Exhibit 10.4

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of
[                    ], 2013 between RTI Biologics, Inc., a Delaware corporation
(the “Company”), and [                    ] (“Indemnitee”).

WHEREAS, Indemnitee is either a member of the board of directors of the Company
(the “Board”) or an officer of the Company, or both, and in such capacity or
capacities is performing a valuable service for the Company;

WHEREAS, the Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations or
other business entities unless they are protected by comprehensive
indemnification and liability insurance, due to increased exposure to litigation
costs and risks resulting from their service to such corporations, and because
the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;

WHEREAS, Section 145 of the General Corporation Law of the State of Delaware
(the “DGCL”), under which the Company is organized, empowers the Company to
indemnify by agreement its officers, directors, employees and agents, and
persons who serve, at the request of the Company, as directors, officers,
employees or agents of other corporations or enterprises, and expressly provides
that the indemnification provided by the DGCL is not exclusive;

WHEREAS, the Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company free from undue
concern for claims for damages arising out of or related to such services to the
Company;

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he or
she be indemnified as herein provided;

WHEREAS, it is intended that Indemnitee shall be paid promptly by the Company
all amounts necessary to effectuate in full the indemnity provided herein;

WHEREAS, Indemnitee has certain rights to indemnification and/or insurance
provided by Water Street Healthcare Partners, LLC (“Water Street”) or affiliates
of and investment funds directly or indirectly managed by Water Street (the
“Water Street Rights”) that Indemnitee and Water Street intend to be secondary
to the primary obligation of the Company to indemnify Indemnitee as provided
herein, with the Company’s acknowledgment of and agreement to the foregoing
being a material condition to Indemnitee’s willingness to serve as a director or
in any other capacity for the Company and its subsidiaries; and

WHEREAS, this Agreement is a supplement to and in furtherance of the Water
Street Rights and the Amended and Restated Certificate of Incorporation of the
Company (the “Charter”) and the Amended and Restated Bylaws of the Company (the
“Bylaws”), and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a
director or officer from and after the date hereof, the parties hereto agree as
follows:

1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by applicable law, as such
may be amended from time to time. In furtherance of the foregoing
indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this
Section l(a) if, by reason of Indemnitee’s Corporate Status (as hereinafter
defined), Indemnitee is, or is threatened to be made, a party to or participant
in any Proceeding (as hereinafter defined) other than a Proceeding by or in the
right of the Company. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Liabilities and Expenses (each as hereinafter defined)
actually incurred by or on behalf of Indemnitee in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal Proceeding,
had no reasonable cause to believe Indemnitee’s conduct was unlawful.

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(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled
to the rights of indemnification provided in this Section 1(b) if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against
all Liabilities and Expenses actually incurred by or on behalf of Indemnitee in
connection with such Proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company; provided, however, if applicable law so provides, no
indemnification against such Liabilities or Expenses shall be made in respect of
any claim, issue or matter in such Proceeding as to which Indemnitee shall have
been adjudged to be liable to the Company, unless and to the extent that the
Court of Chancery of the State of Delaware shall determine that such
indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be
indemnified to the maximum extent permitted by law, as such may be amended from
time to time, against all Expenses actually incurred by or on behalf of
Indemnitee in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually incurred by or on
behalf of Indemnitee in connection with each successfully resolved claim, issue
or matter. For purposes of this Section 1(c) and without limitation, if any
action, suit or proceeding is disposed of or dismissed, on the merits or
otherwise (including a disposition or dismissal without prejudice), without
(i) an adjudication that Indemnitee was liable to the Company, (ii) a plea of
guilty or nolo contendere by Indemnitee, (iii) an adjudication that Indemnitee
did not act in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and (iv) with respect to
any criminal proceeding, an adjudication that Indemnitee had reasonable cause to
believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for
the purposes hereof to have been successful with respect thereto.

2. Additional Indemnity. In addition to, and without regard to any limitations
on, the indemnification provided for in Section 1 of this Agreement, the Company
shall and hereby does, to the fullest extent permitted by applicable law,
indemnify and hold harmless Indemnitee against all Liabilities and Expenses
actually incurred by or on behalf of Indemnitee if, by reason of Indemnitee’s
Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding (including a Proceeding by or in the right of the
Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only limitation
that shall exist upon the Company’s obligations pursuant to this Agreement,
other than those set forth in Section 9 hereof, shall be that the Company shall
not be obligated to make any payment to Indemnitee that is finally determined
(under the procedures, and subject to the presumptions, set forth in Sections 6
and 7 hereof) to be unlawful.

