EXHIBIT 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

February 14, 2018

 

ORBIMED ROYALTY OPPORTUNITIES II, LP

ROS ACQUISITION OFFSHORE LP

c/o OrbiMed Advisors LLC,

601 Lexington Avenue, 54th Floor

New York, NY 10022

 

TELEMETRY SECURITIES, L.L.C.

545 Fifth Avenue, 1108

New York, NY 10017

 

BRUCE FUND, INC.

Suite 2414

20 North Wacker Drive

Chicago, IL 60606

 

PARK WEST INVESTORS MASTER FUND, LIMITED

PARK WEST PARTNERS INTERNATIONAL, LIMITED

c/o Park West Asset Management LLC

900 Larkspur Landing Cir.

Suite 165

Larkspur, CA 94939

 

Ladies and Gentlemen:

 

Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), proposes
to issue to the undersigned (the “Exchange Parties”) shares of common stock of
the Company, $0.000001 par value per share (the “Common Stock”), upon the
conversion or exchange, as the case may be, of the Notes (as defined below), and
pursuant to the Private Placement (as defined below), in each case, in
accordance with the terms set forth in the Restructuring and Exchange Agreement
among the Company, OrbiMed Royalty Opportunities II, LP, ROS Acquisition
Offshore LP and the Consenting Noteholders parties thereto, dated January 11,
2018 (the “Restructuring Agreement”). To induce the Exchange Parties to enter
into the Restructuring Agreement and to satisfy the Company’s obligations
thereunder, the holders of the Notes will have the benefit of this registration
rights agreement (this “Agreement”) pursuant to which the Company agrees with
the Exchange Parties for the benefit of the Exchange Parties and for the benefit
of the holders (the “Holders”) from time to time of the Registrable Securities
(as defined below), as follows:

 

1.       Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

 

“Affiliate” has the meaning set forth in Rule 405 under the Securities Act.

 

 

 

 

“Broker-Dealer” means any broker or dealer registered as such under the Exchange
Act.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which
the Federal Reserve Bank of New York is authorized or required by law or
executive order to close or be closed.

 

“Close of Business” means 5:00 p.m., New York City time.

 

“Closing Date” means the date hereof.

 

“Company” has the meaning set forth in the preamble hereto.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” has the meaning set forth in the preamble hereto.

 

“Control” has the meaning set forth in Rule 405 under the Securities Act, and
the terms “controlling” and “controlled” shall have meanings correlative
thereto.

 

“Deferral Period” has the meaning indicated in Section 3(i).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

 

“Exchange Parties” has the meaning set forth in the preamble hereto.

 

“FINRA Rules” means the Conduct Rules and the By-Laws of the Financial Industry
Regulatory Authority, Inc.

 

“Holder” has the meaning set forth in the preamble hereto.

 

“Losses” has the meaning set forth in Section 5(d).

 

“Majority Holders” means, on any date, Holders of a majority of the Registrable
Securities.

 

“Managing Underwriters” means the investment bank(s) and manager(s) that
administer an underwritten offering, if any, conducted pursuant to Section 6.

 

“Notes” means the 2015 Notes, 2016 Notes and 2017 Notes, in each case, as
defined in the Restructuring Agreement.

 

“Notice and Questionnaire” means a written notice delivered to the Company
substantially in the form attached as Annex A hereto.

 

“Notice Holder” means, on any date, any Holder that has delivered a completed
Notice and Questionnaire to the Company on or before such date.

 

“Private Placement” has the meaning set forth in the Restructuring Agreement.

 

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“Prospectus” means a prospectus included in the Shelf Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or Rule 430B under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Shelf Registration Statement, and all amendments and supplements thereto,
including any and all exhibits thereto and any information incorporated by
reference therein.

 

“Registrable Securities” means the Common Stock issued to the Exchange Parties
pursuant to (i) the transactions described in the Restructuring Agreement upon
conversion and/or exchange of Notes, as the case may be, and (ii) the Private
Placement, and, in each case, any securities for which such shares have been
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event; provided, however, that each such security will cease to
constitute Registrable Securities upon the earliest to occur of (i) such
security being sold pursuant to a registration statement that is effective under
the Securities Act; and (ii) such security ceasing to be outstanding.

