Exhibit 10.1


 








 


COMMON STOCK PURCHASE AGREEMENT


 


COMMON STOCK PURCHASE
AGREEMENT (the “Agreement”), dated as of March 16, 2015, by and between BACTERIN INTERNATIONAL HOLDINGS,
INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability
company (the “Buyer”). Capitalized terms used herein and not otherwise defined herein are defined in Section
10 hereof.


 


WHEREAS:


 


Subject to the terms
and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from the Company,
up to Ten Million Dollars ($10,000,000) of the Company’s common stock, par value $0.000001 (the “Common Stock”).
The shares of Common Stock to be purchased hereunder are referred to herein as the “Purchase Shares.”


 


NOW THEREFORE,
the Company and the Buyer hereby agree as follows:


 


		1.	PURCHASE OF COMMON STOCK. 



 


Subject to the terms
and conditions set forth in this Agreement, the Company has the right to sell to the Buyer, and the Buyer has the obligation to
purchase from the Company, Purchase Shares as follows:


 


(a)Initial Purchase;
Commencement of Purchases of Common Stock. Within five (5) Business Days from the date of approval of the issuance of the shares
hereunder by the Principal Market, the Buyer shall purchase from the Company 207,182 Purchase Shares and upon receipt of such Purchase
Shares pay to the Company as the purchase price therefor, via wire transfer, Seven Hundred Fifty Thousand Dollars ($750,000) (such
purchase the “Initial Purchase” and such Purchase Shares are referred to herein as “Initial Purchase
Shares”).  Upon issuance and payment therefor as provided herein, such Initial Purchase Shares shall be validly
issued and fully paid and non-assessable. The Initial Purchase Shares shall be issued to the Buyer bearing the restrictive legend
set forth in Section 4(e). Thereafter, the purchase and sale of Purchase Shares hereunder shall occur from time to time upon written
notices by the Company to the Buyer on the terms and conditions as set forth herein following the satisfaction of the conditions
(the “Commencement”) as set forth in Sections 6 and 7 below (the date of satisfaction of such conditions, the
“Commencement Date”).


 


(b)The Company’s Right
to Require Regular Purchases. Subject to the terms and conditions of this Agreement, on any given Business Day after the Commencement
Date, the Company shall have the right but not the obligation to direct the Buyer by its delivery to the Buyer of a Purchase Notice
from time to time, and the Buyer thereupon shall have the obligation, to buy the number of Purchase Shares specified in such notice,
up to 50,000 Purchase Shares, on such Business Day (as long as such notice is delivered on or before 5:00 p.m. Eastern time on
such Business Day) (each such purchase, a “Regular Purchase”) at the Purchase Price on the Purchase Date; however,
in no event shall the Purchase Amount of a Regular Purchase exceed Five Hundred Thousand Dollars ($500,000) per Business Day.
The Company may deliver additional Purchase Notices to the Buyer from time to time so long as the most
recent purchase has been completed.  The share amounts in the first sentence of this Section 1(b) shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split, or other similar transaction.


 






    	 



    	 



    

 


(c)VWAP Purchases. Subject
to the terms and conditions of this Agreement, in addition to purchases of Purchase Shares as described in Section 1(b) above,
with one Business Day’s prior written notice (as long as such notice is delivered on or before 5:00 p.m. Eastern time on
the Business Day immediately preceding the VWAP Purchase Date), the Company shall also have the right but not the obligation to
direct the Buyer by the Company’s delivery to the Buyer of a VWAP Purchase Notice from time to time, and the Buyer thereupon
shall have the obligation, to buy the VWAP Purchase Share Percentage of the trading volume of the Common Stock on the VWAP Purchase
Date up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase Date (each such purchase, a “VWAP Purchase”)
at the VWAP Purchase Price. The Company may deliver a VWAP Purchase Notice to the Buyer on or before 5:00 p.m. Eastern time on
a date on which the Company also submitted a Purchase Notice for a Regular Purchase of at least 50,000 Purchase Shares to the Buyer.
A VWAP Purchase shall automatically be deemed completed at such time on the VWAP Purchase Date that the Sale Price falls below
the VWAP Minimum Price Threshold; in such circumstance, the VWAP Purchase Amount shall be calculated using (i) the VWAP Purchase
Share Percentage of the aggregate shares traded on the Principal Market for such portion of the VWAP Purchase Date prior to the
time that the Sale Price fell below the VWAP Minimum Price Threshold and (ii) a VWAP Purchase Price calculated using the volume
weighted average price of Common Stock sold during such portion of the VWAP Purchase Date prior to the time that the Sale Price
fell below the VWAP Minimum Price Threshold. Each VWAP Purchase Notice must be accompanied by instructions to the Company’s
Transfer Agent to immediately issue to the Buyer an amount of Common Stock equal to the VWAP Purchase Share Estimate, a good faith
estimate by the Company of the number of Purchase Shares that the Buyer shall have the obligation to buy pursuant to the VWAP Purchase
Notice. In no event shall the Buyer, pursuant to any VWAP Purchase, purchase a number of Purchase Shares that exceeds the VWAP
Purchase Share Estimate issued on the VWAP Purchase Date in connection with such VWAP Purchase Notice; however, the Buyer will
immediately return to the Company any amount of Common Stock issued pursuant to the VWAP Purchase Share Estimate that exceeds the
number of Purchase Shares the Buyer actually purchases in connection with such VWAP Purchase. Upon completion of each VWAP Purchase
Date, the Buyer shall submit to the Company a confirmation of the VWAP Purchase in form and substance reasonably acceptable to
the Company. The Company may deliver additional VWAP Purchase Notices to the Buyer from time to time so long as the most recent
purchase has been completed. The Company may, by written notice to the Buyer, in its sole discretion at any time after the date
of this Agreement, irrevocably terminate this Section 1(c) and its right to direct the Buyer to make VWAP Purchases.


 


(d)Payment for
Purchase Shares. For each Regular Purchase, the Buyer shall pay to the Company an amount equal to the Purchase Amount as full
payment for such Purchase Shares via wire transfer of immediately available funds on the same Business Day that the Buyer receives
such Purchase Shares. For each VWAP Purchase, the Buyer shall pay to the Company an amount equal to the VWAP Purchase Amount as
full payment for such Purchase Shares via wire transfer of immediately available funds on the third Business Day following the
VWAP Purchase Date. All payments made under this Agreement shall be made in lawful money of the United States of America via wire
transfer of immediately available funds to such account as the Company may from time to time designate by written notice in accordance
with the provisions of this Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any day
that is not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day.


 






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(e)Purchase
Price Floor. The Company and the Buyer shall not effect any sales under this Agreement on any Purchase Date where the Closing
Sale Price is less than the Floor Price. “Floor Price” means $1.00 per share of Common Stock, which shall be
appropriately adjusted for any reorganization, recapitalization, stock dividend, stock split, reverse stock split or other similar
transaction.


 


(f)Records of
Purchases. The Buyer and the Company shall each maintain records showing the remaining Available Amount at any given time and
the dates and purchase amounts for each purchase, or shall use such other method reasonably satisfactory to the Buyer and the Company
to reconcile the remaining Available Amount.


 


(g)Taxes.
The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery
of any shares of Common Stock to the Buyer made under this Agreement.


 


(h)Compliance
with Principal Market Rules. Notwithstanding anything in this Agreement to the contrary, and in addition to the limitations
set forth in Section 1(e), the Company shall not effect any sale under this Agreement and the Buyer shall not have the right or
the obligation to purchase shares of Common Stock under this Agreement to the extent that after giving effect to such purchase
the "Exchange Cap" shall be deemed to be reached, unless stockholder approval is obtained to issue more than such 19.99%.
The "Exchange Cap" shall be deemed to have been reached if, at any time prior to the shareholders of the Company approving
the transaction contemplated by this Agreement, upon a purchase under this Agreement, the Purchase Shares issuable pursuant to
such purchase would, together with any and all shares of Common Stock previously issued or sold under this Agreement, exceed 1,335,942
shares of Common Stock (19.99% of the 6,683,056 outstanding shares of Common Stock as of the date of this Agreement). The Exchange
Cap shall be appropriately adjusted for any stock dividend, stock split, reverse stock split or similar transaction. The Company
may, but shall be under no obligation to, request its shareholders to approve the transaction contemplated by this Agreement. The
Company shall not be required or permitted to issue, and the Buyer shall not be required or permitted to purchase, any Purchase
Shares under this Agreement if such issuance would breach the Company's obligations under the rules or regulations of the Principal
Market.