 

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3. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount incurred by Indemnitee, whether for Liabilities and/or
for Expenses actually incurred, in connection with any claim relating to a
Proceeding under this Agreement, in such proportion as is deemed fair and
reasonable in light of all of the circumstances of such Proceeding in order to
reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding,
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents), on the one hand, and Indemnitee, on the other hand, in
connection with such event(s) and/or transaction(s). To the fullest extent
permitted by applicable law, the Company hereby agrees to fully indemnify and
hold Indemnitee harmless from any claims of contribution which may be brought by
officers, directors, employees, agents or other service providers of the
Company, other than Indemnitee, who may be jointly liable with Indemnitee.

4. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the fullest extent permitted by applicable law
and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate
Status, a witness, or is made (or asked) to respond to discovery requests, in
any Proceeding to which Indemnitee is not a party, Indemnitee shall be
indemnified against all Expenses actually incurred by or on behalf of Indemnitee
in connection therewith.

5. Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance, to the extent not prohibited by law, all
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within fifteen (15) days
after the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall, if and to the
extent required by the DGCL, include or be preceded or accompanied by a written
undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay pursuant to this
Section 5 shall be unsecured and interest-free. In accordance with Sections 7(d)
and 7(e) of this Agreement, advances shall include any and all Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed.

6. Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of the parties to this Agreement to secure for
Indemnitee rights of indemnity that are as favorable as may be permitted under
the DGCL and public policy of the State of Delaware. Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event of
any question as to whether Indemnitee is entitled to indemnification under this
Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary (or comparable officer) of the Company shall,
promptly upon receipt of such a request for indemnification, advise the Board in
writing that Indemnitee has requested indemnification. Notwithstanding the
foregoing, any failure of Indemnitee to provide such a request to the Company,
or to provide such a request in a timely fashion, shall not relieve the Company
of any liability that it may have to Indemnitee unless, and to the extent that,
such failure actually and materially prejudices the interests of the Company.

 

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(b) Upon written request by Indemnitee for indemnification pursuant to the first
sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s
entitlement thereto shall be made in the specific case by one of the following
four methods, which shall be at the election of the Board: (1) by a majority
vote of the Disinterested Directors (as hereinafter defined), even though less
than a quorum, (2) by a committee of Disinterested Directors designated by a
majority vote of the Disinterested Directors, even though less than a quorum or
(3) if there are no Disinterested Directors, or if the Disinterested Directors
so direct, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee; provided, however, that if a Change in
Control has occurred, the determination with respect to Indemnitee’s entitlement
to indemnification shall be made by Independent Counsel.

(c) In the event the determination of entitlement to indemnification is to be
made by Independent Counsel, the Independent Counsel shall be selected as
provided in this Section 6(c). If a Change in Control has not occurred, the
Independent Counsel shall be selected by the Board (including a vote of a
majority of the Disinterested Directors if obtainable), and the Company shall
give written notice to the Indemnitee advising Indemnitee of the identity of the
Independent Counsel so selected. Indemnitee may, within 10 days after such
written notice of selection shall have been given, deliver to the Company a
written objection to such selection; provided, however, that such objection may
be asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 12 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. . If a Change in Control has occurred, the Independent
Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request
that such selection be made by the Board, in which event the preceding sentence
shall apply), and the Indemnitee shall give written notice to the Company
advising the Company of the identity of the Independent Counsel so selected. The
Company may, within 10 days after such written notice of selection shall have
been given, deliver to the Indemnitee a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in Section 12 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the Person so selected shall
act as Independent Counsel. If a written objection is made, the Independent
Counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such objection is without
merit. If a Change in Control has occurred, the Independent Counsel shall be
selected by the Indemnitee (unless the Indemnitee shall request that such
selection be made by the Board, in which event the preceding sentence shall
apply), and approved by the Board within 20 days after notification by
Indemnitee. Absent a proper and timely objection, the Person so selected shall
act as Independent Counsel. If a written objection is made, the Independent
Counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has determined that such objection is without
merit. The Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 6(c), regardless of
the manner in which such Independent Counsel was selected or appointed.

