Document:

Exhibit 10.1

 

Execution
Version

STOCK PURCHASE
AGREEMENT

 

This Stock Purchase
Agreement (this “Agreement”) is entered into as of July 27, 2015, by and among Bacterin International
Holdings, Inc., a Delaware corporation (“Purchaser”), X-spine Systems, Inc., an Ohio corporation (the
“Company”), David L. Kirschman, M.D. (“Kirschman”), the K. Hemmelgarn 1998
Trust, the B. Hemmelgarn 1998 Trust, the K. Hemmelgarn 2010 Trust, and the B. Hemmelgarn 2010 Trust. Kirschman, the K. Hemmelgarn
1998 Trust, the B. Hemmelgarn 1998 Trust, the K. Hemmelgarn 2010 Trust, and the B. Hemmelgarn 2010 Trust are each referred to
herein as a “Seller,” and collectively as the “Sellers.” Unless otherwise
specified, all capitalized terms used in this Agreement shall have the meanings set forth in Exhibit A.

 

Recitals:

 

A.           Sellers
directly own 100% of the issued and outstanding shares of capital stock of the Company (the “Outstanding Shares”).

 

B.           Sellers
desire to transfer to Purchaser, and Purchaser desires to acquire from Sellers, the Outstanding Shares on the terms and conditions
and as more specifically provided in this Agreement (the “Purchase”).

 

NOW, THEREFORE,
in consideration of the promises and the mutual representations, warranties, covenants and agreements contained herein, and the
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser, the Company and
Sellers, intending to be legally bound, agree as follows:

 

ARTICLE
1

THE PURCHASE

 

Section 1.1           Purchase
and Sale of Outstanding Shares. Subject to the terms and conditions of this Agreement, at the Closing, Sellers shall sell,
convey, transfer and assign to Purchaser, and Purchaser shall purchase and acquire, all right, title and interest in and to the
Outstanding Shares, free and clear of all Liens.

 

Section 1.2           Purchase
Price. The aggregate purchase price for the Outstanding Shares (the “Purchase Price”) shall
be, subject to any adjustments (positive or negative) made in accordance with this Section 1.2 and Section 1.3,
the Purchase Consideration, which shall be payable by Purchaser in accordance with the terms hereof.

 

(a)          For
purposes of this Agreement:

 

(i)          “Cash
Consideration” means cash in an amount of $60,000,000, plus or minus the Working Capital Adjustment,
minus the Deductions;

 

(ii)         “Deductions”
means the sum of the Paid Transaction Costs, the Escrowed Cash, and the costs and expenses of the Tail Policies;

 

    	 

    	 

    

 

(iii)        “Net
Purchase Consideration” means the Purchase Consideration, minus each of (1) the Indebtedness Pay-Off Amount,
(2) the Paid Transaction Costs, (3) the Escrowed Amount, and (4) all costs and expenses for the Tail Policies;

 

(iv)        “Ownership
Interest Share” of each Seller means the amount, expressed as a percentage, each Seller is entitled to receive of
that portion of the Purchase Consideration paid to Sellers;

 

(v)         “Purchase
Consideration” means $90,000,000, plus or minus the Working Capital Adjustment, if any; and

 

(vi)        “Purchaser
Stock Consideration” means the Purchase Consideration, minus the Cash Consideration, minus the Indebtedness
Pay-Off Amount, in shares of Purchaser Common Stock valued at $4.00 per share.

 

(b)          The
Purchase Consideration shall be paid at the Closing as provided in Sections 2.2(a) and 2.2(b)(i).

 

(c)          Disclosure
Schedule 1.2(c) sets forth a list of Sellers and their respective Ownership Interest Shares. The Purchase Consideration shall
be allocated among Sellers in proportion to their Ownership Interest Shares and to each Seller as directed by Sellers in the Flow
of Funds Memorandum.

 

Section 1.3           Working
Capital.

 

(a)          At
least five Business Days prior to the Closing Date, the Company shall deliver to Purchaser and Sellers an estimated consolidated
balance sheet of the Company as of the Closing Date (the “Closing Balance Sheet”), which shall set forth
a good faith estimate of the components of the Working Capital Amount (“Closing Working Capital”) to
enable Purchaser to calculate the Working Capital Adjustment. The Closing Balance Sheet shall be prepared by the Company in accordance
with GAAP and in a manner consistent with the preparation of the audited Financial Statements, including any year-end accounting
adjustments, and specifically shall give effect to the payment of the Indebtedness Pay-Off Amount, the Paid Transaction Costs
and the Tail Policies costs and expenses by or on behalf of the Company on or immediately prior to the Closing. If such Closing
Balance Sheet is not acceptable to Purchaser, Purchaser shall promptly submit its comments on the Closing Balance Sheet to the
Company, and the Company and Purchaser shall endeavor in good faith to promptly resolve such comments so as not to delay the Closing.
The Purchase Consideration shall be adjusted by the amount of the Working Capital Adjustment as provided in Section 1.2(a).

 

(b)          Within
60 days after the Closing Date, Purchaser shall prepare and deliver to Sellers a consolidated balance sheet of the Company as
of the Closing Date (the “Final Balance Sheet”), which shall set forth the components of the Working
Capital Amount. The Final Balance Sheet shall be calculated in the same way, using the same accounting principles, practices,
methodologies and policies, as the line items comprising Current Assets and Current Liabilities included in the Closing Balance
Sheet and that are consistent with GAAP and all accounting principles, practices, methodologies and policies historically used
in the preparation of the Financial Statements. Following the delivery of the Final Balance Sheet to Sellers, Purchaser shall
afford Sellers and their representatives the opportunity to examine the Final Balance Sheet, and such supporting schedules, analyses,
workpapers and other underlying records or documentation as are reasonably necessary and appropriate. Purchaser shall cooperate
promptly, as reasonably requested, with Sellers and their representatives in such examination.

 

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(c)          If
within ten days following delivery of the Final Balance Sheet, Sellers have not delivered to Purchaser written notice of its objections
to the Final Balance Sheet (the “Objection Notice”), then the Working Capital Amount as set forth in
the Final Balance Sheet shall be deemed final and conclusive. If Sellers deliver the Objection Notice within such ten-day period,
then Purchaser and Sellers shall endeavor in good faith to resolve the objections, for a period not to exceed 15 days from the
date of delivery of the Objection Notice.

 

(d)          If
at the end of the 15-day period described in Section 1.3(c) there are any objections that remain in dispute, then the remaining
objections in dispute shall be submitted for resolution to a nationally recognized accounting firm that has not been hired by
either the Company or Purchaser in the last five years to be selected jointly by Sellers and Purchaser (the “Neutral
Firm”). The Neutral Firm shall determine any unresolved items of the Working Capital Amount within 30 days after
the objections that remain in dispute are submitted to it. If any remaining objections are submitted to the Neutral Firm for resolution,
(i) each party shall furnish to the Neutral Firm such workpapers and other documents and information relating to such objections
as the Neutral Firm may request and are available to that party, and shall be afforded the opportunity to present to the Neutral
Firm any material relating to the determination of the matters in dispute and to discuss such determination with the Neutral Firm,
(ii) to the extent that a value has been assigned to any objection that remains in dispute, the Neutral Firm shall not assign
a value to such objection that is greater than the greatest value for such objection claimed by either party or less than the
smallest value for such objection claimed by either party, and (iii) the determination by the Neutral Firm of the unresolved items
of the Working Capital Amount, as set forth in a written notice delivered to Purchaser and Sellers by the Neutral Firm, shall
be made in accordance with this Agreement and shall be binding and conclusive on the parties and shall constitute an arbitral
award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction thereof.
The fees and expenses of the Neutral Firm shall be paid by the party whose calculation of the Working Capital Amount in the Final
Balance Sheet deviated the most from the Working Capital Amount in the Final Balance Sheet as determined by the Neutral Firm.

 

(e)          To
the extent that the Final Working Capital, as determined pursuant to Section 1.3(c) or (d), is less than the Closing
Working Capital (such deficit, a “Final Adjustment Deficiency”), and the Final Adjustment Deficiency
exceeds $50,000, Purchaser and Sellers shall instruct the Escrow Agent to release from the escrow to Purchaser the aggregate amount
of the Final Adjustment Deficiency, first from the Escrowed Cash, and if the Escrowed Cash is insufficient for this purpose, then
from the Escrowed Shares (such Escrowed Shares valued at $4.00 per share, As Adjusted). If the amount of the Final Adjustment
Deficiency exceeds the total amount of Escrowed Cash and Escrowed Shares (as valued in accordance with the previous sentence),
then the shortfall shall be promptly paid by Sellers in cash in proportion to their Ownership Interest Shares to Purchaser. To
the extent that the Final Working Capital, as determined pursuant to Section 1.3(c) or (d), exceeds the Closing
Working Capital (such excess, a “Final Adjustment Surplus”), and the Final Adjustment Surplus exceeds
$50,000, Purchaser shall promptly pay to Sellers, in proportion to their Ownership Interest Shares, an aggregate amount of cash
equal to the amount of the Final Adjustment Surplus. For the avoidance of doubt, if the Final Adjustment Deficiency or the Final
Adjustment Surplus, as the case may be, does not exceed $50,000, then no payment shall be made pursuant to this Section 1.3.

 

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(f)          For
all Tax purposes, any payment under this Section 1.3 shall be treated by Purchaser, Sellers and their respective Affiliates
as an adjustment to the Purchase Consideration.

 

Section 1.4           Withholding
Rights. Purchaser shall be entitled to deduct and withhold from any consideration otherwise payable to any Person pursuant
to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code
or any provision of Applicable Law. To the extent that such amounts are so withheld or paid over to or deposited with the relevant
Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the applicable
Person in respect to which such deduction and withholding was made.

 

Section 1.5           Adjustments.
In the event of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible
into capital stock), reorganization, reclassification, combination, recapitalization or other like change with respect to the
Company or Purchaser occurring after the date hereof and prior to the Closing, all references in this Agreement to specified numbers
of shares of any class or series affected thereby, and all calculations provided for that are based upon numbers of shares of
any class or series (or trading prices therefor) affected thereby, shall be equitably adjusted to the extent necessary to provide
the parties the same economic effect as contemplated by this Agreement prior to such stock split, reverse stock split, stock dividend,
reorganization, reclassification, combination, recapitalization or other like change.

 

Section 1.6           Escrow.
On the Closing Date, the Indemnifying Sellers, Purchaser and the Escrow Agent shall enter into the Escrow Agreement. $6,000,000
of the cash portion of the Purchase Consideration (the “Escrowed Cash”) and all of the shares of Purchaser
Common Stock comprising a portion of the Purchase Consideration (the “Escrowed Shares,” and together
with the Escrowed Cash, the “Escrowed Amount”) shall be deducted from the Purchase Consideration and
deposited in escrow at Closing and shall be held in escrow pursuant to the terms of this Agreement and the Escrow Agreement. All
fees due to the Escrow Agent shall be borne by Purchaser.

 

ARTICLE
2

CLOSING

 

Section 2.1           Closing.
Unless this Agreement shall have been terminated pursuant to Article 6, and subject to the satisfaction or waiver of the
conditions set forth in Article 5, the Closing shall take place on a date not later than the second Business Day following
satisfaction or waiver of the conditions set forth in Article 5, at the offices of the Company, 452 Alexandersville Road,
Miamisburg, Ohio 45342, unless another date, time or place is mutually agreed to in writing by Purchaser, Sellers and the Company.

 

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Section 2.2           Actions
to Occur at Closing.

 

(a)          Payments
of the Indebtedness Pay-Off Amount and the Deductions from the Purchase Consideration by Purchaser. At the Closing, the Indebtedness
Pay-Off Amount and the Deductions shall be paid as follows:

 

(i)          Purchaser
shall pay to each creditor of the Company under an Indebtedness Agreement the amount of the outstanding Indebtedness due to such
creditor as specified in such creditor’s Payoff Letter (collectively, the sum of such Indebtedness amounts for all such
creditors being hereinafter referred to as the “Indebtedness Pay-Off Amount”), by wire transfer of immediately
available funds to the account designated by such creditor in the Payoff Letter;

 

(ii)         Purchaser
shall pay any Transaction Costs that remain outstanding as of the Closing Date and for which the Company has received a Payoff
Letter (collectively, the sum of such payments for all payees of Transaction Costs being hereinafter referred to as the “Paid
Transaction Costs”), by wire transfer of immediately available funds to the account designated by such Person in
the applicable Payoff Letter; and

 

(iii)        Purchaser
shall submit the Escrowed Cash to the Escrow Agent by wire transfer of immediately available funds to the account designated by
the Escrow Agent, and shall submit the Escrowed Shares to the Escrow Agent.

 

(b)          Deliveries
by Purchaser. At the Closing, Purchaser shall deliver the following in accordance with the applicable provisions of this Agreement:

 

(i)          the
Net Purchase Consideration shall be delivered, as applicable, to the Escrow Agent and to Sellers, in accordance with the Flow
of Funds Memorandum;

 

(ii)         a
counterpart of the Escrow Agreement, executed by Purchaser, shall be delivered to the Indemnifying Sellers and the Escrow Agent;

 

(iii)        a
certificate of Purchaser, duly executed by an officer of Purchaser, certifying in his or her capacity as an officer and not in
his or her capacity as an individual, the satisfaction of the conditions set forth in Sections 5.3(a), (b) and (d),
shall be delivered to Sellers;

 

(iv)        resolutions
of Purchaser’s Board authorizing the appointment of the Appointee Director to Class II of Purchaser’s Board effective
on the Closing Date shall be delivered to Sellers; and

 

(v)         a
counterpart of the Employment Agreements for each Key Employee identified by Purchaser, executed by the Company (under Purchaser’s
control), shall be delivered to each Key Employee who is a party thereto.

 

(c)          Deliveries
by the Company and Sellers. At or prior to the Closing, the Company and Sellers shall deliver the following in accordance
with the applicable provisions of this Agreement:

 

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(i)          original
stock certificates for the Outstanding Shares, together with stock powers from the respective Sellers duly endorsed in blank;

 

(ii)         a
counterpart of the Escrow Agreement, executed by the Indemnifying Sellers, shall be delivered to Purchaser and the Escrow Agent;

 

(iii)        a
certificate of the Company, duly executed by an officer of the Company, certifying in his or her capacity as an officer and not
in his or her capacity as an individual, the satisfaction of the conditions set forth in Sections 5.2(a), (b) and
(c) as they relate to the Company, shall be delivered to Sellers and to Purchaser;

 

(iv)        a
certificate of each Seller, duly executed by such Seller, certifying the satisfaction of the conditions set forth in Sections
5.2(a) and (b) as they relate to such Seller, shall be delivered to Purchaser;

 

(v)         a
good standing certificate for the Company and the Subsidiary as issued by the Secretary of State, or other appropriate agency,
of the state or other jurisdiction of the Company’s or the Subsidiary’s domicile, each dated within ten days of the
Closing Date, shall be delivered to Purchaser;

 

(vi)        the
Consents set forth on Disclosure Schedule 3.2(e), in a form reasonably satisfactory to Purchaser, shall be delivered to
Purchaser;

 

(vii)       the
resignations of the members of the board of directors of the Company and the Subsidiary and of those officers of the Company and
the Subsidiary whose resignations are requested by Purchaser shall be delivered to Purchaser;

 

(viii)      a
counterpart of the Employment Agreements, executed by each Key Employee identified by Purchaser, shall be delivered to Purchaser;

 

(ix)         the
Payoff Letters shall be delivered to Purchaser;

 

(x)          a
certificate of the Company, duly executed by an officer of the Company, certifying in his or her capacity as an officer and not
in his or her capacity as an individual, specifying the amounts of each of the Indebtedness Pay-Off Amount and Paid Transaction
Costs (the “Deductions Certificate”), shall be delivered to Purchaser;

 

(xi)         certificates
with respect to each of the Company’s and the Subsidiary’s status as a “United States real property holding
corporation,” dated not more than 30 days prior to the Closing Date, as described in Treasury Regulations Sections 1.897-2(h)
and 1.1445-2(c)(3), and proof of delivery to the Internal Revenue Service of the required notice, as described in Treasury Regulations
Section 1.897-2(h)(2), shall be delivered to Purchaser;

 

(xii)        a
counterpart of the Seller Non-Compete Agreements, in the forms attached hereto as Exhibit B-1 and Exhibit B-2, executed
by each Indemnifying Seller and Kenneth J. Hemmelgarn, Jr., and Brian J. Hemmelgarn, as applicable, shall be delivered to Purchaser;

 

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(xiii)       a
counterpart of the Lock-Up Agreement, in the form attached as Exhibit C, executed by each Indemnifying Seller, shall be
delivered to Purchaser;

 

(xiv)      a
counterpart of the Guaranty, in the form attached as Exhibit D, executed by each of Kenneth J. Hemmelgarn, Jr., and Brian
J. Hemmelgarn;

 

(xv)       a
termination of the Amended and Restated Close Corporation Agreement, effective as of the Closing Date; and

 

(xvi)      the
Company and Sellers shall deliver to Purchaser such other documents and instruments as Purchaser may reasonably request to carry
out the purpose and intent of this Agreement.

 

Section 2.3           Appointment
to Purchaser Board. Prior to the Closing, Purchaser shall take such actions as are necessary to appoint Kirschman (the
“Appointee Director”) at the Closing to Class II of Purchaser’s Board.

 

ARTICLE
3

REPRESENTATIONS AND WARRANTIES

 

Section 3.1           Representations
and Warranties Relating to Each Seller. Each Indemnifying Seller, severally and not jointly with the other Indemnifying
Sellers, hereby represents and warrants to Purchaser as follows, except that Kirschman only, and not the K. Hemmelgarn 1998 Trust
or the B. Hemmelgarn 1998 Trust, makes the representation and warranty set forth in Section 3.1(j) (Kirschman HSR Act Compliance),
and provided that the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust make the following representations and
warranties, jointly and severally with each other, as to all of the Hemmelgarn Sellers:

 

(a)          Authority;
Due Execution and Binding Effect. Such Seller has the requisite power and authority to execute and deliver this Agreement
and each other Transaction Document to which it is a party, to consummate the transactions contemplated hereby and thereby and
to perform its obligations under this Agreement and each other Transaction Document to which it is a party. This Agreement has
been, and each other Transaction Document to which such Seller is a party will be, duly and validly executed and delivered by
such Seller. Assuming the due authorization, execution and delivery by the other parties hereto, this Agreement constitutes the
valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Applicable Laws
affecting the enforcement of creditors rights generally and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in law or equity).

 

(b)          No
Conflict. Neither the execution and delivery of this Agreement by such Seller, nor the performance by such Seller of its obligations
hereunder shall, directly or indirectly: (i) contravene, conflict with, or result in (with or without notice or lapse of
time) a violation or breach of any Applicable Law or order to which such Seller is subject; (ii) violate, conflict with or
result in the breach of any provision of the organizational documents of such Seller, if such Seller is not an individual; or
(iii) conflict in any material respect with, result in a material breach of, constitute a material default (or event which
with the giving of notice or lapse of time, or both, would become a material breach or default) under, require any Consent under,
or give to others any right of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the
creation of any Lien pursuant to, any Contract to which such Seller is a party or by which any of its respective assets or properties
are bound or affected.

 

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(c)          Litigation.
There is no Action pending against, or to the knowledge of such Seller, threatened against or affecting such Seller before any
court or arbitrator or any Governmental Entity which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay the transactions contemplated hereby.

 

(d)          Government
Approvals. No consents or approvals of, or filings, declarations or registrations with, any Governmental Entity are necessary
for the execution and delivery of this Agreement by such Seller or the consummation by such Seller of the transactions contemplated
hereby, other than such consents or approvals, filings, declarations or registrations that, if not obtained, made or given, could
not, individually or in the aggregate, reasonably be expected to impair in any material respect the ability of such Seller to
perform its obligations hereunder, or prevent or materially impede, interfere with, hinder or delay the consummation of the Purchase.

 

(e)          Title
to Outstanding Shares. Such Seller is the record and beneficial owner of, and holds good and valid title to the Outstanding
Shares of the Company set forth on Disclosure Schedule 1.2(c), free and clear of any and all Liens. Such Seller has the
sole power and authority to sell, transfer, assign and deliver the Outstanding Shares of such Seller set forth in Disclosure
Schedule 1.2(c) as provided in this Agreement, and upon delivery of and payment for such Outstanding Shares, Purchaser will
acquire at Closing good and valid title to all such Outstanding Shares, free and clear of any and all Liens, which Outstanding
Shares are as of the date hereof, and will be at and immediately after Closing, 100% of the Outstanding Shares of the Company.
Such Seller is not a party to any voting trust or other voting agreement with respect to any of its Outstanding Shares or to any
agreement relating to the issuance, sale, redemption, acquisition, registration, transfer or other disposition of its Outstanding
Shares, except for the Amended and Restated Close Corporation Agreement. Such Seller has not granted to any Person, other than
Purchaser hereunder, any preferential right or option to purchase any of the Outstanding Shares of such Seller, except as set
forth in the Amended and Restated Close Corporation Agreement.

 

(f)          Brokers.
Except for Cockrell Group, whose fees and expenses will be paid by Sellers, no broker, finder or agent is entitled to any brokerage
fees, finder’s fees or commissions in connection with this Agreement or the transactions contemplated hereby based upon
agreement, arrangement or understanding made by or on behalf of such Seller, provided that the K. Hemmelgarn 1998 Trust
and the B. Hemmelgarn 1998 Trust represent and warrant that no Hemmelgarn Seller has engaged any such broker, and they make no
representation or warranty as to any such broker that may have been engaged by Kirschman or any other Person.

 

(g)          Foreign
Corrupt Practices Act. Such Seller has not, directly or indirectly, taken any action which would cause it to be in violation
of the FCPA, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made, offered or authorized any unlawful payment to foreign or domestic government officials or employees,
whether directly or indirectly, or made, offered or authorized any bribe, rebate, payoff, influence payment, kickback or other
similar unlawful payment, whether directly or indirectly.

 

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(h)          Securities
Laws Compliance. Such Seller is an Accredited Investor. Such Seller acknowledges that the Purchaser Stock Consideration has
not been registered under the Securities Act in reliance upon the exemption from registration set forth in Section 4(2) of the
Securities Act and Regulation D promulgated thereunder. The Purchaser Stock Consideration is being acquired by such Seller for
such Seller’s own account without a view to public distribution or resale, and such Seller has no contract, undertaking,
agreement or arrangement to sell or otherwise transfer or dispose of the Purchaser Stock Consideration or any portion thereof
to any other Person. Such Seller will not sell or otherwise transfer or dispose of the Purchaser Stock Consideration or any portion
thereof unless the transfer is made in accordance with the Securities Act.

 

(i)          Seller
HSR Act Compliance. There is no Contract by which any Person, including any Seller, or any combination of Sellers who are
Affiliates, has the contractual power and authority to designate 50% or more of the directors of the Company within the meaning
of the HSR Act.

 

(j)          Kirschman
HSR Act Compliance. Kirschman’s total assets held, whether foreign or domestic, within the meaning of the HSR Act, do
not exceed $152,500,000.

 

Section 3.2           Representations
and Warranties Relating to the Company. The Indemnifying Sellers hereby represent and warrant to Purchaser as set forth
in this Section 3.2. The following representations and warranties are made severally by Kirschman, on the one hand, and
the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust, on the other hand, and by the K. Hemmelgarn 1998 Trust and the
B. Hemmelgarn 1998 Trust jointly and severally with each other. Further, the Hemmelgarn Knowledge Representations and Warranties
are made jointly and severally by the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust to the Knowledge of the Hemmelgarn
Sellers, and the representations and warranties of the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust in Sections
3.2(p) (Foreign Corrupt Practices Act), 3.2(s) (FDA and Regulatory Matters) and 3.2(dd) (Warranty) are made
jointly and severally by the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust with each other to the Knowledge of the
Hemmelgarn Sellers.

 

(a)          Organization
and Qualification. The Company and the Subsidiary are corporations duly organized, validly existing and in good standing under
the Applicable Laws of the states of their formation, and each has all requisite corporate power and authority to own, lease and
operate its properties and to conduct the Business. The Company is not licensed or qualified to do business as a foreign corporation
in any jurisdiction other than the State of Ohio. The Subsidiary is not licensed or qualified to do business as a foreign corporation
in any jurisdiction other than the State of Nevada. The Company has delivered or made available to Purchaser true and complete
copies of the currently effective articles of incorporation and bylaws of the Company and the Subsidiary (such instruments and
documents, the “Charter Documents”), and the minute books and stock ledgers of the Company and the Subsidiary.
Neither the Company nor the Subsidiary is in violation of its Charter Documents. The minute books contain all minutes and consents
adopted by the Company’s board of directors and Sellers.

 

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(b)          Subsidiary.
Except for X-spine Sales Corporation (the “Subsidiary”), neither the Company nor the Subsidiary owns
or controls, directly or indirectly, any interest in any Person. The Company is the record and beneficial owner of all of the
outstanding equity interests of the Subsidiary, free and clear of all Liens, and such equity interests are duly authorized, validly
issued fully paid and nonassessable. There are no outstanding options, warrants, call rights, rights of conversion or other rights,
agreements, arrangements or commitments of any kind or character relating to the equity ownership interests of the Subsidiary
to which the Company or Subsidiary is a party, or by which either is bound, obligating the Subsidiary to issue, deliver or sell,
or cause to be issued, delivered or sold, any of its equity interests or any right to acquire any such equity interests.

 

(c)          Capitalization.
The authorized capital of the Company consists of 1,500 shares of common stock, no par value, of which 1,000 shares are designated
Class A Voting Common Shares and 500 shares are designated Class B Non-Voting Common Shares (collectively, the “Company
Stock”). On the date of this Agreement there are 250 shares of Company Stock (200 shares of Class A Voting Common
Shares and 50 shares of Class B Non-Voting Common Shares) issued and outstanding, held by each Seller as described in Disclosure
Schedule 3.2(c). There are no outstanding options, warrants, call rights, rights of conversion or other rights, agreements,
arrangements or commitments of any kind or character relating to the capital stock of the Company to which the Company is a party,
or by which it is bound, obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, any Company
Stock or other equity interests of the Company or any right to acquire any such equity interests. No Person shall be entitled
to receive a portion of the Purchase Consideration other than Sellers. All Outstanding Shares are duly authorized and validly
issued, fully paid and nonassessable, have been issued in accordance with all Applicable Laws and have not been issued in violation
of any preemptive right. Disclosure Schedule 1.2(c) is accurate in all respects and, without limiting the foregoing, the
allocation of the Purchase Consideration as provided in Disclosure Schedule 1.2(c) is in accordance with the provisions
of the Company’s Charter Documents. There are no Contracts to which the Company or the Subsidiary is a party relating to
the registration, sale or transfer (including Contracts relating to rights of first refusal, co sale rights or “drag-along”
rights) of any equity interests of the Company other than the Amended and Restated Close Corporation Agreement, which will be
terminated by the Company and Sellers as of the Closing Date. As a result of the Purchase, Purchaser will be the sole record and
beneficial holder of the Outstanding Shares. The directors and officers of the Company and Subsidiary are set forth in Disclosure
Schedule 3.2(c).

 

(d)          Authority;
Due Execution and Binding Effect. The Company has the requisite corporate power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party, to consummate the transactions contemplated hereby and thereby
and perform its obligations hereunder and thereunder. The Company’s entry into and performance of its obligations under
this Agreement and each other Transaction Document to which the Company is a party have been approved by the board of directors
of the Company and will be duly authorized by all necessary corporate action of the Company. This Agreement has been, and each
other Transaction Document to which the Company is a party will be, duly and validly executed and delivered by the Company. Assuming
the due authorization, execution and delivery by Purchaser, this Agreement constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar Applicable Laws affecting the enforcement of creditors
rights generally and by general principles of equity (regardless of whether enforcement is considered in a proceeding in law or
equity).

 

    	10

    	 

    

 

(e)          No
Conflict. Except as set forth in Disclosure Schedule 3.2(e), the execution and delivery of, and the performance by
the Company of its obligations under, this Agreement and each other Transaction Document to which it is a party, will not, directly
or indirectly: (i) contravene, conflict with, or result in (with or without notice or lapse of time) a violation or breach
of any Applicable Law or order to which the Company or Subsidiary is subject; (ii) violate, conflict with or result in the
breach of any provision of any Charter Document of the Company or Subsidiary; (iii) require the Company or Subsidiary to
obtain any approval of, observe any waiting period imposed by, or make any filing with or notice to, any Governmental Entity;
or (iv) conflict in any respect with, result in a breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a breach or default) under, require any Consent under, or give to others any right of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Lien (other than a Permitted
Lien) pursuant to, any Contract to which the Company or Subsidiary is a party or by which any of their assets or properties are
bound or affected.

