Execution Version

 

TWENTY-FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

 

This TWENTY-FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is made and entered into as of August 1, 2018 (the “Amendment
Closing Date”) by and among Bacterin International, Inc., a Nevada corporation
(the “Borrower”), ROS acquisition offshore lp, a Cayman Islands Exempted Limited
Partnership (“ROS”), ORBIMED ROYALTY OPPORTUNITIES II, LP, a Delaware limited
partnership (“Royalty Opportunities”), and, in their capacity as Guarantors
under the Credit Agreement (as defined below), XTANT MEDICAL HOLDINGS, INC., a
Delaware corporation (“Holdings”), X-SPINE SYSTEMS, INC., an Ohio corporation
(“X-Spine” or the “Additional Delayed Draw Borrower” and, together with the
Borrower, the “Borrowers”) and XTANT MEDICAL, INC., a Delaware corporation
(“Xtant” and, along with Holdings and X-Spine, collectively, the “Guarantors”).

 

WHEREAS, the Borrowers, ROS and Royalty Opportunities are party to that certain
Amended and Restated Credit Agreement, dated as of July 27, 2015, as amended by
that certain First Amendment to Amended and Restated Credit Agreement, dated as
of March 31, 2016, that certain Second Amendment to Amended and Restated Credit
Agreement, dated as of May 25, 2016, that certain Third Amendment to Amended and
Restated Credit Agreement, dated as of June 30, 2016, that certain Fourth
Amendment to Amended and Restated Credit Agreement, dated as of July 29, 2016,
that certain Fifth Amendment to the Amended and Restated Credit Agreement, dated
as of August 12, 2016, that certain Sixth Amendment to the Amended and Restated
Credit Agreement, dated as of September 27, 2016, that certain Seventh Amendment
to the Amended and Restated Credit Agreement, dated as of December 31, 2016,
that certain Eighth Amendment to Amended and Restated Credit Agreement, dated as
of January 13, 2017, that certain Ninth Amendment to Amended and Restated Credit
Agreement, dated as of January 31, 2017, that certain Tenth Amendment to Amended
and Restated Credit Agreement, dated as of February 14, 2017, that certain
Eleventh Amendment to Amended and Restated Credit Agreement, dated as of
February 28, 2017, that certain Twelfth Amendment and Waiver to Amended and
Restated Credit Agreement, dated as of March 31, 2017, that certain Thirteenth
Amendment to Amended and Restated Credit Agreement, dated as of April 30, 2017,
that certain Fourteenth Amendment to Amended and Restated Credit Agreement,
dated as of May 11, 2017, that certain Fifteenth Amendment to Amended and
Restated Credit Agreement, dated as of June 30, 2017, that certain Sixteenth
Amendment to Amended and Restated Credit Agreement, dated as of July 15, 2017,
that certain Seventeenth Amendment and Waiver to Amended and Restated Credit
Agreement, dated as of August 11, 2017, that certain Eighteenth Amendment to
Amended and Restated Credit Agreement, dated as of September 29, 2017, that
certain Nineteenth Amendment to Amended and Restated Credit Agreement, dated as
of October 31, 2017, that certain Waiver, dated as of November 14, 2017, that
certain Twentieth Amendment and Waiver to Amended and Restated Credit Agreement,
dated as of November 30, 2017, that certain Twenty-First Amendment to Amended
and Restated Credit Agreement, dated as of December 28, 2017, that certain
Twenty-Second Amendment to Amended and Restated Credit Agreement, dated as of
January 30, 2018, that certain Twenty-Third Amendment to Amended and Restated
Credit Agreement, dated as of February 14, 2018 and that certain Twenty-Fourth
Amendment to Amended and Restated Credit Agreement, dated as of April 1, 2018
(the “Credit Agreement”), pursuant to which (i) ROS and Royalty Opportunities,
as Lenders under the Credit Agreement, have extended credit to the Borrowers on
the terms set forth therein and (ii) each Lender has appointed ROS as the
administrative agent (the “Administrative Agent”) for the Lenders;

