

Each Borrower and each other Loan Party represents and warrants to the Lenders that (and where applicable, agrees):

SECTION 3.01. Organization; Powers. Each Orthofix Entity (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, except in the case of any Non-Loan Party, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (b) has all requisite power and authority to carry on its business as now conducted in all material respects and (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure to be qualified to do business in, and be in good standing in, every jurisdiction where such qualification is required, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan Party's organizational powers and (a) have been duly authorized by all necessary organizational actions and, if required, actions by equity holders and (b) will not result in a suspension or revocation of, or limitation on, any material certificate of authority, license, permit, authorization or other approval applicable to the business, operations or properties of any Borrower or any other Loan Party or Orthofix Entity to the extent such suspension, revocation or limitation materially adversely affects the business of the Orthofix Entities, taken as a whole, or the ability of the Orthofix Entities, taken as a whole, to participate in, or contract with, any material Medical Reimbursement Program. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents and except for SEC filings required to be made by the Company, (b) will not violate any Requirement of Law applicable to any Loan Party or any other Orthofix Entity, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding upon any Loan Party or any other Orthofix Entity or the assets of any Loan Party or other Orthofix Entity, or give rise to a right thereunder to require any payment to be made by any Loan Party or any other Orthofix Entity, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any other Orthofix Entity, except Liens created pursuant to the Loan Documents.

SECTION 3.04. Financial Condition; No Material Adverse Change.

(a) The Company has heretofore furnished to the Lenders (i) its consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2018, reported on by Ernst & Young LLP, independent public accountants, and (ii) its consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal quarter and the portion of the fiscal year ended June 30, 2019, certified by its Financial Officer. Such financial statements (including the footnotes thereto) present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its consolidated Subsidiaries as of

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such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments, if applicable, and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b) No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2018.

SECTION 3.05. Properties, etc.

(a) As of the date of this Agreement, Schedule 3.05 sets forth (i) the address of each parcel of real property that is owned or leased by the Loan Parties and (ii) the location of any tangible personal property of the Loan Parties located in the U.S., the Netherlands, England or Wales with a fair market value in excess of the Dollar Amount of $500,000 (other than trade show booths and related assets, tangible personal property in transit or out for repair, held by sales representatives or customers or on consignment with third parties). On the Effective Date, each of such leases and subleases that is material to the business of such Loan Party is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists. On each date after the Effective Date, each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists, except where the failure to be valid and enforceable or the existence of such default, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Each Orthofix Entity has good and indefeasible title to, or valid leasehold interests in, all of its material real and personal property. The real and personal property of each Orthofix Entity is free of all Liens other than those permitted by Section 6.02.

(b) [Reserved].

(c) Each Orthofix Entity owns, or is licensed to use, all material trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted. A correct and complete list of all registrations and applications of Material Intellectual Property owned by a Loan Party (including the title, counterparty and licensed Material Intellectual Property for any exclusive inbound written licenses to which any Loan Party is a party), as of the date of this Agreement, is set forth on Schedule 3.05. The use of any Material Intellectual Property by each such Loan Party does not infringe upon the rights of any other Person in a manner that could reasonably be expected to individually or in the aggregate, have a Material Adverse Effect. As of the date of this Agreement, each Loan Party's rights to any Material Intellectual Property that is necessary to its business as currently conducted are not subject to any licensing agreement or similar arrangement, except as disclosed on Schedule 3.05.

SECTION 3.06. Litigation, Health Care and Environmental Matters.

(a) As of the Effective Date, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority (including, but not limited to those regulatory agencies responsible for licensing, accrediting or issuing Medicare or Medicaid certifications) pending against or, to the knowledge of any Loan Party, threatened in writing against or adversely affecting any Orthofix Entity, (x) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (y) that purports to affect the legality, validity or enforceability of any Loan Document, any material provision thereof or the consummation of the Transactions, other than the Disclosed Matters set forth on Schedule 3.06. On each date after the Effective Date, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority (including, but not limited to those regulatory agencies responsible for licensing, accrediting or issuing Medicare or Medicaid certifications) pending against or, to the knowledge of any Loan Party, threatened against or affecting any Orthofix Entity (i) as to which there is a

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reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that purports to affect the legality, validity or enforceability of any Loan Document, any material provision thereof or the consummation of the Transactions.

(b)

(i) as of the Effective Date, no Orthofix Entity has received notice of any claim with respect to any material Environmental Liability or knows of any basis for any material Environmental Liability, except for the Disclosed Matters, and

(ii) except with respect to any matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Orthofix Entity (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (B) has become subject to any Environmental Liability.

(c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

SECTION 3.07. Compliance with Laws and Agreements; No Default. Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Orthofix Entity is in compliance with (i) all Requirements of Law applicable to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing. Without limiting the generality of the foregoing, each of the Loan Parties represents that:

(a) Each Orthofix Entity is in compliance in all material respects with all Health Care Laws and requirements of Third Party Payor Arrangements applicable to it and its assets, business or operations.

(b) Each Orthofix Entity holds in full force and effect (without default, violation or noncompliance) all material Health Care Permits necessary for it to own, lease, sublease or operate its assets and facilities and to conduct its business and operations as presently conducted (including to obtain reimbursement under all Third Party Payor Arrangements in which it participates). No circumstance exists or event has occurred which could reasonably be expected to result in the suspension, revocation, termination, restriction, limitation, modification or non-renewal of any material Health Care Permit.

(c) With respect to each Orthofix Entity, there are no material claims, actions or appeals pending before any Third Party Payor, CMS, any administrative contractor, intermediary or carrier or any other Governmental Authority with respect to any Medical Reimbursement Programs. No Orthofix Entity (i) has retained an overpayment received from, or failed to refund any amount due to any Medical Reimbursement Program or other Third Party Payor in violation, in any material respect, of any Health Care Law or Third Party Payor Arrangement, or (ii) has received written notice of, or has knowledge of, any material overpayment or material refunds due to any Third Party Payor or Medical Reimbursement Program.

(d) Each Orthofix Entity is in compliance in all material respects with HIPAA. Further, in each arrangement that is a business associate arrangement under HIPAA, each Orthofix Entity has: (i)

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entered into a written business associate agreement (as such term is defined under the HIPAA regulations) that meets the requirements of HIPAA in all material respects, (ii) at all times complied in all material respects with such business associate agreements in respect of the HIPAA privacy or security standards, and (iii) at no time experienced, had or received a report of a material unauthorized use or disclosure of Protected Health Information (as defined in the HIPAA regulations) or material privacy or security breach or other material privacy or security incident within the meaning of HIPAA.

(e) Except as set forth on Schedule 3.07, as of the Effective Date, no Orthofix Entity, nor any owner, officer, director, partner, agent or managing employee of any Orthofix Entity, is a party to or bound by any individual integrity agreement, corporate integrity agreement, corporate compliance agreement, deferred prosecution agreement, or other formal or informal agreement with any Governmental Authority concerning compliance with any Health Care Laws, any Medical Reimbursement Programs or the requirements of any Health Care Permit. After the Effective Date, no Orthofix Entity, nor any owner, officer, director, partner, agent or managing employee of any Orthofix Entity, is a party to or bound by any individual integrity agreement, corporate integrity agreement, corporate compliance agreement, deferred prosecution agreement, or other formal or informal agreement with any Governmental Authority concerning compliance with any Health Care Laws, any Medical Reimbursement Programs or the requirements of any Health Care Permit, where such agreement has or could be reasonably expected to result in a Material Adverse Effect.

(f) (i) To the knowledge of any Responsible Officer, there is no Orthofix Entity or individual employed by any such Orthofix Entity who may reasonably be expected to have criminal culpability or to be excluded or suspended from participation in any Medical Reimbursement Program for their corporate or individual actions or failures to act where such culpability, exclusion and/or suspension has or could be reasonably expected to result in a Material Adverse Effect; and (ii) there is no member of management continuing to be employed by any Orthofix Entity who may reasonably be expected to have individual culpability for matters under investigation by any Governmental Authority where such culpability has or could reasonably be expected to result in a Material Adverse Effect unless such member of management has been, within a reasonable period of time after discovery of such actual or potential culpability, either suspended or removed from positions of responsibility related to those activities under challenge by the Governmental Authority;

(g) current billing policies, arrangements, protocols and instructions comply with expressly stated requirements of Medical Reimbursement Programs and are administered by properly trained personnel except where any such failure to comply could not reasonably be expected to result in a Material Adverse Effect;

(h) current medical director compensation arrangements and other arrangements with referring physicians comply with domestic and foreign, federal and state self-referral and anti-kickback laws, including without limitation the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn and §1395(q)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), except where any such failure to comply could not reasonably be expected to result in a Material Adverse Effect;

(i) none of the Orthofix Entities is currently, nor has in the past been subject to any domestic or foreign, federal, state, local governmental or private payor civil or criminal inspections, investigations, inquiries or audits involving and/or related to its activities, except for routine inspections, investigations, inquiries or audits in the ordinary course not anticipated to result in a Material Adverse Effect and other inspections, investigations, inquiries or audits that could not reasonably be expected to result in a Material Adverse Effect;

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(j) except as set forth on Schedule 3.07 or in materials previously provided to the Administrative Agent's counsel, no Orthofix Entity nor any Controlling owner, officer, director, partner, agent or managing employee or Controlling Person with a "direct or indirect ownership interest" (as that phrase is defined in 42 C.F.R. § 420.201) of 5% or more in any Orthofix Entity (other than the Company), (i) has been excluded from any Medical Reimbursement Program or from participation in a Federal Health Care Program (as that term is defined in 42 U.S.C. §1320a-7b) or had a civil monetary penalty assessed pursuant to 42 U.S.C. § 1320a-7; (ii) has been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of those offenses described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 1035, 1347 or 1518, including, without limitation any of the following categories of offenses: (A) criminal offenses relating to the delivery of an item or service under any state or federal health care program (as that term is defined in 42 U.S.C. §1320a-7b) or healthcare benefit program (as that term is defined in 18 U.S.C. §24b) or any foreign health care program or foreign health care benefit program, (B) criminal offenses under domestic or foreign, federal or state law relating to patient neglect or abuse in connection with the delivery of a healthcare item or service, (C) criminal offenses under laws relating to fraud and abuse, theft, embezzlement, false statements to third parties, money laundering, kickbacks, breach of fiduciary responsibility or other financial misconduct in connection with the delivery of a healthcare item or service or with respect to any act or omission in a program operated by or financed in whole or in part by any domestic or foreign, federal, state or local governmental agency, (D) laws relating to the interference with or obstruction of any investigations into any criminal offenses described in this clause (j), or (E) criminal offenses under laws relating to the unlawful manufacturing, distribution, prescription or dispensing of a controlled substance; or (iii) is, to the knowledge of any Responsible Officer, involved or named in a Governmental Authority or U.S. Attorney complaint made or any other action taken pursuant to the False Claims Act under 31 U.S.C. §§3729-3731 or qui tam action brought pursuant to 31 U.S.C. §3729 et seq; and

(k) each Orthofix Entity is in compliance in all material respects with any applicable laws or regulations of the U.S., the UK, the European Union and, to the extent the laws of which are substantially similar to U.S. law, any other Governmental Authority, in each case relating to money laundering or terrorist financing, including, without limitation, the Bank Secrecy Act, 31 U.S.C. sections 5301 et seq.; the USA Patriot Act; Laundering of Monetary Instruments, 18 U.S.C. section 1956; Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, 18 U.S.C. section 1957; the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Regulations, 31 C.F.R. Part 103; and any similar laws or regulations of such Governmental Authorities currently in force or hereafter enacted.

SECTION 3.08. Investment Company Status. No Orthofix Entity is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09. Taxes. Each Orthofix Entity, as applicable, has timely filed or caused to be filed all federal, state, material foreign and other material Tax returns and reports required to have been filed and has paid or caused to be paid all federal, state, material foreign and other material Taxes required to have been paid by it, except such Taxes (i) that are not yet delinquent, (ii) that are being contested in good faith by appropriate proceedings and for which such Orthofix Entity, as applicable, has set aside on its books adequate reserves, or (iii) other than with regard to any federal or state Taxes, the failure to file or pay could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No tax liens have been filed and no claims are being asserted with respect to any such taxes against a material portion of the Collateral, except such tax liens that constitute Permitted Encumbrances.

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SECTION 3.10. ERISA and Foreign Pension Plans.

(a) No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Effective Date, the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.

(b) Each Foreign Pension Plan is in compliance with all Requirements of Law applicable thereto and the respective requirements of the governing documents for such plan except to the extent such non-compliance could not reasonably be expected to result in a Material Adverse Effect. With respect to each Foreign Pension Plan, no Orthofix Entity, its Affiliates or any of its directors, officers, employees or agents has engaged in a transaction, or other act or omission (including entering into this Agreement or any Loan Document and any act done or to be done in connection with this Agreement or any Loan Document), that has subjected, or could reasonably be expected to subject, such Orthofix Entity, directly or indirectly, to any penalty (including any tax or civil penalty), fine, claim or other liability (including any liability under a contribution notice or financial support direction (as those terms are defined in the United Kingdom Pensions Act 2004), or any liability or amount payable under section 75 or 75A of the United Kingdom Pensions Act 1995) that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect and there are no facts or circumstances which may give rise to any such penalty, fine, claim, or other liability. With respect to each Foreign Pension Plan, reserves have been established in the financial statements furnished to the Administrative Agent in respect of any unfunded liabilities in accordance with applicable law or, where required, in accordance with ordinary accounting practices in the jurisdiction in which such Foreign Pension Plan is maintained. The aggregate unfunded liabilities, with respect to such Foreign Pension Plans could not reasonably be expected to result in a Material Adverse Effectand as of the Effective Date, there are no unfunded liabilities with respect to all such Foreign Pension Plans. There are no actions, suits or claims (other than routine claims for benefits) pending or threatened against any Orthofix Entity or any of its Affiliates with respect to any Foreign Pension Plan which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(c) As of the Effective Date, that such Loan Party is not and will not be using "plan assets" (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.

SECTION 3.11. Disclosure.

(a) The Loan Parties have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which any Orthofix Entity is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other written information (other than the projections, other forward looking information and information of a general economic or general industry nature) furnished by or on behalf of any Orthofix Entity to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (taken as a whole and as modified or supplemented by other information so furnished) contains when furnished any material misstatement of fact or omits to state any material fact necessary to make the statements therein (taken as a whole), in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed by the Loan Parties to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of

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the Effective Date (it being recognized by the Lenders that any projections as to future events are not to be viewed as facts or factual information and that actual results during the period or periods covered by any such projections may differ from the projected results, and such differences may be material).

(b) As of the Effective Date, to the best knowledge of each Borrower, the information included in any Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

SECTION 3.12. Other Agreements; Material Agreements.

(a) No Orthofix Entity is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Medicaid Provider Agreement, Medicare Provider Agreement or other agreement or instrument to which such Person is a party, which default has resulted in, or if not remedied within any applicable grace period could result in, the revocation, termination, cancellation or material suspension of Medicaid Certification or Medicare Certification of any such Person.

(b) All Material Agreements as of the date of this Agreement are listed on Schedule 3.12. On the Effective Date, no Orthofix Entity is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any Material Agreement or (ii) any agreement or instrument evidencing or governing Material Indebtedness. On each date after the Effective Date, no Orthofix Entity is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any Material Agreement or (ii) any agreement or instrument evidencing or governing Material Indebtedness, in each case which has resulted in, or which such default or defaults could reasonably be expected, individually or in the aggregate, to result in, a Material Adverse Effect.

SECTION 3.13. Solvency. (a) Immediately after giving effect to the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of the Loan Parties, taken as a whole, at a fair valuation, will exceed their consolidated debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Loan Parties, taken as a whole, will be greater than the amount that will be required to pay the probable liability of their consolidated debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Loan Parties, taken as a whole, will be able to pay their consolidated debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Loan Parties, taken as a whole, will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

(b) The Loan Parties, taken as a whole, do not intend to, nor will they permit any other Orthofix Entity, taken as a whole with all other Orthofix Entities to, and the Loan Parties, taken as a whole, do not believe that they or any other Orthofix Entity, taken as a whole with all other Orthofix Entities, will, incur debts beyond their ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by the Loan Parties or any such Orthofix Entity and the timing of the amounts of cash to be payable on or in respect of their consolidated Indebtedness or the Indebtedness of any such Orthofix Entity.

SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of each of the Loan Parties as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The insurance maintained by or on behalf of the each of the Orthofix Entities is adequate and is customary for companies engaged in the same or similar businesses operating in the same or similar locations.

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SECTION 3.15. Capitalization; Subsidiaries; Intercompany Loans.

(a) Schedule 3.15 sets forth as of the Effective Date (i) the type of entity of the Company, (ii) a true and complete listing of each class of the Company's issued and outstanding Equity Interests, of which all of such Equity Interests are validly issued, fully paid and non-assessable, (iii) a correct and complete list of the name of each Subsidiary, (iv) a true and complete listing of each class of each of the Subsidiaries' issued and outstanding Equity Interests, of which all of such Equity Interests are owned beneficially and of record by the Persons identified on Schedule 3.15, (v) the type of entity of each Subsidiary, and (vi) whether such Subsidiary is a Subsidiary Guarantor. All of the issued and outstanding Equity Interests of each Subsidiary have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and validly issued and are fully paid and non-assessable.

(b) All Intercompany Loans as of the Effective Date (i) are described on Schedule 6.01(a), (ii) in the case of any such Intercompany Loans owed by any Loan Party to a Non-Loan Party, constitute Subordinated Indebtedness and (iii) in the case of any such Intercompany Loan owed to any such Loan Party (x) are evidenced by duly completed and executed promissory notes in form reasonably satisfactory to the Administrative Agent, and (y) as of the Effective Date will be delivered to the Administrative Agent together with an executed allonge in form reasonably satisfactory to the Administrative Agent.

SECTION 3.16. Security Interest in Collateral. The provisions of the Collateral Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Liens permitted under Section 6.02, (b) Liens perfected only by possession (including possession of any certificate of title) or control, to the extent the Administrative Agent has not obtained or does not maintain possession or control of such Collateral, and (c) Liens perfected by the filing of financing statements, to the extent the Administrative Agent has not filed such financing statements in the applicable filing offices.

SECTION 3.17. Employment Matters. Except as could not reasonably be expected to have a Material Adverse Effect, (i) there are no strikes, lockouts or slowdowns against any Orthofix Entity pending or, to the knowledge of any Responsible Officer of any Loan Party, threatened, (ii) the hours worked by and payments made to employees of the Orthofix Entities have not been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters and (iii) all payments due from any Orthofix Entity, or for which any claim may be made against any Orthofix Entity, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Orthofix Entity.

SECTION 3.18. Federal Reserve Regulations. No part of the proceeds of any Loan or Letter of Credit has been used or will be used, whether directly or indirectly, to purchase or carry any margin stock (within the meaning of Regulation U of the Board), to extend credit to others for purposes of purchasing or carrying any margin stock or for any other purpose that entails a violation of any of Regulations T, U and X of the Board. No Orthofix Entity is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock, or extending credit for the purpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrowers only or of the Company and its Subsidiaries on a consolidated basis) will be margin stock.

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SECTION 3.19. Use of Proceeds. The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20. No Burdensome Restrictions. No Orthofix Entity is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

SECTION 3.21. Anti-Corruption Laws and Sanctions. Each Orthofix Entity has implemented and maintains in effect policies and procedures designed to ensure compliance by each such Orthofix Entity and its respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and, except as set forth on Schedule 3.21, each such Orthofix Entity and its respective officers and directors and, to the knowledge of the Loan Parties, each such Orthofix Entity's employees and agents, are in compliance with Anti‑Corruption Laws and applicable Sanctions and are not knowingly engaged in any activity that would reasonably be expected to result in any Orthofix Entity being designated as a Sanctioned Person. None of (a) any Orthofix Entity or any of their respective directors, officers or employees, or (b) to the knowledge of any Loan Party or its Subsidiaries, any agent of any Orthofix Entity that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate any Anti-Corruption Law or applicable Sanctions.

SECTION 3.22. Fraud and Abuse. To the knowledge of any Responsible Officer, no Orthofix Entity has, nor has any of their officers or directors, engaged in any activities which are prohibited under federal Medicare and Medicaid statutes, 42 U.S.C. § 1320a‑7b, or 42 U.S.C. § 1395nn, any other foreign or domestic statute related to any Medical Reimbursement Program or the regulations promulgated pursuant to such statutes or related domestic or foreign, federal, state or local statutes or regulations, or which are prohibited by binding rules of professional conduct, including but not limited to the following: (a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any applications for any benefit or payment; (b) knowingly and willfully making or causing to be made any false statement or representation of a material fact for use in determining rights to any benefit or payment; (c) failing to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another with the intent to secure such benefit or payment fraudulently; (d) knowingly and willfully soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind or offering to pay such remuneration (i) in return for referring an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicare, Medicaid or other applicable Third Party Payors, or (ii) in return for purchasing, leasing or ordering or arranging for or recommending the purchasing, leasing or ordering of any good, facility, service, or item for which payment may be made in whole or in part by Medicare, Medicaid or other applicable Third Party Payors, except in each case for any such prohibited activity that could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.23. Licensing and Accreditation.

(a) On the Effective Date, each of the Orthofix Entities has, to the extent applicable or required in connection with the business of such Orthofix Entity: (i) obtained and maintains in good standing all material required licenses; (ii) to the extent reasonably determined to be material to the business of such Orthofix Entity in the industry in which it is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies; (iii) obtained and maintains Medicaid Certification and Medicare Certification; and (iv) entered into and maintains in good standing its Medicare Provider

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Agreement and its Medicaid Provider Agreement, and all such required licenses are in full force and effect on the date hereof and have not been revoked or suspended or otherwise limited, and

(b) On each date after the Effective Date, each of the Orthofix Entities has, to the extent applicable: (i) obtained and maintains in good standing all required licenses; (ii) to the extent prudent and customary in the industry in which it is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies; (iii) obtained and maintains Medicaid Certification and Medicare Certification; and (iv) entered into and maintains in good standing its Medicare Provider Agreement and its Medicaid Provider Agreement, except in each case to the extent the absence of such license, accreditation, certification or good standing could not reasonably be expected to have a Material Adverse Effect. All such required licenses are in full force and effect on the date hereof and have not been revoked or suspended or otherwise limited, except in each case to the extent such revocation, suspension or other limitation could not reasonably be expected to have a Material Adverse Effect.

SECTION 3.24. Other Regulatory Protection.

(a) Each Orthofix Entity is in compliance with all applicable rules, regulations and other requirements of the FDA, the FTC, OSHA the Consumer Product Safety Commission, the U.S. Customs Service and the U.S. Postal Service and all other state, federal or foreign regulatory authorities, or jurisdictions in which any of the Orthofix Entities do business or distribute and market products, except to the extent that any such noncompliance, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and

(b) Neither the FDA, the FTC, OSHA, the Consumer Product Safety Commission, nor any other such regulatory authority has requested (or, to the knowledge of any Responsible Officer, are considering requesting) any product recalls or other enforcement actions that (a) if not complied with, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and (b) with which the Orthofix Entities have not complied within the time period allowed.

SECTION 3.25. Reimbursement From Third Party Payors. The accounts receivable of the Orthofix Entities have been and will continue to be adjusted to reflect the reimbursement policies (both those most recently published in writing as well as those not in writing which have been verbally communicated) of Third Party Payors in all material respects. In particular, accounts receivable relating to Third Party Payors do not and shall not exceed amounts any obligee is entered to receive under any capitation arrangement, fee schedule, discount formula, cost‑based reimbursement or other adjustment or limitation to its usual charges in all material respects.

SECTION 3.26. Material Agreements. No Orthofix Entity is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (a) except as set forth in clause (b) below, any agreement or instrument to which any such Person is a party, which default, individually or in the aggregate, has, or if not remedied within any applicable grace period could reasonably be expected to have, a Material Adverse Effect or (b) any Medicaid Provider Agreement, Medicare Provider Agreement or other agreement or instrument to which such Person is a party, which default has resulted in, or if not remedied within any applicable grace period could result in, the revocation, termination, cancellation or material suspension of Medicaid Certification or Medicare Certification of any such Person.

SECTION 3.27. Affiliate Transactions. Except as set forth on Schedule 3.27, as of the Effective Date, there are no (a) Intercompany Loans or (b) supply agreements or arrangements that involve an obligation of any Loan Party owing to any Non-Loan Party or any other Affiliate of any Orthofix Entity.

Second Amended and Restated Credit Agreement (Orthofix), Page 99

SECTION 3.28. Common Enterprise. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to derive benefit), directly and indirectly, from (a) successful operations of each of the other Loan Parties and (b) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party is within its purpose, in furtherance of its direct and/or indirect business interests, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

SECTION 3.29. Foreign Loan Parties.

(a) Each Foreign Loan Party is subject to civil and commercial laws, rules and regulations, including without limitation, with respect to its obligations under the Loan Documents to which it is a party (collectively, the "Applicable Foreign Loan Party Documents"), and the execution, delivery and performance by such Foreign Loan Party of the Applicable Foreign Loan Party Documents constitute and will constitute private and commercial acts and not public or governmental acts. No Foreign Loan Party nor any of its property has any immunity from suit, execution, attachment or jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the jurisdiction in which such Foreign Loan Party is organized and existing, including but without limitation, with respect to its obligations under the Applicable Foreign Loan Party Documents.

(b) On the Effective Date, the Applicable Foreign Loan Party Documents are in proper legal form under the laws, rules and regulations of the jurisdiction in which such Foreign Loan Party is organized and existing for the enforcement thereof against such Foreign Loan Party under the laws, rules and regulations of such jurisdiction, and to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Loan Party Documents, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. On the Effective Date, it is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Loan Party Documents that the Applicable Foreign Loan Party Documents be filed, registered or recorded with, or executed or notarized before, any court or other authority in the jurisdiction in which any Foreign Loan Party is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect of the Applicable Foreign Loan Party Documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been made, will be made by the Administrative Agent or counsel acting for the Administrative Agent, or is not required to be made until the Applicable Foreign Loan Party Document or any other document is sought to be enforced and (ii) any charge or tax as has been timely paid.

(c) On the Effective Date, there is no Tax imposed by any Governmental Authority in or of the jurisdiction in which such Foreign Loan Party is organized and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Loan Party Documents or (ii) on any payment to be made by such Foreign Loan Party pursuant to the Applicable Foreign Loan Party Documents, except as has been disclosed to the Administrative Agent in writing.

(d) On the Effective Date, the execution, delivery and performance of the Applicable Foreign Loan Party Documents executed by such Foreign Loan Party are, under applicable foreign exchange control regulations of the jurisdiction in which such Foreign Loan Party is organized and existing, not subject to any notification or authorization except (i) such as have been made or obtained or (ii) such

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as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (ii) shall be made or obtained as soon as is reasonably practicable).

SECTION 3.30. Classification as Senior Indebtedness. The Secured Obligations constitute "Senior Indebtedness" under and as may be defined in any agreement governing any outstanding Subordinated Indebtedness and the subordination provisions set forth in each such agreement are legally valid and enforceable against the parties thereto.

SECTION 3.31. Tax Shelter Regulations. No Borrower intends to treat the Transactions as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011 4). In the event any Borrower determines to take any action inconsistent with such intention, the Company will promptly notify the Administrative Agent thereof. If the Company so notifies the Administrative Agent, each Borrower acknowledges that one or more of the Lenders may treat its Loans and/or Letters of Credit as part of a transaction that is subject to Treasury Regulation Section 301.6112 1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such treasury regulation.

SECTION 3.32. EEA Financial Institutions.

SECTION 3.33. Existing ABN AMRO Credit Documents. (a) The commitments of each of the Original Agent (as defined below), the Successor Agent (as defined below) and each lender under the ABN Credit Agreement terminated prior to December 31, 2003, (b) the ABN Credit Agreement and each other ABN Credit Document was terminated and discharged prior to December 31, 2003, (c) all monetary obligations and indebtedness (the "ABN Obligations") to the Original Agent, the Successor Agent, each other secured party or any of their respective successors and assigns evidenced by the ABN Credit Documents were concurrently and indefeasibly repaid in full and irrevocably and unconditionally satisfied, released, discharged and terminated, and (d) all charges, Liens and other security interests of the Original Agent, the Successor Agent, each other secured party and each of their respective successors and assigns in the property of the Company, the Dutch Subsidiaries, or any other Orthofix Entity in which the Company, the Dutch Subsidiaries, or any other Orthofix Entity previously granted to the Original Agent, the Successor Agent, any other secured party or any of their respective successors and assigns to secure all or any portion of the ABN Obligations under the ABN Credit Documents and all guarantees of the ABN Obligations, were concurrently, irrevocably and unconditionally, terminated (opgezegd), waived (afstand gedaan), satisfied, released and discharged in full, in accordance with the applicable laws and in compliance with the relevant ABN Credit Documents.

As used in this Section 3.33, the following terms have the meanings specified below:

"ABN Assignment" means that certain Assignment of Pledged Interest in Orthofix International B.V., dated as of December 17, 1999, by and between the Original Agent and the Successor Agent.

"ABN Credit Agreement" means that certain Credit Agreement dated as of August 21, 1995 by and among National Westminster Bank Plc., New York and Nassau Branches (the "Original Agent"), ABN AMRO Bank N.V., New York Branch and each of its successors and assigns (the "Successor Agent"), Orthofix Inc., as borrower, and the Company, as amended, amended and restated, supplemented or otherwise modified from time to time.

"ABN Credit Documents" means, collectively, the ABN Credit Agreement, the Deed of Pledge, the ABN Assignment and all related instruments, documents and agreements.

"Deed of Pledge" means that certain Deed of Pledge and Transfer of the Right to Vote, dated as of September 26, 1995, by the Company to the Original Agent.

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SECTION 3.34. Plan Assets; Prohibited Transactions. None of the Loan Parties or any of their Subsidiaries is an entity deemed to hold "plan assets" (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02), each of which shall in be form and substance and pursuant to documentation reasonably acceptable to the Administrative Agent:

(a) Credit Agreement and Loan Documents. The Administrative Agent (or its counsel, Winstead PC) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include fax or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement, and (ii) 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 Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.09 payable to the order of each such requesting Lender, and written opinions addressed to the Administrative Agent, the Issuing Bank and the Lenders of the Loan Parties' U.S. counsel and Dutch counsel (provided that the Administrative Agent's counsel shall provide the Dutch opinion), in each case acceptable to the Administrative Agent.

(b) Financial Statements and Projections. The Lenders shall have received (i) audited consolidated financial statements of the Company for the 2017 and 2018 fiscal years, (ii) unaudited interim consolidated and consolidating financial statements for the Company, for the fiscal quarter ended June 30, 2019, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the Loan Parties, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph and (iv) satisfactory Projections through December 31, 2023.

(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by any officer, director, manager or member of such Loan Party, 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 a Borrower, its Financial Officers or directors, and (C) contain appropriate attachments, including the charter, articles or certificate 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, and (ii) a good standing certificate or comparable instrument for each Loan Party from its jurisdiction of organization.

(d) No Default Certificate. The Administrative Agent shall have received a certificate, signed by the a Financial Officer of each U.S. Borrower and a Director(s) of each Dutch Borrower, dated

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as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that 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.

(e) Fees. The Lenders and the Administrative Agent shall have received all fees required to be paid under any fee letter, and all other fees and expenses required to be reimbursed for which invoices have been presented (including the reasonable fees and expenses of legal counsel), before the Effective Date. All such amounts may be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Company to the Administrative Agent on or before the Effective Date.

(f) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each Loan Party reasonably requested by the Administrative Agent, and each jurisdiction reasonably requested by the Administrative Agent where assets of the Loan Parties, or such Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except as permitted by Section 6.02.

(g) Credit Termination. The Administrative Agent shall have received satisfactory evidence Indebtedness (including contingent Indebtedness) not permitted to exist under Section 6.01 has been repaid in full and all commitments for all such Indebtedness have been terminated.

(h) Funding Account. The Administrative Agent shall have received a notice setting forth the deposit account of the Borrowers (the "Funding Account") to which the Administrative Agent is authorized by the Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

(i) Solvency. The Administrative Agent shall have received a solvency certificate signed by a Financial Officer of each U.S. Borrower and a Director(s) of each Dutch Borrower dated the Effective Date in form and substance reasonably satisfactory to the Administrative Agent.

(j) Insurance. The Administrative Agent shall have received evidence of insurance coverage for each of the Loan Parties 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.

(k) Pledged Equity Interests; Stock Powers; Pledged Notes. To the extent not previously received, the Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

(l) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described

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therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.

(m) Priority. Subject to Liens permitted by Section 6.02 and to the extent required by the Collateral Documents, the Administrative Agent shall have received evidence satisfactory to it of a first and prior lien on all Collateral, including without limitation, Intercompany Loans owing to any Loan Party listed on Schedule 6.01(a).

(n) Legal Due Diligence. The Administrative Agent and its counsel, including without limitation, U.S. and Dutch, shall have completed all legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion. All legal (including tax implications) and regulatory matters shall be satisfactory to the Administrative Agent and Lenders, including but not limited to compliance with all applicable requirements of Regulations U, T and X of the Board of Governors of the Federal Reserve System.

(o) Structure. The corporate structure, capital structure, other debt instruments, material accounts and governing documents of the Orthofix Entities shall be reasonably acceptable to the Administrative Agent.

(p) Approvals. All governmental and third party approvals necessary in connection with the financing contemplated hereby shall have been obtained and be in full force and effect.

(q) USA PATRIOT Act, Etc. (i) The Administrative Agent and Lenders shall have received (x) at least five (5) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act, to the extent request in writing of the Borrowers at least ten (10) days prior to the Effective Date and (y) a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party, and (ii) to the extent any Loan Party qualifies as a "legal entity customer" under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has requested, in a written notice to a Loan Party as least ten (10) days prior to the Effective Date, a Beneficial Ownership Certification in relation to such Loan Party, shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).

(r) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrowers, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., Local Time, on December 13, 2019 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

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(a) The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (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).

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

(c) In the case of a Borrowing to be denominated in a Foreign Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Lenders (in the case of any Loans to be denominated in a Foreign Currency) or the Issuing Bank (in the case of any Letter of Credit to be denominated in a Foreign Currency) would make it impracticable for such Borrowing to be denominated in the relevant Foreign Currency.

(d) After giving effect to any Borrowing or the issuance, amendment, renewal or extension of any Letter of Credit, Availability shall not be less than zero.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b), and (d) of this Section.

ARTICLE V

Affirmative Covenants

Until the Payment in Full of all Obligations, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. The Company will furnish to the Administrative Agent:

(a) within ninety (90) days after the end of each fiscal year of the Company and the Borrowers, (x) the Company's audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young LLP or any other independent public accountants of recognized national standing (without a "going concern" or like qualification, commentary or exception, and without any qualification or exception as to the scope of such audit, except, in each case, with respect to, or resulting from, the regularly scheduled maturity of the Commitments, the Loans or other Indebtedness or any anticipated inability to satisfy the financial covenants set forth in Section 6.12 of this Agreement) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountant, and (y) the Company's unaudited consolidating balance sheet and related statement of operations as of the end of and for such year, and

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(b) within sixty (60) days after the end of each of the first three fiscal quarters of each fiscal year of the Company, (i) its consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer of the Company as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and if applicable, the absence of footnotes and (ii) its consolidating balance sheet and related statements of operations as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year;

(c) concurrently with any delivery of financial statements under clause (a) or (b) above (collectively or individually, as the context requires, the "Financial Statements"), a certificate of a Financial Officer of the Company in substantially the form of Exhibit B or any other form approved by the Administrative Agent (i) certifying as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, (subject to normal year-end audit adjustments and if applicable, the absence of footnotes except with respect to the audited statements), (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.12(a) and (b), (iv) stating whether any material change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the Financial Statements accompanying such certificate; (v) setting forth either a list that identifies each Domestic Subsidiary of the Company that is an Immaterial Subsidiary as of the date of delivery of such Compliance Certificate or a confirmation that there is no change in such information since the later of the Effective Date or the date of the last such list, and (vi) setting forth either a list that identifies each Material Subsidiary of the Company that is an not Wholly Owned as of the date of delivery of such Compliance Certificate or a confirmation that there is no change in such information since the later of the Effective Date or the date of the last such list;

(d) concurrently with any delivery of Financial Statements under clause (a) above, a certificate of the accounting firm that reported on such Financial Statements stating whether they obtained knowledge during the course of their examination of such Financial Statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

(e) as soon as available, but in any event no later than sixty (60) days after the end of each fiscal year of the Company, a copy of the detailed annual budget (including a projected consolidated balance sheet, income statement and cash flow statement) of the Company, presented on a quarterly basis with respect to the consolidated income statement only and on an annual basis with respect to all other items, of the upcoming fiscal year (the "Projections"), together with a summary of the material assumptions made in preparation of such annual budget or plan and otherwise in form reasonably satisfactory to the Administrative Agent;

(f) promptly and in any event within ten (10) days after the same become publicly available and without duplication of any documents or information delivered pursuant to another clause of this Section 5.01 or Section 5.02, copies of all periodic and other reports, proxy statements and other material information filed by the Company or any other Orthofix Entity with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, as the case may be;

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(g) promptly following any request therefor, copies of any detailed audit reports and final management letters submitted to the board of directors (or the audit committee of the board of directors) of the Company by independent accountants in connection with the accounts or books of any Orthofix Entity or any of their Subsidiaries, or any audit of any of them;

(h) promptly following any request therefor, (i) such other information regarding the operations, material changes in ownership of Equity Interests of the Company, business affairs and financial condition of any Orthofix Entity, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request (provided that no Orthofix Entity shall be required to disclose (1) any materials subject to a confidentiality obligation binding upon such Orthofix Entity to the extent such disclosure would violate any such obligation and such confidentiality obligation was not created in contemplation of this Agreement or any of the other Loan Documents, or (2) any communications protected by attorney-client privilege the disclosure or inspection of which would waive such privilege as reasonably determined in good faith by Company's counsel), including a detailed listing of all changes to Intercompany Loans and any other intercompany advances or transfers made(A) among the Orthofix Entities, (B) among the Loan Parties, (C) between (x) any one or more Loan Parties and (y) any one or more Non-Loan Parties and (D) between (x) any one or more Orthofix Entities and (y) any one or more Affiliates of any Orthofix Entity and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable "know your customer" and anti-money laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation; and

(i) promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Company or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Company or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if the Company or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Company or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.

The Company represents and warrants that it, its controlling Person and any Subsidiary, in each case, if any, files its financial statements with the SEC and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Company hereby (x) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a)(i) and (ii) and Section 5.01(b) above, along with the Loan Documents, available to Public-Siders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Company will not request that any other material be posted to Public-Siders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Company has no outstanding publicly traded securities, including 144A securities. In no event shall the Administrative Agent post compliance certificates or budgets to Public-Siders.

Documents required to be delivered pursuant to Sections 5.01(a), (b), (f) and (g) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (x) on which the Company posts such documents, or provides a link thereto on the Company's website; or (y) on which such documents are posted on the Company's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third party website or whether sponsored by the Administrative Agent); provided that the Company shall, in the case of the documents required to be delivered pursuant to Sections 5.01(a) and (b) notify (by facsimile or electronic mail) the Administrative Agent of the posting of any such documents (who shall then give notice of any such posting

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to the Lenders) and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents or provides a link thereto.

SECTION 5.02. Notices of Material Events. The Company will furnish to the Administrative Agent prompt (but in any event within any time period that may be specified below)(for distribution to each Lender) written notice upon any Responsible Officer of the Loan Parties becoming aware of the following:

(a) the occurrence of any Default;

(b) receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened in writing against any Orthofix Entity that (i) alleges criminal misconduct by any Orthofix Entity (except to the extent disclosure of such investigation is prohibited by applicable Law or court order), (ii) alleges the violation of, or seeks to impose remedies against any Orthofix Entity under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability, that could reasonably be expected to have a Material Adverse Effect; (iii) asserts liability on the part of any Orthofix Entity in excess of the Dollar Amount of $2,000,000 in respect of any tax, fee, assessment, or other governmental charge, (iv) involves any material product recall with respect to any Orthofix Entity or (v) could reasonably be expected to have a Material Adverse Effect;

(c) the occurrence of (i) any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Orthofix Entities in an aggregate amount exceeding the Dollar Amount of $1,000,000, (ii) the United Kingdom Pensions Regulator issuing a financial support direction or a contribution notice (as those terms are defined in the United Kingdom Pensions Act 2004) in relation to any Foreign Pension Plan, (iii) any amount being due to any Foreign Pension Plan pursuant to Section 75 or 75A of the United Kingdom Pensions Act 1995, and/or (iv) an amount becoming payable under section 75 or 75A of the United Kingdom Pensions Act of 1995;

(d) (i) any involvement of any Orthofix Entity in a pending civil investigation or civil action related to any Federal, state, local or foreign healthcare program if such investigation or action could reasonably be expected to result in either (A) a loss of license or privilege to operate under (or loss of the benefit of) such jurisdiction or such regulation or program that is necessary in the conduct of its business, or (B) a fine or loss of property, revenue stream or accounts in an aggregate amount in excess of $1,000,000 or (ii) any involvement of any Orthofix Entity in a pending criminal investigation, criminal action, proposed debarment, exclusion or other sanctioning action related to any Federal, state, local or foreign healthcare program;

(e) the institution of any investigation or proceeding against any Orthofix Entity to suspend, revoke or terminate or which may reasonably be expected to result in the termination of any Medicaid Provider Agreement, Medicaid Certification, Medicare Provider Agreement, Medicare Certification, material Health Care Permit or exclusion from any Medical Reimbursement Program or Third Party Payor Arrangement;

(f) receipt of any notice from National Westminster Bank Plc., New York and Nassau Branches, ABN AMRO Bank N.V., New York Branch or any of their respective successors and assigns, any affiliate of any of the foregoing or any other Person (i) asserting any claims over any assets of the Company, the Dutch Subsidiaries or any other Orthofix Entity related to the ABN Obligations (as such term is defined in Section 3.33 of this Agreement) or any other Indebtedness owed to such Person or (ii) asserting that the ABN Obligations or any other Indebtedness or other obligations owing to National Westminster Bank Plc., New York and Nassau Branches, ABN AMRO Bank N.V., New York Branch or any of their

Second Amended and Restated Credit Agreement (Orthofix), Page 108

respective successors and assigns are secured, in whole or in part, by any Lien or other security interest granted pursuant to any ABN Credit Document or otherwise;

(g) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and

(h) any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

Each notice delivered under this Section shall (i) be in writing, (ii) contain a heading or a reference line that reads "Notice under Section 5.02[(▲)] of Second Amended and Restated Credit Agreement dated October 25, 2019" and (iii) be accompanied by a statement of a Financial Officer or other executive officer of the Company setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause each other Orthofix Entity to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its (i) legal existence under the laws of the jurisdiction of its organization, except, with respect to Non-Loan Parties only, where such failure could not reasonably be expected to have a Material Adverse Effect and (ii) the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business (including Health Care Permits) except, with respect to Non-Loan Parties only, where such failure could not reasonably be expected to have a Material Adverse Effect, (b) maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 and (c) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and reasonably related or incidental fields of enterprise thereto.

SECTION 5.04. Payment of Obligations . Each Loan Party will, and will cause each Orthofix Entity to, pay or discharge (a) all Material Indebtedness and (b) all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except, in the case of clause (b) where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) such Orthofix Entity has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect; provided, however, that each Loan Party will, and will cause each Orthofix Entity to, remit withholding taxes and other payroll taxes to appropriate government taxing authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause each Orthofix Entity to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear and casualty and condemnation events excepted.

SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and will cause each Orthofix Entity to, (a) keep proper books of record and account in which full, true and correct entries in all material respects are made of all dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent (including employees of the Administrative Agent, or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Orthofix Entities' premises field examinations of the Orthofix Entity's assets, liabilities, books and records,

Second Amended and Restated Credit Agreement (Orthofix), Page 109

including examining and making extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided, however, that (i) so long as no Default or Event of Default has occurred and is continuing, the Borrowers shall only be obligated to pay the expenses of the Administrative Agent in connection with one such visit, inspection and discussion per fiscal year and (ii) when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. The Administrative Agent and the Lenders shall give the Company the opportunity to participate in any discussions with the Company's independent public accountants; provided that the Administrative Agent and/or the Lenders shall give the Company not less than ten (10) Business Days' notice prior to initiating discussions with the Company's independent public accountants. Notwithstanding the foregoing, no Orthofix Entity shall be required to disclose (a) any materials subject to a confidentiality obligation binding upon such Orthofix Entity to the extent such disclosure would violate such obligation or (b) any communications protected by attorney-client privilege the disclosure or inspection of which would waive such privilege. The Loan Parties acknowledge that subject to Section 9.12, the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Orthofix Entities' assets for internal use by the Administrative Agent and the Lenders.

SECTION 5.07. Compliance with Laws and Material Contractual Obligations. Each Loan Party will, and will cause each Orthofix Entity to, (a) comply in all material respects with each material Requirement of Law applicable to it or its property (including without limitation Environmental Laws, Titles XVIII and XIX of the Social Security Act, Medicare Regulations, Medicaid Regulations, Health Care Laws and the Health Insurance Portability Act of 1996) and requirements of Third Party Payor Arrangements, (b) obtain and maintain all material licenses, permits, certifications and approvals of all applicable Governmental Authorities as are required for the conduct of its business as currently conducted and herein contemplated, including without limitation professional licenses, appropriate Health Care Permits (including, as applicable, Health Care Permits necessary for it to be eligible to receive payment and compensation from and to participate in any Third Party Payor Arrangements), Medicaid Certifications and Medicare Certifications, (c) perform in all material respects its obligations under material agreements to which it is a party, except, in each case, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect and (d) keep and maintain, in all material respects, all records required to be maintained by any Governmental Authority or otherwise under, or in compliance with, any Health Care Law. Specifically, but without limiting the foregoing, and except where any such failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (x) billing policies, arrangements, protocols and instructions shall comply with reimbursement requirements under Medicare, Medicaid and other Medical Reimbursement Programs and Third Party Payor Arrangements and shall be administered by properly trained personnel; and (y) medical director compensation arrangements and other arrangements with referring physicians shall comply with applicable Health Care Laws. Each Orthofix Entity will maintain in effect and enforce policies and procedures designed to ensure compliance by such Orthofix Entity and its respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Each Orthofix Entity shall maintain a corporate and health care regulatory compliance program ("RCP") which addresses the requirements of Health Care Laws, including without limitation fraud and abuse and HIPAA, and includes at least the following components: (i) standards of conduct and procedures that describe compliance policies regarding laws with an emphasis on prevention of fraud and abuse; (ii) a specific officer within high-level personnel identified as having overall responsibility for compliance with such standards and procedures; (iii) training and education programs which effectively communicate the compliance standards and procedures to employees and agents, including fraud and abuse laws and illegal billing practices; (iv) auditing and monitoring systems and reasonable steps for achieving compliance with such standards and procedures including publicizing a reporting system to allow employees and other agents to anonymously

Second Amended and Restated Credit Agreement (Orthofix), Page 110

report criminal or suspect conduct and potential compliance problems; (v) disciplinary guidelines and consistent enforcement of compliance policies including discipline of individuals responsible for the failure to detect violations of the RCP; and (vi) mechanisms to immediately respond to detected violations of the RCP. Each Orthofix Entity shall modify such RCPs from time to time, as may be reasonably necessary to ensure continuing compliance with all applicable Health Care Laws. Upon reasonable request, the Administrative Agent (and/or their consultants) shall be permitted to review such RCPs.

SECTION 5.08. Use of Proceeds.

(a) The proceeds of the Loans and the Letters of Credit will be used only for working capital and other general corporate purposes of the Borrowers (including Permitted Acquisitions, Investments permitted pursuant to Section 6.04 and Restricted Payments permitted pursuant to Section 6.08) and to refinance existing Indebtedness. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, to purchase or carry margin stock (within the meaning of Regulation U of the Board), to extend credit to others for the purpose of purchasing or carrying margin stock or for any other purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Letters of Credit will be issued only to support transactions of the Loan Parties entered into in the ordinary course of business.

(b) The Borrowers will not request any Borrowing or Letter of Credit, and no Borrower shall use, and each Borrower shall procure that each of its Subsidiaries and other Orthofix Entities and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09. Accuracy of Information . The Loan Parties will ensure that any information, including financial statements or other documents (other than Projections, other forward looking information and information of a general economic nature), furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder (taken as a whole and as modified or supplemented by other information so furnished) contains when furnished no material misstatement of fact or omits to state any material fact necessary to make the statements therein (taken as a whole), in the light of the circumstances under which they were made, not misleading; provided that, with respect to the Projections, the Loan Parties will cause the Projections to be prepared in good faith based upon assumptions believed to be reasonable at the time delivered (it being recognized by the Lenders that any projections as to future events are not to be viewed as facts or factual information and that actual results during the period or periods covered by any such Projections may differ from projected results, and such differences may be material).

SECTION 5.10. Insurance. Each Loan Party will, and will cause each Orthofix Entity to, maintain with financially sound and reputable carriers (a) insurance in such amounts and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the Lenders, upon request of the Administrative Agent, but no less frequently than annually, information in reasonable detail as to the insurance so maintained.

Second Amended and Restated Credit Agreement (Orthofix), Page 111

SECTION 5.11. Appraisals. At any time after the occurrence of and during the continuation of an Event of Default that the Administrative Agent requests, each Loan Party will, and will cause each Orthofix Entity to, provide the Administrative Agent with appraisals or updates thereof of their assets as requested by the Administrative Agent, including, without limitation, Inventory, Equipment and Real Property, from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such appraisals and updates to include, without limitation, information required by any applicable Requirement of Law; provided, however, that no more than one such appraisal per calendar year shall be at the sole expense of the Borrowers.

SECTION 5.12. Casualty and Condemnation. The Company will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any portion of the Collateral in excess of $1,000,000 or the commencement of any action or proceeding for the taking of any portion of the Collateral in excess of $1,000,000 or interest therein under power of eminent domain or by condemnation or similar proceeding.

SECTION 5.13. Additional Collateral; Further Assurances.

(a) Subject to applicable Requirements of Law, within 30 days (or such later period as the Administrative Agent may agree in writing in its reasonable discretion) after the time that any Person, except for an Excluded Subsidiary, becomes a Material Subsidiary of the Company as a result of the creation of such Subsidiary, the growth of such Subsidiary or a Permitted Acquisition or otherwise (including by operation of the definition of Immaterial Subsidiary), each Loan Party will cause such Material Subsidiary (other than a Material Subsidiary of the Company that is not Wholly Owned or is an Excluded Subsidiary) to become a Loan Party by executing a Joinder Agreement; provided, that the joinder of any Foreign Subsidiary organized outside of a jurisdiction that an Orthofix Entity is organized in on the Effective Date (except for Brazil) shall be reasonably agreed to in writing by the Required Lenders. In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to company with the applicable "know your customer" rules and regulations, including the USA Patriot Act. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents, (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property or assets of such Loan Party of the type which constitutes Collateral, in accordance with the requirements of the Collateral Documents, pursuant to joinder agreements to the applicable Collateral Documents in such form reasonably deemed appropriate by the Administrative Agent and (iii) shall execute and deliver to the Administrative Agent legal opinions (consistent in scope and substance as such legal opinions delivered on the Effective Date) and related documents as the Administrative Agent may reasonably request with respect to such property and assets.

(b) Each (i) U.S. Loan Party will cause (A) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and(B) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each first-tier Foreign Subsidiary directly owned by such U.S. Loan Party and (ii) non-U.S. Loan Party will cause 100% of the issued and outstanding Equity Interests of each of its Subsidiaries directly owned by such non-U.S. Loan Party, in each case, to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other Collateral Documents as the Administrative Agent shall reasonably request.

Second Amended and Restated Credit Agreement (Orthofix), Page 112

(c) Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by any applicable Requirement of Law in the U.S. or the Netherlands, or such other applicable jurisdiction or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties (unless such action is excluded by the other terms of this Agreement and/or any of the Collateral Documents, as applicable).

(d) If any assets with a fair market value in excess of the Dollar Amount of $2,500,000 are acquired by any Loan Party after the Effective Date (other than (x) assets constituting Collateral under any Collateral Document that become subject to the Lien under such Collateral Document upon acquisition thereof and (y) Excluded Assets), the Company will (i) notify the Administrative Agent thereof, and, if reasonably requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii) take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.

(e) Notwithstanding anything to the contrary set forth herein or in any of the other Loan Documents, no Loan Party shall be required (i) to enter into any Collateral Document governed by the laws of a jurisdiction other than the U.S., the Netherlands and any other jurisdiction in which a Loan Party is organized, (ii) create any Lien in any jurisdiction other than the U.S., the Netherlands and any other jurisdiction in which a Loan Party is organized, (iii) perfect any Lien in any jurisdiction other than the U.S., the Netherlands and any other jurisdiction in which a Loan Party is organized.

SECTION 5.14. Environmental Covenant. No Orthofix Entity shall use nor permit any third party to use, generate, manufacture, produce, store or Release on, under or about any Real Property, or transfer to or from any Real Property, any Hazardous Materials except in each case, as could not reasonably be expected to have a Material Adverse Effect, provided that if any third party, by act or omission, by intent or by accident, allows any foregoing action to occur, the Orthofix Entity shall promptly remedy such condition, at its sole expense and responsibility in accordance with Section 9.03(b)(iii).

ARTICLE VI

Negative Covenants

Until the Payment in Full of all Obligations, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any Orthofix Entity to, create, incur, assume or suffer to exist any Indebtedness or Disqualified Equity Interests, except:

(a) the Secured Obligations;

(b) Intercompany Loans existing on the Effective Date and set forth on Schedule 6.01(a);

Second Amended and Restated Credit Agreement (Orthofix), Page 113

(c) so long as (i) there exists no Default both before and after giving effect to the incurrence of such Indebtedness, and (ii) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, unsecured Indebtedness (including Guaranties) (A) among and between the U.S. Loan Parties and Foreign Perfected Subsidiaries, (B) among and between the Domestic Non-Loan Parties and (C) among and between the Foreign Unperfected Subsidiaries, provided that any Indebtedness incurred under this subclause (C) (1) owing by a Non-Loan Party to a Loan Party was made in compliance with Section 6.04 and is subject to a first and prior Lien to secure the Secured Obligations, evidenced by a duly completed and executed promissory note in form satisfactory to the Administrative Agent that has been delivered to the Administrative Agent together with an executed allonge thereto satisfactory to the Administrative Agent and (2) owing by a Loan Party to a Non-Loan Party shall constitute Subordinated Indebtedness that in each case is fully subordinated to the prior payment in full of the Secured Obligations, permits no principal repayments until Payment in Full of all Obligations and permits interest payments only so long as there exists no Default or Event of Default;

(d) so long as (i) there exists no Default both before and after giving effect to the incurrence of such Indebtedness, and (ii) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, Indebtedness (including Guaranties) constituting Priority Debt in an aggregate amount of all Indebtedness constituting Priority Debt at any time of incurrence not to exceed the Permitted Priority Debt Cap;

(e) so long as there exists no Default both before and after giving effect to the incurrence of such Indebtedness, unsecured intercompany Indebtedness owed by a Non-Loan Party to a Loan Party, provided that such intercompany Indebtedness was made in compliance with Section 6.04 and is subject to a first and prior Lien to secure the Secured Obligations, evidenced by a duly completed and executed promissory note in form satisfactory to the Administrative Agent that has been delivered to the Administrative Agent together with an executed allonge thereto satisfactory to the Administrative Agent;

(f) so long as (i) there exists no Default both before and after giving effect to the incurrence of such Indebtedness, and (ii) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, unsecured Indebtedness (including Guaranties) incurred by the Loan Parties, provided that Indebtedness of any Loan Party owed to any Non-Loan Party shall constitute Subordinated Indebtedness that in each case is fully subordinated to the prior payment in full of the Secured Obligations, permits no principal repayments until Payment in Full of all Obligations and permits interest payments only so long as there exists no Default or Event of Default;

(g) Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the "Refinance Indebtedness") of any of the Indebtedness described in clause (b), (c), (d), (k) and (n) hereof (such Indebtedness being referred to herein as the "Original Indebtedness"); provided that (i) such Refinance Indebtedness does not increase the principal amount or substantially increase the interest rate of the Original Indebtedness plus the amount of any premiums and accrued and unpaid interest paid on such Original Indebtedness and reasonable fees and expenses associated with such Refinance Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property or assets of any Orthofix Entity, (iii) no Orthofix Entity that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of such Refinance Indebtedness other than fees and interest are not materially less favorable to the obligor thereunder than the original terms of such Original Indebtedness, (vi) if such Original Indebtedness was subordinated in any manner to the Obligations or Secured Obligations (in right of payment, Liens, or remedies), then the terms and conditions of such Refinance

Second Amended and Restated Credit Agreement (Orthofix), Page 114

Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness, (vii) if such Original Indebtedness was pledged to secure the Secured Obligations, then the Refinance Indebtedness must also be pledged to the same extent and in the same manner, (viii) the sum of all outstanding Refinance Indebtedness that refinanced Indebtedness originally incurred under clause (k) of this Section 6.01 together with any outstanding Indebtedness of the Orthofix Entities incurred under clause (k) of this Section 6.01 may not exceed the Dollar Amount of $1,000,000 and (ix) the sum of all outstanding Refinance Indebtedness that refinanced Indebtedness originally incurred under clause (n) of this Section 6.01 together with any outstanding Indebtedness of the Orthofix Entities incurred under clause (n) of this Section 6.01 may not exceed on any date of incurrence the greater of (A) $12,500,000 and (B) 12.5% of LTM EBITDA;

(h) Indebtedness owed to any Person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(i) Indebtedness of any Orthofix Entity in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

(j) so long as (i) there exists no Default both before and after giving effect to the incurrence of such Indebtedness, and (ii) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, Indebtedness constituting Swap Agreement Obligations of the Orthofix Entities and other obligations under Swap Agreements, but only to the extent such agreement is entered into for non-speculative purposes and is permitted by Section 6.07; provided that, (A) no such Indebtedness owing pursuant to this clause (j) may be owed to a Non-Loan Party, (B) any amounts owing to a Loan Party pursuant to this clause (j) shall be unsecured Intercompany Loans pledged to secure the Secured Obligations in accordance with the terms of clause (e) preceding and (C) all such Indebtedness is unsecured except for such Swap Agreements (1) that are entered into with JPMorgan Chase Bank, a Lender or any Affiliate of JPMorgan Chase Bank or a Lender or Person that at the time such Swap Agreement was entered into was a Lender or an Affiliate of a Lender, and (2) that constitute Secured Obligations hereunder;

(k) Indebtedness of the Orthofix Entities consisting of the financing of insurance premiums in the ordinary course of business up to an aggregate amount of all such Indebtedness for all Orthofix Entities outstanding at any one time not to exceed the Dollar Amount of $1,000,000;

(l) Indebtedness (including Guarantees) arising as a result of a fiscal unity (fiscale eenheid) for Dutch tax purposes; and

(m) Indebtedness incurred under a declaration of joint and several liability (hoofdelijke aansprakelijkheid) used for the purpose of section 2:403 of the Dutch Civil Code (Burgerlijk Wetboek) (and any residual liability (overblijvende aansprakelijkheid) under such declaration arising pursuant to section 2:404, paragraph 2, of the Dutch Civil Code) and issued by any Loan Party in respect of any of its Subsidiaries; and

(n) so long as (i) there exists no Default both before and after giving effect to the incurrence of such Indebtedness, and (ii) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, unsecured Indebtedness (including Guaranties) incurred by the Non-Loan Parties not to exceed in the aggregate for all Non-Loan Parties outstanding on any date of incurrence the greater of (A) $12,500,000 and (B) 12.5% of LTM EBITDA.

Second Amended and Restated Credit Agreement (Orthofix), Page 115

SECTION 6.02. Liens. No Loan Party will, nor will it permit any Orthofix Entity to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

(a) Liens securing the Secured Obligations;

(b) Permitted Encumbrances;

(c) Liens (i) arising solely by virtue of any contractual, statutory or common law provision relating to banker's liens, rights of set-off or similar rights and (ii) of a collecting bank arising in the ordinary course of business under Section 4-208 or 4-210 of the UCC (or equivalent in a foreign jurisdiction) in effect in the relevant jurisdiction covering only the items being collected upon;

(d) Liens on fixed or capital assets acquired, constructed or improved by any Orthofix Entity; provided that (i) such Liens secure Indebtedness that is Priority Debt included in the calculation of the Permitted Priority Debt Cap, (ii) such Indebtedness was permitted to be incurred by Section 6.01, (iii) such Liens are only on the fixed or capital assets acquired, constructed or improved, and do not apply to any other property or assets of any Orthofix Entity and (iv) Liens on assets or properties of the Loan Parties that would otherwise constitute Collateral may not secure Indebtedness in an amount in excess of the amount of Other Available Funds on the date of the granting of such Lien;

(e) Liens granted by a Non-Loan Party in favor of a Loan Party in respect of Indebtedness owed by such Non-Loan Party;

(f) Liens on assets and properties that are not Collateral securing Priority Debt permitted to be incurred under Section 6.01(d), provided that all such Priority Debt in the aggregate together with all other Priority Debt (without duplication) does not exceed the Permitted Priority Debt Cap on the date such Liens are granted;

(g) Liens of the Orthofix Entities on insurance policies and the proceeds thereof securing any financing of the premiums with respect thereto permitted under the terms of this Agreement;

(h) precautionary UCC filings (or equivalent filings or registrations in foreign jurisdictions) by lessors under operating leases covering solely the property subject to such leases;

(i) (i) earnest money deposits in respect of (A) any Permitted Acquisition or (B) any other Investment permitted by Section 6.04 and (ii) deposits to secure indemnification obligations relating to any disposition or Investment permitted by this Agreement;

(j) Liens of sellers of goods to the any Orthofix Entity arising under Article 2 of the UCC (or equivalent in foreign jurisdictions) in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses;

(k) (i) any interest or title of a lessor or licensor under any lease or license entered into by an Orthofix Entity in the ordinary course of its business and covering only the assets so leased or licensed and (ii) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Company and its subsidiaries, (ii) secure any Indebtedness, or (iii) constitute a Disposition (unless permitted by Section 6.05);

Second Amended and Restated Credit Agreement (Orthofix), Page 116

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business of the Orthofix Entities;

(m) other Liens on assets and properties that are not Collateral securing Indebtedness or other liabilities permitted to be incurred hereunder in an aggregate amount not to exceed the Dollar Amount of $1,000,000 at any time outstanding;

(n) Liens arising as a result of a fiscal unity (fiscale eenheid) for Dutch tax purposes; and

(o) Liens arising under the Dutch General Banking Conditions (AlgemeneBankvoorwaarden) or any similar term applied by a financial institution in the Netherlands pursuant to its general terms and conditions, provided that the relevant Loan Party organized in the Netherlands has used its commercially reasonable efforts to procure that the relevant account bank consents to the right of pledge (to be) granted under the relevant Security Agreement and waives any right of pledge on the bank account(s) held with such account bank as required under the relevant Security Agreement.

Notwithstanding the foregoing provision or any other provision in this Agreement or in any Loan Document to the contrary, none of the Equity Interests of the Subsidiaries of the Company shall be subject to any Lien at any time except for Liens described in clause (a) of the definition of Permitted Encumbrances.

SECTION 6.03. Fundamental Changes.

(a) No Loan Party will, nor will it permit any Orthofix Entity to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise Dispose of all or any substantial part of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, in each case subject to Section 6.14, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing,

(i) any Subsidiary of the Company may merge into a U.S. Borrower in a transaction in which such U.S. Borrower is the surviving entity,

(ii) any Domestic Subsidiary of the Company (other than a U.S. Borrower) may merge into a U.S. Loan Party in a transaction in which such U.S. Loan Party, as applicable, is the surviving entity or the resulting merged Person is a U.S. Loan Party,

(iii) any Domestic Non-Loan Party may merge into another Domestic Non-Loan Party,

(iv) any Foreign Subsidiary of the Company may merge into a Borrower organized in the same foreign jurisdiction as such Foreign Subsidiary in a transaction in which such Borrower is the surviving entity,

(v) any Foreign Subsidiary of the Company (other than a Borrower) may merge into an Orthofix Entity organized in the same foreign country as such Foreign Subsidiary, but only so long as a Loan Party is the surviving entity if either such Foreign Subsidiary is a Loan Party,

Second Amended and Restated Credit Agreement (Orthofix), Page 117

(vi) any Orthofix Entity (other than a Borrower) may merge with any Person in connection with a Permitted Acquisition or other investment permitted by Section 6.04, but only so long as a (A) a Loan Party is the surviving entity if any party to such merger is a Loan Party and (B) a U.S. Loan Party is the surviving entity if any party to such merger is a U.S. Loan Party,

(vii) any Non-Loan Party may liquidate or dissolve if the Borrowers determine in good faith and reasonably that such liquidation or dissolution is in the best interests of the Borrowers and is not materially disadvantageous to the Lenders,

(viii) any Dutch Borrower may merge into another Dutch Borrower,

(ix)

(A) any Domestic Subsidiary of the Company (other than a U.S. Borrower) that has no assets, or that has sold, disposed of or otherwise transferred all of its assets to a U.S. Loan Party may liquidate or dissolve,

(B) any Foreign Subsidiary of the Company (other than a Borrower) that has no assets or that has sold, disposed of or otherwise transferred all of its assets to (I) another Foreign Subsidiary organized in the same jurisdiction, provided that if such Foreign Subsidiary was a Loan Party, then the buyer, transferee or recipient of the assets must be a Loan Party, or (II) a Loan Party, may liquidate or dissolve, or

(C) Orthosonics Limited, Victory Medical Limited and Colgate Medical Limited may liquidate or dissolve upon completion of the applicable proceedings of dissolution or liquidation under applicable law, and

(x) Dispositions to the extent permitted by Section 6.05.

Notwithstanding the foregoing, in each case of clauses (a)(i) through (a)(x) above, if any such transaction involves a Borrower or a Subsidiary Guarantor, such transaction shall only be permitted if the resulting Orthofix Entity or Orthofix Entities are all Wholly Owned directly or indirectly by the Company.

(b) No Loan Party will, nor will it permit any Orthofix Entity to, engage in any business other than businesses of the type conducted by the Orthofix Entities on the date hereof and businesses reasonably related, ancillary or incidental thereto.

(c) No Loan Party will, nor will it permit any Orthofix Entity to sell, transfer, pledge or otherwise dispose of any Equity Interests in any of the Borrowers or any of the Subsidiary Guarantors, except with respect to the Subsidiary Guarantors that are not Borrowers as permitted by Section 6.05.

(d) No Loan Party will, nor will it permit any Orthofix Entity to, change its fiscal year or any fiscal quarter from the basis in effect on the Effective Date without the consent of the Administrative Agent (which consent shall not be unreasonably withheld).

(e) No Loan Party will, nor will it permit any Orthofix Entity to, change the tax filing elections it has made under the Code, except, if the Company has given five Business Days' prior written notice to the Administrative Agent (or such lesser time period as agreed to by the Administrative Agent), a Subsidiary may change its tax filing elections made under the Code to the extent any such changes

Second Amended and Restated Credit Agreement (Orthofix), Page 118

(individually or collectively for all changes for all Subsidiaries) could not reasonably be expected to be material and adverse to the interests of the Lenders (from the perspective of a secured lender).

(f) No Loan Party will, nor will it permit any Orthofix Entity to, consummate a Division as the Dividing Person, without the prior written consent of Administrative Agent. Without limiting the foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without the prior consent of Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in Section 5.13 and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any Orthofix Entity to, form any subsidiary after the Effective Date, or purchase, hold or acquire (including pursuant to any merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or consummate an Acquisition (collectively, "Investments"), except, in each case subject to Section 6.14:

(a) cash and Permitted Investments;

(b) Investments in existence on the date hereof and described on Schedule 6.04;

(c) Investments (excluding loans or advances) by the Orthofix Entities in Equity Interests (including capital contributions) in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in Section 5.13), and (ii) Investments made by Loan Parties in Non-Loan Parties and Investments made by U.S. Loan Parties and Domestic Subsidiaries in any Foreign Subsidiary may in each case only be made under this clause (c) so long as (A) there exists no Default both before and after giving effect to the making of any such Investment, and (B) after giving effect to the making of any such Investment on a Pro Forma Basis, the Total Net Leverage Ratio shall not be more than 3.00 to 1.00;

(d) loans or advances among the Orthofix Entities, provided that (i) any such loans and advances owing to a Loan Party shall be evidenced by a promissory note in form satisfactory to the Administrative Agent pledged pursuant to the Security Agreement and such note and a duly completed and executed allonge thereto in form satisfactory to the Administrative Agent shall be delivered to the Administrative Agent promptly after execution thereof and (ii) loans and advances made by Loan Parties to Non-Loan Parties and loans and advances made by U.S. Loan Parties and Domestic Subsidiaries to any Foreign Subsidiary may in each case only be made under this clause (d) so long as (A) there exists no Default both before and after giving effect to the making of any such Investment, and (B) after giving effect to the making of any such Investment on a Pro Forma Basis, the Total Net Leverage Ratio shall not be more than 3.00 to 1.00;

(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided that Guarantees by Loan Parties of Indebtedness of Non-Loan Parties and Guaranties by U.S. Loan Parties and Domestic Subsidiaries of Indebtedness of any Foreign Subsidiary may in each case only be made under this clause (e) so long as (A) there exists no Default both before and after giving effect to the making of any such Investment, and (B) after giving effect to the making of any such Investment on a Pro Forma Basis, the Total Net Leverage Ratio shall not be more than 3.00 to 1.00;

Second Amended and Restated Credit Agreement (Orthofix), Page 119

(f) loans or advances made by an Orthofix Entity to its employees in the ordinary course of business for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of the Dollar Amount of $1,000,000 in the aggregate at any one time outstanding for all Orthofix Entities;

(g) notes payable, or stock or other securities issued by Account Debtors to an Orthofix Entity pursuant to (i) negotiated agreements with respect to settlement of such Account Debtor's Accounts in the ordinary course of business or (ii) any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Account Debtors;

(h) Investments in the form of Swap Agreements permitted by Section 6.07;

(i) Investments constituting deposits described in any of clauses (c) and (d) of the definition of the term "Permitted Encumbrances" and Section 6.02(i);

(j) Investments received in connection with the disposition of assets permitted by Section 6.05;

(k) Permitted Acquisitions and Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investment was not made in contemplation of such Permitted Acquisition;

(l) Investments relating to the licensing, commercialization, development, marketing and distribution of orthopedic products (including Investments in joint ventures entered into in connection with the licensing, commercialization, development, marketing and distribution of orthopedic products) to the extent capitalized, in an aggregate amount for the Orthofix Entities not to exceed, in any fiscal year of the Company, the Dollar Amount of the greater of (i) $10,000,000 and (ii) 10% of LTM EBITDA, so long as (x) there exists no Default both before and after giving effect to the making of such Investment and (y) after giving effect to the making of such Investments on a Pro Forma Basis the Borrowers are in compliance with Section 6.12;

(m) so long as (i) there exists no Default both before and after giving effect to the making of any such Investment and (ii) after giving effect to the making of any such Investment on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, other Investments (including intercompany Investments, loans, advances, and Guarantees by Loan Parties of Indebtedness of Non-Loan Parties) by any Orthofix Entity; provided that all such Investments made under this clause (m) may not exceed the amount of Other Available Funds on the date of such Investment;

(n) the specified Investment disclosed by the Company to the Administrative Agent and the Lenders in the notice delivered prior to the date hereof and subject to the terms described in such notice;

(o) (i) bank deposits in the ordinary course of business, (ii) accounts receivables owing if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (iii) endorsement of negotiable instruments held for collection in the ordinary course of business and (iv) lease, utility and other similar deposits in the ordinary course of business; and

(p) to the extent constituting Investments, contingent obligations (i) arising with respect to customary indemnification obligations in connection with Permitted Acquisitions or other Investments permitted by this Section 6.04 or in favor of purchasers in connection with dispositions permitted under Section 6.05, (ii) in respect of obligations to make Restricted Payments that are permitted to be made under the terms of Section 6.08.

Second Amended and Restated Credit Agreement (Orthofix), Page 120

The amount of any Investment outstanding as of any time shall be the Dollar Amount of the original cost of such Investment (which, in the case of any Investment constituting the contribution of asset or property, shall be based on the Company's good faith and reasonable estimate of the fair market value of such asset or property at the time such Investment is made) without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment less the fair market value (as determined by the Borrower in good faith and reasonably) of all amounts received by or cash returned in respect thereof.

SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Orthofix Entity to, sell, transfer, lease or otherwise Dispose of any asset, including any Equity Interest owned by it, nor will any Company and the Borrowers permit any Subsidiary of the Company to issue any additional Equity Interest in such Subsidiary (other than to another Borrower or another Wholly Owned Subsidiary of the Company in compliance with Section 6.04), except, in each case subject to Section 6.14:

(a) sales, transfers and Dispositions of (i) Inventory in the ordinary course of business, (ii) used, obsolete, worn out or surplus Equipment or property in the ordinary course of business and (iii) cash and cash equivalents in connection with a transaction permitted by the terms of this Agreement;

(b) sales, transfers and Dispositions of assets (i) among Loan Parties only, provided that such sales, transfers or Dispositions among Loan Parties are permitted only so long as either (A) the transferee Loan Party is in the same country as the transferor Loan Party or (B) the transferee is a U.S. Loan Party, (ii) among Non-Loan Parties in the same country only, (iii) where the transferor is a Non-Loan Party and the transferee is Loan Party in the same country, but only to the extent that such sale, transfer or other Disposition of assets is at prices and on terms and conditions not less favorable to such Loan Party than could be obtained on an arm's-length basis from unrelated third parties and (iv) so long as there exists no Default both before and after giving effect to any such sale, transfer or Disposition, among the Orthofix Entities where either (x) the transferor is a Loan Party and the transferee is a Non-Loan Party, (y) the transferor is a U.S. Loan Party and the transferee is a Loan Party that is a Foreign Subsidiary or (z) the transferor is a Non-Loan Party and the transferee is an Orthofix Entity in a different country, provided that (A) if the Total Net Leverage Ratio is in excess of 3.00 to 1.00 on any date of making of a sale, transfer or other Disposition, the aggregate book value of such assets sold, transferred or otherwise Disposed of on such date (in each case determined without regard to any write-down or write-offs) permitted under clause (iv) shall not exceed the amount of Other Available Funds on the date of such sale, transfer or Disposition and (B) no Disposition of Equity Interests in (1) any of the Borrowers, (2) any of the Subsidiary Guarantors, or (3) any other Subsidiary may be sold under this clause (b), except, (x) Subsidiaries that are not Borrowers, provided that in the case of such sales under clause (2), such Subsidiary Guarantor continues to be wholly-owned by a Loan Party in the same country and remains a Subsidiary Guarantor after giving effect to such sale and (y) in the case of sales under clauses (2) and (3), all Equity Interests in such Subsidiary are sold;

(c) sales, transfers and Dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

(d) sales, transfers and Dispositions of Permitted Investments;

(e) Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Orthofix Entity;

(f) so long as (x) there exists no Default both before and after giving effect to any such sale, lease, transfer or Disposition and (y) after giving effect to such sale, lease, transfer or Disposition on

Second Amended and Restated Credit Agreement (Orthofix), Page 121

a Pro Forma Basis the Borrowers are in compliance with Section 6.12, sales, leases, transfers and other Dispositions of assets (except Equity Interests in (A) any Borrower or (B) any Subsidiary that is not a Borrower unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that (i) the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (f) shall not exceed the Dollar Amount of (A) $80,000,000 during any fiscal year of the Company and (B) $120,000,000 in the aggregate over the term of this Agreement and (ii) all sales, transfers, leases and other Dispositions permitted under this clause (f) shall be made for fair value and at least 70% cash consideration;

(g) the termination of Swap Agreements permitted by Section 6.07;

(h) transactions permitted under Section 6.03(a), transactions constituting Restricted Payments made pursuant to and in accordance with the provisions of Section 6.08, transactions constituting the granting of Liens permitted under Section 6.02 and transactions constituting Investments permitted under Section 6.04;

(i) so long as (x) there exists no Default both before and after giving effect to any such factoring or disposition of receivables and (y) after giving effect to such factoring or disposition of receivables on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, (i) the factoring or disposition of receivables by Orthofix-Italy in the ordinary course of business and (ii) the factoring or disposition of receivables by U.S. Loan Parties in the ordinary course of business; provided, that the aggregate fair market value of all receivables factored or disposed of in reliance on this clause (i)(ii) during the term of this Agreement shall not exceed the Dollar Amount of the greater of (A) $12,500,000 and (B) 12.5% of LTM EBITDA;

(j) non-exclusive licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business not interfering with the business of the Orthofix Entities;

(k) forgiveness or discounting, on a non-recourse basis and in the ordinary course of business, of past due accounts in connection with the collection or compromise thereof or the settlement of delinquent accounts or in connection with the bankruptcy or reorganization of suppliers or customers;

(l) the abandonment of intellectual property rights which, in the reasonable good faith determination of the Company, are no longer used or useful to the business of any Orthofix Entity;

(m) sales or disposals of Equity Interests of any Foreign Subsidiary that is not a Borrower or a Subsidiary Guarantor in order to qualify a member of the board of directors (or equivalent governing body) of such Person if and to the extent required by applicable law;

(n) so long as (x) there exists no Default both before and after giving effect to any such sale, lease, transfer or disposition and (y) after giving effect to such sale, lease, transfer or Disposition on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, sales, leases, transfers and other Dispositions of assets (except Equity Interests in (A) any Borrower or (B) any Subsidiary that is not a Borrower unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that (i) the aggregate fair market value of all assets sold, transferred or otherwise Disposed of in reliance upon this clause (n) during the term of this Agreement shall not exceed the Dollar Amount of the greater of (A) $7,500,000 and (B) 7.5% of LTM EBITDA and (ii) all sales, transfers, leases and other Dispositions permitted under this clause (n) shall be made for fair value;

Second Amended and Restated Credit Agreement (Orthofix), Page 122

(o) so long as (x) there exists no Default both before and after giving effect to any such sale, lease, transfer or Disposition and (y) after giving effect to such sale, lease, transfer or Disposition on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, sales, leases, transfers and other Dispositions of any assets (excluding Equity Interests), but only to the extent such sale, lease, transfer or other Disposition is made together with a concurrent purchase of, or exchange for, comparable assets of another Person (an "Asset Swap"), in each case so long as (i) the aggregate fair market value of all assets sold, transferred or otherwise Disposed of in reliance upon this clause (o)during the term of this Agreement shall not exceed the Dollar Amount equal to the greater of (A) $7,500,000 and (B) 7.5% of LTM EBITDA, (ii) after giving effect to such Asset Swap, to the extent that any assets that were swapped constituted Collateral, (x) the comparable assets shall also constitute Collateral in the same manner and to the same extent as the prior Collateral and the Loan Parties shall be in compliance with Section 5.13 (within the time period specified therein) and (iii) such Asset Swap is not material and adverse to the Secured Parties (from the perspective of a secured lender); and

(p) the disposition, transfer and termination of all rights in respect of the Company's Investment in eNeura, Inc.

SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Orthofix Entity to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property, except, sale and leaseback transactions to the extent any resulting Indebtedness is permitted under Section 6.01 and any Disposition in connection with such transaction is permitted by Section 6.05 of this Agreement, so long as (a) there exists no Default both before and after giving effect to any such sale and leaseback transaction, (b) after giving effect to such transaction on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, and (c) the aggregate amount of all such sales and leasebacks made in reliance on this Section 6.06 shall not exceed the Dollar Amount of (i) $40,000,000 during any fiscal year of the Company and (ii) $60,000,000 in the aggregate over the term of this Agreement.

SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any Orthofix Entity to, enter into any Swap Agreement, except Swap Agreements entered into to hedge or mitigate risks to which any Orthofix Entity has actual exposure (other than those in respect of Equity Interests of any Subsidiary of the Company), and for non-speculative purposes, and only so long as (a) all such agreements are unsecured unless such Swap Agreement is entered into with JPMorgan Chase Bank, a Lender or an Affiliate of JPMorgan Chase Bank or a Lender and constitute Secured Obligations, (b) no Indebtedness under any Swap Agreement may be owed to a Non-Loan Party, and (c) any amounts owing to a Loan Party pursuant to this Section 6.07 shall be unsecured Intercompany Loans pledged to secure the Secured Obligations.

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. No Loan Party will, nor will it permit any Orthofix Entity to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(a) the Company may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock;

(b) [Reserved];

(c) the Subsidiaries of the Company or any Subsidiary may declare and pay Restricted Payments ratably to their direct holders of their Equity Interests;

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(d) so long as (A) there exists no Default both before and after giving effect to the making of each such Restricted Payment, and (B) after giving effect to the making of any such Restricted Payment on a Pro Forma Basis, the Total Net Leverage Ratio shall not be more than 3.00 to 1.00, the Company (and to the extent constituting Restricted Payments under clauses (iv) and (v) of the definition of Restricted Payments, its Subsidiaries) may make any Restricted Payment (including any earnout permitted by Section 6.01);

(e) payment of regularly scheduled interest and principal payments as and when due in respect of any Subordinated Indebtedness, except (i) payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof, (ii) principal and interest payments on Subordinated Indebtedness owed to Persons that are not Orthofix Entities after the occurrence and during the continuance of an Event of Default and (iii) after the occurrence and during the continuance of an Event of Default, payments in respect of Intercompany Loans owed by (x) any one or more Loan Parties to any Non-Loan Party and (y) any Orthofix Entity to any non-Wholly Owned Orthofix Entity;

(f) any Loan Party may make any Restricted Payment constituting a payment on Intercompany Loans to any other Loan Party;

(g) any Non-Loan Party may make a Restricted Payment to another Non-Loan Party or a Loan Party;

(h) the Company may (i) issue Equity Interests in the Company, (ii) purchase Equity Interests in the Company from present or former officers or employees of any Orthofix Entity upon the death, disability or termination of employment of such officer or employee, provided that no Default then exists or would result therefrom and the aggregate amount of payments made under this clause (h)(ii) shall not exceed the Dollar Amount of $1,000,000 during any fiscal year of the Company;

(i) so long as (1) there exists no Default both before and after giving effect to the making of each such Restricted Payment and (2) after giving effect to any Borrowings or other transactions made in connection with such Restricted Payment on a Pro Forma Basis the Borrowers are in compliance with Section 6.12, the Loan Parties may make additional Restricted Payments in an amount in the aggregate not to exceed the Dollar Amount of $12,500,000 during any fiscal year of the Company; and

(j) the Company and its non-Wholly Owned Subsidiaries may pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof.

SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it permit any Orthofix Entity to sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates or any Non-Loan Parties, except (a) transactions that are at prices and on terms and conditions not less favorable to such Orthofix Entity or Loan Party, respectively, than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the U.S. Loan Parties and between or among the Foreign Perfected Subsidiaries not involving any other Orthofix Entity or other Affiliate, (c) any issuances by the Company of Equity Interests, awards or grants of equity securities, stock options and stock ownership plans approved by the Company's board of directors, (d) transactions not involving an agreement amount in excess of (i) the Dollar Amount of $2,500,000 per transaction (or series of related transactions) and (ii) the Dollar Amount of $2,500,000 in the aggregate for all such transactions outstanding at any time, (e) Restricted Payments permitted by Section 6.08, (f) Investments permitted by Section 6.04 and (g) the payment of reasonable fees to directors of any Orthofix Entity who are not employees of such Orthofix

Second Amended and Restated Credit Agreement (Orthofix), Page 124

Entity, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Orthofix Entities in the ordinary course of business.

SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any Orthofix Entity directly or indirectly to enter into, incur or permit to exist any agreement or other consensual arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Orthofix Entity to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary of the Company to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to any Borrower or any other Orthofix Entity or to Guarantee Indebtedness of any other Orthofix Entity; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any requirement of law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), or at the time any Subsidiary becomes a Subsidiary of the Company, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of the Company, (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of any property pending such sale, provided such restrictions and conditions apply only to such property that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in leases, licenses and contracts restricting the assignment thereof, (vi) clause (a) of the foregoing shall not apply with respect to software and other intellectual property licenses pursuant to which an Orthofix Entity is the licensee of the relevant software or intellectual property, as the case may be (in which case, any such prohibition or limitation shall relate only to the assets subject to the applicable licenses), (vii) clauses (a) and (b) of the foregoing shall not apply to agreements relating to Indebtedness of any Non-Loan Party permitted to be incurred hereunder by such Non-Loan Party (in which case any such prohibit or limitation shall relate only to such Non-Loan Party), (viii) clauses (a) and (b) of the foregoing shall not apply with respect to provisions contained in joint venture agreements or similar agreements entered into in the ordinary course of business and permitted by the terms of this Agreement, so long as in each case such provisions are applicable only to such joint venture, its assets and any equity interests therein, and (ix) restrictions imposed by any agreement governing Indebtedness entered into after the Effective Date and permitted under Section 6.01 that are, taken as a whole, in the reasonable good faith judgment of the Company, no more restrictive with respect to the Company or any Subsidiary than the then customary market terms for Indebtedness of such type (but which shall permit the Liens on the Collateral pursuant to the Loan Documents), so long as the Company shall have determined in good faith and reasonably that such restrictions will not affect the obligation or ability of the Company and the Subsidiaries to make any payments required to be made by it hereunder, become a Loan Party (to the extent so required by Section 5.13) or perform obligations required to be performed by it under the Loan Documents (including obligations to provide Collateral and guarantees under the Loan Documents) and (x) any encumbrances or restrictions of the types referred to in clauses (i) through (ix) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts referred to therein; provided that such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in the good faith and reasonable judgment of the Company, no more restrictive with respect to such encumbrance or other restrictions, taken as a whole, than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it permit any Orthofix Entity to, amend, modify or waive any of its rights under (a) (i) any agreement relating to any Subordinated Indebtedness or (ii) any Intercompany Loan, in each case, without the consent of the Administrative Agent to the extent any such amendment, modification or waiver would be adverse to the

Second Amended and Restated Credit Agreement (Orthofix), Page 125

Lenders in any material respect (from the perspective of a secured lender) (or except as specifically permitted in any applicable intercreditor, subordination or similar agreement) or (b) its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, without the consent of the Required Lenders, to the extent any such amendment, modification or waiver would be adverse to the Lenders in any material respect.

