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”) is made and entered into as of April 1, 2020 (the “Amendment
Closing Date”) by and among Bacterin International, Inc., a Nevada corporation
(“Bacterin”), X-SPINE SYSTEMS, INC., an Ohio corporation (“X-Spine” or the
“Additional Delayed Draw Borrower” and, together with Bacterin, the “Borrower”),
ROS acquisition offshore lp, a Cayman Islands Exempted Limited Partnership
(together with its Affiliates, successors, transferees and assignees, “ROS” and
in its capacity as administrative agent, the “Administrative Agent”), ORBIMED
ROYALTY OPPORTUNITIES II, LP, a Delaware limited partnership (together with its
Affiliates, successors, transferees and assignees, “Royalty Opportunities” and
together with ROS, each individually a “Lender” and collectively, the
“Lenders”), and, in their respective capacities as Guarantors under the Credit
Agreement (as defined below), XTANT MEDICAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), and XTANT MEDICAL, INC., a Delaware corporation
(“Xtant” and, along with Holdings and each Subsidiary thereof, collectively, the
“Guarantors”).

 

WHEREAS, the Borrower, Holdings, Xtant, the Administrative Agent and the Lenders
are party to that certain Second Amended and Restated Credit Agreement, dated as
of March 29, 2019 (the “Credit Agreement”), pursuant to which (i) the Lenders
have extended credit to the Borrower on the terms set forth therein and (ii)
each Lender has appointed ROS as the administrative agent for the Lenders;

 

WHEREAS, effective as of March 24, 2020, Ron Berlin resigned from his position
with Holdings and the Borrower and contemporaneously therewith Holdings and the
Borrower designated Sean Browne as his replacement and the Administrative Agent
approved such replacement, in each case pursuant to and in accordance with
Section 9.1.12 of the Credit Agreement (the “Key Person Change”);

 

WHEREAS, the Borrower and the Administrative Agent wish to confirm that no
Default or Event of Default occurred under Section 9.1.12 of the Credit
Agreement in respect of the Key Person Change;

 

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

 

WHEREAS, the Borrower and the Lenders desire to amend certain provisions of the
Credit Agreement, in each case, 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. Confirmation of Approval of Key Person Change. Holdings and the Borrower
hereby confirm that effective as of March 24, 2020 (a) Ron Berlin resigned from
his position with Holdings and the Borrower and (b) contemporaneously therewith,
with immediate effect, Sean Browne was designated as the replacement to Ron
Berlin. The Administrative Agent hereby confirms that contemporaneously with the
resignation of Ron Berlin and designation of Sean Browne as a replacement, it
approved, effective as of March 24, 2020, such replacement pursuant to and in
accordance with Section 9.1.12 of the Credit Agreement, and that no Default or
Event of Default occurred under Section 9.1.12 of the Credit Agreement as a
result of the Key Person Change.

 

3. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is hereby
amended by amending and restating the following definition in its entirety:

 

“Maturity Date” means December 31, 2021.

 

4. 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 Existing Credit Agreement 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

 

(iii) notwithstanding anything in this Section 3.4(a) to the contrary, from and
after the Existing Credit Agreement 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.

 

 -2- 

 

 

(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 the Fiscal Quarter ended March 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 September 30, 2020, no interest shall
accrue on the Loans during such period.

 

(g) From and after October 1, 2020 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 calculated 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) or (c), 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) or (c) 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)
or (c) and Section 3.6(c).”

 

 -3- 

 

 

5. Amendment to Section 8.4(b). Section 8.4(b) of the Credit Agreement is hereby
amended and restated in its entirety as follows:

 

“(b) Minimum Revenue Base. The Revenue Base for the periods set forth below
shall not be less than the amounts set forth opposite such periods for the
periods set forth below:

 