 

(f)          Financial
Statements. The Company has prepared, or caused to be prepared, and has provided to Purchaser and attached in Disclosure
Schedule 3.2(f), the (i) audited, consolidated financial statements of the Company and the Subsidiary, including the consolidated
balance sheets as of December 31, 2013 and 2014 and the related consolidated statements of operations, changes in shareholders’
equity and cash flows for the years ended December 31, 2013 and 2014, and (ii) unaudited, consolidated financial statements of
the Company and the Subsidiary, including the consolidated balance sheet as of May 31, 2015 and the related consolidated statements
of operations, changes in shareholders’ equity and cash flows for the five months ended May 31, 2015 (collectively, the
“Financial Statements”). The Financial Statements have been prepared from, and are in accordance with,
the books and records of the Company and the Subsidiary and prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated therein and with each other (except that the unaudited Financial Statements do not contain all of the notes
required by GAAP). The Financial Statements present fairly, in all material respects, the financial position, results of operations
and cash flows of the Company and the Subsidiary as of the respective dates and during the respective periods indicated therein,
subject in the case of the unaudited Financial Statements to normal recurring year-end adjustments which will not, individually
or in the aggregate, be material. The books and records of the Company and the Subsidiary have been, and are being, maintained
in all material respects in accordance with GAAP and any other applicable legal and accounting principles.

 

(g)          No
Undisclosed Liabilities. The Company has no Liabilities except as (i) reflected in, reserved against or disclosed in the Financial
Statements, (ii) incurred in the ordinary course of business since the Latest Balance Sheet Date and not as a result of a breach
of Contract, violation of Applicable Law or tort, or (iii) set forth in Disclosure Schedule 3.2(g). All Transaction Costs
other than the Paid Transaction Costs will have been paid in full prior to the Closing. The aggregate amount of Indebtedness as
of the Latest Balance Sheet Date was $12,508,140 and the aggregate amount of Indebtedness as of the date of this Agreement is
not more than $13,100,000.

 

    	11

    	 

    

 

(h)          Accounts
Receivable; Accounts Payable; Inventory.

 

(i)          All
of the accounts receivable of the Company and the Subsidiary are valid and, to the Knowledge of the Company, are not subject to
set-off or counterclaim except for customary allowances and reserves in the ordinary course of business. Since the Latest Balance
Sheet Date, the Company and the Subsidiary have collected their respective accounts receivable in the ordinary course of business
and in a manner which is consistent with past practices and have not accelerated any such collections. Set forth in Disclosure
Schedule 3.2(h)(i) is an aging report with respect to the accounts receivable of the Company and the Subsidiary as of May
31, 2015.

 

(ii)         Neither
the Company nor the Subsidiary has any notes receivable.

 

(iii)        All
accounts payable of the Company and the Subsidiary arose in bona fide arm’s length transactions in the ordinary course of
business. Since the Latest Balance Sheet Date, the Company and the Subsidiary have paid their respective accounts payable in the
ordinary course of their business and in a manner which is consistent with their past practices and have not delayed the payment
of any accounts payable. Set forth in Disclosure Schedule 3.2(h)(iii) is a list of the accounts payable of the Company
and the Subsidiary as of May 31, 2015.

 

(iv)        The
Company and the Subsidiary have good and marketable title to their respective inventories, free and clear of Liens other than
Permitted Liens. The inventories are in good and merchantable condition, and are suitable and usable for the purposes for which
they are intended.

 

(i)          Litigation.
Except as set forth in Disclosure Schedule 3.2(i), there are no (i) Actions by or against the Company or the Subsidiary,
or any directors, officers or employees of the Company or Subsidiary in their capacities as such, or affecting the Company’s
or the Subsidiary’s assets pending, or to the Knowledge of the Company, threatened; or (ii) Judgments or orders outstanding
by any court or Government Entity to which the Company or Subsidiary, or any of their assets, are subject. Without limiting the
generality of the foregoing, except as set forth in Disclosure Schedule 3.2(i), there are no Actions against the Company
or Subsidiary pending, or, to the Knowledge of the Company, threatened relating to any alleged hazard or alleged defect in design,
manufacture, materials or workmanship, including any failure to warn or alleged breach of express or implied warranty or representation,
relating to any Company Product. There is no investigation, audit, or other proceeding pending or, to the Knowledge of the Company,
threatened, against the Company, the Subsidiary, any of their respective assets or any of their respective directors, officers
or employees by or before any Governmental Entity, nor to the Knowledge of the Company is there any reasonable basis therefor.
No Governmental Entity has at any time challenged or questioned the legal right of the Company or the Subsidiary to conduct its
operations as presently or previously conducted or as currently contemplated to be conducted. There is no Action pending against,
or to the Knowledge of the Company, threatened against or affecting, the Company before any court or arbitrator or any Governmental
Entity which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated hereby.

 

    	12

    	 

    

 

(j)          Taxes.

 

(i)          The
Company and the Subsidiary have each timely filed, or have caused to be timely filed, all Tax Returns relating to Taxes required
to be filed by or on behalf of the Company and the Subsidiary except for Tax Returns for which the Company and Subsidiary have
recorded a liability under ASC 740 (relating to uncertain tax positions). All such Tax Returns are true and complete, and all
Taxes due and payable by the Company or Subsidiary shown to be due on such Tax Returns have been fully and timely paid.

 

(ii)         The
Company has delivered to Purchaser correct and complete copies of all material Tax Returns, examination reports, and statements
of deficiencies assessed against or agreed to by the Company since January 1, 2008.

 

(iii)        The
Company and the Subsidiary have complied with all requirements under Applicable Law relating to the payment, reporting and withholding
of Taxes, including with respect to the Company’s and the Subsidiary’s employees, and with respect to payments made
to any non-U.S. person.

 

(iv)        Neither
the Company nor the Subsidiary has been delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding or assessed
against the Company or Subsidiary.

 

(v)         The
Company has been a validly electing S corporation within the meaning of Code Sections 1361 and 1362 at all times since its formation,
and the Company will be an S corporation up to and including the Closing Date.

 

(vi)        The
Subsidiary is an "Interest Charge Domestic International Sales Corporation" within the meaning of Code Sections 991
and 992, and has been and will be a qualified Interest Charge Domestic International Sales Corporation at all times since its
formation up to and including the Closing Date. The Subsidiary has had since its date of formation a valid election to be treated
as an "Interest Charge Domestic International Sales Corporation" within the meaning of Code Section 992, and has at
all times since its formation met the requirements to be qualified as an "Interest Charge Domestic International Sales Corporation"
under Code Section 992 and the Treasury Regulations thereunder. All commissions paid by the Company to the Subsidiary, and all
agreements with respect thereto, have complied with the intercompany pricing rules under Code Section 994 and the Treasury Regulations
thereunder.

 

(vii)       Neither
the Company nor the Subsidiary has, in the past ten years, (A) acquired assets from another corporation in a transaction in which
Company's Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis for the acquired
assets (or any other property) in the hands of the transferor, or (B) acquired the stock of any corporation that is a qualified
subchapter S subsidiary, except for the formation of the Subsidiary as an Interest Charge Domestic International Sales Corporation.

 

    	13

    	 

    

 

(viii)      There
is no (A) claim that a Tax Return should have been filed, or for Taxes that has been asserted against the Company or Subsidiary,
(B) Lien against the property of the Company or Subsidiary, other than Permitted Liens, (C) extension of any statute of limitations
on the assessment of any Taxes granted by the Company or Subsidiary currently in effect, or (D) agreement to any extension of
time for filing any Tax Return which has not been filed.

 

(ix)         No
audit or other examination of any Tax Return of the Company or Subsidiary by any taxing authority is presently in progress, nor
to the Knowledge of the Company is there any threatened audit or other examination by any Governmental Entity in respect of any
Taxes of the Company or Subsidiary.

 

(x)          Neither
the Company nor the Subsidiary has been notified by a taxing authority in any jurisdiction in which the Company or the Subsidiary
does not pay Taxes or file Tax Returns asserting that the Company or the Subsidiary is or may be required to pay Taxes or file
Tax Returns in such jurisdiction, which has not been resolved prior to the date of this Agreement.

 

(xi)         
The Latest Balance Sheet reflects all Liabilities for unpaid Taxes of the Company and the Subsidiary for periods (or portions
of periods) through the Latest Balance Sheet Date. Neither the Company nor the Subsidiary has any Liability for unpaid Taxes accruing
after the Latest Balance Sheet Date except for Taxes arising in the ordinary course of business subsequent to the Latest Balance
Sheet Date. Neither the Company nor the Subsidiary has any Liability for Taxes for any periods or portions of the periods prior
to the Closing Date that are not included in the calculation of the Closing Working Capital.

 

(xii)        Neither
the Company nor the Subsidiary (A) has been a member of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company), or (B) has any liability for the Taxes of any Person (other than the
Company or the Subsidiary) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or non-U.S. law), as
a transferee or success, by contract, or otherwise. Neither the Company nor Subsidiary is a party to or bound by any Tax sharing,
Tax indemnity, or Tax allocation agreement.

 

(xiii)       Neither
the Company nor the Subsidiary is, or has been, a “United States real property holding corporation” (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

 

(xiv)      Disclosure
Schedule 3.2(j)(xiv) lists all jurisdictions (whether foreign or domestic) to which any Tax has been paid by the Company or
the Subsidiary. No claim in writing has ever been made by a Tax authority in a jurisdiction where the Company or the Subsidiary
does not file Tax Returns that the Company or the Subsidiary is or may be subject to Tax in that jurisdiction. Neither the Company
nor the Subsidiary has, or has ever had, a permanent establishment in any foreign country.

 

    	14

    	 

    

 

(xv)       Neither
the Company nor the Subsidiary has been (A) the subject of an IRS private letter ruling (or similar Tax ruling under state, local
or foreign Law) that has continuing effect; (B) the subject of a “closing agreement” as that term is defined in Section
7121 of the Code (or any comparable agreement under state, local or foreign Law) with any Tax authority that has continuing effect;
or (C) granted a power of attorney with respect to any Tax matters that continues in effect.

 

(xvi)      Neither
the Company nor the Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) installment sale or open
transaction disposition made on or prior to the Closing Date, or (B) prepaid amount received on or prior to the Closing Date.
There are no requests for rulings or determinations in respect of any Tax pending between the Company and any governmental authority.

 

(xvii)     Neither
the Company nor the Subsidiary has ever been either a “controlled corporation” or a “distributing corporation”
(within the meaning of Section 355(a)(1)(A) of the Code) with respect to a transaction that was described in, or intended to qualify
as a tax-free transaction pursuant to Section 355 of the Code. Neither the Company nor the Subsidiary has made or agreed to make
any adjustment under Section 481(a) of the Code (or any corresponding provision of state, local or foreign Tax law) by reason
of a change in accounting method or otherwise. Neither the Company nor the Subsidiary has participated in an international boycott
as defined in Section 999 of the Code. Neither the Company nor the Subsidiary owns, directly or indirectly, any interests in an
entity that is or has been a “passive foreign investment company” within the meaning of Section 1297 of the Code or
a “controlled foreign corporation” within the meaning of Section 957 of the Code.

 

(xviii)    Neither
the Company nor the Subsidiary is a party to any contract or plan (including any Company stock rights) that has resulted or would
result, separately or in the aggregate, in the payment of (A) any “excess parachute payments” within the meaning of
Section 280G of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (B)
any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code.

 

(xix)       Each
plan, program, arrangement or agreement which constitutes in any part a nonqualified deferred compensation plan within the meaning
of Section 409A of the Code is identified as such on Disclosure Schedule 3.2(j)(xix). Since December 31, 2004, each plan,
program, arrangement or agreement of the Company or Subsidiary has been operated and maintained in accordance with the requirements
of Section 409A of the Code.

 

(k)          Title
to Property and Assets.

 

(i)          Neither
the Company nor the Subsidiary owns or has ever owned any real property.

 

    	15

    	 

    

 

(ii)         Disclosure
Schedule 3.2(k)(ii) sets forth the address of each parcel of real property in which the Company has a leasehold interest (the
“Leased Real Property”). Each parcel of Leased Real Property is leased under a valid and subsisting
lease. Each lease relating to the Leased Real Property is in full force and effect. With respect to the Leased Real Property:
(A) to the Knowledge of the Company, there are no pending or threatened condemnation proceedings, suits or administrative actions
relating to any such parcel or other matters affecting adversely the current use, occupancy or value thereof; (B) the operation
of the Leased Real Property in the manner in which it is now operated comply with all zoning, building, use, safety or other similar
Laws; (C) all improvements are in good operating condition, ordinary wear and tear excepted, and are supplied with utilities and
other services necessary for the operation of the Business as currently conducted; (D) neither the Company nor the Subsidiary
has received any notice of any special Tax, levy or assessment for benefits or betterments that affect any parcel of Leased Real
Property and, to the Knowledge of the Company, no such special Taxes, levies or assessments are pending or contemplated; and (E) there
are no Contracts to which the Company is a party granting to any third party or parties the right of use or occupancy of the Leased
Real Property, and there are no third parties (other than the Company) in possession of any of the Leased Real Property. The Company
is not a party to any Contract or option to purchase any real property or any portion thereof or interest therein. True and complete
copies of any lease or agreement to lease relating to the Leased Real Property have been provided or made available to Purchaser.

 

(iii)        Each
of the Company and the Subsidiary has good and marketable title to, or a valid leasehold interest or license in, the properties
and assets (tangible and intangible) used by it, located on its premises or shown on the Latest Balance Sheet or acquired after
the date thereof (other than inventory sold in the ordinary course of business), free and clear of all Liens, except for Permitted
Liens. The assets, properties and rights owned by the Company or Subsidiary are all the assets, properties and rights used by
the Company and the Subsidiary in the operation of the Business or necessary to operate the Business consistent with past practice.

 

(iv)        The
buildings, machinery, equipment and other tangible assets that the Company or the Subsidiary owns and leases (A) are, to the Knowledge
of the Company, free from material defects (patent and latent), and (B) have been maintained in accordance with normal industry
practice, and are in good operating condition and repair (subject to normal wear and tear).

 

(l)          Intellectual
Property.

 

(i)          Disclosure
Schedule 3.2(l)(i) contains a true and complete list of all Company Registered Intellectual Property and all Company Licensed
Intellectual Property that is exclusively licensed to the Company or Subsidiary. The Company or Subsidiary, as applicable, owns
all rights in, or has valid and enforceable rights to use, the Company Intellectual Property, free and clear of all Liens except
Permitted Liens.

 

(ii)         Except
as set forth in Disclosure Schedule 3.2(l)(ii) and claims that have been fully resolved: (A) to the Knowledge of the Company,
the Company Intellectual Property has not been infringed, misappropriated or otherwise violated in any material respect by any
Person, including any employee or former employee of the Company or Subsidiary; (B) since January 1, 2012, no Action has been
brought against the Company or Subsidiary (and neither the Company nor the Subsidiary has received any notice, or any threat)
that involves a claim of infringement, misappropriation or other violation of any Intellectual Property of any third party or
that contests the validity, ownership or right of the Company or Subsidiary to exercise any Intellectual Property right; (C) since
January 1, 2012, neither the Company nor the Subsidiary has brought any Action for infringement, misappropriation or other violation
of any Intellectual Property or breach of any Contract relating to the Company Intellectual Property; and (D) neither the Company
nor the Subsidiary has received any unresolved written notice of any alleged invalidity with respect to any of the Company Intellectual
Property in connection with the normal conduct of the Business.

 

    	16

    	 

    

 

(iii)        Neither
the Company nor the Subsidiary has transferred ownership of any Intellectual Property that is or was Company Owned Intellectual
Property, to any third party, or granted any third party any exclusive rights with respect to any Company Intellectual Property,
or to the Knowledge of the Company, permitted the Company’s rights in any Intellectual Property that is or was Company Owned
Intellectual Property to enter the public domain.

 

(iv)        All
fees, annuities, royalties, honoraria and other payments that are due from the Company on or before the date of this Agreement
for any of the Company Intellectual Property and agreements related to the Company Intellectual Property have been paid. Disclosure
Schedule 3.2(l)(iv) sets forth a list of all fees, annuities, royalties, honoraria and other payments that are due from the
Company within one year of the Closing Date for any of the Company Intellectual Property and agreements related to the Company
Intellectual Property existing as of date of this Agreement.

 

(v)         All
registration, maintenance and renewal fees currently due in connection with the Company Registered Intellectual Property have
been paid and all documents, recordations and certificates in connection with such Company Registered Intellectual Property currently
required to be filed have been filed with the relevant patent, copyright, trademark or other authorities in the United States
or foreign jurisdictions, as the case may be, for the purposes of prosecuting, maintaining and perfecting such Company Registered
Intellectual Property and recording the Company’s and the Subsidiary’s ownership interests therein.

 

(vi)        Each
of the Company and the Subsidiary has secured from all of its consultants, employees and independent contractors who independently
or jointly contributed to the conception, reduction to practice, creation or development of any Company Owned Intellectual Property,
unencumbered and unrestricted exclusive ownership of all such third party’s Intellectual Property in such contribution that
the Company or Subsidiary does not already own by operation of law and such third party has not retained any rights or licenses
with respect thereto.

 

(vii)       The
Company and the Subsidiary have taken commercially reasonable steps to protect and preserve the confidentiality of all confidential
or non-public information included in the Company Intellectual Property.

 

    	17

    	 

    

 

(viii)      No
“open source software,” “free software” or other materials licensed under similar licensing or distribution
terms have been incorporated into, combined with, used by, or distributed with the Company Intellectual Property or Company Products.

 

(ix)         Neither
the Company nor the Subsidiary nor, to the Knowledge of the Company, any other Person then acting on their behalf has disclosed,
delivered or licensed to any Person, agreed to disclose, deliver or license to any Person, or permitted the disclosure or delivery
to any escrow agent or other Person of, any software source code. No event has occurred, and no circumstance or condition exists,
that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, result in the disclosure, delivery
or license by the Company or Subsidiary or any Person then acting on their behalf to any Person of any software source code.

 

(x)          No
(A) government funding, or (B) facilities of a university, college, other educational institution or research center
was used in the development of the Company Owned Intellectual Property. To the Knowledge of the Company, there are no usage rights,
march-in rights, manufacturing restrictions, or other rights of any Governmental Entity or any academic institution in or to any
of the Company Owned Intellectual Property.

 

(xi)         Neither
the Company nor the Subsidiary is now or has ever been a member or promoter of, or a contributor to, any industry standards body
or any similar organization that could reasonably be expected to require or obligate the Company or Subsidiary to grant or offer
to any other Person any license or right to any Company Owned Intellectual Property. Neither the Company nor the Subsidiary has
a present obligation to grant or offer to any other Person any license or right to any Company Owned Intellectual Property by
virtue of the Company’s or any other Person’s membership in, promotion of, or contributions to any industry standards
body or any similar organization.

 

(xii)        The
Company has taken all reasonable steps to protect and preserve the confidentiality of all trade secrets, know-how, source code,
databases, customer lists, schematics, ideas, algorithms and processes and all use, disclosure or appropriation thereof by or
to any Person has been pursuant to the terms of a written agreement between such third party and the Company. The Company has
complied in all material respects with all of its confidentiality obligations under each Contract to which the Company is a party.

 

(xiii)       Except
as set forth on Disclosure Schedule 3.2(l)(xiii), to the Knowledge of the Company, (A) the Company Intellectual Property
is all of the Intellectual Property necessary for the conduct of the Business as currently conducted, (B) the operation of the
Business as currently conducted does not infringe, misappropriate or otherwise violate the Intellectual Property of any third
party, (C) each item of Company Registered Intellectual Property is validly registered and subsisting, (D) all Company Products
sold, licensed, leased, provided or delivered by the Company or Subsidiary to customers on or prior to the Closing Date conform
as to applicable contractual commitments and warranties and conform to and perform in accordance with applicable packaging, advertising
and marketing materials, specifications or documentation, and neither the Company nor the Subsidiary has any liability for replacement
or repair thereof or other damages in connection therewith in excess of any reserves therefor reflected in, reserved against or
disclosed in the Financial Statements, and (E) with respect to Company Products sold, licensed, leased, provided or delivered
by the Company or Subsidiary to customers on or prior to the Closing Date with respect to which obligations of any kind on the
part of the Company or such customer remain outstanding, such Company Products have been so sold, licensed, leased, provided or
delivered pursuant to the Company’s standard form of distribution agreement or pursuant to one of the Company’s standard
forms of customer agreement, which forms have been made available to Purchaser, and which forms are valid and enforceable.

 

    	18

    	 

    

 

(m)          Business
Continuity. None of the software, computer hardware (whether general or special purpose), telecommunications capabilities
(including all voice, data and video networks), data storage, and other similar or related items of automated, computerized, and/or
software systems and any other networks or systems and related services that are used by or relied on by the Company in all material
respects in the conduct of its Business (collectively, the “Systems”) have experienced bugs, failures,
breakdowns, breaches, unauthorized access, or continued substandard performance in the past 24 months that has caused or reasonably
could be expected to cause any substantial disruption or interruption in or to the use of any such Systems by the Company or the
Subsidiary.

 

(n)          Information
Privacy and Data Security.

 

(i)          The
Company’s practices concerning collection, use, analysis, retention, storage, protection, security, transfer, disclosure
and disposal of Personal Information comply with, and have not violated, any (A) Contract, including any business associate
agreement with a client, or (B) Privacy Laws.

 

(ii)         The
Company (A) is not now and has not been in the last ten years under investigation by any Governmental Entity for an actual or
alleged violation of any Privacy Law, (B) has not received any notices from the United States Department of Health and Human Services
Office for Civil Rights, Department of Justice, Federal Trade Commission, Attorney General of any state or territory of the United
States, or any other Governmental Entity, relating to any such actual or alleged violations, (C) has not received any complaints,
notices or other written or oral communications from any Person alleging a violation of any Privacy Law, and (D) is not aware
of any incident that would trigger an obligation to notify any Person under any Privacy Laws or business associate agreement as
that term is defined under HIPAA.

 

(iii)        The
Company has implemented reasonable administrative, physical and technical safeguards to protect the Personal Information processed
by the Company. The Company maintains, and has remained in compliance with, written policies and procedures concerning the (A)
protection of Personal Information, (B) the protection of the systems, technology and networks that process such Personal Information,
and (C) prevention, detection, containment, and correction of security violations respecting its information systems. The Company
has provided Purchaser with true and accurate copies of all such written and procedures. Each Company employee and agent has received
training regarding information security that is relevant to each such employee’s or agent’s role and responsibility
within the Company. The Company has deployed industry standard encryption on all portable devices and information systems containing
Sensitive Personal Information.

 

    	19

    	 

    

 

(iv)        To
the extent the Company collects Personal Information of Persons who reside outside of the United States, the Company has implemented
mechanisms to comply with Privacy Laws restricting the transfers of Personal Information from such Persons’ home country
to any other country.

 

(v)         The
Company has implemented commercially reasonable administrative, physical and technical safeguards to protect the Personal Information
processed by the Company.

 

(vi)        To
the extent necessary or required by HIPAA, the Company has entered into a business associate agreement that complies with HIPAA
and HITECH in each case in which the Company’s counterparty is acting as Covered Entity or a Business Associate or the Company
provides access to Protected Health Information to its agents, subcontractors or vendors. There have not been any material violations
of any such business associate agreements by the Company.

 

(vii)       The
Company has made available or provided Purchaser with true and accurate copies of all Contracts with each third-party service
provider, vendor and business partner that has access (including storage) to Sensitive Personal Information, including payment
processors, advertising and marketing agencies, cloud storage vendors and outsourced technology or human resource functions.

 

(o)          Compliance
with Applicable Laws; Permits.

 

(i)          Each
permit, license, approval, franchise, order, consent, authorization, registration, qualification or other right and privilege
from any Governmental Entity (A) pursuant to which the Company or Subsidiary currently operates or holds any interest in any of
its properties or (B) which is required for the operation of the Company’s and the Subsidiary’s business or the holding
of any such interest (collectively, “Permits”) has been issued or granted to the Company or the Subsidiary.
As of the date of this Agreement, the Permits held by or issued to the Company or Subsidiary are in full force and effect, and
the Company and the Subsidiary are in compliance with each such Permit in all material respects.

 

(ii)         Except
as set forth in Disclosure Schedule 3.2(o)(ii), since June 30, 2012, each of the Company and the Subsidiary has complied
in all material respects with all Applicable Laws and is not in violation of, and has not received any written notices of suspected,
potential or actual violation with respect to, any Applicable Laws.

 

(iii)        Except
as set forth in Disclosure Schedule 3.2(o)(iii), during the five year period ending on the date of this Agreement, the
Company has not had any product or manufacturing site subject to a Governmental Entity shutdown or import or export prohibition,
nor received any Governmental Entity notice of inspectional observations, “warning letters,” “untitled letters,”
or similar correspondence or written notice from any Governmental Entity alleging or asserting noncompliance with any Applicable
Law, Permit or such correspondence or notice from any Governmental Entity, and, to the Knowledge of the Company, no Governmental
Entity is considering such action.

 

    	20

    	 

    

 

(p)          Foreign
Corrupt Practices Act. Without limiting the generality of Section 3.2(o), neither the Company nor the Subsidiary (including
any of their respective directors, officers, employees, agents or other Person associated with or acting on their behalf) has,
directly or indirectly, taken any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977,
as amended, or any rules or regulations thereunder (the “FCPA”), used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to political activity, made, offered or authorized any
unlawful payment to foreign or domestic government officials or employees, whether directly or indirectly, or made, offered or
authorized any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment, whether directly or indirectly.

 

(q)          Export
Control Laws. Without limiting the generality of Section 3.2(o), each of the Company and the Subsidiary has at all
times conducted its export transactions in accordance with (i) all applicable U.S. export and re export controls, including the
United States Export Administration Act and Regulations and Foreign Assets Control Regulations and (ii) all other applicable import/export
controls in other countries in which the Company or Subsidiary conducts business. Without limiting the foregoing:

 

(i)          each
of the Company and the Subsidiary has obtained all export licenses, license exceptions and other consents, notices, waivers, approvals,
orders, authorizations, registrations, declarations and filings with any Governmental Entity required for (A) the export and re
export of products, services, software and technologies and (B) releases of technologies and software to foreign nationals located
in the United States and abroad (“Export Approvals”);

 

(ii)         each
of the Company and the Subsidiary is in compliance with the terms of all applicable Export Approvals;

 

(iii)        there
are no pending or, to the Knowledge of the Company, threatened claims against the Company or Subsidiary with respect to such Export
Approvals; and

 

(iv)        to
the Knowledge of the Company, there are no actions, conditions or circumstances pertaining to the Company’s or the Subsidiary’s
export transactions that may give rise to any future claims.

 

(r)          Environmental
Matters. The Company and the Subsidiary have obtained all Environmental Permits necessary for the conduct of Business and
each is in compliance with the requirements of such Environmental Permits and with all applicable Environmental Laws. Except as
set forth in Disclosure Schedule 3.2(r), (i) to the Knowledge of the Company no (A) underground storage tanks, (B)
polychlorinated biphenyls or equipment containing polychlorinated biphenyls, or (C) asbestos or asbestos-containing materials
are present at the Leased Real Property, and (ii) the operations of the Company and the Subsidiary have not resulted in any release
of Hazardous Materials on the Leased Real Property in violation of Applicable Laws. The Company has not received any written or
oral notice, report or other information regarding any actual or alleged violation of Environmental Laws, or any liabilities or
potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial
or corrective obligations, relating to the Company, its current or former facilities or the Leased Real Property arising under
Environmental Laws.

 

    	21

    	 

    

 

(s)          FDA
and Regulatory Matters.

 

(i)          Except
as set forth on Disclosure Schedule 3.2(s)(i), each of the Company and the Subsidiary is, and since its incorporation or
organization has been, in compliance with all Healthcare Laws applicable to the Company, the Subsidiary and the Company Products,
or by which any property or other asset of the Company or the Subsidiary is bound or affected. The design, manufacture, testing,
and distribution of Company Products by or on behalf of the Company is being, and has been since its incorporation or organization,
as applicable, conducted in compliance with all applicable Healthcare Laws, including the FDA’s current good manufacturing
practice regulations at 21 C.F.R. Part 820 for medical device products. The Company and the Subsidiary and, to the Knowledge of
the Company, any contract manufacturers assisting in the manufacture of the Company Products are, and at all times have been,
in compliance with FDA’s registration and listing requirements to the extent required by applicable Healthcare Laws. Neither
the Company nor the Subsidiary has received notification of any pending or threatened Action from any Governmental Entity, including
the FDA, the Centers for Medicare & Medicaid Services, and the U.S. Department of Health and Human Services Office of Inspector
General, or any comparable state or federal Governmental Entity alleging potential or actual non-compliance by, or Liability of,
the Company or the Subsidiary under any Healthcare Law.

