Item 1.01. Entry into a Material Definitive Agreement

On October 1, 2012, we entered into Amendment No. 3 to that certain Purchase Option Agreement, dated December 30, 2008, with Neovasc Inc. and its subsidiary, Neovasc Medical Inc., collectively, Neovasc, pursuant to which we exercised an option to acquire an exclusive, fully paid-up, worldwide, perpetual license and the assets to exclusively develop, manufacture and commercialize bovine and equine pericardium patches for vascular applications in humans from Neovasc for $4.6 million, of which $4.3 million is payable on the closing date and $0.3 million is payable on the one year anniversary of the closing date. We expect to close this transaction on October 31, 2012, subject to certain closing conditions and our right to rescind prior to closing. For a period of sixty months following the closing, both parties have agreed not to engage in certain competitive activities or the solicitation of employees with respect to one another. The parties have also agreed to provide one another cross-indemnification for liabilities that may arise before and after the transaction related to the acquired and licensed assets, respectively. We also separately entered into a 40-month supply agreement with Neovasc to ensure that we have an adequate supply of these patches as we scale up our own manufacturing operations.

The foregoing description of the Purchase Option Agreement and the related amendments is not complete and is qualified in its entirety by reference to the full text of such documents, which will be filed with our Annual Report on Form 10-K for the year ended December 31, 2012.

---