SECTION 6.12. Financial Covenants.

(a) Interest Coverage Ratio. The Company and the other Loan Parties will not permit the Interest Coverage Ratio, for any period of four consecutive fiscal quarters, to be less than 3.00:1.00 as of the last day of such four fiscal quarter period.

(b) Total Net Leverage Ratio. The Company and the other Loan Parties will not permit the Total Net Leverage Ratio, on the last day of any fiscal quarter, to be greater than 3.50:1.00 (the "Maximum Total Net Leverage Ratio"), except as permitted below.

Notwithstanding the foregoing but subject to the final sentence in this paragraph, upon the consummation of a Material Acquisition during the term of this Agreement, the Total Net Leverage Ratio may be greater than the Maximum Total Net Leverage Ratio for the first four fiscal quarters ending after the date of the consummation of such Material Acquisition (the "Increase Period"), but in no event shall the Total Net Leverage Ratio be greater than 4.00 to 1.00 as of the last day of any fiscal quarter (the "Permitted Leverage Increase"). After the Increase Period, the Total Net Leverage Ratio may not be greater than the Maximum Total Net Leverage Ratio as of the last day of each fiscal quarter of the Company until another permitted Increase Period occurs. There may be more than one Permitted Leverage Increase during the term of this Agreement but only so long as there are two full fiscal quarters of compliance with the Maximum Total Net Leverage Ratio prior to the commencement of another Permitted Leverage Increase. Notwithstanding the preceding, the Permitted Leverage Increase provided for during each Increase Period in this paragraph shall only apply (1) with respect to the quarterly calculations of the financial covenants specifically required by this Section 6.12, and (2) for purposes of determining the permissibility of any Material Acquisition in accordance with the terms of this Agreement, and for no other purpose (including but not limited to any permissive bucket, governor or any other requirement for which compliance with any one or more of the financial covenants in this Section 6.12 is required by this Agreement or by any other Loan Document).

SECTION 6.13. Accounts.

(a) Set forth on Schedule 6.13 is a complete and accurate list of all checking, savings or other accounts (including securities accounts) of the Orthofix Entities at any bank or other financial institution, or any other account where money is or may be deposited or maintained with any Person (other than Excluded Deposit Accounts) as of the Effective Date. At any time on or after the Effective Date, no Loan Party will, nor will it permit any of the Subsidiaries of the Company organized in the U.S. to open, maintain or otherwise have any checking, savings or other accounts (including securities accounts) at any bank or other financial institution, or any other account where money is or may be deposited or maintained with any Person, other than (i) deposit accounts that are subject to a Deposit Account Control Agreement (as such term is defined in the Security Agreement), (ii) securities accounts that are subject to a Securities Account Control Agreement (as such term is defined in the Security Agreement), (iii) Excluded Deposit Accounts, (iv) cash collateral accounts required by the terms of this Agreement and the other Loan Documents and (v) other deposit accounts, so long as at any time the balance in any such account does not exceed the Dollar Amount of $500,000 and the aggregate balance in all such accounts does not exceed the Dollar Amount of $1,500,000.

Second Amended and Restated Credit Agreement (Orthofix), Page 126

(b) The Loan Parties shall segregate collections made from Medical Reimbursement Programs, from collections made from all other Account Debtors and customers of the applicable Loan Parties, including, without limitation, to the extent not already accomplished, by (i) notifying all payors (other than Medical Reimbursement Programs) then instructed to make payments to such Loan Parties' deposit accounts to make payments to a deposit account other than a Segregated Governmental Account that is subject to a Deposit Account Control Agreement (such accounts, "Other Accounts"), and (ii) notifying all Medical Reimbursement Programs to make payments to a Segregated Governmental Account that is a zero balance account. The Loan Parties shall not change the zero balance nature of any Segregated Governmental Account. To the extent any Person, whether a Governmental Payor or otherwise, remits payments to an incorrect deposit account or otherwise makes payments not in accordance with the provisions of this Section 6.13(b) or an applicable Loan Parties' payment direction, such Loan Party shall contact such Person and use its commercially reasonable efforts to redirect payment from such Person in accordance with the terms hereof.

SECTION 6.14. Transfer of Assets and Properties of Orthofix Entities. Notwithstanding (1) the provisions of Section 6.03, Section 6.04, Section 6.05 and Section 6.08, and (2) any other provision in this Agreement or in any other Loan Document (except the U.S. Security Agreement) to the contrary, the sum of the aggregate fair market value of all assets and properties (a) owned by any Orthofix Entity that is a U.S. Person (that is not cash or a Permitted Investment) and sold, transferred or otherwise Disposed of to any Person that is not a U.S. Loan Party, except in each case sales, transfers and Dispositions (x) in the ordinary course of business permitted by Sections 6.05(a), (c),(j) (so long such sale, transfer or Disposition under clause (j) has not materially reduced the value of such asset), and (k), (y) permitted by Section 6.05(h) but only with respect to Section 6.02 and further limited to Liens securing the Secured Obligations only and (z) permitted by Sections 6.05(e), (i), (o) and (p) (collectively permitted sales, transfers and Dispositions enumerated under clauses (x) and (y) preceding and excluded from the calculation in this Section 6.14, the "Excluded Sales") plus (b) owned by any Orthofix Entity that is a U.S. Person (that is not cash or a Permitted Investment) and used to make any Investment in any Person that is not a U.S. Loan Party, plus (c) owned by any Loan Party that is not a U.S. Loan Party (that is not cash or a Permitted Investment) and sold, transferred or otherwise Disposed of to any Person that is not a U.S. Loan Party or a Loan Party in the same country, except in each case, Excluded Sales, plus (d) owned by any Loan Party that is not a U.S. Loan Party (that is not cash or a Permitted Investment) and used to make any Investment in any Person that is not a U.S. Loan Party or a Loan Party in the same country, plus (e) without duplication of items included in clauses (a), (b), (c) and (d) preceding, that constitute Collateral located in the Netherlands that is owned by a Dutch Subsidiary that is a Loan Party and such Collateral remains owned by a Dutch Subsidiary but is relocated to another country (except to the U.S., if the Dutch Subsidiary has taken such action so that such Collateral continues to constitute perfected Collateral to the same extent and in the same manner), may not exceed (i) the greater of (A) the Dollar Amount of $80,000,000 and (B) 16% of the total assets of the Company on a consolidated basis, for any fiscal year of the Company, and (ii) $180,000,000 in the aggregate over the term of this Agreement.

ARTICLE VII

Events of Default

If any of the following events ("Events of Default") shall occur:

(a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

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(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days;

(c) any representation, warranty or certification made or deemed made by or on behalf of any Orthofix Entity in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been incorrect when made or deemed made, provided that (i) if such representation, warranty or certification by its terms is made only as of a specified date it shall prove to be incorrect on such specified date, and (ii) if such representation, warranty or certification is not subject to any materiality qualifier, then such representation, warranty or certification shall prove to have been materially incorrect when made or deemed made;

(d) any Orthofix Entity shall fail to observe or perform any covenant, condition or agreement contained in Sections 5.02(a), 5.03 (with respect to a Loan Party's existence), 5.08 or in Article VI;

(e) any Orthofix Entity shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those specified in clause (a), (b) or (d)), and if such breach or failure to comply is capable of cure, such failure shall continue unremedied for a period of (i) ten Business Days after the earlier of (x) any Responsible Officer's knowledge of such breach or failure to comply and (y) notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01(a)-(d), 5.02 (other than Section 5.02(a)), 5.03(a)(i), 5.03(b), 5.06, 5.10, or 5.13 of this Agreement or (ii) 30 days after the earlier of (x) any Responsible Officer's knowledge of such breach or failure to comply and (y) notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement or of any other Loan Document;

(f) any Orthofix Entity shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness (other than subordinated Intercompany Loans owed by any Loan Party), when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of customary non-default mandatory prepayment events, such as asset dispositions, casualty and condemnation events, or issuances of debt or equity, if such transaction is permitted hereunder and under the documents providing for such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of an Orthofix Entity or its debts, or of a substantial part of its assets, under any Debtor Relief Law or federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Orthofix Entity or for a substantial

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part of its assets, and, in any such case, such proceeding or petition shall continue undismissed or unstayed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i) any Orthofix Entity shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Debtor Relief Law or federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Orthofix Entity or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j) any Orthofix Entity shall become generally unable, admit in writing its inability, or publicly declare its intention not to, or fail generally, to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in excess of the Dollar Amount of $12,500,000 (to the extent not covered by insurance for which the applicable carrier has not denied coverage) shall be rendered against any Orthofix Entity or any combination of Orthofix Entities and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be bonded or effectively stayed, or any writ or warrant of attachment or execution or similar process is issued or levied against any material portion of the assets of any Orthofix Entity to enforce any such judgment and is not released, vacated or fully bonded within thirty (30) days after its issue or levy or any Orthofix Entity shall fail within sixty (60) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal and being appropriately contested in good faith by proper proceedings diligently pursued;

(l) (i) an ERISA Event shall have occurred that when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Orthofix Entities in an aggregate amount exceeding the Dollar Amount of $12,500,000 and/or (ii) any Orthofix Entity shall have been notified that any of them has, in relation to a Foreign Pension Plan, incurred a debt or other liability under section 75 or 75A of the United Kingdom Pensions Act 1995, or has been issued with a contribution notice or financial support direction (as those terms are defined in the United Kingdom Pensions Act 2004), or otherwise is liable to pay an amount which, when aggregated with all other amounts required to be paid to Foreign Pension Plans by the Orthofix Entities, exceeds the Dollar Amount of $12,500,000;

(m) a Change in Control shall occur;

(n) the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect other than as permitted pursuant to Section 9.02, or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Orthofix Entity or Affiliate of any Orthofix Entity shall make that assertion, or such Guarantor, Orthofix Entity or Affiliate shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 10.08 or any notice of termination delivered pursuant to the terms of any Obligation Guaranty;

Second Amended and Restated Credit Agreement (Orthofix), Page 129

(o) (i) except as permitted by the terms of any Loan Document, (x) any Collateral Document shall for any reason fail to create a valid security interest in any material portion of the Collateral purported to be covered thereby, or (y) any Lien attached to any material portion of the Collateral securing any Secured Obligation shall cease to be a perfected, first priority Lien except as permitted by Section 6.02 or except as a result of the Administrative Agent's failure to maintain possession or control of any possessory Collateral, or (ii) any Lien purported to be created under any Collateral Document shall be asserted by any Orthofix Entity or any of their Affiliates not to be, a valid and perfected Lien on any material Collateral, with a priority required hereby or thereby,

(p) [Reserved];

(q) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Orthofix Entity or any of their Affiliates shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms, in each case, other than in the case of (x) the termination of any Loan Document or release of any Loan Party in accordance with the terms of, and as contemplated by, this Agreement or (y) the Payment in Full of the Obligations);

(r) (i)the subordination provisions of any Subordinated Indebtedness (the "Subordination Provisions") of any of the Intercompany Loans owing by any Loan Party or any other Subordinated Indebtedness constituting Material Indebtedness of any Orthofix Entity shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any Orthofix Entity party thereto or any other holder of such Subordinated Indebtedness, or (ii) any Orthofix Entity or any other holder of such Subordinated Indebtedness shall, directly or indirectly, disavow or contest in any manner the effectiveness, validity or enforceability of any of the Subordination Provisions; or

(s) National Westminster Bank Plc., New York and Nassau Branches, ABN AMRO Bank N.V., New York Branch or any of their respective successors and assigns, any affiliate of any of the foregoing or any lender or party to any ABN Credit Document (or their successors and assigns or affiliates) (i) asserts any claims over any assets of the Company, the Dutch Subsidiaries or any other Orthofix Entity in connection with the enforcement or exercise of other rights as a secured credit or similar rights related to the ABN Obligations (as such term is defined in Section 3.33 of this Agreement) or any other Indebtedness owed to any such Person or (ii) asserts that the ABN Obligations (as such term is defined in Section 3.33 of this Agreement) or any other Indebtedness or other obligations relating to or arising from the ABN Obligations owing to National Westminster Bank Plc., New York and Nassau Branches, ABN AMRO Bank N.V., New York Branch or any of their respective successors and assigns are secured, in whole or in part, by any Lien or other security interest granted pursuant to any ABN Credit Document or otherwise; provided, however, this clause (s) shall no longer apply upon the Company providing executed payoff, release and other termination documents with respect to the ABN Obligations and the ABN Credit Documents in form and content satisfactory to the Administrative Agent as confirmed by the Administrative Agent in writing,

then, and in every such event (other than an event with respect to an Orthofix Entity described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Company, take either or both of the following actions, at the same or different times: (i) terminate the Commitments (including the Swingline Commitment), whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared

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to be due and payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers and (iii) require cash collateral for the LC Exposure in accordance with Section 2.05(j); and in the case of any event with respect to an Orthofix Entity described in clause (h) or (i) of this Article, the Commitments (including the Swingline Commitment) shall automatically terminate and the principal of the Loans then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

The Administrative Agent

SECTION 8.01. Authorization and Action.

(a) Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and each Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender and each Issuing Bank authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender and each Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender's or such Issuing Bank's behalf. Without limiting the foregoing, each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, and to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

(b) As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and each Issuing Bank; provided, however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the Lenders and the Issuing Banks with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided,

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further, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise of any such instructed action and may refrain from acting until such clarification or direction has been provided. Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity . Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c) In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Banks (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature. Without limiting the generality of the foregoing:

(i) the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term "agent" (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby;

(ii) where the Administrative Agent is required or deemed to act as a trustee in respect of any Collateral over which a security interest has been created pursuant to a Loan Document expressed to be governed by the laws of the United Kingdom, the Netherlands or Italy, or is required or deemed to hold any Collateral "on trust" pursuant to the foregoing, the obligations and liabilities of the Administrative Agent to the Secured Parties in its capacity as trustee shall be excluded to the fullest extent permitted by applicable law;

(iii) to the extent that English law is applicable to the duties of the Administrative Agent under any of the Loan Documents, Section 1 of the Trustee Act 2000 of the United Kingdom shall not apply to the duties of the Administrative Agent in relation to the trusts constituted by that Loan Document; where there are inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 of the United Kingdom and the provisions of this Agreement or such Loan Document, the provisions of this Agreement shall, to the extent permitted by applicable law, prevail and, in the case of any inconsistency with the Trustee Act 2000 of the United Kingdom, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act; and

(iv) nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account;

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(d) The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

(e) None of any Syndication Agent, any Documentation Agent or any Arranger shall have obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.

(f) In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under Sections 2.11, 2.12, 2.14, 2.16 and 9.03) allowed in such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03). Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

(g) The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except solely to the extent of the Borrowers' rights to consent pursuant to and subject to the conditions set forth in this Article, none of the Borrowers or any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the

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benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

SECTION 8.02. Administrative Agent's Reliance, Indemnification, Etc.

(a) Neither the Administrative Agent nor any of its Related Parties shall be (i) liable to any Lender for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

(b) The Administrative Agent shall be deemed not to have knowledge of any (i) notice of any of the events or circumstances set forth or described in Section 5.02 unless and until written notice thereof stating that it is a "notice under Section 5.02" in respect of this Agreement and identifying the specific clause under said Section is giving to the Administrative Agent by the Company, or (ii) notice of any Default unless and until written notice thereof (stating that it is a "notice of Default") is given to the Administrative Agent by the Borrowers, a Lender or an Issuing Bank. Further the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be such items) expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

(c) Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel (including counsel to the Borrowers), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be

Second Amended and Restated Credit Agreement (Orthofix), Page 134

entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

SECTION 8.03. Posting of Communications.

(a) Each Borrower agrees that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Lenders and the Issuing Banks by posting the Communications on IntraLinks™, DebtDomain, SyndTrak, ClearPar or any other electronic system chosen by the Administrative Agent to be its electronic transmission system (the "Approved Electronic Platform").

(b) Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, each of the Issuing Banks and each Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there may be confidentiality and other risks associated with such distribution. Each of the Lenders, each of the Issuing Banks and each Borrower hereby approves distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

(c) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED "AS IS" AND "AS AVAILABLE". THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER, ANY CO-DOCUMENTATION AGENT, ANY SYNDICATION AGENT OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, "APPLICABLE PARTIES") HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY'S OR THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

"Communications" means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

Second Amended and Restated Credit Agreement (Orthofix), Page 135

(d) Each Lender and each Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender's or Issuing Bank's (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

(e) Each of the Lenders, each of the Issuing Banks and each Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent's generally applicable document retention procedures and policies.

(f) Nothing herein shall prejudice the right of the Administrative Agent, any Lender or any Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 8.04. The Administrative Agent Individually. With respect to its Commitment, Loans, including Swingline Loans and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or Issuing Bank, as the case may be. The terms "Issuing Banks", "Lenders", "Required Lenders" and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders, as applicable. The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Banks.

SECTION 8.05. Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving 30 days' prior written notice thereof to the Lenders, the Issuing Banks and the Company, whether or not a successor Administrative Agent has been appointed. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank. In either case, such appointment shall be subject to the prior written approval of the Company (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent. Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent's resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

Second Amended and Restated Credit Agreement (Orthofix), Page 136

(b) Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Company, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties, and continue to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Collateral Document, including any action required to maintain the perfection of any such security interest), and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender and each Issuing Bank. Following the effectiveness of the Administrative Agent's resignation from its capacity as such, the provisions of this Article, Section 2.16(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (ii) above.

SECTION 8.06. Acknowledgements of Lenders and Issuing Banks.

(a) Each Lender represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and that it has, independently and without reliance upon the Administrative Agent, any Arranger, any Syndication Agent, any Documentation Agent, or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger, any Syndication Agent, any Documentation Agent, or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b) Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan document pursuant to which it shall have become a Lender hereunder.

Second Amended and Restated Credit Agreement (Orthofix), Page 137

(c) Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties' books and records, as well as on representations of the Loan Parties' personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys' fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

SECTION 8.07. Collateral Matters.

(a) Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with respect to a Secured Party's right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof. In its capacity, the Administrative Agent is a "representative" of the Secured Parties within the meaning of the term "secured party" as defined in the UCC. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

(b) In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the obligations under which constitute secured Swap Obligations, will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document. By accepting the benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

(c) The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(d).

Second Amended and Restated Credit Agreement (Orthofix), Page 138

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent's Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

SECTION 8.08. Credit Bidding. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties' ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition

Second Amended and Restated Credit Agreement (Orthofix), Page 139

vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

SECTION 8.09. Certain ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that at least one of the following is and will be true:

(i) such Lender is not using "plan assets" (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a "Qualified Professional Asset Manager" (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that none of the Administrative Agent, or any Arranger, any Syndication Agent, any Documentation Agent or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).

Second Amended and Restated Credit Agreement (Orthofix), Page 140

(b) The Administrative Agent, and each Arranger, Syndication Agent and Co-Documentation Agent hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Agreement and any other Loan Documents, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker's acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

SECTION 8.10. Flood Laws. JPMorgan Chase Bank has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the "Flood Laws"). JPMorgan Chase Bank, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws. However, JPMorgan Chase Bank reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices.

(a) Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

(i) if to any Loan Party, to it in care of the Company at:

3451 Plano Parkway
Lewisville, TX 75056
Attention: John Bostjancic, Chief Financial Officer

Email: jbostjan@seaspine.com

Telecopy No.: 214-937-3180

with a copy to

3451 Plano Parkway
Lewisville, TX 75056
Attention: Patrick Keran, Chief Legal Officer

Email: Patrick.keran@seaspine.com

Telecopy No.: 214-937-3180

Second Amended and Restated Credit Agreement (Orthofix), Page 141

(ii) if to the Administrative Agent in connection with a Borrowing Request from a Borrower to JPMorgan Chase Bank at:

10 South Dearborn, Floor L2S

Suite IL1-1145
Chicago, IL, 60603-2300, United States

Attention: Joshua Stapleton

Phone: 312-732-7168

Facsimile: 888-292-9533

Email: joshua.l.stapleton@chase.com;

With a copy to: Jpm.agency.cri@jpmorgan.com

(iii) if to JPMorgan Chase Bank as Issuing Bank, to it at

10 South Dearborn, Floor L2S

Suite IL1-1145

Chicago, IL, 60603-2300, United States

Attention: Joshua Stapleton

Phone: 312-732-7168

Facsimile: 888-292-9533

Email: joshua.l.stapleton@chase.com;

With a copy to: Jpm.agency.cri@jpmorgan.com

or, if to any other Issuing Bank, at such contact information provided by such Issuing Bank;

(iv) if to JPMorgan Chase Bank as Swingline Lender, to it at

10 South Dearborn, Floor L2S

Suite IL1-1145
Chicago, IL, 60603-2300, United States

Attention: Joshua Stapleton

Phone: 312-732-7168

Facsimile: 888-292-9533

Email: joshua.l.stapleton@chase.com;

Second Amended and Restated Credit Agreement (Orthofix), Page 142

With a copy to: Jpm.agency.cri@jpmorgan.com

or, if to any other Swingline Lender, at such contact information provided by such Swingline Lender;

(v) if to any other Lender, to it at its address or fax number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail shall be deemed to have been given when received, (ii) sent by fax shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (iii) delivered through Electronic Systems or Approved Electronic Platforms, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable, or pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the Administrative Agent and the Company (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by using Electronic Systems or Approved Electronic Platforms, as applicable, pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

(c) Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02. Waivers; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party or other Orthofix Entity therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without

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limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

(b) Subject to Sections 2.13(c) and (d) and the other provisions of this Section 9.02, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders, or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall

(A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender),

(B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend Section 2.12(c) or to waive any obligation of the Borrowers to pay interest or letter of credit fees at the rate provided for in Section 2.12(c) or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or LC Disbursement or to reduce any fee payable hereunder,

(C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement (excluding voluntary and mandatory prepayments), or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby,

(D) change Section 2.17(b) or (d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender) directly and adversely affected thereby,

(E) change any of the provisions of this Section or the definition of "Required Lenders" or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby,

(F) amend the definition of "Agreed Currency" set forth in Section 1.01 without the written consent of each Lender directly affected thereby,

(G) release all or substantially all the Guarantors from their obligations under the Loan Guaranty or Obligation Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender directly affected thereby (other than any Defaulting Lender), or

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(H) except as provided in clause (d) of this Section or in any Collateral Document, release all or substantially all of the Collateral without the written consent of each Lender directly affected thereby (other than any Defaulting Lender);

provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being understood that any amendment to Section 2.19 shall require the consent of the Administrative Agent, the Swingline Lender and the Issuing Bank); provided further that no such agreement shall amend or modify the provisions of Section 2.05 or any letter of credit application and any bilateral agreement between any Borrower and the Issuing Bank regarding the Issuing Bank's Letter of Credit Commitment or the respective rights and obligations between such Borrower and the Issuing Bank in connection with the issuance of Letters of Credit without the prior written consent of the Administrative Agent and the Issuing Bank, respectively; providedfurther that any fee letter, Swap Agreement, agreement governing Banking Services or other bilateral agreement between one or more Loan Parties and any Credit Party may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04. Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrowers and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.

(c) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, if the Administrative Agent and the Borrowers acting together identify any omission, mistake, typographical error, inconsistency or other defect in any provision of this Agreement or any other Loan Document, then the Administrative Agent and the Borrowers shall be permitted to amend, modify or supplement such provision to cure such omission, mistake, typographical error, inconsistency or other defect, and such amendment shall become effective without any further action or consent of any other party to this Agreement.

(d) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, the Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent to, and the Administrative Agent will, upon the request of the Borrowers, (A) release (or in the case of clause (iv) below, subordinate) any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of all of the Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than (x) Unliquidated Obligationsand (y) Banking Services Obligations and Swap Obligations as to which arrangements satisfactory to the Administrative Agent, and the relevant Person owed such Banking Services Obligations or Swap Obligations, as applicable, shall have been made), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry); provided no such certification shall be required in connection with sales or dispositions of Collateral in the ordinary course of business, and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Guarantor (that is not the Company or a Borrower), the Administrative Agent is authorized to release any Loan Guaranty or Obligation Guaranty provided by such Guarantor, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the

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Administrative Agent and the Lenders pursuant to Article VII, (v) granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(d), or (vi) to the extent constituting Excluded Assets; and (B) release any Loan Guaranty or Obligation Guaranty provided by (i) any Excluded Subsidiary, (ii) any Subsidiary 100% of the Equity Interests of which are sold or disposed of pursuant to clause (A)(ii) in this Section 9.02(d), or (iii) any Subsidiary that is merged, amalgamated, liquidated or dissolved out of existence in accordance with Section 6.03. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the applicable Loan Guaranty or Obligation Guaranty pursuant to this Section 9.02(d). In each case as specified in this Section 9.02(d), the Administrative Agent will, at the Company's expense (and each Lender irrevocably authorizes the Administrative Agent to), (x) deliver to the applicable Loan Party any Collateral in the Administrative Agent's possession following the release of such Collateral and (y) execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Loan Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.02(d).

(e) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, the Administrative Agent, the Borrower and each Incremental Lender, may, without the input or consent of the Required Lenders or any other Lender, execute any Incremental Amendment or otherwise effect amendments to this Agreement or any other Loan Document as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect any Incremental Commitments in connection with the provisions of Section 2.08(e) through (h).

(f) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, the Administrative Agent, the Company, Orthofix‑Italy and each Italy Sub-Facility Lender, may, without the input or consent of the Required Lenders or any other Lender, effect amendments to this Agreement or any other Loan Document as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of Section 2.24.

(g) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, the Administrative Agent and the Company, may, without the input or consent of the Required Lenders or any other Lender, effect amendments to this Agreement or any other Loan Document, as may be necessary or appropriate, in the opinion of the Administrative Agent, in connection with the addition or replacement of an Issuing Bank or the addition or replacement of the Swingline Lender.

(h) If, in connection with any proposed amendment, waiver or consent requiring the consent of "each Lender" or "each Lender affected thereby," the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a "Non-Consenting Lender"), then the Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers, the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and

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Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to such Non‑Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.14 and 2.16, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.15 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

(i) Notwithstanding the foregoing or any other provision in this Agreement or any other Loan Document to the contrary, only the consent of the Administrative Agent and the Required Lenders will be required under this Agreement and the other Loan Documents to release any Borrower (except the Company) from its obligations hereunder as a Borrower (and related obligations as a Guarantor, grantor, pledgor) or any other obligation or duty of a Borrower. For the avoidance of doubt, (x) the prior written consent of each Lender will be required to take any such action with respect to the Company, and (y) this clause (i) shall not operate in any manner to negate the requirements of consent from each Lender directly affected thereby set forth in clauses (G) and (H) of Section 9.02(b) which will be applicable in all circumstances described therein.

SECTION 9.03. Expenses; Indemnity; Damage Waiver.

(a) The Loan Parties, jointly and severally, shall pay all (i) 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 syndication and distribution (including, without limitation, via the internet or through an Electronic System or Approved Electronic Platform) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable and invoiced out‑of‑pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, the Issuing Bank or the Swingline Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or the Swingline Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out‑of‑pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit, and (iv) reasonable and invoiced out-of-pocket expenses incurred by any Lender, including the fees, charges and disbursements of one counsel and one local counsel in each specialty and relevant jurisdiction for the Lenders, taken as a whole, and in the case of an actual or perceived conflict of interest, one additional counsel in each specialty and relevant jurisdiction to each group of Lenders similarly situated taken as a whole, in connection with the

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enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out‑of‑pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) The Loan Parties, jointly and severally, shall indemnify the Administrative Agent, the Issuing Bank, each Arranger and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, (including, without limitation, reasonable and documented out-of-pocket fees, charges and disbursements of one primary counsel and one local counsel in each specialty and in each relevant jurisdiction for the Indemnitees taken as a whole in connection with indemnification claims arising out of the same facts or circumstances, and, solely in the case of an actual or perceived conflict of interest, as reasonably determined by the affected Indemnitee (based upon the advice of counsel to such Indemnitee), one additional counsel in each specialty and relevant jurisdiction to each group of affected Indemnitees similarly situated taken as a whole), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (A) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (B) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (C) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or any other Orthofix Entity, or any Environmental Liability related in any way to an Orthofix Entity, (D) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by such Loan Party for Taxes pursuant to Section 2.16, (E) the disclosure of Confidential Healthcare Information to the Administrative Agent or any Lender in violation of Section 9.21, or (F) any actual or prospective claim, litigation, investigation, arbitration or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation, arbitration or proceeding is brought by any Loan Party, other Orthofix Entity or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by final and nonappealable judgment of a court of competent jurisdiction to (1) have arisen or resulted from (x) the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) a breach in bad faith of a material obligation of such Indemnitee or any of its Affiliates or (2) not have resulted from an act or omission from any of the Borrowers, the Guarantors or any of their Affiliates and have been brought by an Indemnitee against another Indemnitee (other than against the Administrative Agent, the Swingline Lender, the Issuing Bank or the Arrangers in their capacities or fulfilling their respective roles as an arranger or agent or any similar role hereunder). WITHOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF THE BORROWERS AND THE BORROWERS AGREE THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFORE IN ACCORDANCE WITH CLAUSES (iii) AND (iv) OF SECTION 9.03(a)) WHICH IN WHOLE OR IN PART ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c) Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraph (a) or (b) of this Section 9.03 to the Administrative Agent, the Swingline Lender and

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each Issuing Bank, and each Related Party of any of the foregoing Persons (each, an "Agent Indemnitee") (to the extent not reimbursed by the Loan Parties and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), from and against any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent Indemnitee in its capacity as such; providedfurther that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from such Agent Indemnitee's gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and the Payment in Full of all Obligations.

(d) To the extent permitted by applicable law, no Loan Party or other Orthofix Entity shall assert, and each Loan Party hereby waives, on behalf of itself and each other Orthofix Entity any claim against any Indemnitee, (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), except for damages that are determined by final and nonappealable judgment of a court of competent jurisdiction to have arisen or resulted from the bad faith or willful misconduct of such Indemnitee or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this paragraph (d) shall relieve any Loan Party of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

(e) Parallel Debt.

(i) Notwithstanding any other provision of this Agreement, each Loan Party hereby irrevocably and unconditionally undertakes to pay to the Administrative Agent (the "Parallel Debt"), as creditor in its own right and not as representative of the other Secured Parties, sums equal to and in the currency of each amount payable by the Loan Parties and the other Orthofix Entities respectively to each of the Secured Parties under each of the Loan Documents as and when that amount falls due for payment under the relevant Loan Document.

(ii) The Administrative Agent shall have its own independent right to demand payment of the amounts payable by each of the Loan Parties and other Orthofix Entities to the Administrative Agent under this paragraph (e).

(iii) Any amount due and payable by a Loan Party or any of the other Orthofix Entities to the Administrative Agent under this paragraph (e) shall be decreased to the extent that the other Secured Parties have received (and are able to retain) payment of the corresponding amount under the other provisions of the Loan Documents and any amount due and payable by a Loan Party or any of the other Orthofix Entities to the other Secured Parties under

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those provisions shall be decreased to the extent that the Administrative Agent has received (and is able to retain) payment of the corresponding amount under this paragraph (e).

(iv) The rights of the Secured Parties (other than the Administrative Agent) to receive payment of amounts payable by a Loan Party or any of the other Orthofix Entities under the Loan Documents are several and are separate and independent from, and without prejudice to, the rights of the Administrative Agent to receive payment under this paragraph (e).

(f) All amounts due under this Section shall be payable promptly but not later than 30 days after written demand therefor.

SECTION 9.04. Successors and Assigns.

(a) The provisions of this Agreement shall be 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 (i) 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 (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the Arrangers, the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Company, provided such consent will not be unreasonably withheld and that the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and providedfurther that no consent of the Company shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B) the Administrative Agent; and

(C) the Issuing Bank; and

(D) the Swingline Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender

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subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than the Dollar Amount of $5,000,000 unless each of the Company and the Administrative Agent otherwise consent, provided that no such consent of the Company shall be required if an Event of Default has occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of the Dollar Amount of $3,500;

(D) the assignee must be capable of lending in each of the Agreed Currencies to each of the U.S. Borrowers, the Dutch Borrowers and any UK Borrower, and in respect of lending to a Dutch Borrower, qualify as a Permitted Lender; and

(E) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Company, the other Orthofix Entities and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including federal and state securities laws.

For the purposes of this Section 9.04(b), the terms "Approved Fund" and "Ineligible Institution" have the following meanings:

"Approved Fund" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"Ineligible Institution" means (a) a natural person, (b) a Defaulting Lender and its Parent, (c) company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that, such company, investment vehicle or trust shall not constitute an Ineligible Institution if it (i) has not been established for the primary purpose of acquiring any Loans or Commitments, (ii) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (iii) has assets greater than the Dollar Amount of $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business; provided that upon the occurrence of an Event of Default, any Person (other than a Lender) shall be an Ineligible Institution if after giving effect to any proposed assignment to such Person, such Person would hold more than 25% of the then outstanding Aggregate Revolving Exposure or aggregate Commitments, as the case may be or (d) each of the Borrowers, the other Loan Parties, each other Orthofix Entity and any of Affiliates of each the foregoing.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning

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Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04, 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) Any Lender may, without the consent of, or notice to, the Borrowers, the Administrative Agent, the Swingline Lender or the Issuing Bank, sell participations to one or more banks or other entities (a "Participant") other than an Ineligible Institution in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the requirements and limitations therein, including the requirements under Sections 2.16(f) and (i) (it being understood that the documentation required under Section 2.16(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.16(i)

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will be delivered to the Company and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.17 and 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.14 or 2.16 with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrowers' request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 2.18(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(d) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement or any other Loan Document (the "Participant Register"); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the U.S. Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement, notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution. (a) This Agreement and each other Loan Document may be executed in counterparts (and by different parties hereto

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on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b) Delivery of an executed counterpart of a signature page of this Agreement or any other Loan Document 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 Agreement or such Loan Document. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent. Without limiting the generality of the foregoing, each Loan Party hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders and the Loan Parties, electronic images of this Agreement or any other Loan Documents (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waives any argument, defense or right to contest the validity or enforceability of the Loan Documents based solely on the lack of paper original copies of any Loan Documents, including with respect to any signature pages thereto. THIS WRITTEN AGREEMENT REPRESENTS 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 9.07. Severability. Any provision of any Loan Document 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 thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing, by such Lender, such Issuing Bank or any such Affiliate to or for the credit or the account of any Loan Party against any and all of the Secured Obligations owing to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such

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indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.19 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The applicable Lender, the Issuing Bank or such Affiliate shall notify the Company and the Administrative Agent of such setoff or application; provided that the failure to give such notice shall not affect the validity of such setoff or application under this Section. The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) The Loan Documents (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.

(b) Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.

(c) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such state court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

(d) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(e) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. EACH UK

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BORROWER, EACH DUTCH BORROWER AND OTHER FOREIGN SUBSIDIARY OF THE COMPANY HEREBY IRREVOCABLY APPOINTS THE COMPANY AS ITS AGENT FOR SERVICE OF PROCESS IN ANY PROCEEDING IN CONNECTION WITH THIS AGREEMENT AND THE LOAN DOCUMENTS, AND AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE MADE BY MAILING OR DELIVERING A COPY THEREOF TO IT CARE OF THE COMPANY IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.01.

(f) Notwithstanding paragraph (a) of this Section, if any Loan Party formed under the laws of the Netherlands is represented by an attorney-in-fact in connection with the signing and/or execution of this Agreement (including by way of accession to this Agreement), any other Loan Document, or any other agreement, deed or document referred to in, or made pursuant to, any Loan Document, it is hereby expressly acknowledged and accepted by the other parties to this Agreement that the existence and extent of the attorney-in-fact's authority and the effect of the attorney-in-fact's exercise or purported exercise of his or her authority shall be governed by the laws of the Netherlands.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of, and not to disclose to any Person, the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and who are either subject to customary confidentiality obligations of employment or professional practice, or who agree to be bound by the terms of this paragraph (or language substantially similar to this Section)), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) (in which case the Administrative Agent, such Issuing Bank or such Lender agrees (except with respect to any audit or examination conducted by bank accountants or any self-regulatory authority or governmental or regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by any Requirement of Law, to inform the Company promptly thereof prior to disclosure), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process (in which case the Administrative Agent, such Issuing Bank or such Lender agrees (except with respect to any audit or examination conducted by bank accountants or any self-regulatory authority or governmental or regulatory authority exercising examination or regulatory authority, to the extent practicable and not prohibited by any Requirement of Law), to inform the Company promptly thereof prior to disclosure), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding

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relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties, the other Orthofix Entities and their obligations, (g) with the consent of the Company, (h) to any Person providing a Guarantee of all or any portion of the Secured Obligations, or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrowers that is not, to the knowledge of the Administrative Agent, the Issuing Bank or any Lender, subject to contractual or fiduciary confidentiality obligations owing to any Orthofix Entity. For the purposes of this Section, "Information" means all confidential information received from or on behalf of the Orthofix Entities relating to the Orthofix Entities or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers from a source other than the Borrowers that is not, to the knowledge of the Administrative Agent, the Issuing Bank or any Lender, subject to contractual or fiduciary confidentiality obligations owing to any Orthofix Entity and other than information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION 9.12) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWERS, THE OTHER LOAN PARTIES AND ORTHOFIX ENTITIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWERS, OTHER THE LOAN PARTIES AND ORTHOFIX ENTITIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Board) for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

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SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15. Disclosure. Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with, any of the Loan Parties, any of the other Orthofix Entities and their respective Affiliates.

SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent's request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent's instructions.

SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the applicable Overnight Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.18. Marketing Consent. The Borrowers hereby authorize JPMorgan Chase Bank, N.A., each Lender and each of their respective Affiliates, at their respective sole expense, but without any prior approval by the Borrowers, to publish such tombstones and such other similar and customary marketing materials in respect of this Agreement as each may from time to time determine in its sole discretion. The foregoing authorization shall remain in effect with respect to any such Person unless the Company notifies such Person in writing that such authorization is revoked.

SECTION 9.19. No Fiduciary Duty, etc. The Borrowers acknowledge and agree, and acknowledge its subsidiaries' understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm's length contractual counterparty to the Borrowers with respect to the Loan Documents and the transaction contemplated therein and not as a financial advisor or a fiduciary to, or an agent of, the Borrowers or any other person. Each Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, each Borrower acknowledges and agrees that no Credit Party is advising such Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. Each Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the

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transactions contemplated hereby, and the Credit Parties shall have no responsibility or liability to the Borrowers with respect thereto.

Each Borrower further acknowledges and agrees, and acknowledges its subsidiaries' understanding, that each Credit Party, together with its affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the Borrowers and other companies with which the Borrowers may have commercial or other relationships. With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

In addition, each Borrower acknowledges and agrees, and acknowledges its subsidiaries' understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which such Borrower may have conflicting interests regarding the transactions described herein and otherwise. No Credit Party will use confidential information obtained from the Borrowers by virtue of the transactions contemplated by the Loan Documents or its other relationships with the Borrowers in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies. Each Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to such Borrower, confidential information obtained from other companies.

SECTION 9.20. No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.

SECTION 9.21. Protected Health Information. During the term of this Agreement, the Administrative Agent and the Lenders may be involved in field examinations and other visits, inspections, examinations and discussions with the Company, any other Orthofix Entity or a Subsidiary. Such involvement by the Administrative Agent or any Lender shall not be considered a request for the disclosure of any Protected Health Information or other confidential information relating to healthcare patients (collectively, the "Confidential Healthcare Information"), unless (a) the Lenders have made a written request for such information, (b) the Lenders have entered into a business associate agreement to cover the use and disclosure of such Confidential Healthcare Information by, to, or for the benefit of the Lenders and (c) the Lenders and the Company have determined that such use and disclosure will not violate any laws, regulations or ordinances intended to protect the privacy rights of healthcare patients, including, without limitation, HIPAA. Each of the Company, Borrowers and Subsidiaries hereby acknowledge the foregoing and represent that they will not disclose Confidential Healthcare Information to the Administrative Agent or any Lender except to the extent permitted under this Section and by applicable law.

SECTION 9.22. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion

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Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

SECTION 9.23. Amendment and Restatement. This Agreement constitutes an amendment and restatement of the Existing Agreement and as such, except for the indebtedness and other than obligations provided for in the Existing Agreement (which indebtedness and obligations shall survive, be renewed and restated by the terms of this Agreement), all terms and provisions of this Agreement supersede in their entirety the terms and provisions of the Existing Agreement in its entirety. This Agreement is not intended as and shall not be construed as a release or novation of any or all of the obligations and liabilities existing under the Existing Agreement and the "Loan Documents" (as defined in the Existing Agreement). Notwithstanding anything herein to the contrary, in no event shall the Liens securing the Existing Agreement or the obligations thereunder be deemed affected hereby, it being the intent and agreement of the Loan Parties that, except as otherwise provided in the Loan Documents, the Liens on the Collateral (as defined in the Security Agreement (as defined in the Existing Agreement)) granted to secure the obligations of the Loan Parties in connection with the Existing Agreement and the other Loan Documents (as defined in the Existing Agreement), shall not be extinguished and shall remain valid, binding and enforceable securing the obligations under the Existing Agreement as amended and restated hereby.

SECTION 9.24. Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support "QFC Credit Support" and each such QFC a "Supported QFC"), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the "U.S. Special Resolution Regimes") in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

In the event a Covered Party that is party to a Supported QFC (each, a "Covered Party") becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC

Second Amended and Restated Credit Agreement (Orthofix), Page 160

and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

SECTION 9.25. Release of UK Loan Parties on the Effective Date. On the Effective Date and immediately upon giving effect to this Agreement, Orthofix Limited (an Immaterial Subsidiary on the Effective Date), Victory Medical Limited (an Excluded Subsidiary) and Colgate Medical Limited (an Excluded Subsidiary) are released from their obligations under the Existing Agreement and the other "Loan Documents" as defined in the Existing Agreement. For the avoidance of doubt, on the Effective Date, none of Orthofix Limited, Victory Medical Limited or Colgate Medical Limited are "Borrowers", "Guarantors" or "Loan Parties" under this Agreement and the other Loan Documents. Without limiting the foregoing, in no event shall the release set forth in this Section 9.25 (a) release the Lien on the Equity Interests of Orthofix Limited or (b) effect any other obligation, Lien or pledge of any of the other Loan Parties arising under this Agreement or any Loan Document, including, without limitation, if any one or more of Orthofix Limited, Victory Medical Limited and/or Colgate Medical Limited becomes, or is required to become, a Loan Party on any date after the Effective Date.

ARTICLE X

Loan Guaranty

SECTION 10.01. Guaranty. Each Loan Guarantor (other than those that have delivered a separate Obligation Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and reasonable attorneys' and paralegals' fees and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the "Guaranteed Obligations"); provided, however, that the definition of "Guaranteed Obligations" shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for purposes of determining any obligations of any Loan Guarantor. Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank

Second Amended and Restated Credit Agreement (Orthofix), Page 161

or any Lender to sue any Borrower or any Loan Guarantor, or any other guarantor of, or any other Person obligated for, all or any part of the Guaranteed Obligations (each, an "Obligated Party"), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or their assets, or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any other Person, whether in connection herewith or in any unrelated transactions.

(a) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

(b) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower, any Loan Guarantor or any other Obligated Party, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party or any other Person. Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it

Second Amended and Restated Credit Agreement (Orthofix), Page 162

against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty, except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has against any Obligated Party or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor's obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers' financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

SECTION 10.08. Termination. Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations. Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under Article VII hereof as a result of any such notice of termination.

SECTION 10.09. Taxes.

(a) Withholding Taxes; Gross-Up; Payments Free of Taxes. Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law. If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law. If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor

Second Amended and Restated Credit Agreement (Orthofix), Page 163

shall be increased (without duplication as to any additional amounts paid under Section 2.16) as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.

(b) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been paid additional amounts by a Loan Guarantor pursuant to this Section 10.09, it shall pay to such Loan Guarantor an amount equal to such refund (but only to the extent of payments made under this Section 10.09 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such Loan Guarantor, upon the request of such party, shall repay to such party the amount paid over pursuant to this paragraph (b) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (b), in no event will the party be required to pay any amount to a Loan Guarantor pursuant to this paragraph (b) the payment of which would place the party in a less favorable net after-Tax position than the party would have been in if the Tax giving rise to such refund had not been deducted, withheld or otherwise imposed and the additional amounts giving rise to such refund had never been paid. This paragraph (b) shall not be construed to require any party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Loan Guarantor or any other Person.

SECTION 10.10. Maximum Liability. Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transaction Act or similar statute or common law. In determining the limitations, if any, on the amount of any Loan Guarantor's obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10.11. Contribution.

(a) To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a "Guarantor Payment") which, taking into account all other Guarantor Payments then previously or concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Loan Guarantor's "Allocable Amount" (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment and the Guaranteed Obligations (other than Unliquidated Obligations that have not yet arisen), and all Commitments and Letters of Credit have terminated or expired or, in the case of all Letters of Credit, are fully collateralized on terms reasonably acceptable to the Administrative Agent and the Issuing Bank, and this Agreement, the Swap Agreement Obligations and the Banking Services Obligations have terminated, such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

Second Amended and Restated Credit Agreement (Orthofix), Page 164

(b) As of any date of determination, the "Allocable Amount" of any Loan Guarantor shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan Guarantors as of such date in a manner to maximize the amount of such contributions.

(c) This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

(d) The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and indemnification is owing.

(e) The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the full and indefeasible payment of the Guaranteed Obligations in cash (other than Unliquidated Obligations that have not yet arisen) and the termination or expiry (or, in the case of all Letters of Credit, full cash collateralization), on terms reasonably acceptable to the Administrative Agent and the Issuing Bank, of the Commitments and all Letters of Credit issued hereunder and the termination of this Agreement, the Swap Agreement Obligations and the Banking Services Obligations.

SECTION 10.12. Liability Cumulative. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

SECTION 10.13. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its obligations under this Guarantee in respect of a Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 10.13 shall remain in full force and effect until the termination of all Swap Obligations. Each Qualified ECP Guarantor intends that this Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

ARTICLE XI

The Borrower Representative.

SECTION 11.01. Appointment; Nature of Relationship. The Company is hereby appointed by each of the Borrowers and Guarantors as its contractual representative hereunder and under each other

Second Amended and Restated Credit Agreement (Orthofix), Page 165

Loan Document, and each of the Borrowers and other Loan Parties irrevocably authorizes the Company to act as the contractual representative of such Borrower or such other Loan Parties with the rights and duties expressly set forth herein and in the other Loan Documents. The Company agrees to act as such contractual representative upon the express conditions contained in this Article XI. Additionally, the Borrowers hereby appoint the Company as their agent to receive all of the proceeds of the Loans in the Funding Account, at which time the Company shall promptly disburse such Loans to the appropriate Borrower, provided that, in the case of a Revolving Loan, such amount shall not exceed the Availability. The Administrative Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Company or any Borrower, or any other Loan Party, for any action taken or omitted to be taken by the Company, the Borrowers or the other Loan Parties pursuant to this Section 11.01.

SECTION 11.02. Powers. The Company shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Company by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Company shall have no implied duties to the Borrowers or the other Loan Parties, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Company.

SECTION 11.03. Employment of Agents. The Company may execute any of its duties as the Company hereunder and under any other Loan Document by or through authorized officers.

SECTION 11.04. Notices. Each Borrower and each other Loan Party shall immediately notify the Company of the occurrence of any Default or Event of Default hereunder, refer to this Agreement, describe such Default or Event of Default, and state that such notice is a "notice of default". In the event that the Company receives such a notice, the Company shall give prompt notice thereof to the Administrative Agent and the Lenders. Any notice provided to the Company hereunder shall constitute notice to each Borrower and each other Loan Party on the date received by the Company.

SECTION 11.05. Successor Borrower Representative. Upon the prior written consent of the Administrative Agent, the Company may resign at any time, such resignation to be effective upon the appointment of a successor borrower representative. The Administrative Agent shall give prompt written notice of such resignation to the Lenders.

SECTION 11.06. Execution of Loan Documents. The Borrowers and the other Loan Parties each hereby empower and authorize the Company, on behalf of the Borrowers and the other Loan Parties, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including, without limitation, the Compliance Certificates. Each Borrower and each of the other Loan Parties agrees that any action taken by the Company, the Borrowers or the other Loan Parties in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Company of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon each of the Borrowers and each of the other Loan Parties.

SECTION 11.07. Reporting. Each Loan Party hereby agrees that such Loan Party shall furnish promptly after each fiscal month to the Company a copy of any certificate or report required hereunder or requested by the Company on which the Company shall rely to prepare the Compliance Certificate required pursuant to the provisions of this Agreement.

[Signature Page Follows]

Second Amended and Restated Credit Agreement (Orthofix), Page 166

Second Amended and Restated Credit Agreement (Orthofix), Page 167

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above written.

BORROWERS:

ORTHOFIX MEDICAL INC.


By:
Name:
Title:

ORTHOFIX INTERNATIONAL B.V.


By:
Name:
Title:

By:
Name:
Title:

ORTHOFIX INC.


By:
Name:
Title:

ORTHOFIX SPINAL IMPLANTS INC.


By:
Name:
Title:

Second Amended and Restated Credit Agreement (Orthofix), Signature Page

Orthofix III B.V.


By:
Name:
Title:

By:
Name:
Title:

GUARANTORS:

ORTHOFIX HOLDINGS, INC.


By:
Name:
Title:

SPINAL KINETICS LLC


By:
Name:
Title:

Second Amended and Restated Credit Agreement (Orthofix), Signature Page

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


By:
Name:
Title:

Second Amended and Restated Credit Agreement (Orthofix), Signature Page

[OTHER BANKS]


By:
Name:
Title:

Second Amended and Restated Credit Agreement (Orthofix), Signature Page

EX-10

Exhibit 10.4

LEASE AGREEMENT BETWEEN

AR INDUSTRIAL NO. 1, LTD.,

AS LANDLORD, AND

ORTHOFIX, INC.,

AS TENANT

Dated February 10, 2009

PROJECT: TO BE CONTRUCTED

LEWISVILLE, TEXAS

BASIC LEASE INFORMATION

Lease Date:	February 10, 2009
Landlord:	AR Industrial No. 1, Ltd., a Texas limited partnership
Tenant:	Orthofix, Inc., a Minnesota corporation
Premises:	That certain space containing 144,624 rentable square feet, in a building to be constructed by Landlord (the “Building”) pursuant to the specifications and approved site plan set forth in Exhibit A and such other plans and specifications as may be mutually agreed to in writing by Landlord and Tenant. The land on which the Building is to be located (the “Land”) is described on Exhibit B. The term “Project” shall collectively refer to the Building, the Land and the driveways, parking facilities, loading dock areas, roadways, any rail tracks associated with the Building and similar improvements and easements associated with the foregoing or the operation thereof. Within thirty (30) days following the Commencement Date, Tenant may, at its option and expense, cause the Premises to be measured by Tenant’s architect, which measurement will be certified to both Landlord and Tenant. Tenant shall execute and deliver Landlord a notice (the “Calculation Notice”) containing Tenants calculation (together with backup or supporting information from Tenant’s architect reflecting the calculations made by such architect) of the exact number of rentable square feet contained within the Premises and the Building. Landlord shall have the right to object to the applicable calculations in the Calculation Notice by delivering written notice (including detailed objections to the calculations set forth therein) to Tenant within 10 business days after Tenant delivers such Calculation Notice to Landlord, failing which Landlord shall be deemed to have agreed that the information contained in such Calculation Notice is correct. However, if Landlord timely objects to such calculations, Landlord and Tenant shall work together to resolve their differences, failing which the dispute will be submitted to arbitration. After such differences have been resolved between Landlord and Tenant or by arbitration, if the actual number of rentable square feet within the Premises as determined by such measurement varies by more than one percent (1%) from the number of rentable square feet set forth above, then all amounts under this Lease (including, but not limited to, Basic Rent and any other applicable items) shall be re-calculated based on the actual number of rentable square feet within the Premises as determined by such measurement, and the parties shall enter into an amendment to this Lease for the purpose of reflecting the correct area of the Premises and shall make any necessary cash adjustments within fifteen (15) days after the date on which the actual area of the Premises is so determined. Notwithstanding the foregoing, the rentable square feet within the Premises or the Basic Rent and other applicable items shall not be increased pursuant to the provisions of the previous sentence by more than 2% from the amounts specified in this Lease unless such increase results from a change order executed by Tenant. All payments of Rent shall be made as and when required in this Lease, notwithstanding any unresolved objections to any Calculation Notice; and shall be based (as applicable) upon the rentable square feet set forth above until such amendment has been executed by Landlord and Tenant.
Term:	One hundred twenty (120) full calendar months, plus any partial month from the Commencement Date to the end of the month in which the Commencement Date falls, starting on the Commencement Date and ending at 5:00 p.m. local time on the last day of the 120th full calendar month following the Commencement Date, subject to adjustment and earlier termination as provided in the Lease.
Commencement Date:	The earliest of (a) the date on which Tenant occupies any portion of the Premises and begins conducting business therein, (b) the date on which the Work (as defined in Exhibit D hereto) in the Premises is Substantially Completed (as defined in Exhibit D hereto), or (c) the date on which the Work in the Premises would have been Substantially Completed but for the occurrence of any Tenant Delay Days (as defined in Exhibit D hereto), provided that in no event shall the Commencement Date be sooner than January 31, 2010.

i

Basic Rent:	Basic Rent shall be the following amounts for the following periods of time:
		Lease Month	Annual Basic Rent Rate Per Rentable Square Foot		Monthly Basic Rent
		1 - 60	$8.38		$100,995.76
		61 – 120	$8.88		$107,021.76
	As used herein, the term “Lease Month” means each calendar month during the Term (and if the Commencement Date does not occur on the first day of a calendar month, the period from the Commencement Date to the first day of the next calendar month shall be included in the first Lease Month for purposes of determining the duration of the Term and the monthly Basic Rent rate applicable for such partial month).
Additional Rent:	Tenant's Proportionate Share of Operating Costs, Taxes and Insurance Costs.
Security Deposit:	$128,112.76
Rent:	Basic Rent, Additional Rent, and all other sums that Tenant may owe to Landlord or otherwise be required to pay under the Lease.
Permitted Use:	General office use, light manufacturing and industrial/warehouse use for the purpose of receiving, storing, shipping, testing and selling (but limited to wholesale sales only) products, materials and merchandise made, tested and/or distributed by Tenant. Without limiting the foregoing, Tenant shall be permitted to (a) operate a laboratory, clean room and training room on the Premises in connection with Tenant’s business operations, (b) park trucks and trailers used in Tenant’s business operations on and from the Premises overnight at the truck docks of the Premises and (c) use a portion of the Premises for the operation of a cadaver room.
Tenant’s Proportionate Share:	100%.
Initial Liability Insurance Amount:	$3,000,000.
Initial Monthly Payment of Rent:	The following shall constitute Tenant’s initial monthly payment of Rent required pursuant to Sections 4, 12(e) and 17 of the Lease, which shall be adjusted as and when required under the terms of the Lease:
	Minimum Rent			$100,995.76
	Additional Rent
	Tenant’s Proportionate Share of Operating Costs ($0.64 per square foot)			$7,713.28
	Tenant’s Proportionate Share of Insurance Costs ($0.08 per square foot)			$964.16
	Tenant’s Proportionate Share of Taxes ($1.28 per square foot)			$15,426.56
	Total Initial Monthly Payment			$125,099.76

ii

Tenant's Address:	Orthofix, Inc., a Minnesota corporation
	1720 Bray Central Drive
	McKinney, Texas 75069
	Attention: Michael Simpson
	Telephone: 469-742-2500
	Telecopy: 469-742-2701
Landlord’s Address:	For all Notices:	With a copy to:
	AR Industrial No. 1, Ltd.	Billingsley Company
	4100 International Parkway, Suite 1100	4100 International Parkway, Suite 1100
	Carrollton, Texas 75007	Carrollton, Texas 75007
	Attn: Brett Johansson	Attn: Ruth Waters
	Telephone: 972-820-2200	Vice President – Legal Affairs
	Telecopy: 972-820-2201	Telephone: 972-820-2200
		Telecopy: 972-820-2201

The foregoing Basic Lease Information is incorporated into and made a part of the Lease identified above. If any conflict exists between any Basic Lease Information and the Lease, then the Lease shall control.

BTS – Lease Agreement (Orthofix) V.8.Doc

2/5/2009

iii

TABLE OF CONTENTS

			Page No.
1.	Definitions and Basic Provisions		1
2.	Lease Grant		1
3.	Tender of Possession		1
4.	Rent		2
	(a)	Payment	2
	(b)	Operating Costs	2
5.	Delinquent Payment; Handling Charges		5
6.	Security Deposit		5
7.	Landlord's Maintenance Obligations		5
8.	Improvements: Alterations; Tenant's Maintenance and Repair Obligations		6
	(a)	Improvements; Alterations	6
	(b)	Repairs; Maintenance	6
	(c)	Performance of Work	7
	(d)	Mechanic's Liens	7
	(e)	Janitorial Services	7
9.	Utilities		7
10.	Use		8
11.	Assignment and Subletting		8
	(a)	Transfers	8
	(b)	Consent Standards	8
	(c)	Request for Consent	9
	(d)	Conditions to Consent	9
	(e)	Attornment by Subtenants	9
	(f)	Cancellation	9
	(g)	Additional Compensation	10
	(h)	Permitted Transfers	10
12.	Insurance; Waivers: Subrogation: Indemnity		10
	(a)	Tenant's Insurance	10
	(b)	Landlord's Insurance	11
	(c)	No subrogation: Waiver of Property Claims	11
	(d)	Indemnity	11
	(e)	Cost of Landlord's Insurance	11
13.	Subordination; Attornment; Notice to Landlord's Mortgagee		12
	(a)	Subordination	12
	(b)	Attornment	12
	(c)	Notice to landlord's Mortgagee	12
	(d)	Landlord's Mortgagee's Protection Provisions	12
14.	Rules and Regulations		13

iv

15.	Condemnation		13
	(a)	Total Taking	13
	(b)	Partial Taking- Tenant's Rights	13
	(c)	Partial Taking- Landlord's Rights	13
	(d)	Temporary Taking	13
	(e)	Award	13
16.	Fire or Other Casualty		14
	(a)	Repair Estimate	14
	(b)	Tenant's Rights	14
	(c)	Landlord's Rights	14
	(d)	Repair Obligation	14
	(e)	Abatement of Rent	14
17.	Personal Property Taxes		14
18.	Events of Default		14
	(a)	Payment Default	14
	(b)	Abandonment	14
	(c)	Estoppel	15
	(d)	Insurance	15
	(c)	Mechanic's Liens	15
	(f)	Other Defaults	15
	(g)	Insolvency	15
19.	Remedies		15
	(a)	Termination of I.ease	15
	(b)	Termination of Possession	15
	(c)	Perform Acts on Behalf of Tenant	15
	(d)	Alteration of Locks	15
20.	Payment by Tenant; Non-Waiver; Cumulative Remedies		16
	(a)	Payment by Tenant	16
	(b)	No Waiver	16
	(c)	Cumulative Remedies	16
21.	Waiver of Landlord's Lien		16
22.	Surrender of Premises		16
23.	Holding Over		16
24.	Certain Rights Reserved by Landlord		17
	(a)	Building Operations	17
	(b)	Security	17
	(c)	Prospective Purchasers and Lenders	17
	(d)	Prospective Tenants	17
25.	Intentionally Deleted		17
26.	Miscellaneous		17
	(a)	Landlord Transfer	17
	(b)	Landlord's Liability	17
	(c)	Force Majeure	18
	(d)	Brokerage	18
	(c)	Estoppel Certificates	18
	(f)	Notices	18
	(g)	Separability	18

v

	(h)	Amendments; Binding Effect; No Electronic Records	19
	(i)	Quiet Enjoyment	19
	(j)	No Merger	19
	(k)	No Offer	19
	(l)	Entire Agreement	19
	(m)	Waiver of Jury Trial	19
	(n)	Governing Law	19
	(o)	Recording	19
	(p)	Water or Mold Notification	19
	(q)	Joint and Several Liability	19
	(r)	Financial Reports	19
	(s)	Landlord’s Fees	20
	(t)	Telecommunications	20
	(u)	Confidentiality	20
	(v)	Authority	21
	(w)	Security Service	21
	(x)	List of Exhibits	21
	(y)	Prohibited Persons and Transactions	21
	(z)	Determination of Charges	21
27.	Environmental Requirements		21
	(a)	Prohibition against Hazardous Materials	21
	(b)	Environmental Requirements	22
	(c)	Removal of Hazardous Materials	22
	(d)	Tenant's Indemnity	22
	(e)	Inspections and Tests	22
	(f)	Delivery of the Premises	22
	(g)	Limitation on Liability	23
28.	Parking		23
29.	Other Provisions		23
	(a)	Guaranty	23
	(b)	Termination Right	23
	(c)	Waiver of Consumer Rights	24
EXHIBIT A	BUILDING SPECIFICATIONS AND APPROVED SITE PLAN		A-1
EXHIBIT B	DESCRIPTION OF THE LAND		B-1
EXHIBIT C	BUILDING RULES AND REGULATIONS		C-1
EXHIBIT D	BUILDING RULES AND REGULATIONS		D-1
EXHIBIT E	CONFIRMATION OF COMMENCEMENT DATE		E-1
EXHIBIT F	FORM OF TENANT ESTOPPEL CERTIFICATE		F-1
EXHIBIT G	RENEWAL OPTION		G-1
EXHIBIT H	GUARANTY		H-1
EXHIBIT I	LETTER OF CREDIT SCHEDULES		I-1

vi

LIST OF DEFINED TERMS

	Page No.
Additional Rent	ii
Affiliate	1
Audit Election Period	4
Basic Lease Information	1
Basic Rent	ii
Building	i
Building's Structure	1
Building's Systems	1
Calculation Notice	i
Casualty	14
Commencement Date	i
Complex	2
Construction Allowance	10
Cost Statement	D-1
Damage Notice	14
Default Rate	5
Disabilities Acts	8
Environmental Requirements	22
Estimated Delivery Date	1
Estoppel Certificate	18
Event of Default	14
GAAP	10
Guarantor	10
Hazardous Materials	22
Holdover Notice	16
including	1
Initial Holdover Rent	16
Initial Monthly Payment of Rent	ii
Insurance Costs	12
Land	i
Landlord	1
Landlord's Mortgagee	12
Landlord's Notice	4
Law	1
Laws	1
Lease	1
Lease Month	ii
Letter of Credit	5
Loss	11
Mortgage	12
Net Worth	10
OFAC	8
Operating Costs	2
Operating Costs and Tax Statement	4
Permitted Holdover Period	16
Permitted Transfer	10
Permitted Transferee	10
Permitted Use	ii
Premises	i
Prevailing Rental Rate	G-1
Primary Lease	12
Project	i

vii

Rent	ii
Repair Period	12
Security Deposit	ii
SNDA	12
Space Plans	D-1
Statement Deadline	4
Substantial Completion	D-2
Substantially Completed	D-2
Taking	13
Tax Contest Notice	4
Taxes	3
Telecommunications Services	20
Tenant	1
Tenant Party	1
Tenant's Off-Premises Equipment	1
Tenant's Proportionate Share	ii
Term	i
Total Construction Costs	D-2
Transfer	8
Work	D-1
Working Drawings	D-1

viii

LEASE

This Lease Agreement (this "Lease") is entered into as of February , 2009, between AR INDUSTRIAL NO. 1, LTD., a Texas limitedpartnership ("Landlord"), and ORTHOFIX, INC., aMinnesota corporation ("Tenant").

1. Definitions and Basic Provisions. The definitions and basic provisions set forth in the Basic Lease Information (the "Basic Lease Information") executed by Landlord and Tenant contemporaneously herewith are incorporated herein by reference for all purposes. Additionally, the following terms shall have the following meanings when used in this Lease: "Affiliate"means any person or entity which, directly or indirectly, through oneor more intermediaries, controls, is controlled by, or is under common control with the party in question; "Building's Structure" means the Building's exterior walls, roof, elevator shafts, footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, slab, and structural columns and beams; "Building's Systems" means the Building's HVAC, life-safety, plumbing, electrical, and mechanical systems; "including" means including, without limitation; "Laws" means all federal, state, and local laws, ordinances, rules and regulations, all court orders, governmental directives, and governmental orders, and all interpretations of the foregoing, and all restrictive covenants affecting this Lease or the Project, and "Law" means any of the foregoing; "Tenant's Off-Premises Equipment" means any of Tenant's equipment or other property that may be located on or about the Project (other than inside the Premises); and "Tenant Party" means any of the following persons: Tenant; any assignees claiming by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, licensees, guests and invitees.

2. Lease Grant.Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises. Additionally, subject to the terms of this Lease and Landlord's rules and regulations therefor, Tenant and its employees and invitees shall have a non-exclusive license to use, in common with others, any applicable driveways, loading dock areas, roadways, rail tracks and other similar improvements designated by Landlord from time to time as common areas for the common use and enjoyment of all tenants and occupants of the Project. Notwithstanding the foregoing to the contrary, so long as Tenant leases 100% of the rentable square feet within the Building. Tenant shall have an exclusive license to use the loading dock areas associated with the Building.

3. Tender of Possession.Landlord and Tenant presently anticipate that possession of the Premises will be tendered to Tenant in the condition required by this Lease (i.e., with Substantial Completion having occurred) on or about January 15, 2010 (the "Estimated Delivery Date"). If Landlord does not tender possession of the Premises in such condition to Tenant by the Estimated Delivery Date, then (a) the validity of this Lease shall not be affected or impaired thereby, (b) Landlord shall not be in default hereunder or be liable for damages therefor, and (c) Tenant shall accept possession of the Premises when Landlord tenders possession thereof to Tenant. Notwithstanding the foregoing, (i) if Landlord does not tender possession of the Premises with Substantial Completion having occurred on or prior to April 30, 2010 (which date shall be extended day-for-day in the event of (i) Tenant's failure to deliver to Landlord a copy of this Lease executed by Tenant on or before February 2, 2009, (ii) a Tenant Delay Day, or (iii) delays caused by one or more of the events described in Section 26(c) hereof [ to the extent permitted therein, but only to the extent that any of such matters has delayed Substantial Completion]), then Tenant shall be entitled to receive an abatement of two (2) day's rent for each day thereafter until such time as Landlord tenders possession of the Premises to Tenant in such condition; and (ii) if Landlord does not tender possession of the Premises with Substantial Completion having occurred on or prior to November 1, 2010 (which date shall be extended day-for-day in the event of Tenant's failure to deliver to Landlord a copy of this Lease executed by Tenant on or before February 2, 2009, or (ii) a Tenant Delay Day, but not for delays caused by one or more of the events described in Section 26(c) hereof), Tenant shall have the option to terminate this Lease by written notice to Landlord at any time before the date Landlord tenders possession of the Premises to Tenant in the condition required by this Lease, in which event all prepaid rents and deposits shall be returned to Tenant and Tenant shall have no further obligations or liabilities under this Lease. By occupying the Premises. Tenant shall be deemed to have accepted the Premises in their condition as of the date of such occupancy, subject to the performance of punch-list items that remain to be performed by Landlord, if any, latent defects to be repaired pursuant to Exhibit D and any repairs, restorations or maintenance to be performed by Landlord pursuant to the terms of this Lease. Prior to occupying the Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit E hereto confirming (1) the Commencement Date and the expiration date of the initial Term, (2) that Tenant has accepted the Premises, and (3) that Landlord has performed all of its obligations with respect to the initial construction of the Premises pursuant to Exhibit D hereof (except for punch-list items specified in such letter, and latent defects to be repaired pursuant to Exhibit D): however, the failure of the parties to execute such letter shall not defer the Commencement Date or otherwise invalidate this Lease. Landlord shall furnish to Tenant a certificate of occupancy from the applicable governmental authorities. Notwithstanding the foregoing, Tenant shall cooperate fully with Landlord in Landlord’s effort to obtain such certificate of occupancy. Tenant shall furnish to Landlord certificate(s) of insurance required pursuant to Section 12(a) hereof before commencing business in the Premises. Occupancy of the Premises by Tenant prior to the Commencement Date shall be subject to all of the provisions of this Lease excepting only those requiring the payment of Basic Rent and Additional Rent.

LEASE AGREEMENT (INDUSTRIAL) - Page 1

4.Rent.

(a) Payment. Tenant shall timely pay to Landlord (or such agent of Landlord as Landlord shall designate in writing) Rent, without notice, demand, deduction or set off (except as otherwise expressly provided herein), by good and sufficient check drawn on a national banking association at Landlord's address provided for in this Lease or as otherwise specified by Landlord and shall be accompanied by all applicable state and local sales or use taxes. The obligations of Tenant to pay BasicRent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. Basic Rent, adjusted as herein provided, shall be payable monthly in advance. The Initial Monthly Payment of Rent (as set forth in the Basic Lease Information) shall be payable contemporaneously with the execution of this Lease; thereafter, Basic Rent shall be payable on the first day of each month beginning on the first day of the second full calendar month of the Term. The monthly Basic Rent for any partial month at the beginning of the Term shall equal the product of 1/365 of the annual Basic Rent in effect during the partial month and the number of days in the partial month, and shall be due on the Commencement Date. Payments of Basic Rent for any fractional calendar month at the end of the Term shall be similarly prorated. Tenant shall pay Additional Rent at the same time and in the same manner as Basic Rent.

(b) Operating Costs.

(1) Tenant shall pay to Landlord Tenant's Proportionate Share of the annual Operating Costs (defined below). Landlord may make a good faith estimate of Tenant's Proportionate Share of Operating Costs to be due by Tenant for any calendar year or part thereof during the Term. During each calendar year or partial calendar year of the Term. Tenant shall pay to Landlord, in advance concurrently with each monthly installment of Basic Rent, an amount equal to the estimated Tenant's Proportionate Share of Operating Costs for such calendar year or part thereof divided by the number of months therein. From time to time, Landlord may estimate and re-estimate the amount of Tenant's Proportionate Share of Operating Costs to be due by Tenant and deliver a copy of the estimate or re-estimate to Tenant. Thereafter, the monthly installments of Tenant's Proportionate Share of Operating Costs payable by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the endof the calendar year in question, Tenant shall have paid all of Tenant's Proportionate Share of Operating Costs as estimated by Landlord. Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each calendar year.

(2) The term "Operating Costs" means all expenses and disbursements (subject to the limitations set forth below) that Landlord incurs in connection with the ownership, operation, and maintenance of the Project, determined in accordance with sound accounting principles consistently applied, including the following costs: (A) wages and salaries of all on-site employees at or below the grade of senior building manager engaged in the operation, maintenance or security of the Project (together with Landlord's reasonable allocation of expenses of off-site employees at or below the grade of senior building manager who perform a portion of their services in connection with the operation, maintenance or security of the Project), including taxes, insurance and benefits relating thereto; (B) all supplies and materials used in the operation, maintenance, repair, replacement, and security of the Project; (C) cost of all utilities (including fuel, gas, electricity, water, sewer, and other services) for the common areas and other non-tenant areas of the Project (e.g., mechanical, electrical and telecommunications rooms) as reasonably determined by Landlord: (D) repairs, replacements, and general maintenance of the Project including paving and parking areas, roads, roof repairs (Landlord is responsible for replacement of the roof as provided in Section 7). alleys and driveways, trash collection, sweeping and removal of trash for the common areas, mowing and snow removal, landscaping and exterior painting, the cost of maintaining utility lines, fire sprinklers and fire protection systems, exterior lighting, and mechanical and plumbing systems serving the Project and, to the extent the following items serve more than one tenant in the Project, dock doors, drains and sump pumps; (E) service, maintenance and management contracts with independent contractors for the operation, maintenance, management, repair, replacement, and security of the Project (including alarm service, window cleaning, and elevator maintenance); (F) costs of professional services rendered for the general benefit of the Project: (G) environmental insurance or environmental management fees; (H) the cost of any insurance deductibles for insurance required to be maintained by Landlord; and (I) costs for improvements made to the Project which, although capital in nature, are expected to reduce the normal operating costs (including all utility costs) of the Project, as amortized using a commercially reasonable interest rate over the time period reasonably estimated by Landlord to recover the costs thereof taking into consideration the anticipated cost savings, as determined by Landlord using its good faith, commercially reasonable judgment, as well as capital improvements made in order to comply with any Law hereafter promulgated after the Commencement Date by any governmental authority or any new interpretations of any Law hereafter rendered with respect to any existing Law, as amortized using a commercially reasonable interest rate over the useful economic life of such improvements as determined by Landlord in its reasonable discretion. If the Project is part of an industrial park complex (the "Complex"), Operating Costs, Taxes (defined below) and Insurance Costs (defined below) for the Complex may be prorated among the Project and the other buildings of the Complex, as reasonably determined by Landlord.

Operating Costs shall not include costs for (I) capital expenses (including, but not limited to, capital additions, capital improvements, capital alterations, capital replacements, capital equipment and capital tools, and/or capital redesign) made to the

LEASE AGREEMENT (INDUSTRIAL) - Page 2

Project, other than capital improvements described in Section 4(b)(2) and except for items which are generally considered maintenance and repair items, such as painting of common areas, replacement of carpet in elevator lobbies (if any), and the like; (2) repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other third parties; (3) interest, amortization or other payments on loans to Landlord; (4) depreciation or other "non-cash" expense items or amortization; (5) leasing commissions; (6) Taxes; (7) Insurance Costs; (8) costs of repairs, replacements or other work occasioned by fire or other casualties, or by the exercise by governmental authorities of the right of eminent domain (provided, however, that the cost of any insurance deductibles for insurance required to be maintained by Landlord shall be included as an Operating Cost); (9) costs or expenses (including fines, penalties and legal fees) incurred due to the violation by Landlord, its employees, agents and/or contractors, of any terms and conditions of the Lease or of the leases of other tenants in the Complex, and/or of any applicable laws, rules, regulations and codes of any federal, state, county, municipal or other governmental authority having jurisdiction over the Building that would not have been incurred but for such violation by Landlord, its employees, agents and/or contractors, tenants or other occupants of the Building, it being intended that each party shall be responsible for the costs resulting from its own violation of such leases and laws, rules, regulations and codes as same shall pertain to the Building; (10) penalties for late payment, including, without limitation, penalties for late payment of taxes, equipment leases, and other amounts owing by Landlord (as long as Tenant pays amounts owing to Landlord hereunder on a timely basis); (11) payments to any subsidiary or affiliate of Landlord for services on or to the Building and/or the Land, or for goods, supplies or other materials, to the extent that the costs of such services, goods, supplies and/or materials exceed the costs that would have been paid had the services, goods. supplies or materials been provided by parties unaffiliated with Landlord; (12) management fees in excess of 3.0% of gross Basic Rent; (13) wages, salaries, benefits and expenses attributable to off-site personnel except as provided above; (14) except for emergencies, rentals and other related expenses, if any, incurred in leasing air conditioning systems, elevators or other equipment ordinarily considered to be of a capital nature except equipment the costs of would have been included in Operating Expenses had Landlord purchased such equipment, but not any amounts in excess of the Operating Expenses that Landlord would have incurred had Landlord purchased such equipment; (15) advertising and promotional expenses; (16) costs of correcting or repairing defects, including latent defects, in the construction of the Building. and/or any associated parking facilities, and/or equipment, or the replacement of defective equipment; provided that costs of repair for ordinary wear and tear shall be included in Operating Expenses; (17) contributions to reserves: (18) contributions to charitable organizations; (19) the costs of any initial "tap fees" or one time lump sum sewer or water connection fees for the Building; (20) costs orfees relating to the defense of Landlords title to or interest in the Building and/or the Land, or any part thereof, or any costs or expenses associated with any sale or finance transaction; (21) expenses and costs ofencapsulation. removal, or abatement of substances within the Building required to be encapsulated, removed, or abated pursuant to applicable laws, rules, regulations or codes; (22) costs or expenses, including judgments, incurred in connection with tort claims against Landlord (including the cost of investigating, defending, or settling the same); (23) costs of Landlord’s general corporate overhead and general administrative expenses which would not be chargeable to Operating expenses of the Building, determined by sound accounting principles, andall costs related to maintaining Landlord’s existence as a corporation. partnership or other entity; and (24) Other Tenant Costs (hereinafter defined). For purposes of this paragraph. “Other Tenant Costs” means any of the following costs, expenses or disbursements made or incurred by Landlord in connection with any prospective tenancy, prospective tenant or other occupant of leasable space at the Complex, including without limitation, costs, expenses and disbursements for leasing commissions; attorneys fees; costs and expenses incurred in negotiations and disputes with such prospective tenants or occupants, enforcement of agreements with such prospective tenants or occupants tenant allowances, tenant concessions, work letters, permit licenses and inspection fees, costs, expenses and disbursements for fixturing, furnishing, renovating or otherwise decorating or redecorating, space planning, interior design, and costs for non-standard utilities provided to such occupants.

(3) Tenant shall also pay Tenant’s Proportionate Share of the Taxes for each year and partial year falling within the Term. Tenant shall pay Tenant’s Proportionate Share of Taxes in the same manner as provided above for Tenant’s Proportionate Share of Operating Costs. “Taxes” mean taxes, assessments, and governmental charges or fees whether federal, state, county or municipal. and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments (including non-governmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Costs) now or hereafter attributable to the Project (or its operation), excluding, however, penalties and interest thereon and federal and state taxes on income (if the present method of taxation changes so that in lieu of or in addition to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Project (it being agreed that the so-called “margin tax” enacted by the Special Session of the Texas Legislature on May 2, 2006 in House Bill 3 is such a tax), then all such taxes, assessments, or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for purposes hereof: provided, however, that for purposes of this paragraph, any such “margin tax” shall be calculated as if the Building is Landlord’s only asset. Taxes shall include the costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Project. Far purposes hereof, the amount of Taxes payable by Tenant hereunder shall be reduced by the full amount of any tax abatement or exemption provided by any applicable taxing authority in connection with the development, use or occupancy of the Premises. For property tax purposes, Tenant waives all rights to protest or appeal the appraised value of the Premises, as

LEASE AGREEMENT (INDUSTRIAL) - Page 3

well as the Project, and all rights to receive notices of reappraisement. Notwithstanding the foregoing, with respect to ad valorem taxes attributable to the Premises for all periods during the Term, except the last two (2) Lease Years thereof (taking into account any applicable Renewal Terms as to which Tenant shall have exercised a Renewal Option), (i) Landlord shall furnish written notice to Tenant whether Landlord intends to contest such taxes for the applicable year at least fifteen (15) days prior to the deadline date a notice of contest must be furnished to the taxing authorities, and (ii) if and only if (a) Landlord furnishes notice (“Landlord’s Notice”) to Tenant that Landlord is not contesting the taxes for a particular year, (b) no Event of Default is then in existence hereunder, (c) Tenant continues to lease one hundred percent (100%) of the rentable square feet of the Premises, and (iv) such taxes which Tenant desires to contest are not attributable or rendered with respect to any portion of the last two (2) Lease Years of the Term (taking into account any applicable Renewal Terms as to which Tenant shall have exercised a Renewal Option), then Tenant shall have the right to cause Landlord to contest, by appropriate legal proceedings or other lawful means, any increase in assessed value of the Project by furnishing written notice (the “Tax Contest Notice” to Landlord on or before five (5) days prior to the deadline date a notice of contest must be furnished to the applicable taxing authorities. In the event that Landlord fails to timely deliver Landlord’s Notice to Tenant as provided in clause (a) of the preceding sentence, and all other conditions set forth in the preceding sentence have been satisfied, thenTenant shalt have the right to cause Landlord to contest any increase in assessed value in accordance with the provisions of the preceding sentence. All reasonable consultation fees, accountant fees, legal fees and other similar professional fees and expenses, or costs resulting from any challenge of tax assessments and the preparation therefor as reasonably incurred by Landlord (or a reasonable allocation thereof to the extent such challenge additionally relates to tax assessments applicable to portions of the Complex other than the Building) shall be included in Operating Costs.

(4) By April 1 of each calendar year, or as soon thereafter as practicable, Landlord shall deliver to Tenant a statement of Operating Costs and Taxes for the previous year (the “Operation Costs and Tax Statement”). If Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for the year covered by the Operating Costs and Tax Statement exceed Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Landlord shall promptly credit or reimburse Tenant for such excess; likewise, if Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for such year are less than Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Tenant shall promptly pay Landlord such deficiency. Notwithstanding the foregoing, if Landlord does not deliver to Tenant an Operating Costs and Tax Statement within one hundred eighty (180) days after the last day of any calendar year (the “Statement Deadline”), or if an Operating Costs and Tax Statement does not include a specific expense or item, Landlord shall no longer be entitled to collect and Tenant shall have no further obligation to pay with respect to such calendar year any additional amount not set forth on an Operating Costs and Tax Statement timely delivered by Landlord to Tenant regardless of whether such expenses or any additional amounts result from a change or error in accounting by Landlord.

Within 180 days after Landlord delivers the Operating Costs and Tax Statement for any calendar year (the “Audit Election Period”) Tenant may, at its expense, elect to audit Operating Costs and electrical expenses for such calendar year , subject to the following conditions: (1) there is no uncured Event of Default under this Lease existing beyond any applicable cure period; (2) the audit shall be prepared by an independent certified public accounting firm of recognized regional or national standing, a property management company, a leasing company or any reputable third-party firm that audits office leases reasonably acceptable to Landlord; (3) the audit shall commence within 30 days after Landlord makes Landlord’s books and records available to Tenant’s auditor and shall conclude within 90 days after commencement; (4) the audit shall be conducted during Landlord’s normal business hours at the location where Landlord maintains its books and records and shall not unreasonably interfere with the conduct of Landlord’s business; and (5) Tenant and its auditor shall treat any audit in a confidential manner. This paragraph shall not be construed to limit, suspend, or abate Tenant’s obligation to pay Rent when due, including estimated Operating Costs. Landlord shall credit any overpayment determined by the final approved audit report against the next Rent due and owing by Tenant or, if no further Rent is due, refund such overpayment directly to Tenant within 30 days of determination. Likewise, Tenant shall pay Landlord any underpayment determined by the final approved audit report within 30 days of determination. The foregoing obligations shall survive the expiration or termination of this Lease. If Tenant does not give written notice of its election to audit Operating Costs during the Audit Election Period, the Operating Costs for the applicable calendar year shall be deemed approved for all purposes, and Tenant shall have no further right to review orcontest the same. If the audit proves that Landlord’s calculation of tenant’s share of Operating Costs for the calendar year under inspection was overstated by more than five percent (5%), then, alter verification. Landlord shall pay Tenant’s actual reasonable out-of-pocket audit and inspection fees (not to exceed $5,000.00, and specifically excluding any travel and lodging expenses so long as the audit is performed in Carrollton, Texas) applicable to the review of said calendar year statement within thirty (30) days after receipt of Tenant’s invoice therefor.

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5. Delinquent Payment; Handling Charges. All payments required of Tenant hereunder which are not paid within five (5) days following the date when due shall, bear interest from the date due until paid at the lesser of twelve percent per annum or the maximum lawful rate of interest (such lesser amount is referred to herein us the “Default Rate”); additionally, Landlord, in addition to all other rights and remedies available to it, may charge Tenant a fee equal to the greater of (a) $50.00 or (b) two and one-half percent (2.5%) of the delinquent payment to reimburse Landlord for its cost and inconvenience incurred as a consequence of Tenant’s delinquency with respect to any amount not paid within five (5) days following the date when due, if such nonpayment continues for more than five (5) days following written notice from Landlord to Tenant (provided that such right to written notice shall be limited to a maximum of one (1) time during each calendar year of the term of this Lease). In no event, however, shall the charges permitted under this Section 0 or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest. If any check is tendered by Tenant and not duly honored with good funds, Tenant shall, in addition to any other remedies available to Landlord under this Lease, pay Landlord a “NSF” fee of $75.00, and landlord may require, by giving at least 15 days prior written notice to Tenant (and in addition to any other rights and remedies accruing pursuant to the terms. provisions or covenants of this Lease) that all future rental payments are to be made on or before the due date by cash, cashier’s check, or money order, and that the delivery of Tenant’s personal or corporate check will no longer constitute a payment of rental as provided in this Lease; provided, that at Tenant’s option, Tenant may make such payments by wire transfer in lieu of the foregoing requirements, and in such event, Landlord agrees to provide Landlord’s account number and related information to Tenant within five (5) days after request in order to enable Tenant to effectuate any such wire transfer. In addition, if Tenant fails in two (2) consecutive months to make rental payments within five (5) days after due date, Landlord, in order to reduce its administrative costs, may require, by giving at least 15 days prior written notice to Tenant (and in addition to any interest accruing pursuant to this Section 5 as well as any other rights and remedies accruing pursuant to the terms, provisions or covenants of this Lease), all future rental payments are to be made on or before the due date by cash, cashier’s check. or money order, and that the delivery of Tenant’s personal or corporate check will no longer constitute a payment of rental as provided in this Lease; provided, that at Tenant’s option, Tenant may make such payments by wire transfer in lieu of the foregoing requirements, and in such event, Landlord agrees to provide Landlord’s account number and related information to Tenant within five (5) days after request in order to enable Tenant to effectuate any such wire transfer. Any acceptance of a personal or corporate check thereafter by Landlord shall not be construed as a subsequent waiver of said rights, regardless of any notation on said check or any condition with which Tenant offers such check to Landlord.