 

“Restructuring Agreement” has the meaning set forth in the preamble hereto.

 

“SEC Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Shelf Registration Period” has the meaning set forth in Section 2(b).

 

“Shelf Registration Statement” means a “shelf” registration statement of the
Company prepared pursuant to Section 2 that covers the resale, from time to time
pursuant to Rule 415 under the Securities Act (or any successor thereto), of
some or all of the Registrable Securities on an appropriate form under the
Securities Act, including all post-effective and other amendments and
supplements to such registration statement, the related Prospectus, all exhibits
thereto and all material incorporated by reference therein (including, without
limitation, the Initial Registration Statement, any New Registration Statement
and any Remainder Registration Statement).

 

“Underwriter” means any underwriter of Registrable Securities for an offering
thereof under the Shelf Registration Statement.

 

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2.       Shelf Registration. (a) The Company will, no later than the ninetieth
(90th) day after the Closing Date, file with the Commission a Shelf Registration
Statement (which, initially, will be on Form S-1 and, as soon as the Company is
eligible, will be on Form S-3) providing for the registration of the offer and
sale, from time to time on a continuous or delayed basis, of the Registrable
Securities by the Holders in accordance with the methods of distribution elected
by such Holders, pursuant to Rule 415 (or any successor thereto) under the
Securities Act (the “Initial Registration Statement”) and will use its best
efforts to cause such Initial Registration Statement to become effective under
the Securities Act no later than the one hundred and eightieth (180th) day after
the Closing Date; provided, that if the Commission has notified the Company that
it will not review or has no comments to such Initial Registration Statement
within one hundred and ten (110) days after the Closing Date, the Company will
use its best efforts to cause such Initial Registration Statement to become
effective under the Securities Act no later than the one hundred and twentieth
(120th) day after the Closing Date. Notwithstanding the registration obligations
set forth in this Section 2, in the event the Commission informs the Company
that all of the Registrable Securities cannot, as a result of the application of
Rule 415, be registered for resale as a secondary offering on a single
registration statement, the Company agrees to promptly (i) inform each of the
Holders thereof and use its commercially reasonable efforts to file amendments
to the Initial Registration Statement as required by the Commission and/or (ii)
withdraw the Initial Registration Statement and file a new registration
statement (a “New Registration Statement”), in either case covering the maximum
number of Registrable Securities permitted to be registered by the Commission,
on Form S-3 or, if the Company is ineligible to register the Registrable
Securities on Form S-3, or such other form available to register for resale the
Registrable Securities as a secondary offering; provided, however, that prior to
filing such amendment or New Registration Statement, the Company shall be
obligated to use its commercially reasonable efforts to advocate with the
Commission for the registration of all of the Registrable Securities in
accordance with the SEC Guidance, including without limitation, the Securities
Act Rules Compliance and Disclosure Interpretations Question 612.09.
Notwithstanding any other provision of this Agreement, if any SEC Guidance sets
forth a limitation of the number of Registrable Securities permitted to be
registered on a particular Shelf Registration Statement as a secondary offering
(and notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater number of Registrable
Securities), unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered on
such Shelf Registration Statement will first be reduced by securities to be
included other than Registrable Securities, and second be reduced by Registrable
Securities applied to the Holders on a pro rata basis based on the total number
of unregistered Common Shares held by such Holders, subject to a determination
by the Commission that certain Holders must be reduced first based on the number
of Common Shares held by such Holders. In the event the Company amends the
Initial Registration Statement or files a New Registration Statement, as the
case may be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the Commission, as promptly as
allowed by the Commission or SEC Guidance provided to the Company or to
registrants of securities in general, one or more registration statements on
Form S-3 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).

 

(b)       The Company will use its best efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as required by the
Securities Act, in order to permit the related Prospectus to be usable by
Holders for a period (the “Shelf Registration Period”) from the date the Shelf
Registration Statement becomes effective to, and including, the date upon which
no Registrable Securities are outstanding and constitute “restricted securities”
(as defined in Rule 144 under the Securities Act).