(d) In making a determination with respect to entitlement to indemnification
hereunder, the Person making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement. Anyone seeking to overcome
this presumption shall have

 

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the burden of proof and the burden of persuasion by clear and convincing
evidence. Neither the failure of the Company (including by its directors,
Independent Counsel or stockholders) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors, Independent Counsel or stockholders) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

(e) For purposes of this Agreement, it shall be presumed that Indemnitee has at
all times acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company. Anyone seeking to
overcome this presumption of good faith shall have the burden of proof and the
burden of persuasion by clear and convincing evidence. Without limiting the
generality of the foregoing, Indemnitee shall be deemed to have acted in good
faith if Indemnitee’s action that is the subject of any actual or threatened
Proceeding is based on (i) the records or books of account of the Enterprise (as
hereinafter defined), including financial statements, (ii) information supplied
to Indemnitee by the officers of the Enterprise in the course of their duties,
(iii) the advice of legal counsel for the Enterprise or (iv) information or
records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with reasonable
care by the Enterprise. In addition, the knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.

(f) If the Person empowered or selected under this Section 6 to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within thirty (30) days (or in the case of an advancement of
Expenses in accordance with Section 4, fifteen (15) days; provided that
Indemnitee has, if and to the extent required by the DGCL, delivered the
undertaking contemplated in Section 4) after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law, and such right
to indemnification shall be enforceable by Indemnitee in any court of competent
jurisdiction; provided that the foregoing provisions of this Section 6(f) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination, the Board or the Disinterested Directors, if appropriate, resolve
to submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within sixty (60) days after such receipt and
such determination is made at such stockholders meeting, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (45) days after having been so called and such
determination is made at such meeting.

(g) Indemnitee shall cooperate with the Person making a determination with
respect to Indemnitee’s entitlement to indemnification hereunder, including
providing to such Person upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any Expenses incurred by Indemnitee in so cooperating with the
Person making such determination shall be borne by the Company (irrespective of
the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

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(h) Any Person making a determination as to Indemnitee’s entitlement to
indemnification shall act reasonably and in good faith in making a determination
regarding Indemnitee’s entitlement to indemnification under this Agreement.

(i) With respect to any Proceeding as to which Indemnitee notifies the Company
of the commencement thereof the Company will be entitled to participate therein
at its own expense. The Company, jointly with any other indemnifying party
similarly notified, will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee; provided, however, that the Company shall
not be entitled to assume the defense of any Proceeding if there has been a
Change in Control or if Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee with respect to
such Proceeding. After the Company provides written notice to Indemnitee of its
election to assume the defense of any Proceeding pursuant to this Section 6(i),
the Company will not be liable to Indemnitee under this Agreement for any
Expenses subsequently incurred by Indemnitee in connection with the defense
thereof, other than reasonable costs of investigation or otherwise; provided,
however, that Indemnitee shall have the right to employ Indemnitee’s own
counsel, but the fees and expenses of such counsel incurred after notice from
the Company of its assumption of the defense thereof shall be at the expense of
Indemnitee unless:

(i) the employment of counsel by Indemnitee has been authorized by the Company;

(ii) Indemnitee shall have reasonably concluded that counsel engaged by the
Company may not adequately represent Indemnitee due to, among other things,
actual or potential differing interests; or

(iii) the Company shall not in fact have employed counsel to assume the defense
in such Proceeding or shall not in fact have assumed such defense and be acting
in connection therewith with reasonable diligence; in each of which cases the
fees and expenses of such counsel shall be at the expense of the Company.

(j) The Company acknowledges that a settlement or other disposition short of
final judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any Proceeding to
which Indemnitee is a party is resolved in any manner other than by adverse
judgment against Indemnitee (including, without limitation, settlement of such
action, claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such Proceeding. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence. The Company shall not settle any Proceeding in any
manner unless such settlement (i) provides for a full and final release of all
claims against Indemnitee and (ii) does not impose any penalty (including any
admissions of fault) or limitation on Indemnitee without Indemnitee’s written
consent.

(k) The termination of any Proceeding or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

 

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7. Remedies of Indemnitee.