 


(i)Beneficial
Ownership Limitation. The Company shall not issue and the Buyer shall not purchase any shares of Common Stock under this Agreement
if such shares proposed to be issued and sold, when aggregated with all other shares of Common Stock then owned beneficially (as
calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by the Buyer and its affiliates
would result in the beneficial ownership by the Buyer and its affiliates of more than 19.99% of the then issued and outstanding
shares of Common Stock.


 


		2.	BUYER’S REPRESENTATIONS AND WARRANTIES.



 


The Buyer represents
and warrants to the Company that as of the date hereof and as of the Commencement Date:


 


(a)Investment
Purpose. The Buyer is entering into this Agreement and acquiring the Commitment Shares (as defined in Section 4(e) hereof)
and the Purchase Shares (the Purchase Shares and the Commitment Shares are collectively referred to herein as the “Securities”),
for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution
thereof; provided however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any
minimum or other specific term.


 






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(b)Accredited
Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation
D of the 1933 Act.


 


(c)Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire
the Securities.


 


(d)Information.
The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities that have been reasonably requested by the Buyer, including, without limitation,
the SEC Documents (as defined in Section 3(f) hereof). The Buyer understands that its investment in the Securities involves a high
degree of risk. The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the
proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers
of the Company concerning the financial condition and business of the Company and other matters related to an investment in the
Securities. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives shall
modify, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained in Section
3 below. The Buyer acknowledges that no representation regarding projected financial performance or a projected rate of return
has been made to it by any party. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the Securities.


 


(e)No Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(f)Transfer
or Sale. The Buyer understands that except as provided in the Registration Rights Agreement (as defined in Section 4(a) hereof):
(i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder or (B) an exemption exists permitting such
Securities to be sold, assigned or transferred without such registration; (ii) any sale of the Securities made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations
of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register the Securities under
the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.


 






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(g)Organization.
The Buyer is a limited liability company duly organized and validly existing in good standing under the laws of the jurisdiction
in which it is organized, and has the requisite organizational power and authority to own its properties and to carry on its business
as now being conducted.


 


(h)Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and is a valid
and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to
(i) general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and (ii) public policy
underlying any law, rule or regulation (including any federal or state securities law, rule or regulation) with regards to indemnification,
contribution or exculpation. The execution and delivery of the Transaction Documents by the Buyer and the consummation by it of
the transactions contemplated hereby and thereby do not conflict with the Buyer’s certificate of organization or operating
agreement or similar documents, and do not require further consent or authorization by the Buyer, its managers or its members.


 


(i)Residency.
The Buyer is a resident of the State of Illinois.


 


(j)No Prior
Short Selling. The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement has any
of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly,
any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net
short position with respect to the Common Stock.


 


		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.



 


The Company represents
and warrants to the Buyer that as of the date hereof and as of the Commencement Date:


 


(a)Organization
and Qualification. The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity in
which the Company, directly or indirectly, owns more than 50% of the voting stock or
capital stock or other similar equity interests) are corporations or limited liability companies duly organized and validly existing
in good standing under the laws of the jurisdiction in which they are incorporated or organized, and have the requisite corporate
or organizational power and authority to own their properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation or limited liability company to do business and is in
good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so qualified or be in good standing could not reasonably
be expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any
material adverse effect on any of: (i) the business, properties, assets, operations, results of operations or financial condition
of the Company and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined in Section 3(b) hereof). The Company has no material Subsidiaries except
as set forth on Schedule 3(a).


 






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(b)Authorization;
Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Registration Rights Agreement and each of the other agreements entered into by the parties on the Commencement
Date and attached hereto as exhibits to this Agreement (collectively, the “Transaction Documents”), and to issue
the Securities in accordance with the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation, the issuance
of the Commitment Shares and the reservation for issuance and the issuance of the Purchase Shares issuable under this Agreement,
have been duly authorized by the Company’s Board of Directors or duly authorized committee thereof, do not conflict with
the Company’s Certificate of Incorporation or Bylaws, and do not require further consent or authorization by the Company,
its Board of Directors or its stockholders (other than as contemplated by Section 1(h) hereof), (iii) this Agreement has been,
and each other Transaction Document shall be on the Commencement Date, duly executed and delivered by the Company and (iv) this
Agreement constitutes, and each other Transaction Document upon its execution on behalf of the Company, shall constitute, the valid
and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability
may be limited by (y) general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies and (z) public policy underlying
any law, rule or regulation (including any federal or states securities law, rule or regulation) with regards to indemnification,
contribution or exculpation. The Board of Directors of the Company or duly authorized committee thereof has approved the resolutions
(the “Signing Resolutions”) substantially in the form as set forth as Exhibit B-1 attached hereto to
authorize this Agreement and the transactions contemplated hereby. The Signing Resolutions are valid, in full force and effect
and have not been modified or supplemented in any material respect other than by the resolutions set forth in Exhibit B-2
attached hereto regarding the registration statement referred to in Section 4 hereof. The Company has delivered to the Buyer a
true and correct copy of the Signing Resolutions as approved by the Board of Directors of the Company or an appropriate Board committee.


 


(c)Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of (i) 95,000,000 shares of Common Stock, par value
$0.000001, of which as of the date hereof, 6,683,056 shares are issued and outstanding, zero shares are held as treasury shares,
900,000 shares are reserved for future issuance pursuant to the Company’s equity incentive plans, of which approximately
104,285 shares remain available for future option grants or stock awards, 255,000 shares are reserved for issuance pursuant to
employee stock options granted outside of the Company's equity incentive plan, and 1,501,025 shares are issuable and reserved for
issuance pursuant to securities (other than stock options or equity based awards issued pursuant to the Company’s stock incentive
plans) exercisable or exchangeable for, or convertible into, shares of Common Stock, and (ii) 5,000,000 shares of preferred stock,
with per share liquidation preferences set forth on Schedule 3(c), of which as of the date hereof zero shares are issued and outstanding.
All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and non-assessable. Except
as disclosed in Schedule 3(c), (i) no shares of the Company’s capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities
of the Company or any of its Subsidiaries, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of
the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of
its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, (iv) there are no material agreements
or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except the Registration Rights Agreement), (v) there are no outstanding securities or instruments of the Company
or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered
by the issuance of the Securities as described in this Agreement and (vii) the Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement. The Company has furnished or made available
to the Buyer true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date
hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on
the date hereof (the “Bylaws”).


 






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(d)Issuance
of Securities. The Commitment Shares and the Initial Purchase Shares have been duly authorized and, upon issuance in accordance
with the terms hereof, the Commitment Shares and the Initial Purchase Shares shall be (i) validly issued, fully paid and non-assessable
and (ii) free from all taxes, liens and charges with respect to the issuance thereof. At least 3,000,000 additional shares of Common
Stock have been duly authorized and reserved for issuance upon future purchase as Purchase Shares under this Agreement. Upon issuance
and payment therefore in accordance with the terms and conditions of this Agreement, such Purchase Shares shall be validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock.


 


(e)No Conflicts.
Except as disclosed in Schedule 3(e), the execution, delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation
for issuance and issuance of the Purchase Shares) will not (i) result in a violation of the Certificate of Incorporation, including
any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company, or the Bylaws
or (ii) constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the
Company or any of its Subsidiaries is a party, or result, to the Company’s knowledge, in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal
Market applicable to the Company or any of its Subsidiaries) or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected, except in the case of defaults, terminations, amendments, accelerations, cancellations and violations under
clause (ii), which could not reasonably be expected to result in a Material Adverse Effect. Except as disclosed in Schedule 3(e),
neither the Company nor its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, including
any Certificate of Designation, Preferences and Rights of any outstanding series of preferred stock of the Company, or Bylaws or
their organizational charter or bylaws, respectively. Except as disclosed in Schedule 3(e), neither the Company nor any of its
Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except
for possible violations, defaults, terminations or amendments that could not reasonably be expected to have a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any
law, ordinance, or regulation of any governmental entity, except for possible violations, the sanctions for which either individually
or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Except as specifically contemplated by
this Agreement, reporting obligations under the 1934 Act or as required under the 1933 Act or applicable state securities laws
or the filing of a Listing of Additional Shares Notification Form with the Principal Market, the Company is not required to obtain
any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction
Documents in accordance with the terms hereof or thereof. Except for reporting obligations under the 1934 Act, all consents, authorizations,
orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall be obtained
or effected on or prior to the Commencement Date.