6. Security Deposit. Contemporaneously with the execution of this Lease, Tenant shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease. The Security Deposit is not on advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined herein). Landlord may, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder. Following any such application of the Security Deposit, Tenant shall pay to Landlord within 15 days after demand the amount so applied in order to restore the Security Deposit to its original amount. Subject to the requirements of, and conditions imposed by. Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law, return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered as a result of any breach of this Lease by Tenant which have not been previously reimbursed by Tenant. The Security Deposit may be comingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord may assign the Security Deposit to the transferee and, upon such transfer and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit as provided by Law, Landlord thereafter shall have no further liability for the return of the Security Deposit. Notwithstanding the foregoing. Tenant shall have the right to elect to provide the Security Deposit in the form of an unconditional, irrevocable and transferable letter of credit (such letter of credit and any renewals or substitutions thereof herein called the “Letter of Credit”) in the amount of the Security Deposit in a form mutually acceptable to all parties. The Letter of Credit shall at all times be (1) in favor of Landlord, with amounts drawn thereunder available solely to Landlord upon Landlord’s delivery of a draft to the issuing bank in the form attached as Schedule I to Exhibit 1 attached hereto, (2) issued by a national bank with a long term debt rating of AA (or better) as issued by Moody’s Investors Services, Inc., and otherwise acceptable to Landlord in its reasonable discretion, (3) in effect from the date of the Lease throughout the Term, as may be extended (or if for a shorter initial period, then subject to replacement/renewal as hereinafter provided), and (4) transferable (but only to a successor to Landlord, including without limitation Landlord’s Mortgagee, or any successors thereof or to an assignee of this Lease) solely upon Landlord’s delivery of a notice to the issuing bank in the form attached as Schedule II to Exhibit I.

7. Landlord’s Maintenance Obligations. This Lease is intended to be a net lease; provided, however, that Landlord shall (a) repair, replace and maintain the Building’s Structure; and (b) repair and replace all parking areas, driveways, alleys, common areas and grounds surrounding the Premises, in a manner consistent with the operation of a first-class warehouse budding, including maintenance, repair, and replacement of rail tracks serving the Premises, the exterior of the Building (including painting), landscaping irrigation sprinkler systems and sewage lance and any items normally associated with the foregoing. To the extent permitted pursuant to Section (4)(b)(2) above, the costs incurred by Landlord pursuant to the preceding sentence shall constitute Operating Costs. For

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purposes hereof, the Building’s Structure shall not include skylights, windows, glass or plate glass, doors or overhead doors, special fronts, or office entries, dock bumpers, dock plates or levelers, loading areas and docks, and loading dock equipment, all of which shall be maintained by Tenant. Landlord’s liability for any defects, repairs, replacement or maintenance for which Landlord is specifically responsible for under this Lease shall be limited to the cost of performing the work.

8. Improvements; Alterations; Tenant’s Maintenance and Repair Obligations.

(a) Improvements; Alterations. Except as described in Exhibit D attached hereto or as hereafter provided: (a) improvements to the Premises shall be installed at Tenant’s expense only in accordance with plans and specifications which have been previously submitted to and approved in writing by Landlord, which approval shall be governed by the provisions set forth in this Section 8(a) (b) no alterations or physical additions in or to the Premises may be made without Landlord’s prior written consent; and (c) Tenant shall not paint or install lighting or decorations, signs, window or door lettering, or advertising media of any type visible from the exterior of the Premises without the prior written consent of Landlord. Landlord’s consent or approval as provided herein shall not be unreasonably withheld or delayed and such consent shall be deemed to have been given if Landlord does not respond to Tenant’s request for approval within ten (10) business days after receipt ther eof from Tenant; however, Landlord may withhold its consent to any alteration or addition that would adversely affect (in the reasonable discretion of Landlord) (1) the Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), (2) the exterior appearance of the Building, (3) the appearance of the Building’s common areas, or (4) the provision of services to other Building occupants. All alterations, additions, and improvements shall be constructed, maintained, and used by Tenant, at its risk and expense, in accordance with all Laws; Landlord’s consent to or approval of any alterations, additions or improvements (or the plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord’s acceptance, that the same comply with sound architectural and/or engineering practices or with all applicable Laws. and Tenant shall be solely responsible for ensuring all such compliance Notwithstanding anything herein to the contrary, (i) Tenant shall have the right to make alterations to the Premises without obtaining Landlord’s prior consent provided that the cost of such alterations does not exceed Twenty-Five Thousand and No/100 Dollars ($25,000.00) in any one instance (and not more than One Hundred Thousand and No/100 Dollars ($100,000.00) in the aggregate during any 12-month period), and such alterations do not adversely affect (in the reasonable discretion of Landlord) (1) the Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), (2) the exterior appearance of the Building, (3) the appearance of the Building’s common areas, or (4) the provision of services to other Building occupants: and (ii) Landlord’s consent shall not be required with respect to minor cosmetic changes to the interior of the Premises (such as changing carpets floor coverings, wall coverings and paint). To the extent applicable, Tenant shall provide Landlord with final as-built plans detailing any alterations or additions installed by Tenant, regardless of whether Landlord’s prior consent was required.

(b) Repairs; Maintenance. Tenant shall repair or maintain the Premises, including the loading areas and dock, and loading dock equipment in connection with the Premises, in a clean, safe, and operable condition, and shall not permit or allow to remain any waste or damage to any portion of the Premises, normal wear and tear, damage by tire or casualty and repairs which are the responsibility of Landlord excepted. Additionally, Tenant, at its sole expense, shall repair, replace and maintain in good condition and in accordance with all Laws and the equipment manufacturer’s suggested service programs, all portions of the Premises, Tenant’s Off-Premises Equipment and all areas, improvements and systems exclusively serving the Premises including loading docks, sump pumps, dock wells, dock equipment and loading areas, dock doors, dock seals, overhead doors, “leveler” and similar leveling equipment, plumbing, water, fire sprinkler system, and sewer lines up to points of common connection entries, doors, ceilings, windows, interior walls, and the interior side of demising walls and heating, ventilation and air conditioning systems (including any evaporative units), and other building and mechanical systems saving the Premises. Such repair and replacements include capital expenditures and repairs whose benefit may extend beyond the Term. Within 15 days after the Commencement Date, Tenant shall enter into regularly scheduled preventive maintenance/service contracts for such equipment, each in compliance with Landlord’s specifications and otherwise in form and substance and with a contractor reasonably acceptable to Landlord, and deliver copies thereof to Landlord. No later than 14 days prior to the end of the Term. Tenant shall deliver to Landlord a certificate from an engineer reasonably acceptable to Landlord certifying that the heating, ventilation and air conditioning systems are then in good repair and condition and have been maintained in accordance with this Section 8. Tenant shall keep the parking areas, driveways, alleys and grounds surrounding the Premises (and any items normally associated with the foregoing) in a clean and sanitary condition, consistent with the operation of a first-class warehouse building. Tenant shall repair or replace, subject to Landlord's direction and supervision, any damage to the Building caused by a Tenant Party. If Tenant fails to commence the upkeep, repairs or replacements described above within 10 days after the occurrence of such damage, then Landlord may make the same at Tenant's cost; provided, however, that in the event of an emergency or any damage that endangers the health and/or safety of the Project or any tenant of the Project, or which would affect the structural integrity of the Building. Landlord may immediately make the necessary repairs or replacements at Tenant's cost. If any such damage occurs outside of the Premises, then Landlord may elect to repair such damage at Tenant's expense, rather than having Tenant repair such damage. The cost of all maintenance, repair or replacement work performed by Landlord under this Section 8 shall be paid by Tenant to Landlord within 30 days after Landlord has invoiced Tenant therefor to the extent the cost thereof is not covered by Landlord's insurance.

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(c) Performance of Work. All work which requires Landlord's consent as described in this Section 8 shall be performed only by Landlord or by contractors and subcontractors approved in writing by Landlord in Landlord's reasonable discretion. If Landlord fails to notify Tenant of its approval or disapproval of a contractor or subcontractor within five (5) business days of written request therefor, Landlord shall be deemed to have approved such contractor or subcontractor. Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage naming Landlord, and Landlord's property management company as additional insureds against such risks, in such amounts, and with such companies as Landlord may reasonably require. Tenant shall provide Landlord with the identities, mailing addresses and telephone numbers of all persons performing work or supplying materials prior to beginning such construction and Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable Laws. All such work shall be performed in accordance with all Laws and in a good and workmanlike manner so as not to damage the Building (including the Premises, the Building's Structure and the Building's Systems). All such work which may adversely affect the Building's Structure or the Building’s Systems must be approved by the Building's engineer of record. at Tenant's expense and. at Landlord's election, must be performed by Landlord's usual contractor for such work. All work affecting the roof of the Building must be performed by Landlord's rooting contractor, and no such work will be permitted if it would void or reduce the warranty on the roof.

(d) Mechanic’s Liens. All work performed, materials furnished. or obligations incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant only. and Tenant shall not permit any mechanic’s liens to be filed against the Premises or the Project in connection therewith. Upon completion of any such work, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work. If such a lien is filed, then Tenant shall, within thirty days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period as may be necessary to prevent the forfeiture of the Premises, the Project or any interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either (1) pay the amount of the lien and cause the lien to be released of record, or (2) diligently contest such lien and deliver to Landlord a bond or other security reasonably satisfactory to Landlord. If Tenant fails to timely take either such action, then Landlord may pay the lien claim, and any amounts so paid. including expenses and interest, shall be paid by Tenant to Landlord within ten days after Landlord has invoiced Tenant therefor. Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,” “owner-agent” or other similar relationships). Accordingly. all materialmen, contractors. artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises pursuant to a contract with Tenant or any Tenant Party. at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same. Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the Premises, the Project or Landlord's interest therein due to any work performed by or for Tenant or deemed to give any contractor or subcontractor or material man any right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of such work. Tenant shall defend, indemnify and hold harmless Landlord and its agents and representatives from and against all claims, demands, causes of action. suits, judgments. damages and expenses (including attorneys' fees) in any way arising from or relating to the failure by any Tenant Party to pay for any work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party. This indemnity provision shall survive termination or expiration of this Lease.

(e) Janitorial Services. Tenant, at its sole expense. shall provide its own janitorial services to the Premises and shall maintain the Premises in a clean and safe condition, normal wear and tear, damage by fire or casualty and repairs which are the responsibility of Landlord excepted. Tenant shall store all trash and garbage within the area and in receptacles designated from time to time by Landlord and shall, at its sole. expense, arrange for the regular pickup of such trash and garbage at times, and pursuant to reasonable regulations, established by Landlord from time to time.

9. Utilities. Landlord shall deliver the Premises to Tenant with facilities to provide water, gas, electricity, heat, telephone and sewer utility service to the Building to allow Tenant's use of the Premises for the Permitted Use hereunder and shall pay all meter, connection and tap fees in connection therewith (excluding, however, activation fees that may be charged to Tenant in connection with the accounts set up by or on behalf of Tenant for the delivery of utilities to the Premises. Except as provided in the preceding sentence. Tenant shall pay for all water, gas. electricity, heat, telephone, sewer, sprinkler charges and other utilities and services used at the Premises, together with any taxes, penalties. surcharges, maintenance charges. and the like pertaining to Tenant's use of the Premises. Tenant, at its expense, shall obtain all utility services for the Premises (other than a utility that is submetered or otherwise provided to the Premises by Landlord as provided herein), including making all applications therefor. and paying all deposits. Landlord may, if it so elects, furnish one or more utility service to Tenant, and in such event Tenant shall purchase the use of such services as are tendered by Landlord, and shall pay on demand as additional rental the rates established therefor by Landlord which shall not exceed the rates which would be charged for the same services if furnished directly by the local public utility companies. To the extent any utility service for the Premises is submetered, the meter shall be read by Landlord or Landlord's designee, and Tenant shall pay to Landlord, within 30 days after receipt of an invoice therefor, the cost of such service based on rates charged for such service by the utility company furnishing such service, including all fuel adjustment charges, demand charges and taxes. To the extent that any particular utility is not separately metered or submetered as provided above (e.g.. water or sewer charges). Landlord shall, using its good-faith. reasonable judgment. allocate the expenses for such utility among the existing tenants of the Project based

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upon density, usage, and other factors in Landlord's reasonable judgment. Upon not less than thirty (30) days prior notice to Tenant, Landlord may at any time discontinue furnishing any such service without obligation to Tenant other than to connect the Premises to the public utility, if any, furnishing such service. Landlord shall not be liable for any interruption or failure of utility service to the Premises, and such interruption or failure of utility service shall not be a constructive eviction of Tenant, constitute a breach of any implied warranty, or entitle Tenant to any abatement of Tenant's obligations hereunder; provided, however. that if any such interruption or failure of utility service to the Premises is caused by Landlord or any of its agents, employees, contractors or representatives and same continues for more than five (5) business days after written notice to Landlord, Tenant shall receive an abatement of Rent payable hereunder based on the portion of the Premises affected by such interruption of service from the commencement of such interruption until such time as the services are restored.

10. Use. Tenant may use the Premises only for the Permitted Use and shall comply with all Laws relating to this Lease and/or the use, condition, access to. and occupancy of the Premises and will not commit waste, overload the Building's Structure or the Building's Systems or subject the Premises to use that would damage the Premises. Notwithstanding anything in this Lease to the contrary, as between Landlord and Tenant, (a) Landlord shall deliver the Premises to Tenant in compliance with all applicable laws, and thereafter Tenant shall bear the risk of complying with Title III of the Americans With Disabilities Act of 1990, any state laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines promulgated under such laws, as amended from time to time (the "Disabilities Acts") in the Premises, and (b) Landlord shall bear the risk of complying with the Disabilities Acts in the common areas of the Complex, other than compliance that is necessitated by the use of the Premises for other than the Permitted Use or as a result of any alterations or additions, including any initial tenant improvement work, made by or on behalf of a Tenant Party (which risk and responsibility shall be borne by Tenant). Except for the Permitted Use. the Premises shall not be used for any use which is disreputable, creates extraordinary fire hazards. or results in an increased rate of insurance on the Building or its contents, or for the storage of any Hazardous Materials (except as provided in Section 27 hereto). Outside storage is prohibited without Landlord's prior written consent: provided that Tenant may store trucks, other vehicles and trailers in the parking areas located to the rear of the Building in the area depicted on Exhibit A. If, because of a Tenant Party’s acts or because Tenant vacates the Premises, the rate of insurance on the Building or its contents increases. Tenant shall pay to Landlord the amount of such increase within thirty (30) days of demand by Landlord, and acceptance of such payment shall not waive any of Landlord’s other rights. Tenant shall conduct its business and control each other Tenant Party so as not to create any nuisance. or unreasonably interfere with Landlord in its management of the Building.

11. Assignment and Subletting.

(a) Transfers. Except as provided in Section 11(h) Tenant shall not, without the prior written consent of Landlord, (1) assign, transfer, or encumber this Lease or any estate or interest herein, whether directly or by operation of law. (2) permit any other entity to become Tenant hereunder by merger, consolidation, or other reorganization, (3) if Tenant is an entity other than a corporation whose stock is publicly traded, permit the transfer of on ownership interest in Tenant so as to result in a change in the current control of Tenant, (4) sublet any portion of the Premises. (5) grant any license, concession. or other right of occupancy of any portion of the Premises, or (6) permit the use of the Premises by any parties other than Tenant, any Tenant Party or any Permitted Transferee (any of the events listed in Section 11(a)(1) through 11(a)(6) being a “Transfer”).

(b) Consent Standards. Landlord shall not unreasonably withhold, condition or delay its consent to my assignment or subletting of the Premises, provided that the proposed transferee (1) is creditworthy. (2) has a good reputation in the business community, (3) will use the Premises for the Permitted Use (thus, excluding, without limitation, uses for credit processing and telemarketing) and will not use the Premises in any manner that would conflict with any exclusive use agreement or other similar agreement entered into by Landlord with any other tenant of the Complex. (4) will not use the Premises. Building or Project in a manner that would materially increase the pedestrian or vehicular traffic to the Premises, Building or Project, (5) is not a governmental entity, or subdivision or agency thereof. (6) is not another occupant of the Building or Complex (provided. however, that if Landlord does not have vacant space in the Complex suitable for such other occupant’s needs, such prohibition shall not apply), (7) does not appear as a “Specially Designated National” or “Blocked Person” (or any similar characterization) on any list promulgated by the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury, or any successor entity thereto; and (8) is not a person or entity with whom Landlord is then, or has been within the six-month period prior to the time Tenant seeks to enter into such assignment or subletting, negotiating to lease space in the Building or Complex, or any Affiliate of any such person or entity (provided, however, that if Landlord does not have vacant space in the Complex suitable for such other potential tenant’s needs. such prohibition shall not apply); otherwise. Landlord may withhold its consent its sole discretion. Additionally, Landlord may withhold its consent in its sole discretion to any proposed Transfer if any Event of Default by Tenant then exists beyond the expiration of any applicable cure period which is not cured prior to the commencement date of the Transfer.

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(c) Request for Consent. If Tenant requests Landlord’s consent to a Transfer, then, at least 10 business days prior to the effective date of the proposed Transfer. Tenant shall provide Landlord with a written description of all terms and conditions of the proposed Transfer, copies of the proposed documentation, and the following information about the proposed transferee: name and address of the proposed transferee and any entities and persons who own, control or direct the proposed transferee; reasonably satisfactory information about its business and business history; its proposed use of the Premises; banking, financial, and other credit information; and general references sufficient to enable Landlord to determine the proposed transferee’s creditworthiness and character. Concurrently with Tenant’s notice of any request for consent to a Transfer, Tenant shall pay to Landlord a fee of $750.00 to defray Landlord’s expenses in reviewing such request. Landlord shall, within ten (10) business days following receipt of a written request from Tenant for consent to a Transfer (together with all accompanying documentation and information set forth above), notify Tenant in writing that Landlord elects to (i) permit the Transfer or (ii) refuse consent to the Transfer (subject to the consent standards set forth in Section 11(b) above) and to continue this Lease in full force and effect as to the entire Premises. If Landlord shall fail to notify Tenant in writing of such election within such ten (10) business day period, Landlord shall be deemed to have elected option (i) above.

(d) Conditions to Consent. If Landlord consents to a proposed Transfer, then the proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes Tenant’s obligations hereunder; however, any transferee of less than all of the space in the Premises shall be liable only for obligations under this Lease that are properly allocable tothe space subject to the Transfer for the period of the Transfer. No Transfer shall release Tenant from its obligations under this Lease, but rather Tenant and its transferee shall be jointly and severally liable therefor. Landlord’s consent to any Transfer shall not waive Landlord’s rights as to any subsequent Transfers. If an Event of Default occurs while the Premises or any part thereof are subject to a Transfer, then Landlord, in addition to its other remedies, may collect directly from such transferee all rents becoming due to Tenant and apply such rents against Rent. Tenant authorizes its transferees to make payments of rent directly to Landlord upon receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder. Tenant shall pay for the cost of any demising walls or other improvements necessitated by a proposed subletting or assignment.

(e) Attornment by Subtenants. Each sublease by Tenant hereunder shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the event of termination, re-entry or dispossession by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at landlord’s option. attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be (1) liable for any previous act or omission of Tenant under such sublease. (2) subject to any counterclaim, offset or defense that such subtenant might have against Tenant, (3) bound by any previous modification of such sublease not approved by Landlord in writing or by any rent or additional rent or advance rent which such subtenant might have paid for more than the current month to Tenant, and all such rent shall remain due and owing, notwithstanding such advance payment. (4) bound by any security or advance rental deposit made by such subtenant which is not delivered or paid over to Landlord and with respect to which such subtenant shall look solely to Tenant for refund or reimbursement, or (5) except as otherwise required by this Lease, obligated to perform any work in the subleased space or to prepare it for occupancy, and in connection with such attornment, the subtenant shall execute and deliver to Landlord any instruments Landlord may reasonably request to evidence and confirm such attornment. Each subtenant or licensee of Tenant shall be deemed. automatically upon and as a condition of its occupying or using the Premises or any part thereof, to have agreed to be bound by the terms and conditions set forth in this Section 11(e). The provisions of this Section 11(e) shall be self-operative, and no further instrument shall be required to give effect to this provision.

(f) Cancellation. Landlord may, within 10 business days after submission of Tenant’s written request for Landlord’s consent to an assignment or subletting, cancel this Lease as to the portion of the Premises proposed to be sublet or assigned as of the date the proposed Transfer is to be effective. If Landlord cancels this Lease as to any portion of the Premises, then this Lease shall cease for such portion of the Premises and Tenant shall pay to Landlord All Rent accrued through the cancellation date relating to the portion of the Premises covered by the proposed Transfer. Thereafter, Landlord may lease such portion of the Premises to the prospective transferee (or to any other person) without liability to Tenant. Notwithstanding anything contained herein to the contrary, in the event that Landlord notifies Tenant that Landlord elects to cancel this Lease as provided above, Tenant may negate such cancellation by delivering written notice to Landlord, within five (5) business days of receipt of Landlord’s notice, stating that Tenant has elected to rescind Tenant’s request for a consent to Transfer, in which case this Lease shall continue in full force and effect, the transfer shall not be consummated, and Tenant shall remain the tenant hereunder.

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(g) Additional Compensation. Except in connection with a Permitted Transfer, Tenant shall pay to Landlord, immediately upon receipt thereof, fifty percent (50%) of the excess of (1) all rental, expense reimbursements and any other consideration related to the real property or the leasehold or subleasehold estates therein (excluding consideration related solely to personal property, furniture, fixtures or equipment not purchased with any portion of the Construction Allowance or other funds provided by Landlord, and further excluding any loan proceeds received by Tenant in connection with a loan which is secured by Tenant’s interest in the Premises), less the actual out-of-pocket costs reasonably incurred by Tenant with unaffiliated third parties (i.e., brokerage commissions and tenant finish work) in connection with such Transfer over (2) the Rent allocable to the portion of the Premises covered thereby.

(h) Permitted Transfers. Notwithstanding Section 11(a). Tenant may Transfer all or part of its interest in this Lease or all or part of the Premises (a “Permitted Transfer”) to the following types of entities (a “Permitted Transferee”) without the written consent of Landlord:

(1) an Affiliate of Tenant;

(2) an Affiliate of Guarantor, so long as (A) Tenant's obligations hereunder are assumed by such entity; and (B) the Net Worth of such entity, or the Net Worth of any guarantor of this Lease who remains fully obligated and liable under its guaranty after such transaction, is not less than $100,000,000.00; or,

(3) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities, so long as (A) Tenant's obligations hereunder are assumed by the entity surviving such merger or created by such consolidation; and (B) the Net Worth of the surviving or created entity, or the Net Worth of any guarantor of this Lease who remains fully obligated and liable under its guaranty after such transaction, is not less than $100,000,000.00; or

(4) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant's assets, so long as (A) Tenant's obligations hereunder are assumed by such purchasing entity; and (B) such entity's Net Worth after suchacquisition, or the Net Worth of any guarantor of this Lease who remains fully obligated and liable under its guaranty after such acquisition, is not less than $100,000,000.00;

Permitted Transfer shall also include a transfer of all or a portion of the ownership interests in Tenant as long as the Net Worth of Tenant, or the Net Worth of any guarantor of this Lease who remains fully obligated and liable under its guaranty following such transaction, is not less than $100,000,000.00. Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant shall remain liable for the performance of all of the obligations of Tenant hereunder, or if Tenant no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Tenant hereunder. Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease, including the Permitted Use, and the use of the Premises by the Permitted Transferee may not violate any other agreements affecting the Premises, the Building, the Complex, Landlord or other tenants of the Building or Complex. No later than 30 days after the effective date of any Permitted Transfer. Tenant agrees to furnish Landlord with (A) copies of the instrument effecting any of the foregoing Transfers, (B) documentation establishing Tenant's satisfaction of the requirements set forth above applicable to any such Transfer. (C) evidence of insurance as required under this Lease with respect to the Permitted Transferee, and (D) evidence of compliance with the regulations of OFAC and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto, including the name and address of the Permitted Transferee and any entities and persons who own, control or direct the Permitted Transferee. The occurrence of a Permitted Transfer shall not waive Landlord's rights as to any subsequent Transfers. “Net Worth” means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied (“GAAP”). Any subsequent Transfer by a Permitted Transferee shall be subject to the terms of this Section 11.

12. Insurance; Waivers; Subroaation; Indemnity.

(a) Tenant's Insurance. Effective as of the earlier of (1) the date Tenant enters or occupies the Premises, or (2) the Commencement Date, and continuing throughout the Term, Tenant shall maintain the following insurance policies: (A) commercial general liability insurance in amounts of $3,000,000 per occurrence and in the aggregate or, following the expiration of the initial Term, such other amounts as are then commercially reasonable for similar projects (and, if the use and occupancy of the Premises include any activity or matter that is or may be excluded from coverage under a commercial general liability policy, Tenant shall obtain such endorsements to the commercial general liability policy or otherwise obtain insurance to insure all liability arising from such activity or matter in such amounts as Landlord may reasonably require), insuring Tenant, and naming Landlord, Landlord’s property management company, and, if requested in writing by Landlord, Landlord’s Mortgagee as additional insureds, against all liability for injury to or death of a person or persons or damage to property arising from the use and occupancy of the Premises and, without implying any consent by Landlord to the installation thereof, the installation, operation, maintenance, repair or removal of Tenant’s Off-Premises Equipment, (B)insurance covering the full value of all alterations and improvements and betterments in the Premises, naming Landlord

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and Landlord’s Mortgagee as additional loss payees as their interests may appear. (C) insurance covering the full value of all furniture, trade fixtures and personal property (including property of Tenant or others) in the Premises or otherwise placed in the Project by or on behalf of a Tenant Party (including Tenant’s Off-Premises Equipment), insurance policy), (E) worker’s compensation insurance, and (F) business interruption insurance in a commercially reasonable amount. Tenant shall furnish to Landlord certificates of such insurance and such other evidence satisfactory to Landlord of the maintenance of all insurance coverages required hereunder at least ten days prior to the earlier of the Commencement Date or the date Tenant enters or occupies the Premises. and at least 10 days prior to each renewal of said insurance, and Tenant shall obtain a written obligation on the part of each insurance company to notify Landlord at least 30 days before cancellation or a material change of any such insurance policies. Notwithstanding the foregoing to the contrary, with respect to the worker’s compensation insurance policy. Tenant shall obtain a written obligation on the part of the applicable insurance company to endeavor to provide Landlord with at least 30 days notice prior to cancellation or a material change of such insurance policy. All insurance policies shall be in form, and issued by companies with a Best’s rating of A-:VII or better, reasonably satisfactory to Landlord. If Tenant fails to comply with the foregoing insurance requirements or to deliver to Landlord the certificates or evidence of coverage required herein, and such failure continues uncured for 5 days after written notice thereof from Landlord to Tenant. Landlord. in addition to any other remedy available pursuant to this Lease or otherwise, may, but shall not be obligated to. obtain such insurance and Tenant shall pay to Landlord on demand the premium costs thereof. If Landlord purchases any such policy, then at such time as Tenant provides evidence to Landlord that Tenant has obtained the required insurance, Landlord shall cancel the policy it purchased and Tenant shall receive a credit against amounts due to Landlord pursuant to the preceding sentence for the amount of premium refund that Landlord is entitled to receive under the cancelled policy.

(b) Landlord’s Insurance. Throughout the Term of this Lease, Landlord shall maintain, as a minimum, the following insurance policies: (1) property insurance for the Building’s replacement value (excluding property required to be insured by Tenant), including rent loss insurance, less a commercially-reasonable deductible not to exceed $25,000.00 if Landlord so chooses, and (2) commercial general liability insurance in an amount of not less than $3,000,000. Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem necessary. The cost of all insurance carried by Landlord with respect to the Project shall be in included in Insurance Costs (defined below). Notwithstanding the foregoing. Tenant’s obligation to reimburse Landlord for the costs of any of Landlord’s insurance coverage not specifically identified in clauses (1) and (2) above shall be limited to the costs for such commercially reasonable coverages as may be carried on similar projects located within a five mile radius of the Project. Landlord shall competitively bid any such insurance coverages on an annual basis and shall purchase insurance from the insurance company submitting the lowest bid. The foregoing insurance policies and any other insurance carried by Landlord shall be for the sole benefit of Landlord and under Landlord’s sole control, and Tenant shall have no right or claim to any proceeds thereof or any other rights thereunder.

(c) No Subrogation: Waiver of Property Claims. Landlord and Tenant each waives any claim it might have against the other for any damage to or theft, destruction, loss, or loss of use of any property, to the extent the same is insured against under any insurance policy of the types described in this Section 12 that covers the Project, the Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold improvements, or business (including any applicable deductibles), or is required to be insured against under the terms hereof, regardless of whether the negligence of the other party caused such Loss (defined below).Additionally, each party waives any claim it may have against the other for any Loss to the extent such Loss is caused by a terrorist act. Each party shall cause its insurance carrier to endorse all applicable policies waiving the carrier’s rights of recovery under subrogation or otherwise against the other party.

(d) Indemnity.Subject to Section.12(c).Tenant shall defend, indemnify, and hold harmless Landlord and its representatives and agents from and against all claims, demands, liabilities, causes of action, suits, judgments, damages, and expenses (including reasonable attorneys’ fees) arising from any injury to or death of any person or the damage to or theft, destruction. loss, or loss of use of, any property or inconvenience (a “toss”) occurring in or on the Project; however, such indemnity shall not apply to the negligence, intentional act or willful misconduct of, or breach of this Lease by, Landlord and its agents. Subject to Section 12(c). Landlord shall defend, indemnify, and hold harmless Tenant and its agents from and against all claims, demands, liabilities, causes of action, suits, judgments, damages, and expenses (including reasonable attorneys’ fees) for any Lass arising from any occurrence in or on the Building’s common areas to the extent caused by the negligence. Intentional act or willful misconduct of. or breach of this Lease by Landlord or its agents. The indemnities set forth in this Lease shall survive termination or expiration of this Lease and shall not terminate or be waived, diminished or affected in any manner by any abatement or apportionment of Rent under any provision of this Lease. If any proceeding is filed for which indemnity is required hereunder, the indemnifying party agrees, upon request therefor, to defend the indemnified party in such proceeding at its sole cost utilizing counsel satisfactory to the indemnified party.

(e) Cost of Landlord’s Insurance. Tenant shall pay Tenant’s Proportionate Share of the cost of the propertyand liability insurance carried by Landlord pursuant to Section 12(b) from time to time with respect to the Building (including other improvements and Landlord’s personal property used in connection therewith). which may include fire and extended coverage insurance (including extended and broad form coverage risks, mudslide, land subsidence, volcanic eruption, flood, earthquake and rent loss insurance) and commercial general liability insurance and excess liability insurance, in such amountsand containing such terms as

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Landlord deems necessary or desirable (collectively. “insurance Costs”). During each month of the Term. Tenant shall make a monthly payment to Landlord equal to l/12th of Tenant’s Proportionate Share of Insurance Costs that will be due and payable for that particular year Each payment of Insurance Costs shall be due and payable at the same time as. and in the same manner as. provided above for Tenant’s Proportionate Share of Operating Costs. The initial monthly payment of Insurance Costs is based upon landlord’s good faith estimate of Tenant’s Proportionate Share of the estimated Insurance Costs for the remainder of the first calendar year. The monthly payment o’ Insurance Costs is subject to increase or decrease as determined by Landlord to reflect accurately Tenant’s Proportionate Share of estimated Insurance Costs. If. following Landlord’s receipt of the bill for the insurance premiums for a calendar year. Landlord determines that Tenant’s total payments of Insurance Costs are less than Tenant’s Proportionate Share of actual Insurance Costs. Tenant shall pay to Landlord the difference upon demand: if Tenants total payments of Insurance Costs are more than Tenant’s Proportionate Share of actual Insurance Costs. Landlord shall retain such excess and credit it to Tenant’s future payments of Insurance Costs (unless such adjustment is at the end of the Term. in which event Landlord shall refund such excess to Tenant).

13 Subordination; Attornment: Notice to Landlord’s Mortgagee.

(a) Subordination. this Lease shall be subordinate to any deed of trust, mortgage, or other security instrument (each a “Mortgage”), or any ground lease, master lease, or primary lease (each, a “Primary Lease”), that now or hereafter covers all or any pan of the Premises (the mortgagee under any such Mortgage, beneficiary under any such deed of trust, or the lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”). Any Landlord’s Mortgagee may elect, at any time, unilaterally, to make this Lease superior to its Mortgage. Primary Lease, or other interest in the Premises by so notifying Tenant in writing, the provisions of this Section shall be self-operative and no further instrument of subordination shall be required; however, in confirmation of such subordination, Tenant shall execute and return to Landlord (or such other party designated by Landlord) within ten days after written request therefor such documentation, in recordable form if required, as a Landlord’s Mortgagee may reasonably request to evidence the subordination of this Lease to such Landlord’s Mortgagee’s Mortgage or Primary (.ease (including a subordination, non-disturbance and attornment agreement) or, if the Landlord’s Mortgagee so elects, the subordination of such Landlord’s Mortgagee’s Mortgage or Primary Lease to this Lease. Notwithstanding the foregoing to the contrary. Landlord will, upon Tenant’s written request, use commercially reasonable efforts to obtain from any such Landlord Mortgagee (whether such mortgagee is presently existing or in the future becomes a mortgagee with respect to the Project or any portion thereof), or any lessor under any Primary Lease, an SNDA (hereinafter defined) and this Lease shall not be subject to are such Mortgage or Primary Lease until such time as an SNDA has been executed and delivered by the holder thereof to Tenant.

(b) Attornment. Tenant shall attorn to any party succeeding to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease. Or otherwise, upon such party’s request. and shall execute such agreements confirming such attornment as such party may reasonably request.

(c) Notice to Landlord’s Mortgagee. Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt requested. specifying the default in reasonable detail, to any Landlord’s Mortgagee whose address has been given to ‘Tenant. and affording such Landlord’s Mortgagee a reasonable opportunity to perform Landlord’s obligations hereunder.

(d) Landlord’s Mortgagee’s Protection Provisions. If Landlord’s Mortgagee shall succeed to the interest of Landlord under this Lease. Landlord’s Mortgagee shall not be: (1) liable for any act or omission of any prior lessor (including Landlord); (2) bound by any rent or additional rent or advance rent which Tenant might have paid far more than the current month to any prior lessor (including Landlord), and all such rent shall remain due and owing, notwithstanding such advance payment; (3) bound by any security or advance rental deposit made by Tenant which is not delivered or paid over to Landlord’s Mortgagee and with respect to which Tenant shall look solely to Landlord for refund or reimbursement; (4) bound by (i) any amendment or modification of this Lease made without Landlord’s Mortgagee’s consent and written approval, except for those terminations, amendments and modifications permitted to be made by Landlord without Landlord’s Mortgagee’s consent pursuant to the terms of the loan documents between Landlord and Landlord’s Mortgagee, or (ii) any termination of this Lease made by Tenant pursuant to the express terms of this Lease; (5) subject to the defenses which Tenant mitt’ have against any prior lessor (including Landlord); and (6) subject to the offsets which Tenant might have against any prior lessor (including Landlord) except for those offset rights which (A) are expressly provided in this Lease. (B) relate to periods of time following the acquisition of the Building by Landlord’s Mortgagee, and (C)Tenant has provided written notice to Landlord’s Mortgagee and provided Landlord’s Mortgagee a reasonable opportunity to cure the event giving rise to such offset event. Landlord’s Mortgagee shall have no liability or responsibility under or pursuant to the terms of this Lease or otherwise after it ceases to own an interest in the Project. Nothing in this Lease shall be construed to require Landlord’s Mortgagee to sec to the application of the proceeds of any loan, and Tenant’s agreements set forth herein shall not be impaired on account of any modification of the documents evidencing and securing any loan.

(e) Notwithstanding anything contained herein to the contrary, on or prior to the date of recordation of a mortgage encumbering the Premises, Landlord shall deliver to Tenant a subordination, non-disturbance and attornment agreement (“SNDA”) executed by Landlord’s Mortgagee and, if applicable, the lessor under any Primary Lease wherein such mortgagee, lender or lessor shall agree that in the event of a foreclosure or other similar action taken by the mortgagee or lender, or in the event or a termination of the

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Prima-y Lease, this Lease and the rights of Tenant hereunder shall not be disturbed but shall continue in full force and effect so long as no uncured Event of Default exists, and following such foreclosure, such mortgagee, or its successor landlord. will perform all obligations of Landlord required to be performed under this Lease which thematic- arise. Each such SNDA shat be in form reasonably acceptable to ‘tenant. If Landlord fails to obtain an SNDA from all mortgagees and deliver same to Tenant in the time period specified above, Tenant shall be entitled to terminate this Lease by written notice to Landlord at any time before such SNDA has been executed and delivered to Tenant.

14. Rules and Regulation. Tenant shall comply with the rules and regulations of the Project which are attached hereto as Exhibit C. Landlord may, from time to time, change such rules and regulations for the safety, care, or cleanliness of the Project and related facilities, provided that such changes are applicable to all tenants of the Project, will not unreasonably interfere with Tenant’s use of the Premises and are enforced by Landlord in a nondiscriminatory manner. Tenant shall be responsible for the compliance with such rules and regulations by each Tenant Parry. In the event of any conflict between said rules and regulations and other provisions of this Lease, the provisions of this Lease shall control.

15 Condemnation.

(a) Total Taking. If the entire Building or Premises are taken by right of eminent domain or conveyed Ir. lieu thereof (a “Taking”) this Lease shall terminate as of the date of the Taking.

(b) Partial Taking - Tenant’s Rights. if (1) any pan of the parking area for the Project should be taken as aforesaid, this Lease shall not laminate, nor shall the rent payable hereunder be reduced, except that Tenant may terminate this Lease if the parking area remaining following such taking plus any additional parking area provided by Landlord in reasonable proximity to the Project shall (1) be less than ninety percent (90%) of the parking area immediately prior to the taking, or (2) contain less than the number of parking spaces required by applicable law in connection with the Permitted Use pursuant to this Lease. (ii) any part of the Building becomes subject to a Taking and such Taking will prevent Tenant from conducting on a permanent basis its business in the Premises in a manner reasonably comparable to that conducted immediately before such Taking, then Tenant may terminate this Lease as of the date of such Taking by giving written notice to Landlord within 30 days after the Taking, and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking. If Tenant does not terminate this Lease, then Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.

(c) Partial Taking - Landlord’s Rights. If any material portion, but less than all, of the Building becomes subject to a Taking, then Landlord may terminate this Lease by delivering written notice thereof to Tenant within 30 days after such Taking. and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking. If Landlord does not so terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate as provided in the last sentence of Section 15(b).

(d) Temporary Taking. If all or any portion of the Premises becomes subject to a Taking for a limited period of time, this Lease shall remain in full force and effect and Tenant shall continue to perform all of the terms, conditions and covenants of this Lease except that Basic Rent and all other amounts payable hereunder shall be abated in proportion to the portion of the Premises subject to the temporary Taking during the duration of the Taking. If any such temporary Taking terminates prior to the expiration of the Term, Tenant shall restore the Premises as nearly as possible to the condition prior to such temporary Taking, at Tenant’s sole cost and expense. Landlord shall be entitled to receive the entire award for any such temporary Taking. except tint Tenant shall be entitled to receive the portion of such award which (1) compensates Tenant for its loss of use of be Premises within the Term and (2) reimburses Tenant for the reasonable out-of-pocket costs actually incurred by Tenant to restore the Premises as required by this Section.

(e) Award. If any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building. and other improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord’s award) against the condemnor for the value of Tenant’s personal property which Tenant is entitled to remove under this Lease, moving costs, loss of business. leasehold improvements paid for by Tenant and other claims it may have.

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16. Fire or Other Casualty.

(a) Repair Estimate. If the Premises or the Building are damaged by rue or other casualty (a “Casualty”), Landlord shall, within 60 days after such Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of the time needed to repair the damage caused by such Casualty.

(b) Tenant’s Rights. If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Casualty and Landlord reasonably estimates that the damage caused thereby cannot be repaired within 210 days after the commencement of repairs (the “Repair Period”) then Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within 30 days after the Damage Notice has been delivered to Tenant.

(c) Landlord’s Rights. If a Casualty damages the Premises or a material portion of the Building and (1) Landlord reasonably estimates that the damage to the Premises cannot be repaired within the Repair Period, (2) the damage to the Premises exceeds 50% of the replacement cost thereof (excluding foundations and footings), as estimated by Landlord and such damage occurs during the last two years of the Term, or (3) if the damage occurs in the last two years of the Term, and regardless of the extent of damage to the Premises, the damage is not fully covered by Landlord’s insurance policies plus the deductible amount or Landlord reasonably estimates that the damage to the Premises cannot be repaired within sixty (60) days after the date of the Casualty, and makes a good faith determination that restoring the Building would be uneconomical, then Landlord may terminate this Lease by giving written notice of its election to terminate within 30 days after the Damage Notice has been delivered to Tenant. In the event of any such termination. Tenant will have a reasonable period of time thereafter to move out of the Premises, provided the Premises may be safely occupied without risk of any additional property damage or risk of harm to persons, and subject to any applicable governmental regulations, including without limitation, health and safety regulations or any insurance requirements.

(d) Repair Obligation. If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition as they existed immediately before such Casualty; however, Landlord shall not be required to repair or replace any alterations or betterments installed by Tenant within the Premises after the Commencement Date or any furniture, equipment, trade fixtures or personal property of Tenant or others in the Premises or the Building. If this Lease is terminated under the provisions of this Section 16, Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for all alterations, improvements and betterments in the Premises. If Landlord does not complete restoration of the Premises and access thereto within the 270 days after the date of the Casualty. Tenant shall be entitled to terminate this Lease, in which event all prepaid rents and the Security Deposit shall be returned to Tenant and Tenant will have a reasonable period of time thereafter to move out of the Premises.

(e) Abatement of Rent. If the Premises are damaged by Casualty. Rent for the portion of the Premise rendered untenantable by the damage shall be abated on a reasonable basis from the date of damage until the completion of Landlord’s repairs (or until the date of termination of this Lease by Landlord or Tenant as provided above, as the case may be), unless a Tenant Party caused such damage, in which case, except to the extent of rental loss proceeds paid to Landlord, the rental abatement shall be proportionately reduced based upon the percentage of causation attributable to the Tenant Party.

17. Personal Property Taxes. Tenant shall be liable for all taxes levied or assessed against personal property, furniture, or fixtures placed by Tenant in the Premises or in or on the Building or Project. If any taxes for which Tenant is liable arc levied or assessed against Landlord or Landlord’s property and Landlord elects to pay the same, or if the assessed value of Landlord’s property is increased by inclusion of such personal property, furniture or fixtures and Landlord elects to pay the taxes based on such increase, then Tenant shall pay to Landlord, within 30 days following written request therefor. the part of such taxes for which Tenant is primarily liable hereunder; however, Landlord shall not pay such amount if Tenant notifies Landlord that it will contest the validity or amount of such taxes before Landlord makes such payment, and thereafter diligently proceeds with such contest in accordance with Law and if the non-payment thereof does not pose a threat of loss or seizure of the Project or interest of Landlord therein or impose any fee or penalty against Landlord.

18 Events of Default. Each of the following occurrences shall be an “Event of Default”:

(a) Payment Default. Tenant’s failure to pay Rent within five days after Landlord has delivered written notice to Tenant that the same is due; however, an Event of Default shall occur hereunder without any obligation of Landlord to give any notice if Tenant fails to pay Rent when due and, during the 12 month interval preceding such failure, Landlord has given Tenant written notice of failure to pay Rent on two or more occasions;

(b) Abandonment. Tenant abandons or vacates the Premises or any substantial portion thereof without providing Landlord with thirty (30) days prior written notice;

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(c) Estoppel. Tenant fails to provide any estoppel certificate after Landlord’s written request therefor pursuant to Section 26(e) and such failure shall continue for five business days after Landlord’s second written notice thereof to Tenant;

(d) Insurance. Tenant fails to procure, maintain and deliver to Landlord evidence of the insurance policies and coverages as required under Section 12(a) and such failure continues for five business days after written notice thereof from Landlord to Tenant;

(e) Mechanic’s Liens. Tenant fails to pay and release of record, or diligently contest and bond around, any mechanic’s lien filed against the Premises or the Project for any work performed, materials furnished, or obligation incurred by or at the request of Tenant, within the time and in the manner required by Section 8(d);

(f) Other Defaults. Tenant’s failure to perform, comply with, or observe any other agreement or obligation of Tenant under this Lease and the continuance of such failure for a period of more than 30 days after Landlord has delivered to Tenant written notice thereof; and

(g) Insolvency. The filing of a petition by or against Tenant (the term “Tenant” shall include, for the purpose of this Section 18(g), any guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; (3) for the appointment of a liquidator or receiver forall or substantially all of Tenant’s property or for Tenant’s interest in this Lease; (4) for the reorganization or modification of Tenant’s capital structure; or (5) in any assignment for the benefit of creditors proceeding; however, if such a petition is filed against Tenant, then such filing shall not be an Event of Default unless Tenant fails to havethe proceedings initiated by such petition dismissed within 90 days after the filing thereof.

19. Remedies. Upon any Event of Default, Landlord may, in addition to all other rights and remedies afforded Landlord hereunder or by law or equity (including, without limitation, the rights to enforce specific performance or seek injunctive relief), take any one or more of the following actions:

(a) Termination of Lease. Terminate this Lease by giving Tenant written notice thereof, in which event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder through the date of termination, (2) all amounts due under Section 20(a), and (3) an amount equal to (A) the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at a per annum rate equal to the “Prime Rate” as published on the date this Lease is terminated by The Wall Street Journal. Southwest Edition, in its listing of “Money Rates” minus one percent. minus (B) the then present fair rental value of the Premises for such period, similarly discounted;

(b) Termination of Possession. Terminate Tenant’s right to possess the Premises without terminating this Lease by giving written notice thereof to Tenant, in which event Tenant shall pay to Landlord ( 1 ) all Rent and other amounts accrued hereunder to the date of termination of possession, (2) all amounts due from time to time under Section 20(a), and (3) all Rent and other net sums required hereunder to he paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises during such period, after deducting all costs incurred by Landlord in relating the Premises. If Landlord elects to proceed under this Section 19(b), Landlord may remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby. To the extent required by law. Landlord shall use reasonable efforts to relet the Premises on such terms as Landlord in its sole discretion may determine (including a term different from the Term, rental concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be obligated to relet the Premises before leasing other portions of the Building or Complex and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord’s leasing criteria. Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or to collect rent due for such reletting. Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder. Reentry by Landlord in the Premises shall not affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord’s waiting until the expiration of the Term. Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 19(b). If Landlord elects to proceed under this Section 19(b), it may at any time elect to terminate this Lease under Section 19(a);

(c) Perform Acts on Behalf of Tenant. Perform any act Tenant is obligated to perform under the terms of this Lease (and enter upon the Premises in connection therewith if necessary) in Tenant’s name and on Tenant’s behalf, without being liable for any claim for damages therefor, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease (including, but not limited to, collection costs and legal expenses), plus interest thereon at the Default Rate;

(d) Alteration of Locks. Additionally, with or without notice, and to the extent permitted by Law. Landlord may alter locks or other security devices at the Premises to deprive Tenant of accessthereto, and Landlord shall not be required to provide a new key or right of access to Tenant.

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20. Payment by Tenant; Non-Waiver; Cumulative Remedies.

(a) Payment by Tenant. Upon any Event of Default, subject to the provisions of Section 19(d) above, Tenant shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable attorneys’ fees and expenses) in (1) obtaining possession of the Premises, (2) removing and storing Tenant’s or any other occupant’s property. (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant, (4) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of tenant finish work, and other costs incidental to such reletting), (5) performing Tenant’s obligations which Tenant failed to perform, and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses arising out of the default. To the full extent permitted by law, Landlord and Tenant agree the federal and state courts of the state in which the Premises are located shall have exclusive jurisdiction over any matter relating to or arising from this Lease and the parties’ rights and obligations under this Lease.

(b) No Waiver. Landlord’s acceptance of Rent following an Event of Default shall not waive Landlord’s rights regarding such Event of Default. No waiver by Landlord of any violation or breach of any of the terms contained herein shall waive Landlord’s rights regarding any future violation of such term. Landlord’s acceptance of any partial payment of Rent shall not waive Landlord’s rights with regard to the remaining portion of the Rent that is due. regardless of any endorsement or other statement on any instrument delivered in payment of Rent or any writing delivered in connection therewith; accordingly, Landlord’s acceptance of a partial payment of Rent shall not constitute an accord and satisfaction of the full amount of the Rent that is due.

(c) Cumulative Remedies. Any and all remedies set forth in this Lease: (1) shall be in addition to any and all other remedies Landlord may have at law or in equity, (2) shall be cumulative, and (3) may be pursued successively or concurrently as Landlord may elect. The exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from exercising any other remedies in the future. Additionally, Tenant shall defend, indemnify and hold harmless Landlord, Landlord’s Mortgagee and their respective representatives and agents from and against all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including reasonable attorneys’ fees) arising from Tenant’s failure to perform its obligations under this Lease. Notwithstanding any provision contained in this Lease to the contrary, except for consequential damage amounts arising under Section 23 and Section 27 hereof, the liability of Tenant to Landlord for any default by Tenant under the terms of this Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Building shall be limited to Landlord’s actual direct, but not consequential, damages therefor.

21. Waiver of Landlord’s Lien. Landlord hereby waives the statutory lien for rents against Tenant’s property and agrees to execute and deliver to Tenant within 10 days after Tenant’s request such waivers and agreements as Tenant or its lender may request to confirm the foregoing.

22. Surrender of Premises. No act by Landlord shall be deemed an acceptance of a surrender of the Premises, andno agreement to accept a surrender of the Premises shall be valid unless it is in writing and signed by Landlord. At the expiration or termination of this Lease, Tenant shall deliver to Landlord the Premises with all improvements located therein in good repair and condition, free of Hazardous Materials placed on the Premises during the Term,broom-clean, reasonable wear and tear, condemnation and Casualty damage and repairs required to be completed by Landlord excepted, and shall deliver to Landlord all keys to the Premises. Tenant may remove all trade fixtures, racks, furniture, and personal property placed in the Premises or elsewhere in the Building by Tenant (but Tenant may not remove any such item which was paid for, in whole or in part, by Landlord or any wiring or cabling, unless Landlord requires such removal of such wiring or cabling by written notice to Tenant at the time that Landlord consents to the installation thereof, or, upon written request, consents to such removal). Additionally, at Landlord’s option, Tenant shall remove such alterations, additions, improvements, trade fixtures, personal property, equipment, wiring, conduits, cabling, and furniture (including Tenant’s Off-Premises Equipment, and any such items that were permitted to be installed by Tenant without Landlord’s prior written consent pursuant to Section 8(a) hereof) as Landlord may request: however, Tenant shall not be required to remove any of the foregoing (including any wiring, conduit or cabling) which was installed by Landlord, or which Landlord, at the time Tenant obtained consent to install the same, did not specifically instruct Tenant in writing must be removed. Tenant shall repair all damage caused by such removal. Following the Permitted Holdover Period (if any), all items not so removed shell, at Landlord’s option, be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without notice to Tenant and without any obligation to account for such items; any such disposition shall not be considered a strict foreclosure or other exercise of Landlord’s rights in respect of the security inters granted under Section 20(c). The provisions of this Section 22 shall survive the end of the Term.

23. Holding Over. Provided that (a) Tenant does not elect to exercise any of the Renewal Options which may be granted to Tenant hereunder, and (b) Tenant provides notice to Landlord at least nine (9) months prior to the termination of the Lease that Tenant desires to hold over (the “Holdover Notice”). Tenant shall be entitled to hold over for a period of up to ninety (90) days following the date of termination of this Lease (the “Permitted Holdover Period”) whereupon Tenant shall pay, in addition to other Rent, Basic Rent equal to 125% of the Basic Rent payable during the last month of the Term (the “Initial Holdover Rent”). Tenant’s delivery of the Holdover Notice shall be irrevocable, and upon the termination of the initial Term. Tenant shall be obligated to pay to Landlord the Initial Holdover Rent for the entirety of the Permitted Holdover Period, regardless of whether Tenant vacatesthe Premises prior to the expiration of the Permitted Holdover Period, which amount stall be payable on a monthly basis on or before the first day of each month

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during the Permitted Holdover Period. If Tenant fails to vacate the Premises at the end of the Term or the Permitted Holdover Period, as applicable, then Tenant shall be a tenant at sufferance and, in addition to all other damages and remedies to which Landlord may be entitled for such holding over, Tenant shall pay, in addition to the other Rent. Basic Rent equal to 150% of the Basic Rent payable during the last month of the Term. In all instances of holding over, Tenant shall otherwise continue to be subject to all of Tenant’s obligations under this Lease. The provisions of this Section 23 shall not be deemed to limit or constitute awaiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender Pie Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom. Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including any claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom.

24. Certain Bluish Reserved by Landlord. Provided that the exercise of such rights does not unreasonably interfere with Tenant’s occupancy of the Premises and Landlord provides not less than twenty four (24) hours prior notice to Tenant in connection with any entry into the Premises (except in the event of an emergency, Landlord shall have the following rights:

(a) Building Operations. To decorate and to make inspections, repairs, alterations, additions, changes, or improvements, whether structural or otherwise, required to be made by Landlord pursuant to this Lease; to enter upon the Premises (after giving Tenant at least 24 hours notice thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no notice shall be required) and, during the continuance of any such work, to temporarily close doors, entryways. public space, and corridors in the Building; to interrupt or temporarily suspend Building services and facilities; to

(b) Security. To take such reasonable measures as Landlord deems advisable for the security of the Building and its occupants; evacuating the Building for Cause,suspected cause, or for drill purposes; temporarily denying access to the Building; and closing the Building after normal business hours and on Sundays and holidays, subject, however, to Tenant’s right to enter when the Building is closed alter normal business hours. Without limiting the generality of the immediately preceding sentence, Tenant acknowledges that LANDLORD MAKES NO REPRESENTATION OR WARRANTY REGARDING WHETHER OR NOT LANDLORD WILL PROVIDE SECURITY SERVICES, OR IF SO, WHAT FORM OF SECURITY SERVICES WILL BE PROVIDED;

(c) Prospective Purchasers and Lenders. To enter the Premises at all reasonable hours to show the Premises to prospective purchasers or lenders, subject to suchsecurity measures as Tenant may reasonably require; and

(d) Prospective Tenants. At any time during the last 6 months of the Term (or earlier if Tenant has notified Landlord in writing that it does not desire to renew the Term) or at any time following the occurrence of an Event of Default, to enter the Premises at all reasonable hours to show the Premises to prospective tenants. subject to such security measures as Tenant may reasonably require.

25. Intentionally Deleted

26. Miscellaneous.

(a) Landlord Transfer. Landlord may transfer any portion of the Project and any of its rights under this Lease. If Landlord assigns its rights under this Lease, then Landlord shall thereby be released from any further obligations hereunder arising after the date of transfer. provided that the assignee assumes in writing Landlord’s obligations hereunder arising from and after the transfer date.

(b) Landlord’s Liability. The liability of Landlord (and its partners, shareholders or members) to Tenant (or any person or entity claiming by, through or under Tenant) for any default by Landlord under the terms of this Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Building shall be limited to Tenant’s actual direct, but not consequential, damages therefor and shall he recoverable only from the interest of Landlord in the Building and the proceeds therefrom, and Landlord (and its partners, shareholders or members) shall not be personally liable for any deficiency. Notwithstanding the foregoing to the contrary, any sale or insurance proceeds or any condemnation award, or any proceeds derived therefrom that are distributed to Landlord’s direct or indirect partners, members, shareholders or other constituents prior to Landlord’s obtaining knowledge of any claim by Tenant shall not be recoverable by Tenant for the recovery of any monetary judgment against Landlord, it being agreed that Landlord, its successors and assigns, and their respective constituent parties shall not have any personal liability therefor. The provisions of this Section shall survive any expiration or termination of this Lease. Additionally, Tenant hereby waives its statutory lien under Section 91.004 of the Texas Property Code.

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(c) Force Majeure. Other than for Tenant’s obligations under this Lease that can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance) and except as otherwise provided in this Lease, whatever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, terrorist acts or activities, governmental laws, regulations, or restrictions, or any other causes of any kind whatsoever which are beyond the control of such party, subject to the following: (i) in order to be entitled to receive an extension of time pursuant to this paragraph in connection with the completion of the Work, Landlord must deliver written notice as to the nature and extent of the delay to Tenant within thirty (30) days after the occurrence thereof or Landlord shall not thereafter be entitled to receive an extension of time in connection with such delay, and (ii) the extensions of time may be granted for rain days in any month when the cumulative number of rain days occurring on Mondays through Saturdays during that month exceeds the number typically expected, as shown in the following Rainfall Table (provided that the rainfall prevented the execution of major items of Work). A rain day is defined as a (lay when rainfall exceeds one-tenth (0.1) inch during a 24 hour period. The number of rain days expected for each month during the completion of the Work is shown in the Rainfall Table as follows:

January	7 calendar days
February	5 calendar days
March	5 calendar days
April	7 calendar days
May	7 calendar days
June	5 calendar days
July	3 calendar days
August	4 calendar days

September	4 calendar days
October	5 calendar days
November	4 calendar days
December	5 calendar days

(d) Brokerage. Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than Jackson & Cooksey, Inc. and Billingsley Company. whose commission shall be paid by Landlord pursuant to a separate written agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys’ fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by. through, or under the indemnifying party.

(e) Estoppel Certificates. From time to time, either Landlord or Tenant (the “Certifying Party”) shall furnish to any party designated by the other party (the “Non-Certifying Party”), within ten business days after request therefor, a certificate (the “Estoppel Certificate”) signed by the Certifying Parry confirming and containing such factual certifications and representations as to this Lease as the Non-Certifying Party may reasonably request. Unless otherwise required by Landlord's Mortgagee or a prospective purchaser or mortgagee of the Project, the initial form of Estoppel Certificate to be signed by Tenant is attached hereto as Exhibit F. If the Certifying Party does not deliver to the Non-Certifying Party the executed Estoppel Certificate within such required time period, the Non-Certifying Party and the intended addressee of the Estoppel Certificate may conclusively presume and rely upon the following facts: (1) this Lease is in full force and effect; (2) the terms and provisions of this Lease have not been changed except as otherwise represented by the Non-Certifying Party; (3) not more than one monthly installment of Basic Rent and other charges have been paid in advance; (4) there are no claims against the Non-Certifying Party nor any defenses or rights of offset against collection of Rent or other charges; and (5) the Non-Certifying Party is not in default under this Lease. In such event, the Certifying Party shall be estopped from denying the truth of the presumed facts.

(f) Notices. All notices and other communications given pursuant to this Lease shall be in writing and shall be (1) mailed by first class, United States Mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address specified in the Basic Lease Information, (2) hand delivered to the intended addressee, (3) sent by a nationally recognized overnight courier service. or (4) sent by facsimile transmission during normal business hours followed by a confirmatory letter sent in another manner permitted hereunder. All notices shall be effective upon delivery to the address of the addressee (even if such addressee refuses delivery thereof). The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

(g) Separability. If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future laws, then the remainder of this Lease shall not be affected thereby and in lieu of such clause or provision. there shall be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable.

LEASE AGREEMENT (INDUSTRIAL) - Page 18

(h) Amendments: Binding Effect; No Electronic Records. This Lease may not be amended except by instrument in writing signed by Landlord and Tenant. No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord, and no custom or practice which may evolve between the parties in the administration of the terms hereof shall wave or diminish the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms hereof. Landlord and Tenant hereby agree not to conduct the transactions or communications contemplated by this Lease by electronic means, except by facsimile transmission as specifically set forth in Section 26(f); nor shall the use of the phrase “in writing” or Me word “written” be construed to include electronic communications except by facsimile transmissions as specifically set forth in Section 26(f). The terms and conditions contained in this Lease shall inure to the benefit of and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided. This Lease is for the sole benefit of Landlord and Tenant, and, other than Landlord's Mortgagee, no third party shall be deemed a third party beneficiary hereof.

(i) Quiet Enjoyment. Provided Tenant has performed all of its obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term. without hindrance from Landlord or any party claiming by, through, or tinder Landlord, but not otherwise, subject to the terms and conditions of this Lease.

(j) No Merger. There shall be no merger of the leasehold estate hereby treated with the fee estate in the Premises or any pan thereof if the same person acquires or holds, directly or indirectly, this Lease or any interest it this Lease and the fee estate in the leasehold Premises or any interest in such fee estate.

(k) No Offer. The submission of this Lease to Tenant shall not be construed as an offer, and Tenant shall not have any rights under this Lease unless Landlord executes a copy of this Lease and delivers it to Tenant or any broker representing Tenant.

(l) Entire Agreement. This Lease constitutes the entire agreement between Landlord and Tenant regarding the subject matter hereof and supersedes all oral statements and prior writings relating thereto. Except for those set forth in this Lease, no representations, warranties, or agreements have been made by Landlord or Tenant to the other with respect to this Lease or the obligations of Landlord or Tenant in correction therewith. The normal rule of construction that any ambiguities be resolved against the drafting party shall not apply to the interpretation of this Lease or any exhibits or amendments hereto.

(m) Waiver of Jun Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

(n) Governing Law. This Lease shall be governed by and construed in accordance with the laws of the state in which the Premises are located.

(o) Recording. Tenant shall not record this Lease or any memorandum of this Lease without the prior written consent of Landlord, which consent may be withheld or denied in the sole and absolute discretion of Landlord, and any recordation by Tenant without Landlord's consent shall be a material breach of this Lease. Tenant grants to Landlord a power of attorney to execute and record a release releasing any such recorded instrument of record that was recorded without the prior written consent of Landlord.

(p) Water or Mold Notification. to the extent Tenant or its agents or employees discover any water leakage, water damage or mold in or about the Premises or Project, Tenant shall promptly notify Landlord thereof in writing.

(q) Joint and Several Liability. If Tenant is comprised of more than Ole party, each such party shall be jointly and severally liable for Tenant's obligations under this Lease. All unperformed obligations of Tenant hereunder not fully performed at the end of the Term shall survive the end of the Term, including payment obligations with respect to Rent and all obligations concerning the condition and repair of the Premises.

(r) Financial Reports. If Guarantor (as defined in Exhibit H) and Tenant are not publicly traded at the time of Landlord's request, then. within 15 days after Landlord's request, Tenant will furnish Tenant's most recent audited financial statements (including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant's internally prepared financial statements. Tenant will discuss its financial statements with Landlord. Notwithstanding the foregoing to the contrary, following the occurrence of an Event of Default hereunder, Landlord shall have the right to require that Tenant and/or Guarantor provide their most recent audited financial statements within 15 days of Landlord's request: provided that (1) Tenant and Guarantor shall not be required to provide such financial statement more than one time per year, and (2) if Tenant's financial statements are not audited. the

LEASE AGREEMENT (INDUSTRIAL) - Page 19

audited financial statements of the Guarantor shall satisfy the requirements of this sentence. Landlord will not disclose any aspect of Tenant’s financial statements except (1) to Landlord’s Mortgagee or prospective mortgagees or purchasers of the Building, (2) in litigation between Landlord and Tenant, and/or (3) if required by court order. Tenant shall not be required to deliver the financial statements required under this Section 26(r) more than once in any 12-month period unless requested by Landlord’s Mortgagee or a prospective buyer or lender of the Building or an Event of Default occurs.

(s) Landlord’s Fees.Whenever Tenant requests Landlord to take any action not required of it hereunder or give any consent required or permitted under this Lease, Tenant will reimburse Landlord in an amount not to exceed $750 per request for Landlord’s reasonable, out-of-pocket costs payable to third parties and incurred by Landlord in reviewing the proposed action or consent, including reasonable attorneys’, engineers’ or architects’ fees, within 30 days after Landlord’s delivery to Tenant of a statement of such costs. Tenant will be obligated to make such reimbursement without regard to whether Landlord consents to any such proposed action.

(t) Telecommunications.Tenant and its telecommunications companies, including local exchange telecommunications companies and alternative accessvendor services companies, shall have no right of access to and within the Building, for the installation and operation of telecommunications systems, including voice, video, data, Internet, and any other services provided over wire, fiber optic, microwave, wireless, and any other transmission systems (“Telecommunications Services”), for part or all of Tenant’s telecommunications within the Building and from the Building to any other location without Landlord’s prior written consent. All providers of Telecommunications Services shall be required to comply with the rules and regulations of the Building, applicable Laws and Landlord’s policies and practices for the Building. Tenant acknowledges that except for Work to be performed by Landlord pursuant to Exhibit D or as otherwise required by this Lease. Landlord shall not be required to provide or arrange for any Telecommunications Services and that Landlord shall have no liability to any Tenant Party in connection with the installation, operation or maintenance of Telecommunications Services or any equipment or facilities relating thereto. Tenant. at its cost and for its own account, shall be solely responsible for obtaining all Telecommunications Services.

(u) Confidentiality. The parties acknowledge that the terms and conditions of this Lease are to remain confidential for the parties’ benefit, and may not be disclosed by either party to anyone, by any manner or means, directly or indirectly, without the other party’s prior written consent. Each party shall be liable for any disclosures made in violation of this Section by them or by any entity or individual to whom the terms of and conditions of this Lease were disclosed or made available by such disclosing party except as hereinafter provided. Either party’s consent to any disclosures shall not be deemed to be a waiver on the pan of such party of any prohibition against any future disclosure. This Section will not require a disclosee to maintain confidentiality in respect of information:

(1) which at the date of its disclosure to the disclosee is public knowledge or which subsequently becomes public knowledge other than by any act or failure to act on the part of the disclosee or its Affiliates or any of their officers or employees; or

(2) which is already known to the disclosee as evidenced by its written record and was not acquired directly or indirectly from the discloser; or

(3) which is at any time after the date of this Agreement lawfully acquired by the disclosee from any third party which is rightfully in possession of it and is not bound by an obligation of confidentiality or good faith in respect of it; or

(4) which is required to be disclosed by law or by a court of competent jurisdiction; or

(5) disclosed to any Affiliate or to any sub-contractor or employee working as a member of staff of such Affiliate or sub-contractor on a “need to know” basis for the purpose of this Agreement, in which event the party concerned shall be responsible for ensuring the maintenance of confidentiality by such Affiliate, sub-contractor or employee; or

(6) disclosed to any outside professional consultants or any bank or financial institution who may be giving financial advice to it or from whom it is seeking, or who is advising it in the obtaining of finance; or

(7) disclosed to any of its auditors, rating agencies, professional tax or legal advisers; or

(8) to the extent required by any governmental agency or the regulations of any recognized stock exchange; or

(9) disclosed to any real estate agent or broker representing such party, to any prospective assignee or subtenant or in connection with any Permitted Transfer.

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(v) Authority. Tenant (if a corporation. partnership or other business entity) hereby represents and warrants to Landlord that Tenant is a duly formed and existing entity qualified to do business in the state in which the Premises are located, that Tenant has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Tenant is authorized to do so. Landlord hereby represents and warrants to Tenant that Landlord is a duly formed and existing entity qualified to do business in the state in which the Premises are located, that Landlord has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Landlord is authorized to do so.

(w) Security Service. Tenant acknowledges and agrees that, while Landlord may (but shall not be obligated to) patrol the Building, Landlord is not providing any security services with respect to the Premises or Tenant's Off-Premises Equipment and that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any area where Tenant's Off-Premises Equipment is located or any other breach of security with respect to the Premises or Tenant's Off-Premises Equipment.

(x) List of Exhibits. All exhibits and attachments attached hereto are incorporated herein by this reference.

Exhibit A - Building Specifications

Exhibit B - Description of the Land

Exhibit C - Building Rules and Regulations

Exhibit D - Tenant Finish-Work

Exhibit E - Form of Confirmation of Commencement Date Letter

Exhibit F - Form of Tenant Estoppel Certificate

Exhibit G - Renewal Option

Exhibit H - Guaranty

Exhibit I - Letter of Credit Schedules

(y) Prohibited Persons and Transactions. Tenant represents and warrants to Landlord that Tenant is currently in compliance with and shall at all times during the Term (including any extension thereof) remain in compliance with the regulations of the OFAC of the Department of the Treasury (including those named on OFAC's Specially Designated Nationals and Blocked Persons List) and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism), or other governmental action relating thereto.

(z) Determination of Charles. Landlord and Tenant agree that each provision of this Lease for determining charges and amounts payable by Tenant (including provisions regarding Additional Rent and Tenant's Proportionate Share of Taxes and Electrical Costs) is commercially reasonable and, as to each such charge or amount, constitutes a statement of the amount of the charge or a method by which the charge is to be computed for purposes of Section 93.012 of the Texas Property Code.

27. Environmental Requirements.

(a) Prohibition entrust Hazardous Materials. Except for Hazardous Materials contained in products used by Tenant in de minimis quantities for ordinary cleaning and office purposes or any Hazardous Materials contained in any generator, battery or similar device used by Tenant to provide auxiliary or emergency power to the Premises (all of which must beused, stored and disposed of in strict compliance with all Environmental Requirement and which must be removed upon the expiration of the Term), Tenant shall not permit or cause any party to bring any Hazardous Materials upon the Premises or in the Project of transport, store, use, generate, manufacture, dispose, or release any Hazardous Materials on or from the Premises or the Project without Landlord's prior written consent. Tenant, at its sole cost and expense, shall operate its business in the Premises in strict compliance with all Environmental Requirements and all requirements of this Lease. Tenant shall complete and certify to disclosure statements as requested by Landlord from time to time relating to Tenant's transportation, storage, use, generation, manufacture, or release of Hazardous Materials on the Premises or in the Project, and Tenant shall promptly deliver to Landlord a copy of any notice of violation relating to the Premises or the Project of any Environmental Requirement.

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(b) Environmental Requirements. The term "Environmental Requirements" means all Laws regulating or relating to health, safety, or environmental conditions on, under, or about the Premises or the Project or the environment including the following; the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act: the Clean Air Act; the Clean Water Act; the Toxic Substances Control Act and all state and local counterparts thereto, and any common or civil law obligations including nuisance or trespass, and any other requirements of Section 14 and Exhibit C of this Lease. The term "Hazardous Materials" means and includes any substance, material, waste, pollutant, or contaminant that is or could be regulated under any Environmental Requirement or that may adversely affect human health or the environment, including any solid or hazardous waste, hazardous substance, asbestos, petroleum (including crude oil or any fraction thereof, natural gas, synthetic gas, polychlorinated biphenyls (PCBs), and radioactive material). For purposes of Environmental Requirements, to the extent authorized by law, Tenant is and shall be deemed to be the responsible party, including the "owner" and "operator" of Tenant's "facility" and the "owner” of all Hazardous Materials brought on the Premises or the Project by a Tenant Party and the wastes, by-products, or residues generated, resulting, or produced therefrom.

(c) Removal of Hazardous Materials. Tenant, at its sole cost and expense, shall remove all Hazardous Materials (except for Hazardous Materials contained in products used by Tenant in de minimis quantities for ordinary cleaning and office purposes or contained in any generator, battery or similar deviceused by Tenant to provide auxiliary or emergency power to the Premises) stored, disposed of or otherwise released by a Tenant Party onto or from the Premises or the Project, in a manner and to a level satisfactory to Landlord in its sole discretion, but in no event to a level and in a manner less than that which complies with all Environmental Requirements and does not limit any future uses of the Premises or the Project or require the recording of any deed restriction or notice regarding the Premises or the Project. Tenant shall perform such work at any time during the period of this Lease upon written request by Landlord or, in the absence of a specific request by Landlord, before Tenant's right to possession of the Premises terminates or expires. If Tenant fails to perform such work within the time period specified by Landlord or before Tenant's right to possession terminates or expires (whichever is earlier), Landlord may at its discretion, and without waiving any other remedy available under this Lease or at law or equity (including an action to compel Tenant to perform such work), perform such work at Tenant's cost. Tenant shall pay all costs incurred by Landlord in performing such work within thirty days after Landlord's request therefor. Such work performed by Landlord is on behalf of Tenant and Tenant remains the owner, generator, operator, transporter, and/or arranger of the Hazardous Materials for purposes of Environmental Requirements. Tenant agrees not to enter into any agreement with any person, including any governmental authority, regarding the removal of Hazardous Materials that have been disposed of or otherwise released onto or from the Premises or the Project without the written approval of the Landlord.

(d) Tenant's Indemnity. Tenant shall indemnify, defend, and hold Landlord harmless from and against any and all losses (including diminution in value of the Premises or the Project and less of rental income from the Project), liabilities (INCLUDING ANY STRICT LIABILITY), claims, demands, actions, suits, damages (including punitive damages), expenses (including remediation, removal, repair, corrective action, or cleanup expenses), and costs (including actual attorneys' fees, consultant fees or expert fees and including removal or management of any asbestos brought into the Premises or the Project or disturbed in breach of the requirements of this Section 27, regardless of whether such removal or management is required by Law) which are brought or recoverable against, or suffered or incurred by Landlord as a result of any release of Hazardous Materials which Tenant is obligated to remove as provided above or any other breach of the requirements under this Section 27 by a Tenant Party regardless of whether Tenant had knowledge of such noncompliance. The obligations of Tenant under this Section 27 shall survive any expiration or termination of this Lease.

(e)Inspections and Tests. Landlord shall have access to, and a right to perform inspections and tests of, the Premises to determine Tenant's compliance with Environmental Requirements, its obligations under this Section 27, or the environmental condition of the Premises. Access shall be granted to Landlord upon Landlord's prior notice to Tenant and at such times so as to minimize, so far as may be reasonable under the circumstances, any disturbance to Tenant's operations. Such inspections and tests shall be conducted at Landlord's expense, unless such inspections or tests reveal that Tenant has not complied with any Environmental Requirement, in which case Tenant shall reimburse Landlord for the reasonable cost of such inspection and tests. Landlord’s receipt of or satisfaction with any environmental assessment in no way waives any rights that Landlord holds against Tenant. Tenant shall promptly notify Landlord of any communication or report that Tenant makes to any governmental authority regarding any possible violation of Environmental Requirements or release or threat of release of any Hazardous Materials onto or from the Premises or the Project. Tenant shall, within five days of receipt thereof, provide Landlord with a copy of any documents or correspondence received from any governmental agency or other party relating to a possible violation of Environmental Requirements or claim or liability associated with the release or threat of release or any Hazardous Materials onto or from the Premises or the Project.

(f)Delivery of the Premises. Landlord shall deliver possession of the Leased Premises to Tenant free from any Hazardous Substance and shall conduct all of its activities on the Premises, Building and the Project in compliance with all Environmental Requirements.

LEASE AGREEMENT (INDUSTRIAL) - Page 22

(g)Limitation on Liability. Notwithstanding any provision contained herein to the contrary, Tenant shall not be liable, and shall have no obligation to indemnify Landlord, for any liabilities (including strict liabilities), penalties, demands, actions, costs and expenses (including without limitation legal fees), remediation and response costs, remediation plan preparation costs and any continuing monitoring or closure costs, incurred or suffered which arise from: (i) any Hazardous Materials located in, on or about the Project prior to the Commencement Date; or (ii) any Hazardous Substances not directly caused by Tenant or any Tenant Party. Prior to the Commencement Date, Landlord shall deliver to Tenant a copy of a currently dated environmental report reflecting the environmental condition of the Project.

28.Parking. Tenant shall have the exclusive right to use all parking spaces associated with the Building. Landlord reserves the right to initiate steps to control the parking utilization through gates, access cards, hang-tags or other means as appropriate.

29.Other Provisions.

(a)Guaranty. As additional consideration for Landlord to enter into this Lease. Tenant shall cause Guarantor to execute the guaranty, attached hereto as Exhibit H and Tenant shall deliver same to Landlord contemporaneously with Tenant's execution hereof. Tenant's failure to deliver such guaranty as required in the preceding sentence shall be an automatic Event of Default under this Lease, with no notice being necessary to Tenant, and Landlord shall be entitled to exercise any and all rights and remedies available to it hereunder, as well as at law or in equity. Additionally, if Tenant fails to deliver such guaranty, Landlord, notwithstanding anything to the contrary contained in this Lease, (1) shall not be required to perform any tenant improvement work in the Premises, (2) shall not be required to make any reimbursements or allowances in connection with any tenant improvement work, (3) shall not be required to pay any brokerage commissions to the broker or brokers representing Tenant in connection with this Lease (and Tenant shall indemnify Landlord against all costs, expenses, attorneys' fees, and other liability for commissions or other compensation claimed by any broker or agent claiming the same by. through. or under Tenant), (4) may terminate this Lease by providing Tenant five days advance written notice thereof, and (5) shall not be required to honor any renewal rights set forth in this Lease, if any.

(b) Termination Right. In the event that Landlord fails to close on any construction financing for the construction of the Premises, or such construction has not commenced as of August 1, 2009 (which date shall be extended day-for-day in the event of Tenant's failure to deliver to Landlord a copy of this Lease executed by Tenant on or before February 2, 2009). Tenant shall have the right to terminate this Lease with thirty (30) days prior written notice to Landlord; provided, however, that in the event that Landlord notifies Tenant within such thirty (30) day period that Landlord has closed such financing and commenced construction of the Premises, such termination shall be deemed to be null and void, and this Lease shall continue in full force and effect.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

LEASE AGREEMENT (INDUSTRIAL) - Page 23

(c) Waiver of Consumer Rights. Tenant hereby waives its rights under the Deceptive Trade Practices-Consumer Protection Act, Section 17.41 et seq., Business & Commerce Code, a law that gives consumers special rights and protections. After consultation with an attorney of Tenant's own selection, Tenant voluntarily consents to this waiver.

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED COMMERCIAL PURPOSE, AND TENANT’S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT. WITHOUT ABATEMENT, DEMAND, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

This Lease is executed on the respective dates set forth below, but for reference purposes, this Lease shall be dated as of the date first above written. If the execution date is left blank, this Lease shall be deemed executed as of the date first written above.

LANDLORD:	AR INDUSTRIAL NO. I, LTD.,
	a Texas limited partnership
	By:	29BCO, Inc.,
		a Texas corporation
		General Partner
	By:	/s/ Joel M. Overton, Jr.
	Name:	Joel M. Overton, Jr.
	Title:	Senior Vice President
	Execution Date:	2/10/09
TENANT:	ORTHOFIX, INC.,
	A Minnesota corporation
	By:	/s/ Michael P. Simpson
	Name:	Michael P. Simpson
	Title:	President Orthofix Inc.
	Execution Date:	2/10/2009

LEASE AGREEMENT (INDUSTRIAL) - Page 24

EX-10

Exhibit 10.5

FIRST AMENDMENT TO LEASE AGREEMENT

This FIRST AMENDMENT TO LEASE AGREEMENT (this "Amendment") is

executed and entered into effective as of April 13, 2009, by and between AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership ("Landlord") and ORTHOFIX, INC., a Texas corporation ("Tenant").

RECITALS:

A.Landlord and Tenant have previously entered into that certain Lease Agreement dated effective as of February 10, 2009 (as may be amended from time to time, the "Lease"), covering approximately 144,624 rentable square feet in a building to be constructed by Landlord located in Lewisville, Texas (the "Premises").

B.Landlord and Tenant desire to amend the Lease subject to the terms and conditions more fully described below.

AGREEMENTS:

For valuable consideration, whose receipt and sufficiency are acknowledged, Landlord and Tenant agree as follows:

1.Definitions. All terms not otherwise defined in this Amendment shall have the same meaning as set forth in the Lease.

2.Tender of Possession. Section 3 of the Lease is hereby amended to provide that the Estimated Delivery Date shall be February 15, 2010. In addition, the April 30, 2010 deadline with respect to rental abatement obligations is hereby extended for an additional 38 days, such that the deadline will now be June 7, 2010. In addition, the November 1, 2010 deadline with respect to Tenant's right to terminate the Lease is hereby extended for an additional 38 days, such that the deadline will now be December 9, 2010.

3.Ratification. Where any terms or conditions contained herein conflict with any terms and conditions contained in the Lease, the terms and conditions contained herein shall control. Otherwise, the Lease is ratified and affirmed, and all terms and conditions therein, as amended and modified hereby, shall remain in full force and effect. This Amendment shall be binding upon Landlord and Tenant, and their respective successors and assigns.

4.Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

FIRSTAMENDMENTTO LEASE AGREEMENT

Page 1

Exhibit 10.5

Executed as of the date first written above.

LANDLORD:
AR INDUSTRIAL NO. 1, LTD.,
A Texas limited partnership
By:	29BCO, Inc.
	a Texas corporation
	General Partner
	By: /s/ Joel M. Overton, Jr.
	Name: Joel M. Overton, Jr.
	Title: Senior Vice President
TENANT:
ORTHOFIX, INC.
a Minnesota corporation
	By: /s/ Michael P. Simpson
	Name: Michael P. Simpson
	Title: President

FIRST AMENDMENT TO LEASE AGREEMENT

Signature Page

EX-10

Exhibit 10.6

SECOND AMENDMENT TO LEASE AGREEMENT

This SECOND AMENDMENT TO LEASE AGREEMENT (this "Amendment")

is executed and entered into effective as of May 12, 2010, by and between AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership ("Landlord") and ORTHOFIX, INC., a Texas corporation ("Tenant").

RECITALS:

A.Landlord and Tenant have previously entered into that certain Lease Agreement dated effective as of February 10, 2009, as amended by that certain First Amendment to Lease Agreement dated effective as of April 13, 2009 (as so amended, the "Lease"), covering approximately 144,624 rentable square feet in a building to be constructed by Landlord located in Lewisville, Texas (the "Premises").

B.Landlord and Tenant have made certain agreements relating to the installation of carpet squares within a portion of the Premises, as part of the Tenant Finish Work described in Exhibit D to the Lease, and Landlord and Tenant desire to amend the Lease to reflect such agreements as more fully described below.

AGREEMENTS:

For valuable consideration, whose receipt and sufficiency are acknowledged, Landlord and Tenant agree as follows:

1.Definitions. All terms not otherwise defined in this Amendment shall have the same meaning as set forth in the Lease.

2.Installation of Carpet Squares Using Alternative Adhesive. Landlord and Tenant have agreed to proceed with the immediate installation of carpet squares manufactured by Mohawk as described in the Working Drawing and/or plans and specifications previously agreed to by Landlord and Tenant in approximately 90,000 square feet of the Premises, but have determined to utilize for such installation the alternative adhesive known as "Mapei Ultrabond ECO 810", as described on Exhibit A attached hereto (the "Alternative Adhesive"), rather than the adhesive suggested by Mohawk. Notwithstanding anything in the Lease to the contrary, Landlord hereby agrees that, if following such installation (i) the Tenant experiences a failure of the Alternative Adhesive which results in one or more of the carpet squares becoming detached (in whole or in part) from the slab, (ii) such failure and detachment is not due to any misuse, abuse or neglect of Tenant or any Tenant Party, and (iii) Mapei refuses to honor the warranty for the Alternative Adhesive described in Exhibit A attached hereto and repair such detachment, based upon the moisture level within the concrete slab in the Premises a:t the time of installation exceeding the recommended limits and/or specifications for the Alternative Adhesive described on said Exhibit A, then Landlord, at its sole cost and expense, will make the necessary repairs to the carpet squares affected by such failure of the Alternative Adhesive (and, to the extent the costs associated therewith would have been covered by the Mapei warranty, Landlord will move any furniture which must be moved to complete such repairs), such obligation of Landlord to expire upon the date that

SECOND AMENDMENT TO LEASE AGREEMENT Page I

Exhibit 10.6

Exhibit 10.6

the Mapei 5-year performance warranty described in said Exhibit A expires. Additionally, in connection with such repairs, to the extent and only to the extent, the presence of such mold is determined to have been caused solely by the moisture level in the concrete slab prior to the installation of the carpet squares, and not by some other condition or factor, nor by any misuse, abuse, neglect or other action of Tenant or any Tenant Party, Landlord, at its sole cost and expense, will remove and remediate any mold found to be existing between the concrete slab and any such repaired carpet squares. As a condition to Landlord's obligations under this paragraph Tenant agrees to cause the Tenant Finish Work contractor to commence the installation of the carpet squares and other floor coverings within the Premises within one (1) Business Day after the date of this Amendment, and to continuously and diligently prosecute such installation and complete the same as expeditiously as possible, such that all Work can be completed, Substantial Completion will occur and the Certificate of Occupancy for the Premises can be obtained no later than June I, 2010.

3.Additional Cost to Install Koester Sealer in Cadaver Lab. Additionally, Landlord, at its sole cost and expense, will pay for the cost to install the sealer known as "Koester VAPl 2000" in the Cadaver Lab and Receiving Area pursuant to the Change Order attached as Exhibit B hereto.

4.Ratification. Where any terms or conditions contained herein conflict with any terms and conditions contained in the Lease, the terms and conditions contained herein shall control. Otherwise, the Lease is ratified and affirmed, and all terms and conditions therein, as amended and modified hereby, shall remain in full force and effect. This Amendment shall be binding upon Landlord and Tenant, and their respective successors and assigns.

5.Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

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SECOND AMENDMENT TO LEASE AGREEMENT

Page 2

Exhibit 10.6

Executed as of the date first written above.