 

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(c)       The Company will cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement or such amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the
Securities Act; and (ii) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading.

 

(d)       Subject to applicable law, the Company will provide written notice to
the Holders of the anticipated effective date of the Shelf Registration
Statement at least ten (10) Business Days before such anticipated effective
date. Each Holder, in order to be named in the Shelf Registration Statement at
the time of its initial effectiveness, will be required to deliver a Notice and
Questionnaire and such other information as the Company may reasonably request
in writing, if any, to the Company on or before the fifth (5th) day before the
anticipated effective date of the Shelf Registration Statement as provided in
the notice. Subject to Section 3(i), from and after the effective date of the
Shelf Registration Statement, the Company will, as promptly as is practicable
after the date a Holder’s Notice and Questionnaire is delivered, but in no event
after the tenth (10th) day after such date, (i) file with the Commission an
amendment to the Shelf Registration Statement or prepare and, if permitted or
required by applicable law, file a supplement to the Prospectus or an amendment
or supplement to any document incorporated therein by reference or file any
other required document so that such Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus, and so that such Holder is permitted to
deliver such Prospectus to purchasers of Registrable Securities in accordance
with applicable law (except that the Company will not be required to file more
than one supplement or post-effective amendment in any thirty (30) day period in
accordance with this Section 2(d)(i)) and, in the case of a post-effective
amendment to the Shelf Registration Statement, the Company will use its best
efforts to cause such post-effective amendment to become effective under the
Securities Act as promptly as is practicable; (ii) provide such Holder, upon
request, copies of any documents filed pursuant to Section 2(d)(i); and (iii)
notify such Holder as promptly as practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to Section
2(d)(i); provided, however, that if such Notice and Questionnaire is delivered
during a Deferral Period, then the Company will so inform the Holder delivering
such Notice and Questionnaire and will take the actions set forth in clauses
(i), (ii) and (iii) above upon expiration of the Deferral Period in accordance
with Section 3(i). Notwithstanding anything to the contrary herein, the Company
need not name any Holder that is not a Notice Holder as a selling securityholder
in the Shelf Registration Statement or Prospectus; provided, however, that any
Holder that becomes a Notice Holder pursuant to this Section 2(d) (whether or
not such Holder was a Notice Holder at the effective date of the Shelf
Registration Statement) will be named as a selling securityholder in the Shelf
Registration Statement or Prospectus in accordance with this Section 2(d).

 

3.       Registration Procedures. The following provisions will apply in
connection with the Shelf Registration Statement.

 

(a)       The Company will:

 

(i)       furnish to the Exchange Parties and to counsel for the Notice Holders,
not less than five (5) Business Days before the filing thereof with the
Commission, a copy of the Shelf Registration Statement and each amendment
thereto and each amendment or supplement, if any, to the Prospectus (other than
amendments and supplements that do nothing more than name Notice Holders and
provide information with respect thereto and other than filings by the Company
under the Exchange Act) and will use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as the Exchange
Parties reasonably propose within three (3) Business Days of the delivery of
such copies to the Exchange Parties; and

 

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(ii)       include information regarding the Notice Holders and the methods of
distribution they have elected for their Registrable Securities provided to the
Company in Notices and Questionnaires as necessary to permit such distribution
by the methods specified therein.

 

(b)       The Company will ensure that:

 

(i)       the Shelf Registration Statement and any amendment thereto, and any
Prospectus and any amendment or supplement thereto, comply in all material
respects with the Securities Act; and

 

(ii)       the Shelf Registration Statement and any amendment thereto do not,
when each becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.