 






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(f)SEC Documents;
Financial Statements. Except as disclosed in Schedule 3(f), since January 1, 2013, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934
Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).
As of their respective dates (except as they have been correctly amended), the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC (except as they may have been properly amended), contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective
dates (except as they have been properly amended), the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as disclosed in Schedule 3(f) or routine correspondence, such as comment letters and notices
of effectiveness in connection with previously filed registration statements or periodic reports publicly available on EDGAR, to
the Company’s knowledge, the Company or any of its Subsidiaries are not presently the subject of any inquiry, investigation
or action by the SEC.


 


(g)Absence of
Certain Changes. Except as disclosed in Schedule 3(g), since September 30, 2014, there has been no material adverse change
in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries taken
as a whole. For purposes of this Agreement, neither a decrease in cash or cash equivalents nor losses incurred in the ordinary
course of the Company’s business shall be deemed or considered a material adverse change. The Company has not taken any steps,
and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any
of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or
insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due.


 






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(h)Absence of
Litigation. Except as disclosed in Schedule 3(h), to the Company’s knowledge, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against the Company or any of the Company’s Subsidiaries
or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect (each, an “Action”). A description of each such
Action, if any, is set forth in Schedule 3(h).


 


(i)Acknowledgment
Regarding Buyer’s Status. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further
acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Buyer or
any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that
the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives and advisors.


 


(j)Intellectual
Property Rights. To the Company’s knowledge, the Company and its Subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets
and other intellectual property rights (collectively, “Intellectual Property”) necessary to conduct their respective
businesses as now conducted, except as set forth in Schedule 3(j) or to the extent that the failure to own, possess, license or
otherwise hold adequate rights to use Intellectual Property would not, individually or in the aggregate, have a Material Adverse
Effect. Except as disclosed in Schedule 3(j), none of the Company’s material active and registered Intellectual Property
will expire or terminate by the terms and conditions thereof within two years from the date of this Agreement. The Company and
its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of any Intellectual Property
of others, or of any such development of similar or identical trade secrets or technical information by others with respect to
the Company’s or its Subsidiaries’ Intellectual Property and, except as set forth on Schedule 3(j), there is no claim,
action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company
or its Subsidiaries regarding Intellectual Property, which could reasonably be expected to have a Material Adverse Effect.


 


(k)Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of the environment or human health and safety and with respect to hazardous or
toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or approval, except where, in each of the three foregoing
clauses, the failure to so comply or receive such approvals could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.


 






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(l)Title.
The Company and its Subsidiaries have good and marketable title to all personal property owned by them that is material to the
business of the Company and its Subsidiaries, free and clear of all liens, encumbrances and defects except such as are described
in Schedule 3(l) or such as do not materially affect the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and any of its Subsidiaries or could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Any real property and facilities held under lease by the Company and any of its
Subsidiaries, to the Company’s knowledge, are held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company
and its Subsidiaries.


 


(m)Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be reasonable and customary in the businesses in which the Company
and its Subsidiaries are engaged. To the Company’s knowledge, since January 1, 2013, neither the Company nor any such Subsidiary
has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary, to the Company’s
knowledge, will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material
Adverse Effect.


 


(n)Regulatory
Permits. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, except when the
failure to so possess such certificates, authorizations or permits could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any written notice of proceedings
relating to the revocation or modification of any such material certificate, authorization or permit.


 


(o)Tax
Status. The Company and each of its Subsidiaries has made or filed all federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books reserves reasonably adequate for the payment of all unpaid and
unreported taxes or filed valid extensions) and has paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith
and has set aside on its books reserves reasonably adequate for the payment of all taxes for periods subsequent to the periods
to which such returns, reports or declarations apply. To the Company’s knowledge, there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction.


 


(p)Transactions
With Affiliates. Except as set forth on Schedule 3(p), and other than the grant or exercise of stock options or any other
equity securities offered pursuant to duly adopted stock or incentive compensation plans as disclosed on Schedule 3(c), as
of the date hereof, none of the officers, directors or employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees, officers and directors and reimbursement for expenses
incurred on behalf of the Company), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a material interest or is an officer, director, trustee or general
partner.


 






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(q)Application
of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the state of its incorporation which is or could become applicable to the Buyer as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Buyer’s
ownership of the Securities.


 


		4.	COVENANTS.



 


(a)Filing
of Form 8-K and Registration Statement. The Company agrees that it shall, within the time required under the 1934 Act, file
a Current Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby. The Company shall also file on
or before March 31, 2015 a new registration statement covering the sale of the Securities by the Buyer in accordance with the
terms of the Registration Rights Agreement between the Company and the Buyer, dated as of the date hereof (“Registration
Rights Agreement”).


 


(b)Blue
Sky. The Company shall take such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify
(i) the initial issuance of the Securities to the Buyer under this Agreement and (ii) any subsequent sale of the Securities by
the Buyer, in each case, under applicable securities or “Blue Sky” laws of the states of the United States in such
states as is reasonably requested by the Buyer from time to time, and shall provide evidence of any such action so taken to the
Buyer at its written request.


 


(c)Listing.
The Company shall promptly secure the listing of all of the Securities upon each national securities exchange and automated quotation
system that requires an application by the Company for listing, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall use reasonable efforts to maintain such listing, so long as any other
shares of Common Stock shall be so listed. The Company shall use reasonable efforts to maintain the Common Stock’s listing
on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action that would be reasonably expected
to result in the delisting or suspension of the Common Stock on the Principal Market, unless the Common Stock is immediately thereafter
traded on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the
OTC Bulletin Board, or the OTCQB or OTCQX market places of the OTC Markets. The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section.


 


(d)Limitation
on Short Sales and Hedging Transactions. The Buyer agrees that beginning on the date of this Agreement and ending on the date
of termination of this Agreement as provided in Section 11(k), the Buyer and its agents, representatives and affiliates shall not
in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale” (as such term is defined
in Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii) hedging transaction, which establishes a net
short position with respect to the Common Stock.


 






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(e)Issuance
of Commitment Shares and Initial Purchase Shares. Within five (5) Business Days from the date of approval of the issuance of
the shares hereunder by the Principal Market, the Company shall issue to the Buyer, as consideration for the Buyer entering into
this Agreement, 154,189 shares of Common Stock (the “Commitment Shares”) and, pursuant to Section 1(a), the
Buyer shall purchase the Initial Purchase Shares. The Commitment Shares and Initial Purchase Shares shall be issued in certificated
form and (subject to Section 5 hereof) shall bear a restrictive legend substantially similar to the following:


 


THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.


 


(f)Due
Diligence. After providing the Company with prior written notice, the Buyer shall have the right, from time to time as the
Buyer may reasonably deem appropriate, to perform reasonable due diligence on the Company during normal business hours. The Company
and its officers and employees shall provide information and reasonably cooperate with the Buyer in connection with any reasonable
request by the Buyer related to the Buyer’s due diligence of the Company, including, but not limited to, any such request
made by the Buyer in connection with (i) the filing of the registration statement described in Section 4(a) hereof and (ii) the
Commencement; provided, however, that at no time is the Company required or permitted to disclose material nonpublic information
to the Buyer or breach any obligation of confidentiality or non-disclosure to a third party or make any disclosure that
could cause a waiver of attorney-client privilege. Each party hereto agrees not to disclose any Confidential Information of
the other party to any third party and shall not use the Confidential Information of such other party for any purpose other than
in connection with, or in furtherance of, the transactions contemplated hereby. Each party hereto acknowledges that the Confidential
Information shall remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect
the secrecy of any Confidential Information disclosed by the other party.


 


(g)Disposition
of Securities. The Buyer shall not sell any Securities except as provided in this Agreement, the Registration Rights Agreement
and the “Plan of Distribution” section of the prospectus included in the Registration Statement. The Buyer shall not
transfer any Securities except pursuant to sales described in the “Plan of Distribution” section of the prospectus
included in the Registration Statement or pursuant to Rule 144 under the 1933 Act. In the event of any sales of Securities pursuant
to the Registration Statement, the Buyer will (i) effect such sales pursuant to the “Plan of Distribution” section
of the prospectus included in the Registration Statement, and (ii) will comply with all applicable prospectus delivery requirements.