 

 

 

 

WHEREAS, the Guarantors and the Administrative Agent entered into an Amended and
Restated Guarantee, dated as of July 31, 2015 and supplemented on September 11,
2015, pursuant to which the Guarantors have agreed to guarantee the Obligations
of the Borrowers under the Credit Agreement;

 

WHEREAS, pursuant to Section 11.1 of the Credit Agreement, the Credit Agreement
may be amended by an instrument in writing signed by each of the Borrowers and
the Administrative Agent (acting on behalf of the Lenders); and

 

WHEREAS, the Borrowers and the Lenders desire to amend certain provisions of the
Credit Agreement as provided in this Amendment.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions; Loan Document. Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit Agreement. This
Amendment shall constitute a Loan Document for all purposes of the Credit
Agreement and the other Loan Documents.

 

2. Amendment to Section 3.2. Section 3.2 of the Credit Amendment is hereby
amended by deleting “1.0%” from such Section 3.2 and inserting “2.0%” in
replacement thereof.

 

3. Amendments to Section 3.4. Section 3.4 of the Credit Agreement is hereby
amended and restated in its entirety as follows:

 

“SECTION 3.4 Interest Rate.

 

(a) From and after the Restatement Date until June 30, 2016:

 

(i) interest payable in cash by the Borrower shall accrue on the Loans during
such period at a rate per annum equal to 9.00%;

 

(ii) additional interest (“PIK Interest”) shall accrue on the Loans during such
period at a rate per annum equal to the difference of (A) the sum of (1) the
Applicable Margin plus (2) the higher of (x) the LIBO Rate for such Interest
Period and (y) 1.00% minus (B) 9.00%, and such PIK Interest shall be added to
the outstanding principal amount of the Loans on the last day of each Fiscal
Quarter until July 1, 2016; and

 

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(iii) notwithstanding anything in this Section 3.4(a) to the contrary, from and
after the Restatement Date until March 31, 2016 , the Borrower may elect, in its
sole discretion and in lieu of interest payments pursuant to Section 3.4(a)(i)
and Section 3.4(a)(ii) during such period, by delivering written notice to the
Administrative Agent prior to the date on which the first cash interest payment
would be payable pursuant to Section 3.4(a)(i) and Section 3.6(c), to have all
or any portion (as the Borrower shall so elect) of interest on the Loans accrue
on the Loans during such period at a rate per annum equal to the sum of (1) the
Applicable Margin plus (2) the higher of (x) the LIBO Rate for such Interest
Period and (y) 1.00% (“Optional PIK Interest”), and such Optional PIK Interest
shall be added to the outstanding principal amount of the Loans on the last day
of each Fiscal Quarter until March 31, 2016.

 

(b) From and after July 1, 2016 until February 13, 2018, PIK Interest shall
accrue on the Loans during such period at a rate per annum equal to the
difference of the sum of (1) the Applicable Margin plus (2) the higher of (x)
the LIBO Rate for such Interest Period and (y) 1.00%, and such PIK Interest
shall be added to the outstanding principal amount of the Loans on the last day
of each Fiscal Quarter until December 31, 2017 and on February 14, 2018;

 

(c) From and after February 14, 2018 until March 31, 2018:

 

(i) interest payable in cash by the Borrower shall accrue on the Loans during
such period at a rate per annum equal to the sum of (1) 10.00% plus (2) the LIBO
Rate for such Interest Period; and

 

(ii) notwithstanding anything in this Section 3.4(c) to the contrary, from and
after February 14, 2018 until March 31, 2018, the Borrower may elect, in its
sole discretion and in lieu of interest payments pursuant to Section 3.4(c)(i)
during such period, by delivering written notice to the Administrative Agent
prior to the date on which the first cash interest payment would be payable
pursuant to Section 3.4(c)(i) and Section 3.6(c), to have all or any portion (as
the Borrower shall so elect) of interest on the Loans accrue on the Loans during
such period as Optional PIK Interest at a rate per annum equal to the sum of (1)
12.00% plus (2) the LIBO Rate for such Interest Period, and such Optional PIK
Interest shall be added to the outstanding principal amount of the Loans on the
last day of each Fiscal Quarter until December 31, 2018.