 

(c)       The Company will advise the Exchange Parties, the Notice Holders and
any Underwriter that has provided in writing to the Company a telephone or email
or other address for notices, and confirm such advice in writing, if requested
(which notice pursuant to clauses (ii) to (v), inclusive, below will be
accompanied by an instruction to suspend the use of the Prospectus until the
Company has remedied the basis for such suspension):

 

(i)       when the Shelf Registration Statement and any amendment thereto have
been filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;

 

(ii)       of any request by the Commission for any amendment or supplement to
the Shelf Registration Statement or the Prospectus or for additional
information;

 

(iii)       of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the institution or
threatening of any proceeding for that purpose;

 

(iv)       of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Common Stock included therein for sale in
any jurisdiction or the institution or threatening of any proceeding for such
purpose; and

 

(v)       of the happening of any event that requires any change in the Shelf
Registration Statement or the Prospectus so that they do not contain any untrue
statement of a material fact and do not omit to state a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading.

 

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(d)       The Company will use its best efforts to prevent the issuance of any
order suspending the effectiveness of the Shelf Registration Statement or the
qualification of the securities therein for sale in any jurisdiction and, if
issued, to obtain as soon as practicable the withdrawal thereof.

 

(e)       Upon request, the Company will furnish, in electronic or physical
form, to each Notice Holder, without charge, one copy of the Shelf Registration
Statement and any post-effective amendment thereto, including all material
incorporated therein by reference, and, if a Notice Holder so requests in
writing, all exhibits thereto (including exhibits incorporated by reference
therein).

 

(f)       During the Shelf Registration Period, the Company will promptly
deliver to each Exchange Party, each Notice Holder, and any sales or placement
agents or underwriters acting on their behalf, without charge, as many copies of
the Prospectus (including the preliminary Prospectus, if any) relating to the
Shelf Registration Statement and any amendment or supplement thereto as such
person may reasonably request. Subject to the restrictions set forth in this
Agreement, the Company consents to the use of the Prospectus or any amendment or
supplement thereto by each of the foregoing in connection with the offering and
sale of the Registrable Securities.

 

(g)       Before any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company will arrange for the qualification of the
Registrable Securities for sale under the laws of such U.S. jurisdictions as any
Notice reasonably requests and will maintain such qualification in effect so
long as required; provided, however, that in no event will the Company be
obligated by this Agreement to qualify to do business or as a dealer of
securities in any jurisdiction where it is not then so qualified or to take any
action that would subject it to taxation or service of process in suits in any
jurisdiction where it is not then so subject. If, at any time during the Shelf
Registration Period, the Registrable Securities are not “covered securities”
within the meaning of Section 18 of the Securities Act, then the Company will
arrange for such qualification (subject to the proviso of the immediately
preceding paragraph) in each U.S. jurisdiction of residence of each Notice
Holder.

 

(h)       Upon the occurrence of any event contemplated by subsections (c)(ii)
to (v), inclusive, above, the Company will promptly (or within the time period
provided for by Section 3(i) hereof, if applicable) prepare a post-effective
amendment to the Shelf Registration Statement or an amendment or supplement to
the Prospectus or file any other required document so that the Shelf
Registration Statement and the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made) not
misleading.

 

(i)       Upon the occurrence or existence of any pending corporate development,
public filings with the Commission or any other material event that, in the
reasonable judgment of the Company, makes it appropriate to suspend the
availability of the Shelf Registration Statement and the Prospectus, the Company
will give notice (without notice of the nature or details of such events) to the
Notice Holders that the availability of the Shelf Registration Statement is
suspended and, upon receipt of any such notice, each Notice Holder agrees: (i)
not to sell any Registrable Securities pursuant to the Shelf Registration
Statement until such Notice Holder receives copies of the supplemented or
amended Prospectus provided for in Section 3(i), or until it is advised in
writing by the Company that the Prospectus may be used; and (ii) to hold such
notice in confidence. Except in the case of a suspension of the availability of
the Shelf Registration Statement and the Prospectus solely as the result of
filing a post-effective amendment or supplement to the Prospectus to add
additional selling securityholders therein, the period during which the
availability of the Shelf Registration Statement and any Prospectus is suspended
(the “Deferral Period”) will not exceed an aggregate of (A) thirty (30) days
(or, if the Shelf Registration Statement is on Form S-1 (or any successor
thereto), sixty (60) days) in any calendar quarter; or (B) sixty (60) days (or,
if the shelf registration statement is on Form S-1 (or any successor thereto),
ninety (90) days) in any calendar year.