 


		5.	TRANSFER AGENT INSTRUCTIONS.



 






    	-12-



    	 



    

 


Within two (2) Business
Days from the approval of the issuance of the shares hereunder by the Principal Market, the Company shall deliver to the Transfer
Agent a letter in the form as set forth as Exhibit D attached hereto with respect to the issuance of the Initial Purchase
Shares and the Commitment Shares. On the Commencement Date, the Company shall cause any restrictive legend on the Initial
Purchase Shares and the Commitment Shares to be removed upon surrender of the originally issued certificate(s) for such shares.
So long as the Buyer complies with its obligations in Section 4(g), all of the additional Purchase Shares to be issued under this
Agreement shall be issued without any restrictive legend unless the Buyer expressly consents otherwise. The Company shall issue
irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue Common Stock in the name of the Buyer
for the Purchase Shares (the “Irrevocable Transfer Agent Instructions”). The Company warrants to the Buyer that,
so long as the Buyer complies with its obligations in Section 4(g), no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, will be given by the Company to the Transfer Agent with respect to the Purchase Shares and that
the Commitment Shares and the Purchase Shares shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the Registration Rights Agreement, subject to the provisions of Section 4(e)
in the case of the Commitment Shares and the Initial Purchase Shares.


 


		6.	CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE



			SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.



 


The right of the Company
hereunder to commence sales of the Purchase Shares (other than the Initial Purchase Shares) is subject to the satisfaction of each
of the following conditions on or before the Commencement Date (the date that the Company may begin sales of Purchase Shares (other
than the Initial Purchase Shares)):


 


(a)The Buyer shall
have executed each of the Transaction Documents and delivered the same to the Company;


 


(b)The representations
and warranties of the Buyer shall be true and correct as of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct in all material respects as of such specific date)
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants and agreements required
by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Commencement Date; and


 


(c)A registration
statement covering the sale of the Securities by the Buyer shall have been declared effective under the 1933 Act by the SEC and
no stop order with respect to the registration statement shall be pending or threatened by the SEC.


 


		7.	CONDITIONS TO THE BUYER’S OBLIGATION TO MAKEPURCHASES
OF SHARES OF COMMON STOCK.



 


The obligation of the
Buyer to buy Purchase Shares (other than the Initial Purchase Shares) under this Agreement is subject to the satisfaction of each
of the following conditions on or before the Commencement Date (the date that the Company may begin sales of Purchase Shares (other
than the Initial Purchase Shares)) and once such conditions have been initially satisfied, there shall not be any ongoing obligation
to satisfy such conditions after the Commencement has occurred:


 


(a)The Company
shall have executed each of the Transaction Documents and delivered the same to the Buyer;


 






    	-13-



    	 



    

 


(b)The
Company shall have issued to the Buyer the Commitment Shares and,
in the event that the Buyer shall have surrendered the originally issued certificate(s), shall have removed the restrictive transfer
legend from the certificate representing the Commitment Shares; 


 


(c)The
Common Stock shall be authorized for quotation on the Principal Market;


 


(d)The
Buyer shall have received the opinion of the Company’s legal counsel dated as of the Commencement Date in customary
form and substance;


 


(e)The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to materiality in Section 3 above, in which case, such representations
and warranties shall be true and correct without further qualification) as of the date of this Agreement and as of the
Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date, which
shall be true and correct in all material respects as of such specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by the Company at or prior to the Commencement Date. The Buyer shall have received a
certificate, executed by either the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing
effect in the form attached hereto as Exhibit A;


 


(f)The
Board of Directors of the Company or a duly authorized committee thereof shall have adopted resolutions substantially in
the form attached hereto as Exhibit B-1, which shall be in full force and effect without any amendment or supplement thereto
as of the Commencement Date;


 


(g)As of the Commencement
Date, the Company shall have reserved out of its authorized and unissued Common Stock, solely for the purpose of effecting future
purchases of Purchase Shares hereunder, 3,000,000 shares of Common Stock;


 


(h)The Irrevocable
Transfer Agent Instructions, in form acceptable to the Buyer shall have been signed by the Company and the Buyer and have been
delivered to the Transfer Agent;


 


(i)The Company
shall have delivered to the Buyer a certificate evidencing the incorporation and good standing of the Company in the State of Delaware
issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business Days of the Commencement Date;


 


(j)The Company
shall have delivered to the Buyer a secretary’s certificate executed by the Secretary of the Company, dated as of the Commencement
Date, in the form attached hereto as Exhibit C;


 


(k)A registration
statement covering the sale of (i) all of the Commitment Shares and Initial Purchase Shares and (ii) such number of additional
Purchase Shares as reasonably determined by the Company shall have been declared effective under the 1933 Act by the SEC and no
stop order with respect thereto shall be pending or threatened by the SEC. The Company shall have prepared and delivered to the
Buyer a final and complete form of prospectus, dated and current as of the Commencement Date, to be used by the Buyer in connection
with any sales of any Securities, and to be filed by the Company one (1) Business Day after
the Commencement Date pursuant to Rule 424(b). The Company shall have made all filings under all applicable federal and state securities
laws necessary to consummate the issuance of the Commitment Shares and the Purchase Shares pursuant to this Agreement in compliance
with such laws;


 






    	-14-



    	 



    

 


(l)No
Event of Default has occurred and is continuing, or any event which, after notice and/or lapse of time, would become an
Event of Default has occurred;


 


(m)On
or prior to the Commencement Date, the Company shall take all necessary action, if any, and such actions as reasonably requested
by the Buyer, in order to render inapplicable any control share acquisition, business combination, stockholder rights plan
or poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate
of Incorporation or the laws of the state of its incorporation, other than Section 203 of the Delaware General Corporation
Law, that is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company's issuance of the Securities and the Buyer's ownership of the Securities; and


 


(n)The
Company shall have provided the Buyer with the information reasonably requested by the Buyer in connection with its due diligence
requests made prior to, or in connection with, the Commencement, in accordance with the terms of Section 4(f) hereof.


 


		8.	INDEMNIFICATION.
                                         



 


In
consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities hereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless the Buyer and all of its affiliates, members, officers, directors, and employees, and any of
the foregoing person’s agents or other representatives (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and
all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought),
and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or
made against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction
Documents or any other certificate, instrument or document contemplated hereby or thereby, other than with respect to Indemnified
Liabilities which directly and primarily result from (A) a breach of any of the Buyer’s representations and warranties,
covenants or agreements contained in this Agreement, or (B) the gross negligence, bad faith or willful misconduct of the Buyer
or any other Indemnitee. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.


 


		9.	EVENTS OF DEFAULT.



 






    	-15-



    	 



    

 


An “Event
of Default” shall be deemed to have occurred at any time as any of the following events occurs:


 


(a)while any registration
statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement, the effectiveness
of such registration statement lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Buyer for the sale of all of the Registrable Securities (as defined in the Registration
Rights Agreement), and such lapse or unavailability continues for a period of ten (10) consecutive Business Days or for more than
an aggregate of thirty (30) Business Days in any 365-day period, which is not in connection with a post-effective amendment to
any such registration statement or the filing of a new registration statement; provided, however, that in connection with any post-effective
amendment to such registration statement or filing of a new registration statement that is required to be declared effective by
the SEC, such lapse or unavailability may continue for a period of no more than thirty (30) consecutive Business Days, which such
period shall be extended for up to an additional thirty (30) Business Days if the Company receives a comment letter from the SEC
in connection therewith;


 


(b)the suspension
from trading or failure of the Common Stock to be listed on a Principal Market for a period of three (3) consecutive Business Days;


 


(c)in the event
of a delisting of the Common Stock from the Principal Market, if the Common Stock is not immediately thereafter trading on the
New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Bulletin
Board or the OTCQB marketplace or OTCQX marketplace of the OTC Market Group;


 


(d)the
failure for any reason by the Transfer Agent to issue Purchase Shares to the Buyer within five (5) Business Days after the applicable
Purchase Date that the Buyer is entitled to receive;


 


(e)the
Company’s breach of any representation, warranty, covenant or other term or condition under any Transaction Document if
such breach could reasonably be expected to have a Material Adverse Effect and except, in the case of a breach of a covenant which
is reasonably curable, only if such breach continues uncured for a period of at least five (5) Business Days;


 


(f)if
any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law;


 


(g)if
the Company pursuant to or within the meaning of any Bankruptcy Law; (A) commences a voluntary case, (B) consents to the entry
of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially
all of its property, (D) makes a general assignment for the benefit of its creditors or (E) becomes insolvent;


 


(h)a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company
in an involuntary case, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C)
orders the liquidation of the Company or any Subsidiary; or


 


(i)If at any time
after the Commencement Date, the Exchange Cap is reached unless and until stockholder approval is obtained pursuant to Section
1(h) hereof. The Exchange Cap shall be deemed to be reached at such time if, upon submission of a Purchase Notice or VWAP Purchase
Notice under this Agreement, the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which
the Company may issue under this Agreement without breaching the Company’s obligations under the rules or regulations of
the Principal Market.