 

(d) From and after April 1, 2018 until June 30, 2018, no interest shall accrue
on the Loans during such period.

 

(e) From and after June 30, 2018 until December 31, 2018, no interest shall
accrue on the Loans during such period.

 

(f) From and after January 1, 2019 until June 30, 2019:

 

(i) interest payable in cash by the Borrower shall accrue on the Loans during
such period at a rate per annum equal to the sum of (1) 10.00% plus (2) the
higher of (x) the LIBO Rate for such Interest Period and (y) 2.3125%; and

 

(ii) notwithstanding anything in this Section 3.4(f) to the contrary, from and
after January 1, 2019 until June 30, 2019, the Borrower may elect, in its sole
discretion and in lieu of interest payments pursuant to Section 3.4(f)(i) during
such period, by delivering written notice to the Administrative Agent prior to
the date on which the first cash interest payment would be payable pursuant to
Section 3.4(f)(i) and Section 3.6(c), to have all or any portion (as the
Borrower shall so elect) of interest on the Loans accrue on the Loans during
such period as Optional PIK Interest at a rate per annum equal to the sum of (1)
10.00% plus (2) the higher of (x) the LIBO Rate for such Interest Period and (y)
2.3125%, and such Optional PIK Interest shall be added to the outstanding
principal amount of the Loans on the last day of each Fiscal Quarter until June
30, 2019.

 

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(g) From and after July 1, 2019 until the Maturity Date, interest payable in
cash by the Borrower shall accrue on the Loans during such period at a rate per
annum equal to the sum of (1) 10.00% plus (2) the higher of (x) the LIBO Rate
for such Interest Period and (y) 2.3125%.

 

(h) The interest rate shall be recalculated and, if necessary, adjusted for each
Interest Period, in each case pursuant to the terms hereof.

 

(i) All references hereunder to the principal amount of the Loans shall include
any PIK Interest or Optional PIK Interest, if any, so added to the principal.

 

(j) Notwithstanding anything in this Section 3.4 to the contrary, the Borrower
may, in its sole discretion, and in lieu of PIK Interest and/or Optional PIK
Interest payments pursuant to Sections 3.4(a), (b), (c) or (f), by delivering
written notice to the Administrative Agent prior to the date on which any such
payment-in-kind interest payment would have been payable pursuant to Section
3.4(a), (b). (c) or (f) and Section 3.6(c), elect to pay such aggregate
principal amount of PIK Interest and/or Optional PIK Interest in cash instead of
making payment-in-kind, in which case the Borrower shall be required to make
such PIK Interest and/or Optional PIK Interest payment in cash at the time such
payment-in-kind interest would have been payable pursuant to Section 3.4(a),
(b), (c) or (f) and Section 3.6(c).”

 

4. Conditions to Effectiveness of Amendment. This Amendment shall become
effective upon (1) receipt by the Borrowers, the Administrative Agent, the
Lenders and the Guarantors of a counterpart signature of the others to this
Amendment duly executed and delivered by each of the Borrowers, the Lenders, the
Administrative Agent and the Guarantors and (2) the issuance by Holdings, on the
Amendment Closing Date, of (i) to ROS, a warrant to purchase 765,992 shares of
common stock of Holdings and (ii) to Royalty Opportunities, a warrant to
purchase 434,008 shares of common stock of Holdings, in each case, with an
exercise price of $0.01 per share and an expiration date of August 1, 2028.

 

5. Expenses. The Borrowers agree to pay on demand all expenses of the
Administrative Agent (including, without limitation, the fees and out-of-pocket
expenses of Covington & Burling LLP, counsel to the Administrative Agent)
incurred in connection with the Administrative Agent’s review, consideration and
evaluation of this Amendment, including the rights and remedies available to it
in connection therewith, and the negotiation, preparation, execution and
delivery of this Amendment.