Testing Period  Minimum Revenue Base  Two Fiscal Quarters ended June 30, 2019 
$30,000,000  Three Fiscal Quarters ended September 30, 2019  $45,000,000  Four
Fiscal Quarters ended December 31, 2019  $60,000,000  Four Fiscal Quarters ended
March 31, 2020  $45,000,000  Four Fiscal Quarters ended June 30, 2020 
$45,000,000  Four Fiscal Quarters ended September 30, 2020  $30,000,000  Four
Fiscal Quarters ended December 31, 2020  $25,000,000  Four Fiscal Quarters ended
March 31, 2021  $30,000,000  Four Fiscal Quarters ended June 30, 2021 
$35,000,000  Four Fiscal Quarters ended September 30, 2021  $40,000,000  Four
Fiscal Quarters ended December 31, 2021  $45,000,000 

”

6. Amendment to Section 9.1.12. Section 9.1.12 of the Credit Amendment is hereby
amended by deleting “Ron Berlin” from such Section 9.1.12 and inserting “Sean
Browne” in replacement thereof.

 

7. Conditions to Effectiveness of Amendment. This Amendment shall become
effective upon (a) receipt by the Borrower, the Administrative Agent, the
Lenders and the Guarantors of a counterpart signature of the others to this
Amendment duly executed and delivered by the Borrower, the Lenders, the
Administrative Agent and the Guarantors and (b) the issuance by Holdings, on the
Amendment Closing Date, of (i) to ROS, a warrant to purchase 1,531,984 shares of
common stock of Holdings and (ii) to Royalty Opportunities, a warrant to
purchase 868,016 shares of common stock of Holdings, in each case, with an
exercise price of $0.01 per share and an expiration date of May 6, 2030.

 

8. Expenses. The Borrower agrees 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.

 

 -4- 

 

 

9. Representations and Warranties. The Borrower and the Guarantors represent and
warrant to each Lender as follows:

 

(a) After giving effect to this Amendment, the representations and warranties of
the Borrower 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.

 

(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.

 

10. 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.

 

11. Waiver and Release. TO INDUCE THE ADMINISTRATIVE AGENT, ACTING ON BEHALF OF
THE LENDERS, TO AGREE TO THE TERMS OF THIS AMENDMENT, THE BORROWER, 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.

 

 -5- 

 

 

(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 AMENDMENT 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 AMENDMENT 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.

 

(f) THE RELEASING PARTIES ACKNOWLEDGE THAT THEY HAVE HAD THE BENEFIT OF
INDEPENDENT LEGAL ADVICE WITH RESPECT TO THE ADVISABILITY OF ENTERING INTO THIS
RELEASE AND HEREBY KNOWINGLY, AND UPON SUCH ADVICE OF COUNSEL, WAIVE ANY AND ALL
APPLICABLE RIGHTS AND BENEFITS UNDER, AND PROTECTIONS OF, CALIFORNIA CIVIL CODE
SECTION 1542, AND ANY AND ALL STATUTES AND DOCTRINES OF SIMILAR EFFECT.
CALIFORNIA CIVIL CODE SECTION 1542 PROVIDES AS FOLLOWS:

 

A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing
the release, and that if known by him or her, would have materially affected his
or her settlement with the debtor or released party.

 

12. Counterparts; Governing Law. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of such 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”, “tiff” or similar format) shall be
effective as delivery of a manually executed counterpart of this Amendment. THIS
AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO 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.]

 

 -6- 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized.

 

 

BACTERIN INTERNATIONAL, INC.,

as the Borrower

        By: /s/ Sean E. Browne   Name: Sean E. Browne   Title: Chief Executive
Officer        

XTANT MEDICAL HOLDINGS, INC.,

as a Guarantor

        By: /s/ Sean E. Browne   Name: Sean E. Browne   Title:  President and
Chief Executive Officer        

X-SPINE SYSTEMS, INC.,

as a Guarantor and the Additional Delayed Draw Borrower

        By: /s/ Sean E. Browne   Name: Sean E. Browne   Title:  Chief Executive
Officer        

XTANT MEDICAL, INC.,

as a Guarantor

        By: /s/ Sean E. Browne   Name: Sean E. Browne   Title: Chief Executive
Officer

 

Signature Page to First Amendment to Second A&R Credit Agreement

 

 

 

 

  ROS Acquisition Offshore LP,
as the Administrative Agent and as a Lender      

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 First Amendment to Second A&R Credit Agreement