 

(ii)         The
Company and the Subsidiary hold such Permits of Governmental Entities from the United States government or government agencies
required for the conduct of its Business as currently conducted, including those Permits necessary to permit the design, development,
pre-clinical and clinical testing, manufacture, labeling, sale, shipment, distribution and promotion of the Company Products in
jurisdictions where it currently conducts such activities (the “Activities to Date”) with respect to
each Company Product (collectively, the “Company Licenses”). The Company has fulfilled and performed
all of its obligations in all material respects with respect to each Company License and is in compliance in all material respects
with all terms and conditions of each Company License, and, to the Knowledge of the Company, no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights
of the holder of any Company License. Neither the Company nor the Subsidiary has received any information or notification from
the FDA or any other Governmental Entity with jurisdiction over the testing, marketing, sale, use, handling and control, safety,
efficacy, reliability, or manufacturing of medical devices regarding the denial of any application for marketing approval or clearance
currently pending before the FDA or any other Governmental Entity.

 

(iii)        All
filings, reports, documents, claims, submissions and notices required to be filed, maintained, or furnished to FDA, state, other
federal equivalent agencies by the Company have been so filed, maintained or furnished and were complete and correct in all material
respects on the date filed (or were corrected in or supplemented by a subsequent filing), including adverse event reports and
medical device reports, with regard to the Company Products. Disclosure Schedule 3.2(s)(iii) sets forth a list of all adverse
event reports related to the Company Products, including any Medical Device Reports required in accordance with 21 C.F.R. Part
803. Set forth on Disclosure Schedule 3.2(s)(iii) are complaint review and analysis reports of the Company and the Subsidiary,
including information regarding complaints by product, which reports are complete and correct in all material respects. All applications,
notifications, submissions, information, claims, reports, filings, and other data and conclusions derived therefrom utilized as
the basis for or submitted in connection with any and all requests for a Company License from the FDA or other Governmental Entity
relating to the Company, the Subsidiary or the Business, or the Company Products, when submitted to the FDA or any other Governmental
Entity, whether oral, written or electronically delivered, were true, accurate and complete as of the date of submission. Any
necessary or required updates, changes, corrections or modifications to such applications, notifications, submissions, information,
claims, reports, filings, and other data have been submitted to the FDA or other Governmental Entity and as so updated, changed,
corrected or modified remain true, accurate and complete, and do not materially misstate any of the statements or information
included therein, or omit to state a material fact necessary to make the statements therein not misleading.

 

    	22

    	 

    

 

(iv)        Neither
the Company nor the Subsidiary has received any notice or other communication from the FDA or any other Governmental Entity contesting
the pre-market clearance or approval of, the uses of or the labeling and promotion of any of the Company Products. No manufacturing
site which assists in the manufacture of the Company Products (whether Company-owned or operated, or, to the Knowledge of the
Company, that of a contract manufacturer for the Products) has been subject to a Governmental Entity (including FDA) shutdown
or import or export prohibition. Neither the Company nor, to the Knowledge of the Company, any manufacturing site which assists
in the manufacture of the Products (whether Company-owned or operated, or that of a contract manufacturer for the Products) has
received any FDA Form 483 or other Governmental Entity notice of inspectional observations or adverse findings, “warning
letters,” “untitled letters” or similar correspondence or notice from the FDA or other Governmental Entity alleging
or asserting noncompliance with any applicable Healthcare Laws or Company Licenses or alleging a lack of safety from the FDA or
any other Governmental Entity, and there is no action or proceeding pending or, to the Knowledge of the Company, threatened.

 

(v)         Except
as set forth on Disclosure Schedule 3.2(s)(v), there have been no recalls (either voluntary or involuntary), field notifications,
field corrections, market withdrawals or replacements, warnings, “dear doctor” letters, investigator notices, safety
alerts or other notices of action relating to an alleged lack of safety, efficacy, or regulatory compliance of any Company Product,
or seizures ordered or adverse regulatory actions taken (or, to the Knowledge of the Company, threatened) by the FDA or any other
Governmental Entity with respect to any of the Company Products or any facilities where any such Company Products are tested,
produced, processed, packaged or stored. The FDA has not mandated that the Company do a recall of any of the Company Products.
There are no recalls of any of the Company Products contemplated or pending.

 

(vi)        No
preclinical or clinical trials have been completed, or are being conducted as of the date hereof, by or on behalf of, or sponsored
by, the Company.

 

    	23

    	 

    

 

(vii)       Neither
the Company, nor, to the Knowledge of the Company, any director, officer or employee of the Company, nor any agent acting on behalf
of or for the benefit of any of the Company, has directly or indirectly in connection with the Company: (A) offered or paid any
remuneration, in cash or in kind, to or made any financial arrangements with, any past, present or potential customers, past or
present suppliers, patients, contractors or employees of private third party payors or government programs in return for or to
induce business or payments from such persons other than in the ordinary course of business; (B) given or agreed to give, any
gift or gratuitous payment of any kind, nature or description (whether in money, property or services) to any customer or potential
customer, supplier or potential supplier, contractor, private third party payor or any other person other than in connection with
promotional or entertainment activities in the ordinary course of business and in compliance with the Company’s compliance
program; or (C) made any false entries on any of the Company’s books or records for any purpose prohibited by Applicable
Law.

 

(viii)      The
Company has delivered to Purchaser true, correct and complete copies of all of its material written communications with the FDA.

 

(ix)         The
Company is not the subject of any pending or, to the Knowledge of the Company, threatened investigation regarding the Company
or the Company Products, by the FDA pursuant to its “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”
Final Policy set forth in 56 Fed. Reg. 46,191 (September 10, 1991) and any amendments thereto (“FDA Fraud Policy”),
or otherwise. Neither the Company nor to the Knowledge of the Company, any officer, employee, agent or distributor of the Company
has made an untrue statement of material fact to the FDA or any other Governmental Entity, failed to disclose a material fact
required to be disclosed to the FDA or any other Governmental Entity, or committed an act, made a statement or failed to make
a statement that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA or any other
Governmental Entity to invoke the FDA Fraud Policy or any similar policy. Neither the Company nor, to the Knowledge of the Company,
any officer, employee, agent or distributor of the Company, has been convicted of any crime or engaged in any conduct for which
such Person could be excluded from participating in the federal health care programs under Section 1128 of the Social Security
Act of 1935, as amended, or any similar Law. No claims, actions, proceedings or investigation that would reasonably be expected
to result in a material debarment or exclusion are pending or, to the Knowledge of the Company, threatened, against the Company
or, to the Knowledge of the Company, any of its directors, officers, employees or agents.

 

(t)          Health
Care Professionals. Except as set forth on Disclosure Schedule 3.2(t), no Seller is a Health Care Professional. The
Company and the applicable Sellers acknowledge that Purchaser shall be entitled to disclose information regarding payments and
other related items provided to any Sellers who are or may be Health Care Professionals to the public and various government agencies
as Purchaser deems appropriate for the purpose of providing disclosure of and transparency with respect to interactions with Health
Care Professionals (including information regarding the name of such Seller and the purpose and amount of any such payments),
whether or not required by Applicable Law and regulations and regardless of whether such information is actively sought by the
public or any applicable government agencies.

 

    	24

    	 

    

 

(u)          Restrictions
on Business Activities. Except as set forth in Disclosure Schedule 3.2(u), there is no Contract (non-competition or
otherwise), commitment, Judgment, injunction, order or decree to which the Company or Subsidiary is a party or otherwise binding
upon the Company or Subsidiary which prohibits or impairs any business practice of the Company or Subsidiary, the conduct of business
by the Company or Subsidiary, or otherwise limiting the freedom of the Company to engage or participate in any line of business,
market or geographic area, or to conduct any business activities, or to compete with any Person.

 

(v)         Brokers.
Except for Cockrell Group, whose fees and expenses will be paid by Sellers, no broker, finder or agent is entitled to any brokerage
fees, finder’s fees or commissions in connection with this Agreement or the transactions contemplated hereby based upon
agreement, arrangement or understanding made by or on behalf of the Company or the Subsidiary; provided, the K. Hemmelgarn
1998 Trust and the B. Hemmelgarn 1998 Trust represent and warrant that no Hemmelgarn Seller has engaged any such broker on behalf
of the Company or the Subsidiary, and they make no representation or warranty as to any such broker that may have been engaged
by Kirschman or any other Person on behalf of the Company or the Subsidiary.

 

(w)          Employees;
Compensation; Labor Matters.

 

(i)          Disclosure
Schedule 3.2(w) contains a complete list of all current employees and consultants of the Company, showing for each: (A) name,
(B) hire date, (C) current job title, (D) actual base salary, bonus, commission or other remuneration paid during 2014, (E)
2015 base salary level and 2015 target bonus (if any), and (F) indicating whether there has been any increase in compensation,
bonus, incentive, or service award or any grant of any severance or termination pay or any other increase in benefits or any commitment
to do any of the foregoing since January 1, 2015.

 

(ii)         The
Company has provided Purchaser with complete and correct copies of (A) all existing severance, accrued vacation or other leave
agreement, policies or retiree benefits of any such employee or consultant, (B) all employee or consultant trade secret, non-compete,
non-disclosure and invention assignment agreements and (C) all manuals and handbooks applicable to any current or former officer,
employee or consultant of the Company. The employment or consulting arrangement of each officer, employee, agent or consultant
of the Company is, subject to Applicable Laws involving the wrongful termination of employees, terminable at will (without the
imposition of penalties or damages) by the Company and the Company does not have any severance obligations if any such manager,
officer, employee, agent or consultant is terminated. To the Knowledge of the Company, no executive or Key Employee of the Company
or any group of employees of the Company has any plans to terminate employment with the Company.

 

(iii)        The
Company has not experienced (nor, to the Knowledge of the Company, has it been threatened with) any strike, slow down, work stoppage
or material grievance, claim of unfair labor practices, or other collective bargaining dispute within the past three years. The
Company has not committed any material unfair labor practice. To the Knowledge of the Company, there is no organizational effort
presently being made or threatened by or on behalf of any labor union with respect to employees of the Company. The Company has
paid in full to all of its employees and independent contractors all wages, salaries, commissions, bonuses, benefits and other
compensation due and payable to such employees and independent contractors.

 

    	25

    	 

    

 

(iv)        All
individuals who have performed services for the Company or who otherwise have claims for compensation from the Company have been
properly classified as an employee or an independent contractor and as exempt or non-exempt pursuant to all Applicable Laws, including
the Code and ERISA.

 

(x)          Employee
Benefit Plans.

 

(i)          Disclosure
Schedule 3.2(x)(i) contains a list, as of the date of this Agreement, of all “employee benefit plans” within the
meaning of §3(3) of ERISA, all bonus, equity option, equity purchase, equity, incentive, deferred compensation, supplemental
retirement, severance, change in control, fringe benefit and other employee benefit plans, programs or arrangements, and all employment
or compensation agreements, whether or not subject to ERISA, in each case for the benefit of, or relating to, current employees
and/or former employees of the Company or Subsidiary, sponsored by, contributed to or maintained by the Company or Subsidiary,
or under which the Company or Subsidiary has any present or future Liability, other than those plans, programs and arrangements
sponsored or mandated by a Governmental Entity (collectively, the “Employee Plans”).

 

(ii)         Each
Employee Plan has been established and administered in compliance in all material respects with its terms and the requirements
prescribed by Applicable Laws, and the Company and the Subsidiary, as applicable, has performed all obligations required to be
performed by it under, and is not in violation of the terms of, any of the Employee Plans. To the extent applicable, the Company
has made available to Purchaser copies of: (A) each Employee Plan and applicable amendments; (B) the most recent IRS
Form 5500, if any, prepared for each Employee Plan (including all schedules thereto); (C) the most recent determination letter;
(D) any trust agreement or other funding instrument related to such Employee Plan; and (E) any summary plan description.

 

(iii)        The
execution of this Agreement and the consummation of the transactions contemplated by this Agreement shall not constitute an event
under any Employee Plan that shall result in or cause (A) any payment (whether of severance pay or otherwise), (B) forgiveness
of indebtedness or accelerated vesting with respect to any current employees or former employees of the Company or Subsidiary,
(C) any limitation or restriction on the right of Purchaser to merge, amend or terminate any of the Employee Plans, or (D) payments
under any of the Employee Plans that would not be deductible under Section 280G of the Code.

 

(iv)        Neither
the Company nor the Subsidiary nor any of their ERISA Affiliates maintains, contributes to or is obligated to contribute to, or
has any Liability or responsibility with respect to any Employee Plan that is subject to Title IV of ERISA, including any multi-employer
plan (as defined in Section 3(37) of ERISA).

 

(v)         Neither
the Company nor the Subsidiary has any Liability or obligation under any Employee Plan to provide post-termination life insurance
or medical or health benefits to any employee or dependent other than as required by Part 6 of Title I of ERISA. No nonexempt
“prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has occurred
with respect to any Employee Plan.

 

    	26

    	 

    

 

(y)          Material
Contracts. Disclosure Schedule 3.2(y) sets forth a list of the Material Contracts, true and complete copies of which
have been provided or made available to Purchaser. The Material Contracts are not in default by the Company or Subsidiary, are
not in default by any other party thereto to the Knowledge of the Company, and no circumstance exists that (with or without notice,
the passage of time or both) would constitute a default under any Material Contract by the Company or Subsidiary or, to the Knowledge
of the Company, by any other party thereto. Except as set forth in Disclosure Schedule 3.2(y), neither the Company nor
the Subsidiary has received any notice of default or intention to cancel or modify with respect to a Material Contract.

 

(z)          Transactions
with Affiliates. Except as set forth in Disclosure Schedule 3.2(z), none of Sellers or the directors or officers of
the Company or any of their respective Affiliates or family members:

 

(i)          owns,
directly or indirectly, any ownership interest or investment in any Person that is engaged in the Business or is a competitor,
supplier, customer, lessor or lessee of the Company; provided, however, that the foregoing representation shall
be deemed not to be made as to the ownership of not more than five percent of the securities of any such Person that has securities
registered pursuant to Section 13 or Section 15 of the Exchange Act;

 

(ii)         has
any claim against or owes any amount to, or is owed any amount by, the Company;

 

(iii)        has
any interest in or owns any assets, properties or rights used in the conduct of the Business of the Company;

 

(iv)        is
a party to any Contract to which the Company is a party or which otherwise benefits the Business of the Company; or

 

(v)         is
involved in any business relationship with the Company.

 

(aa)         Absence
of Changes. Since the Latest Balance Sheet Date, the Company and the Subsidiary have conducted the Business only in the ordinary
course consistent with past practice and, except as set forth in Disclosure Schedule 3.2(aa), there has not been:

 

(i)          any
material change in the assets, liabilities, financial condition, properties, business or operations of the Company or the Subsidiary,
other than changes occurring in the ordinary course of business consistent with past practices;

 

(ii)         any
Lien placed on any of the properties of the Company or the Subsidiary, other than Permitted Liens;

 

(iii)        any
damage, destruction or loss, whether or not covered by insurance, to any material property or right of the Company or Subsidiary;

 

    	27

    	 

    

 

(iv)        any
declaration, setting aside or payment of any distribution by the Company, or the making of any other distribution, in respect
of the shares of Company Stock (other than tax distributions in accordance with past practice), or any direct or indirect redemption,
purchase or other acquisition by the Company of its capital stock;

 

(v)         any
resignation, termination or removal of any officer of the Company or the Subsidiary, material loss of personnel of the Company
or the Subsidiary, or change in the terms and conditions of the employment of the Company’s or the Subsidiary’s officers
or Key Employees;

 

(vi)        any
amendment or termination of, or waiver under, any Material Contract, except as otherwise contemplated by this Agreement;

 

(vii)       any
acquisition or disposition of property for a purchase or sale price in excess of $50,000, other than sales of Company Products
in the ordinary course of business;

 

(viii)      any
sale, disposition, transfer or license to any Person of any Company Intellectual Property (other than in the ordinary course of
business consistent with past practice); or any acquisition or license from any Person of any Intellectual Property (other than
“shrink wrap” and similar generally available commercial end-user licenses to software that is not redistributed with
the Company Products);

 

(ix)         any
material change in the manner in which the Company or Subsidiary extends discounts, credits or warranties to customers or otherwise
deals with its customers; or

 

(x)          any
agreement or understanding whether in writing or otherwise, for the Company or the Subsidiary to take any of the actions specified
in paragraphs (i) through (ix).

 

(bb)         Insurance.
Disclosure Schedule 3.2(bb) sets forth the following information with respect to each insurance policy (including policies
providing property, casualty, liability, director & officer, and workers’ compensation coverage and bond and surety
arrangements) with respect to which the Company or Subsidiary is a party, a named insured, or otherwise the beneficiary of coverage
(collectively, the “Insurance Policies”): (A) the name of the insurer, (B) the policy number and the
period of coverage; and (C) a description of any retroactive premium adjustments or other material loss-sharing arrangements.
Except as set forth in Disclosure Schedule 3.2(bb), there is no claim by the Company or any other Person pending under
any such policies and bonds as to which coverage has been questioned, denied or disputed. All premiums due and payable under all
such policies and bonds have been paid. The Company has not received any threatened terminations of any of such policies or bonds.
Disclosure Schedule 3.2(bb) sets forth a list of all claims made under the Insurance Policies, or under any other insurance
policy, bond or agreement covering the Company or its operations since January 1, 2014. Since January 1, 2012, the Company has
maintained insurance policies with coverage and policy limits that are substantially similar to the coverage and policy limits
provided by the Insurance Policies.

 

    	28

    	 

    

 

(cc)         Customers
and Suppliers 

.

 

(i)          Disclosure
Schedule 3.2(cc) sets forth a correct and complete list of the ten largest suppliers (by dollar volume) of products or services
to the Company, and the 20 largest customers (by revenue dollar volume) of the Company each during calendar year 2014 and the
five months ended May 31, 2015. Disclosure Schedule 3.2(cc) also sets forth, for each such supplier and customer, the aggregate
payments from and to such Person by the Company during such periods. There are no outstanding disputes with any of such suppliers
or customers.

 

(ii)         Since
December 31, 2014, none of the suppliers listed on Disclosure Schedule 3.2(cc) has indicated that it shall stop, materially
decrease the rate of, or materially change the pricing of, supplying materials, products or services to the Company, or otherwise
materially change the terms of its relationship with the Company. The Company has no reason to believe that any supplier listed
on Disclosure Schedule 3.2(cc) will stop, materially decrease the rate of, or materially change the pricing of, supplying
products or services to the Company or otherwise materially change the terms of its relationship with the Company after, or as
a result of, the consummation of any transactions contemplated by this Agreement or that any such supplier is threatened with
bankruptcy or insolvency. The Company knows of no fact, condition or event which would adversely affect the relationship of the
Company with any such supplier.

 

(iii)        Since
December 31, 2014, none of the customers listed on Disclosure Schedule 3.2(cc) has indicated that it shall stop, materially
decrease the rate of, or materially change the pricing of, buying products or services from the Company or otherwise materially
change the terms of its relationship with the Company. The Company has no reason to believe that any customer listed on Disclosure
Schedule 3.2(cc) will stop, materially decrease the rate of, or materially change the pricing of, buying products or services
from the Company or otherwise materially change the terms of its relationship with the Company after, or as a result of, the consummation
of any transactions contemplated by this Agreement or that any such customer is threatened with bankruptcy or insolvency. The
Company knows of no fact, condition or event which would adversely affect the relationship of the Company with any such customer.
Since December 31, 2014, to the Knowledge of the Company, no Person who has been a customer or client of the Company has indicated
that it shall stop, materially decrease the rate of, or materially change the pricing of, buying products or services from the
Company or otherwise materially change the terms of its relationship with the Company.

 

(dd)         Warranty.
To the Knowledge of the Company, each Company Product or service, provided, sold, leased, or delivered by the Company is and has
been provided, sold, or delivered in conformity with all applicable contractual commitments and all express and implied warranties.
Disclosure Schedule 3.2(dd) includes copies of the standard terms and conditions of service, sale or lease for the Company
(containing applicable guaranty, warranty, and indemnity provisions). To the Knowledge of the Company, no Company Product or service
sold, leased, or delivered by the Company is subject to any material guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease set forth in Disclosure Schedule 3.2(dd), except for any guaranty, warranty
or other indemnity that is imposed by law.

 

    	29

    	 

    

 

(ee)         Disclosure.
Neither this Agreement nor any agreement, attachment, schedule, exhibit, certificate or other statement delivered pursuant to
this Agreement or in connection with the transactions contemplated hereby omits to state a material fact necessary in order to
make the statements and information contained herein or therein, not misleading. The Company is not aware of any information necessary
to enable a prospective purchaser of the Company Stock or the Business of the Company to make an informed decision with respect
to the purchase of such Company Stock or Business that has not been expressly disclosed herein. Purchaser has been provided full
and complete copies of all documents referred to on the Disclosure Schedules.

 

Section 3.3           Representations
and Warranties of Purchaser. Purchaser represents and warrants to Sellers as follows:

 

(a)          Organization;
Authority; Due Execution and Binding Effect. Purchaser is a corporation duly organized, validly existing and in good standing
under the Applicable Laws of the State of Delaware, and has all requisite corporate power and authority to own, lease and operate
its properties and to conduct its business. Purchaser has the requisite power and authority to execute and deliver this Agreement
and each other Transaction Document to which it is a party, to consummate the transactions contemplated hereby and thereby and
to perform its obligations under this Agreement and each other Transaction Document to which it is a party. This Agreement has
been, and each other Transaction Document to which Purchaser is a party will be, duly and validly executed and delivered by Purchaser.
Assuming the due authorization, execution and delivery by the other parties hereto, this Agreement constitutes the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Applicable Laws affecting the enforcement
of creditors rights generally and by general principles of equity (regardless of whether such enforceability is considered in
a proceeding in law or equity).

 

(b)          Purchaser
Common Stock. The authorized capital stock of Purchaser consists of 95,000,000 shares of common stock, par value $0.000001
per share, of which 7,044,426 shares are issued and outstanding at April 13, 2015, and 5,000,000 shares of preferred stock, par
value $0.000001 per share, none of which are issued or outstanding at April 13, 2015. All outstanding shares of Purchaser Common
Stock are validly issued, fully paid, nonassessable and not subject to any preemptive rights, or to any agreement to which Purchaser
is a party or by which Purchaser may be bound that would conflict with the obligations of Purchaser under this Agreement, the
other Transaction Documents to which Purchaser is a party or the transactions contemplated hereby or thereby. The shares of Purchaser
Common Stock to be issued pursuant to the terms of this Agreement are validly authorized and reserved for issuance and, when such
shares of Purchaser Common Stock have been duly delivered pursuant to the terms of this Agreement, will not have been issued in
violation of any preemptive or similar right of any shareholder or other Person. When the shares of Purchaser Common Stock have
been duly delivered pursuant to the terms of this Agreement, such shares of Purchaser Common Stock will be validly issued, fully
paid and non-assessable.

 

    	30

    	 

    

 

(c)          No
Conflict. Neither the execution and delivery of this Agreement by Purchaser, nor the performance by Purchaser of its obligations
hereunder shall, directly or indirectly: (i) contravene, conflict with, or result in (with or without notice or lapse of
time) a violation or breach of any Applicable Law or order to which Purchaser is subject; (ii) violate, conflict with or
result in the breach of any provision of the organizational documents of Purchaser; or (iii) conflict in any material respect
with, result in a material breach of, constitute a material default (or event which with the giving of notice or lapse of time,
or both, would become a material breach or default) under, require any Consent under, or give to others any right of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Lien pursuant to, any Material
Contract to which Purchaser is a party or by which any of its respective assets or properties are bound or affected.

 

(d)          Litigation.
There is no Action pending against, or to the knowledge of Purchaser, threatened against or affecting, Purchaser before any court
or arbitrator or any Governmental Entity which in any manner challenges or seeks to prevent, enjoin, alter or materially delay
the transactions contemplated hereby.

 

(e)          Purchaser
SEC Documents. Since January 1, 2011, Purchaser has timely filed all Purchaser SEC Documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act.  Purchaser has made available to the Company an accurate
and complete copy of each communication mailed by Purchaser to its stockholders since the time of filing of the Form 10-K for
the year ending December 31, 2014.  No such Purchaser SEC Document or communication, at the time filed or communicated (or,
if amended prior to the date of this Agreement, as of the date of such amendment), contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances in which they are made, not misleading.  As of their respective dates, all Purchaser SEC Documents
complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto.  To
the knowledge of Purchaser, none of the Purchaser SEC Documents is the subject of any ongoing review or investigation by the SEC
or any Governmental Entity and there are no unresolved SEC comments with respect to any of such documents.

 

(f)          Government
Approvals. Except for (i) compliance with applicable requirements of the Securities Act, the Exchange Act and the rules of
the OTCQX Exchange, and (ii) filings required under and compliance with other Applicable Laws, no consents or approvals of, or
filings, declarations or registrations with, any Governmental Entity are necessary for the execution and delivery of this Agreement
by Purchaser or the consummation by Purchaser of the transactions contemplated hereby, other than such consents or approvals,
filings, declarations or registrations that, if not obtained, made or given, could not, individually or in the aggregate, reasonably
be expected to impair in any material respect the ability of Purchaser to perform its obligations hereunder, or prevent or materially
impede, interfere with, hinder or delay the consummation of the Purchase.

 

(g)          Financial
Statements. The financial statements of Purchaser and its subsidiaries included (or incorporated by reference) in the Purchaser
SEC Documents (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books
and records of Purchaser and the subsidiaries; (ii) fairly present in all material respects the consolidated results of operations,
cash flows, change in stockholders’ equity and consolidated financial position of Purchaser and its subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth (subject in the case of their unaudited statements to
recurring year-end audit adjustments normal in nature and amount); (iii) complied, as of their respective dates of filing with
the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the
SEC with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved,
except in each case, as indicated in such statements or in the notes thereto. The books and records of Purchaser and its subsidiaries
have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting
principles.

 

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(h)          Absence
of Certain Changes or Events. Except as disclosed in the Purchaser SEC Documents: (i) since December 31, 2014, no event or
events have occurred or condition or conditions have existed that have had or would reasonably be expected to have, either individually
or in the aggregate, a material adverse effect on the operations, business, financial condition or results of operations of Purchaser
and its subsidiaries, taken as a whole; and (ii) since December 31, 2014 through and including the date of this Agreement, Purchaser
and its subsidiaries have carried on their respective businesses in all material respects in the ordinary course of business consistent
with their past practice.

 

(i)          Compliance
with Applicable Laws. Purchaser and each of its subsidiaries hold all permits, licenses, franchises and authorizations necessary
for the lawful conduct of their respective businesses, are in compliance in all material respects with all Applicable Laws and
have not received any written notices from a Governmental Entity alleging a violation of Applicable Laws that remain unresolved.

 

(j)          Brokers.
Except for William Blair & Co., L.L.C., whose fees and expenses will be paid by Purchaser, no broker, finder or agent is entitled
to any brokerage fees, finder’s fees or commissions in connection with this Agreement or the transactions contemplated hereby
based upon agreement, arrangement or understanding made by or on behalf of Purchaser.

 

ARTICLE
4

COVENANTS

 

Section 4.1           Additional
Agreements. Each of the parties shall use its commercially reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable under Applicable Laws, and execute and deliver such documents
and other papers, as may reasonably be required to carry out the provisions of this Agreement and consummate and make effective
the transactions contemplated hereby. Without limiting the generality of the foregoing, the Company and Sellers shall use their
commercially reasonable efforts to obtain the Consents set forth in Disclosure Schedule 3.2(e) in form reasonably acceptable
to Purchaser.

 

Section 4.2           Conduct
of Business. Except as specifically permitted under this Agreement or to the extent that Purchaser shall otherwise consent
in writing, from the date of this Agreement until the Closing Date, Sellers covenant and agree with Purchaser that the Company
and the Subsidiary shall (i) conduct their business only in the ordinary course of business and in a manner consistent with past
practice and (ii) conduct their business in compliance in all material respects with all Applicable Laws, and shall not:

 

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(a)          take
or authorize any of the actions set forth in Section 3.2(aa);

 

(b)          issue
or sell any stock or other equity interest in the Company or the Subsidiary, or issue or sell any equity interests convertible
into, or options with respect to, or warrants to purchase or rights to subscribe to, any stock or other equity interest in the
Company or the Subsidiary, or make any commitment to issue or sell any such equity interest;

 

(c)          change
the Company’s or the Subsidiary’s Charter Documents;

 

(d)          change
the salary, bonus, wage rates, fringe benefits or other compensation of any employee or consultant;

 

(e)          waive
or release any right or claim of the Company or the Subsidiary, other than in the ordinary course of business;

 

(f)          commence
any lawsuit or settle any lawsuit or threat of a lawsuit, except for collection actions in the ordinary course of business;

 

(g)          enter
into any Contract that would be a Material Contract, except in the ordinary course of business consistent with past practice,
or terminate or waive any of the material terms of any Material Contract;

 

(h)          sell,
dispose, transfer or license to any Person any Company Intellectual Property (other than in the ordinary course of business consistent
with past practice); or abandon or permit to lapse any Company Registered Intellectual Property; or acquire or license from any
Person any Intellectual Property (other than “shrink wrap” and similar generally available commercial end-user licenses
to software that is not redistributed with the Company Products);

 

(i)          make
any material change in the manner in which the Company or the Subsidiary extends discounts, credits or warranties to customers
or otherwise deals with its customers; or

 

(j)          agree
or commit to do or authorize any of the foregoing.