 

6. Representations and Warranties. The Borrowers and the Guarantors represent
and warrant to each Lender as follows:

 

(a) After giving effect to this Amendment, the representations and warranties of
the Borrowers and the Guarantors contained in the Credit Agreement or any other
Loan Document shall, (i) with respect to representations and warranties that
contain a materiality qualification, be true and correct in all respects on and
as of the date hereof, and (ii) with respect to representations and warranties
that do not contain a materiality qualification, be true and correct in all
material respects on and as of the date hereof, and except that the
representations and warranties limited by their terms to a specific date shall
be true and correct as of such date.

 

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(b) Before and after giving effect to this Amendment, no Default or Event of
Default under the Credit Agreement has occurred or will occur or be continuing.

 

7. No Implied Amendment or Waiver. Except as expressly set forth in this
Amendment, this Amendment shall not, by implication or otherwise, limit, impair,
constitute a waiver of or otherwise affect any rights or remedies of the
Administrative Agent or the Lenders under the Credit Agreement or the other Loan
Documents, or alter, modify, amend or in any way affect any of the terms,
obligations or covenants contained in the Credit Agreement or the other Loan
Documents, all of which shall continue in full force and effect. Nothing in this
Amendment shall be construed to imply any willingness on the part of the
Administrative Agent or the Lenders to agree to or grant any similar or future
amendment, consent or waiver of any of the terms and conditions of the Credit
Agreement or the other Loan Documents.

 

8. Waiver and Release. TO INDUCE THE ADMINISTRATIVE AGENT, ACTING ON BEHALF OF
THE LENDERS, TO AGREE TO THE TERMS OF THIS AMENDMENT, THE BORROWERS, THE
GUARANTORS AND THEIR AFFILIATES (COLLECTIVELY, THE RELEASING PARTIES”) REPRESENT
AND WARRANT THAT AS OF THE DATE HEREOF THERE ARE NO CLAIMS OR OFFSETS AGAINST OR
RIGHTS OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO THEIR
OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH THEY:

 

(a) WAIVE ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE HEREOF; AND

 

(b) FOREVER RELEASE, RELIEVE, AND DISCHARGE THE ADMINISTRATIVE AGENT, THE
LENDERS, THEIR OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, PARTNERS,
PREDECESSORS, SUCCESSORS, ASSIGNS, ATTORNEYS, ACCOUNTANTS, AGENTS, EMPLOYEES,
AND REPRESENTATIVES (COLLECTIVELY, THE “RELEASED PARTIES”), AND EACH OF THEM,
FROM ANY AND ALL CLAIMS, LIABILITIES, DEMANDS, CAUSES OF ACTION, DEBTS,
OBLIGATIONS, PROMISES, ACTS, AGREEMENTS, AND DAMAGES, OF WHATEVER KIND OR
NATURE, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, CONTINGENT OR FIXED,
LIQUIDATED OR UNLIQUIDATED, MATURED OR UNMATURED, WHETHER AT LAW OR IN EQUITY,
WHICH THE RELEASING PARTIES EVER HAD, NOW HAVE, OR MAY, SHALL, OR CAN HEREAFTER
HAVE, DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY BASED UPON, CONNECTED
WITH, OR RELATED TO MATTERS, THINGS, ACTS, CONDUCT, AND/OR OMISSIONS AT ANY TIME
FROM THE BEGINNING OF THE WORLD THROUGH AND INCLUDING THE DATE HEREOF, INCLUDING
WITHOUT LIMITATION ANY AND ALL CLAIMS AGAINST THE RELEASED PARTIES ARISING UNDER
OR RELATED TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