 






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In addition to any other rights and remedies
under applicable law and this Agreement, including the Buyer termination rights under Section 11(k) hereof, so long as an Event
of Default has occurred and is continuing, or if any event which, after notice and/or lapse of time, would become an Event of Default,
has occurred and is continuing, or so long as the Closing Sale Price is below the Floor Price, the Company may not require and
the Buyer shall not be obligated or permitted to purchase any shares of Common Stock under this Agreement. If pursuant to or within
the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company,
a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment
for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof)
this Agreement shall automatically terminate without any liability or payment to the Company without further action or notice by
any Person. No such termination of this Agreement under Section 11(k)(i) shall affect the Company’s or the Buyer’s
obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.


 


		10.	CERTAIN DEFINED TERMS.



 


For purposes of this
Agreement, the following terms shall have the following meanings:


 


(a)“1933
Act” means the Securities Act of 1933, as amended.


 


(b)“Available
Amount” means initially Ten Million Dollars ($10,000,000) in the aggregate which amount shall be reduced by the Purchase
Amount each time the Buyer purchases shares of Common Stock pursuant to Section 1 hereof.


 


(c)“Bankruptcy Law”
means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.


 


(d)“Business
Day” means any day on which the Principal Market is open for trading during normal trading hours (i.e., 9:30 a.m. to
4:00 p.m. Eastern Time), including any day on which the Principal Market is open for trading for a period of time less than the
customary time.


 


(e)“Closing
Sale Price” means the last closing trade price for the Common Stock on the Principal Market as reported by the Principal
Market.


 


(f)“Confidential Information”
means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection
of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment), which is designated as
"Confidential," "Proprietary" or some similar designation. Information communicated orally shall be considered
Confidential Information if such information is confirmed in writing as being Confidential Information within ten (10) Business
Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third
parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available
in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available
after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s
files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without
a breach of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence
in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the
receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in
obtaining an order protecting the information from public disclosure.


 






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(g)“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 


(h)“Maturity
Date” means the date that is twenty-four (24) months from the Commencement Date.


 


(i)“Person”
means an individual or entity including any limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization and a government or any department or agency thereof.


 


(j)“Principal
Market” means the NYSE MKT; provided however, that in the event the Company’s Common Stock is ever listed or traded
on the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Bulletin
Board or either of the OTCQB marketplace or the OTCQX marketplace of the OTC Markets Group, then the “Principal Market”
shall mean such other market or exchange on which the Company’s Common Stock is then listed or traded.


 


(k)“Purchase
Amount” means, with respect to any particular purchase made hereunder, the portion of the Available Amount to be purchased
by the Buyer pursuant to Section 1 hereof as set forth in a valid Purchase Notice or VWAP Purchase Notice which the Company delivers
to the Buyer.


 


(l)“Purchase
Date” means with respect to any Regular Purchase made hereunder, the Business Day of receipt by the Buyer of a valid
Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(b) hereof.


 


(m) “Purchase Notice”
shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy Purchase Shares pursuant to Section
1(b) hereof as specified by the Company therein at the applicable Purchase Price on the Purchase Date.


 


(n) “Purchase
Price” means the lesser of (i) the lowest Sale Price of the Common Stock on the Purchase Date or (ii) the arithmetic
average of the three (3) lowest Closing Sale Prices for the Common Stock during the ten (10) consecutive Business Days ending on
the Business Day immediately preceding such Purchase Date (to be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar transaction).


 






    	-18-



    	 



    

 


(o)“Sale
Price” means any trade price for the shares of Common Stock on the Principal Market during normal trading hours, as reported
by the Principal Market.


 


(p)“SEC”
means the United States Securities and Exchange Commission.


 


(q)“Transfer
Agent” means the transfer agent of the Company as set forth in Section 11(f) hereof or such other person who is then
serving as the transfer agent for the Company in respect of the Common Stock.


 


(r)“VWAP
Minimum Price Threshold” means, with respect to any particular VWAP Purchase Notice, the Sale Price on the VWAP Purchase
Date equal to the greater of (i) 80% of the Closing Sale Price on the Business Day immediately preceding the VWAP Purchase Date
or (ii) such higher price as set forth by the Company in the VWAP Purchase Notice.


 


(s)“VWAP
Purchase Amount” means, with respect to any particular VWAP Purchase Notice, the portion of the Available Amount to be
purchased by the Buyer pursuant to Section 1(c) hereof as set forth in a valid VWAP Purchase Notice which requires the Buyer to
buy the VWAP Purchase Share Percentage of the aggregate shares traded on the Principal Market during normal trading hours on the
VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum, subject to the VWAP Minimum Price Threshold.


 


(t)“VWAP
Purchase Date” means, with respect to any VWAP Purchase made hereunder, the Business Day following the receipt by
the Buyer of a valid VWAP Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(c) hereof.


 


(u)“VWAP
Purchase Notice” shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy Purchase
Shares on the VWAP Purchase Date pursuant to Section 1(c) hereof as specified by the Company therein at the applicable VWAP Purchase
Price with the applicable VWAP Purchase Share Percentage specified therein.


 


(v)“VWAP
Purchase Share Percentage” means, with respect to any particular VWAP Purchase Notice pursuant to Section 1(c) hereof,
the percentage set forth in the VWAP Purchase Notice which the Buyer will be required to buy as a specified percentage of the aggregate
shares traded on the Principal Market during normal trading hours up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase
Date subject to Section 1(c) hereof but in no event shall this percentage exceed thirty percent (30%) of such VWAP Purchase Date’s
share trading volume of the Common Stock on the Principal Market during normal trading hours.


 


(w)
“VWAP Purchase Price” means the lesser of (i) the Closing Sale Price on the VWAP Purchase Date; or (ii)
ninety-seven percent (97%) of volume weighted average price for the Common Stock traded on the Principal Market during normal
trading hours on (A) the VWAP Purchase Date if the aggregate shares traded on the Principal Market on the VWAP Purchase Date have
not exceeded the VWAP Purchase Share Volume Maximum, or (B) the portion of the VWAP Purchase Date until such time as the
sooner to occur of (1) the time at which the aggregate shares traded on the Principal Market has exceeded the VWAP Purchase Share
Volume Maximum, or (2) the time at which the sale price of Common Stock falls below the VWAP Minimum Price Threshold (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).


 






    	-19-



    	 



    

 


(x) “VWAP
Purchase Share Estimate” means the number of shares of Common Stock that the Company has in its sole discretion irrevocably
instructed its Transfer Agent to issue to the Buyer via the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program in connection with a VWAP Purchase Notice pursuant to Section 1(c) hereof and issued to the Buyer’s
or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian (DWAC) system on the VWAP Purchase
Date (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split
or other similar transaction).


 


(y) “VWAP
Purchase Share Volume Maximum” means a number of shares of Common Stock traded on the Principal Market during normal
trading hours on the VWAP Purchase Date equal to: (i) the VWAP Purchase Share Estimate, divided by (ii) the VWAP Purchase Share
Percentage (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).


 


		11.	MISCELLHANEOUS.



 


(a)Governing
Law; Jurisdiction; Jury Trial. The corporate laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any
dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 


(b)Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a
facsimile or pdf (or other electronic reproduction) signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or PDF (or other
electronic reproduction) signature.


 


(c)Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.


 






    	-20-



    	 



    

 


(d)Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.


 


(e)Entire Agreement.
This Agreement and the Registration Rights Agreement supersede all other prior oral or written agreements between the Buyer, the
Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement,
the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the
Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees
that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly
set forth in this Agreement.


 


(f)Notices.
Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii)
upon receipt, when sent by electronic message (provided the recipient responds to the message and confirmation of both electronic
messages are kept on file by the sending party); or (iv) one (1) Business Day after timely deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:


 


If to the Company:


Bacterin International Holdings,
Inc.


664 Cruiser Lane


Belgrade, MT 59714


Telephone:406-388-0480


Facsimile:406-388-0422


Attention: John Gandolfo,
CFO


Email:jgandolfo@bacterin.com


 


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


Bacterin International Holdings,
Inc.


664 Cruiser Lane


Belgrade, MT 59714


Telephone:406-388-0480


Facsimile:406-388-0422


Attention:Jill Gilpin, General
Counsel


Email:jgilpin@bacterin.com


 


If to the Buyer:


Aspire Capital Fund, LLC


155 North Wacker Drive, Suite
1600


Chicago, IL 60606


Telephone:312-658-0400


Facsimile:312-658-4005


Attention:Steven G. Martin


Email: smartin@aspirecapital.com


 






    	-21-



    	 



    

 


With a copy to (which
shall not constitute delivery to the Buyer):


Morrison & Foerster LLP


2000 Pennsylvania Avenue, NW, Suite
6000


Washington, DC 20006


Telephone:202-778-1611


Facsimile:202-887-0763


Attention:Martin P. Dunn, Esq.