 

Section 4.3           Access.

 

(a)          General.
From the date of this Agreement until the Closing Date, the Company and Sellers shall provide Purchaser and its representatives
reasonable access during normal business hours to (i) all of the premises, properties, books, Contracts, documents and records
of the Company and the Subsidiary, (ii) all other information concerning the business, properties and personnel (subject to restrictions
imposed by Applicable Law) of the Company and the Subsidiary as Purchaser may reasonably request, and (iii) all employees, customers
or suppliers of the Company or the Subsidiary as identified by Purchaser.

 

(b)          Financial
Information. From the date of this Agreement until the Closing Date, the Company shall provide to Purchaser and its accountants,
counsel and other representatives copies of internal financial statements (including Tax Returns and supporting documentation)
promptly upon request

 

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(c)          Environmental
Investigations. Purchaser and Sellers shall cause to be conducted, at Sellers’ expense, a Phase I environmental investigation
of the Leased Real Property. Further, Purchaser shall have the right to cause to be conducted a Phase II environmental investigation
of the Leased Real Property if the results of the Phase I environmental investigation indicate that a Phase II investigation is
necessary or desirable. In the event that Purchaser concludes that a Phase II environmental investigation of the Leased Real Property
is necessary or desirable, Sellers will allow reasonable access to Purchaser and its consultants to such Leased Real Property
for the purposes of conducting such an investigation. Such access shall be granted in accordance with an access agreement in standard
form to be agreed upon by the parties.

 

(d)          No
Limitation of Remedies. No information discovered through the access afforded by this Section 4.3 shall (i) limit or
otherwise affect any remedies available to Purchaser, (ii) constitute an acknowledgment or admission of a breach of this Agreement,
or (iii) be deemed to amend or supplement the Disclosure Schedules or prevent or cure any misrepresentations, breach of warranty
or breach of covenant.

 

Section 4.4           Tail
Insurance Policies. Purchaser shall maintain in effect (a) a director’s and officers’ liability insurance
policy covering, for a period of three years from the Closing Date, those persons who are currently covered by the Company’s
director’s and officers’ liability insurance policy with coverage in amount and scope at least as favorable as the
Company’s existing coverage, and (b) a tail product liability insurance policy in the amount of at least $20,000,000 covering,
for a period of seven years from the Closing Date, product liability claims based on events occurring before the Closing Date
(together, the “Tail Policies”). All costs and expenses associated with the Tail Policies required to
be purchased and maintained pursuant to this Section 4.4 shall be Transaction Costs paid out of the Purchase Consideration.

 

Section 4.5           Disclosure
Schedules. From time to time prior to the Closing, Sellers shall have the right to supplement or amend the Disclosure
Schedules with respect to any matter hereafter arising or discovered after the delivery of the Disclosure Schedules pursuant to
this Agreement; provided, however, that such supplements or amendments to the Disclosure Schedules shall not be
deemed to amend or otherwise modify the Disclosure Schedules delivered on the date of this Agreement or the representations and
warranties of Sellers contained herein or otherwise have any effect on the satisfaction of the conditions to Purchaser’s
obligations to close hereunder or on Sellers’ indemnity obligations hereunder.

 

Section 4.6           Tax
Matters.

 

(a)          No
Revocation of S Election. Prior to the Closing Date, the Company and Sellers shall not revoke the Company's election to be
taxed as an S corporation within the meaning of Code Sections 1361 and 1362. The Company and Sellers shall not take or allow any
action that would result in the termination of the Company's status as a validly electing S corporation within the meaning of
Code Sections 1361 and 1362.

 

(b)          
Tax Returns. Purchaser shall prepare and timely file (taking into account extensions granted), or cause to be prepared
and timely filed, any Tax Returns for the Company and the Subsidiary that are required to be filed after the Closing Date. All
such Tax Returns for tax periods ending on the closing date, and in the case of Straddle Periods, for the pre-Closing portion
of such Straddle Period shall be prepared in a manner consistent with the Tax Returns of the Company and the Subsidiary for preceding
Tax periods, unless a different treatment is required by Applicable Law. All Taxes relating to Tax periods ending on the Closing
Date or the portion of Straddle Periods ending on the Closing Date shall be paid to Purchaser from the Escrowed Amount pursuant
to Section 7.6.

 

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(c)          Straddle
Period. For purposes of Section 4.6(b), in the case of Taxes that are payable with respect to any Straddle Period,
the portion of any such Tax that is attributable to the portion of the Straddle Period ending on and including the Closing Date
shall be:

 

(i)          in
the case of Taxes that are either (A) based upon or related to income or receipts, or (B) imposed in connection with
any sale or other transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the amount that
would be payable if the Taxable period of the Company and the Subsidiary ended with, and included, the Closing Date; and

 

(ii)         in
the case of Taxes that are imposed on a periodic basis with respect to the assets of the Company and the Subsidiary, deemed to
be the amount of such Taxes for the entire Straddle Period, or, in the case of such Taxes determined on an arrears basis, the
amount of such Taxes for the immediately preceding period, multiplied by a fraction, the numerator of which is the number of calendar
days in the portion of the Straddle Period ending on and including the Closing Date, and the denominator of which is the number
of calendar days in the entire Straddle Period.

 

(d)          Refunds
and Credits. Any refunds or credits of Taxes that are paid or credited in respect of any period ending on or prior to the
Closing Date, and in the case of Straddle Periods, for the pre-Closing portion of such Straddle Period, shall be for the account
of Sellers (except to the extent included as a Current Asset on the Final Balance Sheet in the calculation of the Final Working
Capital or attributable to the carryback of a Tax attribute incurred after the Closing Date) and Purchaser shall pay the amount
of any such refunds or credits that it receives to Sellers in proportion to their Ownership Interest Shares as soon as reasonably
practicable following the receipt thereof. Any refund or credits of Taxes not described in the preceding sentence shall be for
the account of Purchaser. Purchaser shall prepare and file, or cause to be prepared and filed, at the sole cost and expense of
Sellers, any amended Tax Returns or other filings necessary for the Company and/or the Subsidiary to claim any refunds or credits
that Sellers would be entitled to and that Sellers reasonably request; provided that Purchaser determines in its reasonable
discretion that the taking of any such action is not inconsistent with Purchaser’s, the Company’s or the Subsidiary’s
Tax reporting positions and/or Tax Returns, as the case may be, following the Closing.

 

(e)          Tax
Proceedings. If Purchaser becomes aware of any assessment, official inquiry, examination or proceeding (a “Tax
Proceeding”) that could result in an official determination with respect to any Purchaser Indemnified Tax, Purchaser
shall promptly so notify Sellers; provided, however, that the failure to so notify Sellers shall not relieve Sellers
of their obligations with respect to such Purchaser Indemnified Tax unless, and only to the extent that, such failure results
in actual material prejudice to Sellers. If any Seller becomes aware of any Tax Proceeding that could result in an official determination
with respect to Taxes related to the Subsidiary, Sellers shall promptly so notify Purchaser; provided, however,
that the failure to so notify Purchaser shall not relieve Purchaser of its obligation under this Section 4.6 unless, and
only to the extent that, such failure results in actual material prejudice to Purchaser.

 

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(f)          Control.
Purchaser shall have the right to exercise control over the contest and/or settlement of any issue raised in any Tax Proceeding
with respect to Taxes related to the Subsidiary; provided, however, that (i) Purchaser shall keep Sellers informed
of all material developments with respect to such Tax Proceeding if it relates to any Purchaser Indemnified Taxes, and (ii) Purchaser
shall not settle or compromise any such Tax Proceeding that relates to any Tax for which Sellers could be liable, except after
good faith consultation with Sellers concerning such settlement or compromise. Any reasonable expenses incurred in connection
therewith shall be paid by Purchaser to the extent that such expenses relate to a Tax that is not a Purchaser Indemnified Tax.
To the extent that such expenses relate to a Tax that is a Purchaser Indemnified Tax, Purchaser shall have the right to make a
claim for indemnification pursuant to Section 7.6 and the Escrow Agreement in the amount of any Purchaser Indemnified Taxes.

 

(g)          Cooperation.
Sellers and Purchaser shall provide each other with any information reasonably necessary to prepare and file complete and accurate
Tax Returns.

 

(h)          Transfer
Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with the transactions contemplated by this Agreement shall be paid by Sellers when due, and Sellers
will, at their own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by Applicable Law, Purchaser will join in the execution
of any such Tax Returns and other documentation. If required by Applicable Law, the amount paid to any Person pursuant to this
Agreement will be reduced by the amount of Taxes payable by such Person pursuant to this Section 4.6(h). Any amount
so withheld will be promptly remitted to the appropriate Tax authority.

 

Section 4.7           Exclusivity.

 

(a)          From
the date of this Agreement until termination of this Agreement or the Closing Date, Sellers and the Company shall not (and shall
cause the Subsidiary and the directors, officers, Key Employees, consultants, members, agents, advisors, attorneys, accountants,
and representatives (collectively, “Company’s Representatives”) of the Company and the Subsidiary
to not) directly or indirectly, take any of the following actions with any party other than Purchaser: (i) solicit, initiate,
encourage or facilitate in any inquiry, negotiations or discussions, or enter into any Contract, with respect to any offer or
proposal to acquire all or any part of the Business, properties, any of the technologies or assets of the Company or of the Subsidiary,
or any amount of the equity ownership of the Company, (ii) disclose or furnish any information not customarily disclosed
to any person concerning the Business, technologies or properties or assets of the Company or the Subsidiary, or afford to any
Person access to its properties, technologies, books or records, not customarily afforded such access, (iii) assist or cooperate
with any Person to make any proposal to purchase all or any part of the capital stock of the Company or assets of the Company
or Subsidiary, or (iv) enter into any Contract with any Person providing for the acquisition of the Company or of the Subsidiary
(other than inventory in the ordinary course of business), whether by merger, purchase of assets, license, tender offer or otherwise.
Sellers and the Company shall, and shall cause the Subsidiary and the Company’s Representatives to immediately cease and
cause to be terminated any such negotiations, discussion or agreements (other than with Purchaser) that are the subject matter
of the preceding sentence.

 

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(b)          In
the event that Sellers, the Company, the Subsidiary or any of the Company’s Representatives shall receive any offer, proposal,
or request, directly or indirectly, of the type referenced in clause (i), (iii), or (iv) of Section 4.7(a), or any request
for disclosure or access as referenced in clause (ii) of Section 4.7(a), Sellers and the Company shall (i) not engage in
any discussions with such offeror or party with regard to such offers, proposals, or requests and (ii) immediately thereafter,
notify Purchaser thereof, which notice shall contain the pricing, terms, conditions and other material provisions of such proposed
transaction.

 

(c)          The
parties hereto agree that irreparable damage would occur in the event that the provisions of this Section 4.7 were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed by the parties hereto that
Purchaser shall be entitled to an immediate injunction or injunctions, without the necessity of proving the inadequacy of money
damages as a remedy and without the necessity of posting any bond or other security, to prevent breaches of the provisions of
this Section 4.7 and to enforce specifically the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which Purchaser may be entitled at law or in equity. Without
limiting the foregoing, it is understood that any violation of the restrictions set forth above by any of the Company Representatives
shall be deemed to be a breach of this Agreement by Sellers and the Company.

 

Section 4.8           Release
of Liens. In connection with the Closing, Sellers and the Company shall file, or shall have filed, all Contracts, instruments,
certificates and other documents, in form and substance reasonably satisfactory to Purchaser, that are necessary or appropriate
to effect the release of all Liens set forth in Disclosure Schedule 4.8.

 

Section 4.9           General
Release. Notwithstanding anything contained herein to the contrary, effective as of the Closing Date, in consideration
of the mutual agreements contained herein, including the Purchase Price to be received by Sellers, Sellers, for themselves and
all of their Affiliates (other than the Company), heirs, executors, administrators, and assigns (collectively, the “Releasors”),
hereby irrevocably release and forever discharge Purchaser, the Company, and their respective past, present and future subsidiaries,
divisions, Affiliates and parents, and their respective current and former officers, directors, employees, agents, shareholders,
and/or owners, and their respective successors, and assigns and any other Person jointly or severally liable with Purchaser, the
Company or any of the aforementioned Persons (all of the foregoing, collectively, the “Released Parties”),
from any and all manner of actions and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements,
Judgments, charges, claims, and demands whatsoever which the Releasor and its, his or her heirs, executors, administrators, and
assigns have, had, or may hereafter have, against the Released Parties or any of them of any nature, including by reason of or
relating to or arising from the fact of the Releasor’s employment and/or service with the Company or the Releasor’s
direct or indirect ownership interest in the Company, and any and all matters arising under any employment-related federal, state,
or local statute, rule, or regulation, or principle of contract law or common law, in each case whether known, or unknown, suspected
or unsuspected, to the extent relating to facts, actions, events, circumstances or conditions arising, occurring or failing to
occur in the period on or prior to the Closing; provided, however, that nothing contained herein shall operate
to release any claims, liabilities or obligations on account of, arising out of, or relating to the Releasor’s rights under
this Agreement or any of the Transaction Documents.

 

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Section 4.10         Financing.
Upon request of Purchaser from time to time prior to the Closing, Sellers and the Company shall provide reasonable cooperation
and assistance to Purchaser in connection with the arrangement of appropriate financing (and in connection with any closing conditions
and/or post-closing covenants contained in the definitive documentation for such financing); provided, that such requested
cooperation and assistance does not unreasonably interfere with the Business. The foregoing cooperation of Sellers and the Company
shall include: (a) as promptly as practicable, responding to and complying with reasonable requests of Purchaser for information
about the Company and the Subsidiary and their respective business operations, assets, properties and condition (financial or
otherwise), (b) granting Purchaser and its representatives full and complete reasonable access to (and copies of) the books, contracts,
commitments and records of the Company and to senior management knowledgeable about such books, contracts, commitments and records
as set forth in Section 4.3; provided that such representatives agree to be bound by the provisions of the Confidentiality
Agreement, (c) using commercially reasonable efforts to furnish to Purchaser necessary financial and operational information for
interim periods ending subsequent to May 31, 2015, and prior to the Closing in connection with such financing, (d) using commercially
reasonable efforts to obtain landlord estoppel certificates, in form and substance reasonably acceptable to the lenders providing
the financing, and (e) causing the Company and the Subsidiary to execute and deliver any definitive financing documents, including
any guaranties, pledge documents, security documents and other definitive financing documents (including any certificates and
instruments required pursuant to such definitive financing documents), such documents to be effective immediately prior and subject
to the Closing, and otherwise facilitating the pledge, grant, recordation and perfection of security interests to be granted to
the lenders under such definitive financing documents in any and all assets of the Company and the Subsidiary.

 

ARTICLE
5

CONDITIONS PRECEDENT

 

Section 5.1           Conditions
to Each Party’s Obligation. The respective obligations of Purchaser, the Company, and Sellers to effect the transactions
contemplated hereby are subject to the satisfaction on or prior to the Closing Date of the following conditions:

 

(a)          Governmental
Approvals. Any authorizations or approvals of a Governmental Entity necessary for the consummation of the transactions contemplated
by this Agreement shall have been obtained.

 

(b)          No
Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction, or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the transactions contemplated
by this Agreement or any other Transaction Document shall be in effect.

 

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(c)          No
Legal Prohibition. No Applicable Law shall be enacted, issued or enforced by any Governmental Entity that would have the effect
of making the transactions contemplated by this Agreement illegal or would otherwise restrain or prohibit the consummation of
such transactions.

 

Section 5.2           Conditions
to Obligation of Purchaser. The obligations of Purchaser to effect the transactions contemplated hereby are subject to
the satisfaction of the following conditions unless waived, in whole or in part, by Purchaser:

 

(a)          Representations
and Warranties. The representations and warranties of Sellers set forth in Section 3.1 and the Company set forth in
Section 3.2 shall have been be true and correct in all material respects (without giving effect to any limitation as to
“materiality” or “Material Adverse Effect” set forth therein) on the date they were made
and shall be true and correct in all material respects (without giving effect to any limitation as to “materiality”
or “Material Adverse Effect” set forth therein) on and as of the Closing Date as though such representations
and warranties were made on and as of such date (other than the representations and warranties of the Seller and the Company as
of a specified date, which shall be true and correct in all material respects (without giving effect to any limitation as to “materiality”
or “Material Adverse Effect” set forth therein) as of such date) in all cases without giving effect to any
supplements or amendments to the Disclosure Schedules pursuant to Section 4.5.

 

(b)          Performance
of Covenants. The Company and Sellers shall have performed and complied with, in all material respects, all covenants and
agreements required by this Agreement to be performed or complied with by them at or prior to the Closing.

 

(c)          No
Material Adverse Effect. There shall not have occurred any Material Adverse Effect subsequent to the date of this Agreement
that is continuing.

 

(d)          Closing
Deliveries. All documents, instruments, certificates or other items required to be delivered by the Company and Sellers pursuant
to Section 2.2(c) shall have been delivered.

 

(e)          Fairness
Opinion. Purchaser shall have received a fairness opinion from William Blair & Co., L.L.C., in a form reasonably satisfactory
to Purchaser, opining as to the fairness of the Purchase and the other transactions contemplated by this Agreement.

 

(f)          Financing.
Purchaser shall have obtained financing for the Purchase in such amount and on such terms satisfactory to Purchaser in its sole
discretion.

 

(g)          Litigation.
There shall be no action, suit, claim, order, injunction or proceeding of any nature pending, or overtly threatened, against Purchaser,
the Company, or Sellers, their respective properties or any of their respective officers, directors, or subsidiaries (i) by any
Person arising out of, or in any way connected with, the Purchase or the other transactions contemplated by the terms of this
Agreement, or that could give rise to material damages, or (ii) by any Governmental Entity arising out of, or in any way connected
with, the Purchase or the other transactions contemplated by the terms of this Agreement, or that could give rise to material
damages.

 

    	39

    	 

    

 

(h)          Compliance
with Rule 506. Purchaser shall have reasonably concluded in good faith that the issuance of the Purchaser Stock Consideration
can be completed in compliance with Rule 506 of Regulation D promulgated by the SEC under the Securities Act.

 

Section 5.3           Conditions
to Obligations of the Company and Sellers. The obligation of the Company and Sellers to effect the transactions contemplated
hereby is subject to the satisfaction of the following conditions unless waived, in whole or in part, by the Company and Sellers.

 

(a)          Representations
and Warranties. The representations and warranties of Purchaser contained in Section 3.3 shall have been be true and
correct in all material respects (without giving effect to any limitation as to “materiality” or “Material
Adverse Effect” set forth therein) on the date they were made and shall be true and correct in all material respects
(without giving effect to any limitation as to “materiality” or “Material Adverse Effect”
set forth therein) on and as of the Closing Date as though such representations and warranties were made on and as of such date
(other than the representations and warranties of the Company as of a specified date, which shall be true and correct in all material
respects (without giving effect to any limitation as to “materiality” or “Material Adverse Effect”
set forth therein) as of such date).

 

(b)          Performance
of Covenants. Purchaser shall have performed and complied with, in all material respects, all covenants and agreements required
by this Agreement to be performed or complied with by Purchaser on or prior to the Closing.

 

(c)          Closing
Deliveries. All documents, instruments, certificates or other items required to be delivered by Purchaser pursuant to Sections
2.2(a) and (b) shall have been delivered.

 

(d)          No
Material Adverse Effect. There shall not have occurred any material adverse effect on the operations, business, financial
condition or results of operations of Purchaser and its subsidiaries, taken as a whole, subsequent to the date of this Agreement
that is continuing.

 

(e)          Appointment
to Board. The Appointee Director shall be approved for appointment to Class II of Purchaser’s Board on the Closing Date.

 

ARTICLE
6

TERMINATION, AMENDMENT AND WAIVER

 

Section 6.1           Termination.

 

(a)          Subject
to Section 6.1(b), this Agreement may be terminated on written notice:

 

(i)          By
either Purchaser, on the one hand, and the Company and Sellers, on the other hand, if such terminating party is not then in breach
of this Agreement, in the event of a breach by the other party of its material obligations under this Agreement which remains
uncured after notice and opportunity to cure as provided in Section 6.1(b);

 

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(ii)         By
Purchaser, if any of the conditions in Sections 5.1 and 5.2 have not been satisfied in all material respects by
August 31, 2015, or if satisfaction of a condition is or becomes impossible (other than through the failure of Purchaser to comply
with its obligations under this Agreement) and Purchaser has not waived the condition on or before August 31, 2015; or

 

(iii)        By
the Company and Sellers, if any of the conditions in Sections 5.1 and 5.3 have not been satisfied in all material
respects by August 31, 2015, or if satisfaction of a condition is or becomes impossible (other than through the failure of the
Company or Sellers to comply with their obligations under this Agreement) and the Company and Sellers have not waived such condition
on or before August 31, 2015.

 

(b)          If
noncompliance, nonperformance or breach by a party hereto occurs or exists and can be cured or eliminated, the party wishing to
terminate this Agreement in accordance with Section 6.1(a) shall not terminate unless and until (i) it has given the other
party written notice that the noncompliance, nonperformance or breach has occurred, specifying the nature thereof and the action
required to cure, and (ii) such noncompliance, nonperformance or breach shall not have been cured or eliminated, or the party
giving the notice shall not have otherwise been held harmless from the consequences of the noncompliance, nonperformance or breach
to its satisfaction, within 30 days of the receipt of such notice.

 

Section 6.2           Effect
of Termination.

 

(a)          Upon
termination of this Agreement, this Agreement shall forthwith become null and void and there shall be no Liability on the part
of any party hereto, or their respective directors, officers, shareholders, employees, agents or Affiliates; provided,
however, that nothing herein shall relieve any party from any Liability for any willful breach by such party of any of
its representations or warranties or for its breach of any of its covenants or agreements set forth in this Agreement, and all
rights and remedies of such nonbreaching party under this Agreement in the case of such a breach, at law or in equity, shall be
preserved.

 

(b)          If
the Closing does not occur, Purchaser shall not, and Purchaser shall cause its Affiliates not to, directly or indirectly, (a)
use any Confidential Information for any purpose, (b) disclose any Confidential Information to any Person, (c) keep or make copies
of any documents, records or property containing any Confidential Information, except that Purchaser may keep one copy of Confidential
Information in its archives, or (d) assist any other Person in engaging in any of the foregoing, except to the extent necessary
to comply with the express terms of any written agreement between Purchaser and the Company and except to the extent explicitly
requested in writing by the Company. Notwithstanding the foregoing, Purchaser may disclose Confidential Information at such times,
in such manner and to the extent such disclosure is (i) required by Applicable Law, provided that Purchaser (A) provides
the Company with prior written notice thereof, (B) limits such disclosure to what is strictly required, and (C) attempts to preserve
the confidentiality of any Confidential Information so disclosed, or (ii) is necessary for Purchaser to assert its rights under
this Agreement.

 

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(c)          
If the Closing does not occur, Sellers shall not, and Sellers shall cause their Affiliates not to, directly or indirectly, (a)
use any confidential information of Purchaser for any purpose, (b) disclose any confidential information of Purchaser to any Person,
(c) keep or make copies of any documents, records or property containing any confidential information of Purchaser, except that
Sellers may keep one copy of Confidential Information in their archives, or (d) assist any other Person in engaging in any of
the foregoing, except to the extent necessary to comply with the express terms of any written agreement between Purchaser and
the Company and except to the extent explicitly requested in writing by Purchaser. Notwithstanding the foregoing, Purchaser may
disclose Confidential Information at such times, in such manner and to the extent such disclosure is (i) required by Applicable
Law, provided that Purchaser (A) provides the Company with prior written notice thereof, (B) limits such disclosure to
what is strictly required and (C) attempts to preserve the confidentiality of any Confidential Information so disclosed, or (ii)
is necessary for Sellers to assert their rights under this Agreement.

 

ARTICLE
7

INDEMNIFICATION

 

Section 7.1           Survival.

 

(a)          General.
All representations, warranties, covenants and agreements of the parties in this Agreement or any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The right to indemnification, payment of any Losses or other remedy
based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with
respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery
of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant,
or obligation.

 

(b)          Company
Representations. Notwithstanding the generality of Section 7.1(a), the Indemnifying Sellers will have no liability
with respect to any claim under Section 7.2(a)(i) unless Purchaser notifies the Indemnifying Sellers of such a claim on
or before the date that is 15 months after the Closing Date; provided, however, that:

 

(i)          any
claim relating to any representation made in Sections 3.2(e) (No Conflicts), 3.2(f) (Financial Statements), 3.2(g)
(No Undisclosed Liabilities), 3.2(i) (Litigation), 3.2(j) (Taxes), 3.2(k) (Title to Property and Assets),
3.2(l) (Intellectual Property), 3.2(o) (Compliance with Applicable Laws; Permits), 3.2(q) (Export Control
Laws), 3.2(r) (Environmental Matters), 3.2(x) (Employee Benefit Plans) and 3.2(z) (Transactions with Affiliates)
(collectively, the “Interim Representations”) may be made at any time for a period of 27 months after
the Closing Date;

 

(ii)         any
claim relating to any representation made in Sections 3.2(p) (Foreign Corrupt Practices Act) and 3.2(s) (FDA and
Regulatory Matters), may be made at any time for a period of 48 months after the Closing Date;

 

(iii)        any
claim relating to any representation made in Sections 3.2(a) (Organization and Qualification), 3.2(b) (Subsidiary),
3.2(c) (Capitalization), 3.2(d) (Authority; Due Execution and Binding Effect), 3.2(j) (Taxes), and 3.2(v)
(Brokers) may be made at any time without any time limitation (collectively with the representations set forth in Section
7.1(b)(ii) and Section 7.1(d)(i), the “Fundamental Representations”); and

 

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(iv)        any
claim related to intentional or fraudulent breaches of the representations and warranties may be made at any time within any applicable
statute or period of limitations.

 

(c)          Company
Covenants. Notwithstanding the generality of Section 7.1(a), any claim under Section 7.2(a)(ii) may be made
at any time without limitation unless the covenant breached or unfulfilled contains an express expiration date, in which case,
absence active concealment of a breach by Sellers, the Indemnifying Sellers will have no liability with respect to any such claim
unless Purchaser notifies the Indemnifying Sellers of the claim on or before the date such covenant expires.

 

(d)          Individual
Seller Representations. Notwithstanding the generality of Section 7.1(a), no Indemnifying Seller will have liability
with respect to any claim under Section 7.2(b)(i) unless Purchaser notifies such Indemnifying Seller of such a claim on
or before the date that is 15 months after the Closing Date; provided, however, that (i) any claim relating
to any representation made in Sections 3.1(a) (Authority; Due Execution and Binding Effect), 3.1(e) (Title to Outstanding
Shares), and 3.1(f) (Brokers), may be made at any time without any time limitation, and (ii) any claim related to intentional
or fraudulent breaches of the representations and warranties by such Indemnifying Seller may be made at any time within any applicable
statute or period of limitations.

 

(e)          Individual
Seller Covenants. Notwithstanding the generality of Section 7.1(a), any claim under Section 7.2(b)(ii) may be
made at any time without limitation unless the covenant breached or unfulfilled contains an express expiration date, in which
case, absence active concealment of a breach by such Seller, such Indemnifying Seller will have no liability with respect to any
such claim unless Purchaser notifies such Indemnifying Seller of the claim on or before the date such covenant expires.

 

(f)          Purchaser
Representations. Notwithstanding the generality of Section 7.1(a), Purchaser will have no liability with respect to
any claim under Section 7.2(c)(i) unless Sellers notify Purchaser of such a claim on or before the date that is 15 months
after the Closing Date; provided, however, that any claim relating to any representation made in Sections 3.3(a)
(Organization; Authority; Due Execution and Binding Effect), 3.3(b) (Purchaser Common Stock), and 3.3(j) (Brokers)
(collectively, the “Purchaser Fundamental Representations”) may be made at any time without any time
limitation, and any claim related to intentional or fraudulent breaches of the representations and warranties may be made at any
time within any applicable statute or period of limitations.

 

(g)          
Purchaser Covenants. Notwithstanding the generality of Section 7.1(a), any claim under Section 7.2(c)(ii)
may be made at any time without limitation unless the covenant breached or unfulfilled contains an express expiration date, in
which case, absence active concealment of a breach by Purchaser, Purchaser will have no liability with respect to any such claim
unless Sellers notify Purchaser of the claim on or before the date such covenant expires.

 

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(h)          
Extension if Claim is Made. If Purchaser or Sellers, as applicable, provides proper notice of a claim within the applicable
time period set forth above, then liability for such claim will continue until such claim is resolved.

 

Section 7.2           Indemnification;
Limitations.