 

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(j)       The Company will comply with all applicable rules and regulations of
the Commission and will make generally available to its securityholders an
earnings statement (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act as soon as practicable after the effective
date of the Shelf Registration Statement and in any event no later than forty
five (45) days after the end of the twelve (12) month period (or ninety (90)
days, if such period is a fiscal year) beginning with the first month of the
Company’s first fiscal quarter commencing after the effective date of the Shelf
Registration Statement.

 

(k)       The Company may require each Holder of Registrable Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement in order to comply with the Securities Act.
The Company may exclude from the Shelf Registration Statement the Registrable
Securities of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving a request from the Company for such
information.

 

(l)       Subject to Section 6, the Company will enter into customary agreements
(including, if requested by the Majority Holders, an underwriting agreement in
customary form that, for the avoidance of doubt, will provide for customary
representations and warranties, legal opinions, comfort letters and other
documents and certifications) and take all other necessary actions in order to
expedite or facilitate the registration or the disposition of the Registrable
Securities, and in connection therewith, if an underwriting agreement is entered
into, cause the same to contain customary indemnification provisions and
procedures.

 

(m)       Subject to Section 6, for persons who are or may be “underwriters”
with respect to the Registrable Securities within the meaning of the Securities
Act and who make appropriate requests for information to be used solely for the
purpose of taking reasonable steps to establish a due diligence or similar
defense in connection with the proposed sale of such Registrable Securities
pursuant to the Shelf Registration, the Company will:

 

(i)       make reasonably available during business hours for inspection by the
Holders, any Underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained by
the Holders or any such Underwriter all relevant financial and other records and
pertinent corporate documents of the Company and its subsidiaries; and

 

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(ii)       cause the Company’s officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the Holders
or any such Underwriter, attorney, accountant or agent in connection with the
Shelf Registration Statement as is customary for similar due diligence
examinations.

 

(n)       In the event that any Broker-Dealer underwrites any Registrable
Securities or participates as a member of an underwriting syndicate or selling
group or “participates in an offering” (within the meaning of the FINRA Rules)
thereof, whether as a Holder or as an underwriter, placement, sales agent or
broker or dealer in respect thereof, or otherwise, the Company will, upon the
reasonable request of such Broker-Dealer, comply with any reasonable request of
such Broker-Dealer in complying with the FINRA Rules.

 

(o)       The Company will use its best efforts to take all other steps
necessary to effect the registration of the offer and sale of the Registrable
Securities covered by the Shelf Registration Statement.

 

4.       Registration Expenses. The Company will bear all expenses incurred in
connection with the performance of its obligations under Sections 2 and 3. The
Company will reimburse the Exchange Parties and the Holders for the reasonable
fees and disbursements of one firm or counsel (which may be a nationally
recognized law firm experienced in securities matters designated by the Majority
Holders) to act as counsel for the Holders in connection therewith.

 

5.       Indemnification and Contribution.

 

(a)        The Company agrees to indemnify and hold harmless each Holder, the
directors, officers, employees, Affiliates and agents of each Holder and each
person who controls any Holder within the meaning of the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or caused by the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of any preliminary Prospectus or the Prospectus,
in the light of the circumstances under which they were made) not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the party claiming indemnification specifically
for inclusion therein.

 

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The Company also agrees to provide customary indemnities to, and to contribute
as provided in Section 5(d) to Losses of, any underwriters of the Registrable
Securities, their officers, directors and employees and each Person who controls
such underwriters (within the meaning of the Securities Act or the Exchange Act)
to the same extent as provided herein with respect to the Holders.

 

(b)       Each Holder of securities covered by the Shelf Registration Statement
(including each Exchange Party that is a Holder, in such capacity) severally and
not jointly agrees to indemnify and hold harmless the Company, each of the
Company’s directors, each of the Company’s officers who sign the Shelf
Registration Statement and each person who controls the Company within the
meaning of the Securities Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be acknowledged by each Notice Holder that is not an Exchange Party in such
Notice Holder’s Notice and Questionnaire and will be in addition to any
liability that any such Notice Holder may otherwise have.