Email :mdunn@mofo.com


 


If to the Transfer
Agent:


Corporate Stock Transfer, Inc.


3200 Cherry Creek Drive South,
#430


Denver, CO 80209


Telephone: (303) 282-4800


Facsimile: (303) 282-5800


Attention: Carylyn Bell, President


Email:cbell@corporatestock.com


 


 


or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party one (1) Business Day prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, and recipient facsimile number, (C) electronically generated by the sender’s electronic mail containing
the time, date and recipient email address or (D) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of receipt in accordance with clause (i), (ii), (iii) or (iv) above, respectively.


 


(g)Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Buyer, including by merger or consolidation. The Buyer may not assign its rights or obligations under this Agreement.


 


(h)No Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


(i)Publicity.
The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by
or on behalf of the Company whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or any aspect of this
Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval
of the Buyer, to make any press release or other public disclosure (including any filings with the SEC) with respect to such transactions
as is required by applicable law and regulations so long as the Company and its counsel consult with the Buyer in connection with
any such press release or other public disclosure at least two (2) Business Days prior to its release. The Buyer must be provided
with a copy thereof at least one (1) Business Day prior to any release or use by the Company thereof. 


 






    	-22-



    	 



    

 


(j)Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


(k)Termination.
This Agreement may be terminated only as follows:


 


(i)By
the Buyer any time an Event of Default exists without any liability or payment to the Company. However, if pursuant to or within
the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company,
a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment
for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof)
this Agreement shall automatically terminate without any liability or payment to the Company without further action or notice by
any Person. No such termination of this Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s
obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.


 


(ii)In
the event that the Commencement shall not have occurred the Company shall have the option to terminate this Agreement for any reason
or for no reason without any liability whatsoever of either party to the other party under this Agreement except as set forth in
Section 11(k)(viii) hereof.


 


(iii)In
the event that the Commencement shall not have occurred on or before July 1, 2015, due to the failure to satisfy any of the conditions
set forth in Sections 6 and 7 above with respect to the Commencement, either party shall have the option to terminate this Agreement
at the close of business on such date or thereafter without liability of either party to any other party; provided, however, that
the right to terminate this Agreement under this Section 11(k)(iii) shall not be available to either party if such failure to
satisfy any of the conditions set forth in Sections 6 and 7 is the result of a breach of this Agreement by such party or the failure
of any representation or warranty of such party included in this Agreement to be true and correct in all material respects.


 


(iv)
At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no
reason by delivering notice (a “Company Termination Notice”) to the Buyer electing to terminate this Agreement
without any liability whatsoever of either party to the other party under this Agreement except as set forth in Section 11(k)(viii)
hereof. The Company Termination Notice shall not be effective until one (1) Business Day after it has been received by the Buyer.


 


(v)This
Agreement shall automatically terminate on the date that the Company sells and the Buyer purchases the full Available Amount as
provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to any
other party under this Agreement except as set forth in Section 11(k)(viii) hereof.


 






    	-23-



    	 



    

 


(vi)If
by the Maturity Date for any reason or for no reason the full Available Amount under this Agreement has not been purchased as provided
for in Section 1 of this Agreement, this Agreement shall automatically terminate on the Maturity Date, without any action or notice
on the part of any party and without any liability whatsoever of any party to any other party under this Agreement except as set
forth in Section 11(k)(viii) hereof.


 


(vii)Except
as set forth in Sections 11(k)(i) (in respect of an Event of Default under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and 11(k)(vi),
any termination of this Agreement pursuant to this Section 11(k) shall be effected by written notice from the Company to the Buyer,
or the Buyer to the Company, as the case may be, setting forth the basis for the termination hereof.


 


(viii)The
representations and warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification provisions
set forth in Section 8 hereof and the agreements and covenants set forth in Sections 4(e) and 11, shall survive the Commencement
and any termination of this Agreement. No termination of this Agreement shall affect the Company’s or the Buyer’s rights
or obligations (A) under the Registration Rights Agreement, which shall survive any such termination in accordance with its terms,
or (B) under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations
with respect to any pending purchases under this Agreement.


 


(l)No Financial
Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Buyer that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The Buyer represents and warrants
to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. Each party shall be responsible for the payment of any fees or commissions, if any, of any financial advisor,
placement agent, broker or finder engaged by such party relating to or arising out of the transactions contemplated hereby. Each
party shall pay, and hold the other party harmless against, any liability, loss or expense (including, without limitation, attorneys'
fees and out of pocket expenses) arising in connection with any such claim.


 


(m)No Strict
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.


 


(n)Failure or Indulgence Not
Waiver. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege.


 


 


* * * * *






    	-24-



    	 



    




 


IN WITNESS WHEREOF, the Buyer and
the Company have caused this Common Stock Purchase Agreement to be duly executed as of the date first written above.


 


 





	 	THE COMPANY:	 
	 	 	 	 
	 	BACTERIN INTERNATIONAL HOLDINGS, INC. 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ John P. Gandolfo	 
	 	Name:	John P. Gandolfo	 
	 	Title:	CFO	 
	 	 	 	 
	 	 	 	 
	 	BUYER:	 
	 	 	 	 
	 	ASPIRE CAPITAL FUND, LLC	 
	 	BY: 	ASPIRE CAPITAL PARTNERS, LLC	 
	 	BY: 	SGM HOLDINGS CORP.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Steven G. Martin	 
	 	Name: 	Steven G. Martin	 
	 	Title: 	President	 




 


 


 






    	-25-



    	 



    




 


SCHEDULES


 





	Schedule 3(a)	Subsidiaries
	Schedule 3(c)	Capitalization
	Schedule 3(e)	Conflicts
	Schedule 3(f)	1934 Act Filings
	Schedule 3(g)	Material Changes
	Schedule 3(h)	Litigation
	Schedule 3(j)	Intellectual Property
	Schedule 3(l)	Title
	Schedule 3(p)	Transactions with Affiliates







 


 


EXHIBITS


 





	Exhibit A	Form of Officer’s Certificate
	Exhibit B	Form of Resolutions of Board of Directors of the Company
	Exhibit C	Form of Secretary’s Certificate
	Exhibit D	Form of Letter to Transfer Agent







 


 


 






    	 



    	 



    




 


DISCLOSURE SCHEDULES


 


 


Schedule 3(a) - Subsidiaries


 


Bacterin International, Inc., a Nevada corporation, is a wholly
owned subsidiary of Bacterin International Holdings, Inc., a Delaware corporation.


 


Schedule 3(c) - Capitalization


 


The Company has 900,000 shares reserved for issuance pursuant
to the Company’s Equity Incentive Plan, 255,000 shares reserved for issuance pursuant to employee stock options granted outside
of the Company’s Equity Incentive Plan, and 1,501,025 shares reserved for issuance upon the exercise of warrants to purchase
shares of the Company’s common stock.


 


Warrants issued in connection with the Company’s 2010
bridge financing contain an exercise price reset provision. Warrants issued in connection with the Company’s 2014 public
offering contain a put option triggered upon a change in control. Warrants issued in connection with the Company’s 2013 PIPE
transaction contain an exercise price reset provision, but the exercise price has already reset to the exercise price floor.


 


Schedule 3(e) - Conflicts


 


[Intentionally left blank]


 


 


Schedule 3(f) – 1934 Act Filings


 


[Intentionally left blank]


 


 


Schedule 3(g) – Material Changes


 


[Intentionally left blank]


 


 


Schedule 3(h) – Litigation


 


On March 17, 2014, a complaint was served on the Company in
the following state court action in the District Court for the County of Arapahoe, State of Colorado: Robert Taggart v. Guy Cook,
Bacterin International, Inc., a Nevada Corporation and Bacterin International Holdings, Inc., a Delaware corporation, Civil Action
No. 14CV30401. The complaint involves claims under an employment agreement between plaintiff and the Company seeking commissions
on Company sales, a commission on funds obtained by the Company as a result of a reverse merger and vesting of certain stock options.
Plaintiff seeks damages in excess of $5 million. The Company believes this case lacks legal merit and has filed counterclaims for
plaintiff’s breach of his employment agreement and breach of his duty of loyalty to the Company, asserting the right to recover
all compensation paid to Plaintiff during his employment as well as other damages.