 

(a)          By
the Indemnifying Sellers. Upon the terms and subject to the conditions set forth in this Article 7, Kirschman, on the
one hand, and the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust, on the other hand, severally and not jointly, but
with the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust acknowledging and agreeing that they shall be jointly and severally
liable with each other as to all of the Hemmelgarn Sellers for the Hemmelgarn Sellers’ aggregate Ownership Interest Share
of Losses, shall indemnify and hold harmless Purchaser and its directors, officers, employees and Affiliates (collectively, the
“Purchaser Indemnified Parties”), from and against any and all Losses paid, payable, suffered or incurred
that relate to or arise out of (i) the inaccuracy or breach of any representation or warranty made by the Indemnifying Sellers
in Section 3.2, (ii) any nonfulfillment or breach by the Company of any of the covenants set forth in this Agreement, (iii)
any inaccuracy in Disclosure Schedule 1.2(c), (iv) any inaccuracy of the Indebtedness Pay-Off Amount or the Deductions
Certificate, (v) (A) any fraud by the Company or any of its directors, officers or Affiliates in connection with this Agreement
or the transactions contemplated hereby, or (B) any intentional or willful breach of a representation or warranty of the Company
set forth in this Agreement (including the Disclosure Schedules) or in any certificate delivered by the Company to Purchaser pursuant
to this Agreement, (vi) any Purchaser Indemnified Taxes, or (vii) any Pre-Closing Product Liability Claims.

 

(b)          By
the Indemnifying Sellers for Individual Representations. Upon the terms and subject to the conditions set forth in this Article
7, each Indemnifying Seller, severally and not jointly with the other Indemnifying Sellers, except that the K. Hemmelgarn
1998 Trust and the B. Hemmelgarn 1998 Trust shall be jointly and severally liable with each other as to all of the Hemmelgarn
Sellers for the Hemmelgarn Sellers’ aggregate Ownership Interest Share of Losses, shall indemnify and hold harmless the
Purchaser Indemnified Parties from and against any and all Losses paid, payable, suffered or incurred that relate to or arise
out of (i) the inaccuracy or breach of any representation or warranty made by such Indemnifying Seller in Section 3.1,
(ii) any nonfulfillment or breach by such Seller of any of such Seller’s covenants set forth in this Agreement, or (iii)
(A) any fraud by such Seller in connection with this Agreement or the transactions contemplated hereby, or (B) any intentional
or willful breach of a representation or warranty of such Seller set forth in this Agreement or in any certificate delivered by
such Seller to Purchaser pursuant to this Agreement.

 

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(c)          Limitations
for Product Liability. For the avoidance of doubt, and notwithstanding any other provision of this Agreement, except for Liability
for Pre-Closing Product Liability Claims, and except to the extent that a Seller had actual knowledge prior to the Closing, no
Seller shall have any indemnification obligations or other liability to Purchaser in respect of (i) any Liabilities in the nature
of product liability, including any Liabilities for claims made for injury to person, damage to property or other damage arising
from, caused by or arising out of the design, manufacture, assembly, installation, marketing, sale, distribution, lease or license
of any Company Product (whether or not any such products are shipped before or after the Closing), (ii) any Liabilities arising
from, caused by or arising out of any defective or insufficient warnings, labeling or instructions contained on or provided in
connection with any Company Product, or (iii) any Liabilities arising from, caused by or arising out of any obligation to implement
any replacement, field fix, retrofit, modification or recall campaign with respect to any Company Product that was made, designed,
manufactured, assembled, installed, sold, leased or licensed (whether or not any such products are shipped before or after the
Closing).

 

(d)          By
Purchaser. Upon the terms and subject to the conditions set forth in this Article 7, Purchaser shall indemnify and
hold harmless each Seller and its respective Affiliates (collectively, the “Seller Indemnified Parties,”
and together with the Purchaser Indemnified Parties, each an “Indemnified Party”), from and against
any and all Losses paid, payable, suffered or incurred and that relate to or arise out of (i) the inaccuracy or breach of
any representation or warranty made by Purchaser in Section 3.3, (ii) any nonfulfillment or breach by Purchaser of
any of the covenants set forth in this Agreement, (iii)(A) any fraud by Purchaser or any of its officers, directors or Affiliates
in connection with this Agreement or the transactions contemplated hereby, or (B) any intentional or willful breach of a representation
or warranty of Purchaser set forth in this Agreement or in any certificate delivered by Purchaser pursuant to this Agreement,
or (iv) the Post-Closing Operations.

 

(e)          Seller
Deductible and Cap. The indemnification obligations of the Indemnifying Sellers are subject to the following provisions:

 

(i)          The
indemnification obligations set forth in Sections 7.2(a) and 7.2(b) for breaches of the Fundamental Representations,
Purchaser Indemnified Taxes, Pre-Closing Product Liability Claims and fraud or intentional or willful breach of a representation
or warranty in this Agreement or in any certificate delivered hereunder shall, with respect to Kirschman, be limited to Kirschman’s
Ownership Interest Share of the Transaction Cap, and, with respect to the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998
Trust, jointly and severally, shall be limited to the Hemmelgarn Sellers’ aggregate Ownership Interest Share of the Transaction
Cap; provided that nothing in this Section 7.2(e)(i) alters the joint and several liability of the K. Hemmelgarn
1998 Trust and the B. Hemmelgarn 1998 Trust with respect to each other, and the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn
1998 Trust shall be jointly and severally liable with each other as to all of the Hemmelgarn Sellers for the Hemmelgarn Sellers’
aggregate Ownership Interest Share.

 

(ii)         The
indemnification obligations set forth in Sections 7.2(a) and 7.2(b) for all matters other than those described in
Section 7.2(e)(i) shall apply only after the aggregate amount of claims for indemnification against the Indemnifying Sellers
under this Agreement exceeds $100,000 (the “Deductible”), and thereafter the Indemnifying Sellers shall
be liable for all indemnification obligations in excess of the Deductible up to any applicable Cap.

 

(iii)        The
aggregate amount of all indemnification obligations of the Indemnifying Sellers pursuant to Sections 7.2(a) and 7.2(b)
for the Basic Representations shall not exceed the Escrowed Cash (the “Basic Cap”).

 

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(iv)        The
aggregate amount of all indemnification obligations of the Indemnifying Sellers pursuant to Sections 7.2(a) and 7.2(b)
for the Interim Representations shall not exceed the Escrowed Amount (the “Interim Cap”).

 

(v)         The
aggregate amount of all other indemnification obligations of the Indemnifying Sellers not subject to the Basic Cap or the Interim
Cap shall not exceed the Transaction Cap.

 

(vi)        Each
Indemnifying Seller’s respective liability to the Purchaser Indemnified Parties shall be limited to such Indemnifying Seller’s
share of any applicable Cap, pro rata based on the Sellers’ Ownership Interest Shares, except that (A) the K. Hemmelgarn
1998 Trust and the B. Hemmelgarn 1998 Trust acknowledge and agree that they shall be jointly and severally liable with each other
for all of the Hemmelgarn Sellers’ aggregate Ownership Interest Share, and (B) if the K. Hemmelgarn 1998 Trust and the B.
Hemmelgarn 1998 Trust avoid liability due to their lack of Knowledge of a breach of any representation or warranty qualified by
Knowledge of the Hemmelgarn Sellers, then Kirschman shall bear all liability for Losses attributable to such breach, but not more
than $13,500,000 in the aggregate (including the Escrowed Shares attributable to Kirschman, valued as provided in Section 7.6(f)).

 

(f)          Purchaser
Deductible and Cap. The indemnification obligations set forth in Section 7.2(d) (other than for breaches of Purchaser
Fundamental Representations and for fraud or intentional or willful breach of a representation or warranty or in any certificate
delivered hereunder) shall apply only after the aggregate amount of claims for indemnification against Purchaser under this Agreement
exceeds the Deductible, and thereafter Purchaser shall be liable for all indemnification obligations in excess of the Deductible.
The aggregate amount of all indemnification obligations of Purchaser pursuant to Section 7.2(d) shall not exceed an amount
equal to the Escrowed Amount.

 

(g)          Escrow.
Except as set forth below, any amounts payable by an Indemnifying Seller(s) pursuant to Sections 7.2(a) and 7.2(b)
shall be satisfied (i) first against the Escrowed Cash in accordance with the terms of Section 7.6 and the Escrow Agreement,
(ii) if and to the extent that a Purchaser Indemnified Party is entitled to indemnification in amounts in excess of any then remaining
Escrowed Cash, next against the Escrowed Shares (such Escrowed Shares valued at $4.00 per share, As Adjusted) in accordance with
the terms of Section 7.6 and the Escrow Agreement, and (iii) if and to the extent that a Purchaser Indemnified Party is
entitled to indemnification in amounts in excess of any then remaining Escrowed Amount, then from each Indemnifying Seller as
may be applicable pro rata based on the Ownership Interest Shares for Losses under Section 7.2(a) and from the Indemnifying
Seller at issue for Losses under Section 7.2(b).

 

(h)          Losses.
For all purposes of and under this Agreement, “Losses” shall mean (i) any loss, claim, demand, damage,
deficiency, lost profits, diminution in value, consequential or punitive damage, liability, Judgment, fine, penalty, cost or expense
(including reasonable attorneys’, consultants’ and experts’ fees and expenses), (ii) any and all reasonable
fees and costs of enforcing an Indemnified Party’s rights under this Agreement, and (iii) any and all reasonable fees and
costs defending any Third Party Actions. For purposes of determining whether there has been any misrepresentation or breach of
a representation or warranty, and for purposes of determining the amount of Losses resulting therefrom, all qualifications or
exceptions in any representation or warranty relating to or referring to the terms “material,” “materiality,”
“in all material respects,” “Material Adverse Effect” or any similar term or phrase shall
be disregarded, it being the understanding of the parties that for purposes of determining liability under this Article 7,
the representations and warranties of the parties contained in this Agreement shall be read as if such terms and phrases were
not included in them.

 

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(i)          No
Contribution Claims. No Seller will have or assert any claims or rights to contribution or indemnity from the Company with
respect to any amounts paid by such Seller pursuant to this Section 7.2.

 

(j)          Insurance.
Each Indemnified Party shall be obligated in connection with any claim for indemnification under this Article 7 to
use commercially reasonable efforts to obtain any insurance proceeds available to such Indemnified Party with regard to the applicable
claims. The amount that any Indemnifying Party is or may be required to pay to any Indemnified Party pursuant to this Article 7
shall be reduced (retroactively, if necessary) by any insurance proceeds or other amounts actually recovered by or on behalf
of such Indemnified Party in reduction of the related Losses, less the amount of any deductible and other out-of-pocket costs
to the Indemnified Party in seeking such recovery. If an Indemnified Party shall have received the payment required by this Agreement
from the Indemnifying Party in respect of a Loss and shall subsequently receive insurance proceeds or other amounts in respect
of such Loss, then such Indemnified Party shall promptly repay to the Indemnifying Party a sum equal to the amount of such insurance
proceeds or other amounts actually received.

 

Section 7.3           Defense
of Third Party Claims.

 

(a)          An
Indemnified Party shall give prompt written notice to any Person who is obligated to provide indemnification hereunder (an “Indemnifying
Party”) of the commencement or assertion of any action, proceeding, demand or claim by a third party (collectively,
a “Third Party Action”) in respect of which such Indemnified Party shall seek indemnification hereunder.
Any failure so to notify an Indemnifying Party will not relieve such Indemnifying Party from any Liability that it may have to
such Indemnified Party under this Article 7 unless the failure to give such notice materially and adversely prejudices
such Indemnifying Party. Other than with respect to a Third Party Action relating to any Tax due from Purchaser, the Indemnifying
Party shall have the right to assume control of the defense of, settle, or otherwise dispose of such Third Party Action on such
terms as it deems appropriate; provided, however, that:

 

(i)          the
Indemnified Party shall be entitled, at its own expense, to participate in the defense of such Third Party Action; provided
further that the Indemnifying Party shall pay the reasonable attorneys’ fees of the Indemnified Party if (A) the
employment of separate counsel shall have been authorized in writing by all Indemnifying Parties in connection with the defense
of such Third Party Action, (B) the Indemnifying Parties shall not have employed counsel reasonably satisfactory to the Indemnified
Party to have charge of such Third Party Action, (C) the Indemnified Party shall have reasonably concluded that there may
be defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party,
or (D) the Indemnified Party’s counsel shall have advised the Indemnified Party in writing, with a copy delivered to
the Indemnifying Party, that there is a conflict of interest that could make it inappropriate under applicable standards of professional
conduct to have common counsel;

 

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(ii)         the
Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into or making any settlement,
compromise, admission or acknowledgment of the validity of such Third Party Action or any Liability in respect thereof if pursuant
to or as a result of such settlement, compromise, admission or acknowledgment, injunctive or other equitable relief would be imposed
against the Indemnified Party or if, in the reasonable opinion of the Indemnified Party, such settlement, compromise, admission
or acknowledgment could have an adverse effect on its business;

 

(iii)        no
Indemnifying Party shall consent to the entry of any judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all Liability; and

 

(iv)        the
Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of),
and the Indemnified Party shall be entitled to have sole control over, the defense or settlement, compromise, admission or acknowledgment
of any Third Party Action (A) relating to any Tax to be collected from a Purchaser Indemnified Party or an Affiliate of a
Purchaser Indemnified Party, (B) as to which the Indemnifying Party fails to admit Liability in writing delivered to the
Indemnified Party and/or fails to assume the defense within a reasonable length of time, (C) to the extent the Third Party
Action seeks an order, injunction, or other equitable relief against the Indemnified Party which, if successful, would materially
adversely affect the business, operations, assets or financial condition of the Indemnified Party, or (D) for which the Liability
may exceed the Cap; provided, however, in the case of (B) and (C), that the Indemnified Party shall make no settlement,
compromise, admission or acknowledgment that would give rise to Liability on the part of any Indemnifying Party without the prior
written consent of such Indemnifying Party, which shall not be unreasonably withheld, and in the case of (D), the Indemnifying
Party may control the defense of the Third Party Action if it irrevocably in writing agrees to waive the Cap. For the avoidance
of doubt, any Third Party Action relating to any Tax shall be governed by Section 4.6 to the extent provided therein.

 

(b)          The
parties hereto shall extend reasonable cooperation in connection with the defense of any Third Party Action pursuant to this Section
7.3 and, in connection therewith, shall furnish such records, information and testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested.

 

Section 7.4           Direct
Claims. In any case in which an Indemnified Party seeks indemnification hereunder which is not subject to Section 7.3
because no Third Party Action is involved, the Indemnified Party shall notify the Indemnifying Party in writing of any matters
which such Indemnified Party claims are subject to indemnification under the terms hereof. The failure of the Indemnified Party
to exercise promptness in such notification shall not amount to a waiver of such claim unless the resulting delay materially and
adversely prejudices the position of the Indemnifying Party with respect to such claim.

 

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Section 7.5           Determination
of Loss Amount. To the extent that a claim for indemnification by Purchaser hereunder relates to a Liability incurred
by the Company and (a) there is an accrual on the Final Balance Sheet in respect of such Liability, then the determination of
Loss in respect of such claim shall be net of such accrual, or (b) the Liability was a Current Liability taken into account in
the Working Capital Amount, then the determination of Loss in respect of such claim shall be net of such Current Liability.

 

Section 7.6           Procedures
for Claims Against, and Distributions of, the Escrowed Amount.

 

(a)          Claims.
Purchaser may make an indemnification claim on behalf of a Purchaser Indemnified Party pursuant to Sections 7.2(a) or 7.2(b)
(a “Claim”) by delivering written notice of the Claim (the “Claim Notice”)
to the Escrow Agent and the Indemnifying Sellers. Any such Claim Notice shall include a brief description of the Claim, and the
amount (which may be a reasonable estimate) of the Claim. Upon receipt of a Claim Notice, the Escrow Agent shall retain the Claim
amount in escrow (in the form of Escrowed Cash and/or Escrowed Shares, as applicable) and only thereafter distribute the same
in accordance with the joint written instructions of Purchaser and the Indemnifying Sellers given to the Escrow Agent (a “Joint
Written Instruction”) or a final, non-appealable judgment of a court of competent jurisdiction, and the Escrow
Agreement. Any Seller may make an indemnification claim on behalf of a Seller Indemnified Party pursuant to Section 7.2(d)
by delivering a claims notice in writing to Purchaser containing a brief description of the claim, and the amount (which may
be a reasonable estimate) of the claim.

 

(b)          Uncontested
Claims. If within 30 days of its receipt of a Claim Notice the Indemnifying Sellers agree with such Claim or do not contest
such Claim in writing to Purchaser, the Indemnifying Sellers shall be conclusively deemed to have consented to the recovery by
the Purchaser Indemnified Person of the full amount of Losses specified in the Claim Notice, including the forfeiture of the Escrowed
Cash and/or Escrowed Amount, as applicable, in the amount of the uncontested Claim.

 

(c)          Contested
Claims. If the Indemnifying Sellers give Purchaser written notice contesting all or any portion of a Claim Notice (a “Contested
Claim”) (with a copy to the Escrow Agent) within the 30 day period, then such Contested Claim shall be resolved
by either (i) a written settlement agreement executed by Purchaser and the Indemnifying Sellers (a copy of which shall be furnished
to the Escrow Agent) or (ii) in the absence of such a written settlement agreement within 30 days following receipt by Purchaser
of the written notice from the Indemnifying Sellers, by binding litigation between Purchaser and the Indemnifying Sellers in accordance
with the terms and provisions of Section 7.6(d).

 

(d)          Litigation
of Contested Claims. Either Purchaser or the Indemnifying Sellers may bring suit as provided in Sections 8.12 and 8.13
to resolve the Contested Claim. Judgment upon any award rendered by the trial court as to the validity and amount of any claim
in such Claim Notice may be entered in any court having jurisdiction, such award or judgment shall be immediately paid to the
successful party, and the Escrow Agent shall be entitled to act in accordance with such award or judgment and make or withhold
payments out of the Escrowed Amount in accordance therewith. Notwithstanding the foregoing, any award rendered or judgment entered
by the trial court shall be subject to appeal pursuant to Applicable Law, and, once any such appeals are resolved and all appeals
rights are either exhausted or waived, the resulting final decision shall be binding and conclusive upon the parties to this Agreement.
In the event the final, binding and conclusive decision on appeal reverses the trial court’s initial award and/or judgment,
any payment previously made to the successful party shall be returned within a reasonable time.

 

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(e)          Distributions.
On the date that is 15 months after the Closing Date, the Escrow Agent shall release to the Indemnifying Sellers, as provided
in the Escrow Agreement, the Escrowed Cash, less that amount of Escrowed Cash necessary to satisfy an unsatisfied Claim (an “Outstanding
Escrow Claim”). On the dates that are 18 months, 21 months and 24 months after the Closing Date, the Escrow Agent
shall release to the Indemnifying Sellers, as provided in the Escrow Agreement, 25% of the Escrowed Shares, less that number of
Escrowed Shares with a value necessary to satisfy a then Outstanding Escrow Claim. On the date that is 27 months after the Closing
Date, the Escrow Agent shall release to the Indemnifying Sellers, as provided in the Escrow Agreement, the remaining Escrowed
Shares, less that number of Escrowed Shares with a value necessary to satisfy a then Outstanding Escrow Claim. As soon as any
Outstanding Escrow Claims are resolved pursuant to the procedures set forth in this Article 7, the Escrow Agent shall release
any remaining Escrowed Amount held by the Escrow Agent pursuant to the terms of the Escrow Agreement to the Indemnifying Sellers.

 

(f)          Escrow
Amount; Value of Escrowed Shares. Whenever a payment is to be made to Purchaser from the Escrow Amount, such payment shall
be made first from the Escrowed Cash until there is no Escrowed Cash, and then, if applicable, from the Escrowed Shares. When
the Escrowed Shares must be valued for purposes of an Outstanding Escrow Claim or a release of Escrowed Shares, the Escrowed Shares
shall be valued at $4.00 per share, As Adjusted.

 

ARTICLE
8

GENERAL PROVISIONS

 

Section 8.1           Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a Business Day, or otherwise on the next Business Day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a Business Day during Business Hours,
or otherwise on the next Business Day.

 

    	50

    	 

    

 

	If to Purchaser,
        to:

         

        Bacterin International
        Holdings, Inc.

        600 Cruiser Lane

        Belgrade, MT 59714

        Attn: Chief Executive
        Officer

        Facsimile: (406)
        388-0422
	With a copy
        to:

         

        Ballard
        Spahr LLP

        1 East Washington
        Street

        Suite 2300

        Phoenix,
        AZ 85004

        Attn: Karen
        C. McConnell

        Facsimile:
        (602) 798-5595

	 	 
	If to the Company
        prior to Closing to:

         

        X-spine Systems,
        Inc.

        452 Alexandersville
        Rd.

        Miamisburg, OH
        45342

        Attn: David L.
        Kirschman

        Facsimile: (937)
        847-8410
	With a copy
        to:

         

        Dunlevey,
        Mahan & Furry

        110 N. Main
        Street, Suite 1000

        Dayton,
        OH 45402-1738

        Attn: Donald
        B. Rineer

        Facsimile:
        (937) 223-6003

	 	 
	If to Sellers,
        to:

         

        David L. Kirschman

        5101 Garden Spring
        Court

        Dayton, OH 45429

        Facsimile: (937)
        226-9898

         

        Kenneth J. Hemmelgarn,
        Jr. Revocable Living Trust Dated February 9, 1998, as amended

        Brian J. Hemmelgarn
        Revocable Living Trust Dated February 9, 1998, as amended

        Kenneth J. Hemmelgarn,
        Jr. Second Trust Dated March 18, 2010

        Brian J. Hemmelgarn
        Second Trust Dated March 18, 2010

        2122 Winners Circle

        Dayton, OH 45404

        Facsimile: (937)
        228-1608
	With a copy
        to:

         

        Dunlevey,
        Mahan & Furry

        110 N. Main
        Street, Suite 1000

        Dayton,
        OH 45402-1738

        Attn: Donald
        B. Rineer

        Facsimile:
        (937) 223-6003

 

Section 8.2           Severability.
The unenforceability, illegality or invalidity of any provision of this Agreement shall not affect the enforceability or validity
of any other provision.

 

Section 8.3           Assignment;
Successors. Neither this Agreement, nor any rights, obligations or interests hereunder, may be assigned by any party hereto
except with the prior written consent of the other parties hereto; provided that Purchaser may nominate a direct or indirect
subsidiary to take ownership of the Outstanding Shares without the consent of Sellers. Subject to the preceding sentence, this
Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective permitted successors
and assigns.

 

    	51

    	 

    

 

Section 8.4           Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

 

Section 8.5           Expenses.
Except as otherwise expressly provided in this Agreement, all costs and expenses incurred by the parties hereto in connection
with the transactions contemplated by this Agreement shall be borne solely and entirely by the party that has incurred such expenses.

 

Section 8.6           Governing
Law. This Agreement shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

Section 8.7           Headings.
The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Agreement.

 

Section 8.8           Entire
Agreement. This Agreement and the Disclosure Schedules, the Confidentiality Agreement and the other Transaction Documents
set forth the entire understanding of the parties with respect to the transactions contemplated hereby, supersede all prior discussions,
understandings, agreements and representations, and shall not be modified or affected by any offer, proposal, statement or representation,
oral or written, made by or for any party in connection with the negotiation of the terms hereof.

 

Section 8.9           Third-Party
Beneficiaries. Except for the Purchaser Indemnified Parties and the Seller Indemnified Parties and as provided in Section
4.4, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

 

Section 8.10         Disclosure
Schedules. All Disclosure Schedules attached hereto are incorporated herein and expressly made a part of this Agreement
as though completely set forth herein.

 

Section 8.11         Interpretive
Matters. Unless the context otherwise requires, (a) all references to articles, sections or schedules are to Articles,
Sections or Schedules in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned
to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either
the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; and (d) the term “including”
means by way of example and not by way of limitation. The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

 

    	52

    	 

    

 

Section 8.12         Submission
to Jurisdiction. Each of the parties submits to the exclusive jurisdiction of the state or federal courts located in Delaware,
in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or
relating to, this Agreement in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought. Each party agrees that a final judgment in any action so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by Applicable Law.

 

Section 8.13         Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.

 

Section 8.14         Public
Announcements. No party shall issue or cause the publication of any press release or other public announcement with respect
to this Agreement or the Purchase without the prior consent of the others, which shall not be unreasonably withheld or delayed;
provided, however, that nothing herein shall prohibit any party from issuing or causing publication of any such
press release or public announcement to the extent that such party determines such action to be required by Applicable Law, applicable
regulation or stock market rule, in which case the party making such determination shall, if practicable in the circumstances,
use commercially reasonable efforts to allow the other parties reasonable time to comment on such release or announcement in advance
of its issuance. To the extent feasible, all press releases or other announcements or notices regarding this transaction shall
be made jointly by the parties.

 

Section 8.15         Amendment.
This Agreement may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by Purchaser,
the Company and Sellers.

 

[Signature
Page Follows]

 

    	53

    	 

    

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	BACTERIN INTERNATIONAL HOLDINGS,
    INC.
	 	 
	 	By:	/s/ Daniel Goldberger
	 	Name:	 Daniel Goldberger
	 	Title:	CEO 
	 	 
	 	X-SPINE SYSTEMS, INC.
	 	 
	 	By:	/s/ David Kirschman 
	 	Name:	 David Kirschman 
	 	Title:	President and CEO 
	 	 
	 	/s/  David Kirschman 
	 	David L. Kirschman, M.D.
	 	 
	 	KENNETH J. HEMMELGARN, JR. REVOCABLE LIVING TRUST DATED FEBRUARY
    9, 1998, AS AMENDED
	 	 
	 	By:	/s/ Kenneth J. Hemmelgarn, Jr. 
	 	 	Kenneth J. Hemmelgarn, Jr., Trustee
	 	 
	 	BRIAN HEMMELGARN REVOCABLE LIVING TRUST DATED FEBRUARY 9, 1998,
    AS AMENDED
	 	 
	 	By:	/s/ Brian J. Hemmelgarn 
	 	 	Brian J. Hemmelgarn, Trustee
	 	 

 

[Signature
Page to Stock Purchase Agreement]

 

    	S-1

    	 

    

 

	 	KENNETH J. HEMMELGARN, JR. SECOND TRUST DATED MARCH 18, 2010
	 	 
	 	By:	/s/ Kenneth J. Hemmelgarn 
	 	 	Kenneth J. Hemmelgarn, Trustee
	 	 
	 	BRIAN HEMMELGARN SECOND TRUST DATED MARCH 18, 2010
	 	 
	 	By:	/s/ Kenneth J. Hemmelgarn 
	 	 	Kenneth J. Hemmelgarn, Trustee

 

[Signature
Page to Stock Purchase Agreement]

 

    	S-2

    	 

    

 

LIST OF
EXHIBITS AND SCHEDULES

 

Exhibits:

 

Exhibit A – Definitions

Exhibit B-1 – Form of Seller
Non-Compete Agreement (Kirschman)

Exhibit B-2 – Form of Seller
Non-Compete Agreement (Hemmelgarn)

Exhibit C - Lock-Up Agreement

Exhibit D - Guaranty

 

Disclosure Schedules:

 

Disclosure Schedule 1.2(c) –
Sellers and Ownership Interest Shares

Disclosure Schedule 3.2(c) –
Capitalization; Directors and Officers

Disclosure Schedule 3.2(e) –
No Conflict

Disclosure Schedule 3.2(f) –
Financial Statements

Disclosure Schedule 3.2(g) –
Liabilities

Disclosure Schedule 3.2(h)(i) –
Accounts Receivable

Disclosure Schedule 3.2(h)(iii)
– Accounts Payable

Disclosure Schedule 3.2(i) –
Litigation

Disclosure Schedule 3.2(j)(xiv)
– Taxes

Disclosure Schedule 3.2(j)(xix)
– Tax Deficiencies

Disclosure Schedule 3.2(k)(ii) –
Leased Real Property

Disclosure Schedule 3.2(l)(i) –
Intellectual Property

Disclosure Schedule 3.2(l)(ii) –
Intellectual Property Exceptions

Disclosure Schedule 3.2(l)(iv) –
Company Intellectual Property Payments

Disclosure Schedule 3.2(l)(xiii)
– Intellectual Property Violations

Disclosure Schedule 3.2(o)(ii) –
Applicable Laws

Disclosure Schedule 3.2(o)(iii)
– Governmental Notices

Disclosure Schedule 3.2(r) –
Environmental Matters

Disclosure Schedule 3.2(s)(i) –
FDA Exceptions

Disclosure Schedule 3.2(s)(iii)
– Adverse Event and Complaint Review and Analysis Reports

Disclosure Schedule 3.2(s)(v) –
Recalls and Notices

Disclosure Schedule 3.2(t) –
Health Care Professionals

Disclosure Schedule 3.2(u) –
Restrictions on Business

Disclosure Schedule 3.2(w) –
Employees

Disclosure Schedule 3.2(x)(i) –
Employee Plans

Disclosure Schedule 3.2(y) –
Material Contracts

Disclosure Schedule 3.2(z) –
Transactions with Affiliates

Disclosure Schedule 3.2(aa) –
Absence of Changes

Disclosure Schedule 3.2(bb) –
Insurance

Disclosure Schedule 3.2(cc) –
Largest Suppliers and Customers

Disclosure Schedule 3.2(dd) –
Standard Terms and Conditions for Company Products

Disclosure Schedule 4.8 –
Liens

 

    	1

    	 

    

 

EXHIBIT
A

 

DEFINITIONS

 

The following
terms shall have the following meanings in this Agreement:

 

“Action”
means any claim, action, suit or proceeding, litigation, arbitral action, governmental inquiry, criminal prosecution, audit or
other investigation as to which written notice has been provided to the applicable party.