LANDLORD:

AR INDUSTRIAL NO. 1, LTD.,

a Texas limited partnership

By: 29BCOt Inc.,

a Texas corporation General Partner

By: /s/ Joel M. Overton, Jr.

Name: Joel M. Overton, Jr.

Title: Senior Vice President

TENANT:

ORTHOFIX, INC.,

a Minnesota corporation

By: /s/ Brian C. Ranft

Name: Brian C. Ranft

Title: Sr. V.P. Operations

SECOND AMENDMENT TO LEASE AGREEMENT

Page 3

EX-10

Exhibit 10.7

THIRD AMENDMENT TO LEASE AGREEMENT

This THIRD AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is executed as of December 21, 2017, by and between AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership (“Landlord”), and ORTHOFIX, INC., a Minnesota corporation (“Tenant”).

RECITALS:

A.Landlord and Tenant have previously entered into that certain Lease Agreement dated effective as of February 10, 2009 covering approximately 144,624 rentable square feet in the building located at 3451 Plano Parkway, Lewisville, Texas 75056 (the “Original Lease”). The Original Lease, as amended by that certain First Amendment to Lease Agreement dated effective as of April 13, 2009, and by that certain Second Amendment to Lease Agreement dated effective as of May 12, 2010, is referred to herein as the “Lease”.

B.Tenant desires to extend the Term for a period of 123 months, and Landlord has agreed to such extension on the terms and conditions contained herein.

C.Capitalized terms used herein but not defined shall be given the meanings assigned to them in the OriginalLease.

AGREEMENTS:

For valuable consideration, whose receipt and sufficiency are acknowledged, Landlord and Tenant agree as follows:

Section 1.Extension of Term. The Term of the Lease is hereby extended such that it expires at 11:59 p.m., Lewisville, Texas, time, on August 31, 2030 (rather than May 31, 2020), subject to Tenant’s lease renewal options.

Section 2.Basic Rent. Beginning June 1, 2020, the monthly Basic Rent shall be the following amounts for the following periods of time:

Time Period	Annual Basic Rent Rate Per Rentable Square Foot	Monthly Basic Rent
June 1, 2020 – August 31, 2021	$9.70	$116,904.40
September 1, 2021 – August 31, 2022	$9.89	$119,194.28
September 1, 2022 – August 31, 2023	$10.09	$121,604.68
September 1, 2023 – August 31, 2024	$10.29	$124,015.08
September 1, 2024 – August 31, 2025	$10.50	$126,546.00
September 1, 2025 – August 31, 2026	$10.71	$129,076.92
September 1, 2026 – August 31, 2027	$10.92	$131,607.84
September 1, 2027 – August 31, 2028	$11.14	$134,259.28
September 1, 2028 – August 31, 2029	$11.36	$136,910.72
September 1, 2029 – August 31, 2030	$11.59	$139,682.68

Page 1

Exhibit 10.7

Section 3.Conditional Abatement of Basic Rent. Basic Rent shall be conditionally abated from June 1, 2020 through August 31, 2020. Commencing on September 1, 2020, Tenant shall resume Basic Rent payments as otherwise provided in the Lease. Notwithstanding such abatement of Basic Rent (a) all other sums due under the Lease, including Additional Rent and Tenant’s Proportionate Share of Taxes and Insurance Costs, shall be payable as provided in the Lease, and (b) any increases in Basic Rent set forth in the Lease shall occur on the dates scheduled therefor. If at any time during the extended Term described in Section 1 of this Amendment an Event of Default by Tenant occurs for which Landlord dispossesses Tenant from the Premises (or otherwise notifies Tenant that Tenant’s right to possess the Premises is terminated) or terminates the Lease (each being referred to herein as a “Dispossession/Termination Action”), then Tenant shall promptly pay to Landlord, in addition to all other amounts due to Landlord under the Lease, the unamortized portion of the amount of Basic Rent abated under this Section 3 (amortized straight-line in 120 increments, beginning on September 30, 2021, and continuing to reduce by 1/120th on the last day of each calendar month thereafter unless and until such Dispossession/Termination Action by Landlord occurs), and no further abatement of Basic Rent will occur under this Section 3.

Section 4.Tenant’s Notice Address. The “Tenant’s Address” set forth in the Basic Lease Information section at the front of the Original Lease is hereby amended to reflect the following address for notices to Tenant under the Lease (i.e., Tenant’s Address):

Orthofix, Inc.

Attn: Chief Financial Officer

3451 Plano Parkway

Lewisville, TX 75056

Telephone: 214-937-2000

Section 5.Landlord’s Notice Address. The “Landlord’s Address” set forth in the Basic Lease Information section at the front of the Original Lease is hereby amended to reflect the following address for notices to Landlord under the Lease (i.e., Landlord’s Address):

AR Industrial No. 1, Ltd.

Attn: George Billingsley

1722 Routh Street, Suite 770

Dallas, TX 75201

Telephone: 214-270-1001

Section 6.Condition of Premises. Except as described in Exhibit A, Tenant hereby accepts the Premises in their “AS-IS” condition, and acknowledges that (A) Landlord has no obligation for any further finish-out allowance, and (B) Landlord has fulfilled all of its material initial construction obligations under the Lease. Except as set forth in this Amendment, Landlord shall have no obligation for providing to Tenant any other tenant inducement.

Section 7.Renewal Option. The first sentence of Exhibit G to the Lease is hereby deleted in its entirety and replaced with the following (it being agreed that the terms of such Exhibit G, as amended below, provide lease renewal options covering the 15-year period commencing September 1, 2030):

“Provided no Event of Default exists and Tenant is occupying not less than 75% of the Premises at the time of such election, Tenant may renew this Lease for (a) one additional period of five

Page 2

Exhibit 10.7

years with two further options to renew this Lease for additional periods of five years each, (b) one additional period of ten years with the option to renew this Lease for an additional period of five years, or (c) one additional period of 15 years, in each case by delivering written notice of the exercise of any such renewal option to Landlord not earlier than 12 months nor later than nine months before the then-scheduled expiration of the Term, it being agreed that Tenant’s initial election notice shall indicate whether Tenant elects to proceed under subsection (a), (b) or (c) of this sentence.”

Section 8.Tenant's Cancellation Right. Provided that Tenant has not expanded the Premises, and provided no Event of Default exists when Tenant delivers the cancellation notice or on the cancellation date, Tenant may cancel the Lease effective as of 11:59 p.m. on May 31, 2027 by delivering to Landlord not later than August 31, 2026: (a) written notice thereof, and (b) 50% of the Cancellation Fee (defined below). The “Cancellation Fee” shall equal the sum of (1) fivemonths of Basic Rent and monthly escrow amounts for Tenant’s Proportionate Share of Operating Costs, Taxes and Insurance Costs (with such monthly Basic Rent and monthly escrow amounts calculated at 102% of the monthly amounts payable for such items as of July 1, 2026), and (2) the amount that would be outstanding on a hypothetical loan on the cancellation date assuming (A) an original principal balance equal to $691,093.02, (B) an interest rate of 8% per annum, (C) the loan is payable in equal monthly installments of principal and interest, beginning on June 1, 2020 and ending on August 1, 2030, and (D) all payments were timely made before the cancellation date. The balance of the Cancellation Fee shall be paid by Tenant to Landlord not later than May 1, 2027. Landlord agrees to deliver to Tenant Landlord’s calculation of the Cancellation Fee (showing such calculation in reasonable detail) within ten days following Tenant’s request therefor. As a condition to the effectiveness of Tenant’s cancellation right, Tenant shall pay to Landlord prior to the cancellation date any past-due amounts then outstanding under the Lease, and Landlord agrees to promptly notify Tenant of any such amounts upon request from time to time. If Tenant fails timely to deliver either portion of the Cancellation Fee payment or the cancellation notice or is otherwise unable to exercise this cancellation option, then Tenant’s right to cancel the Lease under this Section shall expire; time is of the essence with respect thereto.

Section 9.Assignment and Subletting. Section 11(f) of the Lease is hereby deleted in its entirety and replaced with the following: “Intentionally Deleted.”

Section 10.Landlord’s Mortgagee’s Protection Provisions. Section 13(d)(4)(ii) of the Lease is hereby corrected to read in its entirety as follows: “any termination of this Lease except a termination made by Tenant pursuant to the express terms of this Lease”.

Section 11.Parking Expansion. Promptly following (and in any event within 180 days after, subject to force majeure and/or delays caused by the permitting process with local authorities having jurisdiction over necessary permits) any written request from Tenant to Landlord which is delivered after the execution date of this Amendment and before January 1, 2021, requesting the expansion of parking facilities contemplated by Exhibit A attached hereto, Landlord shall expand the parking facilities associated with the Building according to the terms of Exhibit A attached hereto. The intent of this paragraph is provide Tenant with the option to cause Landlord to construct such parking facilities (at Tenant’s cost, as set forth in greater detail in Exhibit A), which option must be exercised, if at all, by Tenant delivering such notice to Landlord after the execution date of this Amendment and before January 1, 2021.

Section 12.Agreement Regarding Cafeteria Construction. Although Tenant has no immediate plans for any substantial improvements to be constructed at the Project (other than the parking facilities expansion by Landlord which is contemplated by Exhibit A of this Amendment), Landlord

Page 3

Exhibit 10.7

agrees that Tenant may in the future elect to construct (or cause to be constructed) a corporate cafeteria within the Premises (the "Cafeteria Improvement Project"). The plans and specifications for such construction shall remain subject to Landlord's approval as required in Section 8 of the Original Lease (although, for clarity, Landlord shall not reject the concept of a corporate cafeteria as part of such approval process). If Tenant elects to pursue the Cafeteria Improvement Project, the Permitted Use provision of the Lease shall be modified to permit such additional use. Upon Tenant’s request, Landlord shall assist Tenant in managing any substantial improvements desired by Tenant in the future, including, if requested by Tenant, entering into and managing the contract with the general contractor for such improvements (in which case any such project will be bid out to a minimum of three qualified general contractors, and the ultimate selection of the general contractor shall be made by the Tenant, and Tenant would fund such work through Landlord, pursuant to regular draw schedules). The Landlord’s construction management fee for such assistance shall be limited to two percent (2%) based on hard construction costs.

Section 13.Operating Costs Cap. For purposes of calculating Additional Rent under Section 4(b) of the Lease, the maximum increase in the amount of Controllable Operating Costs (defined below) that may be included in calculating such Additional Rent for each calendar year after 2017 shall be limited to 8% per calendar year on a cumulative, compounded basis; for example, the maximum amount of Controllable Operating Costs that may be included in the calculation of such Additional Rent for each calendar year after 2017 shall equal the product of the 2017 Controllable Operating Costs and the following percentages for the following calendar years: 108% for 2018; 116.64% for 2019; etc. However, any increases in Operating Costs not recovered by Landlord due to the foregoing limitation shall be carried forward into succeeding calendar years during the extended Term (subject to the foregoing limitation) to the extent necessary until fully recouped by Landlord. “Controllable Operating Costs” means all Operating Costs other than costs for taxes, insurance, utilities, and snow/ice removal costs, and (to the extent not applicable to the Building’s Structure) costs incurred to comply with governmental requirements.

Section 14.Responsibilities for Certain Repairs and Replacements.

(a)Notwithstanding the presence of the phrase “all areas, improvements and systems exclusively serving the Premises” in the second sentence of Section 8(b) of the Lease, Landlord and Tenant acknowledge and agree that Landlord (rather than Tenant) is responsible for repairing and maintaining, in a manner consistent with the operation of a first-class warehouse building, the parking areas and driveways (subject to Tenant’s Parking Lot Signs rights set forth below in this Amendment), landscaping, and landscape irrigation systems at the Project, the costs of which repairs and maintenance may be included by Landlord in Operating Costs.

(b)Notwithstanding anything to the contrary set forth in Section 8(b) of the Lease or elsewhere, throughout the Term of the Lease (including any extensions thereof from time to time), Landlord shall be solely responsible, at Landlord’s sole costs and expenses (none of which costs or expenses may be included in Operating Costs or otherwise passed through to Tenant) for the prompt completion of all needed major repairs and replacements of the Building’s Structure (as defined in Section 1 of the Original Lease), and the prompt repair of any resulting damage due to Landlord’s failure to timely make such repairs and replacements. For the purposes of this Section, “major repairs” means any repairs (or groups of related repairs, e.g., patching multiple areas of the roof) costing in excess of $2,000 per occurrence or in excess of $10,000 in the aggregate in any 12-month period.

Page 4

Exhibit 10.7

Section 15.Right of First Refusal. Subject to the terms of Exhibit B attached hereto, Tenant shall have a right of first refusal as to the approximately 12.8 acres of land that is immediately south of the Land described on Exhibit B of the Original Lease.

Section 16.Partial Taking – Tenant’s Rights.

(a)Section 15(b)(i)(1) of the Original Lease is hereby deleted in its entirety and replaced with the following:

“contain less than 95% of the easily-accessible, full-sized automobile parking spaces present prior to the Taking in the parking area serving the Building (or less than 100% of the easily-accessible loading dock truck wells serving the Building prior to the Taking), or”

(b)Section 15(b) of the Original Lease is hereby amended by adding the following language at the end thereof:

"Tenant may not exercise its termination rights under Section 15(b) of the Lease arising from Takings under Section 15(b)(i) of the Lease unless (1) Tenant delivers written notice to Landlord of its intention to terminate the Lease (the “Notice of Intent to Terminate”) within 30 days after the Taking, and (2) within such 30-day period, Landlord fails to provide Tenant with additional parking capacity that would effectively restore the parking capacity to a level that would make Tenant's termination pursuant to Section 15(b)(i) unavailable ("Curative Spaces"). Landlord shall use all reasonable efforts to provide the Curative Spaces as soon as reasonably practicable following Tenant’s written notification, and if Curative Spaces cannot reasonably be provided within such 30-day period but Landlord commences pursuit or construction of Curative Spaces within such 30-day period and thereafter diligently pursues such effort to completion and provides Tenant with reasonable notice of Landlord’s efforts at least weekly, then Tenant may not exercise such termination right until the date which is 90 days after the date of Tenant’s delivery of the Notice of Intent to Terminate. If Landlord has not provided Tenant Curative Spaces within such 90-day period, Tenant may terminate the Lease by delivering written notice to Landlord within ten business days following the expiration of such 90-day period and prior to the date upon which Landlord makes Curative Spaces available to Tenant."

Section 17.Taxes.

(a)The sentence in Section 4(b)(3) of the Lease ending “. . . any such “margin tax” shall be calculated as if the Building is Landlord’s only asset” is hereby expanded by adding the following to the end of such sentence:

“. . . and shall not be based upon any revenue from sales of real property or other extraordinary transactions consummated by Landlord.”

(b)The sentence in Section 4(b)(3) of the Lease beginning “Notwithstanding the foregoing, with respect to ad valorem taxes . . .” is hereby deleted in its entirety and replaced with the following:

“Notwithstanding the foregoing, with respect to ad valorem taxes attributable to the Premises for all periods during the Term, (i) Landlord shall furnish written notice to Tenant whether Landlord intends to contest such taxes for the applicable year at least fifteen (15) days prior to the deadline date a notice of contest must be furnished to the taxing authorities, and (ii) if and only if (a) Landlord furnishes notice ("Landlord's Notice") to Tenant that Landlord is not contesting the

Page 5

Exhibit 10.7

taxes for a particular year, (b) no Event of Default is then in existence hereunder, and (c) Tenant continues to lease one hundred percent (100%) of the rentable square feet of the Premises, then Tenant shall have the right to cause Landlord to contest, by appropriate legal proceedings or other lawful means, any increase in assessed value of the Project by furnishing written notice (the "Tax Contest Notice") to Landlord on or before the date which is five (5) days prior to the deadline date a notice of contest must be furnished to the applicable taxing authorities (it being agreed that any such tax contest must be diligently pursued by Landlord, using good faith, reasonable efforts to reduce such taxes as much as practicable).”

Section 18.Return of Security Deposit. Contemporaneously with the execution of this Amendment, Landlord shall return the full amount of the Security Deposit (in the amount of $128,112.76) to Tenant, and no security deposit shall be required from Tenant in the future under the Lease. Those provisions of the Lease that require Tenant to post or restore the Security Deposit are hereby amended mutatis mutandis to remove such requirements.

Section 19.Release of Guarantor. Notwithstanding anything to the contrary set forth in the Guaranty included as Exhibit H of the Original Lease or elsewhere, from and after the execution of this Amendment, Guarantor shall have no liability under the Lease for Tenant’s obligations first accruing after the execution of this Amendment.

Section 20.Signage. Landlord will install (or Tenant may install), at Tenant’s expense, monument signs (the “Signs”) displaying Tenant’s name at the main entrance to the parking lot on Tittle Drive and on Plano Parkway, pursuant to renderings and specifications to be approved in advance by Landlord, which approval shall not be unreasonably withheld. After the earlier of the end of the Term (as extended from time to time) or the date Tenant’s right to possess the Premises has been terminated, Tenant shall remove the Signs, repair all damage caused thereby, and restore the Project grounds on which the Signs were located to their condition before the installation of the Signs within ten days after Landlord’s request therefor. If Tenant fails to timely do so, Landlord may, without compensation to Tenant and at Tenant’s expense, remove the Signs, perform the related restoration and repair work and dispose of the Signs in any manner Landlord deems appropriate. Additionally, Tenant may install customary and ordinary parking lot signage in Tenant’s parking lot (including, but not limited to, towing signs and directional signs) (the “Parking Lot Signs”) and customary and ordinary building entrance signage at the entrances to the Building (including, but not limited to, operating hours, emergency access information, and signs addressing firearms) (the “Building Entrance Signs”), subject to Landlord’s written consent, which shall not be unreasonably withheld. The rights granted to Tenant under this Section are personal to Tenant and its Permitted Transferees (as defined in Section 11(h) of the Original Lease), may not be assigned to any party other than a Permitted Transferee, and may be revoked by Landlord if Tenant (and/or a Permitted Transferee) ceases to lease at least 100,000 rentable square feet in the Building. For all purposes under the Lease, the Signs, the Building Entrance Signs and the Parking Lot Signs shall be deemed to be included within the definition of Tenant’s Off-Premises Equipment.

Section 21.Holding Over. The last sentence in Section 23 of the Lease is hereby expanded by inserting the phrase “(or, if later, upon the expiration of the Permitted Holdover Period)” after the phrase “upon the termination or expiration of this Lease” in such sentence.

Section 22.Limitation of Landlord’s Liability.Section 26(b) of the Lease is hereby amended by replacing the phrase “the interest of Landlord in the Building” in such sentence with the phrase “the interest of Landlord in the Project”.

Page 6

Exhibit 10.7

Section 23.Tenant’s Use of Hazardous Materials for Business Purposes. Notwithstanding anything to the contrary set forth in Section 27 of the Lease or elsewhere, Tenant is entitled to use, store and dispose of Hazardous Materials at the Project in ordinary and reasonable types and quantities for the business purposes contemplated by the Permitted Use provisions of the Lease (all of which must be used, stored and disposed of in compliance with all Environmental Requirements and which must be removed upon the expiration of the Term, as extended from time to time).

Section 24.Brokerage. Landlord and Tenant each warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Amendment other than CBRE, whose commission shall be paid by Landlord pursuant to a separate written agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys' fees, and other liability for commissions or other compensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party.

Section 25.Ratification. Landlord and Tenant each hereby ratifies and confirms its respective obligations under the Lease, and represents and warrants to the other party that it has no defenses thereto. Landlord confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) to the best of Landlord’s actual knowledge, Landlord has no claims, counterclaims, set-offs or currently-exercisable defenses against Tenant arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (x) the Lease is and remains in good standing and in full force and effect, (y) to the best of Tenant’s actual knowledge, Tenant has no claims, counterclaims, set-offs or currently-exercisable defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (z) except as expressly provided for in this Amendment, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.

Section 26.Binding Effect; Governing Law. As modified hereby, the Lease shall remain in full effect and this Amendment shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall prevail. This Amendment shall be governed by the law of the State in which the Premises are located.

Section 27.Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

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Page 7

Exhibit 10.7

Executed as of the date first written above.

LANDLORD: AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership

By: 29BCO, Inc., a Texas corporation

General Partner

By: /s/ George Billingsly

Name: George Billingsly

Title: Vice President

Date signed:

TENANT: ORTHOFIX, INC., a Minnesota corporation

By: /s/ Doug Rice

Name: Doug Rice

Title: Chief Financial Officer

Date signed: December 20, 2017

Page 8

Exhibit 10.7

LENDER’S CONSENT

American National Insurance Company (“Lender”), as the current lender holding a mortgage lien on, and deed of trust encumbering, the Project (which contains the Premises leased to Tenant under the Lease), signs below for the sole purpose of acknowledging its consent and approval of the foregoing Third Amendment to Lease Agreement. The foregoing Lender consent and approval shall be binding upon Lender’s successors and assigns.

LENDER: AMERICAN NATIONAL INSURANCE COMPANY,

a Texas insurance company

By: /s/ Scott F. Brast

Name: Scott F. Brast

Title: Senior Vice President

Date of Signature: December 29, 2017

Page 9

EX-10

Exhibit 10.8

FOURTH AMENDMENT TO LEASE AGREEMENT

This FOURTH AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is executed as of March 13, 2018, by and between AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership (“Landlord”), and ORTHOFIX, INC., a Minnesota corporation (“Tenant”).

RECITALS:

A.Landlord and Tenant have previously entered into that certain Lease Agreement dated effective as of February 10, 2009 covering approximately 144,624 rentable square feet in the building located at 3451 Plano Parkway, Lewisville, Texas 75056 (the “Original Lease”). The Original Lease, as amended by that certain First Amendment to Lease Agreement dated effective as of April 13, 2009, by that certain Second Amendment to Lease Agreement dated effective as of May 12, 2010, and by that certain Third Amendment to Lease Agreement dated effective as of December 21, 2017 (the “Third Amendment”), is referred to herein as the “Lease”.

B.Tenant was granted a right to expand the parking serving the Premises, on the terms provided in Section 11 and Exhibits A and A-1 to the Third Amendment (referred to therein and herein as the “Parking Expansion”).

C.In order to ensure that sufficient space exists within the Land to accommodate the Parking Expansion, Landlord has agreed to expand the “Land” to include additional area to the south of the Land parcel described on Exhibit B to the Original Lease.

D.Also in connection with the Third Amendment, Landlord and Tenant executed a Right of First Refusal agreement, which was recorded on January 3, 2018 at Instrument Number 1042-20180103000377 of the Official Records of Denton County, Texas (the “ROFR”).

E.Landlord and Tenant have agreed to record an Amended and Restated Right of First Refusal agreement to ensure that the land described therein does not overlap with the Land (as modified by this Amendment).

F.Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease.

AGREEMENTS:

For valuable consideration, whose receipt and sufficiency are acknowledged, Landlord and Tenant agree as follows:

Section 1.Description of the Land. The real property description set forth for the Land on Exhibit B to the Original Lease is hereby deleted in its entirety and replaced with the real property description set forth on Exhibit A attached hereto (which shall be deemed to be the new property description for the “Land” under the Lease). Tenant agrees that if Tenant does not timely exercise its option for the Parking Expansion, then upon request therefor from Landlord, Tenant will execute an amendment to the Lease restoring the definition of “Land” to the legal description contained in the Original Lease.

Section 2.Amended and Restated Right of First Refusal. The Amended and Restated Right of First Refusal attached hereto as Exhibit B shall replace the ROFR, and shall be executed by Landlord

Page 1

Exhibit 10.8

and Tenant contemporaneously with the execution of this Amendment and promptly recorded by Landlord in the Official Records of Denton County, Texas.

Section 3.Ratification. Landlord and Tenant each hereby ratifies and confirms its respective obligations under the Lease, and represents and warrants to the other party that it has no defenses thereto. Landlord confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) to the best of Landlord’s actual knowledge, Landlord has no claims, counterclaims, set-offs or currently-exercisable defenses against Tenant arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (x) the Lease is and remains in good standing and in full force and effect, (y) to the best of Tenant’s actual knowledge, Tenant has no claims, counterclaims, set-offs or currently-exercisable defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (z) except as expressly provided for in this Amendment, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.

Section 4.Binding Effect; Governing Law. As modified hereby, the Lease shall remain in full effect and this Amendment shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall prevail. This Amendment shall be governed by the law of the State in which the Premises are located.

Section 5.Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

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Page 2

Exhibit 10.8

Executed as of the date first written above.

LANDLORD: AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership

By: 29BCO, Inc., a Texas corporation

General Partner

By: /s/ Kenneth D. Mabry

Name: Kenneth D. Mabry

Title: Sr. Vice President

Date signed: 3/15/18

TENANT: ORTHOFIX, INC., a Minnesota corporation

By: /s/ Doug Rice

Name: Doug Rice

Title: Chief Financial Officer

Date signed: March 13, 2018

Page 3

EX-10

Exhibit 10.9

FIFTH AMENDMENT TO LEASE AGREEMENT

This Fifth Amendment to Lease Agreement (this “Amendment”) is executed as of January 3, 2019 (the “Effective Date”), between AR INDUSTRIAL NO. 1, LTD., a Texas limited partnership (“Landlord”), and ORTHOFIX INC., a Delaware corporation (formerly a Minnesota corporation) (“Tenant”), for the purpose of amending the Lease (as defined below) between Landlord and Tenant. That certain Lease Agreement between Landlord and Tenant dated February 10, 2009 (the “Original Lease”), as amended by that First Amendment to Lease Agreement dated April 13, 2009, by that Second Amendment to Lease Agreement dated May 12, 2010, by that Third Amendment to Lease Agreement dated December 21, 2017 (the "Third Amendment"), and by that Fourth Amendment to Lease Agreement dated March 13, 2018, is referred to herein as the “Lease”.Capitalized terms used herein but not defined herein shall be given the meanings assigned to them in the Original Lease.

RECITALS:

Pursuant to the terms of the Lease, Tenant is currently leasing approximately 144,624 square feet in the Building located at 3451 Plano Parkway, Lewisville, Texas 75056. Tenant has requested one additional five-year renewal option, and Landlord has agreed to such request on the terms and conditions contained herein.

AGREEMENTS:

For valuable consideration, whose receipt and sufficiency are acknowledged, Landlord and Tenant agree as follows:

Section 1.Renewal Option. The first sentence of Exhibit G to the Original Lease is hereby deleted in its entirety and replaced with the following:

“Provided no Event of Default exists and Tenant is occupying not less than 75% of the Premises at the time of such election, Tenant may renew this Lease for (a) one additional period of five years with three further options to renew this Lease for additional periods of five years each, (b) one additional period of ten years with two further options to renew this Lease for additional periods of five years each, or (c) one additional period of 15 years with the option to renew this Lease for one additional period of five years, by delivering (in any case) written notice of the exercise of any such renewal option to Landlord not earlier than 12 months nor later than nine months before the then-scheduled expiration of the Term, it being agreed that Tenant’s initial election notice shall indicate whether Tenant elects to proceed under subsection (a), (b), or (c) of this sentence.”

It is the intention of the parties that the renewal option (as amended by this Section) provides Tenant with up to 20 years of extended Term, commencing September 1, 2030, with the Basic Rent for each such extension to be set at the Prevailing Rental Rate (as defined in Exhibit G to the Original Lease). Section 7 of the Third Amendment is hereby deleted in its entirety.

Section 2.Brokerage. Landlord and Tenant each warrant to the other that it has not dealt with any broker or agent in connection with the negotiation or execution of this Amendment other than CBRE, whose commission will be payable by Landlord pursuant to a separate written agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys' fees, and other liability for

FIFTH AMENDMENT TO LEASE AGREEMENTPage 1

Exhibit 10.9

commissions or other compensation claimed by any other broker or agent claiming the same by, through or under the indemnifying party.

Section 3.Ratification. Landlord and Tenant each hereby ratifies and confirms its respective obligations under the Lease, and represents and warrants to the other party that it has no defenses thereto. Landlord confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) to the best of Landlord’s actual knowledge, Landlord has no claims, counterclaims, set-offs or currently-exercisable defenses against Tenant arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (x) the Lease is and remains in good standing and in full force and effect, (y) to the best of Tenant’s actual knowledge, Tenant has no claims, counterclaims, set-offs or currently-exercisable defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (z) except as expressly provided for in this Amendment, all tenant finish-work allowances provided to Tenant under the Lease or otherwise, if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto.

Section 4.Binding Effect; Governing Law. As modified hereby, the Lease shall remain in full effect and this Amendment shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall prevail. This Amendment shall be governed by the law of the State in which the Premises are located.

Section 5.Counterparts. This Amendment may be executed in multiple counterparts (and may be executed by exchange of executed electronic PDF files), each of which shall constitute an original, but all of which shall constitute one document.

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FIFTH AMENDMENT TO LEASE AGREEMENTPage 2

Executed as of the date first written above.

LANDLORD: AR INDUSTRIAL NO. 1, LTD.,

a Texas limited partnership

By: 29BCO, Inc.,

a Texas corporation, its general partner

By: /s/ George Billingsly

Name: George Billingsly

Title: Authorized Representative

TENANT: ORTHOFIX INC., a Delaware corporation (formerly a Minnesota corporation)

By: /s/ Douglas Rice

Name: Douglas Rice

Title: Chief Financial Officer and Treasurer

FIFTH AMENDMENT TO LEASE AGREEMENTSignature Page

EX-10

STANDARD LEASE AGREEMENT

(Triple Net)

1.	BASIC LEASE PROVISIONS.
	1.1	DATE FOR REFERENCE PURPOSES:	April 16, 2015
	1.2	LANDLORD:	Lake Midas LLC, a California limited liability company
	1.3	TENANT:	Spinal Kinetics, Inc., a Delaware corporation
	1.4	PREMISES ADDRESS:	501 Mercury Drive, Sunnyvale, California
	1.5	APPROXIMATE RENTABLE AREA OF PREMISES:	25,051 rentable square feed
	1.6	USE:	Office, administration, research and development, light manufacturing and other related legal uses
	1.7	TERM:	Eight seven (87) months
	1.8	COMMENCEMENT DATE:	October 1, 2015

1.9 MONTHLY BASE RENT:	Period:	Per rsf	Monthly Base Rent:
	October 1,2015 - December 31,2016	$2.48	$62,126.48
	January 1, 2017 - December 31,2017	~$2.55	$63,990.27
	January 1, 2018 - December 31,2018	~$2.63	$65,909.98
	January 1,2019 - December 31,2019	~$2.71	$67,887.28
	January 1,2020 - December 31,2020	~$2.79	$69,923.90
	January 1,2021 - December 31,2021	~$2.88	$72,021.62
	January 1,2022 - December 31,2022	~$2.96	$74,182.27

1.10	BASE RENT AND ESTIMATED OPERATING EXPENSES PAID UPON EXECUTION:
	BASE RENT: APPLIED To:	$62,126.48 January 2016
	OPERATING EXPENSES: APPLIED To:	$9,018.36 October 2015
1.11	TENANT'S PERCENTAGE SHARE:	100%

1

	1.12	SECURITY DEPOSIT:	$300,000.00
	1.13	NUMBER OF PARKING SPACES:	All available parking
	1.14	REAL ESTATE BROKER:
		LANDLORD:	Frank Friedrich of CBRE, Inc.
		TENANT:	Bart Lammersen and Conor Flannery of Jones Lang
			LaSalle
	1.15	EXHIBITS ATTACHED TO LEASE:	Exhibit A - 11 Premises; 11 Exhibit B - 11Addendum to
			Standard Lease Agreement; " Exhibit B-1- "Landlord
			Commencement Date Improvement Renderings;" Exhibit c- "Rules and Regulations;" Exhibit D - "Form
			of HazMat Certificate;" Exhibit E - "Form of Letter of
			Credit;" Exhibit F - 11Work Letter Agreement"
	1.16	ADDRESSES FOR NOTICES:
		LANDLORD:	Lake Midas LLC
			c/o Jason Oderio
			PO Box 3125
			Los Altos, California 94024
			Email: jason@odevco.net
		WITH A COPY TO:	Yolanda Faile
			Verity Properties
			530 Showers Drive, #7-318
			Mountain View, California 94040-4740
			Email: ykfaile@verityproperties.com
		TENANT:	Prior to January 1,2016:
			Spinal Kinetics, Inc.
			595 North Pastoria Avenue
			Sunnyvale, California 94085
			Attention: Mike Orth, COO
			Email: morth @spinalkinetics.com
			From and after January 1,2016:
			Spinal Kinetics, Inc.
			501 Mercury Drive
			Sunnyvale, California 94085
			Attention: Mike Orth, COO
			Email: morth@spinalkinetics.com
2.	PREMISES.

2.1 ACCEPTANCE. Landlord leases to Tenant, and Tenant leases from Landlord, the Premises, to have and to hold for the term of thi.s Lease, subject to the terms, covenants and conditions of this Lease. The Premises is depicted on Exhibit A attached hereto and used interchangeably with the term "Project" in this Lease. The Premises

depicted on Exhibit A is the entire building (the "Building") and contains all areas outside of the Building to the extent such areas are within the boundary lines of the parcel of land on which the Building is located. Tenant accepts the Premises in its condition as of the Commencement Date, subject to all applicable laws, ordinances, regulations, covenants, conditions, restrictions and easements, and except as may be otherwise expressly provided herein, Landlord shall not be obligated to make any repairs or alterations to the Premises. Tenant acknowledges that Landlord has made no representation or warranty as to the suitability of the Premises for the conduct of Tenant's business, and Tenant waives any implied warranty that the Premises are suitable for Tenant's intended purposes. The number of square feet set forth in Section 1.5 is an approximation, and the Base Rent shall not be changed if the actual number of square feet in the Premises is different than the number of square feet set forth in Section 1.5.

2.2 EXTERIOR AREAS. Landlord hereby grants to Tenant for the benefit of Tenant and its employees, suppliers, shippers, customers and invitees during the term of this Lease, the exclusive right to use, in common with others entitled to such use (including Landlord), the Exterior Areas (as hereinafter defined) as they exist from time to time, subject to all rights reserved by Landlord hereunder and under the terms of all rules and regulations promulgated by Landlord from time to time with respect thereto. Landlord reserves the right from time to time upon reasonable prior notice and so long as Tenant's access to, or use of, the Premises is not materially impaired (a) make changes in the Exterior Areas, including, without limitation, changes in location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas and walkways; (b) close temporarily any of the Exterior Areas for maintenance purposes so long as reasonable access to the Premises remains available; and (c) do and perform such other acts and make such other changes in, to or with respect to the Exterior Areas as Landlord may deem reasonably appropriate. As used herein, the term "Exterior Areas" means all areas and facilities outside the Building and within the exterior boundary lines of the parcel of land owned by Landlord on which the Building is located, including, parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways and landscaped areas. Under no circumstances shall the right herein granted to use the Exterior Areas be deemed to include the right to store any property, temporarily or permanently, in the Exterior Areas, including, without limitation, the storage of trucks or other vehicles. Any such storage shall be permitted only with the prior written consent of Landlord, which consent shall not be unreasonably withheld. In the event that any unauthorized storage shall occur then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord. Notwithstanding anything contained herein to the contrary, Landlord shall not be permitted to makes changes to the equipment pads or generators.

3.TERM.

3.1TERM AND COMMENCEMENT DATE. The term and Commencement Date of this Lease are as specified in Sections 1.7 and 1.8. Except as set forth in Section 3.2, the Commencement Date shall not be adjusted for any reason, including, but not limited to, Tenant's delay in completion of the Tenant Improvements (as defined in the Work Letter Agreement attached to this Lease).

3.2DELAY IN POSSESSION. lf for any reason Landlord cannot deliver possession of the Premises to Tenant, Landlord shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Tenant hereunder; provided, however, in such a case, if Landlord shall not have tendered possession of the Premises to Tenant within thirty (30) days following the date of this Lease, as the same may be adjusted in accordance with this Section 3.2 or Section 3.3 or in accordance with the terms of any work letter agreement attached to this Lease, Tenant may, at Tenant's option, by notice in writing to Landlord at any time prior to Landlord's delivery of possession of the Premises to Tenant, terminate this Lease. If Tenant terminates this Lease as provided in the preceding sentence, the parties shall be discharged from all obligations hereunder, except that Landlord shall return any money previously deposited with Landlord by Tenant. If Landlord is unable to deliver possession of the Premises to Tenant, as the same may be adjusted in accordance with this Section 3.2 or Section 3.3 or in accordance with any work letter agreement attached to this Lease, due to a Force Majeure Event (as defined below), such estimated thirty (30) day period shall be extended by the period of the delay caused by the Force Majeure Event. A 11 Force Majeure Event 11 shall mean fire, earthquake, weather delays or other acts of God, strikes, boycotts, war, riot,

insurrection, embargoes, shortages of equipment, labor or materials, delays in issuance of governmental permits or approvals, or any other cause beyond the reasonable control of Landlord. Notwithstanding the foregoing, the Commencement Date shall be delayed and the Expiration Date shall be extended on a day for day basis for each day of delay in the delivery of possession of the Premises to Tenant, commencing on the eleventh (11th) day after the last to occur of the events in Section 3.4(a), (b) and (c). By way of example, if the last to occur of the events in Section 3.4(a), (b) and (c) occurs on April 10th and possession of the Premises is delivered on April 25th, the Commencement Date shall be delayed, and the Expiration Date shall be extended for, four (4) days (one day each commencing on April 21st and expiring April 24th). When the Premises is actually delivered by Landlord, Landlord may complete a commencement date memorandum in such form reasonably required by Landlord and Tenant shall, within ten (10) business days after Landlord's request, execute the letter and deliver it to Landlord. Tenant's failure to execute the letter within said ten (10) business day period shall constitute Tenant's acknowledgment of the truth of the facts contained in the letter delivered by Landlord to Tenant.

3.3DELAYS CAUSED BY TENANT. The thirty (30) day period specified in Section 3.2 shall be deemed extended, to the extent of any delays caused by acts or omissions of Tenant, Tenant's agents, employees and contractors, Tenant's failure to timely deliver the proof of insurance, Security Deposit, L-C or prepaid rent required by this Lease, or for Tenant delays as defined in any work letter agreement attached to this Lease,if any (hereinafter 11Tenant Delays").

3.4TENDER OF POSSESSION. Possession of the Premises shall be deemed tendered to Tenant when Landlord has offered Tenant possession of the Premises. Landlord shall tender possession of the Premises to Tenant, in broom clean condition, free of debris and equipment, with all Building systems and structural elements of the Building (including without limitation, the foundation) in good working condition and repair, promptly after the last of (a) the full execution and delivery of this Lease; (b) Tenant providing the Landlord with proof of the insurance required of Tenant herein; and (c) Landlord's receipt of the Security Deposit, L-C and prepaid rent.

4.USE.

4.1PERM ITTED USE. The Premises shall be used only for the purpose described in Section 1.6 and for no other purpose. In no event shall any portion of the Premises be used for retail sales. Tenant shall not initiate, submit an application for, or otherwise request, any land use approvals or entitlements with respect to the Premises, including, without limitation, any variance, conditional use permit or rezoning, without first obtaining Landlord's prior written consent, which may be given or withheld in Landlord's sole discretion. Tenant shall not (a) permit any animals or pets to be brought to or kept in the Premises, (b) install any antenna, dish or other device on the roof of the Building or outside of the Premises except as set forth in Exhibit B, (c) make any penetrations into the roof of the Building unless approved by Landlord as Landlord shall determine in its sole and absolute discretion, (d) place loads upon floors, walls or ceilings in excess of the load such items were designed to carry, (e) place or store, nor permit any other person or entity to place or store, any property, equipment, materials, supplies or other items outside of the Building or (f) change the exterior of the Building. In no event shall Tenant use the Premises for the sale of medical marijuana or any use associated with the sale of medical marijuana. Tenant acknowledges that it has satisfied itself by its own independent investigation that the Premises and the Project are suitable for its intended use and that its use is permitted by applicable laws and regulations, and that neither Landlord nor Landlord's agents have made any representation or warranty as to the present or future suitability of the Premises, or the Project for the conduct of Tenant's business. Subject to the terms of this Lease, Tenant shall have access to the Premises 24 hours a day, 7 days a week.

4.2COMPLIANCE WITH LAWS. Tenant shall, at Tenant's sole expense, promptly comply with all applicable laws, ordinances, rules, regulations, orders, certificates of occupancy, conditional use or other permits, variances, covenants, conditions, restrictions, easements, the reasonable recommendations of Landlord's engineers or other consultants, and requirements of any fire insurance underwriters, rating bureaus or government agencies, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the term or any part of the term hereof, relating in any manner to, or triggered by, the specific use by Tenant of the Premises, the Tenant Improvements and/or any Alterations, if and to the extent required by any applicable

governing agency. Tenant shall, at Tenant's sole expense, comply with all accessibility requirements of State and Federal law that apply to the Premises, Title 24 of the California Code of Regulations (including without limitation the 2013 Building Energy Efficiency Standards) ("Title 24"), and all federal, state and local laws and regulations governing occupational safety and health if required by any applicable governing agency. Tenant acknowledges that it will be responsible for complying with current and future laws and regulations (if and to the extent required by any applicable governing agency) even though such compliance requires Tenant to make substantial repairs or modifications (including structural modifications) to the Premises. Notwithstanding the foregoing, Tenant's obligation to comply with such laws shall not include any compliance obligation to the improvements performed by Landlord pursuant to Section 66. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, or take any other action that would constitute a nuisance, create a dangerous situation, or would disturb, unreasonably interfere with or endanger Landlord. Tenant shall obtain, at its sole expense, any permit or other governmental authorization required to operate its business from the Premises. Landlord shall not be liable for the failure of any other tenant or person to abide by the requirements of this section or to otherwise comply with applicable laws and regulations, and Tenant shall not be excused from the performance of its obligations under this Lease due to such a failure.

4.3DISCLOSURE REGARDING ACCESSIBILITY INSPECTION. The Premises have not undergone an inspection by a Certified Access Specialist ("CASp") to determine whether or not the Premises meets all applicable construction­ related accessibility standards pursuant to California Civil Code Section 55.51 et. seq. Landlord shall have the right (but not the obligation) to obtain a report from a CASp, and, in the event that Landlord does so, and such report provides that the Project is in compliance (or any issues of non-compliance are corrected), then, as between Landlord and Tenant, (regardless of whether the claim is brought by any third party, including a subtenant or invitee of Tenant) such report, upon delivery to Tenant shall be conclusive that Landlord has complied with any obligation relating specifically to matters covered by the CASp as of delivery (and exclusive of any improvements made by Tenant) pursuant to California Civil Code sections 55.52 and 55.53. If Tenant commissions an inspection by a CASp, Tenant (i) will not provide Landlord with a copy of such report; (ii) shall be responsible for any and all consequences resulting from the commissioning of such inspection, including, but not limited to, implementing, managing and performing any and all repairs, improvements and/or modifications to the Premises, Building, Project or Exterior Areas required by any governing agency as a result thereof; and (iii) shall indemnify, defend and hold Landlord harmless from and against any and all losses, liabilities, damages, costs and claims that may be made against Landlord by any party claiming that Landlord had knowledge of a non-compliance of the Premises, Building, Project or Exterior Areas with applicable laws as a result of such inspection. Notwithstanding clause (ii) of the immediately preceding sentence, Landlord may elect to implement, manage and/or perform such repairs, improvements and/or modifications in lieu of requiring Tenant to implement, manager and/or perform such and, in such case, Tenant shall reimburse Landlord for all costs and expenses associated therewith within thirty (30) days after demand from Landlord.

5.BASE RENT. Tenant shall pay Base Rent in the amount set forth on the first page of this Lease. At the time Tenant executes this Lease it shall pay to Landlord the amounts set forth in Sections 1.10 and 1.12. Tenant promises to pay to Landlord in advance, without demand, deduction or set-off, monthly installments of Base Rent and Operating Expenses on or before the first day of each calendar month succeeding the Commencement Date. Payments of Base Rent and Operating Expenses for any fractional calendar month shall be prorated. All payments required to be made by Tenant to Landlord hereunder shall be payable at such address as Landlord may specify from time to time by written notice delivered in accordance herewith. Tenant shall have no right at any time to abate, reduce, or set off any rent due hereunder except where expressly provided in this Lease.

6.OPERATING EXPENSE PAYMENTS.

6.1OPERATING EXPENSES. Commencing on the Commencement Date, Tenant shall pay Tenant's Percentage Share (as set forth in Section 1.11) of the Operating Expenses for the Project. For the purposes of this Lease, the term "Operating Expenses" shall mean all expenses and disbursements of every kind (subject to the limitations set forth below) which Landlord incurs, pays or becomes obligated to pay, whether ordinary or capital, in connection with the ownership, operation, maintenance, repair and replacement of all or any aspect of the Project (including the associated Exterior Areas), including, but not limited to, the following:

(a)wages and salaries of all employees, agents, consultants and other individuals or entities engaged in the operation, repair, replacement, maintenance, and security of the Project, including taxes, insurance and benefits relating thereto;

(b)all supplies and materials used in the operation, maintenance, repair, replacement, and security of the Project;

(c)annual cost of all Capital Improvements (as defined below) made to the Project which although capital in nature (i) can reasonably be expected to reduce the normal operating costs of the Project, (ii) are made in order to comply with any law now or hereafter promulgated by any governmental authority, and/or (iii) are incurred in connection with the ownership, operation, maintenance, repair or replacement of any aspect of the Project, which replacements shall be comparable to similarly situated projects as reasonably determined by Landlord, all, as amortized over the useful economic life of such improvements as determined by Landlord in its reasonable discretion in accordance with generally accepted accounting principles (without regard to the period over which such improvements may be depreciated or amortized for federal income tax purposes) together with an interest factor on the unamortized cost of such item equal to the lesser of eight percent (8%) per annum or the maximum rate of interest permitted by applicable law;

(d)cost of all utilities paid by Landlord;

(e)cost of any insurance or insurance related expense applicable to the Project and Landlord's personal property used in connection therewith, including, but not limited to, the insurance costs described in Section 10.2;

(f)cost of repairs, replacements and general maintenance of the Project (including all truck court areas, paving and parking areas, Exterior Area lighting facilities, fences, gates, water lines, sewer lines, rail spur areas and any other item Landlord is obligated to repair or maintain), other than costs necessary to assure the structural soundness of the roof, foundation and exterior walls of the Project which are payable solely by Landlord under Section 11;

(g)cost of service or maintenance contracts with independent contractors for the operation, maintenance, repair, replacement or security of the Project (including, without limitation, alarm service, exterior painting, trash collection, snow, ice, debris and waste removal and landscape maintenance};

(h)the cost of all accounting fees, legal fees and consulting fees attributable to the operation,

ownership, management, maintenance or repair of the Project;

(i)payments made by Landlord under any easement, license, operating agreement, declaration, restrictive covenant or other agreement relating to the sharing of costs among property owners;

(j)a property management fee in an amount not to exceed 1.5% of Base Rent payable for the Premises

(k)the cost of all business licenses, permits or similar fees relating to the operation,
ownership, repair or maintenance of the Project;

(l)the cost of all Real Property Taxes; and

(m)the cost of any other item the cost of which is stated in this Lease to be an Operating Expense.

For purposes of this Lease, a "Capital Improvement" shall be an improvement to the Project that Landlord is obligated or permitted to make pursuant to this Lease, the cost of which is not fully deductible in the year incurred in accordance with generally accepted accounting principles; provided, however, that, at Landlord's option, the following items shall be treated as expenses and not Capital Improvements, and the entire cost of these items may be included in Operating Expenses in the year incurred: (i) the cost of painting all or part of the Project, (ii) the cost of resurfacing and restriping roadways and parking areas, and (iii) the cost of Capital Improvements incurred in any calendar year to the extent the cost of the Capital Improvements are less than $20,000. References to facilities, services, utilities or other items in this section shall not impose an obligation on Landlord to have said facilities or to provide said services unless such facilities and services already exist at the Project.

6.2OPERATING EXPENSE EXCLUSIONS. Notwithstanding anything to the contrary contained herein, for purposes of this Lease, the term "Operating Expenses" shall not include the following: (i) costs (including permit, license and inspection fees) incurred for tenant improvements; (ii) legal and auditing fees (other than those fees reasonably incurred in connection with the maintenance and operation of all or any portion of the Project), leasing commissions, advertising expenses and similar costs incurred in connection with the leasing of the Project;

(iii) depreciation of the Building or any other improvements situated within the Project; (iv) any items for which Landlord is actually reimbursed by insurance or by direct reimbursement by any other tenant of the Project; (v) costs of repairs or other work necessitated by fire, windstorm or other casualty (excluding any deductibles) and/or costs of repair or other work necessitated by the exercise of the right of eminent domain to the extent insurance proceeds or a condemnation award, as applicable, is actually received by Landlord for such purposes; provided, such costs of repairs or other work shall be paid by the parties in accordance with the provisions of Sections 11and 12, below; (vi) other than any interest charges for Capital Improvements referred to in Section 6. (c) hereinabove, any interest or payments on any financing for the Building or the Project and interest and penalties incurred as a result of Landlord's late payment of any invoice; (vii) costs associated with the investigation and/or remediation of Hazardous Materials (hereafter defined) present in, on or about any portion of the Project, unless such costs and expenses are the responsibility of Tenant as provided in Section 27 hereof, in which event such costs and expenses shall be paid solely by Tenant in accordance with the provisions of Section 27 hereof; (viii) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in the Project to the extent the same exceeds the costs of such by unaffiliated third parties on a competitive basis; (ix) any payments under a ground lease or master lease; (x) except as provided above, the cost of Capital Improvements; (xi) insurance premiums and deductibles for earthquake insurance; (xii) reserves; and (xiii) cost to comply with any violation of law existing as of the date of this Lease (a) compliance with which is not grandfathered, (b) which is not considered legal non­ compliant; and (c) which Landlord has received written notice from applicable governing agencies demanding compliance therewith.

6.3PAYMENT. Tenant's Percentage Share of Operating Expenses shall be payable by Tenant within thirty (30) days after a reasonably detailed statement of actual expenses is presented to Tenant by Landlord. At Landlord's option, however, Landlord may, from time to time, reasonably estimate what Tenant's Percentage Share of Operating Expenses will be, and the same shall be payable by Tenant monthly during each calendar year of the Lease term, on the same day as the Base Rent is due hereunder. In the event that Tenant pays Landlord's estimate of Tenant's Percentage Share of Operating Expenses, Landlord shall deliver to Tenant within one hundred eighty

(180) days after the expiration of each calendar year a reasonably detailed statement (the "Statement") showing Tenant's Percentage Share of the actual Operating Expenses incurred during such year. Landlord's failure to deliver the Statement to Tenant within said period shall not constitute Landlord's waiver of its right to collect said amounts or otherwise prejudice Landlord's rights hereunder. If Tenant's payments under this section during said calendar year exceed Tenant's Percentage Share as indicated on the Statement, Tenant shall be entitled to a refund or a credit the amount of such overpayment against Tenant's Percentage Share of Operating Expenses next falling due. If Tenant's payments under this section during said calendar year were less than Tenant's Percentage Share as indicated on the Statement, Tenant shall pay to Landlord the amount of the deficiency within thirty (30) days after delivery by Landlord to Tenant of the Statement. Landlord and Tenant shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last calendar year for which Tenant is responsible for Operating Expenses, notwithstanding that the Lease term may have terminated before the end of such calendar year; and this provision shall survive the expiration or earlier termination of the Lease.

6.4TENANT'S AUDIT RIGHT. Provided no notice of default has been delivered by Landlord to Tenant which remains uncured, whether before or after expiration of any applicable notice and cure period, Tenant shall have the right, not later than sixty {60) days following receipt of such Statement, during Landlord's regular business hours and on reasonable prior notice, to inspect, at the location of Landlord's accounting records, Landlord's books and records regarding Operating Expenses for the year to which the Statement relates. Tenant's right to undertake an audit with respect to any calendar year shall expire sixty {60) days after Tenant's receipt of the Statement for such calendar year, and such Statement shall be final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct, at the end of such sixty (60) day period. If Tenant gives Landlord notice of its intention to audit Operating Expenses, it must commence such audit within sixty (60) days after such notice is delivered to Landlord, and the audit must be completed within one hundred twenty (120) days after such notice is delivered to Landlord. If Tenant does not commence and complete the audit within such periods, the Statement which Tenant elected to audit shall be deemed final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct. The inspection of Landlord's books and records may be conducted by Tenant's employee or a reputable certified public accountant (i.e., a member of a reputable, independent, nationally or regionally recognized certified public accounting firm, who has experience reviewing financial operating records of building landlords; provided that such accountant is not retained by Tenant on a contingency fee basis). If such inspection reveals that the amount of Operating Expenses billed to Tenant was incorrect, the appropriate party shall pay to the other party the deficiency or overpayment, as applicable, within thirty (30) days following delivery of the inspection, without interest. All costs and expenses of the inspection shall be paid by Tenant unless the final determination in the inspection is that Landlord overstated Operating Expenses by more than five percent (5%) for the applicable year, in which case Landlord shall pay all reasonable costs and expenses of the inspection in an amount not to exceed Three Thousand Five Hundred Dollars ($3,500.00). Landlord shall maintain its accounting records of Operating Expenses for at least two (2) years. Tenant agrees that the results of any Operating Expense audit shall be kept strictly confidential by Tenant and shall not be disclosed to any other person or entity, except to accountants and legal advisors.

7.SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes this Lease the security deposit set forth in Section 1.12 as security for Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails to pay Base Rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease beyond any applicable notice and cure period, Landlord may use all or any portion of said deposit for the payment of any Base Rent or other charge due hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant's default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of said deposit, Tenant shall within twenty (20) days after written demand therefore deposit cash with Landlord in an amount sufficient to restore said deposit to its full amount. Landlord shall not be required to keep said security deposit separate from its general accounts. If Tenant performs all of Tenant's obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by Landlord, shall be returned, without payment of interest or other amount for its use, to Tenant (or, at Landlord's option, to the last assignee, if any, of Tenant's interest hereunder) at the expiration of the term hereof, and after Tenant has vacated the Premises. No trust relationship is created herein between Landlord and Tenant with respect to said security deposit. Tenant acknowledges that the security deposit is not an advance payment of any kind or a measure of Landlord's damages in the event of Tenant's default. Tenant hereby waives the provisions of any law which is inconsistent with this section including, but not limited to, Section 1950.7 (except subsection (b)) of the California Civil Code.

8.UTILITIES.

8.1PAYMENT. From and after possession of the Premises are tendered to Tenant, Tenant shall contract for and pay all water, gas, electricity, telephone, sewer, sprinkler services, refuse and trash collection and other utilities and services used in connection with the Premises, together with any taxes, penalties, surcharges or the like pertaining thereto. Tenant shall contract directly with the applicable public utility for such services.

8.2INTERRUPTIONS. Tenant agrees that Landlord shall not be liable to Tenant for its failure to furnish water, gas, electricity, telephone, sewer, refuse and trash collection or any other utility services or building services when such failure is occasioned, in whole or in part, by repairs, replacements or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, telephone service or other utility at the Project, by any accident, casualty or event arising from any cause whatsoever, including the negligence of Landlord, its employees, agents and contractors, by act, negligence or default of Tenant or any other person or entity, or by any other cause, and such failures shall never be deemed to constitute an eviction or disturbance of Tenant's use and possession of the Premises or relieve Tenant from the obligation of paying rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for loss of property or for injury to, or interference with, Tenant's business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any such services or utilities. Landlord may comply with voluntary controls or guidelines promulgated by any governmental entity relating to the use or conservation of energy, water, gas, light or electricity or the reduction of automobile or other emissions without creating any liability of Landlord to Tenant under this Lease.

8.3 INTENTIONALLY OMITTED.

8.4. ALTERNATIVE UTILITY PROVIDERS. If permitted by applicable laws, Landlord shall have the right at any time and from time to time during the term of this Lease to either contract for service from a different company or companies (each such company referred to as an "Alternate Service Provider") other than the company or companies presently providing electrical service for the Project (the "Electric Service Provider") or continue to contract for service from the Electric Service Provider, at Landlord's sole discretion. Tenant agrees to cooperate with Landlord, the Electric Service Provider, and an Alternate Service Provider at all times and, as reasonably necessary, shall allow Landlord, the Electric Service Provider, and any Alternate Service Provider reasonable access to the Building1s electric lines, feeders, risers, wiring and any other machinery within the Premises.

8.5 ENERGY USE. Landlord shall have the right to require Tenant to provide Landlord with copies of bills from electricity, natural gas or similar energy providers (collectively, "Energy Providers") Tenant receives from Energy Providers relating to Tenant's energy use at the Premises ("Energy Bills") within twenty (20) days after Landlord's written request. In addition, Tenant hereby authorizes Landlord to obtain copies of the Energy Bills directly from the Energy Provider(s), and Tenant hereby authorizes each Energy Provider to provide Energy Bills and related usage information directly to Landlord without Tenant's consent. From time to time within twenty (20) days after Landlord's request, Tenant shall execute and deliver to Landlord an agreement provided by Landlord authorizing the Energy Provider(s) to provide to Landlord Energy Bills and other information relating to Tenant's energy usage at the Premises.

9.REAL AND PERSONAL PROPERTY TAXES.

9.1PAYMENT OF TAXES. Tenant shall pay Real Property Taxes as part of Operating Expenses.

9.2DEFINITION OF REAL PROPERTY TAX. As used herein, the term "Real Property Taxes" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, improvement bond or bonds imposed on the Project or any portion thereof by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Landlord in the Project or in any portion thereof. Real Property Taxes shall not include income, inheritance and gift taxes. Notwithstanding anything contained herein to the contrary, Real Property Taxes shall not include: (a) excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal, state and local income taxes, and other taxes applied or measured by Landlord's general or net income (as opposed to rents, receipts, or income attributable to operations at the Building); (b) any penalty or fee imposed as a result of Landlord's failure to pay Real Property Taxes when due; and (c) any items paid directly to the taxing authority by Tenant under Section 9.3 below.

9.3PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant contained in the Premises or related to Tenant's use of the Premises. If any of Tenant's personal property shall be assessed with Landlord's real or personal property, Tenant shall pay to Landlord the taxes attributable to Tenant within thirty (30) days after receipt of a written statement from Landlord setting forth the taxes applicable to Tenant's property.

9.4REASSESSMENTS. From time to time Landlord may challenge the assessed value of the Project as determined by applicable taxing authorities and/or Landlord may attempt to cause the Real Property Taxes to be reduced on other grounds. If Landlord is successful in causing the Real Property Taxes to be reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter collectively referred to as a "Reduction"), Landlord shall, to the extent practicable, credit the Reduction(s) to Real Property Taxes for the calendar year to which a Reduction applies and recalculate the Real Property Taxes owed by Tenant for that year based on the reduced Real Property Taxes. All costs incurred by Landlord in connection with obtaining and/or processing the Real Property Tax reductions (e.g.,consulting fees, accounting fees etc.) may be included in Operating Expenses or deducted from the Reduction. Landlord shall have the right to compensate a person or entity it employs to obtain a Reduction by giving such person or entity a percentage of any Reduction obtained.

10.INSURANCE.

10.1INSURANCE· TENANT.

(a)Tenant shall obtain and keep in force during the term of this Lease a commercial general liability policy of insurance with coverages acceptable to Landlord, in Landlord's reasonable discretion, which, by way of example and not limitation, protects Tenant, Landlord and its property manager (each as an additional insured) against claims for bodily injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing coverage in an amount not less than $2,000,000 per occurrence and not less than $3,000,000 in the aggregate with an "Additional Insured-Managers and Landlords of Premises Endorsement" and contain the "Amendment of the Pollution Exclusion" for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract 11 for the performance of Tenant's indemnity obligations under this Lease.

(b)Tenant shall obtain and keep in force during the term of this Lease "Causes of Loss - Special Form" extended coverage property insurance (previously known as "all risk" property insurance) with coverages acceptable to Landlord, in Landlord's reasonable discretion. Said insurance shall be written on a one hundred percent (100%) replacement cost basis on Tenant's personal property, all tenant improvements installed at the Premises by Landlord or Tenant, Tenant's trade fixtures and other property. By way of example, and not limitation, such policies shall provide protection against any peril included within the classification "fire and extended coverage," against vandalism and malicious mischief, theft and sprinkler leakage. Tenant's policy shall include endorsements to insure Tenant against losses to valuable papers, records and computer equipment and to compensate Tenant for the cost of recovering lost data. To the extent that Tenant's policy covers tenant improvements to the Premises, Landlord shall be a loss payee on such policy.

(c)Tenant shall obtain and keep in force during the term of this Lease insurance for pollution liability and clean-up costs with coverages acceptable to Landlord, in Landlord's reasonable discretion, which by way of example and not limitation, protects against liability for cleanup costs, bodily injury and property damage, defense costs and contractual liability. Such insurance shall provide coverage of not less $3,000,000 per occurrence and $5,000,000 in the aggregate.

(d)Tenant shall, at all times during the term hereof, maintain the following insurance with coverages reasonably acceptable to Landlord: (i) workers' compensation insurance as required by applicable law, (ii) employers liability insurance with limits of at least $1,000,000 per occurrence, (iii) automobile liability insurance for

owned, non-owned and hired vehicles with limits of at least $1,000,000 per occurrence and (iv) business interruption and extra expense insurance. In addition to the insurance required in (i), (ii), (iii) and (iv) above, Landlord shall have the right to require Tenant to reasonably increase the limits of its insurance and/or obtain such additional insurance as is customarily and reasonably required by landlords owning similar real property in the geographical area of the Project; provided, however, landlord shall not have the right to require that Tenant adjust its insurance coverage more than once in any forty eight (48) month period, and not during the initial forty eight (48) months of the Term.

10.2INSURANCE-LANDLORD.

(a)Landlord may obtain and keep in force a policy of general liability insurance with coverage against such risks and in such amounts as Landlord deems advisable insuring Landlord against liability arising out of the ownership, operation and management of the Project.

(b)Landlord shall also obtain and keep in force during the term of this Lease a policy or policies of insurance covering loss or damage to the Project in the amount of the replacement cost thereof (excluding foundations and similar items unless Landlord elects to insure such and excluding items covered by Tenant's insurance), as determined by landlord from time to time. The terms and conditions of said policies, their deductibles and the perils and risks covered thereby shall be determined by Landlord, from time to time, in Landlord's reasonable discretion. In addition, at Landlord's option, Landlord shall obtain and keep in force, during the term of this ease, a policy of rental interruption insurance, with Joss payable to Landlord, which insurance shall, at Landlord's option, also cover all Operating Expenses. Tenant will not be named as an additional insured in any insurance policies carried by Landlord and shall have no right to any proceeds therefrom. The policies purchased by Landlord shall contain such deductibles as Landlord may determine.

10.3 INSURANCE POLICIES. Tenant shall deliver to Landlord certificates of the insurance policies required under Section 10.1concurrently with Tenant's execution of this Lease using an ACORD 28 form or a similar form approved by Landlord. Tenant's insurance policies shall not be cancelable or subject to reduction of coverage or other modification except after ten (10) days prior written notice to Landlord. Tenant shall, at least ten (10) days prior to the expiration of such policies, furnish Landlord with renewals thereof. Tenant's insurance policies shall be issued by insurance companies authorized to do business in the state in which the Project is located, and said companies shall maintain during the policy term a "General Policyholder's Rating" of at least A- and a financial rating of at least "Class VIII" (or such other rating as may be required by any lender having a lien on the Project) as set forth in the most recent edition of "Best Insurance Reports." All insurance obtained by Tenant shall be primary to and not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only. Landlord, Landlord's property manager and lender(s) and their respective officers, shareholders, directors, partners, members, managers1 employees, successors and assigns, shall be included as additional insureds under Tenant's commercial general liability policy, the pollution liability policy and under the Tenant's excess or umbrella policy, if any, using ISO additional insured endorsement CG 20 11or a substitute providing equivalent coverage, and such additional endorsements as Landlord may reasonably require. Tenant's insurance policies shall not include deductibles in excess of $10,000.

10.4WAIVER OFSUBROGATION. Landlord waives any and all rights of recovery against Tenant and Tenant's employees and agents for or arising out of damage to, or destruction of, the Project to the extent that Landlord's insurance policies then in force insure against such damage or destruction (or to the extent of what would have been covered had Landlord maintained the insurance required to be carried under this Lease) and permit such waiver. Tenant waives any and all rights of recovery against Landlord and Landlord's employees and agents for or arising out of damage to, or destruction of, the Project to the extent that Tenant's insurance policies then in force insure against such damage or destruction (or to the extent of what would have been covered had Tenant maintained the insurance required to be carried under this Lease) and permit such waiver. Tenant shall cause the insurance policies it obtains in accordance with Section 10.1relating to property damage to provide that the insurance company waives all right of recovery by subrogation against Landlord in connection with any liability or damage covered by Tenant's insurance policies.

10.5COVERAGE. Landlord makes no representation to Tenant that the limits or forms of coverage specified above or approved by Landlord are adequate to insure Tenant's property or Tenant's obligations under this Lease, and the limits of any insurance carried by Tenant shall not limit Tenant's obligations or liability under any indemnity provision included in this Lease or under any other provision of this Lease.

11.LANDLORD'S REPAIRS. Subject to Sections 12, 14 and 15, it is the intent of the parties that Landlord have no obligation to maintain, repair or replace any aspect of the Premises. Tenant expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's expense or to terminate this Lease because of Landlord's failure to keep the Premises in good order, condition and repair.

12.TENANT'S REPAIRS.

12.1OBLIGATIONS OF TENANT. Subject to Section 12.2 below, Tenant shall, at its sole cost and expense, keep and maintain all parts of the Premises in good and sanitary condition, promptly making all necessary repairs and replacements, including but not limited to, windows, glass and plate glass, doors, skylights, roof membranes, any special store front or office entry, walls and finish work, floors and floor coverings, heating and air conditioning systems, dock boards, bumpers, plates, seals, levelers and lights, plumbing work and fixtures (including periodic backflow testing), electrical systems, lighting facilities and bulbs, sprinkler systems, alarm systems, life safety systems, fire detection systems, termite and pest extermination, tenant signage, roof covering and membrane, structural elements of the roof, and regular removal of trash and debris. Landlord shall have the right to reasonably approve the contractor Tenant shall use to make any repair or to perform any maintenance on the roof, heating, ventilation and air conditioning systems ("HVAC"), plumbing systems, electrical systems, sprinkler systems, fire alarm systems or fire detection systems located at the Premises. Tenant shall not paint or otherwise change the exterior appearance of the Building without Landlord's prior written consent, which may be given or withheld in Landlord's reasonable discretion. Tenant shall not disturb the integrity and support provided by any wall. Notwithstanding anything contained herein to the contrary, if Landlord reasonably determines that an item described in this Section 1 2.1cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Landlord, and the cost thereof shall be included in Operating Expenses subject to Section 6, provided that, to the extent that such Operating Expense is capitalized, Tenant may prepay its obligation at any time. If Tenant fails to keep the Premises in good condition and repair, Landlord may after providing written notice of such election to Tenant, but shall not be obligated to, make any necessary repairs. If Landlord makes such repairs, Landlord may bill Tenant for the cost of the repairs as additional rent, and said additional rent shall be payable by Tenant within twenty (20) days after demand by Landlord, plus a ten percent (10%) administrative fee.

12.2PERFORMANCE OF WORK BY LANDLORD. Landlord shall keep and maintain in good and sanitary condition, promptly making all necessary repairs and replacements to the structural soundness of the foundation of the Building, structural components of the Building, exterior walls of the Premises, fencing and the Exterior Areas. The items described in the previous sentence that Landlord will cause to be repaired, maintained and replaced are hereinafter referred to as the "Landlord Maintenance Items." Tenant shall reimburse Landlord as additional rent for all costs Landlord incurs in performing the Landlord Maintenance Items as set forth in Section 6. Landlord's maintenance of the exterior walls of the Premises shall include the right, but not the obligation, of Landlord to paint from time to time all or some of the exterior walls, canopies, doors, windows, gutters, handrails and other exterior parts of the Premises with colors selected by Landlord and reasonably approved by Tenant, and Tenant shall reimburse Landlord as provided above for all costs incurred by Landlord in painting such items. Tenant shall promptly give Landlord written notice of any repair or maintenance required by Landlord pursuant to this section, after which Landlord shall have a reasonable time in which to complete such repair or maintenance.

12.3MAINTENANCE CONTRACTS. Tenant shall enter into regularly scheduled preventative maintenance/service contracts for some or all of the following: the HVAC units servicing the Premises, the sprinkler, fire alarm and fire detection systems servicing the Premises, backflow testing for the plumbing servicing the Premises and for the roof membrane of the Premises (the "Maintenance Contracts"). The Maintenance Contracts shall

include maintenance services satisfactory to Landlord, in Landlord's reasonable discretion. If Tenant fails to maintain any Maintenance Contract, Landlord may after providing written notice of such election to Tenant, but shall not be obligated to, enter into such Maintenance Contract. If Landlord enters into any such Maintenance Contract, Landlord may bill Tenant for the cost thereof as additional rent, and said additional rent shall be payable by Tenant within twenty (20) days after demand by Landlord, plus a ten percent (10%) administrative fee.

13.ALTERATIONS AND SURRENDER.

13.1CONSENT OF LANDLORD. Landlord acknowledges that Tenant uses the Premises for manufacturing and consequently Tenant will periodically make Alterations to carry out this purpose. Tenant shall have the right, subject to Landlord's reasonable requirements relating to construction at the Project, upon ten (10) days prior written notice to Landlord but without Landlord's consent, to make alterations ("Permitted Alterations") to the inside of the Building that do not (i) involve the expenditure of more than $50,000 in any consecutive ninety (90) day period or more than $350,000 over the Lease term, (ii) affect the exterior appearance of the Building or the roof,

(iii) affect the Building's electrical, plumbing mechanical systems or the structural elements of the Building, or (iv) affect the Exterior Areas or parking areas. Except with respect to Permitted Alterations, Tenant shall not, without Landlord's prior written consent, which may be given or withheld in Landlord's reasonable discretion, make any alterations, improvements, additions, utility installations or repairs (hereinafter collectively referred to as "Consent Required Alterations") in, on or about the Premises of the Project. References in this Lease to "Alterations" shall

mean both Permitted Alterations and Consent Required Alterations. At the expiration of the term, Landlord may require the removal of any Alterations installed by Tenant and the restoration of the Premises and the Project to their prior condition, at Tenant's expense. If, as a result of any Alteration made by Tenant, Landlord is obligated to comply with the Americans With Disabilities Act, Title 24 or any other law or regulation, and such compliance requires Landlord to make any improvement or Alteration to any portion of the Project, as a condition to Landlord's consent, Landlord shall have the right to require Tenant to pay to Landlord prior to the construction of any Alteration by Tenant the entire cost of any improvement or alteration Landlord is obligated to complete by such law or regulation. Alternatively, Landlord may require that Tenant perform any improvement or alteration required to comply with such law or regulation. Should Landlord permit Tenant to make Alterations, Tenant shall use only such architect and contractor as has been expressly and reasonably approved by Landlord and, if Landlord reasonably determines that there is material risk that Tenant may not complete such Alteration or pay all costs and expenses associated therewith, Landlord may require Tenant to provide to Landlord, at Tenant's sole cost and expense, a lien and completion bond, or similar security reasonably approved by Landlord, such as a bank bond, in an amount equal to one and one-quarter times the estimated cost of such Alteration, to insure Landlord against any liability for mechanic's and materialmen's liens and to insure completion of the work. In addition, Tenant shall pay to Landlord a fee equal to one and one-half percent {1.5%) of the cost of the Alterations to compensate Landlord for the overhead and other costs it incurs in reviewing the plans for the Alterations and in monitoring the construction of the Alterations (the "Landlord Fee"), which Landlord Fee Landlord may agree to waive as it shall determine in its sole and absolute discretion. If Landlord incurs architectural, engineering or other consultant's fees in evaluating such Alterations, Tenant shall reimburse Landlord for these actual and reasonable fees. If Tenant proposes Alterations to Landlord but subsequently elects not to construct the Alterations, and Landlord has incurred costs in reviewing Tenant's proposed Alterations (e.g., architect's, engineer's or property management fees), Tenant shall reimburse Landlord for the actual and reasonable costs incurred by Landlord within thirty (30) days after written demand. Should Tenant make any Alterations without the prior approval of Landlord, or use a contractor not expressly approved by Landlord, Landlord may, at any time during the term of this Lease, require that Tenant remove all or part of the Alterations and return the Premises to the condition it was in prior to the making of the Alterations. In the event Tenant makes any Alterations, Tenant agrees to obtain or cause its contractor to obtain, prior to the commencement of any work, "builders all risk11 insurance in an amount reasonably approved by Landlord, workers compensation insurance and any other insurance requested by Landlord, in Landlord's reasonable discretion.

13.2PERMITS. Any Alterations in or about the Premises that Tenant shall desire to make shall be presented to Landlord in written form, with plans and specifications which are sufficiently detailed to obtain a building permit, if a building permit is required. If Landlord consents to an Alteration and the Alterations require a building permit, the consent shall be deemed conditioned upon Tenant acquiring a building permit from the

applicable governmental agencies, furnishing a copy thereof to Landlord prior to the commencement of the work, and compliance by Tenant with all conditions of said permit in a prompt and expeditious manner. Tenant shall provide Landlord with as-built plans and specifications for any Alterations made to the Premises.

13.3MECHANICS LIENS. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or the Project, or any interest therein. If Tenant shall, in good faith, contest the validity of any such lien, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to not less than one and one-half times the amount of such contested lien claim indemnifying Landlord against liability arising out of such lien or claim. Such bond shall be sufficient in form and amount to free the Project from the effect of such lien. In addition, Landlord may require Tenant to pay Landlord's reasonable attorneys' fees and costs incurred as a result of any such lien.

13.4NOTICE. Tenant shall give Landlord not less than ten (10) days' advance written notice prior to the commencement of any work in the Premises by Tenant, and Landlord shall have the right to post notices of non­ responsibility in or on the Premises or the Project.

13.5SURRENDER. Subject to Landlord's right to require removal or to elect ownership as hereinafter provided, all Alterations made by Tenant to the Premises shall be the property of Tenant, but shall be considered to be a part of the Premises. Provided that Tenant affirmatively requests in writing a determination from Landlord whether or not Landlord will require the removal of some or all of an Alteration, which written requests shall be in bold, all capital letters and state at the top of the first page of such request "TENANT HEREBY REQUESTS LANDLORD TO NOTIFY TENANT IN WRITING WITHIN TEN (10) BUSINESS DAYS AFTER LANDLORD'S RECEIPT OF THIS LETTER WHETHER OR NOT LANDLORD Wil REQUIRE REMOVAL AND RESTORATION OF SOME OR Al OF THE ALTERATION TO WHICH CONSENT IS REQUESTED. LANDLORD'S FAILURE TO NOTIFY TENANT IN WRITING WITHIN TEN (10) BUSINESS DAYS THAT LANDLORD REQUIRES REMOVAL AND RESTORATION OF SOME OR Al OF SUCH ALTERATION SHALL BE DEEMED LANDLORD'S ELECTION TO REQUIRE REMOVAL AND RESTORATION OF SUCH ALTERATION," Landlord shall notify Tenant in writing within ten (10) business days whether or not Landlord will require removal and restoration of some or all of such Alteration and Landlord's failure to timely notify Tenant shall be deemed Landlord's election to require removal and restoration of such Alteration. If Landlord does not respond to Tenant's initial request for a removal and restoration determination, Tenant may deliver a second request for determination to Landlord and, provided that Tenant's second request states in bold, all capital letters and state at the top of the first page of such request "THIS LETTER CONSTITUTES SECOND REQUEST FOR A REMOVAL AND RESTORATION DETERMINATION, TENANT HEREBY REQUESTS LANDLORD TO NOTIFY TENANT IN WRITING WITHIN FIVE (SJ BUSINESS DAYS AFTER LANDLORD'S RECEIPT OF THIS LETTER WHETHER OR NOT LANDLORD WILL REQUIRE REMOVAL AND RESTORATION OF SOME OR All OF THE ALTERATI ON TO WHICH CONSENT IS REQUESTED. LANDLORD'S FAILURE TO NOTIFY TENANT IN WRITING WITHIN FIVE (5) BUSINESS DAYS THAT LANDLORD REQUIRES REMOVAL AND RESTORATION OF SOME OR Al OF SUCH ALTERATION SHALL BE DEEMED LANDLORD'S ELECTION NOT TO REQUIRE REMOVAL AND RESTORATION OF SUCH ALTERATION," Landlord shall notify Tenant in writing within five (5) business days whether or not Landlord will require removal and restoration of some or all of such Alteration and Landlord's failure to timely notify Tenant shall be deemed Landlord's election not to require removal and restoration of such Alteration. Unless Landlord elects, or is deemed to have elected, to require removal and restoration of such Alteration at the end of the term of this Lease, the Alterations shall become the property of Landlord at the end of the term of this Lease. On the last day of the term hereof, or on any sooner termination, Tenant shall surrender the Premises (including, but not limited to, all doors, windows, floors and floor coverings, skylights, heating and air conditioning systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, electrical systems, lighting facilities, sprinkler systems, fire detection systems and roof (collectively the "Elements of the Premises") to Landlord in the same condition as received, ordinary wear and tear and casualty damage excepted, clean and free of debris and Tenant's personal property, trade fixtures and equipment, with all Alterations required to be removed, removed, and the Premises restored back to its condition prior to the construction of such Alterations, with any damage caused by such surrender, removal and restoration repaired by Tenant. Tenant's personal property shall include all computer wiring and cabling installed by Tenant and shall be removed by Tenant unless Landlord otherwise notifies Tenant in writing not to remove the cabling. Provided, however, if Landlord has

not elected to have Tenant remove the Alterations, Tenant shall leave the Alterations at the Premises in good condition and repair, ordinary wear and tear and casualty damage excepted. Tenant shall repair any damage to the Premises occasioned by the installation or removal of Tenant's trade fixtures, furnishings and equipment. Damage to or deterioration of any Element of the Premises or any other item Tenant is required to repair or maintain at the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by good maintenance practices. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all damages, expenses, costs, losses or liabilities arising from any delay by Tenant in so surrendering the Premises including, without limitation, any damages, expenses, costs, losses or liabilities arising from any claim against Landlord made by any succeeding tenant or prospective tenant founded on or resulting from such delay and losses and damages suffered by Landlord due to lost opportunities to lease any portion of the Premises to any such succeeding tenant or prospective tenant, together with, in each case, actual attorneys• fees and costs; provided, however, such indemnity obligation shall not be effective until ten {10) days after Landlord shall deliver written notice (the "New Lease Notice") that Landlord is negotiating for, or has negotiated, a new lease of all of a portion of the Premises, which New Lease Notice shall include a statement that Tenant's indemnity obligation set forth in this Section shall be effective if Tenant does not timely and fully completed its removal and restoration obligations prior to the expiration or earlier termination of this Lease. In addition to the foregoing and regardless of whether or not Landlord provides a New Lease Notice, Tenant shall reimburse Landlord for all costs associated with Tenant's failure to complete its removal and restoration obligation plus an administrative fee in the amount of ten percent {10%) of such costs, which reimbursement shall be made by Tenant within thirty {30) days after demand from Landlord.

13.6FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated due to the expiration of its term or otherwise, and Tenant fails to remove its property, in addition to any other remedies available to Landlord under this Lease, and subject to any other right or remedy Landlord may have under applicable law, Landlord may remove any property of Tenant from the Premises and store the same elsewhere at the expense and risk of Tenant.

14.DAMAGE AND DESTRUCT/ON.

14.1EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Building or Project is damaged by fire, earthquake, flood, explosion, the elements, riot, the release or existence of Hazardous Materials (as defined below) or by any other cause whatsoever (hereinafter collectively referred to as "Damages"), but the Damages are not material (as defined in Section 14.2 below), Landlord shall repair the Damages to the Project as soon as is reasonably possible, and this Lease shall remain in full force and effect. If all or part of the Project is destroyed or materially damaged (as defined in Section 14.2 below), Landlord shall have the right, in its sole and complete discretion, to repair or to rebuild the Project or to terminate this Lease. Landlord shall within ninety (90) days after the discovery of such material damage or destruction notify Tenant in writing of Landlord's intention to repair or to rebuild or to terminate this Lease. Tenant shall in no event be entitled to compensation or damages on account of annoyance or inconvenience in making any repairs, or on account of construction, or on account of Landlord's election to terminate this Lease. Notwithstanding the foregoing, if Landlord shall elect to rebuild or repair the Project after material damage or destruction, but in good faith determines that the Premises cannot be substantially repaired within three hundred sixty (360) days after the date of the discovery of the material damage or destruction, without payment of overtime or other premiums, and the damage to the Project will render the Building untenantable or unusable for Tenant's intended purposes, Landlord shall notify Tenant thereof in writing at the time of Landlord's election to rebuild or repair, and Tenant shall thereafter· have a period of thirty (30) days within which Tenant may elect to terminate this Lease, upon thirty (30) days' advance written notice to Landlord. Tenant's termination right described in the preceding sentence shall not apply if the damage was caused solely by the negligent or intentionally wrongful acts of Tenant or its employees, agents, contractors or invitees. Failure of Tenant to exercise said election within said thirty (30) day period shall constitute Tenant's agreement to accept delivery of the Premises under this Lease whenever tendered by Landlord, provided Landlord thereafter pursues reconstruction or restoration diligently to completion, subject to delays caused by Force Majeure Events. If Landlord is unable to repair the damage to the Premises during such three hundred sixty (360) day period due to Force Majeure Events, the three hundred sixty

{360) day period shall be extended by the period of delay caused by the Force Majeure Events. Subject to Section 14.3 below, if Landlord or Tenant terminates this Lease in accordance with this Section 14.1, Tenant shall continue to pay all Base Rent, Operating Expenses and other amounts due hereunder which arise prior to the date

of Damages. If Damages occur during the last twelve (12) months of the Term and cannot be repaired within 60 days from the date of damage, Tenant may, upon 30 days' notice, terminate this Lease.

14.2DEFINITION OF MATERIAL DAMAGE. Damage to the Project shall be deemed material if, in Landlord's reasonable judgment, the uninsured cost of repairing the damage will exceed $100,000 or the Damage cannot be repaired within two hundred seventy (270) days from the date of such Damage. Damage to the Project shall also be deemed material if (a) the Project cannot be rebuilt or repaired to substantially the same condition it was in prior to the damage due to laws or regulations in effect at the time the repairs will be made, (b) the holder of any mortgage or deed of trust encumbering the Project requires that insurance proceeds available to repair the damage in excess of $75,000 be applied to the repayment of the indebtedness secured by the mortgage or the deed of trust, or (c) the damage occurs during the last twelve (12) months of the Lease term and cannot be repaired within 60 days from the date of damage; provided, however, if prior to such election to terminate Tenant has elected to extend the Term pursuant to the provisions of this Lease and such election may not then according to its terms be rescinded or terminated, then for purposes of this Section 14.2(c) the Term shall be deemed to expire on such extended date.

14.3ABATEMENTOF RENT. In the event of damage to the Premises, and the damage was not caused solely by the negligence or intentionally wrongful acts of Tenant or its employees, agents, contractors or invitees, then Tenant's Base Rent and Tenant's Share of Operating Expenses shall be abated or reduced, as the case may be, for such time that the Premises is unusable for Tenant's intended purposes, or Tenant is prevented from using, and does not use, the Building or a portion thereof, in the proportion that the rentable area of the portion of the Building that Tenant is prevented from using, and does not use, bears to the total rentable area of the Building.

14.4TENANT'SACTS. If such damage or destruction occurs as a result of the negligence or the intentional and wrongful acts of Tenant or Tenant 1s employees, agents, contractors or invitees, and the proceeds of insurance which are actually received by Landlord are not sufficient to pay for the repair of all of the damage, Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon demand, the difference between the cost of repairing the damage and the insurance proceeds received by Landlord.

14.5TENANT'S PROPERTY. Landlord shall not be liable to Tenant or its employees, agents, contractors, invitees or customers for loss or damage to merchandise, tenant improvements, fixtures, automobiles, furniture, equipment, computers, files or other property (hereinafter collectively "Tenant's property") located at the Project. Tenant shall repair or replace all of Tenant's property at Tenant's sole cost and expense. Tenant acknowledges that it is Tenant's sole responsibility to obtain adequate insurance coverage to compensate Tenant for damage to Tenant's property.

14.6WAIVER. Landlord and Tenant hereby waive the provisions of any present or future statutes which relate to the termination of leases when leased property is damaged or destroyed and agree that such event shall be governed by the terms of this Lease.

15.CONDEMNATION. If any portion of the Premises is taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs; provided that if so much of the Premises is taken by such condemnation as would substantially and adversely affect the operation and profitability of Tenant's business conducted from the Premises, and said taking lasts for ninety

(90) days or more, Tenant shall have the option, to be exercised only in writing within thirty (30) days after Landlord shall have given Tenant written notice of such taking (or in the absence of such notice, within thirty (30) days after the condemning authority shall have taken possession), to terminate this Lease as of the date the condemning authority takes such possession. If a taking lasts for less than ninety (90) days, Tenant's rent shall be abated during said period but Tenant shall not have the right to terminate this Lease. If Tenant does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Rent shall be reduced in the proportion that the usable floor area of the Building taken bears to the total usable floor area of the Building. Exterior Areas taken shall be excluded from the Exterior Areas usable by Tenant and no reduction of rent shall occur with respect thereto or by reason thereof. Landlord shall have

the option in its sole discretion to terminate this Lease as of the taking of possession by the condemning authority, by giving written notice to Tenant of such election within thirty (30) days after receipt of notice of a taking by condemnation of any part of the Premises. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Landlord, whether such award shall be made as compensation for diminution in value of the leasehold, for the taking of the fee, as severance damages, or as damages for tenant improvements; provided, however, that Tenant shall be entitled to any separate award for loss of or damage to Tenant's removable personal property and for moving expenses and goodwill. In the event that this Lease is not terminated by reason of such condemnation, and subject to the requirements of any lender that has made a loan to Landlord encumbering the Project, Landlord shall to the extent of severance damages received by Landlord in connection with such condemnation, repair any damage to the Project caused by such condemnation except to the extent that Tenant has been reimbursed therefor by the condemning authority. This section, not general principles of law or California Code of Civil Procedure Sections 1230.010 et seq., shall govern the rights and obligations of Landlord and Tenant with respect to the condemnation of all or any portion of the Project.