(a) Subject to Section 9, in the event that (i) a determination is made pursuant
to Section 6 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 5 of this Agreement, (iii) no determination of
entitlement to indemnification is made pursuant to Section 6(b) of this
Agreement within thirty (30) days (or in the case of an advancement of Expenses
in accordance with Section 4, fifteen (15) days; provided that Indemnitee has,
if and to the extent required by the DGCL, delivered the undertaking
contemplated in Section 4) after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this
Agreement within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 6 of this Agreement, then Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other
court of competent jurisdiction, of Indemnitee’s entitlement to such
indemnification, contribution or advancement of Expenses. Alternatively,
Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 7. Except as set forth herein, the provisions of
Delaware law (without regard to its conflict-of-law rules) shall apply to any
such arbitration. The Company shall not oppose Indemnitee’s right to seek any
such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to
Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial, or arbitration, on the
merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 6(b). In any judicial proceeding or arbitration
commenced pursuant to this Section 7, Indemnitee shall be presumed to be
entitled to indemnification under this Agreement and the Company shall have the
burden of proving by clear and convincing evidence that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be, and
the Company may not refer to or introduce into evidence any determination
pursuant to Section 6(b) of this Agreement adverse to Indemnitee for any
purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant
to this Section 7, Indemnitee shall not be required to reimburse the Company for
any advances pursuant to Section 5 until a final determination is made with
respect to Indemnitee’s entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed).

(c) If a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 7, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s misstatement not
materially misleading, in connection with the application for indemnification,
or (ii) a prohibition of such indemnification under applicable law.

 

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(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial
adjudication of Indemnitee’s rights under, or to recover damages for breach of,
this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company, the Company shall pay on
Indemnitee’s behalf, in advance, any and all Expenses actually incurred by
Indemnitee in such judicial adjudication, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, to the fullest extent permitted by applicable
law.

(e) The Company shall, to the extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this
Section 7 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement. It
is the intent of the Company that, to the fullest extent permitted by applicable
law, Indemnitee not be required to incur Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder. The Company shall indemnify Indemnitee against any and all Expenses
and, if requested by Indemnitee, shall advance, to the extent not prohibited by
law and in accordance with Section 5 of this Agreement, such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company.

8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification;
Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may at any time be entitled under applicable law, the Charter,
the Bylaws, any agreement, a vote of stockholders, a resolution of directors or
otherwise, of the Company. No amendment, alteration or repeal of this Agreement
or of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by Indemnitee in
Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To
the extent that a change in the DGCL, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the
Charter, Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

(b)

(i) The Company shall, if commercially reasonable, obtain and maintain in effect
during the entire period described in Section 10 for which the Company is
obligated to indemnify Indemnitee under this Agreement, one or more policies of
insurance with reputable insurance companies to provide the directors and
officers of the Company with coverage for losses from wrongful acts and
omissions and to ensure the Company’s performance of its indemnification
obligations under this Agreement (“D&O Insurance”); provided, that in connection
with a Change of Control that occurs prior to

 

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the termination of the period described in Section 10 for which the Company is
obligated to indemnify Indemnitee, the Company shall instead purchase a six
(6) year pre-paid “tail policy” (a “Tail Policy”) on terms and conditions (in
both amount and scope) providing substantially equivalent benefits to Indemnitee
as the D&O Insurance in effect as of the closing of the Change of Control (the
“Change of Control Closing Date”) with respect to matters arising on or prior to
the earlier of (i) the Change of Control Closing Date and (ii) the date on which
Indemnitee ceased serving as a director, officer or fiduciary of the Company,
any direct or indirect subsidiary of the Company or of any other corporation,
partnership, joint venture, trust or other enterprise at the express written
consent of the Company.

(ii) Indemnitee shall be covered by such D&O Policies (including any Tail
Policy) in accordance with its or their terms to the maximum extent of the
coverage available for any such officer or director under such D&O Policies. In
all such D&O Policies, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee with the same rights and benefits as are accorded to
the most favorably insured of the Company’s directors and officers. At the time
of the receipt of a notice of a claim pursuant to the terms hereof, the Company
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective D&O Policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such D&O Policies.