 

“Accredited
Investor” has the meaning ascribed thereto in Rule 501(a) of Regulation D promulgated by the SEC under the Securities
Act.

 

“Activities
to Date” is defined in Section 3.2(s)(ii).

 

“Affiliate”
means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes
of this definition and this Agreement, the term “control” (and correlative terms) means the power, whether by contract,
equity ownership or otherwise, to direct the policies or management of a Person.

 

“Agreement”
is defined in the preamble.

 

“Applicable
Law” or “Applicable Laws” means all laws, statutes, constitutions, rules, regulations,
principles of common law, codes, ordinances, Judgments, orders, decrees, injunctions, and writs of any Governmental Entity which
has jurisdiction over the applicable Person or the businesses, operations or assets of the applicable Person.

 

“Appointee
Director” is defined in Section 2.3.

 

“As
Adjusted” means, in the event of any stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into capital stock), reorganization, reclassification, combination, recapitalization or
other like change with respect to Purchaser occurring after the Closing, such equitable adjustment to the agreed value of $4.00
per share of the Purchaser Common Stock necessary to provide the parties the same economic effect as contemplated by this Agreement
prior to such stock split, reverse stock split, stock dividend, reorganization, reclassification, combination, recapitalization
or other like change.

 

“B.
Hemmelgarn 1998 Trust” means the Brian J. Hemmelgarn Revocable Living Trust Dated February 9, 1998, as amended.

 

“B.
Hemmelgarn 2010 Trust” means the Brian J. Hemmelgarn Second Trust Dated March 18, 2010.

 

“Basic
Cap” is defined in Section 7.2(e)(iii).

 

“Basic
Representations” means all representations and warranties in Sections 3.1 and 3.2 of this Agreement
except the Fundamental Representations and the Interim Representations.

 

    	A-1

    	 

    

 

“Business”
means the manufacturing and distribution of spinal implant products for the treatment of spinal disease.

 

“Business
Associate” shall have the meaning given to it 45 C.F.R. 160.103.

 

“Business
Day” means any day other than a Saturday, a Sunday, or a holiday on which national banking associations in the State
of Delaware are authorized by Applicable Law to close.

 

“Cap”
means the Transaction Cap, Basic Cap or Interim Cap.

 

“Cash
Consideration” is defined in Section 1.2(a)(i).

 

“Charter
Documents” is defined in Section 3.2(a).

 

“Claim”
is defined in Section 7.6(a).

 

“Claim
Notice” is defined in Section 7.6(a).

 

“Closing”
means the consummation of the transactions contemplated by this Agreement.

 

“Closing
Balance Sheet” is defined in Section 1.3(a).

 

“Closing
Date” means the date on which the Closing occurs.

 

“Closing
Working Capital” is defined in Section 1.3(a).

 

“Code”
means the United States Internal Revenue Code of 1986, as amended.

 

“Company”
is defined in the preamble.

 

“Company
Intellectual Property” means any and all Intellectual Property of the Company or the Subsidiary whether owned or
controlled by or for, licensed to, or otherwise held by or for the benefit of the Company or Subsidiary that is related to the
Business, including any and all (a) Company Owned Intellectual Property and (b) Company Licensed Intellectual Property.

 

“Company
Licensed Intellectual Property” means any and all third party Intellectual Property that is licensed to the Company
or the Subsidiary.

 

“Company
Licenses” is defined in Section 3.2(s)(ii).

 

“Company
Owned Intellectual Property” means any and all Intellectual Property rights that are owned or are purportedly owned
by the Company or the Subsidiary.

 

“Company
Products” means all products or services produced, marketed, licensed, sold, distributed or performed by or on behalf
of the Company or Subsidiary and all products or services currently under development by the Company or Subsidiary.

 

    	A-2

    	 

    

 

“Company
Registered Intellectual Property” means all United States, international and foreign (a) patents and patent
applications (including provisional applications), (b) registered trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related to trademarks, (c) registered Internet domain names, (d) registered
copyrights and applications for copyright registration and (e) any other Intellectual Property that is the subject of an application,
certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Entity that is owned by,
registered or filed in the name of, the Company or Subsidiary.

 

“Company
Stock” is defined in Section 3.2(c).

 

“Company’s
Representatives” is defined in Section 4.7(a).

 

“Confidential
Information” means information, in any form, relating to the Company’s past, present or future research, development
or business activities, whether or not marked or otherwise identified as “confidential” or “proprietary,”
including any copies, excerpts, summaries, analyses or notes thereof, including all of the following: designs, drawings, specifications,
techniques, models, data, source code, object code, documentation, diagrams, copyrights, flow charts, research, development, processes,
procedures, “know-how,” new product or new technology information, product prototypes, product copies, operational
and data processing capabilities, systems, software and hardware and the documentation thereof development or marketing techniques
and materials, development or marketing timetables, business relationships, methods of transacting business, strategies and development
plans, including trade secrets, trade names, trademarks, customer, supplier or personal names and other information related to
customers, sub-contractors and dealers, suppliers or personnel, current or future cost, pricing information, pricing policies
and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form,
and any other trade secrets or nonpublic business information, including the terms or conditions of this Agreement. “Confidential
Information” shall not include information or documentation that: (a) is or becomes generally available to the public
by acts or omissions other than those of the Person subject to restrictions with respect to the Confidential Information; or (b)
becomes available to a Person on a non-confidential basis from a source other than the Company, provided that to the knowledge
of such Person such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation
of confidentiality to the applicable Company or any other Person with respect to such information.

 

“Confidentiality
Agreement” means that certain Mutual Confidentiality and Nondisclosure Agreement, dated April 1, 2015, by and between
the Company and Bacterin International, Inc.

 

“Consents”
means all consents, approvals, waivers or authorizations of any Governmental Entity or other Person.

 

“Contested
Claim” is defined in Section 7.6(c).

 

    	A-3

    	 

    

 

“Contract”
means any written or oral agreement, contract, subcontract, settlement agreement, lease, instrument, note, option, warranty, purchase
order, license, sublicense, or legally binding commitment or undertaking of any nature.

 

“Covered
Entity” shall have the meaning given to it 45 C.F.R. 160.103.

 

“Current
Assets” means the sum of all current assets of the Company and the Subsidiary on the Closing Date, as determined
in accordance with this Agreement and GAAP.

 

“Current
Liabilities” means the sum of all current liabilities of the Company and the Subsidiary on the Closing Date, but
excluding the Indebtedness Pay-Off Amount and the Paid Transaction Costs that are paid at the Closing, each as determined in accordance
with this Agreement and GAAP.

 

“Deductible”
is defined in Section 7.2(e)(ii).

 

“Deductions”
is defined in Section 1.2(a)(ii).

 

“Deductions
Certificate” is defined in Section 2.2(c)(x).

 

“Disclosure
Schedules” means the disclosure schedules numbered according to the relevant sections in this Agreement, prepared
by Sellers and the Company and delivered to Purchaser concurrently with the execution hereof.

 

“Employee
Plans” has the meaning set forth in Section 3.2(x)(i).

 

“Environmental
Law” means any Applicable Law pertaining to land use, air, soil, surface water, groundwater (including the protection,
cleanup, removal, remediation or damage thereof), or any other environmental matter as in effect as of the date of this Agreement.

 

“Environmental
Permit” means any permit, approval, identification number, license, registration, consent, exemption, variance or
other authorization required under or issued pursuant to any applicable Environmental Law.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA
Affiliate” means any subsidiary or other entity that would be considered a single employer with a Person or a subsidiary
within the meaning of Section 414 of the Code.

 

“Escrow
Agent” means Wells Fargo Bank, N.A.

 

“Escrow
Agreement” means the escrow agreement in a form reasonably satisfactory to the Indemnifying Sellers and Purchaser
entered into on or prior to the Closing Date by and among Purchaser, the Indemnifying Sellers and the Escrow Agent.

 

“Escrowed
Amount” is defined in Section 1.6.

 

“Escrowed
Cash” is defined in Section 1.6.

 

    	A-4

    	 

    

 

“Escrowed
Shares” is defined in Section 1.6.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Export
Approvals” is defined in Section 3.2(q)(i).

 

“FCPA”
is defined in Section 3.2(p).

 

“FDA”
means the Food and Drug Administration.

 

“FDA
Fraud Policy” is defined in Section 3.2(s)(ix).

 

“Final
Adjustment Deficiency” is defined in Section 1.3(e).

 

“Final
Adjustment Surplus” is defined in Section 1.3(e).

 

“Final
Balance Sheet” is defined in Section 1.3(b).

 

“Final
Working Capital” means the Working Capital Amount in the Final Balance Sheet as agreed upon by Sellers and
Purchaser in accordance with Section 1.3(c), or the Working Capital Amount in the Final Balance Sheet as agreed upon by
Sellers and Purchaser with any such objections submitted to and resolved by the Neutral Firm in accordance with Section 1.3(d),
as the case may be.

 

“Financial
Statements” is defined in Section 3.2(f).

 

“Flow
of Funds Memorandum” means a memorandum to be prepared as of the Closing Date in form and substance satisfactory
to Purchaser and Sellers and consistent with the provisions of this Agreement setting forth how the Purchase Consideration is
to be disbursed, which shall include, among other things, instructions from Sellers to Purchaser as to the allocation and disbursement
of the Cash Consideration and the Purchaser Stock Consideration among Sellers.

 

“Fundamental
Representations” is defined in Section 7.1(b)(iii).

 

“GAAP”
means generally accepted accounting principles in the United States.

 

“Governmental
Entity” means any government, any governmental entity, department, commission, board, agency or instrumentality,
and any court, tribunal or judicial body, whether federal, state, county, local or foreign.

 

“Hazardous
Material” means any material or substance that is prohibited or regulated by any Environmental Law or that has been
designated by any Governmental Entity to be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the
environment, including asbestos, petroleum, radon gas and radioactive matter.

 

    	A-5

    	 

    

 

“Healthcare
Laws” means, to the extent related to the conduct of the Business as of the date hereof, the FDCA, Medicare (Title
XVIII of the Social Security Act) and Medicaid (Title XIX of the Social Security Act), the federal Anti-Kickback Statute (42 U.S.C.
§ 1320a-7b(b)), the Stark Anti-Self-Referral Law (42 U.S.C. §§ 1395nn), the Anti-Inducement Law (42 U.S.C. §
1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the administrative False Claims Law (42 U.S.C.
§ 1320a-7b(a)), HIPAA, HITECH, all regulations or guidance promulgated pursuant to such Applicable Laws, and any other federal,
or state Applicable Law that regulates the design, development, testing, studying, manufacturing, processing, storing, importing
or exporting, licensing, labeling or packaging, advertising, distributing or marketing of pharmaceutical or medical device products,
or that is related to kickbacks, patient or program charges, recordkeeping, claims process, documentation requirements, medical
necessity, referrals, the hiring of employees or acquisition of services or supplies from those who have been excluded from government
health care programs, quality, safety, privacy, security, licensure, accreditation or any other aspect of providing health care
services.

 

“Health
Care Professional” means any Person that is licensed or otherwise authorized by Law to provide health care directly
to individuals, or an officer, employee, agent or contractor of such Person acting in the course and scope of his or her employment,
agency or contract related to or in support of the provision of health care directly to individuals.

 

“Hemmelgarn
Knowledge Representations and Warranties” means the representations and warranties set forth in Sections 3.2(g)
(No Undisclosed Liabilities), 3.2(i) (Litigation), 3.2(j) (Taxes), 3.2(l) (Intellectual Property), 3.2(o)
(Compliance with Applicable Laws; Permits), 3.2(q) (Export Control Laws), 3.2(r) (Environmental Matters), and
3.2(x) (Employee Benefit Plans).

 

“Hemmelgarn
Sellers” means the K. Hemmelgarn 1998 Trust, the B. Hemmelgarn 1998 Trust, the K. Hemmelgarn 2010 Trust, and the
B. Hemmelgarn 2010 Trust.

 

“HIPAA”
means the administrative simplification section of the Health Insurance Portability and Accountability Act of 1996, as amended,
including as amended by HITECH.

 

“HITECH”
means Subtitle D of the Health Information Technology for Clinical Health Act.

 

“HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.

 

“Indebtedness”
means, without duplication, (a) all indebtedness (including the principal amount thereof or, if applicable, the accreted amount
thereof and the amount of accrued and unpaid interest thereon) of the Company, whether or not represented by bonds, debentures,
notes or other securities, for the repayment of money borrowed, whether owing to banks, financial institutions, on equipment leases
or otherwise, (b) all deferred indebtedness of the Company for the payment of the purchase price of property or assets purchased,
(c) any outstanding reimbursement obligation of the Company with respect to letters of credit, bankers’ acceptances or similar
facilities issued for the account of the Company, (d) all guaranties, endorsements, assumptions and other contingent obligations
of the Company in respect of or to purchase or to otherwise acquire, indebtedness for borrowed money of others.

 

“Indebtedness
Agreements” means all agreements between the Company and a holder of Indebtedness.

 

    	A-6

    	 

    

 

“Indebtedness
Pay-Off Amount” is defined in Section 2.2(a)(i).

 

“Indemnified
Party” is defined in Section 7.2(d).

 

“Indemnifying
Party” is defined in Section 7.3(a).

 

“Indemnifying
Sellers” means Kirschman, the K. Hemmelgarn 1998 Trust and the B. Hemmelgarn 1998 Trust.

 

“Insurance
Policies” is defined in Section 3.2(bb).

 

“Intellectual
Property” means any or all industrial and intellectual property rights and all rights associated therewith, throughout
the world, including: (a) all patents and applications therefor and all reissues, reexaminations, inter partes review, divisions,
renewals, extensions, adjustments, restorations, provisionals, continuations and continuations-in-part thereof; (b) all inventions
(whether patentable or not), invention disclosures and improvements, all trade secrets, proprietary or Confidential Information,
know-how, technology, technical data, proprietary processes and formulae, algorithms, specifications, customer lists and supplier
lists, computer software, including all source code, object code, firmware, development tools, files, records and data, schematics,
methodologies, prototypes, devices, databases and data collections and all rights therein; (c) all copyrights in both published
and unpublished works of authorship, including all compilations, databases, computer programs, content and manuals and other documentation,
and registrations and applications for any of the foregoing; (d) all corporate names, trade names, logos, trademarks and
service marks, trademark and service mark registrations and applications, and any and all goodwill associated with and symbolized
by the foregoing items, and all Internet domain names; (e) all moral and economic rights of authors and inventors, however denominated,
and any similar or equivalent rights to any of the foregoing, and (f) all tangible embodiments of the foregoing items under the
preceding sub-clauses (a) - (e).

 

“Interim
Cap” is defined in Section 7.2(e)(iv).

 

“Interim
Representations” is defined in Section 7.1(b)(i).

 

“Joint
Written Instruction” is defined in Section 7.6(a).

 

“Judgment”
means any order, judgment, injunction (whether temporary, preliminary or permanent), edict, decree, stipulation, ruling, pronouncement,
determination, decision, opinion, verdict, sentence, subpoena, writ or award issued, made, entered, rendered or otherwise put
into effect by or under the authority of any Governmental Entity or any arbitrator or arbitration panel.

 

“K.
Hemmelgarn 1998 Trust” means the Kenneth J. Hemmelgarn, Jr. Revocable Living Trust Dated February 9, 1998, as amended.

 

“K.
Hemmelgarn 2010 Trust” means the Kenneth J. Hemmelgarn, Jr. Second Trust Dated March 18, 2010.

 

“Key
Employees” means Kirschman, Michael Schmitz, Kriss Anderson, Deborah Klopsch, Greg Causey and Daniel Abramowitz.

 

    	A-7

    	 

    

 

“Kirschman”
is defined in the preamble.

 

“Knowledge
of the Hemmelgarn Sellers” means the actual knowledge of Kenneth J. Hemmelgarn, Jr., and Brian J. Hemmelgarn.

 

“Knowledge
of the Company” means the actual knowledge of each Key Employee after reasonable inquiry of such officers and employees
of the Company whom they reasonably believe would have knowledge of the matters represented.

 

“Latest
Balance Sheet” means the unaudited, consolidated balance sheet of the Company and the Subsidiary at May 31, 2015.

 

“Latest
Balance Sheet Date” means May 31, 2015.

 

“Leased
Real Property” is defined in Section 3.2(k)(ii).

 

“Liabilities”
means any and all debts, liabilities, commitments and obligations, whether contingent, fixed or absolute, direct or indirect,
accrued or unaccrued, asserted or unasserted, matured or unmatured, liquidated or unliquidated, known or unknown, due or to become
due, or determined or determinable.

 

“Lien”
or “Liens” means any pledges, claims, liens, charges, encumbrances, options and security interests of
any kind or nature whatsoever.

 

“Losses”
is defined in Section 7.2(h).

 

“Material
Adverse Effect” means any change, circumstance, event or condition that is materially adverse to the operations,
business, financial condition or results of operations of the Company and the Subsidiary, taken as a whole, or that materially
impairs the ability of the Company to consummate the transaction, other than any changes, circumstances, events or conditions
resulting, directly or indirectly, from: (a) the announcement or performance of the transaction, including any action or inaction
by the Company, Purchaser, Sellers or any of the customers, suppliers, lessors, employees or competitors of the Business; (b)
changes in general economic conditions in any of the markets in which the Business operates (to the extent such change does not
affect the Company and the Subsidiary disproportionately from their competitors); (c) any change in economic conditions or the
financial, banking, currency or capital markets in general; (d) any calamity or other condition generally affecting the medical
device industry and/or the body shaping market (to the extent such change does not affect the Company and the Subsidiary disproportionately
from their competitors); (e) national or international political or social conditions, including the engagement by any country
in hostilities, whether commenced before or after the date of this Agreement, and whether or not pursuant to the declaration of
a national emergency or war, or the occurrence of any military or terrorist attack; (f) changes in any Applicable Law (including
relating to excise Taxes on medical devices and healthcare reform) or interpretations thereof affecting the medical device industry
and/or the body shaping market in general (to the extent such change does not affect the Company and the Subsidiary disproportionately
from their competitors); or (g) changes in GAAP or interpretations thereof or other accounting principles or requirements.

 

    	A-8

    	 

    

 

“Material
Contract” means any of the following: (a) any Contract that requires or that likely will require future expenditures
by the Company or Subsidiary in excess of $150,000 or that likely will result in payments to the Company or Subsidiary in excess
of $150,000; (b) lease agreements in connection with the Leased Real Property; (c) any Contract relating to the Company Intellectual
Property, excluding standard license provisions in distribution agreements and fee per procedure agreements; (d) any Contract
to which the Company or Subsidiary is a party that requires a Consent to a change of control, merger or an assignment by operation
of law, either before or after the Closing Date; (e) any Contract to which the Company or Subsidiary is a party granting any cash
change of control, severance, or termination pay to any Employee; (f) any fidelity or surety bond or completion bond and any Contract
of indemnification or guarantee to which the Company or Subsidiary is a party; (g) any indentures, guarantees, loans or credit
agreements, security agreements or other Contracts or instruments relating to the borrowing of money or extension of credit or
other Indebtedness to which the Company or Subsidiary is a party or by which any of its property is bound; (h) any dealer, distribution,
joint marketing, strategic alliance, affiliate or development Contract; (i) any Contract containing any “most favored nation”
or other preferred pricing provision; (j) any sales representative, original equipment manufacturer, manufacturing, value added,
remarketer, reseller, or independent software vendor, or other Contract for use or distribution of the Company Products; (k) any
nondisclosure, confidentiality or similar Contract, other than those entered into with any actual or prospective customer or vendor
in the ordinary course of business consistent with past practices; (l) any Contract which has or may reasonably be expected to
have the effect of prohibiting or impairing in any material respect any business practice of the Company or the Subsidiary, any
acquisition of property (tangible or intangible) by the Company or the Subsidiary, the conduct of business by the Company or the
Subsidiary, or otherwise limiting in any material respect the freedom of the Company to engage in any line of business, to conduct
any business activities, or to compete with any Person; (m) any partnership or joint venture Contract; (n) any settlement or co-existence
agreement; and (o) any other Contract, or group of Contracts, the termination or breach of which would be reasonably expected
to have a Material Adverse Effect.

 

“Net
Purchase Consideration” is defined in Section 1.2(a)(iii).

 

“Neutral
Firm” is defined in Section 1.3(d).

 

“Objection
Notice” is defined in Section 1.3(c).

 

“Outstanding
Escrow Claim” is defined in Section 7.6(e).

 

“Outstanding
Share” or “Outstanding Shares” is defined in Section A of the Recitals.

 

“Ownership
Interest Share” is defined in Section 1.2(a)(iv).

 

“Paid
Transaction Costs” is defined in Section 2.2(a)(ii).

 

“Payoff
Letters” means the payoff letters in the form prescribed by Purchaser, issued by (a) creditors under all Indebtedness
Agreements, setting forth the amounts required to repay the Indebtedness under the Indebtedness Agreements in full, and (b) recipients
of Transaction Costs that remain outstanding as of the Closing Date, setting for the amount of Transaction Costs outstanding,
each of which shall specifically include a release of the Company and Purchaser for all matters up to the Closing Date, contingent
upon receipt of such payment.

 

    	A-9

    	 

    

 

“Permits”
is defined in Section 3.2(o)(i).

 

“Permitted
Liens” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for Taxes, assessments, charges, levies or other claims not yet due and payable, or
the validity of which are being contested in good faith and for which adequate reserves have been provided on the Latest Balance
Sheet; (b) Liens arising by operation of Applicable Laws, such as materialmen’s, mechanics’ carriers’,
warehousemen’s, workmen’s and repairmen’s liens and other similar liens for amounts not yet due and payable;
(c) pledges or deposits to secure obligations under workers’ compensation or similar Applicable Laws or to secure public
or statutory obligations; (d) immaterial Liens, irregularities, easements, reserves, servitudes, encroachments, rights of
way or other imperfections of title or possession the existence of which do not interfere with the present use of the affected
real or other tangible property; (e) registered easements, rights-of-way, restrictive covenants and servitudes and other
similar rights in land granted to, reserved or taken by any Governmental Entity or public utility, or any registered subdivision,
development, servicing, site plan or other similar agreement with any Governmental Entity or public utility the existence of which
do not interfere with the present use of the affected real property; (f) restrictions on transfer of securities under applicable
state and federal securities laws; and (g) Liens that will be released in connection with the Closing.

 

“Person”
means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization or other
entity.

 

“Personal
Information” refers to data that, separately or when combined with other data, can be used to identify an individual
person, such as name, address, email address, photograph, IP address, and unique device identifier.

 

“Post-Closing
Operations” means the operations of the Company following the Closing Date, including with respect to any claims
for product liability asserted after the Closing Date; provided that Purchaser shall not be obligated to indemnify or hold
harmless any Seller Indemnified Party for Post-Closing Operations to the extent the Losses attributable to such Post-Closing Operations
arise out of or result from a breach by any Seller of its representations and warranties to Purchaser in this Agreement.

 

“Pre-Closing
Product Liability Claims” means claims for product liability asserted against the Company prior to the Closing Date.

 

“Privacy
Laws” means all Applicable Laws and industry self-regulatory programs concerning the collection, use, analysis,
retention, storage, protection, transfer, disclosure and/or disposal of Personal Information including HIPAA, HITECH, state consumer
protection Applicable Laws, state breach notification Applicable Laws, state social security number protection Applicable Laws,
the Federal Trade Commission Act, the federal Privacy Act of 1974, the Telephone Consumer Protection Act, the Fair Credit Reporting
Act and its state law equivalents, the California Online Privacy Protection Act, the Massachusetts Data Security Regulations (201
CMR 17.00 et seq.), each as amended to the date hereof, as well as the Digital Advertising Alliance’s Self-Regulatory Principles
for Online Behavioral Advertising.

 

    	A-10

    	 

    

 

“Protected
Health Information” shall have same meaning prescribed by HIPAA.

 

“Purchase”
is defined in Recital B.

 

“Purchase
Consideration” is defined in Section 1.2(a)(v).

 

“Purchase
Price” is defined in Section 1.2.

 

“Purchaser”
is defined in the preamble.

 

“Purchaser
Common Stock” means the Common Stock, par value $0.001, of Purchaser.

 

“Purchaser
Fundamental Representations” is defined in Section 7.1(f).

 

“Purchaser
Indemnified Parties” is defined in Section 7.2(a).

 

“Purchaser
Indemnified Taxes” means any and all Taxes together with any costs, expenses or damages (including court and administrative
costs and reasonable legal fees and expenses incurred in investigating and preparing for any audit, examination, litigation or
other judicial or administrative proceeding) arising out of, in connection with or incident to the determination, assessment or
collection of such Taxes (a) imposed on the Company or the Subsidiary (including Taxes imposed on or with respect to the income,
business, property or operations of the Company and the Subsidiary), or for which the Company and the Subsidiary may otherwise
be liable, with respect to (i) any Taxable period ending on or prior to the Closing Date or (ii) the portion of any Straddle Period
ending on the Closing Date (determined in accordance with Section 4.6(c)), or (b) arising out of, in connection with, or
related to, a breach of any representation or warranty set forth in Section 3.1(j) or the covenants set forth in Section
4.6; provided, however, that any such Tax shall not be a Purchaser Indemnified Tax to the extent such Tax was
included as a Current Liability in the determination of Final Working Capital pursuant to Section 1.3(c).

 

“Purchaser
SEC Documents” means all reports, schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange.

 

“Purchaser
Stock Consideration” is defined in Section 1.2(a)(vi).

 

“Purchaser’s
Board” means the board of directors of Purchaser.

 

“Released
Parties” is defined in Section 4.9.

 

“Releasors”
is defined in Section 4.9.

 

“Rule
144” means Rule 144 as promulgated by the SEC under the Securities Act.

 

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

 

    	A-11

    	 

    

 

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

 

“Seller”
or “Sellers” is defined in the preamble.

 

“Seller
Indemnified Parties” is defined in Section 7.2(d).

 

“Sensitive
Personal Information” refers to a subset of Personal Information that, separately or when combined with other data
can be used to cause harm, embarrassment, financial loss or injury to an individual or result in identity theft or fraud. Sensitive
Personal Information is a subset of Personal Information. Sensitive Personal Information includes, for example, name or email
address in combination with: date of birth, social security number, government-issued identification numbers, payment card numbers,
log-in credentials, geo-location information, fingerprints, financial account numbers, health information and other health-related
information.

 

“Straddle
Period” means any taxable period that begins on or before the Closing Date and ends after the Closing Date.

 

“Subsidiary”
is defined in Section 3.2(b).

 

“Systems”
is defined in Section 3.2(m).

 

“Tail
Policies” is defined in Section 4.4.

 

“Tax”
or “Taxes” means (i) any federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, franchise, profits,
capital stock, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not; (ii) any liability for payment of amounts described in clause (i)
whether as a result of transferee liability, of being a member of an affiliated, consolidated, combined or unitary group for
any period or otherwise through operation of law; and (iii) any liability for the payment of amounts described in clauses (i)
or (ii) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any other Person.

 

“Tax
Proceeding” is defined in Section 4.6(e).

 

“Tax
Return” means any return, declaration, report, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

“Third
Party Action” is defined in Section 7.3(a).

 

“Transaction
Cap” means an amount equal to the Purchase Consideration.

 

    	A-12

    	 

    

 

“Transaction
Costs” means all fees, costs and expenses of any brokers, financial advisors, consultants, accountants, attorneys
or other professionals engaged by the Company in connection with the structuring, negotiation or consummation of the transactions
contemplated by this Agreement, including the costs associated with the Phase I environmental investigation of the Leased Real
Property, and all fees, costs and expenses of any party that are to be paid by the Company as a result of the transactions contemplated
by this Agreement, whether or not such costs, fees and expenses have been paid prior to Closing.

 

“Transaction
Document” or “Transaction Documents” means this Agreement and all other documents to be
executed by any of the parties to this Agreement in connection with the consummation of the transactions contemplated in this
Agreement.

 

“Working
Capital Adjustment” means the amount, if any, by which the Working Capital Amount is greater than or less than the
Working Capital Target.

 

“Working
Capital Amount” means Current Assets minus Current Liabilities on the Closing Balance Sheet or the Final
Balance Sheet (as the case may be).

 

“Working
Capital Target” means $13,576,366.

 

    	A-13

    	 

    

 

EXHIBIT
B-1

 

Seller
Non-Compete Agreement

 

(Kirschman)

 

    	B-1

    	 

    

 

NON-COMPETITION
AND NON-SOLICITATION AGREEMENT

 

This Non-Competition
and Non-Solicitation Agreement (this “Agreement”), dated [_________], 2015, is made by and between Bacterin
International Holdings, Inc., a Delaware corporation (the “Purchaser”), and David L. Kirschman, M.D.
(“Seller”).