16.ASSIGNMENT AND SUBLETTING.

16.1LANDLDRD's CONSENT REQUIRED. Tenant shall not voluntarily or by operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or in the Premises (hereinafter collectively a "Transfer"), without Landlord's prior written consent, which shall not be unreasonably withheld. Landlord shall respond to Tenant's written request for consent hereunder within fifteen

(15) business days after Landlord's receipt of the written request from Tenant. Any attempted Transfer without such consent shall be void and shall constitute a default and breach of this Lease. Tenant's written request for Landlord's consent shall include, and Landlord's fifteen (15) business day response period referred to above shall not commence, unless and until Landlord has received from Tenant, all of the following information: (a) financial statements for the proposed assignee or subtenant prepared in accordance with generally accepted accounting principles, if available, for the lesser of (i) the past two (2) years or (ii) the time period the assignee or subtenant has been in existence, (b) intentionally omitted, (c) a credit report or similar report on the proposed assignee or subtenant, (d) a detailed description of the business the assignee or subtenant intends to operate at the Premises,

(e) the proposed effective date of the assignment or sublease, (f) a copy of the proposed sublease or assignment agreement which includes all of the terms and conditions of the proposed assignment or sublease, (g) a detailed description of any ownership or commercial relationship between Tenant and the proposed assignee or subtenant,

(h) a detailed description of any Alterations the proposed assignee or subtenant desires to make to the Premises, and (i) a Hazardous Materials Disclosure Certificate substantially in the form of Exhibit D attached hereto (the "Transferee HazMat Certificate"). If the obligations of the proposed assignee or subtenant will be guaranteed by any person or entity, Tenant's written request shall not be considered complete until the information described in (a), (b) and (c) of the previous sentence has been provided with respect to each proposed guarantor. "Transfer" shall also include the transfer (a) if Tenant is a corporation, and Tenant's stock is not publicly traded over a recognized securities exchange, of fifty percent (50%) or more of the voting stock of such corporation during the term of this Lease (whether or not in one or more transfers) or the dissolution, merger or liquidation of the corporation, or (b) if Tenant is a partnership, limited liability company, limited liability partnership or other entity, of fifty percent (50%) or more of the profit and loss participation in such partnership or entity during the term of this Lease (whether or not in one or more transfers) or the dissolution, merger or liquidation of the partnership, limited liability company, limited liability partnership or other entity.

16.2STANDARD FDR APPROVAL. Landlord shall not unreasonably withhold its consent to a Transfer provided that Tenant has complied with each and every requirement, term and condition of this Section 16. Tenant acknowledges and agrees that each requirement, term and condition in this Section 16 is a reasonable requirement, term or condition. It shall be deemed reasonable for Landlord to withhold its consent to a Transfer if any requirement, term or condition of this Section 16 is not complied with or: (a) intentionally omitted; (b) in Landlord's reasonable judgment, a proposed assignee or subtenant does not have the financial wherewithal to satisfy its obligations under such assignment or sublease, as applicable; (c) intentionally omitted; (d) the terms of a proposed assignment or subletting will allow the proposed assignee or subtenant to exercise a right of renewal, right of expansion, right of first offer, right of first refusal or similar right held by Tenant; (e) a proposed assignee or subtenant refuses to enter into a written assignment agreement or sublease containing such terms and conditions as Landlord reasonably deems necessary; (f) the use of the Premises by the proposed assignee or subtenant is not permitted by this Lease; (g) intentionally omitted; (h) Tenant is in default as defined in Section 17 at the time of the request; (i) if requested by Landlord's lender, the assignee or subtenant refuses to sign a non-disturbance and attornment agreement in favor of Landlord's lender; (j) Landlord has sued or been sued by the proposed assignee or subtenant or has otherwise been involved in a legal dispute with the proposed assignee or subtenant; (k) intentionally omitted; (I) intentionally omitted;

(m) the assignment or sublease will result in there being more than two subtenants of the Premises; (n) the assignee or subtenant is a governmental or quasi-governmental entity or an agency, department or instrumentality of a governmental or quasi-governmental agency; or (o) the assignee or subtenant will use, store or handle Hazardous Materials in or about the Premises of a type, nature, quantity not acceptable to Landlord, in Landlord's sole discretion.

16.3 ADDITIONAL TERMS AND CONDITIONS. The following terms and conditions shall be applicable to any Transfer:

(a)Regardless of Landlord's consent, no Transfer shall release Tenant from Tenant's obligations hereunder or alter the primary liability of Tenant to pay the rent and other sums due Landlord hereunder and to perform all other obligations to be performed by Tenant hereunder or release any guarantor from its obligations under its guaranty.

(b)Landlord may accept rent from any person other than Tenant pending approval or disapproval of an assignment or subletting.

(c)Neither a delay in the approval or disapproval of a Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of Landlord's right to exercise its rights and remedies for the breach of any of the terms or conditions of this Section 16.

(d)The consent by Landlord to any Transfer shall not constitute a consent to any subsequent Transfer by Tenant or to any subsequent or successive Transfer by an assignee or subtenant. However, Landlord may consent to subsequent Transfers or any amendments or modifications thereto without notifying Tenant or anyone else liable on the Lease and without obtaining their consent, and such action shall not relieve such persons from liability under this Lease.

(e)In the event of any default under this Lease beyond any applicable notice and cure period, Landlord may proceed directly against Tenant, any guarantors or anyone else responsible for the performance of this Lease, including any subtenant or assignee, without first exhausting Landlord's remedies against any other person or entity responsible therefor to Landlord, or any security held by Landlord.

(I)Landlord's written consent to any Transfer by Tenant shall not constitute an acknowledgment that no default then exists under this Lease nor shall such consent be deemed a waiver of any then-existing default.

(g)The discovery of the fact that any financial statement relied upon by Landlord in giving its consent to an assignment or subletting was materially false shall, at Landlord's election, render Landlord's consent null and void.

(h)Landlord shall not be liable under this Lease or under any sublease to any subtenant.

(i)No assignment or sublease may be modified or amended without Landlord's prior written consent.

(j)Any assignee of, or subtenant under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed, for the benefit of Landlord, to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Tenant during the term of said assignment or sublease, other than such obligations as are contrary or inconsistent with provisions of an assignment or sublease to which Landlord has specifically consented in writing.

(k)At Landlord's request, Tenant shall deliver to Landlord, Landlord's reasonable and standard consent to assignment or consent to sublease agreement, as applicable, executed by Tenant, the assignee and the subtenant, as applicable.

16.3ADDITIONAL TERMSAND CONDITIONS APPLICABLE TO SUBLETTING. The following terms and conditions shall apply to any subletting by Tenant of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:

(a)Tenant hereby absolutely and unconditionally assigns and transfers to Landlord all of Tenant's interest in all rentals and income arising from any sublease entered into by Tenant, and Landlord may collect such rent and income and apply same toward Tenant's obligations under this Lease; provided, however, that until a default beyond any applicable notice and cure period shall occur in the performance of Tenant's obligations under this Lease, Tenant may receive, collect and enjoy the rents accruing under such sublease. Landlord shall not, by reason of this or any other assignment of such rents to Landlord nor by reason of the collection of the rents from a subtenant, be deemed to have assumed or recognized any sublease or to be liable to the subtenant for any failure of Tenant to perform and comply with any of Tenant's obligations to such subtenant under such sublease, including, but not limited to, Tenant's obligation to return any security deposit. Tenant hereby irrevocably authorizes and directs any such subtenant, upon receipt of a written notice from Landlord stating that a default beyond any applicable notice and cure period exists in the performance of Tenant's obligations under this Lease, to pay to Landlord the rents due as they become due under the sublease. Tenant agrees that such subtenant shall have the right to rely upon any such statement and request from Landlord, and that such subtenant shall pay such rents to Landlord without any obligation or right to inquire as to whether such default exists and notwithstanding any notice or claim from Tenant to the contrary.

(b)In the event Tenant shall default beyond any applicable notice and cure period in the performance of its obligations under this Lease, Landlord, at its option and without any obligation to do so, may require any subtenant to attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant under such sublease from the time of the exercise of said option to the termination of such sublease; provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by such subtenant to Tenant or for any other prior defaults of Tenant under such sublease.

16.4TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be entitled to receive from Tenant (as and when received by Tenant) as an item of additional rent one-half of all amounts received by Tenant from the subtenant or assignee in excess of the amounts payable by Tenant to Landlord hereunder (the "Transfer Premium"). The Transfer Premium shall be reduced by the reasonable brokerage commissions, tenant improvement costs and legal fees incurred by Tenant in order to assign the Lease or to sublet all or a portion of the Premises. "Transfer Premium" shall mean all Base Rent, additional rent or other consideration of any type whatsoever payable by the assignee or subtenant in excess of the Base Rent and additional rent payable by Tenant under this Lease and reasonable brokerage commissions, tenant improvement costs, and attorney's fees and costs incurred by Tenant in connection with such sublease or assignment. If less than all of the Premises is subleased, for purposes of calculating the Transfer Premium, the Base Rent and the additional rent due under this Lease shall be allocated to the subleased premises on a per-leasable-square-foot basis (e.g., if one-half of the Premises is subleased, for purposes of determining the amount of the Transfer Premium, one-half of the Base Rent and additional rent due under this Lease would be allocated to the subleased premises, and this amount would be subtracted from the base rent, additional rent and other monies payable to Tenant under the sublease). "Transfer Premium" shall also include, but not be limited to, key money and bonus money paid by the assignee or subtenant to Tenant in connection with such Transfer, and any payment in excess of fair-market value for services rendered by Tenant to the assignee or

subtenant or for assets, fixtures, inventory, equipment or furniture transferred by Tenant to the assignee or subtenant in connection with such Transfer. Landlord and Tenant agree that the foregoing Transfer Premium is reasonable.

16.5PERMITTED TRANSFER. Notwithstanding anything to the contrary contained in this Section 16, an assignment of the Lease or sublease of all or any portion of the Premises to any entity which controls or is controlled by or is under common control with Tenant or which acquires all or substantially all of the assets, stock or equity interests of Tenant or which is the surviving entity resulting from a merger or consolidation of Tenant (in each such case, an "Affiliate"), shall not require Landlord's consent provided that at least ten (10) days prior to such assignment or sublease (or ten (10) days after such assignment or sublease, if prohibited by law) (i) Tenant provides Landlord with reasonable evidence that the successor to Tenant has a tangible net worth computed in accordance with generally accepted accounting principles consistently applied (and excluding goodwill) that is sufficient to meet the obligations of Tenant under the Lease, and that is at least equal to the tangible net worth of Tenant immediately prior to such merger, consolidation or sale; (ii) Tenant notifies Landlord in writing of any such assignment or sublease and provides Landlord with evidence that such assignment or sublease is a Transfer permitted by this section; (iii) prior to the date an assignment or sublease will take effect (or promptly thereafter if Tenant is prohibited by law from notifying Landlord prior to the effective date of such assignment or sublease), the assignee or sublessee and Tenant shall enter into Landlord's standard consent to sublease agreement or consent to assignment agreement (the "Transfer Agreements"), and (iv) Tenant shall pay Landlord's expenses pursuant to Section 16.7. Whether or not an assignment or sublease to an Affiliate is made pursuant to the terms of this section, Tenant shall not be relieved of its obligations under this Lease.

16.6LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease or sublet the Premises or request the consent of Landlord to any Transfer, then Tenant shall pay (a) $1,000 to Landlord to compensate Landlord for its internal administrative costs in processing the request plus (b) Landlord's actual and reasonable out-of-pocket costs and expenses incurred in connection therewith including, but not limited to, attorneys', architects 1 accountants', engineers' or other consultants' fees. ,

17.DEFAULT; REMEDIES.

17.1DEFAULT BY TENANT. Landlord and Tenant hereby agree that the occurrence of any one or more of the following events is a default by Tenant under this Lease and that said default shall give Landlord the rights described in Section 17.2. Landlord or Landlord's authorized agent shall have the right to execute and to deliver any notice of default, notice to pay rent or quit or any other notice Landlord gives Tenant.

(a)Tenant's failure to make any payment of Base Rent, Tenant's Percentage Share of Operating Expenses or any other payment required to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of three (3) business days after written notice thereof from Landlord to Tenant. In the event that Landlord serves Tenant with a notice to pay rent or quit pursuant to applicable unlawful detainer statutes, such notice shall also constitute the notice required by this Section 17.l(a).

(b)The abandonment of the Premises by Tenant coupled with the nonpayment of rent.

(c)The failure of Tenant to comply with any of its obligations under Sections 4, 10, 13, 16, 19, 23, 25, 26, 27 and 28 where Tenant fails to comply with its obligations or fails to cure any earlier breach of such obligation within ten (10) days following written notice from Landlord to Tenant. In the event Landlord serves Tenant with a notice to quit or any other notice pursuant to applicable unlawful detainer statutes, said notice shall also constitute the notice required by this Section 17.l(c).

(d)The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Tenant (other than those referenced in Sections 17. (a), (b) and (c), above), where such failure shall continue for a period of twenty (20) days after written notice thereof from Landlord to Tenant; provided, however, that if the nature of Tenant's nonperformance is such that more than twenty (20)

days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said twenty (20) day period and thereafter diligently pursues such cure to completion. In the event that Landlord serves Tenant with a notice to quit or any other notice pursuant to applicable unlawful detainer statutes, said notice shall also constitute the notice required by this Section 17.l(d).

(e)(i) The making by Tenant or any guarantor of Tenant's obligations hereunder of any general arrangement or general assignment for the benefit of creditors; (ii) Tenant or any guarantor becoming a "debtor" as defined in 11U.S.C. 101 or any successor statute thereto (unless, in the case of a petition filed against Tenant or guarantor, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; (iv) the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged within thirty {30) days; or (v) the insolvency of Tenant. In the event that any provision of this Section 17.l(e) is unenforceable under applicable law, such provision shall be of no force or effect.

(f)The discovery by Landlord that any financial statement, representation or warranty given to Landlord by Tenant, or by any guarantor of Tenant's obligations hereunder, was materially false at the time given. Tenant acknowledges that Landlord has entered into this Lease in material reliance on such information.

(g)If Tenant is a corporation, partnership, limited liability company or similar entity, the dissolution or liquidation of Tenant.

(h)If Tenant's obligations under this Lease are guaranteed: (i) the death of a guarantor, (ii) the termination of a guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a guarantor's refusal to honor the guaranty, (v) a guarantor's breach of its guaranty obligation on an anticipatory breach basis or (vi) if the guarantor is a corporation, limited liability company or partnership, the dissolution of the guarantor or the termination of the guarantor's existence.

17.2REM EDIES.

(a)In the event of any default of this Lease by Tenant as provided in Section 17.1, Landlord may, at any time thereafter, with or without notice or demand, and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such default:

(i)terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease and the term hereof shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. If Landlord terminates this Lease, Landlord may recover from Tenant (A) the worth at the time of award of the unpaid rent which had been earned at the time of termination; (B) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; (C) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; and (D) any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Premises, expenses of releasing, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, any unamortized real estate commissions actually paid by Landlord and the unamortized value of any tenant improvement allowance provided by Landlord. The "worth at time of award" of the amounts referred to in Section 17.2(a)(i)(A) and (B) shall be computed by allowing interest at the lesser of ten percent (10%) per annum or the maximum interest rate permitted by applicable law. The worth at the time of award of the amount referred to in Section 17.2(a)(i)(C) shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). For

purposes of this Section 17.2(a)(i), "rent" shall be deemed to be all monetary obligations required to be paid by Tenant pursuant to the terms of this Lease.

(ii)maintain Tenant's right of possession, in which event Landlord shall have the remedy described in California Civil Code Section 1951.4 which permits Landlord to continue this Lease in effect after Tenant's breach and abandonment and recover rent as it becomes due. In the event Landlord elects to continue this Lease in effect, Tenant shall have the right to sublet the Premises or assign Tenant's interest in the Lease subject to the reasonable requirements contained in Section 16 of this Lease and provided further that Landlord shall not require compliance with any standard or condition contained in Section 16 that has become unreasonable at the time Tenant seeks to sublet or assign the Premises pursuant to this Section 17.2(a)(ii).

(iii)collect sublease rents (or appoint a receiver to collect such rent) and otherwise perform Tenant's obligations at the Premises, it being agreed, however, that the appointment of a receiver for Tenant shall not constitute an election by Landlord to terminate this Lease.

(iv)pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the state in which the Premises are located.

(b)No remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity. The expiration or termination of this Lease and/or the termination of Tenant's right to possession of the Premises shall not relieve Tenant of liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term of the Lease or by reason of Tenant 1s occupancy of the Premises.

(c)If Tenant abandons the Premises, Landlord may re-enter the Premises, and such re-entry shall not be deemed to constitute Landlord's election to accept a surrender of the Premises or to otherwise relieve Tenant from liability for its breach of this Lease. No surrender of the Premises shall be effective against Landlord unless Landlord has entered into a written agreement with Tenant in which Landlord expressly agrees to (i) accept a surrender of the Premises and (ii) relieve Tenant of liability under the Lease. The delivery by Tenant to Landlord of possession of the Premises shall not constitute the termination of the Lease or the surrender of the Premises.

17.3DEFAULT BY LANDLORD. Landlord shall not be in default under this Lease unless Landlord fails to perform obligations required of Landlord within thirty (30) days after written notice by Tenant to Landlord and to the holder of any mortgage or deed of trust encumbering the Project whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its cure, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently pursues the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of Landlord's default, and Tenant's remedies shall be limited to damages and/or an injunction. Tenant hereby waives its right to recover consequential damages (including, but not limited to, lost profits) or punitive damages arising out of a Landlord default. This Lease and the obligations of Tenant hereunder shall not be affected or impaired because Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of a Force Majeure Event, and the time for Landlord's performance shall be extended for the period of any such delay.

17.4LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant to Landlord of Base Rent, Tenant's Percentage Share of Operating Expenses or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed encumbering the Project. Accordingly, if any installment of Base Rent, Tenant's Percentage Share of Operating Expenses or any other sum due from Tenant shall not be received by Landlord within five (5) calendars days of when such amount is due, then, without any requirement for notice or demand to Tenant, Tenant shall immediately pay to Landlord a late charge equal to five percent (5%) of such overdue

amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder, including the assessment of interest under Section 17.5. Notwithstanding the foregoing, Landlord will not be permitted to assess a late charge unless Landlord notifies Tenant of such assessment within thirty (30) days after the date on which such payment first became due.

17.5INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any amount due to Landlord that is not paid within five (5) days of when due shall bear interest from the date due at the lesser of ten percent (10%) per annum or the maximum rate permitted by applicable law. Payment of such interest shall not excuse or cure any default by Tenant under this Lease; provided, however, that interest shall not be payable on late charges incurred by Tenant nor on any amounts upon which late charges are paid by Tenant.

17.6PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant fails to pay Base Rent, Tenant's Percentage Share of Operating Expenses, parking charges or any other monetary obligation due hereunder on the date it is due, after Tenant's third failure to pay any monetary obligation on the date it is due, at Landlord's option, all monetary obligations of Tenant hereunder shall thereafter be paid by wire transfer for the next 12 months. If Landlord has required Tenant to make said payments by wire transfer, Tenant's failure to make a payment by wire transfer shall be a default hereunder.

18.LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any reduction of rent. If Tenant shall fail to perform any of its obligations under this Lease, Landlord may, but shall not be obligated to, after five (5) days' prior written notice to Tenant, make any such payment or perform any such act on Tenant's behalf without waiving its rights based upon any default of Tenant and without releasing Tenant from any obligations hereunder. Tenant shall pay to Landlord, within twenty (20) days after delivery by Landlord to Tenant of statements therefore, an amount equal to the expenditures reasonably made by Landlord in connection with the remedying by Landlord of Tenant's defaults pursuant to the provisions of this section.

19.INDEMNITY. Except for the gross negligence or willful misconduct of Landlord or any Landlord Party (which shall apply throughout this Section), Tenant hereby agrees to indemnify, defend and hold harmless Landlord and its employees, members, managers, agents, property managers, lenders and ground lessors (said persons and entities are hereinafter individually referred to as an "Indemnified Party" or "Landlord Party'', and collectively referred to as the "Indemnified Parties" or "Landlord Parties") from and against any and all liability, loss, cost, damage, claims, loss of rents, liens, judgments, penalties, fines, settlement costs, investigation costs, cost of consultants and experts, reasonable attorney's fees, court costs and other legal expenses, effects of environmental contamination, cost of environmental testing, removal, remediation and/or abatement of Ha2ardous Materials (as said term are defined below), insurance policy deductibles and other expenses (hereinafter collectively referred to as "Damages") arising out of or related to an Indemnified Matter (as defined below). For purposes of this section, an "Indemnified Matter" shall mean any matter for which one or more of the Indemnified Parties incurs liability or Damages if the liability or Damages arise out of or involve, directly or indirectly, (a} Tenant's or its employees', agents', contractors 1 or invitees' (all of said persons or entities are hereinafter collectively referred to as "Tenant Parties") use or occupancy of the Premises or the Project, (b) any act, omission or neglect of a Tenant Party, (c) Tenant's failure to perform any of its obligations under the Lease, (d) the existence, use or disposal of any Hazardous Materials (as defined below) brought on to the project by a Tenant Party or (e) any other matters for which Tenant has agreed to indemnify Landlord pursuant to any other provision of this Lease. Tenant's obligations hereunder shall include, but shall not be limited to (f) compensating the Indemnified Parties for Damages arising out of Indemnified Matters within twenty (20) days after written demand from an Indemnified Party and (g) providing a defense, with counsel reasonably satisfactory to the Indemnified Party, at Tenant's sole expense, within twenty (20) days after written demand from the Indemnified Party, of any claims, action or proceeding arising out of or relating to an Indemnified Matter whether or not litigated or reduced to judgment and whether or not well founded. If Tenant is obligated to compensate an Indemnified Party for Damages arising out of an Indemnified Matter, Landlord shall have the immediate and unconditional right, but not the obligation, without notice or demand to Tenant, to pay the damages, and Tenant

shall, upon twenty (20) days' advance written notice from Landlord, reimburse Landlord for the costs incurred by Landlord. By way of example, and not limitation, Landlord shall have the immediate and unconditional right to cause any damages to the Exterior Areas or to any other part of the Project to be repaired and to compensate other occupants of the Project or other persons or entities for Damages arising out of an Indemnified Matter. The Indemnified Parties need not first pay any Damages to be indemnified hereunder. Tenant's obligations under this section shall not be released, reduced or otherwise limited because one or more of the Indemnified Parties are or may be actively or passively negligent with respect to an Indemnified Matter or because an Indemnified Party is or was partially responsible for the Damages incurred. This indemnity is intended to apply to the fullest extent permitted by applicable law. Tenant's obligations under this section shall survive the expiration or termination of this Lease unless specifically waived in writing by Landlord after said expiration or termination.

20.EXEMPTION OF LANDLORD FROM LIABILITY. Except for the gross negligence or willful misconduct of Landlord or any Landlord Party, Tenant hereby agrees that Landlord Parties shall not be liable for injury to Tenant's business or any loss of income therefrom or for loss of or damage to the merchandise, tenant improvements, fixtures, furniture, equipment, computers, files, automobiles, or other property of Tenant, Tenant1s employees, agents, contractors or invitees, or any other person in or about the Project, nor shall Landlord Parties be liable for injury to the person of Tenant, Tenant's employees, agents, contractors or invitees, whether such damage or injury is caused by or results from any cause whatsoever including, but not limited to, theft, criminal activity at the Project, negligent security measures, bombings or bomb scares, acts of terrorism, Hazardous Substances, fire, steam, electricity, gas, water or rain, flooding, breakage of pipes, sprinklers, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises, or from other sources or places, or from new construction or the repair, alteration or improvement of any part of the Project, and regardless of whether the cause of the damage or injury arises out of the active negligence, passive negligence or intentional acts of Landlord Parties. Landlord Parties shall not be liable for any damages arising from any act or neglect of any employees, agents, contractors or invitees of any other tenant, occupant or user of the Project. Tenant, as a material part of the consideration to Landlord hereunder, hereby assumes all risk of damage to Tenant's property or business or injury to persons, in, upon or about the Project arising from any cause, including the active or passive negligence of landlord Parties, and Tenant hereby waives all claims in respect thereof against Landlord Parties.

21.LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the right to transfer all or any portion of its interest in the Project and to assign this Lease to the transferee. Tenant agrees that in the event of such a transfer Landlord shall automatically be released from all liability under this Lease; and Tenant hereby agrees to look solely to Landlord's transferee for the performance of Landlord's obligations hereunder after the date of the transfer. Upon such a transfer, Landlord shall, at its option, return Tenant's security deposit to Tenant or transfer Tenant's security deposit to Landlord's transferee and, in either event, Landlord shall have no further liability to Tenant for the return of its security deposit. Subject to the rights of any lender holding a mortgage or deed of trust encumbering all or part of the Project, Tenant agrees to look solely to Landlord's equity interest in the Project and any rent, income or proceeds therefrom for the collection of any judgment requiring the payment of money by Landlord arising out of (a) Landlord's failure to perform its obligations under this Lease or (b) the negligence or willful misconduct of Landlord, its partners, employees and agents. No other property or assets of Landlord shall be subject to levy, execution or other enforcement procedure for the satisfaction of any judgment or writ obtained by Tenant against Landlord. No partner, employee or agent of Landlord shall be personally liable for the performance of Landlord's obligations hereunder or be named as a party in any lawsuit arising out of or related to, directly or indirectly, this Lease and the obligations of Landlord hereunder. The obligations under this Lease do not constitute personal obligations of the individual partners of Landlord, if any, and Tenant shall not seek recourse against the individual partners of Landlord or their assets.

22.SIGNS. Tenant shall not make any changes to the exterior of the Premises, install any exterior lights, decorations, balloons, flags, pennants, banners or painting, or erect or install any signs, windows or door lettering, placards, decorations or advertising media of any type which can be viewed from the exterior of the Building, without Landlord's prior written consent, which approval shall not be unreasonably withheld. Upon vacation of the Premises, Tenant shall remove all signs and repair, paint and/or replace the building facia surface to which its signs are attached whether or not such signage was installed as part of the initial Tenant Improvements. Tenant shall obtain all

applicable governmental permits and approvals for signs and exterior treatments. All signs, decorations, advertising media, blinds, draperies and other window treatment or bars or other security installations visible from outside the Premises shall be subject to Landlord's approval and conform in all respects to Landlord's requirements. Tenant shall have the right to install Building facade signage and monument signage at the Premises after first obtaining Landlord's prior written approval, including, but not limited to, approval of the design, location, style, materials and type of signage, which approval shall not be unreasonably withheld.

23.PARKING. During the term and subject to the rules and regulations attached hereto as Exhibit C, as modified by Landlord from time to time (the "Rules"), Tenant shall be entitled to use all parking spaces at the Project at no additional charge during the Term and any extension thereof. If Tenant commits or allows in the parking lot any of the activities prohibited by the Lease or the Rules, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord. Tenant's parking rights are the personal rights of Tenant, and Tenant shall not transfer, assign or otherwise convey its parking rights separate and apart from this Lease. All parking spaces may only be used for parking vehicles no larger than full-size passenger automobiles or pick-up trucks. Landlord, in addition to its other remedies, shall have the right to remove or tow away any other vehicles. Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those reasonably designated by Landlord for such activities. Tenant may designate up to seven (7) parking spaces for visitors to the Project, which parking spaces shall be subject to the mutual agreement of the parties. In addition, Tenant may allocate parking spaces located near the rear of the Building as equipment pads on an as needed basis subject to Landlord's prior written approval, which approval shall not be unreasonably withheld. The re-designation of parking spaces for equipment pads shall be considered an Alteration and subject to all of the terms and conditions of Section 13, including, but not limited to, Landlord's right to require removal of such pads and restoration to parking spaces. Except with respect to the re-designation of the aforementioned parking spaces for equipment pads, Tenant may not reduce the number of full size parking spaces at the Project, convert full size parking spaces to compact spaces or otherwise change the parking configuration of the Project.

24.BROKER'S FEE. Tenant and Landlord each represent and warrant to the other that neither has had any dealings or entered into any agreements with any person, entity, broker or finder other than the persons, if any, listed in Section 1.14, in connection with the negotiation of this Lease, and no other broker, person, or entity is entitled to any commission or finder's fee in connection with the negotiation of this Lease, and Tenant and Landlord each agree to indemnify, defend and hold the other harmless from and against any claims, damages, costs, expenses, attorneys' fees or liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings, actions or agreements of the indemnifying party. The commission payable to Landlord's broker and Tenant's broker with respect to this Lease shall be pursuant to the terms of the separate commission agreement in effect between Landlord and Landlord's broker. Landlord's broker shall pay a portion of its commission to Tenant's broker, if so provided in any agreement between Landlord's broker and Tenant's broker. Nothing in this Lease shall impose any obligation on Landlord to pay a commission or fee to any party other than Landlord's broker.

25.ESTOPPEL CERTIFICATE.

25.1DELIVERY OF CERTIFICATE. Tenant shall from time to time, upon not less than ten (10) business days' prior written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying such information as Landlord may reasonably request including, but not limited to, the following: (a) that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect), (b) the date to which the Base Rent and other charges are paid in advance and the amounts so payable, (c) that there are not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on the part of Landlord, or specifying such defaults or unfulfilled obligations, if any are claimed,

(d) that all tenant improvements to be constructed by Landlord, if any, have been completed in accordance with

Landlord's obligations, and (e) that Tenant has taken possession of the Premises. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Project.

25.2FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the failure of Tenant to deliver such statement within such time shall constitute a default of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this Lease is in full force and effect, without modification except as may be represented by Landlord, (b) there are no uncured defaults in Landlord's performance, (c) not more than one month's Base Rent has been paid in advance, (d) all tenant improvements to be constructed by Landlord, if any, have been completed in accordance with Landlord's obligations, and (e) Tenant has taken possession of the Premises.

26.FINANCIAL INFORMATION. From time to time, at Landlord's request but not more than once per calendar year unless such request is made in connection with a proposed sale or financing of the Project (requests in connection with a proposed sale or financing of the Project shall not count as the one per calendar year request), Tenant shall cause the following financial information to be delivered to Landlord, at Tenant's sole cost and expense, upon not less than ten (10) business days' advance written notice from Landlord: (a) a current financial statement for Tenant and Tenant's financial statements for the previous two accounting years, (b) a current financial statement for any guarantor(s) of this Lease and the guarantor'(s) financial statements for the previous two accounting years and (c) such other financial information pertaining to Tenant or any guarantor as Landlord or any lender or purchaser of Landlord may reasonably request. All financial statements shall be prepared in accordance with generally accepted accounting principles consistently applied and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Tenant hereby authorizes Landlord, from time to time but not more than once per calendar year unless such request is made in connection with a proposed sale or financing of the Project (requests in connection with a proposed sale or financing of the Project shall not count as the one per calendar year request), without notice to Tenant, to obtain a credit report or credit history on Tenant from any credit reporting company. Prior to receiving any such financial information, Landlord shall execute and deliver to Tenant a commercially reasonable confidentiality agreement.

27.ENVIRONM ENTAL M ATTERS/ HAZARDOUS M ATERIALS.

27.1HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE. Prior to executing this Lease, Tenant has delivered to Landlord Tenant's executed initial Hazardous Materials Disclosure Certificate (the "Initial HazMat Certificate"), a copy of which is attached hereto as Exhibit D. Tenant covenants, represents and warrants to Landlord that the information in the Initial HazMat Certificate is true and correct and accurately describes the use(s) of Hazardous Materials which will be made and/or used on the Premises by Tenant. Tenant shall, commencing with the date which is one year from the Commencement Date and continuing every year thereafter, deliver to Landlord an executed Hazardous Materials Disclosure Certificate (the "HazMat Certificate") describing Tenant's then-present use of Hazardous Materials on the Premises, and any other reasonably necessary documents and information as requested by Landlord. The HazMat Certificates required hereunder shall be in substantially the form attached hereto as Exhibit D.

27.2DEFINITION OF HAZARDOUS M ATERIALS. As used in this Lease, the term Hazardous Materials shall mean and include (a) any hazardous or toxic wastes, materials or substances, and other pollutants or contaminants, which are or become regulated by any Environmental Laws (defined below); (b) petroleum, petroleum by-products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos and asbestos-containing material, in any form, whether friable or non-friable; (d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-containing materials; (g) any other material, waste or substance displaying toxic, reactive, ignitable or corrosive characteristics, as all such terms are used in their broadest sense, and are defined or become defined by any Environmental Law; or

(h) any materials which cause or threatens to cause a nuisance upon or waste to any portion of the Project or any surrounding property; or poses or threatens to pose a hazard to the health and safety of persons on the Premises, any other portion of the Project or any surrounding property. For purposes of this Lease, the term "Hazardous Materials" shall not include nominal amounts of ordinary household cleaners, office supplies and janitorial supplies which are not actionable under any Environmental Laws.

27.3PROHIBITION; ENVIRONMENTAL LAWS. Tenant shall not be entitled to use or store any Hazardous Materials on, in, or about any portion of the Premises and the Project without, in each instance, obtaining Landlord's prior written consent thereto. If Landlord, in its sole discretion, consents to any such usage or storage, then Tenant shall be permitted to use and/or store only those Hazardous Materials that are necessary for Tenant's business and to the extent disclosed in the HazMat Certificate and as expressly approved by Landlord in writing. Any such usage and storage may only be to the extent of the quantities of Hazardous Materials as specified in the then-applicable HazMat Certificate as expressly approved by Landlord. In all events such usage and storage must at all times be in full compliance with any and all local, state and federal environmental, health and/or safety-related laws, statutes, orders, standards, courts' decisions, ordinances, rules and regulations (as interpreted by judicial and administrative decisions}, decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Tenant or all or any portion of the Premises (collectively, the "Environmental Laws") and in compliance with the recommendations of Landlord's consultants. Tenant agrees that any changes to the type and/or quantities of Hazardous Materials specified in the most recent HazMat Certificate may be implemented only with the prior written consent of Landlord, which consent may be given or withheld in Landlord's sole discretion. Tenant shall not be entitled nor permitted to install any tanks under, on or about the Premises for the storage of Hazardous Materials without the express written consent of Landlord, which may be given or withheld in Landlord's sole discretion. Landlord shall have the right, in Landlord's sole discretion, at all times during the Term of this Lease to (i) inspect the Premises, (ii) conduct tests and investigations to determine whether Tenant is in compliance with the provisions of this Section 27 or to determine if Hazardous Materials are present in, on or about the Project, (iii) request lists of all Hazardous Materials used, stored or otherwise located on, under or about any portion of the Premises and/or the Exterior Areas, and (iv) to require Tenant to complete a survey of its use, storage and handling of Hazardous Materials in the Premises, using a form and following procedures designated by Landlord, in Landlord's sole discretion (the "Survey"). Tenant shall reimburse Landlord for the cost of all such inspections, tests and investigations, and all costs associated with any Survey. If as a result of an inspection, test or Survey Landlord determines, in Landlord's sole discretion, that Tenant should implement or perform safety, security or compliance measures, Tenant shall within thirty (30) days after written request by Landlord perform such measures, at Tenant's sole cost and expense. The aforementioned rights granted herein to Landlord and its representatives shall not create (a) a duty on Landlord's part to inspect, test, investigate, monitor or otherwise observe the Premises or the activities of Tenant and Tenant Parties with respect to Hazardous Materials, including without limitation, Tenant's operation, use and any remediation relating thereto, or (b) liability on the part of Landlord and its representatives for Tenant's use, storage, disposal or remediation of Hazardous Materials, it being understood that Tenant shall be solely responsible for all liability in connection therewith.

27.4TENANT'S ENVIRONMENTAL OBLIGATIONS. Tenant shall give to Landlord immediate verbal and follow- up written notice of any spills, releases, discharges, disposals, emissions, migrations, removals or transportation of Hazardous Materials on, under or about any portion of the Premises or in any Exterior Areas; provided that Tenant has actual, implied or constructive knowledge of such event(s). Tenant, at its sole cost and expense, covenants and warrants to promptly investigate, clean up, remove, restore and otherwise remediate (including, without limitation, preparation of any feasibility studies or reports and the performance of any and all closures) any spill, release, discharge, disposal, emission, migration or transportation of Hazardous Materials arising from or related to the intentional or negligent acts or omissions of Tenant or Tenant Parties such that the affected portions of the Project and any adjacent property are returned to the condition existing prior to the appearance of such Hazardous Materials. Any such investigation, clean up, removal, restoration and other remediation shall only be performed after Tenant has obtained Landlord's prior written consent, which consent shall not be unreasonably withheld so long as such actions would not potentially have a material adverse long-term or short-term effect on any portion of the Project. Notwithstanding the foregoing, Tenant shall be entitled to respond immediately to an emergency without first obtaining Landlord's prior written consent. Tenant, at its sole cost and expense, shall conduct and perform, or cause to be conducted and performed, all closures as required by any Environmental Laws or any agencies or other governmental authorities having jurisdiction thereof. If Tenant fails to so promptly investigate, clean up, remove, restore, provide closure or otherwise so remediate, Landlord may, but without obligation to do so, take any and all steps necessary to rectify the same, and Tenant shall promptly reimburse Landlord, upon demand, for all costs and expenses to Landlord of performing investigation, cleanup, removal, restoration, closure

and remediation work. All such work undertaken by Tenant, as required herein, shall be performed in such a manner so as to enable Landlord to make full economic use of the Premises and other portions of the Project after the satisfactory completion of such work.

27.5ENVIRONMENTAL INDEMNITY. In addition to Tenant's other indemnity obligations under this Lease, Tenant agrees to, and shall, protect, indemnify, defend (with counsel reasonably acceptable to Landlord) and hold Landlord and the other Landlord Parties harmless from and against any and all loss, cost, damage, liability or expense (including, without limitation, diminution in value of any portion of the Premises or the Project, damages for the loss of or restriction on the use of rentable or usable space, and from any adverse impact of Landlord's marketing of any space within the Project) arising at any time during or after the term of this Lease in connection with or related to, directly or indirectly, the use, presence, transportation, storage, disposal, migration, removal, spill, release or discharge of Hazardous Materials on, in or about any portion of the Project as a result (directly or indirectly) of the intentional or negligent acts or omissions of Tenant or Tenant Parties. In addition to the foregoing indemnity, if Landlord is prevented or delayed from leasing all or any portion of the Premises as a result of Tenant's failure to surrender the Premises to Landlord in compliance with all Environmental Laws as required of Tenant by the terms of this Lease, Tenant shall pay Landlord rent at fair market value (calculated as if the Premises were in full compliance with Environmental Laws) for the portion of the Premises that Landlord is prevented or delayed from leasing such portion of the Premises for such period of time as Landlord is prevented or delayed from leasing such portion of the Premises. Payment owing pursuant to the preceding sentence shall be due within thirty (30) days after demand from Landlord. Neither the written consent of Landlord to the presence, use or storage of Hazardous Materials in, on, under or about any portion of the Project nor the strict compliance by Tenant with all Environmental Laws shall excuse Tenant from its obligations of indemnification pursuant hereto. Tenant shall not be relieved of its indemnification obligations under the provisions of this Section 27.5 due to Landlord's status as either an "owner" or "operator" under any Environmental Laws. Notwithstanding the foregoing, Tenant shall not be responsible for any (i) Hazardous Materials conditions existing as of the date of this Lease (other than to the extent such existing conditions are exacerbated by Tenant or any Tenant Party; or (ii) any violation of Environmental Laws caused by Landlord or any employee, contractor or agent of Landlord.

27.6SURVIVAL. Tenant's obligations and liabilities pursuant to the provisions of this Section 27 shall survive the expiration or earlier termination of this Lease. If it is determined by Landlord that the condition of all or any portion of the Project is not in compliance with the provisions of this Lease with respect to Hazardous Materials, including without limitation, all Environmental Laws at the expiration or earlier termination of this Lease, then Landlord may require Tenant to surrender the Premises to Landlord in the condition in which the Premises existed as of the Commencement Date and prior to the appearance of such Hazardous Materials except for reasonable wear and tear, including without limitation, the conduct or performance of any closures as required by any Environmental Laws. The burden of proof hereunder shall be upon Tenant. For purposes hereof, the term "reasonable wear and tear" shall not include any deterioration in the condition or diminution of the value of any portion of the Project in any manner whatsoever related to, directly. or indirectly, Hazardous Materials.

28.SUBDRDINATION.

28.1EFFECT OF SUBORDINATION. This Lease, and any Option (as defined below) granted hereby, upon Landlord's written election, shall be subject and subordinate to any ground lease, mortgage, deed of trust or any other hypothecation or security now or hereafter placed upon the Project and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such subordination, Tenant's right to quiet possession of the Premises shall not be disturbed if Tenant is not in default beyond any applicable notice and cure period and so long as Tenant shall pay the rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. At the request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such person or entity. If any mortgagee, trustee or ground lessor shall elect to have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Tenant, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease or such Options are dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of

recording thereof. In the event of the foreclosure of a security device, the new owner shall not (a) be liable for any act or omission of any prior landlord or with respect to events occurring prior to its acquisition of title, (b) be liable for the breach of this Lease by any prior landlord, (c) be subject to any offsets or defenses which Tenant may have against the prior landlord or (d) be liable to Tenant for the return of its security deposit. If requested by Tenant, Landlord shall use commercially reasonable efforts to obtain a subordination, non-disturbance and attornment agreement from any future lender holding a security interest in the Project, ground lessor, mortgage holder or other lien holder, which agreement shall be on such lender's standard and reasonable form agreement and Tenant shall pay any and all costs and expenses associated therewith. Landlord's failure to obtain such agreement for Tenant's benefit shall not be a default by Landlord and shall not afford Tenant any rights or remedies, including, but not limited to, the right to terminate this Lease.

28.2EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge any documents Landlord reasonably requests that Tenant execute to effectuate an attornment, a subordination, or to make this Lease or any Option granted herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Tenant's failure to execute such documents within ten (10) business days after written demand shall constitute a default by Tenant hereunder or, at Landlord's option, Landlord shall have the right to execute such documents on behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make, constitute and Irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant1s name, place and stead to execute such documents in accordance with this section.

28.3MORTGAGEE PROTECTION. Tenant will give the holder of any mortgage, by registered mail, a copy of any notice of default Tenant serves on Landlord, provided that Landlord or the holder of the mortgage previously notified Tenant (by way of notice of assignment of rents and leases or otherwise) of the address of such holder. Tenant further agrees that if Landlord fails to cure such default within the time provided for in this Lease, then Tenant will provide written notice of such failure to such holder and such holder will have an additional 15 days after receipt of such notice within which to cure the default (but shall not be obligated to cure the default). If the default cannot be cured within the additional 15 day period, then the holder will have such additional time as may be necessary to effect the cure if, within the 15 day period, the holder has promptly commenced and is diligently pursuing the cure (including without limitation commencing foreclosure proceedings if necessary to effect the cure).

29.OPTIONS.

29.1DEFINITION. As used in this Lease, the word "Option" has the following meaning: (1) the right or option to extend the term of this Lease or to renew this Lease, (2) the option or right of first refusal to lease the Premises or the right of first offer to lease the Premises or the right of first refusal to lease other space within the Project or the right of first offer to lease other space within the Project, and (3) the right or option to terminate this Lease prior to its expiration date or to reduce the size of the Premises. Any Option granted to Tenant by Landlord must be evidenced by a written option agreement attached to this Lease as a rider or addendum or said option shall be of no force or effect. For purposes of this section, an Option shall also include any Option contained in any subsequent amendment to this Lease.

29.2OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if any, is personal to the original Tenant and may be exercised only by the original Tenant or any Affiliate while occupying the entire Premises and may not be exercised or be assigned, voluntarily or involuntarily, by or to any person or entity other than Tenant other than an Affiliate. The Options, if any, herein granted to Tenant are not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise. If at any time an Option is exercisable by Tenant, the Lease has been assigned or a sublease exists as to any portion of the Premises other than to an Affiliate, the Option shall be deemed null and void and neither Tenant nor any assignee or subtenant shall have the right to exercise the Option.

29.3MULTIPLE OPTIONS. In the event that Tenant has multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Option to extend or renew this Lease has been so exercised.

29.4EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to exercise an Option (i) during the time commencing from the date Landlord gives to Tenant a notice of default pursuant to Section 17.1 and continuing until the noncompliance alleged in said notice of default is cured, or (ii) if Tenant is in default of any of the terms, covenants or conditions of this Lease beyond any applicable notice and cure period. The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise an Option because of the provisions of this section.

29.5INTENTIONALLY DMITTED.

29.6INTENT/ONALLY DMITTED.

29.7NOTICE OF EXERCISE OF OPTION. Notwithstanding anything to the contrary contained in Section 43, Tenant shall give written notice exercising the Option using certified mail return receipt requested or some other method where the person delivering the package containing the notice obtains a signature of the person accepting the package containing the notice (e.g., by FedEx with the requirement that the FedEx delivery person obtain a signature from the person accepting the package). It shall be the obligation of Tenant to prove that Landlord received the notice exercising the Option in a timely manner.

30.LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the name and address of the Project or Building upon not less than ninety (90) days prior written notice; and (b) to place signs, notices or displays upon the roof, interior or exterior of the Building or Exterior Areas of the Project. Landlord reserves the right to use the exterior walls of the Premises, and the area beneath, adjacent to and above the Premises together with the right to install, use, maintain and replace equipment, machinery, pipes, conduits and wiring through the Premises provided that Landlord's use does not unreasonably interfere with Tenant's use of the Premises.

31.CHANGES ro PROJECT. Landlord shall have the right, in Landlord's sole discretion, from time to time upon reasonable prior notice and provided that Tenant's use of or access to the Premises is not materially impaired, to make changes to the size, shape, location, number and extent of the improvements comprising the Project (hereinafter referred to as "Changes") including, but not limited to, the exterior of buildings, the Exterior Areas, HVAC, electrical systems, communication systems, fire protection and detection systems, plumbing systems, security systems, parking control systems, driveways, entrances, parking spaces, parking areas and landscaped areas. Jn connection with the Changes, Landlord may, among other things, erect scaffolding or other necessary structures at the Project, limit or eliminate access to portions of the Project, including portions of the Exterior Areas, or perform work in the Building, which work may create noise, dust or leave debris in the Building. Tenant hereby agrees that such Changes and Landlord's actions in connection with such Changes shall in no way constitute a constructive eviction ofTenant or entitle Tenant to any abatement of rent. Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the Changes, nor shall Tenant be entitled to any compensation or damages from Landlord for any inconvenience or annoyance occasioned by such Changes or Landlord's actions in connection with such Changes. Landlord shall use commercially reasonable efforts to minimize disruption to Tenant's business operations caused by Changes.

32. INTENT/ONALLY DMITTED.

33.HOLDING OVER. If Tenant remains in possession of the Premises or any part thereof after the expiration or earlier termination of the term hereof with Landlord's consent, such occupancy shall be a tenancy from month to month upon all the terms and conditions of this Lease pertaining to the obligations of Tenant, except that the Base Rent payable shall be one hundred fifty percent (150%) of the Base Rent payable immediately preceding the termination date of this Lease; and all Options, if any, shall be deemed terminated and be of no further effect. If Tenant remains in possession of the Premises or any part thereof, after the expiration of the term hereof without Landlord's consent, Tenant shall, at Landlord's option, be treated as a tenant at sufferance. Nothing contained herein shall be construed to constitute Landlord's consent to Tenant holding over at the expiration or earlier termination of the Lease term or to give Tenant the right to hold over after the expiration or earlier termination of the Lease term. Tenant hereby agrees to indemnify, hold harmless and defend Landlord from any cost, Joss, claim

or liability (including attorneys' fees) Landlord may incur as a result of Tenant's failure to surrender possession of the Premises to Landlord upon the termination of this Lease.

34.LANDLORD'S ACCESS.

34.1ACCESS. Landlord and Landlord's agents, contractors and employees shall have the right to enter the Premises at reasonable times upon reasonable advance telephonic notice to Tenant (except in the case of any emergency, where no advance notice shall be required) for the purpose of inspecting the Premises, performing any services required of Landlord, showing the Premises to prospective purchasers, lenders or tenants (during the last 8 months of the Term), undertaking safety measures and making alterations, repairs, improvements or additions to the Premises or to the Project. In the event of an emergency, Landlord may gain access to the Premises by any reasonable means, and Landlord shall not be liable to Tenant for damage to the Premises or to Tenant's property resulting from such access. Landlord may at any time place on or about the Building or the Project for sale or for lease signs (during the last 8 months of the Term).

34.2KEYS. Landlord shall have the right to retain keys to the Jocks on the entry doors to the Premises and all interior doors at the Premises.

35.SECURITY M EASURES. Tenant hereby acknowledges that Landlord shall have no obligation whatsoever to provide guard service or other security measures for the benefit of the Premises, and Landlord shall have no liability to Tenant due to its failure to provide such services. Tenant assumes all responsibility for the protection of Tenant, its agents, employees, contractors and invitees and the property of Tenant and of Tenant's agents, employees, contractors and invitees from acts of third parties. Nothing herein contained shall prevent Landlord, at Landlord's sole option, from implementing security measures for the Project or any part thereof, in which event Tenant shall participate in such security measures and the cost thereof shall be included within the definition of Operating Expenses, and Landlord shall have no liability to Tenant and its agents, employees, contractors and invitees arising out of Landlord's negligent provision of security measures. In no event shall Tenant or its employees, agents or contractors bring firearms or other weapons to the Project or the Premises, and Tenant shall not have the right to employ armed security guards.

36.EASEM ENTS. Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign any of the aforementioned documents within ten (10) business days after Landlord's request, and Tenant's failure to do so shall constitute a default by Tenant. The obstruction of Tenant's view, air or light by any structure erected in the vicinity of the Project, whether by Landlord or third parties, shall in no way affect this Lease or impose any liability upon Landlord.

37.TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole expense with all present or future programs implemented or required by any governmental or quasi-governmental entity to manage parking, transportation, air pollution or traffic in and around the Project or the metropolitan area in which the Project is located.

38.SEVERABIL/TY. The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

39.TIME OF ESSENCE. Time is of the essence with respect to each of the obligations to be performed by Tenant and Landlord under this Lease.

40.DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to Landlord under the terms of this Lease, including, but not limited to, Base Rent, Tenant's Percentage Share of Operating Expenses and late charges shall be deemed to be rent.

41.INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed in Section 1.15 contain all agreements of the parties with respect to the lease of the Premises and any other matter mentioned herein. No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective. Except as otherwise stated in this Lease, Tenant hereby acknowledges that no real estate broker nor Landlord nor any employee or agents of any of said persons has made any oral or written warranties or representations to Tenant concerning the condition or use by Tenant of the Premises or the Project or concerning any other matter addressed by this Lease.

42.AM EN DM ENTS. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. One or more emails signed by one or more parties shall never constitute a writing signed by the parties that is capable of amending or modifying the Lease.

43.NOTICES. All notices required or permitted by this Lease shall be in writing and may be delivered (a) in person (by hand, by messenger or by courier service), (b) by U.S. Postal Service regular mail, (c) by U.S. Postal Service certified mail, return receipt requested, (d) by U.S. Postal Service Express Mail, Federal Express or other overnight courier, or (e) by email transmission provided that a copy is also delivered via the method identified in clause (a) or

(d) within one (1) business day after such email transmission. Any notice permitted or required hereunder, and any notice to pay rent or quit or similar notice, shall be deemed personally delivered to Tenant on the date the notice is personally delivered to any employee of Tenant at the Premises. The addresses set forth in Section 1.16 of this Lease shall be the address of each party for notice purposes. Landlord or Tenant may by written notice to the other specify a different address for notice purposes, except that upon Tenant's taking possession of the Premises, the Premises shall constitute Tenant's address for the purpose of mailing or delivering notices to Tenant. A copy of all notices required or permitted to be given to Landlord hereunder shall be concurrently transmitted to such party or parties at such addresses as Landlord may from time to time hereinafter designate by written notice to Tenant. Any notice sent by regular mail or by certified mail, return receipt requested, shall be deemed given three (3) days after deposited with the U.S. Postal Service. Notices delivered by U.S. Express Mail, Federal Express or other courier shall be deemed given on the date delivered by the carrier to the appropriate party's address for notice purposes. If any notice is transmitted by email, the notice shall be deemed delivered upon telephone confirmation of receipt of the transmission thereof at the appropriate party's address for notice purposes, electronic receipt by the sender of successful transmission, or the recipient's acknowledgement of receipt or response to the delivering email. A copy of all notices delivered to a party by email transmission shall also be delivered via the method identified in clause (a) or (d) within one (1) business day after such email transmission. If notice is received on Saturday, Sunday or a legal holiday, it shall be deemed received on the next business day. Nothing contained herein shall be construed to limit Landlord's right to serve any notice to pay rent or quit or similar notice by any method permitted by applicable law, and any such notice shall be effective if served in accordance with any method permitted by applicable law whether or not the requirements of this section have been met.

44.WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Landlord or Tenant of the same or any other provision. Landlord's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Landlord's consent to or approval of any subsequent act by Tenant. The acceptance of rent hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. No acceptance by Landlord of partial payment of any sum due from Tenant shall be deemed a waiver by Landlord of its right to receive the full amount due, nor shall any endorsement or statement on any check or accompanying letter from Tenant be deemed an accord and satisfaction. Tenant hereby waives California Code of Civil Procedure Section 1179 and Civil Code section 3275 which allow tenants to obtain relief from the forfeiture of a lease, and Tenant hereby waives any claim it may have against Landlord based on Landlord's failure to comply with Section 1938 of the Calif9rnia Civil Code. Tenant hereby waives for Tenant and all those claiming under Tenant all rights now or hereafter existing to redeem by order or judgment of any court or by legal process or writ Tenant's right of occupancy of the Premises after any termination of this Lease.

45.COVENANTS. This Lease shall be construed as though Landlord's covenants contained herein are independent and not dependent and Tenant hereby waives the benefit of any statute to the contrary. All provisions of this Lease to be observed or performed by Tenant are both covenants and conditions.

46.BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting assignment or subletting by Tenant, this Lease shall bind the parties, their heirs, personal representatives, successors and assigns. This Lease shall be governed by the laws of the state in which the Project is located, and any litigation concerning this Lease between the parties hereto shall be initiated in the county in which the Project is located.

47.ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, or appeal thereon, shall be entitled to its reasonable attorneys' fees and court costs to be paid by the losing party as fixed by the court in the same or separate suit, and whether or not such action is pursued to decision or judgment. The attorneys' fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees and court costs reasonably incurred in good faith. Landlord shall be entitled to reasonable attorneys' fees and all other costs and expenses incurred in the preparation and service of notices of default, whether or not a legal action is subsequently commenced in connection with such default. Landlord and Tenant agree that attorneys' fees incurred with respect to defaults and bankruptcy are actual pecuniary losses within the meaning of Section 365(b)(l)(B) of the Bankruptcy Code or any successor statute.

48.AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction or going-out-of-business sale upon the Premises or the Exterior Areas.

49.MERGER. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall not result in the merger of Landlord's and Tenant's estates and shall, at the option of Landlord, terminate all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

SO. QUIET POSSESSION. Subject to the other terms and conditions of this Lease, and the rights of any lender, and provided Tenant is not in default beyond any applicable notice and cure period hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease.

51.AUTHORITY. /!Tenant is a corporation, trust, limited liability company, limited liability partnership or general or limited partnership, Tenant, and each individual executing this Lease on behalf of such entity, represents and warrants that such individual is duly authorized to execute and deliver this Lease on behalf of said entity, that said entity is duly authorized to enter into this Lease, and that this Lease is enforceable against said entity in accordance with its terms. If Tenant is a corporation, trust, limited liability company, limited liability partnership or other partnership, Tenant shall deliver to Landlord upon demand evidence of such authority satisfactory to Landlord.

52.CONFLICT. Any conflict between the type written provisions of this Lease and handwritten provisions, if any, shall be controlled by the handwritten provisions; provided, however, handwritten provisions shall have no force or effect unless separately initialed by both Landlord and Tenant.

53.MULTIPLE PARTIES. If more than one person or entity is named as Tenant herein, the obligations of Tenant shall be the joint and several responsibility of all persons or entities named herein as Tenant. Service of a notice in accordance with Section 43 on one Tenant shall be deemed service of notice on all Tenants.

54.INTERPRETATION. This Lease shall be interpreted as if it was prepared by both parties, and ambiguities shall not be resolved in favor of Tenant because all or a portion of this Lease was prepared by Landlord. The captions contained in this Lease are for convenience only and shall not be deemed to limit or alter the meaning of this Lease. As used in this Lease, the words tenant and landlord include the plural as well as the singular. Words used in the neuter gender include the masculine and feminine gender.

55.PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant. Landlord shall have the right to record a memorandum of this Lease, and Tenant shall execute, acknowledge and deliver to Landlord for recording any memorandum prepared by Landlord.

56.RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant.

57.RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules and to cause its employees, suppliers, customers and invitees to so abide and conform. Landlord shall have the right, from time to time, to modify, amend and enforce the Rules in a nondiscriminatory and reasonable manner. Landlord shall not be responsible to Tenant for the failure of other persons, including, but not limited to, other tenants, their agents, employees and invitees, to comply with the Rules.

58. INTENTIONALLY OMITTED.

59.PATRIOT ACT.Tenant represents to Landlord that to its actual knowledge, (i) neither Tenant nor any person or entity that directly owns a 10% or greater equity interest in it nor any of its officers, directors or managing members is a person or entity (each, a "Prohibited Person") with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under Executive Order 13224 (the "Executive Order") signed on September 24, 2001,and entitled "Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, or other governmental action, (ii) Tenant's

activities do not violate the International Money Laundering Abatement and Financial Anti-Terrorism Act of2001 or the regulations or orders promulgated thereunder (as amended from time to time, the "Money Laundering Act") and (iii) throughout the term of this Lease, Tenant shall comply with the Executive Order and with the Money Laundering Act.

60.CONFIDENTIALITY. Tenant acknowledges and agrees that the terms of this Lease are confidential and constitute proprietary information of Landlord. Disclosure of the terms hereof could adversely affect the ability of Landlord to negotiate other leases with respect to the Project and may impair Landlord's relationship with other tenants of the Project. Tenant agrees that it and its partners, officers, directors, employees, brokers, and attorneys, if any, shall not disclose the terms and conditions of this Lease for a period of one year to any other person or entity without the prior written consent of Landlord, which may be given or withheld by Landlord, in Landlord's sole discretion, except to Tenant's agents, employees, lenders, and prospective transferees. It is understood and agreed that damages alone would be an inadequate remedy for the breach of this provision by Tenant, and Landlord shall also have the right to seek specific performance of this provision and to seek injunctive relief to prevent its breach or continued breach.

61.WAIVER OF JURY TRIAL. TO THE EXTENT PERMITIED BY APPLICABLE LAW, LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS­ COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATIER WHATSOEVER ARISI NG OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

62.COUNTERPART COPIES; ELECTRONIC SIGNATURES. This Lease and any documents or addenda attached hereto may be executed in two or more counterpart copies, each of which shall be deemed to be an original and all of which counterparts shall have the same force and effect as if the parties had executed a single copy of this Lease or the attached document or addenda. The parties acknowledge and agree that notwithstanding any law or presumption to the contrary, Landlord shall have the right to execute this Lease and any documents and addenda attached to this

Lease using an electronic signature, and Landlord's electronic signature shall be deemed valid and binding and admissible by either party against the other as if same were an original ink signature. If Landlord executes this ease or any documents or addenda attached to this Lease using an electronic signature, Landlord's electronic signature will appear in Landlord's signature block. An email from Landlord, its agents, brokers, attorneys, employees or other representatives shall never constitute Landlord's electronic signature or be otherwise binding on Landlord. Tenant shall not have the right to execute this Lease or any documents or addenda attached hereto using an electronic signature, and Tenant shall execute this ease and any documents or addenda attached hereto using an original ink signature.

LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT IN THE MANNER SET FORTH IN THIS LEASE. THE DELIVERY OF A DRAFT OF THIS LEASE TO TENANT SHALL NOT CONSTITUTE AN AGREEMENT BY LANDLORD TO NEGOTIATE IN GOOD FAITH, AND LANDLORD EXPRESSLY DISCLAIMS ANY LEGAL OBLIGATION TO NEGOTIATE IN GOOD FAITH.

[Remainder of page left intentionally blank.)

LANDLORD:

Lake Midas LLC

a California limited liability company

By: /s/ Jason Oderio

Name: Jason Oderio, Manager

TENANT*:

Spinal Kinetics, Inc.

a Delaware corporation

By: /s/ Thomas Afzal

Thomas Afzal

Its: Chief Executive Officer

By: /s/ Michael Orth

Michael Orth

Its: Chief Operating Officer

*If Tenant is a corporation, the authorized officers must sign on behalf of the corporation and indicate the capacity in which they are signing. The Lease must be executed by the president or vice president and the secretary or assistant secretary, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may be, must be attached to this Lease.

EXHIBIT B

ADDENDUM TO STANDARD LEASE AGREEMENT (the "Lease")

Between Lake Midas LLC ("Landlord") and

Spinal Kinetics, Inc. ("Tenant")

It is hereby agreed by Landlord and Tenant that the provisions of this Addendum are a part of the Lease. If there is a conflict between the terms and conditions of this Addendum and the terms and conditions of the Lease, the terms and conditions of this Addendum shall control. Capitalized terms in this Addendum shall have the same meaning as capitalized terms in the Lease, and, if a Work Letter Agreement is attached to this Lease, as those terms have been defined in the Work Letter Agreement.

63.ABATEMENT OF RENT. Landlord hereby agrees to waive the Base Rent due for the period from October 1, 2015 through December 31, 2015. No amounts due to Landlord under the Lease other than the Base Rent referred to above shall be waived. In the event Tenant commits a monetary default as defined in the Lease beyond any applicable notice and cure period, Base Rent coming due thereafter shall not be waived. The total amount of Base Rent waived shall not exceed One Hundred Eighty Six Thousand Three Hundred Seventy Nine and 44/100 Dollars ($186,379.44).

64.RENEWAL OPTIONS. Landlord hereby grants to Tenant the option to extend the term of the Lease for two (2) consecutive five (5)-year periods (the "Extension Options") commencing when the initial lease term expires and when the first option term expires upon each and all of the following terms and conditions:

a.On a date which is prior to the date that the applicable option period would commence (if exercised) by at least two hundred forty (240) days and not more than four hundred fifty (450) days, Landlord shall have received from Tenant a written notice of the exercise of the applicable option to extend the Lease for said additional term (an "Exercise Notice"), time being of the essence. If the Exercise Notice is not so given and received, the Extension Options shall automatically expire, Tenant shall no longer have the right to give an Exercise Notice and this section shall be of no further force or effect. Tenant shall give each Exercise Notice using certified mail return receipt requested or some other method where the person delivering the package containing the Exercise Notice obtains a signature of the person accepting the package containing the Exercise Notice (e.g. by FedEx with the requirement that the FedEx delivery person obtain a signature from the person accepting the package). Once Tenant gives an Exercise Notice its exercise of the Extension Option shall be irrevocable.

b.All of the terms and conditions of the Lease except where specifically modified by this Addendum shall apply to each option term.

c.The monthly Base Rent payable during the term of each Extension Option shall be the Market Rate on the date the option term commences; provided, however, that at no time during the term of the Extension Option shall the Base Rent be less than the Base Rent due immediately preceding the commencement of the term of the Extension Option.

d.The term "Market Rate" shall mean the annual amount per rentable square foot that a willing, comparable tenant would pay and a willing, comparable landlord of a similar research and development building, with similar level of improvements, systems, capabilities and infrastructure would accept at arm's length for similar space, giving appropriate consideration to the following matters: (i) annual rental rates per rentable square foot; (ii) the type of escalation clauses (including, but without limitation, operating expense, real estate taxes, and CPI) and the extent of liability under the escalation clauses ()&, whether determined on a "net lease" basis or by increases over a particular base year or base dollar amount); (iii) rent abatement provisions reflecting free rent and/or no rent during the lease term; (iv) length of lease term; (v) size and location of premises being leased; and (vi) other generally applicable terms and conditions of tenancy for similar space; provided, however, Tenant shall not be entitled to any tenant improvement

allowance. If tenants exercising similar market rate extension options are receiving a tenant improvement allowance, this fact shall be taken into consideration in determining the Market Rate. The Market Rate may also designate periodic rental increases, a new Base Year and similar economic adjustments.

e.If Tenant exercises an Extension Option, Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide Tenant with written notice of such amount within thirty (30) days after receipt of the Exercise Notice. Tenant shall have ten (10) days ("Tenant's Review Period") after receipt of Landlord's notice of the new rental within which to accept such rental. In the event Tenant fails to accept in writing such rental proposal by Landlord, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt to agree upon such Market Rate, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within ten (10) days following Tenant's Review Period ("Outside Agreement Date"), then each party shall deliver their final proposal as to the Market Rate ("Final Proposals") to the other party. If one party fails to deliver their Final Proposal the Final Proposal actually delivered shall be the Market Rent unless the non-delivering party cures such failure within one (1) business day after written notice from the delivering party.

f.If the Market Rate is not determined as set forth above, either party may accept the other's Final Proposal by delivering written notice to the other party of such acceptance within ten (10) days after delivery of the last of the Final Proposals ("Final Acceptance Deadline"). If the Market Rate is not finally determined by the Final Acceptance Deadline, then within ten (10) days thereafter, each party shall specify in writing to the other the name and address of a licensed commercial real estate broker with at least ten

(10) years of experience with the prevailing market rents in the area ("Broker") to act on its behalf in determining Market Rent. If either party fails to timely appoint a Broker, the determination of the timely appointed Broker shall be final and binding. The Brokers shall have thirty (30) days from the day of their respective appointments (the "Determination Period") to make their respective determinations and agree on the Market Rent. If the two Brokers selected by Landlord and Tenant cannot reach agreement on the Market Rent, such Brokers shall within five (5) business days jointly appoint an impartial and independent third broker ("Third Broker") with qualifications as set forth above, and the Market shall be established by the Brokers and Third Broker in accordance with the following procedures. The Brokers shall state inwriting their determinations of Market Rent. The Brokers shall arrange for the simultaneous delivery of their determinations to the Third Broker no later than ten (10) days after the expiration of the Determination Period. The role of the Third Broker shall be to select which of the two proposed determinations by the Brokers most closely approximates the Third Broker's determination of Market Rent, and the Third Broker shall have no more than fifteen (15) days in which to select the final determination. The determination by the Third Broker shall constitute the decision of the Brokers and be final and binding on Landlord and Tenant. Each party shall pay the cost of its own Broker and shall share equally the cost of the Third Broker. If the Brokers cannot agree on the selection of the Third Broker, then either party may apply to Presiding Judge of the Superior Court for the county in which the Premises is located for the selection for the Third Broker.

g.Landlord shall have the right to require Tenant to execute and to deliver to Landlord an amendment to the Lease that accurately sets forth the extended term of the Lease and the new Base Rent and other economic terms, if any. Within ten (10) days after Landlord provides the amendment to Tenant and Market Rent has been established, Tenant shall execute the amendment and deliver the amendment to Landlord. Landlord's election not to require Tenant to execute an amendment shall not invalidate Tenant's exercise of the Extension Option.

65.EARLY POSSESSION. Provided that Tenant does not interfere with or delay the completion by Landlord or its agents or contractors of the construction of any tenant improvements, and provided Landlord has possession of the Premises, Tenant shall have the right to enter the Premises upon full Lease execution by Landlord and Tenant for the sole purpose of installing furniture, trade fixtures, equipment, and similar items, planning, designing and construction of the Tenant Improvements and Tenant shall have no obligation to begin paying Base Rent or Operating Expenses during such period but shall be responsible for the payment of all utilities during such period.

Tenant shall be liable for any damages or delays caused by Tenant's activities at the Premises. Prior to entering the Premises, Tenant shall obtain all insurance it is required to obtain by the Lease and shall provide certificates of said insurance to Landlord. Tenant shall coordinate such entry with Landlord's manager, and such entry shall be made in compliance with all terms and conditions of this Lease and the Rules and Regulations attached hereto.

66.LANDLORD IMPROVEMENTS. Prior to the Commencement Date, Landlord shall, at its sole cost and expense, perform those improvements to the exterior of the Building and Exterior Areas set forth on the renderings attached hereto as Exhibit B-1 substantially as shown thereon ("Landlord Commencement Date Improvements"). Tenant acknowledges that the renderings attached hereto are not final engineered drawings and that Landlord shall have the right, as it shall determine in its sole and absolute discretion and without Tenant's approval or consent, to modify such renderings and Landlord Commencement Date Improvements, provided that Landlord determines to modify such renderings and Landlord Commencement Date Improvements due to compliance requirements of any governmental agency or due to structural feasibility concerns, Landlord and Tenant shall meet and confer in good faith as to such modifications. In such event, Exhibit B-1 shall be automatically modified and replaced with such revised renderings, drawings and Landlord Commencement Date Improvements.

67.MONUMENT SIGN. There is an existing monument sign at the Project (the "Monument Sign"). Subject to Tenant obtaining any required governmental permits, Tenant shall be entitled to place its name on the Monument Sign, at Tenant's sole cost and expense. Landlord shall have the right to approve the size, design, location and color of Tenant's name on the Monument Sign, in Landlord's reasonable discretion. Tenant shall maintain its name in good condition, at Tenant1s sole cost and expense. Prior to the expiration or earlier termination of the Lease, Tenant shall remove its name from the Monument Sign and repair any damages caused by such removal.

68.LETTER OF CREDIT.

a.DELIVERY OF LETTER OF CREDIT, Tenant shall deliver to Landlord concurrent with Tenant's execution of this Lease, as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease, an unconditional, clean, irrevocable negotiable standby letter of credit (the "L-C") in the amount of Seven Hundred Fifty Thousand Dollars ($7S0,000.00) (the "L-C Amount"), in the form attached hereto as Exhibit E, payable in the City of San Jose, California, or Santa Clara, California running in favor of Landlord, drawn on a bank (the "Bank") reasonably approved by Landlord and at a minimum having a long term issuer credit rating from Standard and Poor's Professional Rating Service of A or a comparable rating from Moody's Professional Rating Service (the "Credit Rating Threshold"), and otherwise conforming in all respects to the requirements of this Section 68, including, without limitation, all of the requirements of Section 68(b) below, all as set forth more particularly hereinbelow. Tenant shall pay all expenses, points and/or fees incurred by Tenant in obtaining and maintaining the L-C. In the event of an assignment by Tenant of its interest in the Lease (and irrespective of whether Landlord's consent is required for such assignment), the acceptance of any replacement or substitute letter of credit by Landlord from the assignee shall be subject to Landlord's prior written approval, in Landlord's reasonable discretion, and the attorney's fees incurred by Landlord in connection with such determination shall be payable by Tenant to Landlord within thirty (30) days of billing.

b.IN GENERAL. The L-C shall be "callable" at sight, permit partial draws and multiple presentations and drawings, and be otherwise subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev), International Chamber of Commerce Publication #500,or the International Standby Practices­ ISP 98, International Chamber of Commerce Publication #590. Tenant further covenants and warrants as follows:

i.LANDLORD RIGHT TO TRANSFER. The L-C shall provide that Landlord, its successors and assigns, may, at any time and without notice to Tenant and without first obtaining Tenant's consent thereto, transfer (one or more times) all or any portion of its interest in and to the L-C to another party, person or entity, regardless of whether or not such transfer is separate from or as

a part of the assignment by Landlord of its rights and interests in and to this Lease. In the event of a transfer of Landlord's interest in the Building or the Project, Landlord shall transfer the L-C, in whole or in part, to the transferee and thereupon Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said L­ C to a new landlord. In connection with any such transfer of the L-C by Landlord, Tenant shall, at Tenant's sole cost and expense, execute and submit to the Bank such applications, documents and instruments as may be necessary to effectuate such transfer, and Tenant shall be responsible for paying the Bank's transfer and processing fees in connection therewith.

ii.No ASSIGNMENT BY TENANT. Tenant shall neither assign nor encumber the L-C or any part thereof. Neither Landlord nor its successors or assigns will be bound by any assignment, encumbrance, attempted assignment or attempted encumbrance by Tenant in violation of this Section.

iii.REPLENISHMENT. If, as a result of any drawing by Landlord on the L-C pursuant to its rights set forth in Section 3.6.3 below, the amount of the L-C shall be less than the L-C Amount, Tenant shall, within ten (10) days after written demand, provide Landlord with (i) an amendment to the L­ C restoring such L-C to the L-C Amount or (ii) additional L-Cs in an amount equal to the deficiency, which additional L-Cs shall comply with all of the provisions of this Section 68, and if Tenant fails to comply with the foregoing, notwithstanding anything to the contrary contained in Section 17, the same shall constitute an incurable default by Tenant under this Lease (without the need for any additional notice and/or cure period).

iv.RENEWAL; REPLACEMENT. If the L-C expires earlier than the date (the "LC Expiration Date") that is sixty (60) days after the expiration of the Lease Term, Tenant shall deliver a new L-C or certificate of renewal or extension to Landlord at least thirty (30) days prior to the expiration of the L-C then held by Landlord, without any action whatsoever on the part of Landlord, which new L-C shall be irrevocable and automatically renewable through the LC Expiration Date upon the same terms as the expiring L-C or such other terms as may be acceptable to Landlord in its sole discretion. In furtherance of the foregoing, Landlord and Tenant agree that the L-C shall contain a so-called "evergreen provision," whereby the L-C will automatically be renewed unless at least sixty (60) days' prior written notice of non-renewal is provided by the issuer to Landlord; provided, however, that the final expiration date identified in the L-C, beyond which the L-C shall not automatically renew, shall not be earlier than the LC Expiration Date.

v.BANK'S FINANCIAL CONDITION. If, at any time during the Lease Term, the Bank's long term credit rating is reduced below the Credit Rating Threshold, or if the financial condition of the Bank changes in any other materially adverse way (either, a "Bank Credit Threat"), then Landlord shall have the right to require that Tenant obtain from a different issuer a substitute L-C that complies in all respects with the requirements of this Section 68, and Tenant's failure to obtain such substitute L-C within ten (10) days following Landlord's written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary) shall entitle Landlord, or Landlord's then managing agent, to immediately draw upon the then existing L- C in whole or in part, without notice to Tenant, as more specifically described in Section 68(c), below. Tenant shall be responsible for the payment of any and all costs incurred with the review of any replacement L-C (including without limitation Landlord's reasonable attorneys' fees), which replacement is required pursuant to this Section or is otherwise requested by Tenant.

c.APPLICATION OF LETTER OF CREDIT. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the L-C as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and

damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default beyond any applicable notice and cure period by Tenant under this Lease. Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the L-C if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease beyond any applicable notice and cure period, or (B) Tenant has filed a voluntary petition under the U.S. Bankruptcy Code or any state bankruptcy code (collectively, "Bankruptcy Code"), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or

(E) a Bank Credit Threat or Receivership (as defined below below) has occurred and Tenant has failed to comply with the requirements of either Section 68(b)(v) or Section·68(f), as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default beyond any applicable notice and cure period hereunder or if any of the foregoing events identified in Section 68(c)(ii) through (v) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default ofTenant beyond any applicable notice and cure period and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant's breach or default beyond any applicable notice and cure period, (ii) against any Rent payable by Tenant under this Lease that is not paid when due beyond any applicable notice and cure period and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default beyond any applicable notice and cure period by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L-C, either prior to or following a "draw" by Landlord of any portion of the L-C, regardless of whether any dispute exists between Tenant and Landlord as to Landlord's right to draw upon the L-C. No condition or term of this Lease shall be deemed to render the L-C conditional to justify the issuer of the L-C in failing to honor a drawing upon such L-C in a timely manner. Tenant agrees and acknowledges that (i) the L-C constitutes a separate and independent contract between Landlord and the Bank, (ii) Tenant is not a third party beneficiary of such contract, and (iii) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant's bankruptcy estate shall have any right to restrict or limit Landlord's claim and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise.

d.LETTER OF CREDIT NDT A SECURITY DEPOSIT. Landlord and Tenant acknowledge and agree that in no event or circumstance shall the L-C or any renewal thereof or any proceeds thereof be (i) deemed to be or treated as a "security deposit" within the meaning of California Civil Code Section 1950.7, (ii) subject to the terms of such Section 1950.7, or (iii) intended to serve as a "security deposit" within the meaning of such Section 1950.7. The parties hereto (A) recite that the L-C is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules and regulations applicable to security deposits in the commercial context ("Security Deposit Laws") shall have no applicability or relevancy thereto, and (B) waive any and all rights, duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws except California Civil Code Section 1950.7(b).

e.PROCEEDS OF DRAW. In the event Landlord draws down on the L-C pursuant to Section 68(c)(iv) or

(v)above, the proceeds of the L-C may be held by Landlord and applied by Landlord against any Rent payable by Tenant under this Lease that is not paid when due and/or to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. Any unused proceeds shall constitute the property of Landlord and need not be segregated from Landlord's other assets. Tenant hereby (i) agrees that (A) Tenant has no property interest whatsoever in the proceeds from any such draw, and (B) such proceeds shall not be deemed to be or treated as a "security deposit" under the Security Deposit Law, and (ii) waives all rights,

duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws except California Civil Code Section 1950.7(b). Landlord agrees that the amount of any proceeds of the L-C received by Landlord, and not (a) applied against any Rent payable by Tenant under this Lease that was not paid when due, or (b) used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will suffer) as a result of any breach or default by Tenant under this Lease (the "Unused L-C Proceeds"), shall be paid by Landlord to Tenant (x) upon receipt by Landlord of a replacement L-C in the full L-C Amount, which replacement L-C shall comply in all respects with the requirements of this Section 68, or (y) within thirty (30) days after the LC Expiration Date; provided, however, that if prior to the LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant's creditors, under the Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the Unused L-C Proceeds until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed.

f.BANK PLACED INTO RECEIVERSHIP. In the event the Bank is placed into receivership or conservatorship (any such event, a "Receivership") by the Federal Deposit Insurance Corporation or any successor or similar entity (the "FDIC"), then, effective as of the date such Receivership occurs, the L-C shall be deemed to not meet the requirements of this Section 68, and, within ten (10) days following Landlord's notice to Tenant of such Receivership (the "LC Replacement Notice"), Tenant shall replace the L-C with a substitute L-C from a different issuer reasonably acceptable to Landlord and that complies in all respects with the requirements of this Section 68. If Tenant fails to replace such L-C with a substitute L-C from a different issuer pursuant to the terms and conditions of this Section 68(f)(i), then, notwithstanding anything in this Lease to the contrary, Landlord shall have the right, at Landlord's option, to declare Tenant in default of this Lease for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid ten (10) day period), in which event, Landlord shall have the right to pursue any and all remedies available to it under this Lease and at law, including, without limitation, treating any Receivership as a Bank Credit Threat and exercising Landlord's remedies under Section 68(b)(v) above, to the extent possible pursuant to then-existing FDIC policy;. Tenant shall be responsible for the payment of any and all costs incurred with the review of any replacement L- C (including without limitation Landlord's reasonable attorneys' fees), which replacement is required pursuant to this Section or is otherwise requested by Tenant.

g.TERMINAT/ONOF L-C. Provided that, as of the fifteen (15) month anniversary of the Commencement Date, (i) no event of Tenant default, after expiration of any notice and cure period, has occurred; (ii) no event exists, which, with the giving of notice, passing of time, or both, would constitute an event of Tenant default; and (iii) there exists no uncured event of Tenant default, whether before or after expiration of any applicable cure period; the Tenant's obligation to maintain the L-C set forth in this Section 68 shall automatically terminate and Landlord shall return the L-C to Tenant promptly after such obligation terminates; provided, however, if any of the events described in clauses (i), (ii) or (iii) of this subsection exist as of such date, the L-C shall remain in effect throughout the remaining Lease term. If an event described in clause (ii) or (iii) of this subsection exists as of the fifteen month anniversary of the Commencement Date, Tenant's obligation to maintain the L-C shall terminate if and when Landlord cures such event.

69.ROOF RIGHTS.

a.SATELLITE ANTENNA. Tenant shall have the nonexclusive right, at no additional charge, to install, operate and maintain on the roof of the Building ("Roof'), at Tenant's sole cost and expense, a antenna and associated cabling (collectively, the "Antenna") complying with all of the reasonable specifications required by Landlord (the "Specifications"). The Antenna shall not require a source of electricity or other power on the Roof for its operation. The right granted to Tenant hereunder is a nonexclusive license and is not a lease.

b.TERM. Tenant's right to operate and maintain the Antenna shall automatically expire and terminate on the date that the term of the Lease expires (as may be extended) or is otherwise terminated. In addition,

such right shall also terminate if any of the following continue for more than ten (10) days after written notice from Landlord to Tenant: (a) the Antenna is causing physical damage to the Building or the Roof, (b) the Antenna is causing Landlord to be in violation of any agreement to which Landlord is a party or (c) the Antenna is causing Landlord to be in violation any local, state or federal law, regulation or ordinance.

c.USE. Tenant shall only use the Antenna to transmit and to receive radio transmissions for Tenant's use in the Premises. No person or entity other than Tenant shall have the right to send or receive transmissions using the Antenna.

d.LOCATION. The Antenna shall be installed at a location on the Roof selected by Landlord, in Landlord's reasonable discretion and reasonably approved by Tenant. Landlord makes no representation or warranty to Tenant that the location selected by the parties on the Roof, from time to time, will be satisfactory to Tenant or will permit Tenant to transmit or to receive the radio transmissions it desires to transmit and to receive.

e.LANDLORD APPROVAL. Prior to installing the Antenna, Tenant shall submit to Landlord plans and specifications for the installation of the Antenna that are reasonably satisfactory to Landlord (the "Plans"). The Plans shall be consistent with the Specifications and shall show the location of the Antenna on the Roof, the location and type of all cabling, the way the Antenna will be placed on the Roof and any other information requested by Landlord, in Landlord's reasonable discretion. Landlord shall have the right to require that the Antenna not be visible from any location on the ground and/or that the Antenna be screened in a manner satisfactory to Landlord, in Landlord's reasonable discretion. Landlord shall have the right to employ an engineer or other consultant to review the Plans and the actual and reasonable cost of such engineer or consultant shall be paid by Tenant to Landlord within thirty (30) days after demand. Landlord may approve or reject all or part of the Plans in Landlord's reasonable discretion. After Landlord has approved the Plans and prior to installing the Antenna and any cabling, Tenant shall obtain and provide to Landlord: (a) all required governmental and quasi-governmental permits, licenses, special zoning variances and authorizations, all of which Tenant shall obtain at its own cost and expense; and (b) a policy or certificate of insurance evidencing such insurance coverage as may be reasonably required by Landlord as hereinafter provided. Any alteration or modification of the Antenna or any associated cabling after the Plans have been approved shall require Landlord's prior written approval, which may be given or withheld in Landlord 1 s reasonable discretion.

f.INSTALLATION.

i.Installation and maintenance of the Antenna shall be performed solely by contractors approved by Landlord, in its reasonable discretion. Except as may be permitted by Landlord pursuant to Section 7, Tenant shall not have the right to penetrate the Roof for any purpose including, but not limited to, the installation of the Antenna. The Antenna shall be installed in a manner that will not damage the Roof. Landlord may require anyone going on the Roof to execute in advance a liability waiver satisfactory to Landlord, in Landlord's sole discretion.

ii.Tenant shall bear all costs and expenses incurred in connection with the installation, operation and maintenance of the Antenna. In addition, Tenant shall reimburse Landlord for all of its actual and reasonable out-of-pocket costs incurred in reviewing Tenant's Plans and monitoring the installation, maintenance and removal of the Antenna. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant which claims are or may be secured by any mechanic's or materialmen's lien against the Building, or any interest therein.

iii.Tenant may not take, or cause to be taken, any action that would void, impair, abrogate, limit or eliminate any Building warranty, including, but not limited to, any structural roof or roof membrane warranty. Should Tenant take, or cause to be taken, any action that voids, impairs,

abrogates, limits or eliminates any such warranty, Tenant shall provide such warranty in lieu of thereof on the same terms and conditions of such warranty as if such warranty were not voided, impaired, abrogated, limited or eliminated by Tenant's actions.

g.ROOF REPAIRS. If repairs to, or replacement of, the Roof is necessary and/or required under the Lease (hereinafter "Roof Repairs"), Tenant shall, upon Landlord's request, temporarily remove the Antenna so that the Roof Repairs may be completed. The cost of removing and reinstalling the Antenna shall be paid by Tenant, at Tenant's sole cost and expense. Landlord shall not be liable to Tenant for any damages, lost profits or other costs or expenses incurred by Tenant as the result of the Roof Repairs.

h.REMOVALOF ANTENNA. On or before the expiration or earlier termination of the Lease (or if Tenant's rights to use the Roof are termination prior thereto), Tenant shall remove the Antenna and all associated cabling and repair any damages caused thereby, at Tenant's sole cost and expense. If Tenant does not remove the Antenna on or before the date this Agreement terminates, Tenant hereby authorizes Landlord to remove and dispose of the Antenna and associated cabling, and Tenant shall immediately reimburse Landlord for the costs and expenses it incurs in removing the Antenna and associated cabling and repairing any damages caused thereby. Tenant agrees that Landlord may dispose of the Antenna and any associated cabling, in any manner selected by Landlord, if Tenant does not remove it.

i.INSURANCE. The liability and property damage insurance that Tenant is required to obtain by the Lease shall also specifically apply to the Antenna. If Tenant's insurance policies do not already include full coverage for radio and television antennas, prior to Tenant's installation of the Antenna, Tenant shall obtain an endorsement to its policies providing full coverage for liability relating to the Antenna.

j.INDEMNITY AND LANDLORD LIABILITY. The provisions of Section 19 shall apply to the Antenna, Tenant's use of the Roof and the provisions of this Section 69. Tenant's obligations under this section shall survive the expiration or earlier termination of the Lease unless specifically waived in writing by Landlord after said expiration or termination.

k.No TRANSFER OF ROOF RIGHTS. Tenant's rights under this Section 69 and the license granted hereunder may not be transferred or assigned by Tenant other than to an Affiliate and any such transfer or assignment shall be void.