(c) The Company hereby acknowledges that Indemnitee has the Water Street Rights
provided by Water Street and/or certain of Water Street’s affiliates that,
directly or indirectly, (i) are controlled by, (ii) control or (iii) are under
common control with Water Street (collectively, the “Fund Indemnitors”). The
Company hereby agrees (A) that the Company is the indemnitor of first resort
(i.e., its obligations to Indemnitee are primary and any obligation of the Fund
Indemnitors to advance Expenses or to provide indemnification for the same
Liabilities or Expenses incurred by Indemnitee is secondary), (B) that it shall
be required to advance the full amount of Expenses actually incurred by
Indemnitee and shall be liable for the full amount of all Liabilities and
Expenses to the extent legally permitted and as required by the terms of this
Agreement and the Charter or Bylaws of the Company (or any other agreement
between the Company and Indemnitee), without regard to any rights Indemnitee may
have against the Fund Indemnitors, and (C) that it irrevocably waives,
relinquishes and releases the Fund Indemnitors from any and all claims against
the Fund Indemnitors for contribution, subrogation or any other recovery of any
kind in respect thereof. The Company further agrees that no advancement or
payment by the Fund Indemnitors on behalf of Indemnitee with respect to any
claim for which Indemnitee has sought indemnification from the Company shall
affect the foregoing, and the Fund Indemnitors shall have a right of
contribution and/or be subrogated to the extent of such advancement or payment
to all of the rights of recovery of Indemnitee against the Company. The Company
and Indemnitee agree that the Fund Indemnitors are express third party
beneficiaries of the terms of this Section 8(c).

(d) Except as provided in Section 8(c) above, in the event of any payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee (other than against the Fund
Indemnitors), who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.

 

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(e) Except as provided in Section 8(c) above, the Company shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

(f) Except as provided in Section 8(c) above, the Company’s obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, employee or agent of any
other corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of Expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.

9. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

(a) for an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act (as hereinafter defined), or similar
provisions of state statutory law or common law; or

(b) for Indemnitee’s reimbursement to the Company of any bonus or other
incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, in each case as required
under the Exchange Act; or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated
by Indemnitee, including any Proceeding (or any part of any Proceeding)
initiated by Indemnitee against the Company or its directors, officers,
employees or other indemnitees, unless (i) the Company has joined in or the
Board authorized the Proceeding (or any part of any Proceeding) prior to its
initiation, (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law,
or (iii) the Proceeding is one to enforce Indemnitee’s rights under this
Agreement, the Charter or the Bylaws.

10. Duration of Agreement. All agreements and obligations of the Company
contained herein shall continue until and terminate upon the later of (i) ten
(10) years after the date that Indemnitee shall have ceased to serve as a
director or officer of the Company or a director, officer, trustee, partner,
managing member, fiduciary, employee or agent of any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served at the request of the Company, and
(ii) two (2) years after the final termination of any Proceeding (including any
rights of appeal thereto) in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any Proceeding
commenced by Indemnitee pursuant to Section 7 of this Agreement relating thereto
(including any rights of appeal of any Section 7 Proceeding).

11. Security. To the extent requested by Indemnitee and approved by the Board,
the Company shall provide security to Indemnitee for the Company’s obligations
hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to Indemnitee, may not be revoked
or released without the prior written consent of Indemnitee.

 

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12. Definitions. For purposes of this Agreement:

(a) “Change in Control” shall be deemed to occur upon the earliest to occur
after the date of this Agreement of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person, other than WSHP Biologics
Holdings, LLC, Water Street or any of their respective affiliates and other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company’s then
outstanding securities, unless the change in relative “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act) of the Company’s securities by any
Person results solely from a reduction in the aggregate number of outstanding
securities entitled to vote generally in the election of directors;

(ii) Change in Board of Directors. During any period of two (2) consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a Person who has entered into
an agreement with the Company to effect a transaction described in
Section 12(a)(i), 12(a)(iii) or 12(a)(iv)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved or who was otherwise nominated by WSHP
Biologics Holdings, LLC, Water Street or any of their respective affiliates,
cease for any reason to constitute at least a majority of the members of the
Board;

(iii) Corporate Transactions. The effective date of a merger or consolidation of
the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity; and

(iv) Liquidation. The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement or series of agreements for the sale
or disposition by the Company of all or substantially all of the Company’s
assets, or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale, or disposition in one transaction or a
series of related transactions.