 

Recitals:

 

In connection
with the closing (the “Closing”) of the transactions contemplated by the Stock Purchase Agreement, dated
as of [__________], 2015, by and among Purchaser, X-spine Systems, Inc., an Ohio corporation (the “Company”),
Seller, and certain other parties (the “Purchase Agreement”), Seller has agreed to provide the Company
with certain restrictive covenants, upon the terms and conditions set forth herein, in order to maintain the value and goodwill
of the business of the Company purchased by Purchaser pursuant to the Purchase Agreement. Capitalized terms used but not otherwise
defined herein shall take their meaning from the Purchase Agreement.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the promises contained herein, and the other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and Seller, intending to be legally bound, agree as follows:

 

SECTION
1.          Effective Date.
This Agreement shall commence on the date hereof (the “Effective Date”).

 

SECTION
2.         Restrictive Covenants.
As an inducement and as essential consideration for Purchaser to consummate the Purchase contemplated by the Purchase Agreement,
and as additional consideration for the payments to which Seller is entitled under the Purchase Agreement, Seller hereby agrees
to the restrictive covenants contained in this Section 2. The parties agree that such restrictive covenants are essential
to preserve the goodwill of the business of the Company acquired under the Purchase Agreement and that Purchaser would not have
entered into the Purchase Agreement without Seller’s consent to the restrictive covenants set forth in this Section 2.

 

2.1.                       
Non-Competition. During the period commencing on the Effective Date and ending on the date that is three years following
the Effective Date (the “Restricted Period”), Seller shall not, without the advance written consent
of the board of directors of Purchaser (the “Board”), such consent to be granted or withheld in the
Board’s sole discretion, either directly or indirectly, as a proprietor, partner, stockholder (except as the passive holder
of not more than 1% of the outstanding stock of a publicly held company), director, executive, employee, consultant, joint venturer,
investor or otherwise, (a) own, manage, operate or control, (b) participate in the ownership, management, operation or control
of, or (c) be employed by and/or perform services for any Person that engages in the design, manufacturing and/or distribution
of spinal implant products (the “Restricted Business”), in North America, except for Purchaser and the
Company.

 

    	1

    	 

    

 

2.2.                        Non-Solicitation.
During the Restricted Period, Seller shall not, directly or indirectly, on its own behalf or on behalf of any other Person,
solicit, divert, take away, encourage to terminate or reduce, or otherwise harm the Company’s relationship with any present
or prospective customer of the Company (each, a “Customer”). During the Restricted Period, Seller shall
not, directly or indirectly, on its own behalf or on behalf of any other Person, solicit, employ, engage, interfere with, or attempt
to entice away from the Company, any individual who either (i) is employed by or engaged as an independent contractor consultant
to the Company at the time of the solicitation, or (ii) has been so employed or engaged within six months prior to the time of
solicitation. During the Restricted Period, Seller shall not, directly or indirectly, on its own behalf or on behalf of any other
Person, harm the Company’s relationship, or attempt to harm the Company’s relationship, with any landlord or supplier.

 

2.3.                        Confidentiality.
Seller shall not, without the advance written consent of the Board, directly or indirectly divulge, disclose or make available
or accessible any Confidential Information to any Person, other than to enforce its rights under the Purchase Agreement or Transaction
Documents, or when required to do so by a lawful order of a court of competent jurisdiction, any governmental authority or agency,
or any recognized subpoena power, or in connection with Seller’s continued employment with the Company or Purchaser, if
applicable. In addition, Seller shall not create any derivative work or other product based on or resulting from any Confidential
Information, and shall proffer to the Board’s designee, on or promptly (and in any event, within five Business Days) following
the Effective Date, and without retaining any copies, notes or excerpts thereof, all memoranda, computer disks or other media,
computer programs, diaries, notes, records, data, customer or client lists, marketing plans and strategies, and any other documents
consisting of or containing Confidential Information that are in Seller’s actual or constructive possession or which are
subject to its control at such time.

 

2.4.                        Injunctive
Relief. Seller acknowledges and agrees that Purchaser will have no adequate remedy at law and would be irreparably harmed,
if Seller actually breaches or threatens to breach any of the provisions of this Section 2. Seller agrees that Purchaser
shall be entitled to equitable and/or injunctive relief to prevent any actual breach or threatened breach of this Section 2,
and to specific performance of each of the terms of such Section 2, without the need for posting a bond or other security
and in addition to any other legal or equitable remedies that Purchaser may have. Seller further agrees that it shall not, in
any equity proceeding relating to the enforcement of the terms of this Section 2, raise the defense that Purchaser has
an adequate remedy at law.

 

2.5.                        Special
Severability. The terms and provisions of this Section 2 are intended to be separate and divisible provisions and
if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability
of any other provision of this Agreement shall thereby be affected. Seller acknowledges and agrees, and it is the intention of
the parties to this Agreement, that the potential restrictions on Seller’s future employment and activities imposed by this
Section 2 are reasonable in both duration and geographic scope and in all other respects to protect the legitimate business
interests of Purchaser. Further, Seller agrees and acknowledges that the Company is currently engaging in business and actively
marketing its services and products throughout North America, and the Company expends significant time and effort developing and
protecting the confidentiality of its Confidential Information. If for any reason any court of competent jurisdiction shall find
any provisions of this Section 2 unreasonable in duration or geographic scope or otherwise, it is the intention of the
parties that the restrictions and prohibitions contained herein shall be reformed and enforced to the fullest extent allowed under
applicable law in such jurisdiction.

 

    	2

    	 

    

 

2.6.                        Tolling
During Periods of Breach. The parties agree and intend that Seller’s obligations under this Section 2 be
tolled during any period that Seller is in breach of any of the obligations under this Section 2, so that Purchaser is
provided with the full benefit of the restrictive periods set forth herein.

 

2.7.                       
Notification. Seller consents to Purchaser notifying any future employer of Seller of Seller’s obligations
under this Section 2, and if Seller becomes self-employed or has an ownership interest in any future employer, then Seller
further consents to Purchaser notifying any future customer, vendor or client of such future employer of Seller’s obligations
under this Section 2.

 

2.8.                       
Fees. If Purchaser (a) brings any action or proceeding to enforce any provision of this Agreement or to obtain damages
as a result of a breach of this Agreement or to enjoin any breach of this Agreement and (b) prevails in such action or proceeding,
then Seller will, in addition to any other rights and remedies available to Purchaser, reimburse Purchaser for any and all reasonable
costs and expenses (including attorneys’ fees) incurred by Purchaser in connection with such action or proceeding.

 

SECTION
3.          Successors. This
Agreement is personal to Seller and, without the prior express written consent of the Board, shall not be assignable by Seller.
This Agreement shall be binding upon Seller’s heirs, beneficiaries and/or legal representatives. This Agreement shall inure
to the benefit of Purchaser and its respective successors, purchasers and assigns.

 

SECTION
4.          Miscellaneous.

 

4.1.                        Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a business day, or otherwise on the next business day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a business day during business hours,
or otherwise on the next business day.

 

 

    	3

    	 

    

 

	if to Purchaser,
        to:

         

        Bacterin International
        Holdings, Inc.

        600 Cruiser Lane

        Belgrade, MT 59714

        Attn: Chief Executive
        Officer

        Facsimile: (406)
        388-0422
	with a copy to:

         

        Ballard
        Spahr LLP

        1 East Washington Street

        Suite 2300

        Phoenix, AZ 85004

        Attn: Karen C. McConnell

        Facsimile: (602) 798-5595

	 	 
	if to Seller,
        to:

         

        David L Kirschman

        5101 Garden Spring
        Court

        Dayton, OH 45429

        Facsimile: (937)
        226-9898
	with a copy to:

         

        Dunlevey, Mahan & Furry

        110 N. Main Street, Suite
        1000

        Dayton, OH 45402-1738

        Attn: Donald B. Rineer

        Facsimile: (937) 223-8550

 

4.2.                        Severability.
The unenforceability, illegality or invalidity of any provision of this Agreement shall not affect the enforceability or validity
of any other provision.

 

4.3.                        Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.

 

4.4.                        Governing
Law. This Agreement shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

4.5.                        Headings.
The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Agreement.

 

4.6.                        Entire
Agreement. This Agreement, the Purchase Agreement and the Transaction Documents set forth the entire understanding of
the parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements
and representations, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written,
made by or for any party in connection with the negotiation of the terms hereof.

 

4.7.                        Interpretive
Matters. Unless the context otherwise requires, (a) all references to sections are to Sections in this Agreement; (b)
words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter; and (c) the term “including” means by way of example and
not by way of limitation. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement.

 

    	4

    	 

    

 

4.8.                        Submission
to Jurisdiction. Each of the parties submits to the exclusive jurisdiction of the state or federal courts located in Delaware,
in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or
relating to, this Agreement in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought. Each party agrees that a final judgment in any action so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by applicable law.

 

4.9.                        Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.

 

4.10.                      Amendments.
This Agreement may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by the
parties.

 

[Signature
Page Follows]

 

    	5

    	 

    

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	BACTERIN INTERNATIONAL HOLDINGS, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	Seller:
	 	 
	 	 
	 	David L. Kirschman, M.D.

 

[Signature
Page to Non-Competition Agreement]

 

    	 

    	 

    

 

EXHIBIT
B-2

 

Seller
Non-Compete Agreement 

 

(Hemmelgarn)

 

    	B-2

    	 

    

 

NON-COMPETITION
AND NON-SOLICITATION AGREEMENT

 

This Non-Competition
and Non-Solicitation Agreement (this “Agreement”), dated [_________], 2015, is made by and between Bacterin
International Holdings, Inc., a Delaware corporation (the “Purchaser”), and Kenneth J. Hemmelgarn, Jr.
(“Hemmelgarn”), and the Kenneth J. Hemmelgarn, Jr. Revocable Living Trust Dated February 9, 1998, as
amended (“Seller,” and together with Hemmelgarn, the “Hemmelgarn Parties”).

 

Recitals:

 

In connection
with the closing (the “Closing”) of the transactions contemplated by the Stock Purchase Agreement, dated
as of [__________], 2015, by and among Purchaser, X-spine Systems, Inc., an Ohio corporation (the “Company”),
Seller, and certain other parties (the “Purchase Agreement”), the Hemmelgarn Parties have agreed to
provide the Company with certain restrictive covenants, upon the terms and conditions set forth herein, in order to maintain the
value and goodwill of the business of the Company purchased by Purchaser pursuant to the Purchase Agreement. Capitalized terms
used but not otherwise defined herein shall take their meaning from the Purchase Agreement.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the promises contained herein, and the other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and the Hemmelgarn Parties, intending to be legally bound, agree as follows:

 

SECTION
5.          Effective Date.
This Agreement shall commence on the date hereof (the “Effective Date”).

 

SECTION
6.         Restrictive Covenants. As an
inducement and as essential consideration for Purchaser to consummate the Purchase contemplated by the Purchase Agreement, and
as additional consideration for the payments to which Seller is entitled under the Purchase Agreement, the Hemmelgarn Parties
hereby agree to the restrictive covenants contained in this Section 2. The parties agree that such restrictive covenants
are essential to preserve the goodwill of the business of the Company acquired under the Purchase Agreement and that Purchaser
would not have entered into the Purchase Agreement without the Hemmelgarn Parties’ consent to the restrictive covenants
set forth in this Section 2.

 

6.1.                        Non-Competition.
During the period commencing on the Effective Date and ending on the date that is three years following the Effective
Date (the “Restricted Period”), the Hemmelgarn Parties shall not, without the advance written consent
of the board of directors of Purchaser (the “Board”), such consent to be granted or withheld in the
Board’s sole discretion, either directly or indirectly, as a proprietor, partner, stockholder (except as the passive holder
of not more than 1% of the outstanding stock of a publicly held company), director, executive, employee, consultant, joint venturer,
investor or otherwise, (a) own, manage, operate or control, (b) participate in the ownership, management, operation or control
of, or (c) be employed by and/or perform services for any Person that engages in the marketing and/or selling of spinal implant
products (the “Restricted Business”), in North America. Notwithstanding the foregoing, for purposes
of clarification, “Restricted Business” shall not include the Hemmelgarn Parties’ ownership, management,
operation or control of Norwood Tool Company d/b/a Norwood Medical (“Norwood”), which, in part, is a
contract manufacturer for third parties engaged in the spinal products business, so long as Norwood itself does not sell spinal
products to hospitals or other end-user purchasers of spinal products.

 

    	1

    	 

    

 

6.2.                        Non-Solicitation.
During the Restricted Period, the Hemmelgarn Parties shall not, directly or indirectly, on their own behalf or on behalf
of any other Person, solicit, divert, take away, encourage to terminate or reduce, or otherwise harm the Company’s relationship
with any present or prospective customer of the Company (each, a “Customer”). During the Restricted
Period, the Hemmelgarn Parties shall not, directly or indirectly, on their own behalf or on behalf of any other Person, solicit,
employ, engage, interfere with, or attempt to entice away from the Company, any individual who either (i) is employed by or engaged
as an independent contractor consultant to the Company at the time of the solicitation, or (ii) has been so employed or engaged
within six months prior to the time of solicitation. During the Restricted Period, the Hemmelgarn Parties shall not, directly
or indirectly, on their own behalf or on behalf of any other Person, harm the Company’s relationship, or attempt to harm
the Company’s relationship, with any landlord or supplier; provided the foregoing shall not apply with respect to Norwood
and the parties acknowledge that the Hemmelgarn Parties may operate Norwood in their sole discretion.

 

6.3.                        Confidentiality.
The Hemmelgarn Parties shall not, without the advance written consent of the Board, directly or indirectly divulge, disclose or
make available or accessible any Confidential Information to any Person, other than to enforce their rights under the Purchase
Agreement or Transaction Documents, or when required to do so by a lawful order of a court of competent jurisdiction, any governmental
authority or agency, or any recognized subpoena power, or in connection with the Hemmelgarn Parties’ continued employment
with the Company or Purchaser, if applicable. In addition, the Hemmelgarn Parties shall not create any derivative work or other
product based on or resulting from any Confidential Information, and shall proffer to the Board’s designee, on or promptly
(and in any event, within five Business Days) following the Effective Date, and without retaining any copies, notes or excerpts
thereof, all memoranda, computer disks or other media, computer programs, diaries, notes, records, data, customer or client lists,
marketing plans and strategies, and any other documents consisting of or containing Confidential Information that are in the Hemmelgarn
Parties’ actual or constructive possession or which are subject to its control at such time.

 

6.4.                        Injunctive
Relief. The Hemmelgarn Parties acknowledge and agree that Purchaser will have no adequate remedy at law and would be irreparably
harmed, if the Hemmelgarn Parties actually breach or threaten to breach any of the provisions of this Section 2. The Hemmelgarn
Parties agree that Purchaser shall be entitled to equitable and/or injunctive relief to prevent any actual breach or threatened
breach of this Section 2, and to specific performance of each of the terms of such Section 2, without the need for
posting a bond or other security and in addition to any other legal or equitable remedies that Purchaser may have. The Hemmelgarn
Parties further agree that they shall not, in any equity proceeding relating to the enforcement of the terms of this Section
2, raise the defense that Purchaser has an adequate remedy at law.

 

    	2

    	 

    

 

6.5.                        Special
Severability. The terms and provisions of this Section 2 are intended to be separate and divisible provisions and
if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability
of any other provision of this Agreement shall thereby be affected. The Hemmelgarn Parties acknowledge and agree, and it is the
intention of the parties to this Agreement, that the potential restrictions on the Hemmelgarn Parties’ future employment
and activities imposed by this Section 2 are reasonable in both duration and geographic scope and in all other respects
to protect the legitimate business interests of Purchaser. Further, the Hemmelgarn Parties agree and acknowledge that the Company
is currently engaging in business and actively marketing its services and products throughout North America, and the Company expends
significant time and effort developing and protecting the confidentiality of its Confidential Information. If for any reason any
court of competent jurisdiction shall find any provisions of this Section 2 unreasonable in duration or geographic scope
or otherwise, it is the intention of the parties that the restrictions and prohibitions contained herein shall be reformed and
enforced to the fullest extent allowed under applicable law in such jurisdiction.

 

6.6.                        Tolling
During Periods of Breach. The parties agree and intend that the Hemmelgarn Parties’ obligations under this Section
2 be tolled during any period that the Hemmelgarn Parties are in breach of any of the obligations under this Section 2,
so that Purchaser is provided with the full benefit of the restrictive periods set forth herein.

 

6.7.                       
Fees. If Purchaser (a) brings any action or proceeding to enforce any provision of this Agreement or to obtain damages
as a result of a breach of this Agreement or to enjoin any breach of this Agreement and (b) prevails in such action or proceeding,
then the Hemmelgarn Parties will, in addition to any other rights and remedies available to Purchaser, reimburse Purchaser for
any and all reasonable costs and expenses (including attorneys’ fees) incurred by Purchaser in connection with such action
or proceeding.

 

SECTION
7.          Successors. This
Agreement is personal to the Hemmelgarn Parties and, without the prior express written consent of the Board, shall not be assignable
by the Hemmelgarn Parties. This Agreement shall be binding upon the Hemmelgarn Parties’ heirs, beneficiaries and/or legal
representatives. This Agreement shall inure to the benefit of Purchaser and its respective successors, purchasers and assigns.

 

SECTION
8.          Miscellaneous.

 

8.1.                        Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a business day, or otherwise on the next business day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a business day during business hours,
or otherwise on the next business day.

 

 

    	3

    	 

    

 

	if to Purchaser,
        to:

         

        Bacterin International
        Holdings, Inc.

        600 Cruiser Lane

        Belgrade, MT 59714

        Attn: Chief Executive
        Officer

        Facsimile: (406)
        388-0422
	with a copy to:

         

        Ballard
        Spahr LLP

        1 East Washington Street

        Suite 2300

        Phoenix, AZ 85004

        Attn: Karen C. McConnell

        Facsimile: (602) 798-5595

	 	 
	if to the Hemmelgarn
        Parties, to:

         

        Kenneth J. Hemmelgarn,
        Jr.

        Kenneth J. Hemmelgarn,
        Jr. Revocable Living Trust Dated February 9, 1998, as amended

        2122 Winners Circle

        Dayton, OH 45404

        Facsimile: (937)
        228-1608
	with a copy to:

         

        Dunlevey, Mahan & Furry

        110 N. Main Street, Suite
        1000

        Dayton, OH 45402-1738

        Attn: Donald B. Rineer

        Facsimile: (937) 223-8550

 

8.2.                        Severability.
The unenforceability, illegality or invalidity of any provision of this Agreement shall not affect the enforceability or validity
of any other provision.

 

8.3.                        Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.

 

8.4.                        Governing
Law. This Agreement shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

8.5.                        Headings.
The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Agreement.

 

8.6.                        Entire
Agreement. This Agreement, the Purchase Agreement and the Transaction Documents set forth the entire understanding of
the parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements
and representations, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written,
made by or for any party in connection with the negotiation of the terms hereof.

 

8.7.                        Interpretive
Matters. Unless the context otherwise requires, (a) all references to sections are to Sections in this Agreement; (b)
words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter; and (c) the term “including” means by way of example and
not by way of limitation. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement.

 

    	4

    	 

    

 

8.8.                        Submission
to Jurisdiction. Each of the parties submits to the exclusive jurisdiction of the state or federal courts located in Delaware,
in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or
relating to, this Agreement in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought. Each party agrees that a final judgment in any action so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by applicable law.

 

8.9.                        Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.

 

8.10.                      Amendments.
This Agreement may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by the
parties.

 

[Signature
Page Follows]

 

    	5

    	 

    

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	BACTERIN INTERNATIONAL HOLDINGS, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	 
	 	Kenneth J. Hemmelgarn, Jr.
	 	 
	 	KENNETH J. HEMMELGARN, JR. REVOCABLE LIVING TRUST DATED FEBRUARY
    9, 1998, AS AMENDED
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[Signature
Page to Non-Competition Agreement]

 

    	 

    	 

    

 

NON-COMPETITION
AND NON-SOLICITATION AGREEMENT

 

This Non-Competition
and Non-Solicitation Agreement (this “Agreement”), dated [_________], 2015, is made by and between Bacterin
International Holdings, Inc., a Delaware corporation (the “Purchaser”), and Brian J. Hemmelgarn (“Hemmelgarn”)
and the Brian J. Hemmelgarn Revocable Living Trust Dated February 9, 1998, as amended (“Seller,” and
together with Hemmelgarn, the “Hemmelgarn Parties”).

 

Recitals:

 

In connection
with the closing (the “Closing”) of the transactions contemplated by the Stock Purchase Agreement, dated
as of [__________], 2015, by and among Purchaser, X-spine Systems, Inc., an Ohio corporation (the “Company”),
Seller, and certain other parties (the “Purchase Agreement”), the Hemmelgarn Parties have agreed to
provide the Company with certain restrictive covenants, upon the terms and conditions set forth herein, in order to maintain the
value and goodwill of the business of the Company purchased by Purchaser pursuant to the Purchase Agreement. Capitalized terms
used but not otherwise defined herein shall take their meaning from the Purchase Agreement.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the promises contained herein, and the other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and the Hemmelgarn Parties, intending to be legally bound, agree as follows:

 

SECTION
9.          Effective Date.
This Agreement shall commence on the date hereof (the “Effective Date”).

 

SECTION
10.        Restrictive Covenants. As an inducement
and as essential consideration for Purchaser to consummate the Purchase contemplated by the Purchase Agreement, and as additional
consideration for the payments to which Seller is entitled under the Purchase Agreement, the Hemmelgarn Parties hereby agree to
the restrictive covenants contained in this Section 2. The parties agree that such restrictive covenants are essential
to preserve the goodwill of the business of the Company acquired under the Purchase Agreement and that Purchaser would not have
entered into the Purchase Agreement without the Hemmelgarn Parties’ consent to the restrictive covenants set forth in this
Section 2.

 

10.1.                     
Non-Competition. During the period commencing on the Effective Date and ending on the date that is three years following
the Effective Date (the “Restricted Period”), the Hemmelgarn Parties shall not, without the advance
written consent of the board of directors of Purchaser (the “Board”), such consent to be granted or
withheld in the Board’s sole discretion, either directly or indirectly, as a proprietor, partner, stockholder (except as
the passive holder of not more than 1% of the outstanding stock of a publicly held company), director, executive, employee, consultant,
joint venturer, investor or otherwise, (a) own, manage, operate or control, (b) participate in the ownership, management, operation
or control of, or (c) be employed by and/or perform services for any Person that engages in the marketing and/or selling of spinal
implant products (the “Restricted Business”), in North America. Notwithstanding the foregoing, for purposes
of clarification, “Restricted Business” shall not include the Hemmelgarn Parties’ ownership, management,
operation or control of Norwood Tool Company d/b/a Norwood Medical (“Norwood”), which, in part, is a
contract manufacturer for third parties engaged in the spinal products business, so long as Norwood itself does not sell spinal
products to hospitals or other end-user purchasers of spinal products.

 

    	1

    	 

    

 

10.2.                      Non-Solicitation.
During the Restricted Period, the Hemmelgarn Parties shall not, directly or indirectly, on their own behalf or on behalf
of any other Person, solicit, divert, take away, encourage to terminate or reduce, or otherwise harm the Company’s relationship
with any present or prospective customer of the Company (each, a “Customer”). During the Restricted
Period, the Hemmelgarn Parties shall not, directly or indirectly, on their own behalf or on behalf of any other Person, solicit,
employ, engage, interfere with, or attempt to entice away from the Company, any individual who either (i) is employed by or engaged
as an independent contractor consultant to the Company at the time of the solicitation, or (ii) has been so employed or engaged
within six months prior to the time of solicitation. During the Restricted Period, the Hemmelgarn Parties shall not, directly
or indirectly, on their own behalf or on behalf of any other Person, harm the Company’s relationship, or attempt to harm
the Company’s relationship, with any landlord or supplier; provided the foregoing shall not apply with respect to Norwood
and the parties acknowledge that the Hemmelgarn Parties may operate Norwood in their sole discretion.

 

10.3.                     
Confidentiality. The Hemmelgarn Parties shall not, without the advance written consent of the Board, directly or
indirectly divulge, disclose or make available or accessible any Confidential Information to any Person, other than to enforce
their rights under the Purchase Agreement or Transaction Documents, or when required to do so by a lawful order of a court of
competent jurisdiction, any governmental authority or agency, or any recognized subpoena power, or in connection with the Hemmelgarn
Parties’ continued employment with the Company or Purchaser, if applicable. In addition, the Hemmelgarn Parties shall not
create any derivative work or other product based on or resulting from any Confidential Information, and shall proffer to the
Board’s designee, on or promptly (and in any event, within five Business Days) following the Effective Date, and without
retaining any copies, notes or excerpts thereof, all memoranda, computer disks or other media, computer programs, diaries, notes,
records, data, customer or client lists, marketing plans and strategies, and any other documents consisting of or containing Confidential
Information that are in the Hemmelgarn Parties’ actual or constructive possession or which are subject to its control at
such time.

 

10.4.                      Injunctive
Relief. The Hemmelgarn Parties acknowledge and agree that Purchaser will have no adequate remedy at law and would be irreparably
harmed, if the Hemmelgarn Parties actually breach or threaten to breach any of the provisions of this Section 2. The Hemmelgarn
Parties agree that Purchaser shall be entitled to equitable and/or injunctive relief to prevent any actual breach or threatened
breach of this Section 2, and to specific performance of each of the terms of such Section 2, without the need for
posting a bond or other security and in addition to any other legal or equitable remedies that Purchaser may have. The Hemmelgarn
Parties further agree that they shall not, in any equity proceeding relating to the enforcement of the terms of this Section
2, raise the defense that Purchaser has an adequate remedy at law.

 

    	2

    	 

    

 

10.5.                      Special
Severability. The terms and provisions of this Section 2 are intended to be separate and divisible provisions and
if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability
of any other provision of this Agreement shall thereby be affected. The Hemmelgarn Parties acknowledge and agree, and it is the
intention of the parties to this Agreement, that the potential restrictions on the Hemmelgarn Parties’ future employment
and activities imposed by this Section 2 are reasonable in both duration and geographic scope and in all other respects
to protect the legitimate business interests of Purchaser. Further, the Hemmelgarn Parties agree and acknowledge that the Company
is currently engaging in business and actively marketing its services and products throughout North America, and the Company expends
significant time and effort developing and protecting the confidentiality of its Confidential Information. If for any reason any
court of competent jurisdiction shall find any provisions of this Section 2 unreasonable in duration or geographic scope
or otherwise, it is the intention of the parties that the restrictions and prohibitions contained herein shall be reformed and
enforced to the fullest extent allowed under applicable law in such jurisdiction.

 

10.6.                      Tolling
During Periods of Breach. The parties agree and intend that the Hemmelgarn Parties’ obligations under this Section
2 be tolled during any period that the Hemmelgarn Parties are in breach of any of the obligations under this Section 2,
so that Purchaser is provided with the full benefit of the restrictive periods set forth herein.

 

10.7.                     
Fees. If Purchaser (a) brings any action or proceeding to enforce any provision of this Agreement or to obtain damages
as a result of a breach of this Agreement or to enjoin any breach of this Agreement and (b) prevails in such action or proceeding,
then the Hemmelgarn Parties will, in addition to any other rights and remedies available to Purchaser, reimburse Purchaser for
any and all reasonable costs and expenses (including attorneys’ fees) incurred by Purchaser in connection with such action
or proceeding.

 

SECTION
11.         Successors. This Agreement
is personal to the Hemmelgarn Parties and, without the prior express written consent of the Board, shall not be assignable by
the Hemmelgarn Parties. This Agreement shall be binding upon the Hemmelgarn Parties’ heirs, beneficiaries and/or legal representatives.
This Agreement shall inure to the benefit of Purchaser and its respective successors, purchasers and assigns.

 

SECTION
12.        Miscellaneous.

 

12.1.                      Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a business day, or otherwise on the next business day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a business day during business hours,
or otherwise on the next business day.

 

    	3

    	 

    

 

	if to Purchaser,
        to:

         

        Bacterin International
        Holdings, Inc.

        600 Cruiser Lane

        Belgrade, MT 59714

        Attn: Chief Executive
        Officer

        Facsimile: (406)
        388-0422
	with a copy to:

         

        Ballard
        Spahr LLP

        1 East Washington Street

        Suite 2300

        Phoenix, AZ 85004

        Attn: Karen C. McConnell

        Facsimile: (602) 798-5595

	 	 
	if to the Hemmelgarn
        Parties, to:

         

        Brian J. Hemmelgarn

        Brian J. Hemmelgarn
        Revocable Living Trust Dated February 9, 1998, as amended

        2122 Winners Circle

        Dayton, OH 45404

        Facsimile: (937)
        228-1608
	with a copy to:

         

        Dunlevey, Mahan & Furry

        110 N. Main Street, Suite
        1000

        Dayton, OH 45402-1738

        Attn: Donald B. Rineer

        Facsimile: (937) 223-8550

 

12.2.                      Severability.
The unenforceability, illegality or invalidity of any provision of this Agreement shall not affect the enforceability or validity
of any other provision.