I.DEFAULT. Any default by Tenant under this Section shall also constitute a default by Tenant as set forth in Section 17.

70.BACKUP GENERATOR. Landlord acknowledges that Tenant may desire to install an uninterruptable power supply or backup generator (as applicable "Generator") at the Premises. The size and location of the Generator and the size of the pad to accommodate the Generator will both be considered Alterations and subject to the provisions of Section 13.

71.ELECTRIC VEHICLE CHARGING STATIONS INSTALLED BY TENANT. Under certain circumstances Section 1952.7 of the California Civil Code ("Section 1952.7") may permit Tenant to install electric vehicle charging stations ("Tenant Charging Stations") in the parking area of the Project. In the event Section 1952.7 does permit Tenant to install Tenant Charging Stations and Tenant elects to install Tenant Charging Stations, the requirements set forth below shall apply. If, and only if, Section 1952.7 of the California Civil Code ("Section 1952.7") applies to the parking area of the Project where Tenant's parking spaces are located and gives Tenant the legal right to install electric vehicle charging stations ("Tenant Charging Stations"), Tenant shall have the right to install Tenant Charging Stations in its parking spaces subject to all of the following terms and conditions and Tenant hereby acknowledges and agrees that all of the following terms and conditions are reasonable restrictions on the installation of the Tenant Charging Stations:

a.Prior to installing, modifying, replacing or removing any Charging Station Improvements (as defined below) Tenant shall obtain the prior written approval of Landlord. For purposes of this Section, "Charging Station Improvements" shall mean the Tenant Charging Stations, the Charging Station Parking Spaces (as defined below), all other improvements or alterations made to the Project as part of the installation of the Tenant Charging Stations or any modifications to any of the foregoing. Landlord shall provide its written approval or disapproval of Tenant's request to install or modify the Charging Station Improvements within thirty (30) days after Landlord has received the Charging Station Plans (as defined below). Nothing contained in this Section shall be interpreted as granting Tenant the right to alter any aspect of the parking spaces including, but not limited to, the size or location of parking spaces, and Tenant shall not have the right to alter the parking spaces at the Project.

b.Tenant may install no more than two Tenant Charging Stations; provided, however, in no event shall Tenant be permitted to install more Tenant Charging Stations than are permitted by Section 1952.7. To the extent Section 1952.7 permits Tenant to install without Landlord's approval a greater number of Tenant Charging Stations than provided above, Tenant shall be entitled to install the smallest number of Tenant Charging Stations it is permitted to install without Landlord's approval by Section 1952.7. The parking spaces used when vehicles are being charged at the Tenant Charging Stations are hereinafter collectively referred to as the "Charging Station Parking Spaces". Charging Station Parking Spaces shall be included in the number of parking spaces Tenant is entitled to use pursuant to the Lease.

c.Landlord may determine the location of the Tenant Charging Stations, the Charging Station Parking Spaces and the other Charging Station Improvements in its sole discretion provided that they are located in the Project's parking area.

d.The Charging Station Improvements shall comply with all Federal, State and local laws and regulations and all covenants, conditions and restrictions applicable to the Project including, but not limited to, applicable health, safety, zoning and land use laws (collectively, "Applicable Requirements").

e.At Tenant's sole cost and expense, Tenant may place a sign in front of each Charging Station Parking Space stating that the Charging Station Parking Space is reserved for use by Tenant (the "Charging Station Signs"). Landlord shall have the right to approve in its sole discretion the size, content, color, design, materials and method of attachment of the Charging Station Signs. The Charging Station Signs shall be maintained by Tenant in good condition and repair at Tenant's sole cost and expense.

f.The Tenant Charging Stations may only be used by Tenant's employees while working at the Premises, no other person or entity shall have the right to use the Tenant Charging Stations, and Tenant shall not permit any other person or entity to use the Tenant Charging Stations. Landlord shall not be responsible for the security or use of the Tenant Charging Stations or for preventing other persons or entities from using the Tenant Charging Stations or from parking in the Charging Station Parking Spaces.

g.Tenant shall pay, at Tenant's sole cost and expense, any cost or expense related directly or indirectly to the existence of the Charging Station Improvements, including, but not limited to, all costs associated with the ownership, design1 purchase, installation, maintenance, repair, operation and removal of the Charging Station Improvements (collectively, "Charging Station Expenses"). Landlord shall have no obligation to pay any Charging Station Expense. If Tenant fails to pay any Charging Station Expense or if Tenant fails to perform any obligation it has under this Exhibit (collectively, a "Tenant Obligation"), Landlord shall have the right, but not the obligation, to complete the Tenant Obligation (e.g., by paying the Charging Station Expense or performing the Tenant obligation), and Tenant shall reimburse Landlord for the costs incurred by Landlord plus and amount equal to ten percent (10%) of such costs within twenty (20) days after written demand.

h.At all times Tenant shall, at Tenant's sole cost and expense, maintain the Charging Station Improvements in good condition and repair and in compliance with all Applicable Requirements. Tenant

shall keep the area around the Tenant Charging Stations and the Charging Station Parking Spaces in neat

and clean condition, at Tenant's sole expense.

i. Tenant shall employ qualified engineers and architects approved by Landlord, in Landlord's reasonable discretion, to prepare detailed plans and specifications for the installation and any subsequent modification of the Charging Station Improvements (the "Charging Station Plans"). Landlord shall have the right to approve the Charging Station Plans including, but not limited to, the type and size of the charging stations Tenant desires to install and all electrical infrastructure. Once Landlord has approved the Charging Station Plans, Tenant shall obtain all required permits and other governmental approvals needed in order to install or modify the Charging Station Improvements pursuant to the approved Charging Station Plans, at Tenant's sole cost and expense. Tenant shall provide copies of the permits to Landlord prior to commencing the construction or modification of the Charging Station Improvements. Landlord shall have the right to approve in its sole discretion any conditions imposed by applicable governmental agencies on the installation or modification of the Charging Station Improvements. In addition, Landlord shall have the right to approve in its sole discretion the methods and procedures used to complete any trenching, landscaping repairs and/or asphalt and concrete repairs.

j.Landlord shall have the right to approve in advance the contractors (the "Contractors") used by Tenant to construct, install and/or modify the Charging Station Improvements, in Landlord's reasonable discretion; provided, however, any work on the Project's electrical systems, plumbing systems, life/fire/safety systems, any modifications to concreate or asphalt areas or any modifications to landscaped areas shall be performed by contractors designated by Landlord. The Contractors shall carry worker's compensation insurance covering all of their respective employees, and shall also carry public liability insurance, including property damage, all with limits, in form and with companies as are acceptable to Landlord, in Landlord's reasonable discretion. Certificates for all insurance carried pursuant to this Section shall be delivered to Landlord before the commencement of the construction or modification of the Charging Station Improvements. All such policies of insurance shall name Landlord, its property manager and such other parties as Landlord shall designate as additional insured. Prior to commencing construction or modification of the Charging Station Improvements, Tenant shall provide Landlord with copies of the final contract entered into with each Contactor.

k.The Contractors shall comply with Landlord's construction rules and procedures (the "Construction Procedures"), and if any Contractor fails to comply with the Construction Procedures after Landlord has provided the Contractor with written notice of its non-compliance, Landlord shall have th'e right to prohibit such Contractor from performing any further work at the Project, and Landlord shall have no liability to Tenant do to such prohibition. Tenant and the Contractors shall not have the right, at any time, to disrupt any Building or Project service (e.g., electrical, plumbing etc.) to the Exterior Areas. Tenant and the Contractors shall not store construction materials at the Project and the Contractors shall not dispose of their refuse or construction materials in the Project's trash receptacles. Tenant shall reimburse Landlord for the cost of repairing any damage to the Project caused by the construction or modification of the Charging Station Improvements, plus an amount equal to ten percent (10%) of such cost, within twenty

(20)days after written request by Landlord. Landlord shall have the right to inspect the Charging Station Improvements at all times. Landlord shall have the right to receive a fee to reimburse it for its costs in providing approvals hereunder and in monitoring the construction or modification of the Charging Station Improvements in an amount equal to three percent (3%) of the total cost of constructing, installing and/or modifying the Charging Station Improvements (the "Charging Station Landlord Fee"). Tenant shall pay the Charging Station Landlord Fee to Landlord within twenty (20) days after written demand.

I.All electricity used by the Tenant Charging Stations shall be paid by Tenant, at Tenant's sole cost and expense. The electricity used by the Tenant Charging Stations shall be separately metered by the applicable public utility and Tenant shall pay the electricity charges directly to the applicable public utility. All costs associated with metering the electricity used by the Tenant Charging Stations, bringing electricity to the Tenant Charging Stations (e.g., the cost of metering devices, the cost of modifications to the Project's

electrical system, the cost of bringing electrical lines to the Tenant Charging Stations etc.) and all design and construction costs associated with bringing electricity to the Tenant Charging Stations shall be paid by Tenant, at Tenant's sole cost and expense. Landlord shall determine in its sole discretion what electrical improvements need to be made to bring the electricity to the Tenant Charging Stations, and where such electrical improvements will be located, and all such electrical improvements shall be included in the Charging Station Plans.

m.Upon the expiration or earlier termination of the Lease or upon Tenant's election to no longer use the Tenant Charging Stations, Tenant shall remove the Charging Station Improvements and shall return the Project to the condition it was in prior to the installation of the Charging Station Improvements, at Tenant's sole cost and expense. At Landlord's option, Landlord may require Tenant to leave some or all of the Charging Station Improvements in place upon the expiration or earlier termination of the Lease or upon Tenant's election to no longer use the Tenant Charging Stations, and in this event, the Charging Station Improvements left by Tenant shall be the property of Landlord. At Landlord's option, Tenant shall execute a bill of sale confirming that it has conveyed title to the Charging Station Improvements to Landlord free of all liens and encumbrances within ten (10) days after Landlord's written request.

n.Tenant hereby agrees to indemnify, defend and hold harmless Indemnified Parties from and against any and all Damages arising out of or related to a "Charging Station Indemnified Matter" (as defined below). A "Charging Station Indemnified Matter " shall mean any matter for which one or more of the Indemnified Parties incurs liability or Damages if the liability or Damages arise out of or involve, directly or indirectly, (a) Tenant's or any Tenant Party's installation, use, repair, maintenance and removal of the Charging Station Improvements, (b) any act, omission or neglect of Tenant or a Tenant Party or (c) Tenant's failure to perform any of its obligations under this Section. Tenant's obligations hereunder shall include, but shall not be limited to providing a defense, with counsel reasonably satisfactory to the Indemnified Party, at Tenant's sole expense, within twenty (20) days after written demand from the Indemnified Party, of any claims, action or proceeding arising out of or relating to an Indemnified Matter whether or not litigated or reduced to judgment and whether or not well founded. This indemnity is intended to apply to the fullest extent permitted by applicable law. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom or for loss of or damage to the Charging Station Improvements or other property of Tenant, Tenant's employees, agents, contractors or invitees, nor shall Landlord be liable for injury to the person of Tenant Parties, whether such damage or injury is caused by or results from any cause whatsoever including, but not limited to, the negligent or intentional acts of the Indemnified Parties. Tenant's obligations under this Section shall survive the expiration or termination of the Lease. The insurance purchased by Tenant pursuant to the Lease shall apply to the Charging Station Improvements, and within fourteen (14) days after Landlord approves the installation of the Tenant Charging Stations Tenant shall provide Landlord with a certificates of insurance meeting the requirements of the Lease showing that the insurance required by the Lease is in place with respect to the Charging Station Improvements.

o.If as a result of the construction or the existence of the Charging Station Improvements, Landlord is obligated to comply with the Americans With Disabilities Act or any other law or regulation and such compliance requires Landlord to make any improvements or alterations to any portion of the Project (an "Additional Alteration"), Landlord shall have the right to make the Additional Alteration and in this event Tenant shall reimburse Landlord for the cost of the Additional Alteration within twenty (20) days after written demand, or require that Tenant make such Additional Alteration at its sole cost and expense.

p.At Landlord's option and in addition to all of Landlord's other rights under this Section, Landlord may require Tenant to comply with some or all of the items described on the "Permitting Checklist" of the "Zero-Emission Vehicles in California: Community Readiness Guidebook" referred to in Section 1952.7, at Tenant's sole cost and expense.

q.If any provision of this Section is determined to conflict with the requirements of Section 1952.7, the provision shall be modified to the least extent possible to comply with the requirements of Section 1952.7 and except as modified such provision shall remain in full force and effect.

[SIGNATURES TO FOLLOW ON SUCCEEDING PAGE)

IN WITNESS WHEREOF, the parties hereto have respectively executed this Addendum.

LANDLORD:

Lake Midas LLC

a California limited liability company

By: /s/ Jason Oderio

Name: Jason Oderio,

Its: Manager

TENANT*:

Spinal Kinetics, Inc.

a California corporation

By: /s/ Thomas Afzal

Thomas Afzal

Its: Chief Executive Officer

By: /s/ Michael Orth

Michael Orth

Its: Chief Operating Officer

*lf Tenant is a corporation, the authorized officers must sign on behalf of the corporation and indicate the capacity in which they are signing. The Lease must be executed by the president or vice president and the secretary or assistant secretary, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may be, must be attached to this Lease.

50

EX-10

Exhibit 10.11

FIRST AMENDMENT TO LEASE

This First Amendment to Lease (the "FirstAmendment") is dated as of March 4, 2022, by and between Lake Midas LLC, a California limited liability company ("Landlord"), and Spinal Kinetics LLC, a Delaware limited liability company (formerly known as Spinal Kinetics, Inc., a Delaware corporation) ("Tenant"), with reference to the following recitals.

R E C I T A L S:

A.On or about April 16, 2015, Landlord and Tenant entered into a Standard Lease Agreement (the "Lease") for that certain premises commonly known as 501 Mercury Drive, Sunnyvale, California (the "Premises"), containing approximately 25,051 rentable square feet.

B.On or about April 27, 2018, Landlord and Tenant entered into a Consent to Transfer wherein Landlord approved the Transaction referenced therein.

C.Landlord and Tenant wish to amend the Lease on the terms and conditions set forth below.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Recitals. The Recitals above are incorporated herein as if fully set forth herein.

2.Extension of Lease Term. The Lease term is hereby extended such that it expires on December 31, 2027 (the period from January 1, 2023, through and including December 31, 2027, is referred to herein as “Extended Term”).

3.Base Rent. Base Rent for the Premises during the Extended Term shall be:

Period	Rent/RSF/Month	Total Monthly Base Rent
January 1, 2023 – December 31, 2023	$3.35	$83,920.85
January 1, 2024 – December 31, 2024	~$3.45	$86,438.48
January 1, 2025 – December 31, 2025	~$3.55	$89,031.63
January 1, 2026 – December 31, 2026	~$3.66	$91,702.58
January 1, 2027 – December 31, 2027	~$3.77	$94,453.66

4.As-Is. Landlord shall not be obligated to make any improvements to the Premises except as expressly set forth in this First Amendment or provide Tenant with any improvement allowance in connection with this First Amendment. Tenant currently occupies the Premises and accepts the Premises in its current condition, subject to the provisions of this First Amendment.

5.Abatement of Rent. Landlord hereby agrees to waive the Base Rent due for the period from January 1, 2023, through March 31, 2023. No amounts due to Landlord under the Lease other than the Base Rent referred to above shall be waived. In the event Tenant commits a monetary default as defined in the Lease beyond any applicable notice and cure period, Base Rent coming due thereafter shall not be waived. The total amount of Base Rent waived shall not exceed Two Hundred Fifty-One Thousand Seven Hundred Sixty-Two and 60/100 Dollars ($251,762.60).

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Exhibit 10.11

6.Security Deposit. Provided (a) no event of Tenant’s default beyond expiration of any applicable notice and cure exists; and (b) Landlord has not provided Tenant with written notice of default, which default remains uncured; effective as of December 31, 2022, the Security Deposit shall be reduced to One Hundred Thirteen Thousand Two Hundred Forty-One and 91/100 Dollars ($113,241.91) and Landlord shall return to Tenant the remaining portion of the original Security Deposit held by Landlord in the amount of One Hundred Eighty-Six Thousand Seven Hundred Fifty-Eight and 09/100 Dollars ($186,758.09) by January 31, 2023. If the condition set forth in clause (b) is not satisfied as of December 31, 2022, Tenant shall be entitled to the partial refund of the Security Deposit set forth in this Section upon the Landlord’s acceptance of Tenant’s cure of such default and provided further that the conditions set forth in clauses (a) and (b) are satisfied as of Landlord’s acceptance of such cure.

7.Renewal Options. Section 64 of the Lease is amended to provide that the Extension Options shall commence when the Extended Term expires and when the first Extension Option term expires on all of the terms and conditions otherwise set forth in Section 64 of the Lease.

8.Exterior Area Storage. Tenant is entitled to install and maintain throughout the Lease term a single non-permanent outdoor storage container (“Storage Container”) in the Exterior Area adjacent to the Building. The size, location, and specifications of the Storage Container will be subject to Landlord’s reasonable approval and Tenant shall remove the Storage Container and repair any damage caused by the Storage Container or its removal prior to the expiration or earlier termination of this Lease.

9.Waiver of Restoration of Certain Interior Alterations. Tenant shall not be required to remove any Tenant Improvements (as defined in Exhibit F to the Lease) performed by Tenant to the interior of the Building or any Consent Required Alterations (as defined in Section 13.1 of the Lease) performed by Tenant to the interior of the Building prior to the date of this First Amendment, nor restore the interior of the Building to its condition prior to the installation of such Tenant Improvements and such Consent Required Alterations. Landlord reserves all other rights Landlord has in the Lease to require removal and restoration of the Tenant Improvements and any Alterations.

10.Compliance with Laws. Section 4.2 of the Lease is amended to read “Tenant shall, at Tenant's sole expense, promptly comply with all applicable laws, ordinances, rules, regulations, orders, certificates of occupancy, conditional use or other permits, variances, covenants, conditions, restrictions, easements, the reasonable recommendations of Landlord's engineers or other consultants, and requirements of any fire insurance underwriters, rating bureaus or government agencies, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the term or any part of the term hereof, relating in any manner to, or triggered by, the specific use by Tenant of the Premises, the Tenant Improvements and/or any Alterations, if and to the extent required by any applicable governing agency. Tenant shall, at Tenant's sole expense, comply with all accessibility requirements of State and Federal law that apply to the Premises, Title 24 of the California Code of Regulations (including without limitation the 2013 Building Energy Efficiency Standards) (“Title 24”), and all federal, state and local laws and regulations governing occupational safety and health if required by any applicable governing agency; provided, however, that Landlord (rather than Tenant) shall be required to perform any structural improvements or exterior improvements related to such requirements, laws and regulations at Landlord’s sole cost and expense, unless such relate in any manner to, or are triggered by, the specific use by Tenant of the Premises, the Tenant Improvements and/or any Alterations (in which case Tenant must make such structural improvements or exterior improvements if and to the extent required by any applicable governing agency). Any structural improvements or exterior improvements that are not the Tenant’s responsibility pursuant to the immediately preceding sentence

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Exhibit 10.11

shall be performed by Landlord if and to the extent required by any applicable governing agency. Tenant acknowledges that it will be responsible for complying with current and future laws and regulations (if and to the extent required by any applicable governing agency) even though such compliance requires Tenant to make substantial repairs or modifications (including structural modifications) to the Premises, subject however to the terms of the immediately-preceding sentence. Notwithstanding the foregoing, Tenant’s obligation to comply with such laws shall not include any compliance obligation to the improvements performed by Landlord pursuant to Section 66. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, or take any other action that would constitute a nuisance, create a dangerous situation, or would disturb, unreasonably interfere with or endanger Landlord. Tenant shall obtain, at its sole expense, any permit or other governmental authorization required to operate its business from the Premises. Landlord shall not be liable for the failure of any other tenant or person to abide by the requirements of this section or to otherwise comply with applicable laws and regulations, and Tenant shall not be excused from the performance of its obligations under this Lease due to such a failure.”

11.Operating Expense Modifications. Landlord may not include in Operating Expenses the cost of (a) resurfacing and/or restriping the parking lot more than once in any forty-eight (48) month period; provided, however, the foregoing limitation does not limit Landlord’s right to include ordinary maintenance and repair costs in Operating Expenses and; provided, further, however, the foregoing limitation shall not apply to the extent the need for such resurfacing and/or restriping is the result of inappropriate use of the parking lot by Tenant, its employees, agents, contractors, or invitees, or beyond ordinary and normal use; and (b) repainting the exterior of the Building more than once in any sixty (60) month period; provided, however, the foregoing limitation shall not apply if the need for such repainting is due to use of the Building beyond ordinary and normal use.

12.Tenant’s Repairs – Obligations of Tenant. Section 12.1 of the Lease is amended to read “Subject to Section 12.2 below, Tenant shall, at its sole cost and expense, keep and maintain all parts of the Premises in good and sanitary condition, promptly making all necessary repairs and replacements, including but not limited to, windows, glass and plate glass, doors, skylights, roof membranes, any special store front or office entry, walls and finish work, floors and floor coverings, heating and air conditioning systems, dock boards, bumpers, plates, seals, levelers and lights, plumbing work and fixtures (including periodic backflow testing), electrical systems, lighting facilities and bulbs, sprinkler systems, alarm systems, life safety systems, fire detection systems, termite and pest extermination, tenant signage, roof covering and membrane, and regular removal of trash and debris. Landlord shall have the right to reasonably approve the contractor Tenant shall use to make any repair or to perform any maintenance on the roof, heating, ventilation and air conditioning systems ("HVAC"), plumbing systems, electrical systems, sprinkler systems, fire alarm systems or fire detection systems located at the Premises. Tenant shall not paint or otherwise change the exterior appearance of the Building without Landlord's prior written consent, which may be given or withheld in Landlord's reasonable discretion. Tenant shall not disturb the integrity and support provided by any wall. Notwithstanding anything contained herein to the contrary, if Landlord reasonably determines that an item described in this Section 12.1 is in need of replacement in lieu of repair, then such item shall be replaced by Landlord, and the cost thereof shall be included in Operating Expenses subject to Section 6, provided that, to the extent that such Operating Expense is capitalized, Tenant may prepay its obligation at any time. If Tenant fails to keep the Premises in good condition and repair, Landlord may after providing written notice of such election to Tenant, but shall not be obligated to, make any necessary repairs. If Landlord makes such repairs, Landlord may bill Tenant for the cost of the repairs as additional rent, and said additional rent shall be payable by Tenant within twenty (20) days after demand by Landlord, plus a ten percent (10%) administrative fee.”

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Exhibit 10.11

13.Roof Repairs. Notwithstanding Section 12.1 of the Lease (as amended by this First Amendment), Landlord shall, at its sole cost and expense and not as an Operating Expense, (a) reseal the existing roof in calendar year 2022 per recommendation of existing roof warranty and as otherwise reasonably determined by Landlord; and (b) repair and maintain the structural elements of the roof throughout the Lease term. Other than as set forth in the preceding sentence, the responsibility for repairing and maintaining the roof shall be as set forth in the Lease, including, but not limited to, with respect to any costs and expenses thereof being included in Operating Expenses.

14.Intellectual Property and Ownership Related Matters. Tenant represents and warrants that Orthofix US LLC, a Delaware limited liability company f/k/a Orthofix, Inc., a Delaware corporation (“Orthofix”) is the sole member of Tenant, and is the successor-by-merger to Orthofix Spinal Implants Inc., a Delaware corporation f/k/a Blackstone Medical, Inc., a Massachusetts corporation (“Blackstone”). Tenant represents and warrants that Tenant is the owner of those certain registered trademarks and registered patents (“IP”) listed on the attached Exhibit A, and that since the Commencement Date, no material portion of the IP has been conveyed or assigned to Blackstone, Orthofix, any parent, subsidiary or affiliate of Blackstone or Orthofix, or any third party (other than collateral assignments in connection with financing). If Tenant intends or desires to transfer any of the IP and which cover a material part of Tenant’s business to Blackstone, Orthofix, or any parent, subsidiary or affiliate of Blackstone or Orthofix or any third party (other than collateral assignments in connection with financing), Tenant shall first cause Orthofix (or another party having comparable or better creditworthiness which is approved by Landlord for such purposes, it being agreed that such approval must not be unreasonably withheld or delayed), to provide a Guaranty of Lease for the benefit of Landlord in the form attached hereto as Exhibit B, which Guaranty of Lease shall be executed and delivered by the guaranteeing party prior to the date of the transfer of the IP. However, Tenant may license or cancel any such registered trademarks or registered patents of Tenant in the ordinary course of Tenant’s business without notice to Landlord and without the need to provide the Guaranty of Lease. Tenant’s failure to timely provide the executed Guaranty of Lease or notice required by this Section shall be an immediate default under the Lease and, in addition to such rights and remedies Landlord has for a Tenant default, shall permit Landlord the right to require Tenant to increase the Security Deposit to Three Hundred Thousand Dollars ($300,000.00) upon written notice from Landlord.

15.Failure to Provide Insurance. Tenant acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Landlord to risks and potentially cause Landlord to incur costs not contemplated by the Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Tenant does not maintain the required insurance and/or does not provide Landlord with the required binders or certificates evidencing the existence of the required insurance and such failure continues for 10 business days after Tenant’s receipt of notice from Landlord specifying the purported shortcomings or omissions of Tenant’s insurance coverages and/or the insurance binders or insurance certificates submitted (or required to be submitted, in the case of omissions) by Tenant to Landlord, the Base Rent shall be automatically increased, without any requirement for further notice to Tenant, by an amount equal to 10% of the then existing monthly Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Landlord will incur by reason of Tenant's failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Tenant's default with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Tenant of its obligation to maintain the insurance specified in the Lease.

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Exhibit 10.11

16.Exemption of Landlord from Liability. The last sentence of Section 20 of the Lease is hereby revised to read in its entirety as follows: “Tenant, as a material part of the consideration to Landlord hereunder, hereby assumes all risk of damage to Tenant's property or business or injury to persons, in, upon or about the Project arising from any cause, including the active or passive negligence of Landlord Parties except for the gross negligence or willful misconduct of Landlord or any Landlord Party, and Tenant hereby waives all claims in respect thereof against Landlord Parties.”

17.Landlord’s Liability. The second sentence of Section 21 of the Lease is hereby revised to read in its entirety as follows: “Tenant agrees that in the event of such a transfer Landlord shall automatically be released from all liability thereafter accruing under this Lease; and Tenant hereby agrees to look solely to Landlord's transferee for the performance of Landlord's obligations hereunder after the date of the transfer.”

18.SNDA. Promptly following the execution date of this First Amendment, Landlord shall request from Landlord’s current mortgagee holding a security interest in the Project a subordination, non-disturbance and attornment agreement for Tenant on such mortgagee’s standard form and Landlord shall use commercially reasonable efforts to cause such mortgagee to execute and deliver such subordination, non-disturbance and attornment agreement to Tenant; provided, however, it shall neither be a condition to the effectiveness of this First Amendment nor a default by Landlord hereunder if Landlord is unable to cause such mortgagee to execute and deliver such subordination, non-disturbance and attornment agreement to Tenant provided that Landlord has promptly requested such document and used commercially reasonable efforts to obtain it as set forth above in this paragraph.

19.Use of the Roof and Building Exterior. Notwithstanding anything to the contrary set forth in Section 30 of the Lease or any other portion of the Lease, Landlord must not use the roof or other exterior portions of the Building, nor any portions of the Exterior Areas, for signage (other than Tenant’s signage, brokerage signs related to the sale or leasing of the Project, signage related to construction occurring at the Project, security, safety, and property management signage as is customary to similarly situated projects, and signage or notices required by applicable law, insurance providers, or lenders holding a security interest in the Project) or other advertising displays without Tenant's prior written consent, which consent shall not be unreasonably withheld.

20.Deletion of Obsolete Letter of Credit Provisions. Section 68 of the Lease is hereby deleted in its entirety.

21.Service Dogs. Notwithstanding anything to the contrary set forth in the Lease, Tenant shall be permitted to bring (or allow its employees to bring) into the Premises non-aggressive, fully-domesticated, fully-vaccinated service dogs as defined under Title III of the Americans with Disabilities Act and California Civil Code § 54.1(b)(6)(C)(iii), (a "Tenant Service Dog"). Tenant Service Dogs must be owned by the person requesting to bring the Tenant Service Dog onto the premises. Tenant shall have the obligation to verify to the Landlord whether the animal is a qualified service dog as defined under Title III of the Americans with Disabilities Act and California Civil Code § 54.1(b)(6)(C)(iii). Landlord reserves the right to request from Tenant a copy of the Tenant Service Dog’s health records showing that the animal is in good health, parasite-free and immunized/vaccinated. The Tenant Service Dog must be on a leash, under control, and accompanied by its owner at all times. Tenant is required to comply with applicable laws and regulations related to Service Animals doing work or performing tasks for individuals with disabilities. No Tenant Service Dog shall be brought to the Premises if such dog is ill or contracts a disease that could potentially threaten the health or wellbeing of any tenant or occupant of the Premises (which diseases may include, but shall not be limited to, rabies, leptospirosis and Lyme disease). Tenant shall not

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Exhibit 10.11

permit any objectionable dog-related odors to emanate from the Premises, and in no event shall any Tenant Service Dog remain at the Premises overnight. All bodily waste generated by a Tenant Service Dog in or about the Premises shall be promptly removed and disposed of in trash receptacles designated by the Landlord, and any areas of the Premises affected by such waste shall be cleaned and otherwise sanitized by Tenant. No Tenant Service Dog shall be permitted to enter the Premises if such Tenant Service Dog has previously exhibited dangerously aggressive behavior. In the event Landlord receives any verbal or written complaints from any other tenant or occupant of the Premises in connection with health-related issues related to the presence of a Tenant Service Dog in the Premises, Landlord and Tenant shall promptly meet and confer, in good-faith, to determine appropriate mitigation measures to eliminate the causes of such complaints (which mitigation measures may include, without limitation, additional and/or different air filters to be installed in the Premises, HVAC system, or elsewhere in the Premises), and Tenant shall cause such measures to be taken promptly at its sole cost or expense. For further information regarding a qualified service dog, please visit https://www.ada.gov/regs2010/service_animal_qa.html. A Tenant Service Dog shall be individually trained to do work or perform tasks, including, but not limited to, minimal protection work, rescue work, pulling a wheelchair, or fetching dropped items, for the benefit of the individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. This definition shall exclude animals that are not covered under the Americans with Disabilities Act of 1990, including, but not limited, “emotional support animal."

22.Disclosure Regarding Accessibility Inspection. Section 4.3 of the Lease is amended to read: “The Premises have not undergone an inspection by a Certified Access Specialist (“CASp”) to determine whether or not the Premises meets all applicable construction-related accessibility standards pursuant to California Civil Code Section 55.51 et. seq. Accordingly, pursuant to California Civil Code § 1938(e), Landlord hereby further states as follows: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises”. Landlord shall have the right (but not the obligation) to obtain a report from a CASp, and, in the event that Landlord does so, and such report provides that the Project is in compliance (or any issues of non-compliance are corrected), then, as between Landlord and Tenant, (regardless of whether the claim is brought by any third party, including a subtenant or invitee of Tenant) such report, upon delivery to Tenant, shall be conclusive that Landlord has complied with any obligation relating specifically to matters covered by the CASp as of delivery (and exclusive of any improvements made by Tenant) pursuant to California Civil Code sections 55.52 and 55.53. Landlord and Tenant agree that if Tenant requests or performs a CASp inspection of the Premises, Building or Project, then (i) Tenant shall pay the fee for such inspection, (ii) Tenant shall reimburse Landlord upon demand for the cost of making any repairs necessary to correct violations of construction-related accessibility standards to the Premises, Building and/or Project; and (iii) if Tenant commissions an inspection by a CASp, Tenant (a) will not provide Landlord with a copy of such report unless specifically requested in writing by Landlord; (b) shall be responsible for any and all consequences resulting from the commissioning of such inspection, including, but not limited to, implementing, managing and performing any and all repairs, improvements and/or modifications to the Premises, Building, Project or Exterior Areas related to addressing and/or correcting any violations disclosed by such inspection; and (c) shall indemnify, defend and hold Landlord harmless from and against any and all losses, liabilities, damages,

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Exhibit 10.11

costs and claims that may be made against Landlord by any party claiming that Landlord had knowledge of a non-compliance of the Premises, Building, Project or Exterior Areas with applicable laws as a result of such inspection. Notwithstanding clause (b) of the immediately preceding sentence, Landlord may elect to require Tenant to implement, manage and/or perform such repairs, improvements and/or modifications in lieu of performing such and requiring reimbursement from Tenant requiring Tenant to implement, manager and/or perform such and, in such case, Tenant shall reimburse Landlord for all costs and expenses associated therewith within twenty (20) days after demand from Landlord. It shall be an uncurable, material default if Tenant commissions an inspection by a CASp and delivers a copy thereof to Landlord unless specifically requested in writing by Landlord.”

23.Energy Consumption Reporting. Landlord shall have the right to require Tenant to provide Landlord with copies of bills from electricity, natural gas or similar energy providers (collectively, “Energy Providers”) Tenant receives from Energy Providers relating to Tenant’s energy use at the Premises (“Energy Bills”) within ten (10) days after Landlord’s written request. In addition, Tenant hereby authorizes Landlord to obtain copies of the Energy Bills directly from the Energy Provider(s), and Tenant hereby authorizes each Energy Provider to provide Energy Bills and related usage information directly to Landlord without Tenant’s consent. From time to time within ten (10) days after Landlord’s request, Tenant shall execute and deliver to Landlord an agreement provided by Landlord authorizing the Energy Provider(s) to provide to Landlord Energy Bills and other information relating to Tenant’s energy usage at the Premises.

24.Conflict. If there is a conflict between the terms and conditions of this First Amendment and the terms and conditions of the Lease, the terms and conditions of this First Amendment shall control. As modified by this First Amendment, the terms and conditions of the Lease shall remain in full force and effect. Capitalized terms included in this First Amendment shall have the same meaning as capitalized terms in the Lease unless otherwise defined herein. Tenant hereby acknowledges and agrees that the Lease is in full force and effect, that to the best of Tenant’s actual knowledge Landlord is not currently in default under the Lease, and that, to the best of Tenant’s actual knowledge, no event has occurred which, with the giving of notice or the passage of time, or both, would ripen into Landlord’s default under the Lease. Landlord hereby acknowledges and agrees that the Lease is in full force and effect, that to the best of Landlord’s actual knowledge Tenant is not currently in default under the Lease, and, to the best of Landlord’s actual knowledge, no event has occurred which, with the giving of notice or the passage of time, or both, would ripen into Tenant’s default under the Lease.

25.Authority. The persons executing this First Amendment on behalf of the parties hereto represent and warrant that they have the authority to execute this First Amendment on behalf of said parties and that said parties have authority to enter into this First Amendment.

26.Brokers. Tenant and Landlord each represent and warrant to the other that neither has had any dealings or entered into any agreements with any person, entity, broker or finder other than Frank Friedirch of CBRE, Inc., as Landlord’s broker, and John Roper, Chris Shepherd, Matt Taylor, and Garrett Taylor of CBRE, Inc., as Tenant’s broker, in connection with the negotiation of this First Amendment, and no other broker, person, or entity is entitled to any commission or finder's fee in connection with the negotiation of this First Amendment, and Tenant and Landlord each agree to indemnify, defend and hold the other harmless from and against any claims, damages, costs, expenses, attorneys' fees or liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings, actions or agreements of the indemnifying party.

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Exhibit 10.11

27.Confidentiality. Tenant acknowledges and agrees that the terms of this First Amendment are confidential and constitute proprietary information of Landlord. Disclosure of the terms hereof could adversely affect the ability of Landlord to negotiate other leases with respect to the property and may impair Landlord's relationship with other tenants of the property. Tenant agrees that it and its partners, officers, directors, employees, brokers, and attorneys, if any, shall not disclose the terms and conditions of this First Amendment for one year from the execution date of this First Amendment to any other person or entity without the prior written consent of Landlord which may be given or withheld by Landlord, in Landlord's sole discretion, except that Tenant may disclose the terms and conditions of this First Amendment and the Lease (A) if required by any applicable law, regulation or court order, (B) in any judicial proceedings involving Landlord and Tenant, and (C) to Tenant’s attorneys, accountants, employees and existing or prospective financial partners or lenders, successors, assignees or sublessees. It is understood and agreed that damages alone would be an inadequate remedy for the breach of this provision by Tenant, and Landlord shall also have the right to seek specific performance of this provision and to seek injunctive relief to prevent its breach or continued breach.

28.Counterparts. This First Amendment may be executed in counterparts. Each counterpart shall be deemed an original, and all counterparts shall be deemed the same instrument with the same effect as if all parties hereto had signed the same signature page.

29.Delivery of Amendment. Preparation of this First Amendment by Landlord or Landlord's agent and submission of same to Tenant shall not be deemed an offer by Landlord to enter into this First Amendment. This First Amendment shall become binding upon Landlord only when fully executed by all parties and when Landlord has delivered a fully executed original of this First Amendment to Tenant. The delivery of this First Amendment to Tenant shall not constitute an agreement by Landlord to negotiate in good faith, and Landlord expressly disclaims any legal obligation to negotiate in good faith.

30.Notices. Section 1.16 of the Lease is amended to provide that the respective notice addresses of Landlord and Tenant are as follows (notwithstanding anything to the contrary in Section 43 of the Lease):

Landlord: Lake Midas LLC c/o Jason Oderio 1484 Pollard Road, #264 Los Gatos, California 95032	Tenant: Spinal Kinetics LLC Attn: Doug Rice, CFO 3451 Plano Parkway Lewisville, Texas 75056
With a copy to: Yolanda Faile Verity Properties 530 Showers Drive, #7-318 Mountain View, California 94040-4740	With a copy to: Bell Nunnally & Martin LLP Attn: Jean Pierre Boyea, Esq. 2323 Ross Ave., 19th Floor Dallas, Texas 75201

(signatures to follow on succeeding page)

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Exhibit 10.11

IN WITNESS WHEREOF, the parties hereby execute this First Amendment as of the date first written above.

Landlord: Lake Midas LLC a California limited liability company By:  /s/ Jason Oderio Name: Jason Oderio Its: Manager Tenant: Spinal Kinetics LLC a Delaware limited liability company (formerly known as Spinal Kinetics, Inc., a Delaware corporation) By:  /s/ Kimberley A. Elting Name:  Kimberley A. Elting Its: Chief Legal and Development Officer By:  /s/ Douglas Rice Name:  Douglas Rice Its:  Chief Financial Officer

*Authorized officers must sign on behalf of the corporation and indicate the capacity in which they are signing. The amendment must be executed by the president or vice president and the secretary or assistant secretary, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may be, must be attached to this amendment.

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EX-10

Exhibit 10.22

ORTHOFIX MEDICAL INC.

AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN

Stock Unit Grant Agreement

COVER SHEET

Orthofix Medical Inc., a Delaware corporation (the “Company”), hereby grants to the Award Recipient named below, on the Grant Date set forth below, the specified number of Stock Units relating to shares of the Company’s common stock, par value $0.10 per share (the “Stock”) under the Plan, subject to the vesting schedule and terms and conditions set forth below (the “Award”). Additional terms and conditions of the Stock Units are set forth on this cover sheet, in the attached Stock Unit Grant Agreement (together, the “Agreement”), and in the Company’s Amended and Restated 2012 Long-Term Incentive Plan (as amended from time to time, the “Plan”). Capitalized terms used and not otherwise defined herein shall have the meanings attributed thereto in the Plan.

Grant Date:

Name of Award Recipient:

Employee ID Number:

Number of Shares of Stock Underlying Stock Units:

You agree to all of the terms and conditions described in this Agreement and in the Plan, unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

Attachment
This is not a stock certificate or a negotiable instrument.

Exhibit 10.22

ORTHOFIX MEDICAL INC.

AMENDED AND RESTATED 2012 LONG-TERM INCENTIVE PLAN

Stock Unit Grant Agreement

Attachment

1.Grant of Stock Units.

(a)Vesting. Subject to earlier termination in accordance with the Plan or this Agreement and the terms and conditions herein, Stock Units granted under this Agreement shall vest with respect to one-third of the shares of Stock covered hereby on each of the first, second and third anniversaries of the Grant Date (each, a “Vesting Date”) provided that Award Recipient continues in Service and has not had a Separation from Service on each such date; provided further, however, for the avoidance of doubt, that there shall be no proportionate or partial vesting in the periods prior to or between each Vesting Date unless otherwise provided under this Agreement or the Plan; provided further, that for the avoidance of doubt, following Award Recipient’s Separation from Service, no additional Stock Units shall vest.

(b)Additional Documents. The Award Recipient agrees to execute such additional documents and complete and execute such forms as the Company may require for purposes of this Agreement.

(c)Issuance of Stock. The shares of Stock underlying the Award Recipient’s vested Stock Units will be issued as soon as practicable following the earlier of (i) the date that the Stock Units vest pursuant to the vesting schedule, or (ii) the date of the Award Recipient’s termination of Service, but in no event later than March 15 of the calendar year that immediately follows the first of such events (the date or dates such shares of Stock are delivered, the “Settlement Date”). The issuance of shares of Stock under this grant shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry registration or issuance of one or more stock certificates. On the Settlement Date, the Company shall also deliver to the Award Recipient the number of additional shares of Stock, the number of any other securities of the Company and the amount of any other property (in the case of cash dividends, assuming such dividends had been reinvested in shares of Stock as of the ex-dividend date thereof), in each case that the Company distributed per share of Stock to holders generally during the period commencing on the Grant Date and ending on the applicable Settlement Date, multiplied by the number of shares of Stock that are being delivered to the Award Recipient under this paragraph, without interest, and less any tax withholding amount applicable to such distribution. To the extent that the Stock Units are forfeited prior to vesting, the right to receive such distributions shall also be forfeited.

(d)Shareholder Rights. The Award Recipient has no rights as a shareholder with respect to the shares of Stock underlying the Stock Units unless and until the Stock relating to the Stock Units has been delivered. No adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before the certificate is issued (or appropriate book entry is made), except as described above.

2.Incorporation of Plan. The Award Recipient acknowledges receipt of the Plan, a copy of which is annexed hereto, and represents that he is familiar with its terms and provisions and hereby accepts this grant of Stock Units subject to all of the terms and provisions of the Plan and all interpretations, amendments, rules and regulations which may, from time to time, be promulgated and adopted pursuant to the Plan. The Plan is incorporated herein by reference. In the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern and this Agreement shall be interpreted to minimize or eliminate any such conflict or inconsistency.

3.Restrictions on Transfer. To the extent not yet vested, the Stock Units may not be sold, transferred, assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment, or similar process. If the Award Recipient attempts to do any of these things, he will immediately and automatically forfeit the Stock Units.

Exhibit 10.22

4.Termination of Service; Corporate Transaction.

(a)Certain Terminations of Service. If, prior to vesting, the Award Recipient’s Service is terminated for any reason other than (i) death, (ii) Disability, (iii) a Qualified Retirement occurring no less than six months after the Grant Date or (iv) a circumstance providing for accelerated vesting pursuant Section 4(d) hereof, the unvested portion of the Stock Units shall be forfeited by the Award Recipient and cancelled by the Company as of the date of the Award Recipient’s termination of Service, and the Award Recipient shall have no further right or interest therein unless the Committee in its sole discretion shall determine otherwise.

(b)Termination of Service for Death or Disability. If the Award Recipient’s Service terminates by reason of death or Disability, the Stock Units shall automatically vest in full as of the date of the Award Recipient’s termination of Service.

(c)Termination of Service for Certain Qualified Retirements. If the Award Recipient’s Service terminates by reason of a Qualified Retirement occurring no less than six months after the Grant Date but prior to the first anniversary of the Grant Date, the Stock Units shall be considered vested as of the date of such Qualified Retirement with respect to the aggregate number of shares of Stock as to which the Stock Units would have been vested as of such first anniversary of the Grant Date. If the Award Recipient’s Service terminates by reason of a Qualified Retirement after the first anniversary of the Grant Date but before the second anniversary of the Grant Date, the Stock Units shall be considered vested as of the date of such Qualified Retirement with respect to the aggregate number of shares of Stock as to which the Stock Units would have been vested as of the second anniversary of the Grant Date. In each of the circumstances described in the preceding two sentences, the portion of the Stock Units that shall not be considered vested as of the date of such Qualified Retirement shall be forfeited by the Award Recipient and cancelled by the Company as of the date of such Qualified Retirement. If the Award Recipient’s Service terminates by reason of a Qualified Retirement after the second anniversary of the Grant Date but before the third anniversary of the Grant Date, the remaining unvested Stock Units shall automatically vest in full as of the date of such Qualified Retirement.

(d)Certain Additional Corporate Transaction Circumstances. In the event that the unvested portion of this Award is assumed or continued, or substituted for new restricted stock units or another equity-based Award of a successor entity, or parent or subsidiary thereof (with appropriate adjustments as to the number of shares), in each case upon the occurrence of any Corporate Transaction (or in the case of an Award Recipient who is party to a Change in Control and Severance Agreement, upon the consummation of any Change in Control (as defined in the Change in Control and Severance Agreement)), and the employment of the Award Recipient with the Company or an Affiliate is terminated within 24 months following the occurrence of such Corporate Transaction (or in the case of an Award Recipient who is party to a Change in Control and Severance Agreement, upon the consummation of such Change in Control (as defined in the Change in Control and Severance Agreement)) by the employer without Cause or by the Award Recipient for Good Reason, the unvested portion of the Stock Units shall be fully vested on the date of such termination of employment with the Company. (Nothing in the preceding sentence shall limit or alter the Award Recipient’s rights under Section 4(c) hereof in the event that Award Recipient instead terminates his or her Service by reason of a Qualified Retirement.)In the event a Corporate Transaction occurs (or in the case of an Award Recipient who is party to a Change in Control and Severance Agreement, in the event that a Change in Control (as defined in the Change in Control and Severance Agreement) occurs) in which this Award is not being assumed, continued or substituted (as contemplated by the preceding sentence), the unvested portion of the Award shall be treated in accordance with the default rules applicable under Section 17.3 of the Plan.

5.Effect of Section 6 of Change in Control and Severance Agreements. The Company and the Award Recipient agree that this Agreement and the Stock Units granted hereunder are not subject to Section 6 of the Change in Control and Severance Agreement, and the Stock Units granted hereunder do not constitute Time-Based Restricted Stock as defined in such Change in Control and Severance Agreement.

6.Withholding.

The Company shall have the right to require the Award Recipient to remit to the Company any and all amounts sufficient to satisfy any withholding or other taxes that may be due as a result of the issuance of shares of Stock subject to the Stock Units. At the time of the Settlement Date (or, in the event that tax withholding is required

Exhibit 10.22

as of an earlier date, then such earlier date), the Award Recipient shall pay in cash to the Company any amount that the Company may reasonably determine to be necessary to satisfy such withholding or other tax obligation. The Company shall have the right, but not the obligation, to permit or require the Award Recipient to satisfy, in whole or in part, such obligation to remit withholding or other taxes, (a) by directing the Company to withhold shares of Stock that would otherwise become vested, or (b) by entering into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby Award Recipient irrevocably elects to sell a portion of the shares of Stock to be delivered in connection with the Stock Units to satisfy withholding obligations and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the withholding obligations directly to the Company or any Affiliate in each case pursuant to such rules as the Committee may establish from time to time. The Company, in its sole discretion, may also permit, the Award Recipient to satisfy, in whole or in part, such obligation to remit withholding or other taxes, by delivering to the Company shares of Stock already owned by the Award Recipient and not then subject to any repurchase, forfeiture, unfulfilled vesting, or similar requirements. The Company shall also have the right to deduct from all cash payments made pursuant to, or in connection with, the Stock Units, the federal, state, or local taxes required to be withheld with respect to such payments. The maximum number of shares of Stock that may be withheld to satisfy any federal, state, or local tax requirements may not exceed such number of shares of Stock having a Fair Market Value equal to the minimum statutory amount required by the Company to be withheld and paid to any such federal, state, or local taxing authority with respect to such vesting or payment; provided, however, for so long as Accounting Standards Update 2016-09 or a similar rule remains in effect, the Committee has full discretion to choose, or to allow the Award Recipient to elect, to withhold a number of shares of Stock having an aggregate Fair Market Value that is greater than the applicable minimum required statutory withholding obligation (but such withholding may in no event be in excess of the maximum required statutory withholding obligation in such Award Recipient’s relevant tax jurisdiction).

7.No Employment or Other Rights. This Award does not confer upon the Award Recipient any right to be continued in the employment of, or otherwise provide Services to, the Company or any Subsidiary or other affiliate thereof, or interfere with or limit in any way the right of the Company or any Subsidiary or other affiliate thereof to terminate such Award Recipient’s employment or other service relationship at any time. For purposes of this Agreement only, the term “employment” shall include circumstances under which Award Recipient provides consulting or other Services to the Company or any of its Subsidiaries as an independent contractor, but such Award Recipient is not, nor shall be considered, an employee; provided, however, nothing in this Section 7 or this Agreement shall create an employment relationship between such person and the Company or its applicable Subsidiary, as the usages described in this Section are for convenience only.

8.Adjustment of and Changes in Shares of Stock. In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, extraordinary dividend, or other event or change in corporate structure affecting the shares of Stock, the Committee shall make such adjustments, if any, as it deems appropriate in the number and class of shares subject to the Stock Units. The foregoing adjustments shall be determined by the Committee in its sole discretion.

9.Discretionary Nature of Plan. The Plan is discretionary in nature, and the Company may suspend, modify, amend or terminate the Plan in its sole discretion at any time, subject to the terms of the Plan and any applicable limitations imposed by law. This Stock Unit grant under the Plan is a one-time benefit and does not create any contractual or other right to receive additional Stock Units or other benefits in lieu of Stock Units in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of Stock Units granted, and the vesting provisions.

10.Section 409A. The grant of Stock Units under this Agreement is intended to comply with Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on Award Recipient under Code Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to Award Recipient for such tax or penalty. For purposes of this Agreement, a termination of Service occurs only upon an event that would be a Separation from Service within the meaning of Section 409A. If, at the time of Award Recipient’s Separation from Service, (1) Award Recipient is a “specified employee” within the meaning of Code

Exhibit 10.22

Section 409A, and (2) the Company makes a good faith determination that an amount payable on account of Award Recipient’s Separation from Service constitutes deferred compensation (within the meaning of Code Section 409A), the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Code Section 409A to avoid taxes or penalties under Code Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after the Delay Period (or upon Award Recipient’s death, if earlier), without interest. Each installment of Stock Units that vest under this Agreement (if there is more than one installment) will be considered one of a series of separate payments for purposes of Code Section 409A.

11.Miscellaneous Provisions.

(a)Applicable Law. The validity, construction, interpretation and effect of this instrument will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of law provisions thereof.

(b)Notice. Any notice required by the terms of this Agreement shall be delivered or made electronically, over the Internet or otherwise (with request for assurance of recipient in a manner typical with respect to communications of that type), or given in writing. Any notice given in writing shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, and shall be addressed to the Company at its principal executive office and to the Award Recipient at the address that he or she has most recently provided to the Company. Any notice given electronically shall be deemed effective on the date of transmission.

(c)Headings. The headings of sections and subsections are included solely for convenience of reference and shall not affect the meaning of the provisions of this Agreement.

(d)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(e)Amendments. The Board and the Committee shall have the power to alter or amend the terms of the grant of Stock Units as set forth herein from time to time, in any manner consistent with the provisions of the Plan, and any alteration or amendment of the terms of this grant of Stock Units by the Board or the Committee shall, upon adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by any such person. The Committee shall give notice to the Award Recipient of any such alteration or amendment as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of the Award Recipient and the Board or the Committee by mutual written consent to alter or amend the terms of this grant of Stock Units in any manner which is consistent with the Plan.

(f)Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the Award Recipient and the Company.

(g)Entire Agreement. This Agreement and the Plan constitute the entire agreement between the Award Recipient and the Company regarding the grant of Stock Units and supersede all prior arrangements or understandings (whether oral or written and whether express or implied) with respect thereto.

12.Definitions. For purposes of this Agreement, the following capitalized words shall have the meanings set forth below.

“Cause” shall mean (i) if the Award Recipient is party to a Change in Control and Severance Agreement that defines “Cause,” the definition of “Cause” contained in such Change in Control and Severance Agreement, and (ii) if the Award Recipient is not party to a Change in Control and Severance Agreement that defines “Cause,” the definition of “Cause” contained in the Plan.

“Change in Control and Severance Agreement” shall mean a written change in control and severance agreement between the Award Recipient and the Company.

Exhibit 10.22

“Good Reason” shall mean (i) if the Award Recipient is party to a Change in Control and Severance Agreement that defines “Good Reason,” the definition of “Good Reason” contained in such Change in Control and Severance Agreement, and (ii) if the Award Recipient is not party to a Change in Control and Severance Agreement that defines “Good Reason,” the Award Recipient voluntarily terminating his employment, following a Corporate Transaction, after the occurrence of any of the following circumstances (in each case, after notice by the Award Recipient to employer of the circumstance, and failure by the employer to cure and eliminate such circumstance within 15 calendar days of such notice): (x) a requirement that the Award Recipient work principally from a location that is more than fifty (50) miles from his principal place of employment immediately prior to such Corporate Transaction, or (y) a ten percent or greater reduction in Award Recipient’s Total Compensation from the amount of such Total Compensation immediately prior to such Corporate Transaction.

“Qualified Retirement” shall mean a retirement from Service by the Award Recipient in which, at the time of such retirement, the sum of the Award Recipient’s age and aggregate 12-month completed periods of Service (whether or not such completed 12-month periods are consecutive), in each case without giving credit for any partial years, equals or exceeds 75. For the avoidance of doubt, if Award Recipient is terminated by the Company with or without Cause he shall not be eligible to retire pursuant to a Qualified Retirement.

“Separation from Service” shall have the meaning given such term in Code Section 409A.

“Total Compensation” shall mean aggregate of base salary, target bonus opportunity, employee benefits (retirement plan, welfare plans, and fringe benefits), and grant date fair value of equity-based compensation, but excluding for the avoidance of doubt any reductions caused by the failure to achieve performance targets) taken as a whole.

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EX-10

Exhibit 10.24

Employee

Nonqualified Stock Option Agreement under

the Orthofix Medical Inc.

2012 Long-Term Incentive Plan

This Employee Nonqualified Stock Option Agreement (the “Agreement”) is made this __ day of _________ 20__ (the “Grant Date”) between Orthofix Medical Inc., a Delaware corporation (the “Company”), and the person signing this Agreement adjacent to the caption “Optionee” on the signature page hereof (the “Optionee”). Capitalized terms used and not otherwise defined herein shall have the meanings attributed thereto in the Orthofix Medical Inc. 2012 Long-Term Incentive Plan, as amended (the “Plan”).

WHEREAS, pursuant to the Plan, the Company desires to afford the Optionee the opportunity to purchase shares of Stock (“Common Shares”) on the terms and conditions set forth herein;

NOW, THEREFORE, in connection with the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Option. Subject to the provisions of this Agreement and the Plan, the Company hereby grants to the Optionee the right and option (the “Option”) to purchase ________ Common Shares at an exercise price of $__.__ per share (the “Exercise Price”).

2. Incorporation of Plan. The Optionee acknowledges receipt of the Plan, a copy of which is annexed hereto, and represents that he or she is familiar with its terms and provisions and hereby accepts this Option subject to all of the terms and provisions of the Plan and all interpretations, amendments, rules and regulations which may, from time to time, be promulgated and adopted pursuant to the Plan. The Plan is incorporated herein by reference. In the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern and this Agreement shall be interpreted to minimize or eliminate any such conflict or inconsistency.

3. Non-Qualified Stock Option. The Option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.

4. Vesting. Subject to earlier termination in accordance with the Plan or this Agreement and the terms and conditions herein or therein, the Option shall vest and become exercisable with respect to one-third (1/3rd) of the shares covered thereby on the first anniversary of the Grant Date and one-twelfth (1/12th) of the shares covered thereby on each of the 15-month, 18-month, 21-month, 24-month, 27-month, 30-month, 33-month and 36-month anniversaries of the Grant Date; provided, however, that the exercisability of any portion of the Option relating to a fractional share shall be deferred until such time, if any, that such portion can be exercised as a whole Common Share.

5. Term. The Option shall expire and no longer be exercisable 10 years from the Grant Date, subject to earlier termination in accordance with the Plan or this Agreement.

6. Termination of Service; Change in Control.

(a) Certain Terminations of Service. If, prior to vesting, the Optionee’s Service is terminated for any reason other than (i) death, Disability, (iii) a Qualified Retirement occurring no less than six months after the Grant Date or (iv) a circumstance providing for accelerated vesting pursuant Section 6(d) hereof, the unvested portion of the Option shall be cancelled and revert back to the Company as of the date of such termination of Service, and the Optionee shall have no further right or interest therein unless the Committee in its sole discretion shall determine otherwise. In such event, the Optionee shall have the right, subject to the other terms and conditions set forth in this Agreement and the Plan, to exercise the Option, to the extent it has vested as of the date of such termination of Service, at any time within 3 months after the date of such termination of Service, subject to the earlier expiration of the Option as provided in Section 5 hereof. To the extent the vested portion of the Option is not

exercised within such 3-month period, the Option shall be cancelled and revert back to the Company and the Optionee shall have no further right or interest therein.

(b) Termination of Service for Death or Disability. If the Optionee’s Service terminates by reason of death or Disability, the Option shall automatically vest and become immediately exercisable in full as of the date of such termination of Service. The Option shall remain exercisable by the Optionee (or any person entitled to do so) at any time within 18 months after the date of such termination of Service, subject to the earlier expiration of the Option as provided in Section 5 hereof. To the extent the Option is not exercised within such 18-month period, the Option shall be cancelled and revert back to the Company and the Optionee or any permitted transferee pursuant to Section 11, as applicable, shall have no further right or interest therein.

(c) Termination of Service for Certain Qualified Retirements. If the Optionee’s Service terminates by reason of a Qualified Retirement occurring no less than six months after the Grant Date but prior to the first anniversary of the Grant Date, the Option shall automatically vest and become immediately exercisable as of the date of such termination of Service with respect to the aggregate number of Common Shares as to which the Option would have been vested as of such first anniversary of the Grant Date. If the Optionee’s Service terminates by reason of a Qualified Retirement after the first anniversary of the Grant Date but before the second anniversary of the Grant Date, the Option shall automatically vest and become immediately exercisable as of the date of such termination of Service with respect to the aggregate number of Common Shares as to which the Option would have been vested as of the second anniversary of the Grant Date. If the Optionee’s Service is terminated by reason of a Qualified Retirement after the second anniversary of the Grant Date but before the third anniversary of the Grant Date, the Option shall automatically vest and become immediately exercisable in full as of the date of such termination of Service. In each of the circumstances described in the preceding three sentences, the Option shall remain exercisable by the Optionee (or any person entitled to do so) at any time within 18 months after the date of such termination of Service, subject to the earlier expiration of the Option as provided in Section 5 hereof. To the extent the Option is not exercised within such 18-month period, the Option shall be cancelled and revert back to the Company and the Optionee or any permitted transferee pursuant to Section 11, as applicable, shall have no further right or interest therein.

(d) Certain Additional Change in Control Circumstances. In the event that the Option is assumed or continued, or substituted for new common stock options or another equity-based Award of a successor entity, or parent or subsidiary thereof (with appropriate adjustments as to the number of shares and option exercise prices), in each case upon the consummation of any Change in Control, and the employment of Optionee with the Company or an Affiliate is terminated within 24 months following the consummation of such Change in Control by the employer without Cause or by the Optionee for Good Reason, the Option shall be fully vested and may be exercised in full, to the extent applicable, beginning on the date of such termination and for the 12-month period immediately following such termination (subject to the earlier expiration of the Option as provided in Section 5 hereof) or for such longer period as the Committee shall determine. (Nothing in the preceding sentence shall limit or alter the Optionee’s rights under Section 6(c) hereof in the event that Optionee instead terminates his or her Service by reason of a Qualified Retirement.) In the event a Change in Control occurs in which this Option is not being assumed, continued or substituted (as contemplated by the preceding sentence), the Option shall be treated in accordance with the default rules applicable under Section 17.3 of the Plan.

7. Effect of Severance Agreements Generally. The Company and Optionee agree that notwithstanding anything herein to the contrary, the terms of a Severance Agreement expressly defining whether and in what manner (including upon termination of employment) the unvested portion of an Option shall vest, be exercisable or be cancelled shall control over the terms of this Agreement (including the vesting, exercise period, forfeiture and other provisions contained in Section 6 hereof), and shall not be disregarded with respect to the terms of this Award.

8. Method of Exercising Option.

(a) Notice of Exercise. Subject to the terms and conditions of this Agreement, the Option may be exercised by written or electronic notice to the Company, from the Optionee or a person who proves to the

Company’s satisfaction that he or she is entitled to do so, stating the number of Common Shares in respect of which the Option is being exercised and specifying how such Common Shares should be registered (e.g., in Optionee’s name only or in Optionee’s and his or her spouse’s names as joint tenants with right of survivorship). Such notice shall be accompanied by payment of the Exercise Price for all Common Shares purchased pursuant to the exercise of such Option. The date of exercise of the Option shall be the later of (i) the date on which the Company receives the notice of exercise or (ii) the date on which the conditions set forth in Sections 8(b) and 8(e) are satisfied. Notwithstanding any other provision of this Agreement, the Optionee may not exercise the Option and no Common Shares will be issued by the Company with respect to any attempted exercise when such exercise is prohibited by law or any Company policy then in effect. The Option may not be exercised at any one time as to less than 100 shares (or such number of shares as to which the Option is then exercisable if less than 100). In no event shall the Option be exercisable for a fractional share.

(b) Payment. Prior to the issuance of the Common Shares pursuant to Section 8(e) hereof in respect of which all or a portion of the Option shall have been exercised, the Optionee shall have paid to the Company the Exercise Price for all Common Shares purchased pursuant to the exercise of such Option. Payment may be made by personal check, bank draft or postal or express money order (such modes of payment are collectively referred to as “cash”) payable to the order of the Company in U.S. dollars. Payment may also be made in mature Common Shares owned by the Optionee, or in any combination of cash or such mature shares as the Committee in its sole discretion may approve. The Company may also permit the Optionee to pay for such Common Shares by directing the Company to withhold Common Shares that would otherwise be received by the Optionee, pursuant to such rules as the Committee may establish from time to time. In the discretion of the Committee, and in accordance with rules and procedures established by the Committee, the Optionee may be permitted to make a “cashless” exercise of all or a portion of the Option.

(c) Shareholder Rights. The Optionee shall have no rights as a shareholder with respect to any Common Shares issuable upon exercise of the Option until the Optionee shall become the holder of record thereof, and no adjustment shall be made for dividends or distributions or other rights in respect of any Common Shares for which the record date is prior to the date upon which the Optionee shall become the holder of record thereof.

(d) Limitation on Exercise. The Option shall not be exercisable unless the offer and sale of Common Shares pursuant thereto has been registered under the Securities Act of 1933, as amended (the “1933 Act”), and qualified under applicable state “blue sky” laws or the Company has determined that an exemption from registration under the 1933 Act and from qualification under such state “blue sky” laws is available.

(e) Issuance of Common Shares. The issuance of all Common Stock purchased pursuant to the exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry registration or issuance of one or more stock certificates.

9. Adjustment of and Changes in Common Shares. In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, extraordinary dividend, or other event or change in corporate structure affecting the Common Shares, the Committee shall make such adjustments, if any, as it deems appropriate in the number and class of shares subject to, and the exercise price of, the Option. The foregoing adjustments shall be determined by the Committee in its sole discretion.

10. Tax Withholding. The Company shall have the right, prior to the issuance of any Common Shares upon full or partial exercise of the Option (whether by the Optionee or any person entitled to do so), to require the Optionee to remit to the Company any amount sufficient to satisfy any minimum applicable and required tax withholding requirements The Company may permit the Optionee to satisfy, in whole or in part, such obligation to remit taxes, by directing the Company to withhold Common Shares that would otherwise be received by the Optionee, pursuant to such rules as the Committee may establish from time to time. The Company shall also have the right to deduct from all cash payments made pursuant to, or in connection with, the Option, the minimum federal, state or local taxes required to be withheld with respect to such payments.

11. Transfers. Except as provided in this Section 11, during Optionee’s lifetime, only Optionee (or in the event of Optionee’s legal incapacity or incompetency, his or her guardian or legal representative) may exercise the Option, and the Option shall not be assignable or transferable by Optionee, other than by designation of beneficiary, will or the laws of descent and distribution. Optionee may transfer all or part of this Option, not for value, to any Family Member, provided that Optionee provides prior written notice to the Company, of such transfer. For the purpose of this section, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights, or (iii) a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (or Optionee) in exchange for an interest in such entity. Subsequent transfers of transferred portions of the Option are prohibited except to Optionee’s Family Members in accordance with this Section 11 or by will or the laws of descent and distribution. In the event of Optionee’s termination of service, this Agreement shall continue to be applied with respect to Optionee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods specified herein.

12. Prohibition on Repricing. The Agreement may not be amended to (a) reduce the Exercise Price of the Option granted hereunder, nor (b) cancel or replace the Option hereunder with an Option having a lower exercise price.

13. Miscellaneous Provisions.

(a) Notices. Any notice required by the terms of this Agreement shall be delivered or made electronically, over the Internet or otherwise (with request for assurance of receipt in a manner typical with respect to communications of that type), or given in writing. Any notice given in writing shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, and shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she has most recently provided to the Company. Any notice given electronically shall be deemed effective on the date of transmission.

(b) Headings. The headings of sections and subsections are included solely for convenience of reference and shall not affect the meaning of the provisions of this Agreement.

(c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(d) Entire Agreement. This Agreement and the Plan constitute the entire agreement between the parties hereto with regard to the subject matter hereof. They supersede all other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. In the event the Optionee has a Severance Agreement, any conflicts or ambiguities shall be resolved first by reference to the Severance Agreement, then to the Plan, and finally to this Agreement.

(e) Amendments. The Board and the Committee shall have the power to alter or amend the terms of the Option as set forth herein from time to time, in any manner consistent with the provisions of Sections 5.3 and 18.10 of the Plan, and any alteration or amendment of the terms of the Option by the Board or the Committee shall, upon adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by any such person. The Committee shall give notice to the Optionee of any such alteration or amendment as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of the Optionee and the Board or the Committee by mutual written consent to alter or amend the terms of the Option in any manner which is consistent with the Plan.

(f) Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto and may only be amended by written agreement of the parties hereto.

(g) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to the choice of law provisions thereof.

(h) No Employment or Other Rights. This Option grant does not confer upon the Optionee any right to be continued in the employment of, or otherwise provide Services to, the Company or any Subsidiary or other affiliate thereof, or interfere with or limit in any way the right of the Company or any Subsidiary or other affiliate thereof to terminate such Optionee’s employment at any time. For purposes of this Agreement only, the term “employment” shall include circumstances under which Optionee provides consulting or other Services to the Company or any of its Subsidiaries as an independent contractor, but such Optionee is not, nor shall be considered, an employee; provided, however, nothing in this Section 13(h) or this Agreement shall create an employment relationship between such person and the Company or its applicable Subsidiary, as the usages described in this Section are for convenience only.

14. Definitions. For purposes of this Agreement, the following capitalized words shall have the meanings set forth below.

“Severance Agreement” shall mean a written change in control and severance agreement between the Optionee and the Company.

“Good Reason” shall mean the Optionee voluntarily terminating his or her employment, following a Change in Control, after the occurrence of any of the following circumstances (in each case, after notice by the Optionee to employer of the circumstance, and failure by the employer to cure and eliminate such circumstance within 15 calendar days of such notice: (i) a requirement that the Optionee work principally from a location that is more than fifty (50) miles from his or her principal place of employment immediately prior to such Change in Control, or (ii) a ten percent or greater reduction in Optionee’s Total Compensation from the amount of such Total Compensation immediately prior to such Change in Control.

“Qualified Retirement” shall mean a retirement from Service by the Optionee in which, at the time of such retirement, the sum of the Optionee’s age and aggregate 12-month completed periods of Service (whether or not such completed 12-month periods are consecutive), in each case without giving credit for any partial years, equals or exceeds 75.

“Total Compensation” shall mean aggregate of base salary, target bonus opportunity, employee benefits (retirement plan, welfare plans, and fringe benefits), and grant date fair value of equity-based compensation, but excluding for the avoidance of doubt any reductions caused by the failure to achieve performance targets) taken as a whole.

(Remainder of page intentionally left blank)

EXECUTED as of the date first written above.

COMPANY:	ORTHOFIX MEDICAL INC.
	By:
	Name:
	Title:
OPTIONEE:
	By:
	Name:
	Title:

EX-10

Exhibit 10.28

ORTHOFIX MEDICAL INC.

2012 LONG-TERM INCENTIVE PLAN

DEFERRED Stock Unit Agreement

COVER SHEET

Orthofix Medical Inc., a Delaware corporation (the “Company”), hereby grants deferred stock units (the “Deferred Stock Units”) relating to shares of the Company’s common stock, par value $0.01 per share (the “Stock”) to the Grantee named below, who is a non-employee member of the Board of Directors of the Company (the “Board”), subject to the satisfaction of the vesting conditions set forth below. Additional terms and conditions of the Deferred Stock Units are set forth on this cover sheet, in the attached Deferred Stock Unit Agreement (together, the “Agreement”), and in the Company’s 2012 Long-Term Incentive Plan (as amended from time to time, the “Plan”).

Grant Date:

Name of Grantee:

Last Four Digits of Grantee’s Social Security Number (if applicable):

Number of Deferred Stock Units:

You agree to all of the terms and conditions described in this Agreement and in the Plan, unless you deliver a notice in writing within thirty (30) days of receipt of this Agreement to the Company stating that you do not accept the terms and conditions described in this Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

Attachment
This is not a stock certificate or a negotiable instrument.

ORTHOFIX MEDICAL INC.

2012 LONG-TERM INCENTIVE PLAN

DEFERRED Stock Unit Agreement

Deferred Stock Units	This Agreement evidences an award of Deferred Stock Units in the number set forth on the cover sheet and subject to the terms and conditions set forth in the Agreement and the Plan.
Deferred Stock Unit Transferability	Prior to the Settlement Date (as defined below), your Deferred Stock Units may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise, nor may the Deferred Stock Units be made subject to execution, attachment, or similar process. If you attempt to do any of these things, you will immediately and automatically forfeit your Deferred Stock Units.
Vesting	Subject to earlier termination or acceleration of vesting in accordance with the Plan or this Agreement, your Deferred Stock Units will vest and become non-forfeitable on the earlier of (i) June 30, 2024 or (ii) the date that the Company holds its 2024 annual meeting of stockholders (the “Vesting Date”) provided you continue in Service through such date.
Vesting upon Certain Terminations of Service	Death, Disability, Annual Meeting Separation. If your Service terminates prior to the Vesting Date by reason of death, Disability, or Annual Meeting Separation, the Deferred Stock Units shall automatically vest in full as of the date of your termination of Service. Other Terminations. If your Service is terminated prior to the Vesting Date other than as a result of death, Disability, or Annual Meeting Separation, a prorata percentage of the Deferred Stock Units, equal to the number of days between the Grant Date and the effective date of such termination of Service divided by 365, shall accelerate and vest 30 calendar days following the effective date of such termination of Service (the “Determination Deadline”) unless, prior to the Determination Deadline, the Board or the Committee adopts a resolution providing that such pro rata acceleration and vesting shall not occur (for any reason(s) that the Board or Committee may determine in its sole and absolute discretion). Any Deferred Stock Units that do not accelerate and vest shall be forfeited and cancelled by the Company, and you will have no further right or interest therein unless the Committee, in its sole discretion, shall determine otherwise.
Settlement of Deferred Stock Units	Your rights to receive the shares of Stock represented by your vested Deferred Stock Units will become non-forfeitable on the Vesting Date (or, if applicable, the effective date of any acceleration of vesting in connection with a termination of Service), and the shares represented by your vested Deferred Stock Units shall settle, convert and be delivered on or within 45 calendar days of your termination of Service

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	(the “Settlement Date”). On the date on which shares of Stock are delivered to you (or your beneficiary or, if none, your estate in the event of your death) under this paragraph, the Company shall also deliver to you (or your beneficiary or, if none, your estate in the event of your death) the number of additional shares of Stock, the number of any other securities of the Company and the amount of any other property (in the case of cash dividends, assuming such dividends had been reinvested in shares of Stock as of the ex-dividend date thereof), in each case that the Company distributed per share of Stock to holders generally during the period commencing on the Grant Date and ending on the delivery date, multiplied by the number of shares of Stock that are being delivered to you under this paragraph, without interest, and less any tax withholding amount applicable to such distribution. To the extent that the Deferred Stock Units are forfeited prior to vesting, the right to receive such distributions shall also be forfeited.
Evidence of Issuance	The issuance of the shares of Stock with respect to the Deferred Stock Units will be evidenced in such a manner as the Company, in its discretion, deems appropriate, including, without limitation, book-entry, registration, or issuance of one or more share certificates.
Withholding	In the event that the Company or any Affiliate determines that any federal, state, local, or foreign tax or withholding payment is required relating to the Deferred Stock Units, or the issuance of shares of Stock with respect to the Deferred Stock Units, the Company or any Affiliate will have the right to (i) require you to tender a cash payment, (ii) deduct from payments of any kind otherwise due to you, (iii) permit or require you to enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRADealer”) whereby you irrevocably elect to sell a portion of the shares of Stock to be delivered in connection with the Deferred Stock Units to satisfy withholding obligations and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the withholding obligations directly to the Company or any Affiliate, or (iv) withhold the delivery of vested shares of Stock otherwise deliverable under this Agreement to meet such obligations; provided, however, that (x) the shares of Stock so withheld will have an aggregate Fair Market Value not exceeding the minimum amount of tax required to be withheld by Applicable Law, provided that, following the Company’s adoption of Accounting Standards Update 2016-09, and to the extent permitted by the Company, you may elect to have shares withheld up to an amount equal to the maximum statutory rate applicable to you, and (y) in the event that you are subject to any tax withholding on a date prior to the Settlement Date, clauses (iii) and (iv) shall not be available as a means of satisfying such tax withholding obligations.

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Retention Rights	This Agreement and the Deferred Stock Units evidenced by this Agreement do not give you the right to be retained by the Company or any Affiliate in any capacity. The Company or any Affiliate, as applicable, reserves the right to terminate your Service with the Company or an Affiliate at any time and for any reason.
Shareholder Rights	You have no rights as a shareholder with respect to the Deferred Stock Units unless and until the Stock relating to the Deferred Stock Units has been delivered to you. No adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before your certificate is issued (or an appropriate book entry is made), except as described in the Plan.
Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Texas, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
Definitions	“Annual Meeting Separation” shall mean a separation from Service effective as of the date of the Company’s annual meeting of stockholders held during the year immediately following the year of the Grant Date. Any other capitalized terms used in this Agreement other than the foregoing shall have the meanings set forth in the Plan.
The Plan	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan constitute the entire understanding between you and the Company regarding the Deferred Stock Units. Any prior agreements, commitments, or negotiations concerning the Deferred Stock Units are superseded. This Agreement shall be binding upon the heirs, executors, administrators and successors of you and the Company.
Amendment or Termination	The Board and the Committee shall have the power to alter or amend the terms of the grant of the Deferred Stock Units as set forth herein from time to time, in any manner consistent with the provisions of Sections 5.3 and 18.10 of the Plan, and any alteration or amendment of the terms of this grant of Deferred Stock Units by the Board or the Committee shall, upon adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by any such person. The Committee shall give notice to you of any such alteration or amendment as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of you and the Board or the Committee by mutual written consent to alter or amend the terms of this grant of Deferred Stock Units in any manner which is consistent with the Plan.

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	The Plan is discretionary in nature, and the Company may suspend, modify, amend or terminate the Plan in its sole discretion at any time, subject to the terms of the Plan and any applicable limitations imposed by law. This Deferred Stock Units grant under the Plan is a one-time benefit and does not create any contractual or other right to receive additional Deferred Stock Units or other benefits in lieu of Deferred Stock Units in the future. Future grants, if any, will be at the sole discretion of the Committee, including, but not limited to, the timing of any grant, the number of shares of Deferred Stock Units granted, and the vesting provisions.
Data Privacy	To administer the Plan, the Company may process personal data about you. Such data includes, but is not limited to, information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you, such as your contact information, payroll information, and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting the Deferred Stock Units, you give explicit consent to the Company to process any such personal data.
Disclaimer of Rights	The grant of Deferred Stock Units under this Agreement will in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to you. You will have no rights under this Agreement or the Plan other than those of a general unsecured creditor of the Company. Deferred Stock Units represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the Plan and this Agreement.
Electronic Delivery	By accepting the Deferred Stock Units, you consent to receive documents related to the Deferred Stock Units by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Notice	Any notice required by the terms of this Agreement shall be delivered or made electronically, over the internet or otherwise (with request for assurance of recipient in a manner typical with respect to communications of that type), or given in writing. Any notice given in writing shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, and shall be addressed to the Company at its principal executive office and to you at the address that you have most recently provided to the Company. Any notice given electronically shall be deemed effective on the date of transmission.

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Additional Documents

You agree to execute such additional documents and complete and execute such forms as the Company may require for purposes of this Agreement.

Code Section 409A

The grant of Deferred Stock Units under this Agreement is intended to comply with Code Section 409A (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, its Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Section 409A, and neither the Company, its Affiliates, the Board, nor the Committee will have any liability to you for such tax or penalty. To the extent that the Deferred Stock Units constitute “deferred compensation” under Section 409A, a termination of Service occurs only upon an event that would be a Separation from Service within the meaning of Section 409A. If, at the time of your Separation from Service, (1) you are a “specified employee” within the meaning of Section 409A, and (2) the Company makes a good faith determination that an amount payable on account of your Separation from Service constitutes deferred compensation (within the meaning of Section 409A), the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Section 409A to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after the Delay Period (or upon your death, if earlier), without interest. Each installment of Deferred Stock Units that vest under this Agreement (if there is more than one installment) will be considered one of a series of separate payments for purposes of Section 409A.

By accepting this Agreement, you agree to all of the terms and conditions described above and in the Plan.

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EX-10

Exhibit 10.69

TRANSITION AGREEMENT

This Transition Agreement (the “Agreement”) is entered into as of March 3, 2023 (the “Effective Date”) by and among Orthofix Medical Inc. (the “Company”) and Jon Serbousek (the “Executive”) (collectively, the “Parties”).

WHEREAS, on January 5, 2023, the Company completed the transactions contemplated by the Agreement and Plan of Merger, dated as of October 10, 2022 (the “Merger Agreement”), by and among the Company, Orca Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”) and SeaSpine Holdings Corporation, a Delaware corporation (“SeaSpine”), pursuant to which Merger Sub merged with and into SeaSpine, with SeaSpine continuing as the surviving corporation (the “Transaction”);

WHEREAS, until the closing of the Transaction on January 5, 2023 (the “Closing”), the Executive had served since November 2019 as the President and Chief Executive Officer of the Company (and as its Principal Executive Officer as contemplated by rules of the Securities and Exchange Commission (the “SEC”)) (collectively, the “Prior Officer Positions”);

WHEREAS, effective and conditioned upon the Closing, the Executive ceased to hold the Prior Officer Positions and transitioned his employment with the Company to the position of Executive Chairman of the Company;

WHEREAS, the Parties have agreed that the Executive shall continue to serve as the Executive Chairman until the date that the Company holds its 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting Date”), and will remain in a non-executive, part-time employment role from the date of the 2023 Annual Meeting Date through July 5, 2023, at which time his employment relationship with the Company will cease;

WHEREAS, the Parties have previously entered into a Change in Control and Severance Agreement, made and entered into as of August 5, 2019 (the “Change in Control and Severance Agreement”);

WHEREAS, capitalized terms used, but not defined, herein shall have the meaning given such terms in the Change in Control and Severance Agreement; and

WHEREAS, the Company and the Executive desire to set forth certain promises, agreements and understandings relating to Executive’s transition from President and Chief Executive Officer of the Company to Executive Chairman of the Company.

NOW, THEREFORE, upon execution and non-revocation of this Agreement, in exchange for the terms and conditions set forth below, the Parties agree as follows:

1.Executive Chairman Service; Cessation Date.

(a)Effective as of the Closing, the Executive transitioned from the position of President and Chief Executive Officer of the Company to the position of Executive Chairman of the Company. The position of Executive Chairman of the Company shall include service as a

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director of the Company and as Chair of the Company’s board of directors. The Executive shall continue to serve as Executive Chairman of the Company until the 2023 Annual Meeting Date, and will remain in a non-executive, part-time employment role from the date of the 2023 Annual Meeting Date through July 5, 2023 (the “Cessation Date”). During the period from the Effective Date through the Cessation Date (the “Transition Period”), the Executive will remain an employee of the Company, the Change in Control and Severance Agreement will remain in effect except to the extent modified pursuant to this Agreement, and the Executive will, in addition to his other duties and responsibilities identified by the Company, assist in the transition of his duties as requested from time to time by the Company. It is the intent of the Parties that the Executive will devote a majority of his professional time to the role of Executive Chairman until the date that is one week following the date that the Company files its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, at which time the Executive will be expected to provide up to eight (8) hours of professional service per week until the Cessation Date.

(b)Effective as of the Cessation Date, the Executive hereby resigns his employment with the Company and from all offices, positions, directorships, chairmanships, and/or fiduciary responsibilities of any nature or description with the Company, its affiliates, and each of their respective subsidiaries, and each of their respective employee benefit plans.

(c)The Parties agree that, as a result of the change in the Executive’s position from President and Chief Executive Officer of the Company to Executive Chairman of the Company, the Executive shall possess CiC Period Good Reason under the Change in Control and Severance Agreement, and the Executive’s termination of employment on the Cessation Date will be treated under the Change in Control and Severance Agreement as a termination by the Executive for CiC Period Good Reason. Except as set forth in the preceding sentence and under Section 4 below, the Executive’s rights in such circumstance shall be as provided in the Change in Control and Severance Agreement, and this Agreement will not be deemed to otherwise amend or alter the Parties’ respective rights and obligations under the Change in Control and Severance Agreement.

2.Transition Period Consideration. Provided that the Executive signs this Agreement and complies with all of its terms, the Company shall provide the Executive with the following:

(a)The Executive will continue to receive an annual base salary of $800,000, payable in accordance with the Company’s regular payroll practices and less applicable deductions and tax withholdings;

(b)The Executive will remain eligible to receive a bonus with respect to the 2022 calendar year under the Company’s annual cash incentive program, to the extent that applicable performance goals related thereto have been achieved, which bonus will be payable at the same time as payments are made to other participants under the Company’s annual cash incentive program;

(c)In lieu of participating in the Company’s annual cash incentive program with respect to the 2023 calendar year, the Executive will receive a pro-rated cash bonus for the 2023 calendar year equal to 105% of the Executive’s annual base salary for the portion of the 2023

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calendar year served, which pro-rated bonus will be paid to the Executive within thirty (30) calendar days of the Cessation Date;

(d)Through the Cessation Date, to the extent permitted by the terms of the applicable plan taking into account the Executive’s transition to part-time status over the course of the Transition Period, the Executive will be eligible to continue to participate in the Company’s health insurance and other employee benefit plans (including the perquisites and benefits provided to executive officers with respect to reimbursement for tax preparation expenses, estate planning expenses, and annual physical exams), to the same extent as he was eligible on the Effective Date and in accordance with the terms of such health insurance and other employee benefit plans; and

(e)The Executive will not receive any new equity-based compensation for the 2023 calendar year. The Executive will be eligible to vest in any Company equity awards that vest in accordance with the current terms of the applicable equity award agreements during the Transition Period and will maintain all rights with respect to such Company equity awards as are provided in the Change in Control and Severance Agreement (as further modified by Section 4 below).