(b) “Corporate Status” describes the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Company, any direct or
indirect subsidiary of the Company, or of any other corporation, limited
liability company, partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, that such person is
or was serving at the request of the Company; provided, that any person that
serves as a director, officer, employee, agent or fiduciary of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, of at least 50% of whose equity interests are owned by the
Company, shall be conclusively presumed to be serving in such capacity at the
request of the Company.

 

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(c) “Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

(d) “Enterprise” shall mean the Company and any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise that Indemnitee is or was serving at the express written
request of the Company as a director, officer, trustee, partner, managing
member, employee, agent or fiduciary.

(e) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(f) “Expenses” shall include all reasonable documented direct and indirect
costs, including attorneys’ fees, retainers, court costs, transcript costs, fees
of experts and other professionals, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, out-of-pocket expenses and other disbursements and expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a
witness in a Proceeding, responding to, or objecting to, a request to provide
discovery in any Proceeding, or, to the fullest extent permitted by applicable
law, successfully establishing a right to indemnification under this Agreement,
whether in whole or part. Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding and any federal, state,
local or foreign taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement, including without limitation the
premium, security for, and other costs relating to any cost bond, supersede as
bond, or other appeal bond or its equivalent. Expenses, however, shall not
include any Liabilities.

(g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporate law and neither presently is, nor in the
past five (5) years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect
to matters concerning Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any Person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The Company
agrees to pay the reasonable fees and disbursements of the Independent Counsel
referred to above and to fully indemnify such counsel against any and all
expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

(h) “Liabilities” shall mean damages, losses and liabilities of any type
whatsoever, including, but not limited to, any judgments, fines, excise or other
taxes, penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, excise or other taxes, penalties or amounts paid in
settlement) of any Proceeding.

(i) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of
the Exchange Act; provided, however, that Person shall exclude (i) the Company,
(ii) any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, and (iii) any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

 

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(j) “Proceeding” includes any actual, threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened, pending or
completed proceeding, and any appeal thereof, whether brought by or in the right
of the Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the Corporate Status of Indemnitee, by reason of any
action taken by Indemnitee or of any inaction on Indemnitee’s part while acting
in such Corporate Status, or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust or other
enterprise; in each case whether or not Indemnitee is acting or serving in any
such capacity at the time any Liability or Expense is incurred for which
indemnification can be provided under this Agreement; including one pending on
or before the date of this Agreement.

13. Severability. If any provision of this Agreement or the application of any
such provision to any Person or circumstance shall be declared by any court of
competent jurisdiction to be invalid, illegal, void or unenforceable in any
respect, all other provisions of this Agreement, or the application of such
provision to Persons or circumstances other than those as to which it has been
held invalid, illegal, void or unenforceable, shall nevertheless remain in full
force and effect and will in no way be affected, impaired or invalidated
thereby. Upon such determination that any provision, or the application of any
such provision, is invalid, illegal, void or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties hereto as closely as possible to the fullest
extent permitted by law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible.

14. Enforcement and Binding Effect.

(a) The Company expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director, officer or key employee of the Company and/or
Enterprise, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director, officer or key employee of the Company
and/or Enterprise.

(b) Without limiting any of the rights of Indemnitee under the Charter or Bylaws
of the Company as they may be amended from time to time, this Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the
subject matter hereof.

(c) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Agreement shall be binding upon and be enforceable by the
parties hereto and their respective successors and assigns (including any direct
or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or of any other Enterprise at the Company’s request, and shall inure
to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.

 

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(d) The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform 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.

(e) The Company and Indemnitee agree herein that a monetary remedy for breach of
this Agreement, at some later date, may be inadequate, impracticable and
difficult of proof, and further agree that such breach may cause Indemnitee
irreparable harm. Accordingly, the parties hereto agree that Indemnitee may
enforce this Agreement by seeking injunctive relief and/or specific performance
hereof or other equitable relief, without any necessity of showing actual damage
or irreparable harm, and that by seeking injunctive relief and/or specific
performance or other equitable relief, Indemnitee shall not be precluded from
seeking or obtaining any other relief to which Indemnitee may be entitled. The
Company and Indemnitee further agree that Indemnitee shall be entitled to such
specific performance and injunctive or other equitable relief, including
temporary restraining orders, preliminary injunctions and permanent injunctions,
without the necessity of posting bonds or other undertaking in connection
therewith. The Company acknowledges that in the absence of a waiver, a bond or
undertaking may be required of Indemnitee by the court, and the Company hereby
waives any such requirement of such a bond or undertaking.