 

(c)       Promptly after receipt by an indemnified party under this Section 5 or
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b), as applicable, above unless and to the
extent it has been materially prejudiced through the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b), as applicable, above. If any action is brought against an indemnified party
and it has notified the indemnifying party thereof, the indemnifying party will
be entitled to appoint counsel (including local counsel) of the indemnifying
party’s choice at the indemnifying party’s expense to represent the indemnified
party in any action for which indemnification is sought (in which case, the
indemnifying party will not thereafter be responsible for the fees and expenses
of any separate counsel, other than local counsel if not appointed by the
indemnifying party, retained by the indemnified party or parties, except as set
forth below); provided, however, that such counsel will be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party’s
election to appoint counsel (including local counsel) to represent the
indemnified party in an action, the indemnified party will have the right to
employ separate counsel (including local counsel), and the indemnifying party
will bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest; (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
has reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party has not
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action; or (iv) the indemnifying party has authorized the indemnified
party to employ separate counsel at the expense of the indemnifying party. The
indemnifying party will not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one (1) separate law firm (in addition to any local counsel) for all
indemnified persons. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf of any such
indemnified party.

 

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(d)       In the event that the indemnity provided in paragraph (a) or (b) of
this Section 5 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party will have a
several, and not joint, obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending such losses, claims,
damages, liabilities or actions) (collectively “Losses”) to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the offering of the Registrable
Securities and the Shelf Registration Statement that resulted in such Losses;
provided, however, that in no case will any underwriter be responsible for any
amount in excess of the underwriting discount or commission applicable to the
securities purchased by such underwriter under the Shelf Registration Statement
that resulted in such Losses. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, then the indemnifying party
and the indemnified party will contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions, or alleged statements or
omissions, that resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company will be deemed to be equal to
the total net proceeds from the offering of the Notes (before deducting
expenses). Benefits received by any Holder will be deemed to be equal to the
value of having the offer and sale of such Holder’s Registrable Securities
registered under the Securities Act pursuant to the Shelf Registration Statement
and hereunder. Benefits received by any underwriter will be deemed to be equal
to the total underwriting discounts and commissions, as set forth on the cover
page of the Prospectus relating to the Shelf Registration Statement that
resulted in such Losses. Relative fault will be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission or alleged untrue statement or omission. The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding
anything to the contrary in this Section 5(d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5, each person who
controls a Holder within the meaning of the Securities Act or the Exchange Act
and each director, officer, employee, Affiliate and agent of such Holder will
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who signed the Shelf Registration Statement and
each director of the Company will have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
Section 5(d).

 

- 11 - 

 

 

(e)       The provisions of this Section 5 will remain in full force and effect,
regardless of any investigation made by or on behalf of any Exchange Party or
Holder or the Company or any of the indemnified persons referred to in this
Section 5, and will survive the sale by a Holder of securities covered by the
Shelf Registration Statement.

 

6.       Underwritten Registrations. (a) Notwithstanding anything to the
contrary herein, in no event will the method of distribution of Registrable
Securities take the form of an underwritten offering without the prior written
consent of the Company. Consent may be conditioned on waivers of any of the
obligations in Section 3, 4 or 5.

 

(b)       If any Registrable Securities are to be sold in an underwritten
offering, the Managing Underwriters will be selected by the Company, subject to
the prior written consent of the Majority Holders, which consent will not be
unreasonably withheld.

 

(c)       No person may participate in any underwritten offering pursuant to the
Shelf Registration Statement unless such person: (i) agrees to sell such
person’s Registrable Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements; and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

 

7.       No Inconsistent Agreements. The Company has not entered into, and
agrees not to enter into, any agreement with respect to its securities that is
inconsistent with the registration rights granted to the Holders herein.