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(c) IN CONNECTION WITH THE RELEASE CONTAINED HEREIN, THE RELEASING PARTIES
ACKNOWLEDGE THAT THEY ARE AWARE THAT THEY MAY HEREAFTER DISCOVER CLAIMS
PRESENTLY UNKNOWN OR UNSUSPECTED, OR FACTS IN ADDITION TO OR DIFFERENT FROM
THOSE WHICH THEY KNOW OR BELIEVE TO BE TRUE, WITH RESPECT TO THE MATTERS
RELEASED HEREIN. NEVERTHELESS, IT IS THE INTENTION OF THE RELEASING PARTIES,
THROUGH THIS AGREEMENT AND WITH ADVICE OF COUNSEL, FULLY, FINALLY, AND FOREVER
TO RELEASE ALL SUCH MATTERS, AND ALL CLAIMS RELATED THERETO, WHICH DO NOW EXIST,
OR HERETOFORE HAVE EXISTED. IN FURTHERANCE OF SUCH INTENTION, THE RELEASES
HEREIN GIVEN SHALL BE AND REMAIN IN EFFECT AS A FULL AND COMPLETE RELEASE OR
WITHDRAWAL OF SUCH MATTERS NOTWITHSTANDING THE DISCOVERY OR EXISTENCE OF ANY
SUCH ADDITIONAL OR DIFFERENT CLAIMS OR FACTS RELATED THERETO.

 

(d) THE RELEASING PARTIES COVENANT AND AGREE NOT TO BRING ANY CLAIM, ACTION,
SUIT, OR PROCEEDING AGAINST THE RELEASED PARTIES, DIRECTLY OR INDIRECTLY,
REGARDING OR RELATED IN ANY MANNER TO THE MATTERS RELEASED HEREBY, AND FURTHER
COVENANT AND AGREE THAT THIS AGREEMENT IS A BAR TO ANY SUCH CLAIM, ACTION, SUIT,
OR PROCEEDING.

 

(e) THE RELEASING PARTIES REPRESENT AND WARRANT TO THE RELEASED PARTIES THAT
THEY HAVE NOT HERETOFORE ASSIGNED OR TRANSFERRED, OR PURPORTED TO ASSIGN OR
TRANSFER, TO ANY PERSON OR ENTITY ANY CLAIMS OR OTHER MATTERS HEREIN RELEASED.

 

9. Counterparts; Governing Law. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
such when so executed and delivered shall be an original, but all of such
counterparts shall together constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page of this Amendment by fax
transmission or other electronic mail transmission (e.g., “pdf” or “tif”) shall
be effective as delivery of a manually executed counterpart of this Amendment.
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

 

  BACTERIN INTERNATIONAL, INC., as the Borrower         By: /s/ Carl D.
O’Connell        Name: Carl D. O’Connell   Title: Chief Executive Officer      
 

XTANT MEDICAL HOLDINGS, INC.,

(fka: Bacterin International Holdings, Inc.)

as a Guarantor

        By: /s/ Carl D. O’Connell   Name: Carl D. O’Connell   Title: Chief
Executive Officer        

X-SPINE SYSTEMS, INC.,

as a Guarantor and the Additional Delayed Draw

Borrower

        By: /s/ Carl D. O’Connell   Name: Carl D. O’Connell   Title: Chief
Executive Officer        

XTANT MEDICAL, INC.,

as a Guarantor

        By: /s/ Carl D. O’Connell   Name: Carl D. O’Connell   Title: Chief
Executive Officer

 

Signature Page to Twenty-Fifth Amendment to A&R Credit Agreement

 

 

 

 

  ROS Acquisition Offshore LP,
as a Lender and as the Administrative Agent       By OrbiMed Advisors LLC,
solely in its   capacity as Investment Manager         By: /s/ W. Carter Neild  
Name: W. Carter Neild   Title: Member         ORBIMED ROYALTY OPPORTUNITIES II,
LP,
as a Lender       By OrbiMed ROF II LLC,   its General Partner   By OrbiMed
Advisors LLC,   its Managing Member         By: /s/ W. Carter Neild             
  Name: W. Carter Neild   Title: Member

 

Signature Page to Twenty-Fifth Amendment to A&R Credit Agreement