First
Amendment to Credit Agreement


 


This FIRST AMENDMENT
TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of May 16, 2013 by and among Bacterin
International Inc., a Nevada corporation (the “Borrower”),
and ROS Acquisition Offshore LP,
a Cayman Islands Exempted Limited Partnership (the “Lender”).


 


WHEREAS, the Borrower
and the Lender are party to that certain Credit Agreement, dated as of August 24, 2012 (the “Credit Agreement”),
pursuant to which the Lenders have extended credit to the Borrower on the terms set forth therein;


 


WHEREAS, the Borrower
has requested that the Lender amend the Credit Agreement, as more fully described herein; and


 


WHEREAS, the Lender
is willing to agree to such amendment, but only upon the terms and subject to the conditions set forth herein.


 


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


 


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


 


2.          Amendment
to Section 8.4.2. Section 8.4.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:


 


SECTION 8.4.2
Minimum Liquidity. The Liquidity of the Borrower shall not be less than (i) $750,000 at any time on or prior to September
30, 2013 or (ii) $1,500,000 at any time after September 30, 2013. The Borrower shall maintain an amount equal to the amount required
under this Section 8.4.2, along with its other cash and Cash Equivalent Investments, in a Controlled Account.


 


3.          Amendment
to Section 3.2. The last sentence of Section 3.2 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:


 


At such time
as the Borrower pays, prepays or repays, or is required to pay, prepay or repay, any principal amount of the Loans, whether on
the Maturity Date or otherwise, whether voluntarily or involuntarily (if involuntarily, whether required by this Agreement, the
Royalty Agreement or any other Loan Document) and whether before or after acceleration of the Obligations, including without limitation
any payment pursuant to any provision of this Section 3.2, the Borrower shall pay to the Lender a fee in the amount equal
to 1.5% of the aggregate principal amount of such payment, prepayment or repayment. For the avoidance of doubt, any such fees paid
by the Borrower to the Lender shall not be included in clause (ii) of the definition of “Recovered Amount” for purposes
of the Royalty Agreement.


 




    	 



    	 



    

 


4.          Effective
Date. This Amendment shall become effective on the date on which the Lender and the Borrower each duly executes a counterpart
of this Amendment.


 


5.          Expenses.
The Borrower agrees to pay on demand all expenses of the Lender (including, without limitation, the fees and out-of-pocket expenses
of Covington & Burling LLP, counsel to the Lender, and of local counsel, if any, who may be retained by or on behalf of the
Lender) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment.


 


6.          Representations
and Warranties. The Borrower represents and warrants to the Lender as follows:


 


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


 


(b)          After
giving effect to this Amendment, no Default or Event of Default under the Credit Agreement will occur or be continuing.


 


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


 


8.          Waiver
and Release. TO INDUCE THE LENDER TO AGREE TO THE TERMS OF THIS AMENDMENT, THE BORROWER REPRESENTS AND WARRANTS THAT AS
OF THE DATE HEREOF THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS
TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH IT:


 


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


 




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(b)          RELEASES
AND DISCHARGES THE LENDER, ITS AFFILIATES AND ITS AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS AND ATTORNEYS
(COLLECTIVELY THE “RELEASED PARTIES”) FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS,
CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH THE BORROWER
EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN CONNECTION
WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.


 


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


 


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of Page Intentionally Left Blank]


 




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


 


	 	
        BACTERIN INTERNATIONAL, INC.,

        as the Borrower

	 	 
	 	By:	/s/ John P. Gandolfo
	 	Name:  John P. Gandolfo
	 	Title:    Chief Financial Officer


 


	 	ROS Acquisition Offshore LP,

as the Lender
	 	By ROS Acquisition Offshore GP Ltd.,
	 	its General Partner
	 	By OrbiMed Advisors LLC,
	 	its investment manager
	 	 
	 	By:	/s/ Samuel D. Isaly
	 	Name:  Samuel D. Isaly
	 	Title:    Managing Member


 





Signature Page to First Amendment to
Credit Agreement