 






    	 



    	 



    

 


On February 11, 2013, we received a subpoena from the Office
of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) in connection with an investigation
into possible false or otherwise improper claims submitted to Medicare. The subpoena requested documents related to physician referral
programs operated by the Company, which we believe refers to the Company’s prior practice of compensating physicians for
performing certain educational and promotional services on behalf of the Company. This program was discontinued in 2010 and involved
payments to only a small number of physicians that we believe were made in accordance with all applicable laws. We submitted our
response to the OIG’s subpoena in March of 2013 and have not heard anything further regarding this matter.


 


 


Schedule 3(j) – Intellectual Property


 


[Intentionally left blank]


 


 


Schedule 3(l) - Title


 


ROS Acquisition Offshore LP, a Cayman Islands Exempted Limited
Partnership, has a continuing security interest in substantially all of the Company’s property. In addition, liens exist
pursuant to the following debt obligations:


 


Equipment lease pursuant to that certain Lease Line Agreement,
dated as of November 23, 2011, by and among Boston Financial & Equity Corporation, Bacterin International, Inc. and Bacterin
International Holdings, Inc., and that certain Master Equipment Lease, dated as of November 10, 2011, by and between Boston Financial
& Equity Corporation, Bacterin International, Inc. and Bacterin International Holdings, Inc.


 


Real estate mortgage for 664 Cruiser Lane pursuant to that certain
Deed of Trust, dated as of December 24, 2010, by and among Bacterin International, Inc., Flathead Bank and Stewart Title of Bozeman.


 


Avaya Financial Services equipment lease pursuant to that certain
Lease Agreement, dated as of May 26, 2011, by and between Bacterin International, Inc. and CIT Communications Finance Corporation.


 


 


Schedule 3(p) - Transactions with Affiliates


 


Inducement grant to Daniel Goldberger, granted outside of the
Company’s equity incentive plan: stock option to purchase 200,000 shares of the Company’s common stock at $6.00 per
share, vesting over 5 years from the August 14, 2013 grant date.


 


Inducement grant to Robert Di Silvio, granted outside of the
Company’s equity incentive plan: stock option to purchase 55,000 shares of the Company’s common stock at $6.80 per
share, vesting over 5 years from the July 1, 2014 grant date.


 


 






    	 



    	 



    




 


EXHIBIT A


 


FORM OF OFFICER’S CERTIFICATE


 


This Officer’s
Certificate (“Certificate”) is being delivered pursuant to Section 7(e) of that certain Common Stock Purchase
Agreement dated as of March 16, 2015 (the “Common Stock Purchase Agreement”), by and between BACTERIN INTERNATIONAL
HOLDINGS, INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois
limited liability company (the “Buyer”). Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Common Stock Purchase Agreement.


 


The undersigned, ______________,
________________ of the Company, hereby certifies as follows:


 


1.I
am the _________________ of the Company and make the statements contained in this Certificate in such capacity and not personally;


 


2.The representations
and warranties of the Company are true and correct in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 3 of the Common Stock Purchase Agreement, in which case, such
representations and warranties are true and correct without further qualification) as of the date when made and as of the Commencement
Date as though made at that time (except for representations and warranties that speak as of a specific date);


 


3.The Company
has performed, satisfied and complied in all material respects with covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.


 


4. The
Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as
they become due.


 


IN WITNESS WHEREOF,
I have hereunder signed my name on this 16th day of March, 2015.


 


___________________________________


___________________________


 


The undersigned as
Secretary of BACTERIN INTERNATIONAL HOLDINGS, INC., a Delaware corporation, hereby certifies that ___________________ is
the duly elected, appointed, qualified and acting ______________ of BACTERIN INTERNATIONAL HOLDINGS, INC. and that the signature
appearing above is his genuine signature.


 


___________________________________


_______________, Secretary


 


 



    	 



    	 



    




 




EXHIBIT B-1


 


FORM OF COMPANY RESOLUTIONS


FOR SIGNING PURCHASE AGREEMENT


 


WHEREAS,
management has reviewed with the Board of Directors the background, terms and conditions of the transactions subject to the Common
Stock Purchase Agreement (the “Purchase Agreement”)
by and between the Company and Aspire Capital Fund, LLC (“Aspire”), including all materials terms and conditions
of the transactions subject thereto, providing for the purchase by Aspire of up to Ten Million Dollars ($10,000,000) of the Company’s
common stock, par value $0.000001 per share (the “Common Stock”); and


 


WHEREAS,
after careful consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the
Board of Directors, the Board of Directors has determined that it is advisable and in the best interests of the Company to engage
in the transactions contemplated by the Purchase Agreement, including, but not limited to, the issuance of 154,189 shares of Common
Stock to Aspire as a commitment fee (the “Commitment Shares”) and the sale of shares of Common Stock to Aspire
up to the available amount under the Purchase Agreement (the “Purchase Shares,” and
together with the Commitment Shares, the “Aspire Shares”).


 


Transaction Documents


 


NOW, THEREFORE, BE
IT RESOLVED, that the transactions described in the Purchase Agreement are hereby approved and the Chief Executive Officer and
Chief Financial Officer (the “Authorized Officers”) are severally authorized to execute and deliver the Purchase
Agreement, and any other agreements or documents contemplated thereby including, without limitation, a registration rights agreement
(the “Registration Rights Agreement”) providing for the registration of the shares of the Company’s Common
Stock issuable in respect of the Purchase Agreement on behalf of Aspire, with such amendments, changes, additions and deletions
as the Authorized Officers may deem to be appropriate and approve on behalf of, the Company, such approval to be conclusively evidenced
by the signature of an Authorized Officer thereon; and


 


FURTHER RESOLVED, that
the terms and provisions of the Registration Rights Agreement by and among the Company and Aspire are hereby approved and the Authorized
Officers are authorized to execute and deliver the Registration Rights Agreement (pursuant to the terms of the Purchase Agreement),
with such amendments, changes, additions and deletions as the Authorized Officer may deem appropriate and approve on behalf of,
the Company, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and


 






    	 



    	 



    

 


FURTHER RESOLVED, that
the terms and provisions of the Form of Transfer Agent Instructions (the “Instructions”) are hereby approved
and the Authorized Officers are authorized to execute and deliver the Instructions (pursuant to the terms of the Purchase Agreement),
with such amendments, changes, additions and deletions as the Authorized Officers may deem appropriate and approve on behalf of,
the Company, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and


  


 


Execution of Purchase Agreement


 


FURTHER RESOLVED, that
the Company be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of common stock of the
Company having an aggregate value of up to $10,000,000; and


 


Issuance of Common Stock


 


FURTHER RESOLVED, that
the Company is hereby authorized to issue the Commitment Shares to Aspire as Commitment Shares and that upon issuance of
the Commitment Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly authorized, validly issued, fully
paid and non-assessable; and


 


FURTHER RESOLVED, that
the Company is hereby authorized to issue shares of Common Stock upon the purchase of Purchase Shares up to the available amount
under the Purchase Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of the Purchase Shares
pursuant to the Purchase Agreement, the Purchase Shares will be duly authorized, validly issued, fully paid and non-assessable;
and


 


FURTHER RESOLVED, that
the Corporation shall initially reserve 3,000,000 shares of Common Stock for issuance as Purchase Shares under the Purchase Agreement;
and 


 


Listing of Shares on the NYSE MKT


 


FURTHER RESOLVED, that
the officers of the Company with the assistance of counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the listing of the Aspire Shares on the NYSE MKT; and


 


Approval of Actions


 


FURTHER RESOLVED, that,
without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Company and to take all such steps as deemed necessary or appropriate, with the advice and assistance of counsel,
to cause the Company to consummate the agreements referred to herein and to perform its obligations under such agreements;


 


FURTHER RESOLVED, that
the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf of and in the name of the
Company, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered
all such further agreements, amendments, documents, certificates, reports, schedules, applications, notices, letters and undertakings
and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect
the purpose and intent of any and all of the foregoing resolutions, and that all actions heretofore taken by any officer or director
of the Company in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects; and


 


FURTHER RESOLVED, that
any and all actions heretofore or hereinafter taken on behalf of the Company by any of said persons or entities within the terms
of the foregoing resolutions are hereby approved, ratified and confirmed in all respects as the acts and deeds of the Company.