15. Modification and Waiver. No term of this Agreement may be amended or
modified without the prior written consent of each party hereto. No provision of
this Agreement may be waived except in a writing executed and delivered by the
party against whom such waiver is sought to be enforced. Any amendment or waiver
effected in accordance with this Section 15 shall be binding upon the parties
hereto.

16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment or other similar document relating to any
Proceeding or matter which may be subject to indemnification covered hereunder.
The failure to so notify the Company shall not relieve the Company of any
obligation which it may have to Indemnitee under this Agreement or otherwise
unless and only to the extent that such failure or delay materially prejudices
the Company.

17. Notices. Unless otherwise provided, any notice or request required or
permitted to be delivered under this Agreement shall be given in writing and
shall be deemed effectively given as hereinafter described (a) if given by
personal delivery, upon actual delivery, (b) if given by facsimile or
telecopier, upon receipt of confirmation of a completed transmittal, (c) if
given by mail, upon the earlier of (i) actual receipt of such notice by the
intended recipient or (ii) three (3) business days after such notice is
deposited in first class mail, postage prepaid, and (d) if by an internationally
recognized overnight air courier, one (1) business day after delivery to such
carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
(10) days’ advance written notice to the other party:

If to the Company:

RTI Biologics, Inc.

11621 Research Circle

Alachua, FL 32615

Attention: Board of Directors

Telecopy: 386-418-0342

 

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With a copy to (which shall not constitute notice to the Company):

Fulbright & Jaworski LLP

666 Fifth Avenue

New York, NY 10103

Attention: Warren J. Nimetz

Facsimile: (212) 318-3400

If to Indemnitee:

At the address set forth below Indemnitee’s signature hereto

With a copy to (which shall not constitute notice to Indemnitee):

Kirkland & Ellis LLP

300 North LaSalle

Chicago, IL 60654

Attention: Ted H. Zook, P.C.

                           James S. Rowe

                           Martin A. DiLoreto, Jr., P.C.

Telecopy: (312) 862-2200

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

18. Counterparts; Electronic Delivery. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement and any
signed agreement or instrument entered into in connection with this Agreement,
and any amendments hereto or thereto, to the extent delivered by means of a
telecopy machine or electronic mail (any such delivery, an “Electronic
Delivery”), shall be treated in all manner and respects as an original agreement
or instrument and shall be considered to have the same binding legal effect as
if it were the original signed version thereof delivered in person. At the
request of any party hereto or to any such agreement or instrument, each other
party hereto or thereto shall re-execute original forms thereof and deliver them
to all other parties. No party hereto or to any such agreement or instrument
shall raise (a) the use of Electronic Delivery to deliver a signature or (b) the
fact that any signature or agreement or instrument was transmitted or
communicated through the use of Electronic Delivery, as a defense to the
formation of a contract, and each such party forever waives any such defense,
except to the extent such defense related to lack of authenticity.

19. Headings; Interpretation. All headings and subheadings used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. The words “include,” “includes” and
“including” will be deemed to be followed by the phrase “without limitation”.
The meanings given to terms defined herein will be equally applicable to both
the singular and plural forms of such terms. Whenever the context may require,
any pronoun includes the corresponding masculine, feminine and neuter forms. All
references to “dollars” or “$” will be deemed references to the lawful money of
the United States of America. Further, the parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any provisions of this Agreement.

 

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20. Governing Law; CONSENT TO JURISDICTION. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its
conflict-of-laws rules. Except with respect to any arbitration commenced by
Indemnitee pursuant to Section 7 of this Agreement, the Company and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Delaware Court”), and not in any
other state or federal court in the United States of America or any court in any
other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) agree that service of process in any such
action or proceeding may be effected by notice given pursuant to Section 17 of
this Agreement, (iv) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (v) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
Delaware Court has been brought in an improper or inconvenient forum. The
foregoing consent to jurisdiction shall not constitute general consent to
service of process in the state for any purpose except as provided above, and
shall not be deemed to confer rights on any Person other than the parties to
this Agreement.

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first written above.

 

RTI BIOLOGICS, INC. By:  

 

Name:   Title:  

INDEMNITEE

 

Name:   Address:  

 

 

 

Signature Page to Director Indemnification Agreement