3.Calculation of CiC Severance Amount. The parties agree and acknowledge that the CiC Severance Amount under Section 4 of the Change in Control and Severance Agreement shall be equal to two (2) times the sum of (A) the Executive’s annual base salary prior to the Closing, (B) the Executive’s current annual target cash bonus amount under the Company’s Annual Cash Incentive Program prior to the Closing, and (C) $12,500 to be used by the Executive for outplacement services. The Executive understands and acknowledges that, in accordance with Section 8(c) of the Change in Control and Severance Agreement, any payment of the CiC Severance Amount that is due and payable under Section 4 of the Change in Control and Severance Agreement shall be made on the earlier of: (1) the date of the Executive’s death and (2) the first day of the seventh month following the Executive’s “separation from service” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended), and that the Parties expect that such a “separation from service” will occur on the date that is one week following the date that the Company files its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023.

4.Extended Option Exercise Period. The parties agree that Section 6(d) of the Change in Control and Severance Agreement is hereby amended such that the reference therein to “twenty four (24)-month period” shall be removed and replaced by “forty eight (48)-month period”.

5.Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto. The Parties acknowledge that (a) they have read this Agreement; (b) they have had the opportunity to seek legal counsel of their own choice; (c) they understand the terms and consequences of this Agreement and of the releases it contains; and (d) they are fully aware of the legal and binding effect of this Agreement.

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6.Miscellaneous.

(a)Except for injunctive relief as set forth in Section 9 of the Change of Control and Severance Agreement, the Parties agree that any dispute or controversy arising under or in connection with this Agreement shall be resolved exclusively and finally by binding arbitration in Lewisville, Texas, before a single arbitrator, with such arbitration to be conducted in accordance with the rules of the American Arbitration Association’s Commercial Arbitration Rules then in effect. Judgment on the arbitrator’s award may be entered by any court having jurisdiction. The Company shall be responsible for its own attorneys’ fees, costs and expenses and shall pay to the Executive an amount equal to all reasonable attorneys’ and related fees, costs and expenses incurred by the Executive in connection with such arbitration and entry of judgment, but only if the arbitrator determines that the Executive prevailed on a material issue of the arbitration. If there is any dispute between the Company and the Executive as to the payment of such fees and expenses, the arbitrator shall resolve such dispute, which resolution shall also be final and binding on the Parties, and as to such dispute only, the burden of proof shall be on the Company.

(b)This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Texas (without regard to any provision of that State’s rules on the conflicts of law that might make applicable the law of a jurisdiction other than that of the State of Texas). Subject to Section 6(a) hereof, all actions or proceedings for injunctive relief arising out of this Agreement shall exclusively be heard and determined in state or federal courts in the State of Texas having appropriate jurisdiction for Collin County, Texas. The Parties expressly consent to the exclusive jurisdiction of such courts in any such action or proceeding and waive any objection to venue therein and any defense of forum non conveniens.

(c)This Agreement may be executed in any number of counterparts, each of which, when executed by both Parties to this Agreement shall be deemed to be an original, and all of which counterparts together shall constitute one and the same instrument.

(d)The failure of either party hereto to enforce any right under this Agreement shall not be construed to be a waiver of that right, or of damages caused thereby, or of any other rights under this Agreement.

(e)This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(f)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. This Agreement shall bind any successor of or to the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Agreement if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Agreement, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. All

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rights under this Agreement are personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable in the event of the Executive’s death or disability by the Executive’s legal representatives, heirs and legatees.

(g)The Executive and the Company acknowledge that the employment of the Executive by the Company is “at will” and may be terminated by either the Executive or the Company at any time. Nothing contained in the Agreement shall affect such rights to terminate, provided, however, that nothing in this Section 6(g) shall prevent the Executive from receiving any amounts payable pursuant to this Agreement and the Change in Control and Severance Agreement, if applicable.

(h)Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(i)Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or when sent by express U.S. mail or overnight delivery through a national delivery service (or an international delivery service in the case of an address outside the U.S.) with signature required. Notice to the Company shall be directed to the attention of the General Counsel of the Company at the address of the Company’s headquarters, and notice to the Executive shall be directed to the Executive at the Executive’s most recent personal residence on file with the Company.

(j)The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement all required withholding amounts and deductions, including but not limited to federal, state and local withholding amounts in accordance with all applicable laws and regulations and deductions authorized by the Executive. The Executive shall be solely responsible for and shall pay all taxes associated with the amounts payable under this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed or caused to be executed this Transition Agreement as of the Effective Date.

JON SERBOUSEK

/s/ Jon Serbousek

Jon Serbousek

ORTHOFIX MEDICAL INC.

/s/ Keith Valentine

Keith C. Valentine

President and Chief Executive Officer

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EX-10

Exhibit 10.70

TRANSITION AGREEMENT

This Transition Agreement (the “Agreement”) is entered into as of March 3, 2023 (the “Effective Date”) by and among Orthofix Medical Inc. (the “Company”) and Doug Rice (the “Executive”) (collectively, the “Parties”).

WHEREAS, on January 5, 2023, the Company completed the transactions contemplated by the Agreement and Plan of Merger, dated as of October 10, 2022 (the “Merger Agreement”), by and among the Company, Orca Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”) and SeaSpine Holdings Corporation, a Delaware corporation (“SeaSpine”), pursuant to which Merger Sub merged with and into SeaSpine, with SeaSpine continuing as the surviving corporation (the “Transaction”);

WHEREAS, until the closing of the Transaction on January 5, 2023 (the “Closing”), the Executive served as the Company’s Chief Financial Officer (and as its Principal Financial and Accounting Officer as contemplated by rules of the Securities and Exchange Commission (the “SEC”)) (collectively, the “Officer Positions”);

WHEREAS, effective and conditioned upon the Closing, the Executive ceased to hold the Officer Positions and transitioned his employment with the Company to a non-officer role where he is providing assistance with integration activities in connection with the Transaction (the “Transition Role”);

WHEREAS, the Parties have agreed that the Executive shall continue to serve in a non-executive, employment role through June 30, 2023, at which time his employment relationship with the Company will cease;

WHEREAS, the Parties have previously entered into an Amended Change in Control and Severance Agreement, made and entered into as of November 1, 2016 (the “Change in Control and Severance Agreement”);

WHEREAS, capitalized terms used, but not defined, herein shall have the meaning given such terms in the Change in Control and Severance Agreement; and

WHEREAS, the Company and the Executive desire to set forth certain promises, agreements and understandings relating to the Transition Role.

NOW, THEREFORE, upon execution and non-revocation of this Agreement, in exchange for the terms and conditions set forth below, the Parties agree as follows:

1.Target Employment Cessation Date and Separation Date.

(a)Effective as of the Closing, the Executive transitioned from the position of Chief Financial Officer of the Company to the Transition Role. The Executive shall serve in the Transition Role through June 30, 2023 (such date, the “Target Employment Cessation Date”), or such earlier date if Executive’s employment is terminated prior to the Target Employment Cessation Date pursuant to the terms of this Agreement. Subject to the terms of this Agreement, Executive’s employment may be terminated in advance of the Target Employment Cessation Date

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by the Company, with or without Cause, by the Executive with or without Good Reason (as modified by this Agreement) or due to the Executive’s death or Disability. The date on which Executive’s employment with the Company terminates, regardless of whether such date is the Target Employment Cessation Date or an earlier date, is referred to herein as the “Separation Date”. During the period from the Effective Date through the Separation Date (the “Transition Period”), the Executive will remain an employee of the Company and the Change in Control and Severance Agreement will remain in effect except to the extent modified pursuant to this Agreement.

(b)To the extent that the Separation Date does not occur prior to the Target Employment Cessation Date, the Parties agree that the Executive’s employment with the Company shall automatically terminate as of the close of business on the Target Employment Cessation Date.

(c)During the period from the Effective Date through the Target Employment Cessation Date, the Parties agree that, as a result of the change in the Executive’s position from Chief Financial Officer of the Company to the Transition Role, the Executive shall possess CiC Period Good Reason under the Change in Control and Severance Agreement, and notwithstanding the second sentence in the definition of “CiC Period Good Reason” in the Change in Control and Severance Agreement, the Executive may provide notice of termination to the Company and have such termination treated as a termination for CiC Period Good Reason so long as such notice is provided to the Company at least fifteen (15) calendar days prior to the termination date referenced in such notice, and such termination date is no later than the Target Employment Cessation Date. If the Executive serves through the Target Employment Cessation Date, his termination of employment as of such date shall be treated under the Change in Control and Severance Agreement under the Change in Control and Severance Agreement as a termination by the Company without Cause during a CiC Period. Except as set forth in the preceding sentence and under Sections 2(c) and 3 below, the Executive’s rights in such circumstance shall be as provided in the Change in Control and Severance Agreement, and this Agreement will not be deemed to otherwise amend or alter the Parties’ respective rights and obligations under the Change in Control and Severance Agreement.

2.Transition Period Consideration. Provided that the Executive signs this Agreement and complies with all of its terms, the Company shall provide the Executive with the following:

(a)In lieu of receiving an annual base salary and annual cash incentive program bonus opportunity, the Executive will be paid a monthly fee of $65,000 during the Transition Period, payable in accordance with the Company’s regular payroll practices and less applicable deductions and tax withholdings (the “Transition Period Compensation”);

(b)The Executive will remain eligible to receive a bonus with respect to the 2022 calendar year under the Company’s annual cash incentive program, to the extent that applicable performance goals related thereto have been achieved, which bonus will be payable at the same time as payments are made to other participants under the Company’s annual cash incentive program;

(c)If Executive’s employment is terminated by the Company without Cause prior to the Target Employment Cessation Date, the Executive shall continue to be paid pursuant to

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clause (a) above through the Target Employment Cessation Date, and shall be treated under clause (b) above as having served through the Target Employment Cessation Date (i.e., the Transition Period Compensation will be paid with respect to the period between the applicable termination date and the Target Employment Cessation Date, notwithstanding that the Executive’s employment terminated prior to the Target Employment Cessation Date);

(d)Through the Separation Date, the Executive will be eligible to continue to participate in the Company’s health insurance and other employee benefit plans (including the perquisites and benefits provided to executive officers with respect to reimbursement for tax preparation expenses, estate planning expenses, and annual physical exams), to the same extent as he was eligible on the Effective Date and in accordance with the terms of such health insurance and other employee benefit plans; and

(e)The Executive will not receive any new equity-based compensation for the 2023 calendar year. The Executive will be eligible to vest in any Company equity awards that vest in accordance with the current terms of the applicable equity award agreements during the Transition Period and will maintain all rights with respect to such Company equity awards as are provided in the Change in Control and Severance Agreement (as further modified by Section 3 below).

3.Extended Option Exercise Period. The Parties agree that Section 6(d) of the Change in Control and Severance Agreement is hereby amended such that the reference therein to “twenty four (24)-month period” shall be removed and replaced by “forty eight (48)-month period”.

4.Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto. The Parties acknowledge that (a) they have read this Agreement; (b) they have had the opportunity to seek legal counsel of their own choice; (c) they understand the terms and consequences of this Agreement and of the releases it contains; and (d) they are fully aware of the legal and binding effect of this Agreement.

5.Miscellaneous.

(a)Except for injunctive relief as set forth in Section 9 of the Change of Control and Severance Agreement, the Parties agree that any dispute or controversy arising under or in connection with this Agreement shall be resolved exclusively and finally by binding arbitration in Lewisville, Texas, before a single arbitrator, with such arbitration to be conducted in accordance with the rules of the American Arbitration Association’s Commercial Arbitration Rules then in effect. Judgment on the arbitrator’s award may be entered by any court having jurisdiction. The Company shall be responsible for its own attorneys’ fees, costs and expenses and shall pay to the Executive an amount equal to all reasonable attorneys’ and related fees, costs and expenses incurred by the Executive in connection with such arbitration and entry of judgment, but only if the arbitrator determines that the Executive prevailed on a material issue of the arbitration. If there is any dispute between the Company and the Executive as to the payment of such fees and expenses, the arbitrator shall resolve such dispute, which resolution shall also be final and binding on the Parties, and as to such dispute only, the burden of proof shall be on the Company.

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(b)This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Texas (without regard to any provision of that State’s rules on the conflicts of law that might make applicable the law of a jurisdiction other than that of the State of Texas). Subject to Section 5(a) hereof, all actions or proceedings for injunctive relief arising out of this Agreement shall exclusively be heard and determined in state or federal courts in the State of Texas having appropriate jurisdiction for Collin County, Texas. The Parties expressly consent to the exclusive jurisdiction of such courts in any such action or proceeding and waive any objection to venue therein and any defense of forum non conveniens.

(c)This Agreement may be executed in any number of counterparts, each of which, when executed by both Parties to this Agreement shall be deemed to be an original, and all of which counterparts together shall constitute one and the same instrument.

(d)The failure of either party hereto to enforce any right under this Agreement shall not be construed to be a waiver of that right, or of damages caused thereby, or of any other rights under this Agreement.

(e)This Agreement may not be amended or modified otherwise than by a written agreement executed by the Parties hereto or their respective successors and legal representatives.

(f)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. This Agreement shall bind any successor of or to the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Agreement if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Agreement, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. All rights under this Agreement are personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable in the event of the Executive’s death or disability by the Executive’s legal representatives, heirs and legatees.

(g)Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(h)Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or when sent by express U.S. mail or overnight delivery through a national delivery service (or an international delivery service in the case of an address outside the U.S.) with signature required. Notice to the Company shall be directed to the attention of the General Counsel of the Company

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at the address of the Company’s headquarters, and notice to the Executive shall be directed to the Executive at the Executive’s most recent personal residence on file with the Company.

(i)The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement all required withholding amounts and deductions, including but not limited to federal, state and local withholding amounts in accordance all applicable laws and regulations and deductions authorized by the Executive. The Executive shall be solely responsible for and shall pay all taxes associated with the amounts payable under this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed or caused to be executed this Transition Agreement as of the Effective Date.

DOUG RICE

/s/ Doug Rice

Doug Rice

ORTHOFIX MEDICAL INC.

/s/ Keith Valentine

Keith Valentine

President and Chief Executive Officer

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EX-21

Exhibit 21.1

The following is a list of our significant subsidiaries:

Company	Country of Incorporation	Ultimate Ownership by Parent
Orthofix Australia Pty. Ltd.	Australia	100%
Orthofix do Brasil Ltda.	Brazil	100%
Orthofix S.A.	France	100%
Orthofix GmbH	Germany	100%
Orthofix Spine GmbH	Germany	100%
Orthofix S.r.l.	Italy	100%
Orthofix Netherlands B.V.	Netherlands	100%
Implantes y Sistemas Medicos, Inc.	Puerto Rico	100%
Orthofix AG	Switzerland	100%
Orthofix Limited	UK	100%
Orthofix US LLC	US	100%
Spinal Kinetics, LLC	US	100%
Spinal Kinetics GmbH	Germany	100%
SeaSpine Holdings Corporation	US	100%
IsoTis International SARL	Switzerland	100%
IsoTis OrthoBiologics, Inc.	US	100%
IosTis, Inc.	US	100%
SeaSpine, Inc.	US	100%
SeaSpine Sales LLC	US	100%
SeaSpine Orthopedics Corporation	US	100%
Theken Spine, LLC	US	100%
SeaSpine Orthopedics IntermediateCo, Inc.	US	100%
Project Maple Leaf Holdings ULC	British Columbia	100%
7D Surgical ULC	British Columbia	100%
7D Surgical USA Inc.	US	100%
7D Surgical International Inc.	Barbados	100%

EX-23

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)Amended and Restated 2004 Long-Term Incentive Plan and the Orthofix Medical Inc. (formerly Orthofix International N.V.) Amended and Restated Stock Purchase Plan;

(2)Form S-8 No. 333-226504 pertaining to the Orthofix Medical Inc. (formerly Orthofix International N.V.) Second Amended and Restated Stock Purchase Plan, as amended;

(3)Form S-8 No. 333-172697 pertaining to the Orthofix Medical Inc. (formerly Orthofix International N.V.) Amended and Restated Stock Purchase Plan, as amended;

(4)Form S-8 No. 333-226503 pertaining to the Orthofix Medical Inc. (formerly Orthofix International N.V.) Amended and Restated 2012 Long-Term Incentive Plan;

(5)Form S-8 No. 333-195797 pertaining to the Inducement Grant Non-Qualified Stock Option Agreement between Orthofix Medical Inc. (formerly Orthofix International N.V.) and Bradley R. Mason, the Inducement Grant Non-Qualified Stock Option Agreement between Orthofix Medical Inc. (formerly Orthofix International N.V.) and Mark A. Heggestad and the Inducement Grant Restricted Stock Agreement between Orthofix Medical Inc. (formerly Orthofix International N.V.) and Mark A. Heggestad;

(6)Form S-8 No. 333-206098 pertaining to the Orthofix Medical Inc. (formerly Orthofix International N.V.) 2012 Long-Term Incentive Plan;

(7)Registration Statement (Form S-8 No. 333-224548) pertaining to the Orthofix Medical Inc. (formerly Orthofix International N.V.) Inducement Plan for Spinal Kinetics Employees;

(8)Form S-8 No. 333-233031 pertaining to the Orthofix Medical Inc. Employee Inducement Non-Qualified Stock Option Agreement for Jon Serbousek and Employee Inducement Restricted Stock Unit Agreement for Jon Serbousek;

(9)Form S-8 No. 333-239090 pertaining to the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan, as amended;

(10)Form S-8 No. 333-258569 pertaining to the Orthofix Medical Inc. Second Amended and Restated Stock Purchase Plan, as amended;

(11)Form S-8 No. 333-258571 pertaining to the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan, as amended;

(12)Form S-8 No. 333-268232 pertaining to the Orthofix Medical Inc. Amended and Restated 2012 Long-Term Incentive Plan, as amended;

(13)Form S-8 No. 333-269116 pertaining to the Orthofix Medical Inc. Inducement Plan for SeaSpine Employees;

(14)Post-Effective Amendment on Form S-8 to the Registration Statement (Form S-4 No. 333-268234) pertaining to the Orthofix Medical Inc.’s (i) SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan, as amended, (ii) the SeaSpine Holdings Corporation 2018 Employment Inducement Incentive Award Plan, and (iii) the SeaSpine Holdings Corporation 2020 Employment Inducement Incentive Award Plan; and

(15)Form S-8 No. 333-269168 pertaining to the Orthofix Medical Inc.’s SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan, as amended;

of our reports dated March 6, 2023, with respect to the consolidated financial statements of Orthofix Medical Inc. and the effectiveness of internal control over financial reporting of Orthofix Medical Inc. included in this Annual Report (Form 10-K) of Orthofix Medical Inc. for the year ended December 31, 2022.

/s/ Ernst & Young LLP

Dallas, Texas

March 6, 2023

EX-31

Exhibit 31.1

CERTIFICATION

I, Keith Valentine, certify that:

1. I have reviewed this annual report on Form 10-K of Orthofix Medical Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has material affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 6, 2023	By:	/s/ KEITH VALENTINE
		Name: Keith Valentine
		Title: President and Chief Executive Officer, Director

EX-31

Exhibit 31.2

CERTIFICATION

I, John Bostjancic, certify that:

1. I have reviewed this annual report on Form 10-K of Orthofix Medical Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has material affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 6, 2023	By:	/s/ JOHN BOSTJANCIC
		Name: John Bostjancic
		Title: Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Orthofix Medical Inc. (“Orthofix”) on Form 10-K for the period ended December 31, 2022, (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, Jon Serbousek, Chief Executive Officer and President of Orthofix, and Doug Rice, Chief Financial Officer, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orthofix.

Dated: March 6, 2023	/s/ KKEITH VALENTINE
	Name: Keith Valentine
	Title: President and Chief Executive Officer, Director

Dated: March 6, 2023	/s/ JOHN BOSTJANCIC
	Name: John Bostjancic
	Title: Chief Financial Officer

XML

Document and Entity Information - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2022

Mar. 01, 2023

Jun. 30, 2022

Cover [Abstract]

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2022

Document Fiscal Year Focus

2022

Document Fiscal Period Focus

FY

Trading Symbol

OFIX

Entity Registrant Name

ORTHOFIX MEDICAL INC.

Entity Central Index Key

0000884624

Current Fiscal Year End Date

--12-31

Entity Well-known Seasoned Issuer

No

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Filer Category

Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

Entity Shell Company

false

Entity Interactive Data Current

Yes

Entity Common Stock, Shares Outstanding

36,455,564

Entity Public Float

$ 470.8

Entity File Number

0-19961

Entity Tax Identification Number

98-1340767

Entity Address, Address Line One

3451 Plano Parkway

Entity Address, City or Town

Lewisville

Entity Address, State or Province

TX

Entity Address, Postal Zip Code

75056

City Area Code

214

Local Phone Number

937-2000

Entity Incorporation, State or Country Code

DE

Title of 12(b) Security

Common Stock, $0.10 par value

Security Exchange Name

NASDAQ

Document Annual Report

true

ICFR Auditor Attestation Flag

true

Document Transition Report

false

Auditor Firm ID

42

Auditor Name

Ernst & Young LLP

Auditor Location

Dallas, Texas

Documents Incorporated by Reference

Certain sections of the registrant’s definitive proxy statement to be filed with the Commission in connection with the Orthofix Medical Inc. 2022 Annual Meeting of Shareholders are incorporated by reference in Part III of this Annual Report.

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 50,700	$ 87,847
Accounts receivable, net of allowances of $6,419 and $4,944, respectively	82,857	78,560
Inventories	100,150	82,974
Prepaid expenses and other current assets	22,283	20,141
Total current assets	255,990	269,522
Property, plant and equipment net	58,229	59,252
Intangible assets, net	47,388	52,666
Goodwill	71,317	71,317
Other long-term assets	25,705	23,866
Total assets	458,629	476,623
Current liabilities
Accounts payable	27,598	26,459
Current portion of finance lease liability	652	2,590
Other current liabilities	55,374	76,781
Total current liabilities	83,624	105,830
Long-term portion of finance lease liability	19,239	19,890
Other long-term liabilities	18,906	13,969
Total liabilities	121,769	139,689
Contingencies (Note 13)
Shareholders’ equity
Common shares $0.10 par value; 50,000 shares authorized; 20,162 and 19,837 issued and outstanding as of December 31, 2022 and 2021, respectively	2,016	1,983
Additional paid-in capital	334,969	313,951
Retained earnings	1,251	21,000
Accumulated other comprehensive loss	(1,376)
Total shareholders’ equity	336,860	336,934
Total liabilities and shareholders’ equity	$ 458,629	$ 476,623

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 6,419	$ 4,944
Common shares, par value	$ 0.10	$ 0.10
Common shares, authorized	50,000,000	50,000,000
Common shares, issued	20,162,000	19,837,000
Common shares, outstanding	20,162,000	19,837,000

XML

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Net sales	$ 460,713	$ 464,479	$ 406,562
Cost of sales	123,544	114,914	101,889
Gross profit	337,169	349,565	304,673
Sales and marketing	228,810	221,318	204,434
General and administrative	79,966	69,353	67,948
Research and development	49,065	49,621	39,056
Acquisition-related amortization and remeasurement	(7,404)	17,588	(499)
Operating (loss)	(13,268)	(8,315)	(6,266)
Interest expense, net	(1,288)	(1,837)	(2,483)
Other income (expense), net	(3,150)	(3,343)	8,381
Income (loss) before income taxes	(17,706)	(13,495)	(368)
Income tax benefit (expense)	(2,043)	(24,884)	2,885
Net income (loss)	$ (19,749)	$ (38,379)	$ 2,517
Net income (loss) per common share:
Basic	$ (0.98)	$ (1.95)	$ 0.13
Diluted	$ (0.98)	$ (1.95)	$ 0.13
Weighted average number of common shares:
Basic	20,053,548	19,690,593	19,267,920
Diluted	20,053,548	19,690,593	19,391,718
Other comprehensive income (loss), before tax
Unrealized gain (loss) on debt securities	$ 395	$ (942)	$ 1,881
Currency translation adjustment	(1,771)	(2,544)	4,872
Other comprehensive income (loss), before tax	(1,376)	(3,486)	6,753
Income tax benefit (expense) related to items of other comprehensive income (loss)		234	(462)
Other comprehensive income (loss), net of tax	(1,376)	(3,252)	6,291
Comprehensive income (loss)	$ (21,125)	$ (41,631)	$ 8,808

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Shares [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2019	$ 327,631	$ 1,902	$ 271,019	$ 57,749	$ (3,039)
Balance, Shares at Dec. 31, 2019		19,023
Cumulative effect adjustment from adoption | ASU 2016-13 [Member]	(887)			(887)
Net income (loss)	2,517			2,517
Other comprehensive income (loss), net of tax	6,291				6,291
Share-based compensation expense	16,207		16,207
Common shares issued, net	5,105	$ 40	5,065
Common shares issued, net, Shares		401
Ending Balance at Dec. 31, 2020	356,864	$ 1,942	292,291	59,379	3,252
Balance, Shares at Dec. 31, 2020		19,424
Net income (loss)	(38,379)			(38,379)
Other comprehensive income (loss), net of tax	(3,252)				(3,252)
Share-based compensation expense	15,432		15,432
Common shares issued, net	6,269	$ 41	6,228
Common shares issued, net, Shares		413
Ending Balance at Dec. 31, 2021	$ 336,934	$ 1,983	313,951	21,000
Balance, Shares at Dec. 31, 2021	19,837,000	19,837
Net income (loss)	$ (19,749)			(19,749)
Other comprehensive income (loss), net of tax	(1,376)				(1,376)
Share-based compensation expense	18,443		18,443
Common shares issued, net	2,608	$ 33	2,575
Common shares issued, net, Shares		325
Ending Balance at Dec. 31, 2022	$ 336,860	$ 2,016	$ 334,969	$ 1,251	$ (1,376)
Balance, Shares at Dec. 31, 2022	20,162,000	20,162

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net income (loss)	$ (19,749)	$ (38,379)	$ 2,517
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation and amortization	29,019	29,599	30,546
Impairment of goodwill		11,756
Amortization of operating lease assets, debt costs, and other assets	3,056	3,496	3,730
Provision for expected credit losses	2,095	444	199
Deferred income taxes	314	24,482	10,787
Share-based compensation expense	18,443	15,432	16,207
Interest and (gain) loss on the valuation of investment securities	(308)	(1,146)	116
Change in fair value of contingent consideration	(17,200)	(3,575)	(7,300)
Other	2,027	1,064	(2,228)
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable	(6,735)	(7,049)	13,283
Inventories	(18,133)	619	(873)
Prepaid expenses and other current assets	(874)	(2,834)	4,526
Accounts payable	2,282	4,253	2,532
Other current liabilities	627	1,013	5,975
Contract liability (Note [15])	(4,791)	(9,060)	13,851
Payment of contingent consideration		(6,595)
Other long-term assets and liabilities	(1,611)	(5,045)	(19,596)
Net cash from operating activities	(11,538)	18,475	74,272
Cash flows from investing activities
Acquisition of a business			(18,000)
Capital expenditures for property, plant and equipment	(21,364)	(17,785)	(15,485)
Capital expenditures for intangible assets	(1,796)	(1,807)	(1,609)
Purchase of investment securities		(2,171)	(10,000)
Asset acquisitions and other investments	(1,374)	(1,250)	(7,240)
Net cash from investing activities	(24,534)	(23,013)	(52,334)
Cash flows from financing activities
Proceeds from revolving credit facility			100,000
Repayment of revolving credit facility			(100,000)
Proceeds from issuance of common shares	4,337	8,824	7,598
Payments related to withholdings for share-based compensation	(1,729)	(2,555)	(2,493)
Payment of contingent consideration		(8,405)
Payments related to finance lease obligation	(2,594)	(537)	(323)
Payment of debt issuance costs and other financing activities	(92)	(948)	(1,537)
Net cash from financing activities	(78)	(3,621)	3,245
Effect of exchange rate changes on cash and restricted cash	(997)	(815)	1,235
Net change in cash, cash equivalents, and restricted cash	(37,147)	(8,974)	26,418
Cash, cash equivalents, and restricted cash at the beginning of the year	87,847	96,821	70,403
Cash, cash equivalents, and restricted cash at the end of the year	50,700	87,847	96,821
Components of cash, cash equivalents, and restricted cash at the end of the year
Cash and cash equivalents	50,700	87,847	96,291
Restricted cash			530
Cash, cash equivalents, and restricted cash at the end of the year	$ 50,700	$ 87,847	$ 96,821

XML

Business, basis of presentation, COVID-19 update, and CARES Act

12 Months Ended

Dec. 31, 2022

Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract]

Business, basis of presentation, COVID-19 update, and CARES Act

1. Business and basis of presentation

Description of the Business

Orthofix Medical Inc. and its subsidiaries (the “Company”), following its recent merger with SeaSpine Holdings Corporation ("SeaSpine"), is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions and a leading surgical navigation system. Its products are distributed in 68 countries worldwide.
 

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, CA, with a focus on spinal product innovation and surgeon education, and in Verona, Italy, with an emphasis on product innovation, production, and medical education for Orthopedics. The combined Company’s global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France and Sao Paulo, Brazil.

The merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. For additional discussion of the merger with SeaSpine, see Note 22. Orthofix, as the corporate parent entity in the combined company structure, will continue to trade on NASDAQ under the symbol “OFIX.” The combined company will be renamed at a later date and until then will continue to be known as Orthofix Medical Inc. The financial statements of the Company for the period ended as of December 31, 2022, do not include the financial position or operations of SeaSpine since the merger occurred subsequent to the end of the reporting period.

Basis of Presentation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Information on our accounting policies and methods used in the preparation of our consolidated financial statements are included, where applicable, in the respective footnotes that follow.

Footnote	Footnote Reference
Business and basis of presentation	1
Significant accounting policies	2
Recently adopted accounting standards, recently issued accounting pronouncements, and recent law changes	3
Acquisitions	4
Inventories	5
Property, plant, and equipment	6
Intangible assets	7
Goodwill	8
Leases	9
Other current liabilities	10
Long-term debt	11
Fair value measurements and investments	12
Commitments and contingencies	13
Shareholders' equity	14
Revenue recognition and accounts receivable	15
Business segment information	16
Acquisition-related amortization and remeasurement	17
Share-based compensation	18
Defined contribution plans and deferred compensation	19
Income taxes	20
Earnings per share	21
Subsequent events	22

XML

Significant accounting policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Significant accounting policies

2. Significant accounting policies

The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, allowances for expected credit losses, inventories, valuation of intangible assets, goodwill, fair value measurements, litigation and contingent liabilities, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations, and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The following is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes.

Market risk

In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures.

The financial statements for operations outside the U.S. are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other expense, net and were a loss of $3.3 million, a loss of $4.0 million, and a gain of $3.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Financial instruments and concentration of credit risk

Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified.

Cash, cash equivalents, and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

In September 2019, approximately $0.5 million (based upon foreign exchange rates as of December 31, 2020) of the Company’s cash in Brazil was frozen upon request to satisfy a judgment related to an ongoing legal dispute with a former Brazilian distributor. In December 2021, the dispute was settled and the cash was disbursed to the former distributor.

Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2022, 2021, and 2020 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows:

(U.S. Dollars, in thousands)	2022		2021		2020
Supplemental disclosure of cash flow information:
Noncash investing activities:
Intangible assets acquired in asset acquisitions	$	2,000	$	—	$	1,575
Contingent consideration recognized at acquisition date		—		—		375

Advertising costs

Advertising costs are expensed as incurred. Advertising costs are included within sales and marketing expense and totaled $0.5 million, $0.5 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Research and development costs, including collaborative arrangements

Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. The Company recognized $0.0 million, $0.8 million and $0.8 million in research and development expense for the years ended December 31, 2022, 2021, and 2020, respectively.

In October 2020, the Company and Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery (“Neo Medical”), entered into a co-development agreement covering the parties’ joint development of single use instruments for cervical spine procedures. In connection with this agreement, the Company is responsible for the payment of variable costs associated with the development of the specified products. Research and development expenses incurred under this collaborative arrangement totaled $0.5 million, $0.6 million, and less than $0.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.

XML

Recently adopted accounting standards and recently issued accounting pronouncements

12 Months Ended

Dec. 31, 2022

Accounting Changes and Error Corrections [Abstract]

Recently adopted accounting standards and recently issued accounting pronouncements

3. Recently adopted accounting standards, recently issued accounting pronouncements, and recent law changes

Recently Adopted Accounting Standards

Adoption of Accounting Standards Update (“ASU”) 2021-10—Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, which aims to increase the transparency of government assistance by requiring entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. The Company voluntarily elected to early adopt this standard for the year ended December 31, 2021, on a prospective basis. Adoption of this standard did not have a significant impact to the existing disclosures made in relation to government assistance received by the Company in 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").

Adoption of ASU 2019-12, Simplifying the accounting for income taxes

In December 2019, the FASB issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes. Additionally, the ASU simplifies U.S. GAAP by amending the requirements related to the accounting for "hybrid" tax regimes and also adding the requirement to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination and when it should be considered a separate transaction. The Company adopted this ASU effective January 1, 2021, with certain provisions applied retrospectively and other provisions applied prospectively. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Adoption of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and Subsequent Amendments

In June 2016, the FASB issued ASU 2016-13 (which was then further clarified in subsequent ASUs), which required that credit losses for certain types of financial instruments, including accounts receivable, be estimated based on expected credit losses among other changes. The Company adopted this ASU effective as of January 1, 2020, using a modified retrospective approach. See Note 15 for additional discussion of the Company’s adoption of Topic 326 and its resulting accounting policies.

Adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, which eliminated Step 2 of the previous goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under ASU 2017-04, a goodwill impairment loss is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The Company adopted this ASU effective January 1, 2020, on a prospective basis and followed this guidance to measure the goodwill impairment of $11.8 million recorded in the year ended December 31, 2021.

Adoption of ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, which eliminated certain disclosures, such as the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and added new disclosure requirements for Level 3 measurements. The Company adopted this ASU effective January 1, 2020, with certain provisions of the ASU applied retrospectively and other provisions provided prospectively. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of operations, or cash flows; however, adoption of the ASU did result in modified disclosures in Note 12.

Adoption of ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued ASU 2018-15, which aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract was not affected by the amendments in this update. The Company adopted this ASU effective January 1, 2020, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows, but is expected to impact future cloud computing arrangements.

Adoption of ASU 2020-04, Reference Rate Reform (Topic 848)

In March 2020, the FASB issued ASU 2020-04, which provided temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from the London Inter-Bank Offered Rate. The new guidance provided optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedge accounting, and other transactions affected by reference rate reform if certain criteria are met through December 31, 2022. The Company adopted this ASU effective March 12, 2020, the effective date of the ASU, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08)	Requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606, which governs the accounting for revenue contracts with customers. The guidance is to be applied prospectively to acquisitions occurring on or after the effective date, with early adoption permitted.	January 1, 2023	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Recent Law Changes

COVID-19 and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

In March 2020, the CARES Act entered into federal law, which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the Coronavirus Disease 2019 ("COVID-19") pandemic and to provide general support to the U.S. economy. The CARES Act, among other things, included provisions relating to the deferment of employer side social security payments and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act had no impact to the Company’s income tax expense/benefit reported within the consolidated statements of operations for each of

the years ended December 31, 2021 and 2020. The CARES Act also provided financial relief to the Company through other various programs, each of which are described in further detail below.

In April 2020, the Company received $13.9 million in funds from the Centers for Medicare & Medicaid Services (“CMS”) Accelerated and Advance Payment Program. For discussion of the Company’s accounting for these funds, see Note 15.

In April 2020, the Company also automatically received $4.7 million in funds from the U.S. Department of Health and Human Services as part of the Provider Relief Fund. The Company recognized this in-substance grant within other income for the year ended December 31, 2020.

In addition, as part of the CARES Act, the Company was permitted to defer all employer social security payroll tax payments for the remainder of the 2020 calendar year subsequent to the CARES Act being signed into federal law, such that 50% of the taxes could be deferred until December 31, 2021, with the remaining 50% deferred until December 31, 2022. As of December 31, 2020, the Company had deferred $0.6 million associated with this program, which was then voluntarily repaid, in full, in 2021.

Consolidated Appropriations Act of 2021 (the “Consolidated Appropriations Act”)

On December 27, 2020, the Consolidated Appropriations Act entered into federal law. The Consolidated Appropriations Act did not have a material impact to the Company’s income tax provision for the year ended December 31, 2021.

American Rescue Plan Act of 2021 (“the American Rescue Plan”)

On March 11, 2021, the American Rescue Plan entered into federal law. The American Rescue Plan, among other things, included provisions related to the deduction of executive compensation beginning in 2027. The American Rescue Plan had no impact to the Company’s condensed consolidated financial statement for the year ended December 31, 2021.

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Acquisitions

12 Months Ended

Dec. 31, 2022

Business Combinations [Abstract]

Acquisitions

4. Acquisitions

FITBONE Asset Purchase Agreement

In March 2020, the Company completed an Asset Purchase Agreement (the “Purchase Agreement”) with Wittenstein SE (“Wittenstein”), a privately-held German-based company, to acquire assets associated with the FITBONE intramedullary lengthening system for limb lengthening of the femur and tibia bones for $18.0 million in cash consideration. The Company also entered into a Contract Manufacturing and Supply Agreement (“CMSA”) with Wittenstein, which was accounted for as a finance lease.

Distributor Acquisition

In July 2020, the Company acquired certain assets of a medical device distributor for consideration of up to $7.6 million.

Purchase Price Allocations for Completed Acquisitions Discussed Above

(U.S. Dollars, in thousands)	FITBONE		Assigned Useful Life	Distributor Acquisition		Assigned Useful Life
Assets acquired
Inventories	$	528		$	—
Other long-term assets		—			—
Intangible assets
Customer relationships		800	15 years		7,340	5 years
Developed technology		4,500	8 years		—	N/A
In-process research and development ("IPR&D")		300	Indefinite		—	N/A
Trade name		600	15 years		—	N/A
Assembled workforce		—	N/A		235	5 years
Total identifiable assets acquired	$	6,728		$	7,575
Liabilities assumed		—			—
Goodwill		11,272			—
Total fair value of consideration transferred	$	18,000		$	7,575

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Inventories

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred.

Work-in-process and finished products include material, labor, and production overhead costs. Field and consignment inventory, which represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third-party customers, such as distributors and hospitals, is included within finished products. Inventory previously reported as field/consignment inventory has been reclassified to finished products to conform with current period presentation.

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Raw materials	$	17,035	$	9,589
Work-in-process		19,243		15,096
Finished products		63,872		58,289
Inventories	$	100,150	$	82,974

The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or estimated net realizable value.

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Property, plant and equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property, plant and equipment

6. Property, plant, and equipment

Property, plant, and equipment is stated at cost or estimated fair value when acquired as part of a business combination, less accumulated depreciation. Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant, and equipment includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products.

The useful lives of these assets are generally as follows:

	Years
Buildings	25 to 33
Plant and equipment	1 to 10
Instrumentation	3 to 4
Computer software	3 to 7
Furniture and fixtures	4 to 8

The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $19.6 million, $20.2 million, and $19.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service.

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Cost
Buildings	$	3,867		$	3,925
Plant and equipment		48,358			50,275
Instrumentation		92,607			100,515
Computer software		40,685			53,200
Furniture and fixtures		7,917			8,307
Construction in progress		4,515			2,597
Finance lease assets		23,276			23,397
Property, plant, and equipment, gross		221,225			242,216
Accumulated depreciation		(162,996	)		(182,964	)
Property, plant, and equipment, net	$	58,229		$	59,252

The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which generally ranges from three to seven years.

Long-lived assets are evaluated for impairment annually or whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to fair value in the period identified.

The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment.

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Intangible assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

7. Intangible assets

Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets.

		December 31,
(U.S. Dollars, in thousands)	Weighted Average Amortization Period	2022			2021
Cost
Patents	10.0 years	$	40,108		$	44,561
Developed technology	9.8 years		43,699			43,979
IPR&D	Indefinite		300			300
Customer relationships	7.8 years		15,572			15,621
License and other	9.3 years		23,295			18,924
Trademarks—finite lived	10.0 years		1,875			1,839
	9.3 years		124,849			125,224
Accumulated amortization
Patents		$	(37,506	)	$	(41,408	)
Developed technology			(17,830	)		(13,409	)
Customer relationships			(6,938	)		(4,520	)
License and other			(14,386	)		(12,528	)
Trademarks—finite lived			(801	)		(693	)
			(77,461	)		(72,558	)
Intangible assets, net		$	47,388		$	52,666

Acquired IPR&D represents the fair value assigned to acquired research and development assets that have not reached technological feasibility. In a business combination, the fair value assigned to acquired IPR&D is determined by estimating the remaining costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects, and discounting the net cash flows to present value. The revenue and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the asset. Additionally, estimated revenues consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the project and uncertainties in the economic estimates used in the projections. Any future costs to further develop the IPR&D subsequent to acquisition are recorded to research and development expense as incurred.

IPR&D assets are considered to be indefinite-lived assets until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they are not amortized but tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are reclassified to developed technology and are amortized over an assigned useful life that best reflects the economic benefits provided by these assets.

Amortization expense for intangible assets was $9.4 million, $9.4 million, and $11.2 million for the years ended December 31, 2022, December 31, 2021, and 2020, respectively. Future amortization expense for intangible assets is estimated as follows:

(U.S. Dollars, in thousands)	Amortization
2023	$	9,250
2024		8,705
2025		7,692
2026		6,658
2027		6,470
Thereafter		8,313
Total finite-lived intangible assets, net	$	47,088
Indefinite-lived intangible assets, net		300
Intangible assets, net	$	47,388

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Goodwill

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

8. Goodwill

The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

The following table presents the net carrying value of goodwill as of December 31, 2022, and 2021, and a rollforward of such balances from December 31, 2021, by reportable segment:

(U.S. Dollars, in thousands)	December 31, 2021			Impairment		Currency Translation Adjustment			December 31, 2022
Global Spine	$	71,317		$	—	$	—		$	71,317
Global Orthopedics		11,822					(692	)		11,130
Goodwill, gross	$	83,139		$	—	$	(692	)	$	82,447
Accumulated impairment loss		(11,822	)		—		692			(11,130	)
Goodwill, net of accumulated impairment losses	$	71,317		$	—	$	—		$	71,317

In the fourth quarter of 2021, the Company performed a quantitative assessment of its goodwill. The Company estimated the fair value of each reporting unit using a weighted average of fair value derived from both an income approach and a market approach (all Level 3 fair value measurements). Upon estimating the fair value of each of its reporting units, the Company determined its Global Orthopedics reporting unit’s fair value was less than its carrying value of net assets. This resulted in recording a full impairment of the Global Orthopedics goodwill of $11.8 million, which was reflected within Acquisition-related amortization and

remeasurement. This amount also represents the total of the Company’s accumulated goodwill impairment losses as of December 31, 2022, and 2021, respectively. The assessment concluded there were no indicators of impairment for the Global Spine goodwill.

In the fourth quarter of 2022, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in impairment. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events.

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Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

9. Leases

The Company determines if a contractual arrangement qualifies as a lease at inception. The Company’s leases primarily relate to facilities, vehicles, equipment, and certain contract manufacturing agreements. Lease assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used as a discount rate, based on the information available at the commencement date, in determining the present value of lease payments. Lease assets also include the impact of any prepayments made and are reduced by the impact of any lease incentives.

The Company does not recognize lease liabilities or lease assets on the balance sheet for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The current period short-term lease expense reasonably reflects our short-term lease commitments.

For all classifications of leases, the Company combines lease and non-lease components to account for them as a single lease component. Variable lease payments are excluded from the lease liability and recognized in the period in which the obligation is incurred. Additionally, lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

A summary of the Company’s lease portfolio as of December 31, 2022, and 2021, is presented in the table below:

(U.S. Dollars, in thousands, except lease term and discount rate)	Classification	December 31, 2022			December 31, 2021
Assets
Operating leases	Other long-term assets	$	6,788		$	3,155
Finance leases	Property, plant and equipment, net		17,360			18,600
Total lease assets		$	24,148		$	21,755
Liabilities
Current
Operating leases	Other current liabilities	$	1,638		$	1,834
Finance leases	Current portion of finance lease liability		652			2,590
Long-term
Operating leases	Other long-term liabilities		5,376			1,443
Finance leases	Long-term portion of finance lease liability		19,239			19,890
Total lease liabilities		$	26,905		$	25,757
Weighted Average Remaining Lease Term
Operating leases		4.5 years			3.3 years
Finance leases		17.6 years			17.0 years
Weighted Average Discount Rate
Operating leases			4.0	%		2.6	%
Finance leases			4.4	%		4.2	%

The components of lease costs were as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Finance lease costs:
Amortization of right-of-use assets	$	1,238	$	2,049	$	1,766
Interest on finance lease liabilities		890		933		940
Operating lease costs		2,126		2,234		2,235
Short-term lease costs		152		213		230
Variable lease costs		932		815		673
Total lease costs	$	5,338	$	6,244	$	5,844

Supplemental cash flow information related to leases was as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,805	$	4,627	$	4,299
Operating cash flows from finance leases		885		907		689
Financing cash flows from finance leases		2,594		537		323
Right-of-use assets obtained in exchange for lease obligations
Operating leases		5,603		589		959
Finance leases		—		149		1,949

A summary of the Company’s remaining lease liabilities as of December 31, 2022, is included below:

(U.S. Dollars, in thousands)	Operating Leases			Finance Leases
2023	$	1,821		$	1,508
2024		1,587			1,538
2025		1,497			1,543
2026		1,411			1,562
2027		1,211			1,593
Thereafter		129			21,021
Total undiscounted value of lease liabilities		7,656			28,765
Less: Interest		(642	)		(8,874	)
Present value of lease liabilities	$	7,014		$	19,891
Current portion of lease liabilities	$	1,638		$	652
Long-term portion of lease liabilities		5,376			19,239
Total lease liabilities	$	7,014		$	19,891

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Other current liabilities

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Other current liabilities

10. Other current liabilities

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Accrued expenses	$	9,611	$	7,151
Salaries, bonuses, commissions, and related taxes payable		18,531		23,552
Accrued distributor commissions		10,483		10,787
Accrued legal and settlement expenses		3,891		3,794
Contingent consideration liability		1,000		17,200
Short-term operating lease liability		1,638		1,834
Non-income taxes payable		6,586		4,655
Accelerated and advance payment program		—		4,791
Other payables		3,634		3,017
Other current liabilities	$	55,374	$	76,781

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Long-term debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Long-term debt

11. Long-term debt

On October 25, 2019, the Company, and certain of its wholly-owned subsidiaries (collectively with the Company, the “Borrowers”), as borrowers, and certain material subsidiaries of the Company as guarantors, entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, and certain lender parties thereto. The Amended Credit Agreement provides for a $300.0 million secured revolving credit facility (the “Facility”) amending and restating the $125.0 million secured revolving credit facility that previously existed with such lenders. The Credit Agreement has a maturity date of October 25, 2024. On March 1, 2023, the Amended Credit Agreement and the Facility were amended to replace London Inter-Bank Offered Rate ("LIBOR")-based pricing with Secured Overnight Financing Rate ("SOFR")-based pricing.

In April 2020, as a precautionary measure to increase the Company’s cash position and to preserve financial flexibility during the initial uncertainty resulting from the COVID-19 pandemic, the Company completed a borrowing of $100.0 million under the Facility, which the Company then paid back in full later that year. The Company had no borrowings outstanding under the Facility at December 31, 2022, and 2021, respectively. However, on January 3, 2023, the Company borrowed $30.0 million under the Facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023.

Borrowings under the Amended Credit Agreement may be used for, among other things, working capital and other general corporate purposes of the Company and its subsidiaries (including permitted acquisitions and permitted payments of dividends and other distributions). The Facility is available in U.S. Dollars with up to $150.0 million of the Facility available to be borrowed in Euros or Pound Sterling (the “Agreed Currencies”). The Facility further permits up to $50.0 million of the Facility to be utilized for the issuance of letters of credit in the Agreed Currencies. The Borrowers have the ability to increase the amount of the Facility, which increases may take the form of increases to the revolving credit commitments or the issuance of new term A loans, by an aggregate amount of up to the greater of $150.0 million or an incremental amount such that the total amount of the Facility does not exceed 350% of consolidated EBITDA of the Company (as determined for the four fiscal quarter period most recently ended for which financial statements are available), upon satisfaction of customary conditions precedent for such increases or incremental loans and receipt of additional commitments by one or more existing or new lenders.

Borrowings under the Facility bear interest at a floating rate, which is, at the Borrowers’ option, either SOFR, plus an applicable margin ranging from 1.25% to 2.25% or a base rate plus an applicable margin ranging from 0.25% to 1.25% (in each case subject to adjustment based on the Company’s total leverage ratio). An unused fee ranging from 0.15% to 0.25% (subject to adjustment based on the Company’s total leverage ratio) is payable quarterly in arrears based on the daily amount of the undrawn portion of each lender’s revolving credit commitment under the Facility. Fees are payable on outstanding letters of credit at a rate equal to the applicable margin for SOFR loans, plus certain customary fees payable solely to the issuer of the letter of credit.

Certain of the Company’s existing and future material subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of the Borrowers’ obligations under the Amended Credit Agreement. The obligations of the Borrowers and each of the Guarantors with respect to the Amended Credit Agreement are secured by a pledge of substantially all of the personal property

assets of the Borrowers and each of the Guarantors, including accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment, and equity interests in their respective subsidiaries.

The Amended Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness, and enter into affiliate transactions. In addition, the Amended Credit Agreement contains financial covenants requiring the Company on a consolidated basis to maintain, as of the last day of any fiscal quarter, a total net leverage ratio of not more than 3.5 to 1.0 (which ratio can be permitted to increase to 4.0 to 1.0 for no more than 4 fiscal quarters following a material acquisition) and an interest coverage ratio of at least 3.0 to 1.0. The Amended Credit Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Facility may be accelerated and/or the lenders’ commitments terminated. The Company is in compliance with all required financial covenants as of December 31, 2022.

In conjunction with obtaining the Facility, the Company paid $1.5 million in debt issuance costs and capitalized a total of $1.8 million associated with the Facility (inclusive of certain capitalized costs prior to the most recent amendment). These costs are being amortized over the life of the Facility. Capitalized debt issuance costs are included in other long-term assets, net of accumulated amortization. As of December 31, 2022, and December 31, 2021, debt issuance costs, net of accumulated amortization, were $0.7 million and $1.0 million, respectively. Debt issuance costs amortized or expensed totaled $0.4 million for each of the years ended December 31, 2022, 2021, and 2020, respectively.

The Company has an unused available Italian line of credit of €5.5 million ($5.9 million and $6.3 million) at December 31, 2022, and 2021, respectively. This unsecured line of credit provides the Company the option to borrow amounts in Italy at interest rates determined at the time of borrowing.

The Company paid cash related to interest of $1.4 million, $1.5 million, and $1.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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Fair value measurements and investments

12 Months Ended

Dec. 31, 2022

Fair Value Measurements And Investment Disclosure [Abstract]

Fair value measurements and investments

12. Fair value measurements and investments

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets that are impaired in a currently reported period or equity securities measured at observable prices in orderly transactions. The authoritative guidance also describes three levels of inputs that may be used to measure fair value:

Level 1:	quoted prices in active markets for identical assets and liabilities
Level 2:	observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3:	unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions

The Company’s financial instruments include cash equivalents, accounts receivable, accounts payable, long-term secured debt, available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities. The carrying value of cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s secured revolving credit facility carries a floating rate of interest; therefore, the carrying value of long-term debt is considered to approximate the fair value.

The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows:

(U.S. Dollars, in thousands)	Balance December 31, 2022			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreement	$	7,140		$	—	$	—		$	7,140
Neo Medical preferred equity securities		6,084			—		6,084			—
Bone Biologics equity securities		—			—		—			—
Other investments		1,726			—		—			1,726
Total	$	14,950		$	—	$	6,084		$	8,866
Liabilities
Spinal Kinetics contingent consideration		—		$	—	$	—		$	—
Deferred compensation plan		(1,515	)		—		(1,515	)		—
Total	$	(1,515	)	$	—	$	(1,515	)	$	—

(U.S. Dollars, in thousands)	Balance December 31, 2021			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreements	$	7,148		$	—	$	—		$	7,148
Neo Medical preferred equity securities		5,413			—		5,413			—
Bone Biologics equity securities		309			309		—			—
Other Investments		1,505			—		—			1,505
Total	$	14,375		$	309	$	5,413		$	7,148
Liabilities
Spinal Kinetics contingent consideration	$	(17,200	)	$	—	$	—		$	(17,200	)
Deferred compensation plan		(1,314	)		—		(1,314	)		—
Total	$	(18,514	)	$	—	$	(1,314	)	$	(17,200	)

The fair value of the Company’s deferred compensation plan liabilities are determined based on inputs that are readily available in public markets or that can be derived from information available in publicly quoted markets; therefore, the Company has categorized this liability as a Level 2 financial instrument.

Neo Medical Convertible Loan Agreements and Equity Investment

On October 1, 2020, the Company purchased shares of Neo Medical’s preferred stock for consideration of $5.0 million and entered into a Convertible Loan Agreement pursuant to which Orthofix loaned Neo Medical CHF 4.6 million, or $5.0 million at the date of issuance (the “Convertible Loan”). The loan bears interest at 8.0%, with interest due semi-annually. At each interest payment date, the borrower may elect to capitalize any interest due to the then outstanding principal balance of the loan. The Convertible Loan matures on October 1, 2024. If a change in control of Neo Medical occurs prior to the maturity date, the Convertible Loan shall become immediately due upon such event. The Convertible Loan may be convertible by either party into shares of Neo Medical’s preferred stock. The Company may convert the loan at its own election at any time prior to the full repayment or settlement of the Convertible Loan. Neo Medical may elect to convert the loan only in the event of a qualified financing event, as defined within the agreement. The price per share at which the loan converts is dependent upon i) the party electing conversion and ii) Neo Medical’s price per share in its most recent fundraising activities at the time of conversion, as specified within the agreement.

In October 2021, the Company entered into an additional Convertible Loan Agreement (the “Additional Convertible Loan”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million ($0.7 million as of the issuance date). In January 2022, the Company elected to convert the Additional Convertible Loan into shares of Neo Medical’s preferred stock.

The equity securities are recorded in other long-term assets and are considered an investment that does not have a readily determinable fair value. As such, the Company measures this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2022, and 2021:

(U.S. Dollars, in thousands)	2022		2021
Fair value of Neo Medical preferred equity securities at January 1	$	5,413	$	5,000
Conversion of loan into preferred equity securities		671		—
Foreign currency remeasurement recognized in other income, net		—		77
Unrealized gain recognized in other income (expense), net		—		336
Fair value of Neo Medical preferred equity securities at December 31		6,084		5,413
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

The remaining Convertible Loan is recorded in other long-term assets as an available for sale debt security as of December 31, 2022. The Convertible Loan is recorded at fair value, with applicable interest recorded in interest income. The fair value of the Convertible Loan is based upon significant unobservable inputs, including the use of option-pricing models, Monte Carlo simulations for certain periods, and a probability-weighted discounted cash flows model, requiring the Company to develop its own assumptions. Therefore, the Company has categorized this asset as a Level 3 financial asset.

Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, and projected cash flows in support of the estimated enterprise value of Neo Medical. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the Convertible Loan. If the amortized cost of the Convertible Loan exceeds its estimated fair value, the security is deemed to be impaired, and must be evaluated for the recognition of credit losses. Impairment resulting from credit losses is recognized within the statement of income, while impairment resulting from other factors is recognized within other comprehensive income (loss). As of December 31, 2022, the Company has not recognized any credit losses related to the Convertible Loan.

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan(s), measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Fair value of Neo Medical Convertible Loans at January 1	$	7,148		$	7,160
Additions		—			671
Interest recognized in interest income, net		436			421
Foreign currency remeasurement recognized in other income (expense), net		(67	)		(162	)
Unrealized gain (loss) recognized in other comprehensive income (loss)		294			(942	)
Conversion of Additional Convertible Loan into preferred equity securities		(671	)		—
Fair value of Neo Medical Convertible Loan(s) at December 31		7,140			7,148
Amortized cost basis of Neo Medical Convertible Loan(s) at December 31		5,907			6,209

The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loan as of December 31, 2022:

(U.S. Dollars, in thousands)	Fair Value as of December 31, 2022		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,140	Cost of equity discount rate		18.0	%
			Implied volatility		73.9	%

Bone Biologics Equity Securities

Until August of 2022, the Company held an investment in common stock of Bone Biologics Inc. (“Bone Biologics”), a developer of orthobiologic products. Prior to 2021, the equity securities were considered an investment that did not have a readily determinable fair value as Bone Biologics had very limited trading volumes. As such, the Company measured the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

In 2021, Bone Biologics completed a public offering of units, with each unit consisting of one share of common stock and one warrant to purchase common shares. As a result, Bone Biologics’ common stock became actively traded on the NASDAQ (ticker BBLG). The Company concluded the investment represented a Level 1 fair value measurement subsequent to the public offering as the common shares subsequently had quoted prices in active markets for identical assets. As such, the Company recorded the investment at fair value, with changes in fair value recorded within other income (expense), net, subsequent to the public offering.

The following table presents the changes in fair value recognized for each of the years ended December 31, 2022, 2021, and 2020:

(U.S. Dollars, in thousands)	2022			2021		2020
Bone Biologics equity securities at January 1	$	309		$	—	$	219
Fair value adjustments and impairments recognized in other income (expense), net		(183	)		309		(219	)
Proceeds from the disposition of equity securities		(126	)		—		—
Bone Biologics equity securities at December 31	$	—		$	309		—

Other investments

Other investments represent other assets and investments recorded at fair value that are not deemed to be material for disclosure on an individual basis. The fair value of these assets is based upon significant unobservable inputs, such as probability-weighted discounted cash flows models, requiring the Company to develop its own assumptions. Therefore, the Company has categorized these assets as Level 3 financial assets. As of December 31, 2022, this balance was classified within other current assets, while as of December 31, 2021, this balance was classified within other long-term assets.

Contingent Consideration

The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The Spinal Kinetics contingent consideration consists of potential future milestone payments of up to $60.0 million in cash. The milestone payments included (i) $15.0 million upon U.S. Food and Drug Administration (“FDA”) approval of the M6-C artificial cervical disc (the “FDA Milestone”) and (ii) revenue-based milestone payments of up to $45.0 million in connection with future sales of the acquired artificial discs. To trigger applicable payments, milestones must be achieved by April 30, 2023. The FDA Milestone was achieved and paid in 2019. A second milestone payment, totaling $15.0 million, was achieved and paid in 2021 upon meeting certain net sales targets.

The estimated fair value of the remaining Spinal Kinetics contingent consideration, attributable to a revenue-based milestone, was concluded to be zero as of December 31, 2022, as the Company does not expect to achieve the milestone by April 30, 2023. The estimated fair value reflects assumptions made by management as of December 31, 2022, such as the expected timing and volume of elective procedures and the impact of these procedures on future revenues. Any changes in fair value are recorded as an operating expense within acquisition-related amortization and remeasurement.

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Spinal Kinetics contingent consideration at January 1	$	17,200		$	35,400
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(17,200	)		(3,200	)
Payment made		—			(15,000	)
Spinal Kinetics contingent consideration at December 31		—		$	17,200

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Contingencies policy

The Company records accruals for certain outstanding legal proceedings, investigations, or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates developments in legal proceedings, investigations, and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable on a quarterly basis. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred.

In addition to the matters described in the paragraphs below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss.

Italian Medical Device Payback (“IMDP”)

In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. A key provision of the law is a ‘payback’ measure, requiring medical device companies in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps.

In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the years ended December 31, 2015, through December 31, 2018. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures.

The Company accounts for the estimated cost of the IMDP as sales and marketing expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded expense of $1.2 million for the year ended December 31, 2022, a benefit of $1.2 million for the year ended December 31, 2021, as a result of certain temporary relief provided by the Italian National Healthcare System in response to the COVID-19 pandemic, and expense of $1.5 million for the year ended December 31, 2020. As of December 31, 2022, the Company has accrued $5.9 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities for more recent fiscal years.

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Shareholder's equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Shareholders' equity

14. Shareholders’ equity

Dividends

The Company has not historically paid dividends to holders of its common stock. Certain subsidiaries of the Company have restrictions on their ability to pay dividends in certain circumstances pursuant to the Amended Credit Agreement. In the event that the Company decides to pay a dividend to holders of its common stock in the future with dividends received from its subsidiaries, the Company may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts received from its subsidiaries.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments and unrealized gains (losses) on available for sale debt securities. The Company’s policy is to release income tax effects related to items recognized within accumulated other comprehensive income (loss) using a portfolio approach. The components of and changes in accumulated other comprehensive income (loss) are as follows:

(U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans			Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(3,039	)	$	—		$	—	$	(3,039	)
Other comprehensive income		4,872			1,881			—		6,753
Income taxes		—			(462	)		—		(462	)
Balance at December 31, 2020	$	1,833		$	1,419		$	—	$	3,252
Other comprehensive loss		(2,544	)		(942	)		—		(3,486	)
Income taxes		—			234			—		234
Balance at December 31, 2021	$	(711	)	$	711		$	—	$	—
Other comprehensive income (loss)		(1,771	)		294			101		(1,376	)
Income taxes		—			—			—		—
Balance at December 31, 2022	$	(2,482	)	$	1,005		$	101	$	(1,376	)

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Revenue recognition and accounts receivable

12 Months Ended

Dec. 31, 2022

Revenue Recognition And Accounts Receivable [Abstract]

Revenue recognition and accounts receivable

15. Revenue recognition and accounts receivable

Revenue Recognition

The Company accounts for a contract when there is (i) approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, (v) and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the promised goods or services. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The following sections discuss the Company’s revenue recognition policies by significant product category:

Bone Growth Therapies

Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue.

The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare. Revenue is recognized when the product is fitted to and accepted by the patient and all applicable documents required by the third-party payor have been obtained. Amounts paid by third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment.

Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods.

Biologics

Biologics revenue is largely attributable to the U.S. and is primarily related to a collaborative arrangement with MTF, which extends through December 31, 2032. Under this arrangement, the Company markets tissue for bone repair and reconstruction under the brand names Trinity Evolution and Trinity ELITE. Per the terms of the agreement, MTF sources the tissue, processes it to create the allografts, packages, and delivers the tissue to the customer. The Company has exclusive global marketing rights for the Virtuos Lyograft and Trinity ELITE tissue forms, exclusive rights to market FiberFuse Advanced, FiberFuse Strip, and certain other tissues in the U.S., non-exclusive marketing rights for certain other products, and receives marketing fees from MTF based on total sales. MTF is considered the primary obligor in these arrangements; therefore, the Company recognizes marketing service fees on a net basis within net sales upon shipment of the product to the customer and receipt of a confirming purchase order.

Spinal Implants and Global Orthopedics

Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from both commercial sales and stocking distributor arrangements.

Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Global Orthopedics products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital.

Other revenues within the Spinal Implants and Global Orthopedics product categories are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For stocking distributor arrangements, it is the Company’s policy to recognize revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price for revenue recognition is estimated based upon the Company’s historical collection experience with the stocking distributor.

Product Sales and Marketing Service Fees

The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2022, 2021, and 2020.

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Product sales	$	405,437	$	409,554	$	353,087
Marketing service fees		55,276		54,925		53,475
Net sales	$	460,713	$	464,479	$	406,562

Product sales primarily consists of the sale of Bone Growth Therapies, Spinal Implants, and Global Orthopedics products. Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics product category within the Global Spine reporting segment. Marketing service fees received from MTF were $55.3 million, or approximately 98% of total Biologics revenues, for the year ended December 31, 2022. As MTF is the single supplier for certain allografts in the Company’s Biologics portfolio, derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF’s continued access to donors or the Company’s ability to market these tissues may adversely impact the Company’s financial results.

Revenues exclude any value added or other local taxes, intercompany sales, and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were $4.2 million, $3.5 million, and $2.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Accounts receivable and related allowances

Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant.

The Company’s allowance for expected credit losses represents the portion of the receivable’s amortized cost basis that an entity does not expect to collect over the receivable’s contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

The process for estimating the ultimate collection of accounts receivable involves certain assumptions and judgments. The determination of the contractual life of accounts receivable, the aging of outstanding receivables, as well as the historical collections, write-offs, and payor reimbursement experience over the estimated contractual lives of such receivables, are integral parts of the estimation process related to reserves for expected credit losses and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for expected credit losses and contractual allowances. Revisions in allowances for expected credit loss estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses. Revisions to contractual allowances are recorded as an adjustment to net sales. These estimates are periodically tested against actual collection experience. In addition, the Company analyzes its receivables by geography and by customer type, where appropriate, in developing estimates for expected credit losses.

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the years ended December 31, 2022, and 2021:

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Allowance for expected credit losses beginning balance	$	4,944		$	4,848
Current period provision for expected credit losses		2,095			444
Write-offs charged against the allowance and other		(450	)		(126	)
Effect of changes in foreign exchange rates		(170	)		(222	)
Allowance for expected credit losses ending balance	$	6,419		$	4,944

The Company will generally sell receivables from certain Italian public hospitals each year to accelerate cash collections. During 2022, 2021, and 2020, the Company sold €9.2 million, €8.4 million, and €8.3 million ($9.6 million, $9.9 million, and $9.6 million) of receivables, respectively. The related fees for 2022, 2021, and 2020, were $0.3 million, $0.2 million, and $0.3 million, respectively, which were recorded as interest expense. Accounts receivables sold without recourse are removed from the balance sheet at the time of sale.

Contract Liabilities

The Company’s contract liabilities largely relate to a prepayment of $13.9 million received in 2020 from the CMS as part of the Accelerated and Advance Payment Program of the CARES Act.

On October 1, 2020, the President of the United States signed the “Continuing Appropriations Act, 2021 and Other Extensions Act,” which relaxed a number of the Medicare Accelerated and Advance Payment Program’s recoupment terms for providers and suppliers that received funds from the program. In April 2021, Medicare began to recoup 25% of Medicare payments otherwise owed to the provider or supplier for submitted claims. Recoupment then increased to 50% of Medicare payments in March 2022. Thus, during these time periods, rather than receiving the full amount of payment for newly submitted claims, the Company’s outstanding balance under the Accelerated and Advance Payment Program was reduced by the recoupment amount until the full balance had been repaid.

The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the years ended December 31, 2022, and 2021:

	For the Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Contract liability beginning balance	$	4,791		$	13,851
Recoupment recognized in net sales		(4,791	)		(9,060	)
Contract liability ending balance	$	—		$	4,791

Other Contract Assets

The Company’s contract assets, excluding accounts receivable (“Other Contract Assets”), largely consist of payments made to certain distributors to obtain contracts, gain access to customers in certain territories, and to provide the benefit of the exclusive distribution of the Company’s products. Other Contract Assets are included in other long-term assets and totaled $1.1 million and $1.4 million as of December 31, 2022, and 2021, respectively.

Other Contract Assets are amortized on a straight-line basis over the term of the related contract. No impairments were incurred for other contract assets in 2022 or 2021. Further, the Company applies the practical expedient to expense sales commissions when incurred, as the applicable amortization period would be for one year or less.

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Business segment information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Business segment information

16. Business segment information

As of December 31, 2022, the Company's operations were managed through two reporting segments: Global Spine and Global Orthopedics. These reporting segments represent the operating segments for which the Chief Executive Officer, who is also Chief Operating Decision Maker (the “CODM”), reviews financial information and makes resource allocation decisions among businesses. As of December 31, 2022, the primary metric used by the CODM in managing the Company is earnings before interest, tax, depreciation, and amortization (“EBITDA”). The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information.

Following the merger with SeaSpine, which was completed on January 5, 2023, the Company expects to reassess its reporting segments in the first quarter of 2023 based on how the operations of the newly combined company will be managed The Company will also reassess its identified segment profitability metric at that time. Accordingly, the reporting segment information below has been prepared based on the Company's two historical reporting segments, which were utilized in managing operations for the year ended December 31, 2022.

Global Spine

The Global Spine reporting segment offers three primary product categories: Bone Growth Therapies, Spinal Implants, and Biologics.

The Bone Growth Therapies product category manufactures, distributes, and provides support services of market leading bone growth stimulator devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This product category uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S.

The Spinal Implants product category designs, develops, and markets a broad portfolio of motion preservation and fixation implant products used in surgical procedures of the spine. Spinal Implants distributes its products through a global network of distributors and sales representatives to sell spine products to hospitals and healthcare providers.

The Biologics product category provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This product category specializes in the marketing of the Company’s regeneration tissue forms and distributes its tissues to hospitals and healthcare providers, primarily in the U.S., through a network of independent distributors and sales representatives. The partnership with MTF allows the Company to exclusively market the Virtuos Lyograph, Trinity Evolution, FiberFuse Advanced, FiberFuse Strip, and certain other tissue forms for musculoskeletal defects to enhance bony fusion.

Global Orthopedics

The Global Orthopedics reporting segment offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions unrelated to the spine. This reporting segment specializes in the design, development, and marketing of the Company’s orthopedic products used in fracture repair, deformity correction, and bone reconstruction procedures. Global Orthopedics distributes its products through a global network of distributors and sales representatives to sell orthopedic products to hospitals, and healthcare providers.

Corporate

Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments.

The table below presents net sales by major product category by reporting segment:

	Year Ended December 31,
	2022					2021					2020
(U.S. Dollars, in thousands)	Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales
Bone Growth Therapies	$	187,247		40.7	%	$	187,448		40.4	%	$	171,396		42.2	%
Spinal Implants		109,546		23.8	%		115,094		24.8	%		94,857		23.3	%
Biologics		56,381		12.2	%		56,421		12.1	%		55,482		13.6	%
Global Spine		353,174		76.7	%		358,963		77.3	%		321,735		79.1	%
Global Orthopedics		107,539		23.3	%		105,516		22.7	%		84,827		20.9	%
Net sales	$	460,713		100.0	%	$	464,479		100.0	%	$	406,562		100.0	%

The following table presents EBITDA, the primary metric used in managing the Company, by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Global Spine	$	60,649		$	58,014		$	63,036
Global Orthopedics		(4,037	)		3,374			(4,993	)
Corporate		(44,011	)		(31,691	)		(25,382	)
Total EBITDA		12,601			29,697			32,661
Depreciation and amortization		(29,019	)		(29,599	)		(30,546	)
Goodwill impairment		—			(11,756	)		—
Interest expense, net		(1,288	)		(1,837	)		(2,483	)
Loss before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine	$	18,213	$	17,548	$	18,362
Global Orthopedics		6,696		8,233		7,896
Corporate		4,110		3,818		4,288
Total	$	29,019	$	29,599	$	30,546

Geographical information

The following data includes net sales by geographic destination:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
U.S.	$	358,843	$	361,945	$	327,280
Italy		19,098		20,187		18,733
Germany		11,569		13,716		11,940
United Kingdom		10,171		10,552		7,147
France		10,377		10,475		8,354
Brazil		5,668		5,108		2,347
Others		44,987		42,496		30,761
Net sales	$	460,713	$	464,479	$	406,562

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine
U.S.	$	332,846	$	337,455	$	304,595
International		20,328		21,508		17,140
Total Global Spine		353,174		358,963		321,735
Global Orthopedics
U.S.	$	25,997		24,490		22,685
International		81,542		81,026		62,142
Total Global Orthopedics		107,539		105,516		84,827
Consolidated
U.S.		358,843		361,945		327,280
International		101,870		102,534		79,282
Net sales	$	460,713	$	464,479	$	406,562

The following data includes property, plant, and equipment by geographic area:

(U.S. Dollars, in thousands)	2022		2021
U.S.	$	44,802	$	45,090
Italy		8,535		9,412
Germany		3,115		2,544
United Kingdom		1,149		1,193
Brazil		85		91
Others		543		922
Total	$	58,229	$	59,252

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Acquisition-Related Amortization and Remeasurement

12 Months Ended

Dec. 31, 2022

Acquisition Related Amortization And Remeasurement [Abstract]

Acquisition-Related Amortization and Remeasurement

17. Acquisition-related amortization and remeasurement

Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions, (ii) the remeasurement of any related contingent consideration arrangement, (iii) recognized costs associated with acquired IPR&D assets, which are recognized immediately upon acquisition, and (iv) impairments of goodwill related to previously recognized business combinations. Components of acquisition-related amortization and remeasurement for the years ended December 31, 2022, 2021, and 2020, respectively, are as follows:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Changes in fair value of contingent consideration	$	(17,200	)	$	(3,575	)	$	(7,300	)
Amortization of acquired intangibles		8,196			7,907			6,801
Acquired IPR&D		1,600			1,500			—
Impairment of Global Orthopedics goodwill		—			11,756			—
Total	$	(7,404	)	$	17,588		$	(499	)

CGBio Co. Ltd. License and Distribution Agreement

On July 30, 2022, the Company entered into an exclusive License and Distribution Agreement (the "License Agreement") with CGBio Co., Ltd. (“CGBio”), a developer of innovative, synthetic bone grafts. The Agreement grants the Company the exclusive right to conduct pre-clinical and clinical studies, commercialize, promote, market, and sell the Novosis recombinant human bone morphogenetic protein-2 (rhBMP-2) bone growth materials and other future tissue regenerative solutions in the U.S. and Canada. As consideration, the Company agreed to pay CGBio an upfront payment of $1.4 million with additional payments contingent upon the achievement of specified development milestones. The Company accounted for this transaction as an asset acquisition. As the

transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The $1.4 million upfront payment was paid in the third quarter of 2022 and was recognized as acquired IPR&D costs, which was then immediately expensed.

Legion Innovations, LLC Asset Acquisition

On December 29, 2022, the Company entered into a technology assignment and royalty agreement with Legion Innovations, LLC, a U.S.-based medical device technology company, whereby the Company acquired intellectual property rights to certain assets. As consideration, the Company agreed to pay $0.2 million in January 2023, with additional payments contingent upon reaching future commercialization and revenue-based milestones. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The $0.2 million initial payment was accrued as of December 31, 2022, and was recognized as acquired IPR&D costs, which was then immediately expensed.

IGEA S.p.A Asset Acquisition

In April 2021, the Company entered into an Exclusive License and Distribution Agreement (the “License Agreement”) with IGEA S.p.A (“IGEA”), an Italian manufacturer and distributor of bone and cartilage stimulation systems. As consideration for the License Agreement, the Company agreed to pay up to $4.0 million, with certain payments contingent upon reaching an FDA milestone. Of this amount, $0.5 million was paid in 2021, which was recognized as acquired IPR&D costs within acquisition-related amortization and remeasurement. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The License Agreement also includes certain minimum purchase requirements.

In May 2022, the Company achieved FDA approval pertaining to the acquired technology, triggering a contingent consideration milestone obligation of $3.5 million. Of this amount, $1.5 million was paid in 2022, $1.0 million was accrued within other current liabilities, and $1.0 million was accrued within other long-term liabilities as of December 31, 2022.

Related Party Asset Acquisition

In February 2021, the Company entered into a technology assignment and royalty agreement with a medical device technology company partially owned and controlled by the wife of our Executive Chairman, and former President and Chief Executive Officer, Jon Serbousek, whereby the Company acquired the intellectual property rights to certain assets for consideration of up to $10.0 million.

Consideration was comprised of $1.0 million due at signing, which was recognized immediately as acquired IPR&D expense within acquisition-related amortization and remeasurement, and $9.0 million in contingent consideration. The contingent consideration is dependent upon multiple milestones, such as receipt of 510(k) clearance and the attainment of certain net sales targets. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. In addition, the Company is obligated to pay a royalty of 2% to 4% on net sales, commencing upon commercialization of the assets.

The transaction was approved by the Company’s Audit and Finance Committee, with the Audit and Finance Committee directly supervising the negotiations of the transaction. Mr. Serbousek was excluded from such discussions and did not participate in the negotiation or evaluation of the transaction. Mr. Serbousek also continues to be excluded from the oversight of the Company’s development and commercialization activities in relation to the acquired technology and all other matters relating to the relationship between the Company and the counterparty

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Share-based compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Share-based compensation

18. Share-based compensation

At December 31, 2022, and 2021, the Company had stock option and award plans, and a stock purchase plan.

2012 Long Term Incentive Plan

The Board of Directors adopted the Amended and Restated 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 23, 2018, which was subsequently approved by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors, consultants, and advisors who perform services for the Company and its subsidiaries and affiliates may receive awards under the 2012 LTIP. Awards granted under the 2012 LTIP expire no later than ten years after the date of grant. At December 31, 2022, the Company reserves a total of 8,375,000 shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2022, there were 1,098,680 options outstanding under the 2012 LTIP, of which 852,490 were exercisable. In addition, there were 1,359,693 restricted stock units outstanding, some of which contain performance-based or market-based vesting conditions, under the 2012 LTIP as of December 31, 2022.

Inducement Plans

In 2013, the Company granted options to acquire up to 150,000 shares of common stock to a former Chief Executive Officer as an inducement to accept employment with the Company. As of December 31, 2022, there were 150,000 options outstanding under this inducement, all of which were exercisable.

In August 2019, the Company appointed a new President of Global Spine, who was then subsequently promoted to President and Chief Executive Officer. As an inducement to accept employment with the Company, the individual was awarded a grant of stock options to acquire up to 50,711 shares of common stock and an award of 14,743 restricted stock units. As of December 31, 2022, there were 50,711 options outstanding under this inducement, 38,033 of which were exercisable, and 3,686 unvested restricted stock units outstanding.

Stock Purchase Plan

The Second Amended and Restated Stock Purchase Plan, as Amended (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers).

During each purchase period, eligible employees may designate between 1% and 25% of their compensation to be deducted for the purchase of common stock under the plan (or such other percentage in order to comply with regulations applicable to employees domiciled in or resident of a member state of the European Union). For eligible directors, the designated percentage will be applied to an amount equal to his or her director compensation paid in cash for the current plan period. The purchase price of the shares under the plan is equal to 85% of the fair market value on the first day of the plan period or, if lower, on the last day of the plan period.

Due to the compensatory nature of such plan, the Company records the related share-based compensation expense in the consolidated statement of operations. Compensation expense is estimated using the Black-Scholes valuation model, with such value recognized as expense over the plan period. As of December 31, 2022, the aggregate number of shares reserved for issuance under the Stock Purchase Plan is 2,850,000. As of December 31, 2022, a total of 2,395,673 shares had been issued pursuant to the Stock Purchase Plan.

Share-Based Compensation Expense

Share-based compensation expense is recorded in the same line of the consolidated statements of operations as the employee’s cash compensation. The following tables present the detail of share-based compensation expense by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Cost of sales	$	826	$	779	$	705
Sales and marketing		3,865		3,385		3,620
General and administrative		12,917		10,289		10,624
Research and development		835		979		1,258
Total	$	18,443	$	15,432	$	16,207

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Stock options	$	1,114	$	1,893	$	2,571
Time-based restricted stock awards and stock units		9,452		7,437		8,485
Performance-based / Market-based restricted stock units		6,425		4,414		3,509
Stock purchase plan		1,452		1,688		1,642
Total	$	18,443	$	15,432	$	16,207

The income tax benefit related to this expense was $3.3 million, $3.1 million, and $3.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Stock Options

The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically four years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during each of the years ended December 31, 2022, 2021, and 2020, is shown in the following table. The Company did not grant any time-based stock options in 2022.

	Year Ended December 31,
	2022		2021		2020
Assumptions:
Expected term (in years)		—	6.0		5.5
Expected volatility		—	34.4% – 34.8%		30.2% – 35.1%
Risk free interest rate		—	0.83% – 1.25%		0.28% – 1.65%
Dividend yield		—		—		—
Weighted average grant date fair value		—	$	12.33	$	8.74

The expected term of the options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, and an employee’s average length of service. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option.

Summaries of the status of the Company’s stock option plans as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2021		1,397,054		$	39.20
Granted		—		$	-
Exercised		(575	)	$	21.78
Forfeited or expired		(97,088	)	$	38.14
Outstanding at December 31, 2022		1,299,391		$	39.29		3.77
Vested and expected to vest at December 31, 2022		1,299,391		$	39.29		3.77
Exercisable at December 31, 2022		1,040,523		$	40.70		3.13

As of December 31, 2022, the unamortized compensation expense relating to options granted and expected to be recognized was $0.8 million. This amount is expected to be recognized through December 2025 over a weighted average period of approximately 1.0 years. The total intrinsic value of options exercised was $0.0 million, $0.6 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. For the year ended December 31, 2022, we received $0.0 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $0.0 million. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2022, is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for options that had exercise prices lower than $20.53, the closing price of the Company’s stock on December 31, 2022. The aggregate intrinsic value of options outstanding was $0.0 million as of December 31, 2022. The aggregate intrinsic value of options exercisable was also $0.0 million as of that date.

Time-based Restricted Stock Awards and Stock Units

Compensation expense for time-based restricted stock awards and stock units, which represents the fair value of the stock measured at the market price at the date of grant, is recognized on a straight-line basis over the vesting period, which is typically four years, net of actual forfeitures.

Since 2017, the annual grant to non-employee directors has been made in the form of one-year vesting restricted stock units with deferred delivery (“DSUs”), whereby shares are not settled until after the director ceases service as a director. As of December 31, 2022, there were 86,542 DSUs outstanding that are vested but not settled.

The aggregate fair value of time-based restricted stock awards and stock units that vested during the years ended December 31, 2022, 2021, and 2020, was $5.2 million, $9.0 million, and $6.5 million, respectively. Unamortized compensation expense related to time-based restricted stock awards and stock units amounted to $18.6 million at December 31, 2022. This amount is expected to be recognized through October 2026 over a weighted average period of approximately 2.5 years. The aggregate intrinsic value of time-based restricted stock awards and stock units outstanding was $17.4 million as of December 31, 2022.

Performance-based and Market-based Restricted Stock Units

Certain of the Company's outstanding restricted stock units contain performance-based vested conditions or market-based vesting conditions.

The fair value of performance-based restricted stock units is calculated based upon the closing stock price at the date of grant. Such value is recognized as expense over the requisite service period beginning in the period in which they are deemed probable to vest, net of actual forfeitures. Vesting probability is assessed based upon forecasted earnings and financial results.

The fair value of market-based restricted stock units is determined at the date of the grant using the Monte Carlo valuation methodology, with any discounts for post-vesting restrictions estimated using the Chaffe Model. The Monte Carlo methodology incorporates into the valuation the possibility that the market condition may not be satisfied. Such value is recognized on a straight-line basis over the vesting period, net of actual forfeitures.

The fair value of performance-based and/or market-based restricted stock units that vested and settled during the years ended December 31, 2022, 2021, and 2020, totaled $0.0 million, $0.0 million, and $1.4 million, respectively. Unamortized compensation expense for performance-based and/or market-based restricted stock units totaled $9.3 million at December 31, 2022, and is expected to be recognized over a weighted average period of approximately 1.4 years. The aggregate intrinsic value of market-based restricted stock units outstanding was $10.6 million as of December 31, 2022.

A summary of the status of our time-based and performance-based and/or market-based restricted stock units as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Time-based Restricted Stock Awards and Stock Units					Performance-based and/or Market-based Restricted Stock Units
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021		559,368		$	40.03		323,081		$	48.56
Granted		500,222		$	29.81		255,327		$	33.57
Vested and settled		(152,735	)	$	41.03		—		$	—
Cancelled		(59,708	)	$	34.80		(62,176	)	$	55.70
Outstanding at December 31, 2022		847,147		$	34.18		516,232		$	40.29

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Defined Contribution Plans and deferred compensation

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

Defined contribution plans and deferred compensation

19. Defined contribution plans and deferred compensation

Defined Contribution Plans

Orthofix US LLC sponsors a defined contribution plan (the “401(k) Plan”) covering substantially all full-time U.S. employees. The 401(k) Plan allows participants to contribute up to 80% of their pre-tax compensation, subject to certain limitations, with the Company matching 100% of the first 2% of the employee’s base compensation and 50% of the next 4% of the employee’s base compensation if contributed to the 401(k) Plan. During the years ended December 31, 2022, 2021, and 2020, expenses incurred relating to the 401(k) Plan, including matching contributions, were approximately $3.3 million, $2.8 million, and $1.1 million, respectively.

In April 2020, as a precautionary measure to increase the Company’s cash position and preserve financial flexibility in response to the initial uncertainty of the COVID-19 pandemic, the Company temporarily suspended the 401(k) match program through the remainder of fiscal year 2020. The 401(k) match program was reinstated in January 2021.

The Company also operates defined contribution plans for its international employees meeting minimum service requirements. The Company’s expenses for such contributions during each of the years ended December 31, 2022, 2021, and 2020, were $1.1 million, $1.2 million, and $1.1 million, respectively.

Deferred Compensation Plans

Under Italian Law, our Italian subsidiary accrues deferred compensation on behalf of its employees, which is paid on termination of employment. The accrual for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal, which is regulated by a national contract and is equal to approximately 4% of total commissions earned from the Company. The Company’s relations with its Italian employees, who represent 21% of total employees at December 31, 2022, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. The Company is not a party to any other collective bargaining agreement. The balance in other long-term liabilities as of December 31, 2022, and 2021 was $1.5 million and $1.3 million, respectively, and represents the amount that would be payable if all the employees and agents had terminated employment at that date.