 






    	 



    	 



    

 


EXHIBIT B-2


 


FORM OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT


 


WHEREAS, there has
been presented to the Board of Directors of the Company a Common Stock Purchase Agreement (the “Purchase Agreement”)
by and among the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for the purchase by Aspire of
up to Ten Million Dollars ($10,000,000) of the Company’s common stock, par value $0.000001 (the “Common Stock”);
and


 


WHEREAS, after careful
consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has approved the Purchase Agreement and the transactions contemplated thereby and the Company has executed
and delivered the Purchase Agreement to Aspire; and


 


WHEREAS, in connection
with the transactions contemplated pursuant to the Purchase Agreement, the Company has agreed to file a registration statement
with the Securities and Exchange Commission (the “Commission”) registering the Commitment Shares (as defined
in the Purchase Agreement) and the Purchase Shares (as defined in the Purchase Agreement) and to list the Commitment Shares and
Purchase Shares on the NYSE MKT;


 


WHEREAS, the management
of the Company has prepared an initial draft of a Registration Statement on Form S-1 (the “Registration Statement”)
in order to register the sale of the Purchase Shares and the Commitment Shares (collectively, the “Securities”)
by Aspire; and


 


WHEREAS, the Board
of Directors has determined to approve the Registration Statement and to authorize the appropriate officers of the Company to take
all such actions as they may deem appropriate to effect the offering.


 


NOW, THEREFORE, BE
IT RESOLVED, that the officers and directors of the Company be, and each of them hereby is, authorized and directed, with the assistance
of counsel and accountants for the Company, to prepare, execute and file with the Commission the Registration Statement, which
Registration Statement shall be filed substantially in the form presented to the Board of Directors, with such changes therein
as the Chief Executive Officer or Chief Financial Officer of the Company shall deem desirable and in the best interest of the Company
and its stockholders (such officer’s execution thereof including such changes shall be deemed to evidence conclusively such
determination); and


 


FURTHER RESOLVED, that
the officers of the Company be, and each of them hereby is, authorized and directed, with the assistance of counsel and accountants
for the Company, to prepare, execute and file with the Commission all amendments, including post-effective amendments, and supplements
to the Registration Statement, and all certificates, exhibits, schedules, documents and other instruments relating to the Registration
Statement, as such officers shall deem necessary or appropriate (such officer’s execution and filing thereof shall be deemed
to evidence conclusively such determination); and


 






    	 



    	 



    

 


FURTHER RESOLVED, that
the execution of the Registration Statement and of any amendments and supplements thereto by the officers of the Company be, and
the same hereby is, specifically authorized either personally or by the Chief Executive Officer and Chief Financial Officer (the
“Authorized Officers”) as such officer’s true and lawful attorneys-in-fact and agents; and


 


FURTHER RESOLVED, that
the Authorized Officers are hereby designated as “Agent for Service” of the Company in connection with the Registration
Statement and the filing thereof with the Commission, and the Authorized Officers hereby are authorized to receive communications
and notices from the Commission with respect to the Registration Statement; and


 


FURTHER RESOLVED, that
the officers of the Company be, and each of them hereby is, authorized and directed to pay all fees, costs and expenses that may
be incurred by the Company in connection with the Registration Statement; and


 


FURTHER RESOLVED, that
it is desirable and in the best interest of the Company that the Securities be qualified or registered for sale in various states;
that the officers of the Company be, and each of them hereby is, authorized to determine the states in which appropriate action
shall be taken to qualify or register for sale all or such part of the Securities as they may deem advisable; that said officers
be, and each of them hereby is, authorized to perform on behalf of the Company any and all such acts as they may deem necessary
or advisable in order to comply with the applicable laws of any such states, and in connection therewith to execute and file all
requisite papers and documents, including, but not limited to, applications, reports, surety bonds, irrevocable consents, appointments
of attorneys for service of process and resolutions; and the execution by such officers of any such paper or document or the doing
by them of any act in connection with the foregoing matters shall conclusively establish their authority therefor from the Company
and the approval and ratification by the Company of the papers and documents so executed and the actions so taken; and


 


FURTHER RESOLVED, that
if, in any state where the securities to be registered or qualified for sale to the public, or where the Company is to be registered
in connection with the public offering of the Securities, a prescribed form of resolution or resolutions is required to be adopted
by the Board of Directors, each such resolution shall be deemed to have been and hereby is adopted, and the Secretary is hereby
authorized to certify the adoption of all such resolutions as though such resolutions were now presented to and adopted by the
Board of Directors; and


 


FURTHER RESOLVED, that
the officers of the Company with the assistance of counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the listing of the Securities on the NYSE MKT; and


 


Approval of Actions


 


FURTHER RESOLVED, that,
without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Company and to take all such steps as are deemed necessary or appropriate, with the advice and assistance of counsel,
to cause the Company to take all such action referred to herein and to perform its obligations incident to the registration, listing
and sale of the Securities; and


 


FURTHER RESOLVED, that
the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf of and in the name of the
Company, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered
all such further agreements, amendments, documents, certificates, reports, schedules, applications, notices, letters and undertakings
and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect
the purpose and intent of any and all of the foregoing resolutions, and that all actions heretofore taken by any officer or director
of the Company in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.


 






    	 



    	 



    

  


EXHIBIT C


 


FORM OF SECRETARY’S CERTIFICATE


 


This Secretary’s
Certificate (the “Certificate”) is being delivered pursuant to Section 7(j) of that certain Common Stock Purchase
Agreement dated as of March 16, 2015 (the “Common Stock Purchase Agreement”), by and between BACTERIN INTERNATIONAL
HOLDINGS, INC., a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND, LLC, an Illinois
limited liability company (the “Buyer”), pursuant to which the Company may sell to the Buyer up to Ten Million
Dollars ($10,000,000) of the Company’s Common Stock, par value $0.000001 (the “Common Stock”). Terms used
herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement.


 


The undersigned, _______________, Secretary
of the Company, in his capacity as such, hereby certifies as follows:


1.I am the
Secretary of the Company and make the statements contained in this Secretary’s Certificate.


 


2.Attached
hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s bylaws (“Bylaws”)
and Certificate of Incorporation (“Articles”), in each case, as amended through the date hereof, and no action
has been taken by the Company, its directors, officers or stockholders, in contemplation of the filing of any further amendment
relating to or affecting the Bylaws or Articles.


 


3.Attached
hereto as Exhibit C are true, correct and complete copies of the Signing Resolutions duly adopted by the Board of Directors of
the Company [by unanimous written consent]. Such resolutions have not been amended, modified or rescinded and remain in full force
and effect and such resolutions are the only resolutions adopted by the Company’s Board of Directors, or any committee thereof,
or the stockholders of the Company relating to or affecting (i) the entering into and performance of the Common Stock Purchase
Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment Shares and (ii) and the performance of
the Company of its obligation under the Transaction Documents as contemplated therein.


 


4.As
of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth on Exhibit D hereto.


 


IN WITNESS WHEREOF,
I have hereunder signed my name on this 16th day of March, 2015.


 


_________________________


____________________,
Secretary


 


The undersigned as
Chief Executive Officer of BACTERIN INTERNATIONAL HOLDINGS, INC., a Delaware corporation, hereby certifies that ____________________
is the duly elected, appointed, qualified and acting Secretary of BACTERIN INTERNATIONAL HOLDINGS, INC., and that the signature
appearing above is his genuine signature.


 


___________________________________


___________________________________


 






    	 



    	 



    




 


EXHIBIT D


 


FORM OF LETTER TO THE TRANSFER AGENT
FOR THE ISSUANCE OF THE COMMITMENT SHARES AND 

INITIAL PURCHASE SHARES AT SIGNING OF THE PURCHASE AGREEMENT


 


[COMPANY LETTERHEAD]


 


March 16, 2015


 


Corporate Stock Transfer, Inc.


3200 Cherry Creek Drive South, #430


Denver, CO 80209


Attention: Carylyn Bell


 


Re: Issuance of Common Stock to Aspire Capital Fund, LLC


 


Ladies and Gentlemen:


 


On behalf of BACTERIN INTERNATIONAL
HOLDINGS, INC., (the “Company”), you are hereby instructed to issue as soon as possible 361,371
shares of our common stock in the name of ASPIRE CAPITAL FUND, LLC. The share certificate should be dated March 16, 2015.
I have included a true and correct copy of adopted resolutions of the Board of Directors of the Company approving the issuance
of these shares. The shares should be issued subject to the following restrictive legend:


 


THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS
SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL, IN A
CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.


 






    	 



    	 



    

 


The share certificate should be sent as
soon as possible via overnight mail to the following address:


 


Aspire Capital Fund, LLC


155 North Wacker Drive, Suite 1600


Chicago, IL 60606


Attention: Steven G. Martin


 


Thank you very much for your help. Please
call __________________, at ____________ if you have any questions or need anything further.


 


 


 


BACTERIN INTERNATIONAL HOLDINGS, INC.


 


 


BY:_____________________________