 

8.       Rule 144A and Rule 144. So long as any Registrable Securities remain
outstanding, the Company will file the reports required to be filed by it under
Rule 144A(d)(4) under the Securities Act and the reports required to be filed by
it under the Exchange Act in a timely manner and, if at any time the Company is
not required to file such reports, it will, upon the written request of any
Holder of Registrable Securities, make publicly available other information so
long as necessary to permit sales of such Holder’s Registrable Securities
pursuant to Rules 144 and 144A of the Securities Act. The Company covenants that
it will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act pursuant to Rule 144 or Rule 144A (including, without limitation, satisfying
the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
anything to the contrary in this Section 8, nothing in this Section 8 will be
deemed to require the Company to register any of its securities pursuant to the
Exchange Act.

 

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9.       Amendments and Waivers. The provisions of this Agreement may not be
amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Holders of a majority of the Registrable
Securities (determined on an as-converted basis); provided, however, that this
Section 9 may not be amended, qualified, modified or supplemented, and waivers
of or consents to departures from this Section 9 may not be given, unless the
Company has obtained the written consent of each Exchange Party and each Holder.

 

10.       Notices. All notices and other communications provided for or
permitted hereunder will be made in writing by hand-delivery, first-class mail,
telex, telecopier, email or air courier guaranteeing overnight delivery:

 

(a)       if to a Holder, at the most current address given by such holder to
the Company in accordance with the provisions of the Notice and Questionnaire.

 

(b)       if to any Exchange Party, initially at the address thereof set forth
above; and

 

(c)       if to the Company, initially at its address set forth in the
Restructuring Agreement.

 

All such notices and communications shall be deemed to have been duly given when
received.

 

11.       Remedies. Each Holder, in addition to being entitled to exercise all
rights provided to it herein or in the Restructuring Agreement or granted by
law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive in any action for specific performance the defense that a remedy at law
would be adequate.

 

12.       Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors and assigns, including,
without the need for an express assignment or any consent by the Company
thereto, subsequent Holders, and the indemnified persons referred to in Section
5. The Company hereby agrees to extend the benefits of this Agreement to any
Holder, and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.

 

13.       Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.

 

14.       Headings. The section headings used herein are for convenience only
and shall not affect the construction or interpretation hereof.

 

15.       Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT THE TRANSACTION CONTEMPLATED HEREBY.

 

- 13 - 

 

 

16.       Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof will not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
will be enforceable to the fullest extent permitted by law.

 

17.       Common Stock Held by the Company, Etc. Whenever the consent or
approval of Holders of a specified percentage of securities is required
hereunder, securities held by the Company or its Affiliates (other than
subsequent Holders thereof if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such securities) will not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

- 14 - 

 

 

  Very truly yours,       Company:       Xtant Medical Holdings, Inc.      
By:   /s/ Carl O’Connell   Name: Carl D. O’Connell   Title: Chief Executive
Officer

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

EXCHANGE PARTIES:

 

  ORBIMED ROYALTY OPPORTUNITIES II, LP       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         ROS
ACQUISITION OFFSHORE LP       By OrbiMed Advisors LLC, solely in its   capacity
as Investment Manager         By: /s/ W. Carter Neild     Name: W. Carter Neild
    Title: Member

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  TELEMETRY SECURITIES, L.L.C.         By: /s/ Dan Sommers     Name: Dan Sommers
    Title: Portfolio Manager

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  BRUCE FUND, INC.         By: /s/ R. Jeffrey Bruce     Name: R. Jeffrey Bruce  
  Title: Vice President, Secretary

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  PARK WEST INVESTORS MASTER FUND, LIMITED       By: Park West Asset Management
LLC   Its: Investment Manager         By: /s/ Grace Jimenez     Name: Grace
Jimenez     Title: Chief Financial Officer         PARK WEST PARTNERS
INTERNATIONAL, LIMITED       By: Park West Asset Management LLC   Its:
Investment Manager         By: /s/ Grace Jimenez     Name: Grace Jimenez    
Title: Chief Financial Officer

 

[Signature Page to Registration Rights Agreement]