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Income taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income taxes

20. Income taxes

Income (loss) before provision for income taxes consisted of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
U.S.	$	(22,318	)	$	(5,987	)	$	5,556
Non-U.S.		4,612			(7,508	)		(5,924	)
Income (loss) before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

The provision for income taxes consists of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021			2020
U.S.
Current	$	1,151	$	(607	)	$	(15,054	)
Deferred		67		24,292			(29	)
		1,218		23,685			(15,083	)
Non-U.S.
Current		578		1,009			1,382
Deferred		247		190			10,816
		825		1,199			12,198
Income tax expense (benefit)	$	2,043	$	24,884		$	(2,885	)

The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2022, 2021, and 2020, consist of the following:

	2022						2021						2020
(U.S. Dollars, in thousands, except percentages)	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	(3,718	)		21.0	%	$	(2,834	)		21.0	%	$	(77	)		21.0	%
State taxes, net of U.S. federal benefit		(1,312	)		7.4			(24	)		0.2			1,151			(312.8	)
Foreign rate differential, including withholding taxes		475			(2.7	)		480			(3.6	)		(147	)		39.9
Valuation allowances, net		7,638			(43.1	)		27,819			(206.1	)		14,514			(3,944.0	)
Foreign income inclusions, net		1,018			(5.7	)		—			—			—			—
Research credits		(750	)		4.2			(537	)		4.0			(982	)		266.8
Unrecognized tax benefits, net of settlements		(599	)		3.4			(1,363	)		10.1			(17,321	)		4,706.8
Equity compensation		1,441			(8.1	)		1,091			(8.1	)		1,657			(450.3	)
Executive compensation		697			(3.9	)		456			(3.4	)		375			(101.9	)
Contingent consideration		(3,316	)		18.7			(640	)		4.7			(1,460	)		396.7
Other, net		469			(2.6	)		436			(3.2	)		(595	)		161.8
Income tax expense (benefit) /effective rate	$	2,043			(11.5	)%	$	24,884			(184.4	)%	$	(2,885	)		784.0	%

The Company paid (received or was refunded) cash relating to taxes totaling ($0.9) million, $4.8 million, and $0.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The Company’s deferred tax assets and liabilities are as follows:

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Intangible assets and goodwill	$	5,807		$	5,245
Inventories and related reserves		17,819			17,097
Deferred revenue and cost of goods sold		3,642			3,888
Other accruals and reserves		2,756			3,082
Accrued compensation		8,795			7,784
Provision for expected credit losses		1,253			1,217
Net operating loss and tax credit carryforwards		40,676			42,546
R&D capitalization		4,353			—
Lease liabilities		6,440			5,691
Other, net		3,767			852
Total deferred tax assets		95,308			87,402
Valuation allowance		(83,797	)		(76,725	)
Deferred tax asset, net of valuation allowance	$	11,511		$	10,677
Withholding taxes		(10	)		(10	)
Property, plant, and equipment		(5,516	)		(4,809	)
Right-of-use lease assets		(5,771	)		(5,165	)
Deferred tax liability		(11,297	)		(9,984	)
Net deferred tax assets	$	214		$	693
Reported as:
Deferred income tax assets (classified within other long-term assets)		1,470			1,771
Deferred income tax liabilities (classified within other long-term liabilities)		(1,256	)		(1,078	)
Net deferred tax assets	$	214		$	693

The Company historically presented deferred income tax assets as a separate and discrete line item on its consolidated balance sheet; however, as the significance of the asset has decreased as a result of the recognition of valuation allowances, the Company has reclassified this balance to be included within other long-term assets. As such, the prior year balance has been reclassified to conform to current period presentation.

The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future.

The valuation allowance is primarily attributable to net operating loss carryforwards and temporary differences in domestic and certain foreign jurisdictions. The net increase in the valuation allowance of $7.1 million during the year principally relates to recognizing a full valuation allowance against the net deferred tax asset within the Company’s U.S. operations as well as an increase in valuation allowance against deferred tax assets within the Company’s Italian manufacturing subsidiary. The Company considered many factors when assessing the likelihood of future realization of these deferred tax assets, including recent cumulative losses experienced by the subsidiary, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. That increase was partially offset by a decrease of valuation allowances on net operating loss carryforwards in other foreign jurisdictions due to expiration, statutory rate changes, and changes regarding the realizability of net deferred tax assets. It is reasonably possible that the valuation allowance will increase in 2023 due to further losses in certain jurisdictions, offset by decreases related to the expiration of foreign net operating losses.

The Company has federal net operating loss carryforwards of $13.3 million and research and development credits of $1.7 million, including amounts from the acquisition of Spinal Kinetics. These carryforwards are subject to limitation under the provisions of Section 382 and will begin to expire in 2026. The Company has state net operating loss carryforwards of approximately $31.1 million,

of which $20.6 million relates to Spinal Kinetics and begins to expire in 2027. Additionally, the Company has net operating loss carryforwards in various foreign jurisdictions of approximately $120.4 million, the majority of which do not have an expiration, which mainly relate to the Company’s Italy, Netherlands, and Brazil operations.

Unremitted foreign earnings were $27.0 million as of December 31, 2022. The Company’s investment in foreign subsidiaries continues to be indefinite in nature; however, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur significant additional tax liability. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings of foreign subsidiaries is not practicable.

The Company records a benefit for uncertain tax positions when the weight of available evidence indicates that it is more likely than not, based on an evaluation of the technical merits, that the tax position will be sustained on audit. The tax benefit is measured as the largest amount that is more than 50% likely to be realized upon settlement. The Company re-evaluates income tax positions periodically to consider changes in facts or circumstances such as changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. The Company includes interest and any applicable penalties related to income tax issues as part of income tax expense in its consolidated financial statements.

The Company’s unrecognized tax benefit was $1.7 million and $3.5 million for the years ended December 31, 2022, and 2021, respectively. The Company recorded net interest and penalties expense (benefit) on unrecognized tax benefits of $0.1 million, $(0.4) million, and $(5.4) million for the years ended December 31, 2022, 2021, and 2020, respectively, and had approximately $0.9 million and $0.8 million accrued for payment of interest and penalties as of December 31, 2022, and 2021, respectively. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. The Company believes it is reasonably possible that, in the next 12 months, no unrecognized tax benefits, exclusive of interest and penalties, will be resolved by the closure of an audit or statute release.

A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2022, and 2021, is shown below:

(U.S. Dollars, in thousands)	2022			2021
Balance as of January 1,	$	3,462		$	4,629
Additions for current year tax positions		46			45
Increases for prior year tax positions		16			110
Settlements of prior year tax positions		(144	)		—
Expiration of statutes		(1,637	)		(1,322	)
Balance as of December 31,	$	1,743		$	3,462

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in certain state and foreign jurisdictions, including Italy, as well as other jurisdictions where the Company maintains operations. The statute of limitations with respect to federal and state tax filings is closed for years prior to 2019. The statute of limitations with respect to the major foreign tax filing jurisdictions is closed for years prior to 2018. The Company cannot reasonably determine if any state and local or foreign examinations will have a material impact on its financial statements and cannot predict the timing regarding the resolution of these tax examinations.

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Earnings per share (EPS)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Earnings per share (EPS)

21. Earnings per share (EPS)

The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards in certain periods with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method. The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 18).

For each of the three years ended December 31, 2022, 2021, and 2020, no significant adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in the diluted EPS computations:

	Year Ended December 31,
	2022		2021		2020
Weighted average common shares-basic		20,053,548		19,690,593		19,267,920
Effect of diluted securities:
Unexercised stock options and employee stock purchase plan		—		—		51,951
Unvested time-based restricted stock units		—		—		71,847
Weighted average common shares-diluted		20,053,548		19,690,593		19,391,718

There were 2,313,226; 1,711,323; and 1,499,630 weighted average outstanding options, restricted stock, and market-based units not included in the diluted earnings per share computation for the years ended December 31, 2022, 2021, and 2020, respectively, because inclusion of these awards was anti-dilutive or, for market-based units, all necessary conditions had not been satisfied by the end of the respective period.

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Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

22. Subsequent Events

Merger with SeaSpine Holdings Corporation

On October 10, 2022, the Company and Orca Merger Sub Inc., a wholly-owned subsidiary of Orthofix (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SeaSpine, a global medical technology company focused on surgical solutions for the treatment of spinal disorders. On January 5, 2023, the transaction was completed and Merger Sub was merged with and into SeaSpine (the “Merger”), with SeaSpine continuing as the surviving company and a wholly-owned subsidiary of Orthofix following the transaction. For the year ended December 31, 2022, the Company incurred approximately $9.3 million in acquisition-related costs, substantially all of which was classified as general and administrative expenses.

As a result of the Merger, each share of common stock of SeaSpine issued and outstanding immediately prior to the closing date was converted into the right to receive 0.4163 shares of common stock of Orthofix. In addition, the Company assumed SeaSpine’s existing equity incentive plans in connection with the Merger, and outstanding SeaSpine equity awards were converted into Orthofix equity awards (on the same vesting schedule and other terms and conditions as existed prior to such conversion). The conversion of such equity awards occurred at the same exchange ratio as applied to SeaSpine common stock in the Merger, and the exercise price of converted SeaSpine stock options was also correspondingly adjusted.

The Merger is being accounted for as an acquisition of SeaSpine by Orthofix under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. Thus, Orthofix is treated as the acquirer for accounting purposes. In identifying the acquirer, Orthofix and SeaSpine considered the structure of the transaction and other actions contemplated by the Merger Agreement, relative outstanding share ownership, and market values, the composition of the combined company’s board of directors, and the relative size of Orthofix and SeaSpine.

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,104,854
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	366,546
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards		11,508
Total estimated fair value of consideration	$	378,054

Pursuant to the Merger Agreement, the outstanding equity awards of SeaSpine (including stock options and restricted stock units) were exchanged for awards of Orthofix. The Company issued 1,889,812 options to purchase shares of Orthofix common stock and 490,338 shares of time-based vesting restricted stock in the conversion of such awards. The estimated fair value of the portion of the SeaSpine awards for which the required service period had been completed at the time of the acquisition was treated as

purchase consideration. The remaining estimated fair value will be recorded as compensation expense over the remainder of the service period associated with the awards.

As of the date the consolidated financial statements were available to be issued, the Company was in the process of determining a preliminary allocation of the total estimated fair value of consideration to the fair value of the net assets acquired and residual goodwill; however, such allocation has not yet been finalized. A preliminary allocation of the purchase price to assets acquired and liabilities assumed will be reported in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2023; however, such allocation will be subject to completion of the Company’s valuation of the assets acquired and liabilities assumed, which the Company expects to complete within one year from the acquisition date.

In connection with the Merger, immediately after the closing of the acquisition on January 5, 2023, Orthofix repaid on behalf of SeaSpine all of the outstanding obligations in respect of principal, interest and fees under an Amended and Restated Credit Agreement, dated July 27, 2018, among SeaSpine and Project Maple Leaf Holdings ULC, as guarantors, and SeaSpine Orthopedics Corporation, SeaSpine, Inc., ISOTIS, Inc., SeaSpine Sales LLC, ISOTIS Orthobiologics, Inc., Theken Spine, LLC, SeaSpine Orthopedics Intermediate Co, Inc., 7D Surgical USA Inc. and 7D Surgical ULC, as borrowers, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and terminated all applicable commitments under such agreement.

In addition, on January 3, 2023, the Company borrowed $30.0 million under its $300.0 million secured revolving credit facility for working capital purposes, including to fund certain merger-related expenses. Further, an additional $15.0 million was borrowed on March 3, 2023.

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Significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Accounting Policies [Abstract]

Market risk

Market risk

In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures.

The financial statements for operations outside the U.S. are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other expense, net and were a loss of $3.3 million, a loss of $4.0 million, and a gain of $3.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Financial instruments and concentration of credit risk

Financial instruments and concentration of credit risk

Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified.

Cash, cash equivalents and restricted cash

Cash, cash equivalents, and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

In September 2019, approximately $0.5 million (based upon foreign exchange rates as of December 31, 2020) of the Company’s cash in Brazil was frozen upon request to satisfy a judgment related to an ongoing legal dispute with a former Brazilian distributor. In December 2021, the dispute was settled and the cash was disbursed to the former distributor.

Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2022, 2021, and 2020 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows:

(U.S. Dollars, in thousands)	2022		2021		2020
Supplemental disclosure of cash flow information:
Noncash investing activities:
Intangible assets acquired in asset acquisitions	$	2,000	$	—	$	1,575
Contingent consideration recognized at acquisition date		—		—		375

Advertising costs

Advertising costs

Advertising costs are expensed as incurred. Advertising costs are included within sales and marketing expense and totaled $0.5 million, $0.5 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Research and development costs

Research and development costs, including collaborative arrangements

Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. The Company recognized $0.0 million, $0.8 million and $0.8 million in research and development expense for the years ended December 31, 2022, 2021, and 2020, respectively.

In October 2020, the Company and Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery (“Neo Medical”), entered into a co-development agreement covering the parties’ joint development of single use instruments for cervical spine procedures. In connection with this agreement, the Company is responsible for the payment of variable costs associated with the development of the specified products. Research and development expenses incurred under this collaborative arrangement totaled $0.5 million, $0.6 million, and less than $0.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Recently adopted accounting standards and recently issued accounting pronouncements

Adoption of Accounting Standards Update (“ASU”) 2021-10—Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, which aims to increase the transparency of government assistance by requiring entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. The Company voluntarily elected to early adopt this standard for the year ended December 31, 2021, on a prospective basis. Adoption of this standard did not have a significant impact to the existing disclosures made in relation to government assistance received by the Company in 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").

Adoption of ASU 2019-12, Simplifying the accounting for income taxes

In December 2019, the FASB issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes. Additionally, the ASU simplifies U.S. GAAP by amending the requirements related to the accounting for "hybrid" tax regimes and also adding the requirement to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination and when it should be considered a separate transaction. The Company adopted this ASU effective January 1, 2021, with certain provisions applied retrospectively and other provisions applied prospectively. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Adoption of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and Subsequent Amendments

In June 2016, the FASB issued ASU 2016-13 (which was then further clarified in subsequent ASUs), which required that credit losses for certain types of financial instruments, including accounts receivable, be estimated based on expected credit losses among other changes. The Company adopted this ASU effective as of January 1, 2020, using a modified retrospective approach. See Note 15 for additional discussion of the Company’s adoption of Topic 326 and its resulting accounting policies.

Adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04, which eliminated Step 2 of the previous goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under ASU 2017-04, a goodwill impairment loss is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The Company adopted this ASU effective January 1, 2020, on a prospective basis and followed this guidance to measure the goodwill impairment of $11.8 million recorded in the year ended December 31, 2021.

Adoption of ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, which eliminated certain disclosures, such as the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and added new disclosure requirements for Level 3 measurements. The Company adopted this ASU effective January 1, 2020, with certain provisions of the ASU applied retrospectively and other provisions provided prospectively. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of operations, or cash flows; however, adoption of the ASU did result in modified disclosures in Note 12.

Adoption of ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued ASU 2018-15, which aligned the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract was not affected by the amendments in this update. The Company adopted this ASU effective January 1, 2020, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows, but is expected to impact future cloud computing arrangements.

Adoption of ASU 2020-04, Reference Rate Reform (Topic 848)

In March 2020, the FASB issued ASU 2020-04, which provided temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from the London Inter-Bank Offered Rate. The new guidance provided optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedge accounting, and other transactions affected by reference rate reform if certain criteria are met through December 31, 2022. The Company adopted this ASU effective March 12, 2020, the effective date of the ASU, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of operations, or cash flows.

Recently Issued Accounting Pronouncements

Topic	Description of Guidance	Effective Date	Status of Company's Evaluation
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08)	Requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606, which governs the accounting for revenue contracts with customers. The guidance is to be applied prospectively to acquisitions occurring on or after the effective date, with early adoption permitted.	January 1, 2023	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)	Clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively.	January 1, 2024	The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

Recent Law Changes

COVID-19 and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

In March 2020, the CARES Act entered into federal law, which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the Coronavirus Disease 2019 ("COVID-19") pandemic and to provide general support to the U.S. economy. The CARES Act, among other things, included provisions relating to the deferment of employer side social security payments and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act had no impact to the Company’s income tax expense/benefit reported within the consolidated statements of operations for each of

the years ended December 31, 2021 and 2020. The CARES Act also provided financial relief to the Company through other various programs, each of which are described in further detail below.

In April 2020, the Company received $13.9 million in funds from the Centers for Medicare & Medicaid Services (“CMS”) Accelerated and Advance Payment Program. For discussion of the Company’s accounting for these funds, see Note 15.

In April 2020, the Company also automatically received $4.7 million in funds from the U.S. Department of Health and Human Services as part of the Provider Relief Fund. The Company recognized this in-substance grant within other income for the year ended December 31, 2020.

In addition, as part of the CARES Act, the Company was permitted to defer all employer social security payroll tax payments for the remainder of the 2020 calendar year subsequent to the CARES Act being signed into federal law, such that 50% of the taxes could be deferred until December 31, 2021, with the remaining 50% deferred until December 31, 2022. As of December 31, 2020, the Company had deferred $0.6 million associated with this program, which was then voluntarily repaid, in full, in 2021.

Consolidated Appropriations Act of 2021 (the “Consolidated Appropriations Act”)

On December 27, 2020, the Consolidated Appropriations Act entered into federal law. The Consolidated Appropriations Act did not have a material impact to the Company’s income tax provision for the year ended December 31, 2021.

American Rescue Plan Act of 2021 (“the American Rescue Plan”)

On March 11, 2021, the American Rescue Plan entered into federal law. The American Rescue Plan, among other things, included provisions related to the deduction of executive compensation beginning in 2027. The American Rescue Plan had no impact to the Company’s condensed consolidated financial statement for the year ended December 31, 2021.

Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred.

Property, plant and equipment

. Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant, and equipment includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products.

The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $19.6 million, $20.2 million, and $19.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service.

The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which generally ranges from three to seven years.

Long-lived assets are evaluated for impairment annually or whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to fair value in the period identified.

The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment.

Intangible assets

Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets.

Goodwill

The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.

Leases

The Company determines if a contractual arrangement qualifies as a lease at inception. The Company’s leases primarily relate to facilities, vehicles, equipment, and certain contract manufacturing agreements. Lease assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used as a discount rate, based on the information available at the commencement date, in determining the present value of lease payments. Lease assets also include the impact of any prepayments made and are reduced by the impact of any lease incentives.

The Company does not recognize lease liabilities or lease assets on the balance sheet for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The current period short-term lease expense reasonably reflects our short-term lease commitments.

For all classifications of leases, the Company combines lease and non-lease components to account for them as a single lease component. Variable lease payments are excluded from the lease liability and recognized in the period in which the obligation is incurred. Additionally, lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

Commitments and contingencies

Contingencies policy

The Company records accruals for certain outstanding legal proceedings, investigations, or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates developments in legal proceedings, investigations, and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable on a quarterly basis. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred.

Revenue Recognition

Revenue Recognition

The Company accounts for a contract when there is (i) approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, (v) and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the promised goods or services. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The following sections discuss the Company’s revenue recognition policies by significant product category:

Bone Growth Therapies

Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue.

The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare. Revenue is recognized when the product is fitted to and accepted by the patient and all applicable documents required by the third-party payor have been obtained. Amounts paid by third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment.

Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods.

Biologics

Biologics revenue is largely attributable to the U.S. and is primarily related to a collaborative arrangement with MTF, which extends through December 31, 2032. Under this arrangement, the Company markets tissue for bone repair and reconstruction under the brand names Trinity Evolution and Trinity ELITE. Per the terms of the agreement, MTF sources the tissue, processes it to create the allografts, packages, and delivers the tissue to the customer. The Company has exclusive global marketing rights for the Virtuos Lyograft and Trinity ELITE tissue forms, exclusive rights to market FiberFuse Advanced, FiberFuse Strip, and certain other tissues in the U.S., non-exclusive marketing rights for certain other products, and receives marketing fees from MTF based on total sales. MTF is considered the primary obligor in these arrangements; therefore, the Company recognizes marketing service fees on a net basis within net sales upon shipment of the product to the customer and receipt of a confirming purchase order.

Spinal Implants and Global Orthopedics

Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from both commercial sales and stocking distributor arrangements.

Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Global Orthopedics products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital.

Other revenues within the Spinal Implants and Global Orthopedics product categories are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For stocking distributor arrangements, it is the Company’s policy to recognize revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price for revenue recognition is estimated based upon the Company’s historical collection experience with the stocking distributor.

Product Sales and Marketing Service Fees

The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2022, 2021, and 2020.

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Product sales	$	405,437	$	409,554	$	353,087
Marketing service fees		55,276		54,925		53,475
Net sales	$	460,713	$	464,479	$	406,562

Product sales primarily consists of the sale of Bone Growth Therapies, Spinal Implants, and Global Orthopedics products. Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics product category within the Global Spine reporting segment. Marketing service fees received from MTF were $55.3 million, or approximately 98% of total Biologics revenues, for the year ended December 31, 2022. As MTF is the single supplier for certain allografts in the Company’s Biologics portfolio, derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF’s continued access to donors or the Company’s ability to market these tissues may adversely impact the Company’s financial results.

Revenues exclude any value added or other local taxes, intercompany sales, and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were $4.2 million, $3.5 million, and $2.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Accounts receivable and related allowances

Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant.

The Company’s allowance for expected credit losses represents the portion of the receivable’s amortized cost basis that an entity does not expect to collect over the receivable’s contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

Earnings Per Share

The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards in certain periods with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method. The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 18).

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Significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of Supplemental Disclosure of Cash Flow Information

Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2022, 2021, and 2020 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows:

(U.S. Dollars, in thousands)	2022		2021		2020
Supplemental disclosure of cash flow information:
Noncash investing activities:
Intangible assets acquired in asset acquisitions	$	2,000	$	—	$	1,575
Contingent consideration recognized at acquisition date		—		—		375

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2022

Business Combinations [Abstract]

Summary of Fair Values of Assets Acquired and Liabilities Assumed

Purchase Price Allocations for Completed Acquisitions Discussed Above

(U.S. Dollars, in thousands)	FITBONE		Assigned Useful Life	Distributor Acquisition		Assigned Useful Life
Assets acquired
Inventories	$	528		$	—
Other long-term assets		—			—
Intangible assets
Customer relationships		800	15 years		7,340	5 years
Developed technology		4,500	8 years		—	N/A
In-process research and development ("IPR&D")		300	Indefinite		—	N/A
Trade name		600	15 years		—	N/A
Assembled workforce		—	N/A		235	5 years
Total identifiable assets acquired	$	6,728		$	7,575
Liabilities assumed		—			—
Goodwill		11,272			—
Total fair value of consideration transferred	$	18,000		$	7,575

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Inventories (Tables)

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred.

Work-in-process and finished products include material, labor, and production overhead costs. Field and consignment inventory, which represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third-party customers, such as distributors and hospitals, is included within finished products. Inventory previously reported as field/consignment inventory has been reclassified to finished products to conform with current period presentation.

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Raw materials	$	17,035	$	9,589
Work-in-process		19,243		15,096
Finished products		63,872		58,289
Inventories	$	100,150	$	82,974

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Property, plant and equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of Useful Lives of Assets

The useful lives of these assets are generally as follows:

	Years
Buildings	25 to 33
Plant and equipment	1 to 10
Instrumentation	3 to 4
Computer software	3 to 7
Furniture and fixtures	4 to 8

Schedule of Property, Plant and Equipment

The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service.

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Cost
Buildings	$	3,867		$	3,925
Plant and equipment		48,358			50,275
Instrumentation		92,607			100,515
Computer software		40,685			53,200
Furniture and fixtures		7,917			8,307
Construction in progress		4,515			2,597
Finance lease assets		23,276			23,397
Property, plant, and equipment, gross		221,225			242,216
Accumulated depreciation		(162,996	)		(182,964	)
Property, plant, and equipment, net	$	58,229		$	59,252

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Intangible assets (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets.

		December 31,
(U.S. Dollars, in thousands)	Weighted Average Amortization Period	2022			2021
Cost
Patents	10.0 years	$	40,108		$	44,561
Developed technology	9.8 years		43,699			43,979
IPR&D	Indefinite		300			300
Customer relationships	7.8 years		15,572			15,621
License and other	9.3 years		23,295			18,924
Trademarks—finite lived	10.0 years		1,875			1,839
	9.3 years		124,849			125,224
Accumulated amortization
Patents		$	(37,506	)	$	(41,408	)
Developed technology			(17,830	)		(13,409	)
Customer relationships			(6,938	)		(4,520	)
License and other			(14,386	)		(12,528	)
Trademarks—finite lived			(801	)		(693	)
			(77,461	)		(72,558	)
Intangible assets, net		$	47,388		$	52,666

Schedule of Future Amortization Expense

Future amortization expense for intangible assets is estimated as follows:

(U.S. Dollars, in thousands)	Amortization
2023	$	9,250
2024		8,705
2025		7,692
2026		6,658
2027		6,470
Thereafter		8,313
Total finite-lived intangible assets, net	$	47,088
Indefinite-lived intangible assets, net		300
Intangible assets, net	$	47,388

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Net Carrying Amount of Goodwill

The following table presents the net carrying value of goodwill as of December 31, 2022, and 2021, and a rollforward of such balances from December 31, 2021, by reportable segment:

(U.S. Dollars, in thousands)	December 31, 2021			Impairment		Currency Translation Adjustment			December 31, 2022
Global Spine	$	71,317		$	—	$	—		$	71,317
Global Orthopedics		11,822					(692	)		11,130
Goodwill, gross	$	83,139		$	—	$	(692	)	$	82,447
Accumulated impairment loss		(11,822	)		—		692			(11,130	)
Goodwill, net of accumulated impairment losses	$	71,317		$	—	$	—		$	71,317

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Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Summary of Lease Portfolio

A summary of the Company’s lease portfolio as of December 31, 2022, and 2021, is presented in the table below:

(U.S. Dollars, in thousands, except lease term and discount rate)	Classification	December 31, 2022			December 31, 2021
Assets
Operating leases	Other long-term assets	$	6,788		$	3,155
Finance leases	Property, plant and equipment, net		17,360			18,600
Total lease assets		$	24,148		$	21,755
Liabilities
Current
Operating leases	Other current liabilities	$	1,638		$	1,834
Finance leases	Current portion of finance lease liability		652			2,590
Long-term
Operating leases	Other long-term liabilities		5,376			1,443
Finance leases	Long-term portion of finance lease liability		19,239			19,890
Total lease liabilities		$	26,905		$	25,757
Weighted Average Remaining Lease Term
Operating leases		4.5 years			3.3 years
Finance leases		17.6 years			17.0 years
Weighted Average Discount Rate
Operating leases			4.0	%		2.6	%
Finance leases			4.4	%		4.2	%

Summary of Components of Lease Costs

The components of lease costs were as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Finance lease costs:
Amortization of right-of-use assets	$	1,238	$	2,049	$	1,766
Interest on finance lease liabilities		890		933		940
Operating lease costs		2,126		2,234		2,235
Short-term lease costs		152		213		230
Variable lease costs		932		815		673
Total lease costs	$	5,338	$	6,244	$	5,844

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

(U.S. Dollars, in thousands)	For the Year Ended December 31, 2022		For the Year Ended December 31, 2021		For the Year Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,805	$	4,627	$	4,299
Operating cash flows from finance leases		885		907		689
Financing cash flows from finance leases		2,594		537		323
Right-of-use assets obtained in exchange for lease obligations
Operating leases		5,603		589		959
Finance leases		—		149		1,949

Summary of Remaining Lease Liabilities

A summary of the Company’s remaining lease liabilities as of December 31, 2022, is included below:

(U.S. Dollars, in thousands)	Operating Leases			Finance Leases
2023	$	1,821		$	1,508
2024		1,587			1,538
2025		1,497			1,543
2026		1,411			1,562
2027		1,211			1,593
Thereafter		129			21,021
Total undiscounted value of lease liabilities		7,656			28,765
Less: Interest		(642	)		(8,874	)
Present value of lease liabilities	$	7,014		$	19,891
Current portion of lease liabilities	$	1,638		$	652
Long-term portion of lease liabilities		5,376			19,239
Total lease liabilities	$	7,014		$	19,891

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Other current liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Summary of Other Current Liabilities

	December 31,
(U.S. Dollars, in thousands)	2022		2021
Accrued expenses	$	9,611	$	7,151
Salaries, bonuses, commissions, and related taxes payable		18,531		23,552
Accrued distributor commissions		10,483		10,787
Accrued legal and settlement expenses		3,891		3,794
Contingent consideration liability		1,000		17,200
Short-term operating lease liability		1,638		1,834
Non-income taxes payable		6,586		4,655
Accelerated and advance payment program		—		4,791
Other payables		3,634		3,017
Other current liabilities	$	55,374	$	76,781

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Fair value measurements and investments (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis

The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows:

(U.S. Dollars, in thousands)	Balance December 31, 2022			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreement	$	7,140		$	—	$	—		$	7,140
Neo Medical preferred equity securities		6,084			—		6,084			—
Bone Biologics equity securities		—			—		—			—
Other investments		1,726			—		—			1,726
Total	$	14,950		$	—	$	6,084		$	8,866
Liabilities
Spinal Kinetics contingent consideration		—		$	—	$	—		$	—
Deferred compensation plan		(1,515	)		—		(1,515	)		—
Total	$	(1,515	)	$	—	$	(1,515	)	$	—

(U.S. Dollars, in thousands)	Balance December 31, 2021			Level 1		Level 2			Level 3
Assets
Neo Medical convertible loan agreements	$	7,148		$	—	$	—		$	7,148
Neo Medical preferred equity securities		5,413			—		5,413			—
Bone Biologics equity securities		309			309		—			—
Other Investments		1,505			—		—			1,505
Total	$	14,375		$	309	$	5,413		$	7,148
Liabilities
Spinal Kinetics contingent consideration	$	(17,200	)	$	—	$	—		$	(17,200	)
Deferred compensation plan		(1,314	)		—		(1,314	)		—
Total	$	(18,514	)	$	—	$	(1,314	)	$	(17,200	)

Schedule of Reconciliation of Carrying Value of Investments in Equity Securities

The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2022, and 2021:

(U.S. Dollars, in thousands)	2022		2021
Fair value of Neo Medical preferred equity securities at January 1	$	5,413	$	5,000
Conversion of loan into preferred equity securities		671		—
Foreign currency remeasurement recognized in other income, net		—		77
Unrealized gain recognized in other income (expense), net		—		336
Fair value of Neo Medical preferred equity securities at December 31		6,084		5,413
Cumulative unrealized gain on Neo Medical preferred equity securities		413		413

The remaining

Schedule of Changes in Valuation of Securities

The following table presents the changes in fair value recognized for each of the years ended December 31, 2022, 2021, and 2020:

(U.S. Dollars, in thousands)	2022			2021		2020
Bone Biologics equity securities at January 1	$	309		$	—	$	219
Fair value adjustments and impairments recognized in other income (expense), net		(183	)		309		(219	)
Proceeds from the disposition of equity securities		(126	)		—		—
Bone Biologics equity securities at December 31	$	—		$	309		—

Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Spinal Kinetics contingent consideration at January 1	$	17,200		$	35,400
Decrease in fair value recognized in acquisition-related amortization and remeasurement		(17,200	)		(3,200	)
Payment made		—			(15,000	)
Spinal Kinetics contingent consideration at December 31		—		$	17,200

Fair Value, Inputs, Level 3 [Member]

Schedule of Reconciliation For Convertible Loan Measured At Fair Value Using Significant Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan(s), measured at fair value using significant unobservable inputs (Level 3):

(U.S. Dollars, in thousands)	2022			2021
Fair value of Neo Medical Convertible Loans at January 1	$	7,148		$	7,160
Additions		—			671
Interest recognized in interest income, net		436			421
Foreign currency remeasurement recognized in other income (expense), net		(67	)		(162	)
Unrealized gain (loss) recognized in other comprehensive income (loss)		294			(942	)
Conversion of Additional Convertible Loan into preferred equity securities		(671	)		—
Fair value of Neo Medical Convertible Loan(s) at December 31		7,140			7,148
Amortized cost basis of Neo Medical Convertible Loan(s) at December 31		5,907			6,209

Schedule of Changes in Valuation of Securities

The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loan as of December 31, 2022:

(U.S. Dollars, in thousands)	Fair Value as of December 31, 2022		Unobservable inputs	Estimate
Neo Medical Convertible Loan	$	7,140	Cost of equity discount rate		18.0	%
			Implied volatility		73.9	%

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Shareholders' equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Components of Changes in Accumulated Other Comprehensive Income (Loss)

The components of and changes in accumulated other comprehensive income (loss) are as follows:

(U.S. Dollars, in thousands)	Currency Translation Adjustments			Neo Medical Convertible Loans			Other Investments		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(3,039	)	$	—		$	—	$	(3,039	)
Other comprehensive income		4,872			1,881			—		6,753
Income taxes		—			(462	)		—		(462	)
Balance at December 31, 2020	$	1,833		$	1,419		$	—	$	3,252
Other comprehensive loss		(2,544	)		(942	)		—		(3,486	)
Income taxes		—			234			—		234
Balance at December 31, 2021	$	(711	)	$	711		$	—	$	—
Other comprehensive income (loss)		(1,771	)		294			101		(1,376	)
Income taxes		—			—			—		—
Balance at December 31, 2022	$	(2,482	)	$	1,005		$	101	$	(1,376	)

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Revenue recognition and accounts receivable (Tables)

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Revenue Recognition And Accounts Receivable [Abstract]

Schedule of Net Sales

The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2022, 2021, and 2020.

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Product sales	$	405,437	$	409,554	$	353,087
Marketing service fees		55,276		54,925		53,475
Net sales	$	460,713	$	464,479	$	406,562

Allowances for Expected Credit Losses

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the years ended December 31, 2022, and 2021:

	For the year ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Allowance for expected credit losses beginning balance	$	4,944		$	4,848
Current period provision for expected credit losses		2,095			444
Write-offs charged against the allowance and other		(450	)		(126	)
Effect of changes in foreign exchange rates		(170	)		(222	)
Allowance for expected credit losses ending balance	$	6,419		$	4,944

Schedule of Changes in Contract Liability

The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the years ended December 31, 2022, and 2021:

	For the Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021
Contract liability beginning balance	$	4,791		$	13,851
Recoupment recognized in net sales		(4,791	)		(9,060	)
Contract liability ending balance	$	—		$	4,791

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Business segment information (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Schedule of Net Sales by Major Product Category by Reporting Segment

The table below presents net sales by major product category by reporting segment:

	Year Ended December 31,
	2022					2021					2020
(U.S. Dollars, in thousands)	Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales
Bone Growth Therapies	$	187,247		40.7	%	$	187,448		40.4	%	$	171,396		42.2	%
Spinal Implants		109,546		23.8	%		115,094		24.8	%		94,857		23.3	%
Biologics		56,381		12.2	%		56,421		12.1	%		55,482		13.6	%
Global Spine		353,174		76.7	%		358,963		77.3	%		321,735		79.1	%
Global Orthopedics		107,539		23.3	%		105,516		22.7	%		84,827		20.9	%
Net sales	$	460,713		100.0	%	$	464,479		100.0	%	$	406,562		100.0	%

Summary of EBITDA by Reporting Segment

The following table presents EBITDA, the primary metric used in managing the Company, by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Global Spine	$	60,649		$	58,014		$	63,036
Global Orthopedics		(4,037	)		3,374			(4,993	)
Corporate		(44,011	)		(31,691	)		(25,382	)
Total EBITDA		12,601			29,697			32,661
Depreciation and amortization		(29,019	)		(29,599	)		(30,546	)
Goodwill impairment		—			(11,756	)		—
Interest expense, net		(1,288	)		(1,837	)		(2,483	)
Loss before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

Schedule of Depreciation and Amortization by Reporting Segment

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine	$	18,213	$	17,548	$	18,362
Global Orthopedics		6,696		8,233		7,896
Corporate		4,110		3,818		4,288
Total	$	29,019	$	29,599	$	30,546

Summary of Net Sales by Geographic Destination

The following data includes net sales by geographic destination:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
U.S.	$	358,843	$	361,945	$	327,280
Italy		19,098		20,187		18,733
Germany		11,569		13,716		11,940
United Kingdom		10,171		10,552		7,147
France		10,377		10,475		8,354
Brazil		5,668		5,108		2,347
Others		44,987		42,496		30,761
Net sales	$	460,713	$	464,479	$	406,562

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Global Spine
U.S.	$	332,846	$	337,455	$	304,595
International		20,328		21,508		17,140
Total Global Spine		353,174		358,963		321,735
Global Orthopedics
U.S.	$	25,997		24,490		22,685
International		81,542		81,026		62,142
Total Global Orthopedics		107,539		105,516		84,827
Consolidated
U.S.		358,843		361,945		327,280
International		101,870		102,534		79,282
Net sales	$	460,713	$	464,479	$	406,562

Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area

The following data includes property, plant, and equipment by geographic area:

(U.S. Dollars, in thousands)	2022		2021
U.S.	$	44,802	$	45,090
Italy		8,535		9,412
Germany		3,115		2,544
United Kingdom		1,149		1,193
Brazil		85		91
Others		543		922
Total	$	58,229	$	59,252

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Acquisition-Related Amortization and Remeasurement (Tables)

12 Months Ended

Dec. 31, 2022

Acquisition Related Amortization And Remeasurement [Abstract]

Components of Acquisition-Related Amortization and Remeasurement

Components of acquisition-related amortization and remeasurement for the years ended December 31, 2022, 2021, and 2020, respectively, are as follows:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
Changes in fair value of contingent consideration	$	(17,200	)	$	(3,575	)	$	(7,300	)
Amortization of acquired intangibles		8,196			7,907			6,801
Acquired IPR&D		1,600			1,500			—
Impairment of Global Orthopedics goodwill		—			11,756			—
Total	$	(7,404	)	$	17,588		$	(499	)

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Share-based compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income

The following tables present the detail of share-based compensation expense by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2022, 2021, and 2020:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Cost of sales	$	826	$	779	$	705
Sales and marketing		3,865		3,385		3,620
General and administrative		12,917		10,289		10,624
Research and development		835		979		1,258
Total	$	18,443	$	15,432	$	16,207

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021		2020
Stock options	$	1,114	$	1,893	$	2,571
Time-based restricted stock awards and stock units		9,452		7,437		8,485
Performance-based / Market-based restricted stock units		6,425		4,414		3,509
Stock purchase plan		1,452		1,688		1,642
Total	$	18,443	$	15,432	$	16,207

Schedule of Assumptions Used in Determining Fair Value of Stock Options

The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically four years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during each of the years ended December 31, 2022, 2021, and 2020, is shown in the following table. The Company did not grant any time-based stock options in 2022.

	Year Ended December 31,
	2022		2021		2020
Assumptions:
Expected term (in years)		—	6.0		5.5
Expected volatility		—	34.4% – 34.8%		30.2% – 35.1%
Risk free interest rate		—	0.83% – 1.25%		0.28% – 1.65%
Dividend yield		—		—		—
Weighted average grant date fair value		—	$	12.33	$	8.74

Schedule of Stock Option Plans

Summaries of the status of the Company’s stock option plans as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2021		1,397,054		$	39.20
Granted		—		$	-
Exercised		(575	)	$	21.78
Forfeited or expired		(97,088	)	$	38.14
Outstanding at December 31, 2022		1,299,391		$	39.29		3.77
Vested and expected to vest at December 31, 2022		1,299,391		$	39.29		3.77
Exercisable at December 31, 2022		1,040,523		$	40.70		3.13

Schedule of Changes in Time-Based and Market-Based Restricted Stock Awards and Stock Units

A summary of the status of our time-based and performance-based and/or market-based restricted stock units as of December 31, 2022, and 2021, and changes during the year ended December 31, 2022, are presented below:

	Time-based Restricted Stock Awards and Stock Units					Performance-based and/or Market-based Restricted Stock Units
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021		559,368		$	40.03		323,081		$	48.56
Granted		500,222		$	29.81		255,327		$	33.57
Vested and settled		(152,735	)	$	41.03		—		$	—
Cancelled		(59,708	)	$	34.80		(62,176	)	$	55.70
Outstanding at December 31, 2022		847,147		$	34.18		516,232		$	40.29

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Income taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Provision for Income Taxes

Income (loss) before provision for income taxes consisted of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022			2021			2020
U.S.	$	(22,318	)	$	(5,987	)	$	5,556
Non-U.S.		4,612			(7,508	)		(5,924	)
Income (loss) before income taxes	$	(17,706	)	$	(13,495	)	$	(368	)

Schedule of Provision for Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2022		2021			2020
U.S.
Current	$	1,151	$	(607	)	$	(15,054	)
Deferred		67		24,292			(29	)
		1,218		23,685			(15,083	)
Non-U.S.
Current		578		1,009			1,382
Deferred		247		190			10,816
		825		1,199			12,198
Income tax expense (benefit)	$	2,043	$	24,884		$	(2,885	)

Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations

The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2022, 2021, and 2020, consist of the following:

	2022						2021						2020
(U.S. Dollars, in thousands, except percentages)	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	(3,718	)		21.0	%	$	(2,834	)		21.0	%	$	(77	)		21.0	%
State taxes, net of U.S. federal benefit		(1,312	)		7.4			(24	)		0.2			1,151			(312.8	)
Foreign rate differential, including withholding taxes		475			(2.7	)		480			(3.6	)		(147	)		39.9
Valuation allowances, net		7,638			(43.1	)		27,819			(206.1	)		14,514			(3,944.0	)
Foreign income inclusions, net		1,018			(5.7	)		—			—			—			—
Research credits		(750	)		4.2			(537	)		4.0			(982	)		266.8
Unrecognized tax benefits, net of settlements		(599	)		3.4			(1,363	)		10.1			(17,321	)		4,706.8
Equity compensation		1,441			(8.1	)		1,091			(8.1	)		1,657			(450.3	)
Executive compensation		697			(3.9	)		456			(3.4	)		375			(101.9	)
Contingent consideration		(3,316	)		18.7			(640	)		4.7			(1,460	)		396.7
Other, net		469			(2.6	)		436			(3.2	)		(595	)		161.8
Income tax expense (benefit) /effective rate	$	2,043			(11.5	)%	$	24,884			(184.4	)%	$	(2,885	)		784.0	%

Schedule of Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities are as follows:

	December 31,
(U.S. Dollars, in thousands)	2022			2021
Intangible assets and goodwill	$	5,807		$	5,245
Inventories and related reserves		17,819			17,097
Deferred revenue and cost of goods sold		3,642			3,888
Other accruals and reserves		2,756			3,082
Accrued compensation		8,795			7,784
Provision for expected credit losses		1,253			1,217
Net operating loss and tax credit carryforwards		40,676			42,546
R&D capitalization		4,353			—
Lease liabilities		6,440			5,691
Other, net		3,767			852
Total deferred tax assets		95,308			87,402
Valuation allowance		(83,797	)		(76,725	)
Deferred tax asset, net of valuation allowance	$	11,511		$	10,677
Withholding taxes		(10	)		(10	)
Property, plant, and equipment		(5,516	)		(4,809	)
Right-of-use lease assets		(5,771	)		(5,165	)
Deferred tax liability		(11,297	)		(9,984	)
Net deferred tax assets	$	214		$	693
Reported as:
Deferred income tax assets (classified within other long-term assets)		1,470			1,771
Deferred income tax liabilities (classified within other long-term liabilities)		(1,256	)		(1,078	)
Net deferred tax assets	$	214		$	693

The Company historically presented deferred income tax assets as a separate and discrete line item on its consolidated balance sheet; however, as the significance of the asset has decreased as a result of the recognition of valuation allowances, the Company has reclassified this balance to be included within other long-term assets. As such, the prior year balance has been reclassified to conform to current period presentation.

Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties)

A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2022, and 2021, is shown below:

(U.S. Dollars, in thousands)	2022			2021
Balance as of January 1,	$	3,462		$	4,629
Additions for current year tax positions		46			45
Increases for prior year tax positions		16			110
Settlements of prior year tax positions		(144	)		—
Expiration of statutes		(1,637	)		(1,322	)
Balance as of December 31,	$	1,743		$	3,462

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Earnings per share (EPS) (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS

The following is a reconciliation of the weighted average shares used in the diluted EPS computations:

	Year Ended December 31,
	2022		2021		2020
Weighted average common shares-basic		20,053,548		19,690,593		19,267,920
Effect of diluted securities:
Unexercised stock options and employee stock purchase plan		—		—		51,951
Unvested time-based restricted stock units		—		—		71,847
Weighted average common shares-diluted		20,053,548		19,690,593		19,391,718

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Subsequent Events (Tables)

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Schedule of Estimated Fair Value of Consideration Associated with Merger

The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of:

(U.S. Dollars, in thousands, except shares and price per share)
Share Consideration:
Orthofix common shares to be issued in exchange for SeaSpine common shares		16,104,854
Orthofix closing price per share as of January 4, 2023	$	22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$	366,546
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards		11,508
Total estimated fair value of consideration	$	378,054

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Business, basis of presentation, COVID-19 update, and CARES Act - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Business And Basis Of Presentation [Line Items]
CARES Act of 2020 funds received	$ 13,900	$ (4,791)	$ (9,060)	$ 13,851
CARES Act of 2020 deferred taxes percentage		50.00%	50.00%
Deferred tax payments				$ 600
U.S. Department of Health and Human Services [Member]
Business And Basis Of Presentation [Line Items]
CARES Act of 2020 funds received	$ 4,700

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Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2019
Summary Of Significant Accounting Policies [Line Items]
Freezing amount in cash resulted from court pending legal action issued				$ 0.5
Advertising costs	$ 0.5	$ 0.5	$ 0.9
Musculoskeletal Transplant Foundation ("MTF") [Member]
Summary Of Significant Accounting Policies [Line Items]
Expenditures for other research and development	0.0	0.8	0.8
Neo Medical SA [Member]
Summary Of Significant Accounting Policies [Line Items]
Expenditures for other research and development	0.5	0.6
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Transactional foreign currency gains and (losses), including those generated from intercompany operations	$ (3.3)	$ (4.0)	3.9
Maximum [Member] | Neo Medical SA [Member]
Summary Of Significant Accounting Policies [Line Items]
Expenditures for other research and development			$ 0.1

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Significant accounting policies - Schedule of Supplemental Disclosure of Cash Flow Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2020
Noncash investing activities:
Intangible assets acquired in asset acquisitions	$ 2,000	$ 1,575
Contingent consideration recognized at acquisition date		$ 375

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Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Impairment of goodwill			$ 11,756
CARES Act of 2020 funds received	$ 13,900	$ (4,791)	$ (9,060)	$ 13,851
CARES Act of 2020 deferred taxes percentage		50.00%	50.00%
Deferred tax payments				$ 600
U.S. Department of Health and Human Services [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
CARES Act of 2020 funds received	$ 4,700
ASU 2017-04 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Jan. 01, 2020
Impairment of goodwill			$ 11,800
Accounting Standards Update 2018-13
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Jan. 01, 2020
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]		true
Accounting Standards Update 2018-15
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Jan. 01, 2020
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]		true
ASU 2020-04 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Mar. 12, 2020
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]		true
ASU 2016-13 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Jan. 01, 2020
ASU 2019-12 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
Change in Accounting Principle, Accounting Standards Update, Adoption Date		Jan. 01, 2021
ASU 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
ASU 2018-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true

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Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Jul. 31, 2020	Mar. 31, 2020	Dec. 31, 2020
Business Acquisition [Line Items]
Cash consideration paid for assets acquired			$ 18,000
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member]
Business Acquisition [Line Items]
Date of assets purchase agreement		Mar. 31, 2020
Cash consideration paid for assets acquired		$ 18,000
DR Medical, LLC and MedSelect Corporation [Member]
Business Acquisition [Line Items]
Consideration transferred	$ 7,600

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Acquisitions - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Jul. 31, 2020	Mar. 31, 2020	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill			$ 71,317	$ 71,317
Assigned Useful Life			9 years 3 months 18 days
In-Process Research and Development ("IPR&D") [Member]
Business Acquisition [Line Items]
Assigned Useful Life			Indefinite
DR Medical, LLC and MedSelect Corporation [Member]
Business Acquisition [Line Items]
Total identifiable assets acquired	$ 7,575
Total fair value of consideration transferred	7,575
FITBONE Asset Purchase Agreement [Member] | Wittenstein [Member]
Business Acquisition [Line Items]
Inventories		$ 528
Total identifiable assets acquired		6,728
Goodwill		11,272
Total fair value of consideration transferred		18,000
FITBONE Asset Purchase Agreement [Member] | Wittenstein [Member] | In-Process Research and Development ("IPR&D") [Member]
Business Acquisition [Line Items]
Indefinite lived intangible assets, net acquired		$ 300
Assigned Useful Life		Indefinite
Developed Technology [Member]
Business Acquisition [Line Items]
Assigned Useful Life			9 years 9 months 18 days
Developed Technology [Member] | FITBONE Asset Purchase Agreement [Member] | Wittenstein [Member]
Business Acquisition [Line Items]
Finite lived intangible assets, net acquired		$ 4,500
Assigned Useful Life		8 years
Customer Relationships [Member]
Business Acquisition [Line Items]
Assigned Useful Life			7 years 9 months 18 days
Customer Relationships [Member] | DR Medical, LLC and MedSelect Corporation [Member]
Business Acquisition [Line Items]
Finite lived intangible assets, net acquired	$ 7,340
Assigned Useful Life	5 years
Customer Relationships [Member] | FITBONE Asset Purchase Agreement [Member] | Wittenstein [Member]
Business Acquisition [Line Items]
Finite lived intangible assets, net acquired		$ 800
Assigned Useful Life		15 years
Trade name [Member] | FITBONE Asset Purchase Agreement [Member] | Wittenstein [Member]
Business Acquisition [Line Items]
Finite lived intangible assets, net acquired		$ 600
Assigned Useful Life		15 years
Assembled Workforce [Member] | DR Medical, LLC and MedSelect Corporation [Member]
Business Acquisition [Line Items]
Finite lived intangible assets, net acquired	$ 235
Assigned Useful Life	5 years

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Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 17,035	$ 9,589
Work-in-process	19,243	15,096
Finished products	63,872	58,289
Inventories	$ 100,150	$ 82,974

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Property, Plant and Equipment - Schedule of Useful Lives of the Assets (Detail)	12 Months Ended
	Dec. 31, 2022
Minimum [Member] | Buildings [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	25 years
Minimum [Member] | Plant and equipment [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	1 year
Minimum [Member] | Instrumentation [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	3 years
Minimum [Member] | Computer software [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	3 years
Minimum [Member] | Furniture and fixtures [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	4 years
Maximum [Member] | Buildings [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	33 years
Maximum [Member] | Plant and equipment [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	10 years
Maximum [Member] | Instrumentation [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	4 years
Maximum [Member] | Computer software [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	7 years
Maximum [Member] | Furniture and fixtures [Member]
Property Plant And Equipment [Line Items]
Useful life, in years	8 years

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Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Depreciation expense	$ 19.6	$ 20.2	$ 19.3
Internal-use Software [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Estimated useful life	3 years
Internal-use Software [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Estimated useful life	7 years

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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	$ 221,225	$ 242,216
Accumulated depreciation	(162,996)	(182,964)
Property, plant, and equipment, net	58,229	59,252
Buildings [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	3,867	3,925
Plant and equipment [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	48,358	50,275
Instrumentation [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	92,607	100,515
Computer software [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	40,685	53,200
Furniture and fixtures [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	7,917	8,307
Construction in progress [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	4,515	2,597
Finance lease assets [Member]
Property Plant And Equipment [Line Items]
Property, plant, and equipment, gross	$ 23,276	$ 23,397

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Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 124,849	$ 125,224
Accumulated amortization	(77,461)	(72,558)
Intangible assets, net	$ 47,388	52,666
Weighted Average Amortization Period	9 years 3 months 18 days
Patents [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 40,108	44,561
Accumulated amortization	$ (37,506)	(41,408)
Weighted Average Amortization Period	10 years
Developed Technology [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 43,699	43,979
Accumulated amortization	$ (17,830)	(13,409)
Weighted Average Amortization Period	9 years 9 months 18 days
Customer Relationships [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 15,572	15,621
Accumulated amortization	$ (6,938)	(4,520)
Weighted Average Amortization Period	7 years 9 months 18 days
Licenses and Other [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 23,295	18,924
Accumulated amortization	$ (14,386)	(12,528)
Weighted Average Amortization Period	9 years 3 months 18 days
Trademarks-Finite Lived [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 1,875	1,839
Accumulated amortization	$ (801)	(693)
Weighted Average Amortization Period	10 years
In-Process Research and Development ("IPR&D") [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 300	$ 300
Weighted Average Amortization Period	Indefinite

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Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Finite And Indefinite Lived Intangible Assets [Abstract]
Amortization of intangible assets	$ 9.4	$ 9.4	$ 11.2

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Intangible Assets - Schedule of Future Amortization Expense (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 9,250
2024	8,705
2025	7,692
2026	6,658
2027	6,470
Thereafter	8,313
Total finite-lived intangible assets, net	47,088
Indefinite-lived intangible assets, net	300
Intangible assets, net	$ 47,388	$ 52,666

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Goodwill - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Goodwill [Line Items]
Impairment of goodwill		$ 11,756,000
Global Orthopedics [Member]
Goodwill [Line Items]
Impairment of goodwill		$ 11,756,000
Global Spine [Member]
Goodwill [Line Items]
Impairment of goodwill	$ 0

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Goodwill - Schedule of Net Carrying Amount of Goodwill (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Goodwill [Line Items]
Goodwill, gross Beginning balance	$ 83,139
Goodwill gross, Foreign Currency Translation Adjustment	(692)
Goodwill, gross Ending balance	82,447
Accumulated impairment loss Beginning balance	(11,822)
Accumulated Impairment loss, Currency Translation Adjustment	692
Accumulated impairment loss Ending balance	(11,130)
Goodwill, net Beginning balance	71,317
Goodwill, net Ending balance	71,317
Global Spine [Member]
Goodwill [Line Items]
Goodwill, gross Beginning balance	71,317
Goodwill, gross Ending balance	71,317
Global Orthopedics [Member]
Goodwill [Line Items]
Goodwill, gross Beginning balance	11,822
Goodwill gross, Foreign Currency Translation Adjustment	(692)
Goodwill, gross Ending balance	$ 11,130

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Leases - Summary of Lease Portfolio (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets
Operating leases	$ 6,788	$ 3,155
Operating lease, right-of-use asset, statement of financial position [Extensible List]	Other long-term assets	Other long-term assets
Finance leases	$ 17,360	$ 18,600
Finance lease, right-of-use asset, statement of financial position [Extensible List]	Property, plant and equipment net	Property, plant and equipment net
Total lease assets	$ 24,148	$ 21,755
Current
Operating leases	$ 1,638	$ 1,834
Operating lease, liability, current, statement of financial position [Extensible List]	Other current liabilities	Other current liabilities
Finance leases	$ 652	$ 2,590
Long-term
Operating leases	$ 5,376	$ 1,443
Operating lease, liability, noncurrent, statement of financial position [Extensible List]	Other long-term liabilities	Other long-term liabilities
Finance leases	$ 19,239	$ 19,890
Total lease liabilities	$ 26,905	$ 25,757
Weighted Average Remaining Lease Term
Operating leases	4 years 6 months	3 years 3 months 18 days
Finance leases	17 years 7 months 6 days	17 years
Weighted Average Discount Rate
Operating leases	4.00%	2.60%
Finance leases	4.40%	4.20%

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Leases - Summary of Components of Lease Costs (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Finance lease costs:
Amortization of right-of-use assets	$ 1,238	$ 2,049	$ 1,766
Interest on finance lease liabilities	890	933	940
Operating lease costs	2,126	2,234	2,235
Short-term lease costs	152	213	230
Variable lease costs	932	815	673
Total lease costs	$ 5,338	$ 6,244	$ 5,844

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Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 3,805	$ 4,627	$ 4,299
Operating cash flows from finance leases	885	907	689
Financing cash flows from finance leases	2,594	537	323
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$ 5,603	589	959
Finance leases		$ 149	$ 1,949

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Leases - Summary of Remaining Lease Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Operating Leases
2023	$ 1,821
2024	1,587
2025	1,497
2026	1,411
2027	1,211
Thereafter	129
Total undiscounted value of lease liabilities	7,656
Less: Interest	(642)
Present value of lease liabilities	7,014
Current portion of lease liabilities	1,638	$ 1,834
Long-term portion of lease liabilities	5,376	1,443
Total lease liabilities	7,014
Finance Leases
2022	1,508
2023	1,538
2024	1,543
2025	1,562
2026	1,593
Thereafter	21,021
Total undiscounted value of lease liabilities	28,765
Less: Interest	(8,874)
Present value of lease liabilities	19,891	19,891
Current portion of finance lease liability	652	2,590
Long-term portion of finance lease liability	19,239	19,890
Total lease liabilities	$ 19,891	$ 19,891

XML

Other Current Liabilities - Summary of Other Current Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued expenses	$ 9,611	$ 7,151
Salaries, bonuses, commissions and related taxes payable	18,531	23,552
Accrued distributor commissions	10,483	10,787
Accrued legal and settlement expenses	3,891	3,794
Contingent consideration liability	1,000	17,200
Short-term operating lease liability	1,638	1,834
Non-income taxes payable	6,586	4,655
Accelerated and advance payment program		4,791
Other payables	3,634	3,017
Other current liabilities	$ 55,374	$ 76,781

XML

Long-Term Debt - Additional Information (Detail)		12 Months Ended
	Oct. 25, 2019 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 03, 2023 USD ($)	Jan. 03, 2023 USD ($)	Dec. 31, 2022 EUR (€)	Apr. 30, 2020 USD ($)	Aug. 31, 2015 USD ($)
Debt Instrument [Line Items]
Repayment of borrowings				$ 100,000,000
Debt issuance costs paid		$ 92,000	$ 948,000	1,537,000
Cash paid to interest		1,400,000	1,500,000	1,900,000
Italy [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		5,900,000	6,300,000				€ 5,500,000
Subsequent Event [Member]
Debt Instrument [Line Items]
Amount outstanding under lines of credit					$ 15,000,000.0	$ 30,000,000.0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Amount outstanding under lines of credit								$ 100,000,000.0
Revolving Credit Facility [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 300,000,000.0
Amended Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 300,000,000.0
Credit agreement maturity date	Oct. 25, 2024
Amount outstanding under lines of credit		0	0
Maximum borrowing capacity available for issuance of letters of credit	$ 50,000,000.0
Maximum additional borrowing capacity	$ 150,000,000.0
Line of credit facility, percentage of maximum incremental amount on consolidated EBITDA	350.00%
Borrowers ability to increase amount of line of credit facility, Description	The Borrowers have the ability to increase the amount of the Facility, which increases may take the form of increases to the revolving credit commitments or the issuance of new term A loans, by an aggregate amount of up to the greater of $150.0 million or an incremental amount such that the total amount of the Facility does not exceed 350% of consolidated EBITDA of the Company (as determined for the four fiscal quarter period most recently ended for which financial statements are available), upon satisfaction of customary conditions precedent for such increases or incremental loans and receipt of additional commitments by one or more existing or new lenders.
Line of credit, leverage ratio	3.5
Line of credit, interest coverage ratio	300.00%
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity available for working capital and other general corporate purposes	$ 150,000,000.0
Line of credit facility, unused commitment fee percentage	0.25%
Line of credit, leverage ratio	4.0
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Margin on variable rate	2.25%
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Margin on variable rate	1.25%
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility, unused commitment fee percentage	0.15%
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Margin on variable rate	1.25%
Amended Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Margin on variable rate	0.25%
2015 Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				125,000,000.0
Debt issuance costs paid		1,500,000
Debt issuance costs capitalized									$ 1,800,000
Debt issuance costs, net of accumulated amortization		700,000	1,000,000.0
Debt issuance costs amortized or expensed		$ 400,000	$ 400,000	$ 400,000

XML

Fair Value Measurements and Investments- Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	$ 14,950	$ 14,375
Deferred compensation plan, Liabilities	(1,515)	(1,314)
Liabilities fair value, Total	(1,515)	(18,514)
Spinal Kinetics [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent consideration		(17,200)
Convertible Loan Agreements [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	7,140	7,148
Preferred Equity Securities [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084	5,413
Equity Securities [Member] | Bone Biologics Inc [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value		309
Other Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	1,726	1,505
Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value		309
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Bone Biologics Inc [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value		309
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084	5,413
Deferred compensation plan, Liabilities	(1,515)	(1,314)
Liabilities fair value, Total	(1,515)	(1,314)
Fair Value, Inputs, Level 2 [Member] | Preferred Equity Securities [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	6,084	5,413
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	8,866	7,148
Liabilities fair value, Total		(17,200)
Fair Value, Inputs, Level 3 [Member] | Spinal Kinetics [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Contingent consideration		(17,200)
Fair Value, Inputs, Level 3 [Member] | Convertible Loan Agreements [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	7,140	7,148
Fair Value, Inputs, Level 3 [Member] | Other Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets fair value	$ 1,726	$ 1,505

XML

Fair Value Measurements and Investments - Additional Information (Detail) SFr in Millions		12 Months Ended
	Oct. 01, 2020 USD ($)	Dec. 31, 2021 USD ($)	Apr. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 10, 2021 USD ($)	Oct. 10, 2021 CHF (SFr)	Oct. 01, 2020 CHF (SFr)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Convertible loans	$ 5,000,000.0
Maximum [Member] | Spinal Kinetics [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Future milestone payments			$ 60,000,000.0
US Food And Drug Administration [Member] | Spinal Kinetics [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Future milestone payments			15,000,000.0
Revenue Milestone [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Future milestone payments		$ 15,000,000.0
Revenue Milestone [Member] | Spinal Kinetics [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Future milestone payments			$ 45,000,000.0
Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Convertible loans					$ 700,000	SFr 0.6	SFr 4.6
Convertible loans interest rate	8.00%						8.00%
Maturity date	Oct. 01, 2024
Convertible loan credit losses				$ 0
Preferred Stock [Member] | Neo Medical [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Amount of Preferred stock consideration	$ 5,000,000.0
Unrealized gain (loss) on equity investments		$ 336,000

XML

Fair Value Measurements and Investments - Schedule of Reconciliation of Carrying Value of Investments in Equity Securities (Detail) - Preferred Stock [Member] - Neo Medical [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value of equity securities beginning balance	$ 5,413	$ 5,000
Conversion Of Loan Into Preferred Equity Shares	671
Foreign currency remeasurement recognized in other income, net		77
Unrealized gain recognized in other income (expense), net		336
Fair value of equity securities Ending balance	6,084	5,413
Cumulative unrealized gain on Neo Medical preferred equity securities	$ 413	$ 413

XML

Fair Value Measurements and Investments - Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Neo Medical [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value of convertible loans beginning balance	$ 7,148	$ 7,160
Additions		671
Interest recognized in interest income, net	436	421
Foreign currency remeasurement recognized in other income (expense), net	(67)	(162)
Unrealized gain (loss) recognized in other comprehensive income (loss)	294	(942)
Conversion of Additional Convertible Loan into preferred equity securities	(671)
Fair value of convertible loans ending balance	7,140	7,148
Amortized cost basis of Neo Medical Convertible Loans at December 31	$ 5,907	$ 6,209

XML

Fair Value Measurements and Investments - Schedule of Valuation Methodology and Unobservable Inputs for Level 3 Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Spinal Kinetics [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Spinal Kinetics contingent consideration at January 1	$ 17,200	$ 35,400
Decrease in fair value recognized in acquisition-related amortization and remeasurement	(17,200)	(3,200)
Payment made		(15,000)
Spinal Kinetics contingent consideration at December 31		$ 17,200
Neo Medical [Member]
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Neo Medical Convertible Loans	$ 7,140
Fair value discount rate	18.00%
Fair value implied volatility	73.90%

XML

Fair Value Measurements and Investments - Schedule of Change in Valuation of Securities (Detail) - Bone Biologics Inc [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Equity securities beginning balance	$ 309		$ 219
Fair value adjustments and impairments recognized in other income (expense), net	(183)	$ 309	$ (219)
Proceeds from the disposition of equity securities	$ 126
Equity securities ending balance		$ 309

XML

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Accrued other long-term liabilities	$ 5.9
Estimated sales and marketing expense (benefit)	$ 1.2	$ 1.2	$ 1.5

XML

Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 336,934	$ 356,864	$ 327,631
Ending Balance	336,860	336,934	356,864
Other Investments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive income (loss)	101
Ending Balance	101
Convertible Loan [Member] | Neo Medical SA [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	711	1,419
Other comprehensive income (loss)	294	(942)	1,881
Income taxes		234	(462)
Ending Balance	1,005	711	1,419
Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(711)	1,833	(3,039)
Other comprehensive income (loss)	(1,771)	(2,544)	4,872
Ending Balance	(2,482)	(711)	1,833
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance		3,252	(3,039)
Other comprehensive income (loss)	(1,376)	(3,486)	6,753
Income taxes		$ 234	(462)
Ending Balance	$ (1,376)		$ 3,252

XML

Revenue Recognition and Accounts Receivable - Schedule of Net Sales (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue Recognition [Abstract]
Product sales	$ 405,437	$ 409,554	$ 353,087
Marketing service fees	55,276	54,925	53,475
Net sales	$ 460,713	$ 464,479	$ 406,562

XML

Revenue Recognition and Accounts Receivable - Additional Information (Detail) € in Millions	1 Months Ended			12 Months Ended
	Mar. 31, 2022	Apr. 30, 2021	Apr. 30, 2020 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 EUR (€)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 EUR (€)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 EUR (€)
Revenue Recognition And Accounts Receivable [Line Items]
Marketing service fees				$ 55,276,000		$ 54,925,000		$ 53,475,000
Cost of sales				123,544,000		114,914,000		101,889,000
Sale of receivables				9,600,000	€ 9.2	9,900,000	€ 8.4	9,600,000	€ 8.3
Related fees recorded as interest expense				300,000		200,000		300,000
CARES Act of 2020 funds received			$ 13,900,000	(4,791,000)		(9,060,000)		13,851,000
Medicare recoupment	0.50	0.25
Contract liability, total						4,791,000		13,851,000
Other Contract Assets [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Other contract assets impairment				0		0
Other Long-Term Assets [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Other contract assets				1,100,000		1,400,000
Shipping and Handling Costs [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Cost of sales				4,200,000		$ 3,500,000		$ 2,400,000
Biologics [Member]
Revenue Recognition And Accounts Receivable [Line Items]
Marketing service fees				$ 55,300,000
Marketing service fee as percentage of segment revenues				98.00%	98.00%

XML

Revenue Recognition and Accounts Receivable - Schedule of Allowance for Expected Credit Losses (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue Recognition [Abstract]
Allowance for expected credit losses beginning balance	$ 4,944	$ 4,848
Current period provision for expected credit losses	2,095	444	$ 199
Write-offs charged against the allowance and other	(450)	(126)
Effect of changes in foreign exchange rates	(170)	(222)
Allowance for expected credit losses ending balance	$ 6,419	$ 4,944	$ 4,848

XML

Revenue Recognition and Accounts Receivable - Schedule of Changes In Contract Liability (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenue Recognition [Abstract]
Contract liability beginning balance	$ 4,791	$ 13,851
Recoupment recognized in net sales	$ (4,791)	(9,060)
Contract liability ending balance		$ 4,791

XML

Business Segment Information - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2022 Segment
Segment Reporting [Abstract]
Number of reporting segments	2

XML

Business Segment Information - Schedule of Net Sales by Major Product Category by Reporting Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Net Sales	$ 460,713	$ 464,479	$ 406,562
Percent of Total Net Sales	100.00%	100.00%	100.00%
Bone Growth Therapies [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 187,247	$ 187,448	$ 171,396
Percent of Total Net Sales	40.70%	40.40%	42.20%
Spinal Implants [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 109,546	$ 115,094	$ 94,857
Percent of Total Net Sales	23.80%	24.80%	23.30%
Biologics [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 56,381	$ 56,421	$ 55,482
Percent of Total Net Sales	12.20%	12.10%	13.60%
Global Spine [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 353,174	$ 358,963	$ 321,735
Percent of Total Net Sales	76.70%	77.30%	79.10%
Global Orthopedics [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 107,539	$ 105,516	$ 84,827
Percent of Total Net Sales	23.30%	22.70%	20.90%

XML

Business Segment Information - Summary of EBIDTA by Reporting Segment (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Total EBITDA	$ 12,601,000	$ 29,697,000	$ 32,661,000
Depreciation and amortization	(29,019,000)	(29,599,000)	(30,546,000)
Goodwill, Impairment		(11,756,000)
Interest expense, net	(1,288,000)	(1,837,000)	(2,483,000)
Income (loss) before income taxes	(17,706,000)	(13,495,000)	(368,000)
Global Spine [Member]
Segment Reporting Information [Line Items]
Goodwill, Impairment	0
Global Orthopedics [Member]
Segment Reporting Information [Line Items]
Goodwill, Impairment		(11,756,000)
Operating Segments [Member] | Global Spine [Member]
Segment Reporting Information [Line Items]
Total EBITDA	60,649,000	58,014,000	63,036,000
Operating Segments [Member] | Global Orthopedics [Member]
Segment Reporting Information [Line Items]
Total EBITDA	(4,037,000)	3,374,000	(4,993,000)
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Total EBITDA	$ (44,011,000)	$ (31,691,000)	$ (25,382,000)

XML

Business Segment Information - Schedule of Depreciation and Amortization by Reporting Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 29,019	$ 29,599	$ 30,546
Operating Segments [Member] | Global Spine [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	18,213	17,548	18,362
Operating Segments [Member] | Global Orthopedics [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	6,696	8,233	7,896
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 4,110	$ 3,818	$ 4,288

XML

Business Segment Information - Summary of Net Sales by Geographic Destination (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 460,713	$ 464,479	$ 406,562
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	358,843	361,945	327,280
Italy [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	19,098	20,187	18,733
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	11,569	13,716	11,940
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	10,171	10,552	7,147
France [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	10,377	10,475	8,354
Brazil [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	5,668	5,108	2,347
Others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 44,987	$ 42,496	$ 30,761

XML

Business Segment Information - Summary of Net Sales by Geographic Destination for Each Reporting Segment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 460,713	$ 464,479	$ 406,562
Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	353,174	358,963	321,735
Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	107,539	105,516	84,827
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	358,843	361,945	327,280
U.S. [Member] | Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	332,846	337,455	304,595
U.S. [Member] | Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	25,997	24,490	22,685
International [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	101,870	102,534	79,282
International [Member] | Global Spine [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	20,328	21,508	17,140
International [Member] | Global Orthopedics [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Net sales	$ 81,542	$ 81,026	$ 62,142

XML

Business Segment Information - Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	$ 58,229	$ 59,252
U.S. [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	44,802	45,090
Italy [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	8,535	9,412
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	3,115	2,544
United Kingdom [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	1,149	1,193
Brazil [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	85	91
Others [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment net	$ 543	$ 922

XML

Acquisition-Related Amortization and Remeasurement - Components of Acquisition-Related Amortization and Remeasurement (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Research And Development Arrangement Contract To Perform For Others [Line Items]
Changes in fair value of contingent consideration	$ (17,200)	$ (3,575)	$ (7,300)
Amortization of acquired intangibles	8,196	7,907	6,801
Acquired IPR&D	1,600	1,500
Impairment of goodwill		11,756
Total	$ (7,404)	17,588	$ (499)
Global Orthopedics [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Impairment of goodwill		$ 11,756

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Acquisition-Related Amortization and Remeasurement - Additional Information (Details) - USD ($) $ in Millions		1 Months Ended			3 Months Ended
	Dec. 29, 2022	May 31, 2022	Apr. 30, 2021	Feb. 28, 2021	Sep. 30, 2022	Dec. 31, 2022	Jul. 30, 2022
License Agreement [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Upfront payment payable with additional payments							$ 1.4
Upfront payment					$ 1.4
Consideration agreed to pay with additional payments contingent upon reaching future commercialization and revenue-based milestones	$ 0.2
Initial payment accrued						$ 0.2
Contingent Payment Upon Reaching FDA Milestone			$ 4.0
Amount Received for the year		$ 1.5	$ 0.5
Contingent consideration milestone obligation		$ 3.5
License Agreement [Member] | Other Current Liabilities [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Contingent consideration accrued						1.0
License Agreement [Member] | Other Noncurrent Liabilities [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Contingent consideration accrued						$ 1.0
Intellectual Property Rights [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Consideration transferred				$ 1.0
Consideration transferred				$ 9.0
Maximum [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Royalty percentage on net sales				4.00%
Maximum [Member] | Intellectual Property Rights [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Consideration transferred				$ 10.0
Minimum [Member]
Research And Development Arrangement Contract To Perform For Others [Line Items]
Royalty percentage on net sales				2.00%

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Share-based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Aug. 31, 2019	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Options outstanding		1,299,391	1,397,054
Options exercisable		1,040,523
Income tax benefit related to expense		$ 3,300	$ 3,100	$ 3,200
Exercised stock option amount		0
Realized tax benefit amount		$ 0
Closing stock price		$ 20.53
Share-based compensation		$ 18,443	15,432	16,207
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation		$ 12,917	10,289	10,624
Global Spine [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Options outstanding		50,711
Options exercisable		38,033
Share based compensation grants of restricted stock unit	14,743
Global Spine [Member] | Maximum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Common stock acqure under stock option	50,711
Global Extremities [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Options outstanding		150,000
Global Extremities [Member] | Maximum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Common stock acqure under stock option					150,000
2012 LTIP Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Award Contractual term		10 years
Amount of shares reserved for issuance		8,375,000
Options outstanding		1,098,680
Options exercisable		852,490
Stock Purchase Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Amount of shares reserved for issuance		2,850,000
Maximum percentage of compensation eligible employees to be deducted for purchase of common stock		25.00%
Purchase price of shares equivalent to fair market value		85.00%
Shares issued under stock purchase plan		2,395,673
Stock Purchase Plan [Member] | Minimum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Percentage of compensation eligible employees to be deducted for purchase of common stock		1.00%
Restricted Stock Units [Member] | Global Spine [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unvested restricted stock and stock units outstanding		3,686
Restricted Stock Units [Member] | 2012 LTIP Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unvested restricted stock and stock units outstanding		1,359,693
Market-based Restricted Stock Units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unamortized compensation expense		$ 9,300
Weighted-average period for unamortized compensation cost expected to be recognized		1 year 4 months 24 days
Aggregate intrinsic value of restricted stock outstanding		$ 10,600
Share based compensation, fair market value of restricted stock units vested		0	0	1,400
Stock Option [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unamortized compensation expense		$ 800
Weighted-average period for unamortized compensation cost expected to be recognized		1 year
Total intrinsic value of options exercised		$ 0	600	900
Aggregate intrinsic value of options outstanding		0
Aggregate intrinsic value of options exercisable		0
Share-based compensation		$ 1,114	1,893	2,571
Time-based Restricted Stock Awards and Stock Units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share based compensation grants of restricted stock unit		500,222
Unamortized compensation expense		$ 18,600
Weighted-average period for unamortized compensation cost expected to be recognized		2 years 6 months
Vesting period		4 years
Non-vested shares, vested in period		$ 5,200	9,000	6,500
Aggregate intrinsic value of restricted stock outstanding		17,400
Share-based compensation		$ 9,452	$ 7,437	$ 8,485
Restricted Stock Unit with Deferred Delivery (DSUs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Vesting period		1 year
Awards vested but not settled			86,542

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Share-based Compensation - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 18,443	$ 15,432	$ 16,207
Stock options [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	1,114	1,893	2,571
Time-based Restricted Stock Awards and Stock Units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	9,452	7,437	8,485
Performance-based / Market-based restricted stock units [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	6,425	4,414	3,509
Stock purchase plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	1,452	1,688	1,642
Cost of sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	826	779	705
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	3,865	3,385	3,620
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	12,917	10,289	10,624
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 835	$ 979	$ 1,258

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Share-based Compensation - Schedule of Assumptions Used in Determining Fair Value of Stock Options Granted (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected term (in years)	6 years	5 years 6 months
Expected volatility, minimum	34.40%	30.20%
Expected volatility, maximum	34.80%	35.10%
Risk free interest rate, minimum	0.83%	0.28%
Risk free interest rate, maximum	1.25%	1.65%
Weighted average grant date fair value	$ 12.33	$ 8.74

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Share-based Compensation - Schedule of Stock Option Plans (Detail)	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Share-Based Payment Arrangement [Abstract]
Outstanding at the beginning of the period (in shares) | shares	1,397,054
Exercised | shares	(575)
Forfeited or expired | shares	(97,088)
Outstanding at the end of the period (in shares) | shares	1,299,391
Vested and expected to vest | shares	1,299,391
Exercisable (in shares) | shares	1,040,523
Outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 39.20
Exercised | $ / shares	21.78
Forfeited or expired | $ / shares	38.14
Outstanding at the end of the period (in dollars per share) | $ / shares	39.29
Vested and expected to vest | $ / shares	39.29
Exercisable | $ / shares	$ 40.70
Options outstanding, weighted average remaining contractual term	3 years 9 months 7 days
Options vested and expected, weighted average remaining contractual term	3 years 9 months 7 days
Options exercisable, weighted average remaining contractual term	3 years 1 month 17 days

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Share-based Compensation - Schedule of Changes in Time-Based and Market-Based Restricted Stock Awards and Stock Units (Detail)	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Time-based Restricted Stock Awards and Stock Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding at December 31, 2021 | shares	559,368
Granted (in shares) | shares	500,222
Vested and settled (in shares) | shares	(152,735)
Cancelled (in shares) | shares	(59,708)
Outstanding at December 31, 2022 | shares	847,147
Outstanding at December 31, 2021 | $ / shares	$ 40.03
Granted (in dollars per share) | $ / shares	29.81
Vested and settled (in dollars per share) | $ / shares	41.03
Cancelled (in dollars per share) | $ / shares	34.80
Outstanding at December 31, 2022 | $ / shares	$ 34.18
Preformance based and Market Based Restricted Stock Unit [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding at December 31, 2021 | shares	323,081
Granted (in shares) | shares	255,327
Cancelled (in shares) | shares	(62,176)
Outstanding at December 31, 2022 | shares	516,232
Outstanding at December 31, 2021 | $ / shares	$ 48.56
Granted (in dollars per share) | $ / shares	33.57
Cancelled (in dollars per share) | $ / shares	55.70
Outstanding at December 31, 2022 | $ / shares	$ 40.29

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Defined Contribution Plans and Deferred Compensation - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Defined Contribution Plan Disclosure [Line Items]
Amount of deferred compensation payable	$ 1.5	$ 1.3
U.S. [Member]
Defined Contribution Plan Disclosure [Line Items]
Employee contribution limit per calendar year (as a percent of compensation)	80.00%
Employer match of employee contributions of first level of eligible compensation (as a percent)	100.00%
Percentage of eligible compensation, matched by employer, level one	2.00%
Employer match of employee contributions of second level of eligible compensation (as a percent)	50.00%
Percentage of eligible compensation matched by employer, level two	4.00%
Expenses incurred for contribution plans	$ 3.3	2.8	$ 1.1
Foreign Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Expenses incurred for contribution plans	$ 1.1	$ 1.2	$ 1.1
Italy [Member]
Defined Contribution Plan Disclosure [Line Items]
Annual deferred compensation provision for leaving indemnity, as a percentage of total commissions earned	4.00%
Italy [Member] | Labor Force Concentration Risk [Member] | National Collective Labor Agreement [Member]
Defined Contribution Plan Disclosure [Line Items]
Number of employees, percentage	21.00%

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Income Taxes - Schedule of Income (Loss) Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
U.S.	$ (22,318)	$ (5,987)	$ 5,556
Non-U.S.	4,612	(7,508)	(5,924)
Income (loss) before income taxes	$ (17,706)	$ (13,495)	$ (368)

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Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
U.S.
Current	$ 1,151	$ (607)	$ (15,054)
Deferred	67	24,292	(29)
Total U.S	1,218	23,685	(15,083)
Non-U.S.
Current	578	1,009	1,382
Deferred	247	190	10,816
Total Non U.S	825	1,199	12,198
Income tax expense (benefit)	$ 2,043	$ 24,884	$ (2,885)

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Income Taxes - Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Statutory U.S. federal income tax rate	$ (3,718)	$ (2,834)	$ (77)
State taxes, net of U.S. federal benefit	(1,312)	(24)	1,151
Foreign rate differential, including withholding taxes	475	480	(147)
Valuation allowances, net	7,638	27,819	14,514
Foreign income inclusions, net	1,018
Research credits	(750)	(537)	(982)
Unrecognized tax benefits, net of settlements	(599)	(1,363)	(17,321)
Equity compensation	1,441	1,091	1,657
Executive compensation	697	456	375
Contingent consideration	(3,316)	(640)	(1,460)
Other, net	469	436	(595)
Income tax expense (benefit)	$ 2,043	$ 24,884	$ (2,885)
Statutory U.S. federal income tax rate	21.00%	21.00%	21.00%
State taxes, net of U.S. federal benefit	7.40%	0.20%	(312.80%)
Foreign rate differential, including withholding taxes	(2.70%)	(3.60%)	39.90%
Valuation allowances, net	43.10%	(206.10%)	(3944.00%)
Foreign income inclusions, net	(5.70%)
Research credits	4.20%	4.00%	266.80%
Unrecognized tax benefits, net of settlements	3.40%	10.10%	4706.80%
Equity compensation	(8.10%)	(8.10%)	(450.30%)
Executive compensation	(3.90%)	(3.40%)	(101.90%)
Contingent consideration	18.70%	4.70%	396.70%
Other, net	(2.60%)	(3.20%)	161.80%
Income tax expense (benefit) /effective rate	(11.50%)	(184.40%)	784.00%

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Components Of Income Tax Expense Benefit [Line Items]
Tax paid (received or refunded) cash	$ (0.9)	$ 4.8	$ 0.5
Net increase in valuation allowance	7.1
Unremitted foreign earnings	$ 27.0
Minimum percentage of income tax benefit	50.00%
Gross unrecognized tax benefit	$ 0.7	0.5
Net interest and penalties on unrecognized tax benefits	(0.1)	(0.4)	$ (0.4)
Accrued interest and penalties related to unrecognized tax benefits	0.9	$ 0.8
State [Member]
Components Of Income Tax Expense Benefit [Line Items]
Operating loss carry forwards, net of tax	$ 31.1
Operating loss carryforwards, expiration year	2027
State [Member] | Spinal Kinetics [Member]
Components Of Income Tax Expense Benefit [Line Items]
Operating loss carry forwards, net of tax	$ 20.6
Federal [Member]
Components Of Income Tax Expense Benefit [Line Items]
Operating loss carry forwards, net of tax	$ 13.3
Operating loss carryforwards, expiration year	2026
Research and development credits	$ 1.7
Foreign Tax Authority
Components Of Income Tax Expense Benefit [Line Items]
Operating loss carry forwards, net of tax	$ 120.4

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Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Intangible assets and goodwill	$ 5,807	$ 5,245
Inventories and related reserves	17,819	17,097
Deferred revenue and cost of goods sold	3,642	3,888
Other accruals and reserves	2,756	3,082
Accrued compensation	8,795	7,784
Provision for expected credit losses	1,253	1,217
Net operating loss and tax credit carryforwards	40,676	42,546
R&D capitalization	4,353
Lease liabilities	6,440	5,691
Other, net	3,767	852
Total deferred tax assets	95,308	87,402
Valuation allowance	(83,797)	(76,725)
Deferred tax asset, net of valuation allowance	11,511	10,677
Withholding taxes	(10)	(10)
Property, plant, and equipment	(5,516)	(4,809)
Right-of-use lease assets	(5,771)	(5,165)
Deferred tax liability	(11,297)	(9,984)
Net deferred tax assets	214	693
Reported as:
Deferred income taxes (classified within other long-term assets)	1,470	1,771
Deferred income tax liabilities (classified within other long-term liabilities)	(1,256)	(1,078)
Net deferred tax assets	$ 214	$ 693

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Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Beginning Balance	$ 3,462	$ 4,629
Additions for current year tax positions	46	45
Increases for prior year tax positions	16	110
Settlements of prior year tax positions	(144)
Expiration of statutes	(1,637)	(1,322)
Ending Balance	$ 1,743	$ 3,462

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Earnings Per Share (EPS) - Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS (Detail) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share [Line Items]
Weighted average common shares-basic	20,053,548	19,690,593	19,267,920
Effect of diluted securities:
Weighted average common shares-diluted	20,053,548	19,690,593	19,391,718
Stock Options And Employee Stock Purchase Plan [Member]
Effect of diluted securities:
Effect of diluted securities			51,951
Time-Based Restricted Stock Units [Member]
Effect of diluted securities:
Effect of diluted securities			71,847

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Earnings Per Share (EPS) - Additional Information (Detail) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Restricted Stock and Market Based Equity Units [Member] | Stock options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average outstanding options, awards not included in diluted earnings per share	2,313,226	1,711,323	1,499,630

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Subsequent Events - Additional Information (Detail) - USD ($)		12 Months Ended
	Oct. 10, 2022	Dec. 31, 2022	Jan. 04, 2023	Jan. 03, 2023
Subsequent Event [Line Items]
Conversion of Stock, Shares Converted	0.4163
Subsequent Event [Member] | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity				$ 300,000,000.0
Line of credit			$ 15,000,000.0	$ 30,000,000.0
SeaSpine Holdings Corporation [Member]
Subsequent Event [Line Items]
Acquisition-related costs		$ 9,300,000
Number of options issued in conversion of awards	1,889,812
Number of time based RSU issued in exchange for equity awards	490,338

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Subsequent Events - Schedule of Estimated Fair Value of Consideration Associated with Merger (Detail) - SeaSpine Holdings Corporation [Member] $ / shares in Units, $ in Thousands	Oct. 10, 2022 USD ($) $ / shares shares
Business Acquisition [Line Items]
Orthofix common shares to be issued in exchange for SeaSpine common shares | shares	16,104,854
Orthofix closing price per share as of January 4, 2023 | $ / shares	$ 22.76
Estimated fair value of shares issued in exchange for SeaSpine common shares	$ 366,546
Estimated fair Value of Stock Options and RSU issued InExchange for Equity Awards	11,508
Total estimated fair value of consideration	$ 378,054