 

12.3.                      Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.

 

12.4.                      Governing
Law. This Agreement shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

12.5.                      Headings.
The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Agreement.

 

12.6.                      Entire
Agreement. This Agreement, the Purchase Agreement and the Transaction Documents set forth the entire understanding of
the parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements
and representations, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written,
made by or for any party in connection with the negotiation of the terms hereof.

 

12.7.                      Interpretive
Matters. Unless the context otherwise requires, (a) all references to sections are to Sections in this Agreement; (b)
words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter; and (c) the term “including” means by way of example and
not by way of limitation. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event
an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this
Agreement.

 

    	4

    	 

    

 

12.8.                      Submission
to Jurisdiction. Each of the parties submits to the exclusive jurisdiction of the state or federal courts located in Delaware,
in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or
relating to, this Agreement in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought. Each party agrees that a final judgment in any action so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by applicable law.

 

12.9.                      Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.

 

12.10.                    Amendments.
This Agreement may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by the
parties.

 

[Signature
Page Follows]

 

    	5

    	 

    

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	 	BACTERIN INTERNATIONAL HOLDINGS, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	 
	 	Brian J. Hemmelgarn
	 	 
	 	BRIAN J. HEMMELGARN REVOCABLE LIVING TRUST DATED FEBRUARY 9, 1998,
    AS AMENDED
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[Signature
Page to Non-Competition Agreement]

 

    	 

    	 

    

 

EXHIBIT
C

 

Lock-Up
Agreement

 

    	C-1

    	 

    

 

[__________],
2015

 

Bacterin International Holdings,
Inc.

600 Cruiser Lane

Belgrade, MT 59714

Attention: Chief Executive Officer

 

 

Re:        Lock-Up Agreement

 

Ladies and Gentlemen:

 

Reference
is made to that certain Stock Purchase Agreement, dated [__________], 2015 (the “Purchase Agreement”),
by and among Bacterin International Holdings, Inc., a Delaware corporation (the “Purchaser”), X-spine
Systems, Inc., an Ohio corporation (the “Company”), David L. Kirschman, M.D. (“Kirschman”),
the Kenneth J. Hemmelgarn, Jr. Revocable Living Trust Dated February 9, 1998, as amended (the “K. Hemmelgarn 1998
Trust”), the Brian J. Hemmelgarn Revocable Living Trust Dated February 9, 1998, as amended (the “B.
Hemmelgarn 1998 Trust”), the Kenneth J. Hemmelgarn, Jr. Second Trust Dated March 18, 2010 (the “K. Hemmelgarn
2010 Trust”), and the Brian J. Hemmelgarn Second Trust Dated March 18, 2010 (the “B. Hemmelgarn 2010
Trust,” and collectively with Kirschman, the K. Hemmelgarn 1998 Trust, the B. Hemmelgarn 1998 Trust, the K. Hemmelgarn
2010 Trust, and the B. Hemmelgarn 2010 Trust, the “Sellers”), pursuant to which Sellers will sell and
transfer to Purchaser, and Purchaser will acquire from Sellers, the Outstanding Shares of the Company (the “Purchase”).
In connection with the Purchase, Purchaser will issue Purchaser Common Stock to certain of the Sellers in reliance on one or more
exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and exemptions from the qualification requirements of applicable state law. Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings given to such terms in the Purchase Agreement.

 

In
order to induce Purchaser to enter into the Purchase Agreement, the undersigned Seller hereby executes this Lock-Up Agreement
and agrees with Purchaser as follows.

 

The
undersigned will not engage in any of the following dispositive actions with respect to the shares of Purchaser Common Stock issued
to the undersigned in the Purchase (the “Shares”) for a period of one year following the Closing Date:
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly,
the Shares or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of
the Shares, in cash or otherwise (“Dispositive Actions”). The restrictions set forth in this paragraph
shall not apply to (1) any transfers made by the undersigned (a) as a bona fide gift to any member of the immediate family
(as defined below) of the undersigned or to a trust, the beneficiaries of which are exclusively the undersigned or members of
the undersigned’s immediate family, (b) by will or intestate succession upon the death of the undersigned or (c) as
a bona fide gift to a charity or educational institution, or (2) if the undersigned is a trust, the distribution by the trust
of the Shares to its beneficiaries; provided, however, that it shall be a condition to any such transfer that the
transferee executes and delivers to Purchaser, not later than one business day prior to such transfer, a written agreement, in
substantially the form of this letter agreement and otherwise satisfactory in form and substance to the Purchaser. For purposes
of this paragraph, “immediate family” shall mean a spouse, domestic partner, child, grandchild or other lineal descendant
(including by adoption), father, mother, brother or sister of the undersigned.

 

    	 

    	 

    

 

The
undersigned acknowledges that the Shares issued to the undersigned in the Purchase are characterized as “restricted securities”
under the Securities Act inasmuch as they are being acquired from Purchaser in a transaction not involving a public offering and
that, consequently, such Shares may be resold only pursuant to an exemption from registration under the Securities Act. The undersigned
acknowledges and agrees that any certificate issued to the undersigned respecting the Shares will bear a restricted legend, including
a legend referencing this Lock-Up Agreement.

 

This
Lock-Up Agreement will be binding upon and inure to the benefit of the undersigned and its successors and permitted assigns. This
Lock-Up Agreement may be executed in any number of counterparts, each of which will be an original and all of which together will
constitute one and the same instrument.

 

The
parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Lock-Up Agreement were
not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall
be entitled to seek an injunction to prevent breaches of this Lock-Up Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, without the need to post any bond or other security
therefor.

 

Any
term or provision of this Lock-Up Agreement may be amended, and the observance of any term of this Lock-Up Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively), only by a writing signed by the undersigned
and Purchaser.

 

[Signature
Page Follows]

 

    	2

    	 

    

 

	 	Very truly yours,
	 	 
	 	 
	 	Signature
	 	 
	 	 
	 	Name (Please Type or Print)
	 	 
	 	 
	 	Name and Title if signing on behalf an entity
	 	 
	 	 
	 	Address
	 	 
	 	 
	 	City, State and Zip Code

 

	Agreed to and Accepted:	 
	 	 
	Bacterin International Holdings, Inc.	 
	 	 
	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 

 

[Signature
Page to Lock-Up Agreement]

 

    	 

    	 

    

 

exhibit
D

 

guarantIes

 

    	D-1

    	 

    

 

GUARANTY

 

This Guaranty
(“Guaranty”), dated [_________], 2015, is made by Kenneth J. Hemmelgarn, Jr. (“Guarantor”),
in favor of Bacterin International Holdings, Inc., a Delaware corporation (the “Purchaser”).

 

Recitals:

 

In connection
with the closing of the transactions contemplated by the Stock Purchase Agreement, dated as of [__________], 2015, by and among
Purchaser, X-spine Systems, Inc., an Ohio corporation, and certain selling parties (the “Purchase Agreement”),
Guarantor has agreed to guarantee the obligations of the K. Hemmelgarn 1998 Trust and K. Hemmelgarn 2010 Trust (together, the
“Trusts”) owed to Purchaser under the Purchase Agreement, upon the terms and conditions set forth herein.
Capitalized terms used but not otherwise defined herein shall take their meaning from the Purchase Agreement.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the promises contained herein, and the other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Guarantor, intending to be legally bound, agrees as follows:

 

SECTION
13.         Affirmation and Guaranty of Guarantor.
Guarantor hereby represents and warrants that he is in control of and a direct or indirect beneficiary of the K. Hemmelgarn 1998
Trust and the grantor of the K. Hemmelgarn 2010 Trust, and will receive value under the Purchase Agreement, including some of
the Purchase Consideration that the Sellers receive from Purchaser pursuant to the Purchase Agreement. As a result, and in order
to induce Purchaser to enter into the Purchase Agreement, to pay the Purchase Consideration and as security for the performance
of the Trusts’ obligations under the Purchase Agreement, Guarantor unconditionally guarantees the full and prompt payment
and performance of all obligations of the Trusts to Purchaser arising out of or in connection with the Purchase Agreement. This
guaranty is an absolute, complete and continuing guaranty and shall be fully binding upon and enforceable against Guarantor. Guarantor
acknowledges that because he is in control of and is a beneficiary of the K. Hemmelgarn 1998 Trust that will receive a portion
of the Purchase Consideration, but may distribute such consideration to Guarantor pursuant to the applicable trust agreement,
and because he is the grantor of the K. Hemmelgarn 2010 Trust, without this guaranty Purchaser would not have agreed to consummate
the transactions contemplated by the Purchase Agreement. Guarantor may not rescind or revoke his obligations hereunder and his
liabilities hereunder shall be absolute, unconditional and irrevocable irrespective of the failure of Purchaser to exercise any
available rights or remedies against any other Person, any amendment to or waiver of the Purchase Agreement that does not expressly
reference this Guaranty, or the insolvency or bankruptcy of, or similar event affecting the Trusts.

 

    	 

    	 

    

 

SECTION
14.         Miscellaneous.

 

14.1.                      Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Guaranty
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a business day, or otherwise on the next business day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a business day during business hours,
or otherwise on the next business day.

 

	if to Guarantor,
        to:

         

        Kenneth J. Hemmelgarn,
        Jr.

        2122 Winners Circle

        Dayton, OH 45404

        Facsimile: (937)
        228-1608
	with a copy to:

         

        Dunlevey, Mahan & Furry

        110 N. Main Street, Suite
        1000

        Dayton, OH 45402-1738

        Attn: Donald B. Rineer

        Facsimile: (937) 223-8550

 

14.2.                      Severability.
The unenforceability, illegality or invalidity of any provision of this Guaranty shall not affect the enforceability or validity
of any other provision.

 

14.3.                      Governing
Law. This Guaranty shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

14.4.                      Headings.
The section headings of this Guaranty are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Guaranty.

 

14.5.                      Entire
Agreement. This Guaranty, the Purchase Agreement and the Transaction Documents set forth the entire understanding of the
parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and
representations, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made
by or for any party in connection with the negotiation of the terms hereof.

 

14.6.                      Interpretive
Matters. Unless the context otherwise requires, (a) all references to sections are to Sections in this Guaranty; (b) words
in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter; and (c) the term “including” means by way of example and not by
way of limitation. The parties have participated jointly in the negotiation and drafting of this Guaranty. In the event an ambiguity
or question of intent arises, this Guaranty shall be construed as if drafted jointly by the parties, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Guaranty.

 

14.7.                      Submission
to Jurisdiction. Guarantor submits to the exclusive jurisdiction of the state or federal courts located in Delaware, in
any action or proceeding arising out of, or relating to, this Guaranty, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or relating to,
this Guaranty in any other court. Guarantor waives any defense of inconvenient forum to the maintenance of any action or proceeding
so brought. Guarantor agrees that a final judgment in any action so brought shall be conclusive and may be enforced by suit on
the judgment or in any other manner provided by applicable law.

 

    	2

    	 

    

 

14.8.                      Waiver
of Jury Trial. GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF, OR RELATING TO, THIS GUARANTY.

 

14.9.                      Amendments.
This Guaranty may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by Guarantor
and approved by Purchaser.

 

[Signature
Page Follows]

 

    	3

    	 

    

 

IN WITNESS
WHEREOF, Guarantor has executed this Guaranty as of the date first written above.

 

	 	 
	 	Kenneth J. Hemmelgarn, Jr.

 

[Signature
Page to Guaranty]

 

    	 

    	 

    

 

GUARANTY

 

This Guaranty
(“Guaranty”), dated [_________], 2015, is made by Brian J. Hemmelgarn (“Guarantor”),
in favor of Bacterin International Holdings, Inc., a Delaware corporation (the “Purchaser”).

 

Recitals:

 

In connection
with the closing of the transactions contemplated by the Stock Purchase Agreement, dated as of [__________], 2015, by and among
Purchaser, X-spine Systems, Inc., an Ohio corporation, and certain selling parties (the “Purchase Agreement”),
Guarantor has agreed to guarantee the obligations of the B. Hemmelgarn 1998 Trust and B. Hemmelgarn 2010 Trust (together, the
“Trusts”) owed to Purchaser under the Purchase Agreement, upon the terms and conditions set forth herein.
Capitalized terms used but not otherwise defined herein shall take their meaning from the Purchase Agreement.

 

Agreements:

 

NOW, THEREFORE,
in consideration of the promises contained herein, and the other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Guarantor, intending to be legally bound, agrees as follows:

 

SECTION
15.         Affirmation and Guaranty of Guarantor.
Guarantor hereby represents and warrants that he is in control of and a direct or indirect beneficiary of the B. Hemmelgarn 1998
Trust and the grantor of the B. Hemmelgarn 2010 Trust, and will receive value under the Purchase Agreement, including some of
the Purchase Consideration that the Sellers receive from Purchaser pursuant to the Purchase Agreement. As a result, and in order
to induce Purchaser to enter into the Purchase Agreement, to pay the Purchase Consideration and as security for the performance
of the Trusts’ obligations under the Purchase Agreement, Guarantor unconditionally guarantees the full and prompt payment
and performance of all obligations of the Trusts to Purchaser arising out of or in connection with the Purchase Agreement. This
guaranty is an absolute, complete and continuing guaranty and shall be fully binding upon and enforceable against Guarantor. Guarantor
acknowledges that because he is in control of and is a beneficiary of the B. Hemmelgarn 1998 Trust that will receive a portion
of the Purchase Consideration, but may distribute such consideration to Guarantor pursuant to the applicable trust agreements,
and because he is the grantor of the B. Hemmelgarn 2010 Trust, without this guaranty Purchaser would not have agreed to consummate
the transactions contemplated by the Purchase Agreement. Guarantor may not rescind or revoke his obligations hereunder and his
liabilities hereunder shall be absolute, unconditional and irrevocable irrespective of the failure of Purchaser to exercise any
available rights or remedies against any other Person, any amendment to or waiver of the Purchase Agreement that does not expressly
reference this Guaranty, or the insolvency or bankruptcy of, or similar event affecting the Trusts.

 

    	 

    	 

    

 

SECTION
16.        Miscellaneous.

 

16.1.                      Notices.
All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Guaranty
shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if personally delivered by
hand, (b) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified
mail, postage prepaid, return receipt requested, (c) upon the date scheduled for delivery after such notice is sent by a
nationally recognized overnight express courier if the delivery date is a business day, or otherwise on the next business day,
or (d) by fax upon written confirmation (including the automatic confirmation that is received from the recipient’s
fax machine) of receipt by the recipient of such notice if such confirmation is received on a business day during business hours,
or otherwise on the next business day.

 

	if to Guarantor,
        to:

         

        Brian J. Hemmelgarn

        2122 Winners Circle

        Dayton, OH 45404

        Facsimile: (937)
        228-1608
	with a copy to:

         

        Dunlevey, Mahan & Furry

        110 N. Main Street, Suite
        1000

        Dayton, OH 45402-1738

        Attn: Donald B. Rineer

        Facsimile: (937) 223-8550

 

16.2.                      Severability.
The unenforceability, illegality or invalidity of any provision of this Guaranty shall not affect the enforceability or validity
of any other provision.

 

16.3.                      Governing
Law. This Guaranty shall be construed and governed in accordance with the Applicable Laws of the State of Delaware, without
regard to its Applicable Laws regarding conflicts of law.

 

16.4.                      Headings.
The section headings of this Guaranty are included for reference purposes only and shall not affect the construction or interpretation
of any of the provisions of this Guaranty.

 

16.5.                      Entire
Agreement. This Guaranty, the Purchase Agreement and the Transaction Documents set forth the entire understanding of the
parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and
representations, and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made
by or for any party in connection with the negotiation of the terms hereof.

 

16.6.                      Interpretive
Matters. Unless the context otherwise requires, (a) all references to sections are to Sections in this Guaranty; (b) words
in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter; and (c) the term “including” means by way of example and not by
way of limitation. The parties have participated jointly in the negotiation and drafting of this Guaranty. In the event an ambiguity
or question of intent arises, this Guaranty shall be construed as if drafted jointly by the parties, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Guaranty.

 

16.7.                      Submission
to Jurisdiction. Guarantor submits to the exclusive jurisdiction of the state or federal courts located in Delaware, in
any action or proceeding arising out of, or relating to, this Guaranty, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any action or proceeding arising out of, or relating to,
this Guaranty in any other court. Guarantor waives any defense of inconvenient forum to the maintenance of any action or proceeding
so brought. Guarantor agrees that a final judgment in any action so brought shall be conclusive and may be enforced by suit on
the judgment or in any other manner provided by applicable law.

 

    	2

    	 

    

 

16.8.                      Waiver
of Jury Trial. GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF, OR RELATING TO, THIS GUARANTY.

 

16.9.                      Amendments.
This Guaranty may not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by Guarantor
and approved by Purchaser.

 

[Signature
Page Follows]

 

    	3

    	 

    

 

IN WITNESS
WHEREOF, Guarantor has executed this Guaranty as of the date first written above.

 

	 	 
	 	Brian J. Hemmelgarn

 

[Signature
Page to Guaranty]Exhibit 10.2

 

Execution Version

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of July 27, 2015

 

by and among

 

BACTERIN INTERNATIONAL, INC.,

 

as the Borrower,

 

The Lenders Party Hereto,

 

and

 

ROS
Acquisition Offshore LP

 

as the Administrative Agent

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	Page
	 	 
	Article I DEFINITIONS AND ACCOUNTING TERMS
	SECTION 1.1 Defined Terms.	1
	SECTION 1.2 Use of Defined Terms.	20
	SECTION 1.3 Cross-References.	20
	SECTION 1.4 Accounting and Financial Determinations.	20
	 	 
	Article II COMMITMENT and BORROWING procedures
	SECTION 2.1 Restatement Date Transactions.	21
	SECTION 2.2 Loans and Borrowing.	21
	SECTION 2.3 Borrowing Procedure.	21
	SECTION 2.4 Funding.	21
	SECTION 2.5 Reduction of the Commitment Amounts.	21
	 	 
	Article III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
	SECTION 3.1 Repayments and Prepayments; Application.	21
	SECTION 3.2 Repayments and Prepayments.	22
	SECTION 3.3 Application.	22
	SECTION 3.4 Interest Rate.	23
	SECTION 3.5 Default Rate.	24
	SECTION 3.6 Payment Dates.	24
	 	 
	Article IV LIBO RATE AND OTHER PROVISIONS
	SECTION 4.1 Increased Costs, Etc.	25
	SECTION 4.2 Increased Capital Costs.	25
	SECTION 4.3 Taxes.	25
	SECTION 4.4 Payments, Computations; Proceeds of Collateral, Etc.	29
	SECTION 4.5 Setoff.	30
	SECTION 4.6 LIBO Rate Not Determinable.	30
	 	 
	Article V CONDITIONS TO Making the LOANs
	SECTION 5.1 Credit Extensions.	30
	 	 
	Article VI REPRESENTATIONS AND WARRANTIES
	SECTION 6.1 Organization, Etc.	35
	SECTION 6.2 Due Authorization, Non-Contravention, Etc.	35
	SECTION 6.3 Government Approval, Regulation, Etc.	35
	SECTION 6.4 Validity, Etc.	35
	SECTION 6.5 Financial Information.	35
	SECTION 6.6 No Material Adverse Change.	36
	SECTION 6.7 Litigation, Labor Matters and Environmental Matters.	36
	SECTION 6.8 Subsidiaries.	36
	SECTION 6.9 Ownership of Properties.	37
	SECTION 6.10 Taxes.	37
	SECTION 6.11 Benefit Plans, Etc.	37
	SECTION 6.12 Accuracy of Information.	37
	SECTION 6.13 Regulations U and X.	37
	SECTION 6.14 Solvency.	38

 

    	- ii -

    	 

    

  

TABLE OF CONTENTS

 

	 	Page
	 	 
	SECTION 6.15 Intellectual Property.	38
	SECTION 6.16 Material Agreements.	39
	SECTION 6.17 Permits.	39
	SECTION 6.18 Regulatory Matters.	39
	SECTION 6.19 Transactions with Affiliates.	42
	SECTION 6.20 Investment Company Act.	42
	SECTION 6.21 OFAC.	42
	SECTION 6.22 Holdings.	43
	SECTION 6.23 Deposit and Disbursement Accounts.	43
	 	 
	Article VII AFFIRMATIVE COVENANTS
	SECTION 7.1 Financial Information, Reports, Notices, Etc.	43
	SECTION 7.2 Maintenance of Existence; Compliance with Contracts, Laws, Etc.	46
	SECTION 7.3 Maintenance of Properties.	46
	SECTION 7.4 Insurance.	46
	SECTION 7.5 Books and Records.	47
	SECTION 7.6 Environmental Law Covenant.	47
	SECTION 7.7 Use of Proceeds.	47
	SECTION 7.8 Future Guarantors, Security, Etc.	47
	SECTION 7.9 Obtaining of Permits, Etc.	48
	SECTION 7.10 Product Licenses.	48
	SECTION 7.11 Maintenance of Regulatory Authorizations, Contracts, Intellectual Property, Etc.	48
	SECTION 7.12 Inbound Licenses.	49
	SECTION 7.13 Cash Management.	49
	SECTION 7.14 [Intentionally Omitted].	49
	SECTION 7.15 [Intentionally Omitted].	49
	SECTION 7.16 Board Observation Rights.	50
	 	 
	Article VIII negativE COVENANTS
	SECTION 8.1 Business Activities.	51
	SECTION 8.2 Indebtedness.	51
	SECTION 8.3 Liens.	51
	SECTION 8.4 Financial Covenants.	52
	SECTION 8.5 Investments.	54
	SECTION 8.6 Restricted Payments, Etc.	55
	SECTION 8.7 Consolidation, Merger; Permitted Acquisitions, Etc.	55
	SECTION 8.8 Permitted Dispositions.	55
	SECTION 8.9 Modification of Certain Agreements.	55
	SECTION 8.10 Transactions with Affiliates.	56
	SECTION 8.11 Restrictive Agreements, Etc.	56
	SECTION 8.12 Sale and Leaseback.	56
	SECTION 8.13 Product Agreements.	56
	SECTION 8.14 Change in Name, Location, Executive Office, or Executive Management; Change in Fiscal Year.	57
	SECTION 8.15 Benefit Plans.	56
	SECTION 8.16 Holdings.	57

 

    	- iii -

    	 

    

  

TABLE OF CONTENTS

 

	 	Page
	 	 
	Article IX EVENTS OF DEFAULT
	SECTION 9.1 Listing of Events of Default.	57
	SECTION 9.2 Action if Bankruptcy.	60
	SECTION 9.3 Action if Other Event of Default.	60
	 	 
	Article X THe Administrative agent
	SECTION 10.1 Administrative Agent; Actions, Etc.	61
	SECTION 10.2 Administrative Agent Appointed Attorney-in-Fact	64
	SECTION 10.3 Register	64
	 	 
	Article XI MISCELLANEOUS PROVISIONS
	SECTION 11.1 Waivers, Amendments, Etc.	64
	SECTION 11.2 Notices; Time.	65
	SECTION 11.3 Payment of Costs and Expenses.	65
	SECTION 11.4 Indemnification.	66
	SECTION 11.5 Survival.	66
	SECTION 11.6 Severability.	66
	SECTION 11.7 Headings.	66
	SECTION 11.8 Execution in Counterparts, Effectiveness, Etc.	67
	SECTION 11.9 Governing Law; Entire Agreement.	67
	SECTION 11.10 Successors and Assigns.	67
	SECTION 11.11 Other Transactions.	67
	SECTION 11.12 Forum Selection and Consent to Jurisdiction.	67
	SECTION 11.13 Waiver of Jury Trial.	68
	SECTION 11.14 Confidentiality.	69
	SECTION 11.15 Exceptions to Confidentiality.	68
	SECTION 11.16 Remedies.	69

 

SCHEDULES:

 

	Schedule 2.1	Lenders on the Restatement Date
	Schedule 6.6	Material Adverse Change
	Schedule 6.7(a)	Litigation
	Schedule 6.7(b)	Labor Controversies
	Schedule 6.8	Existing Subsidiaries
	Schedule 6.15(a)	Intellectual Property
	Schedule 6.15(b)	Intellectual Property Proceedings
	Schedule 6.15(c)	Infringement Notices Sent
	Schedule 6.15(e)	Infringement Notices Received
	Schedule 6.16	Material Agreements
	Schedule 6.18(a)	Regulatory Authorizations
	Schedule 6.18(b)	Regulatory Actions
	Schedule 6.18(c)	Regulatory Compliance

 

    	- iv -

    	 

    

 

 

TABLE OF CONTENTS

 

	Schedule 6.18(d)	Organ Transplant Compliance
	Schedule 6.19	Transactions with Affiliates
	Schedule 6.21	Regulatory Compliance
	Schedule 6.23	Deposit and Disbursement Accounts
	Schedule 7.7	Use of Proceeds
	Schedule 8.2(b)	Indebtedness to be Paid
	Schedule 8.2(c)	Existing Indebtedness
	Schedule 8.3(c)	Existing Liens
	Schedule 8.5(a)	Investments
	Schedule 8.16	Holdings’ Agreements
	Schedule 11.2	Notice Information

 

EXHIBITS:

 

	Exhibit A	-	Form of Promissory Note
	Exhibit B	-	Form of Loan Request
	Exhibit C	-	Form of Compliance Certificate
	Exhibit D	-	Form of Guarantee
	Exhibit E	-	Form of Security Agreement
	Exhibit F	-	Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders That Are Not Partnerships)
	Exhibit G	-	Form of U.S. Tax Compliance Certificate (Non-U.S. Participants That Are Not Partnerships)
	Exhibit H	-	Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders That Are Partnerships)
	Exhibit I	-	Form of U.S. Tax Compliance Certificate (Non-U.S. Participants That Are Partnerships)

 

    	- v -

    	 

    

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 27, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to
time, this “Agreement”), is by and among BACTERIN INTERNATIONAL, INC., a Nevada corporation (the “Borrower”),
ROS Acquisition Offshore LP, a Cayman Islands Exempted Limited Partnership (together
with its Affiliates, successors, transferees and assignees, “ROS”), as lender and as “Administrative Agent”
for the lenders pursuant to Section 10.1.1 hereof, and ORBIMED ROYALTY OPPORTUNITIES II, LP, a Delaware limited partnership
(together with its Affiliates, successors, transferees and assignees, “Royalty Opportunities” and together with
ROS, each individually a “Lender” and collectively, the “Lenders”).

 

WITNESSETH:

 

WHEREAS, Holdings (such term and each other
capitalized term used but not otherwise defined herein having the meaning assigned to it in Article I), X-spine Systems, Inc.,
an Ohio corporation (the “Target”), David L. Kirschman, M.D., the Kenneth J. Hemmelgarn, Jr. Revocable Living
Trust Dated February 9, 1998, as amended, the Brian J. Hemmelgarn Revocable Living Trust Dated February 9, 1998, as amended, the
Kenneth J. Hemmelgarn, Jr. Second Children’s Trust Dated March 18, 2010, and the Brian J. Hemmelgarn Second Children’s
Trust Dated March 18, 2010, have entered into a Stock Purchase Agreement dated as of the date hereof (the “Acquisition
Agreement”);

 

WHEREAS, pursuant to the Acquisition Agreement,
Holdings has agreed to acquire, 100% of the issued and outstanding shares of capital stock of the Target (the “Acquisition”);

 

WHEREAS, on the date hereof, the parties
to the 2012 Royalty Agreement have agreed to terminate the 2012 Royalty Agreement, effective on the Restatement Date;

 

WHEREAS, the Borrower has requested that
the Lenders agree to amend and restate the Existing Credit Agreement in order to continue the existing Loans thereunder and provide
$18,000,000 of additional Loans hereunder to finance a portion of the Acquisition; and

 

WHEREAS, the Lenders are willing, on the
terms and subject to the conditions hereinafter set forth, to continue Loans under the Existing Credit Agreement, extend the Commitment,
make the new Loans to the Borrower and amend and restate the Existing Credit Agreement in the form hereof;

 

NOW, THEREFORE, the parties hereto agree
as follows.

 

Article
I

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1 Defined
Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to
the singular and plural forms thereof):

 

    	 

    	 

    

 

“2012 Royalty Agreement”
means the Royalty Agreement, dated as of August 24, 2012 (as amended, supplemented or otherwise modified from time to time), by
and between ROS Acquisition Offshore LP, a Cayman Islands Exempted Limited Partnership, and Bacterin International, Inc., a Nevada
corporation.

 

“361 Product” means a
human cellular or tissue-based product that meets the criteria under 21 C.F.R. § 1271.10 and is subject to regulation under
Section 361 of the Public Health Services Act and 21 C.F.R. Part 1271, but is not regulated under Section 351 of the Public Health
Services Act or regulated as drug, biologic, or medical device.

 

“Acquisition” is defined
in the preamble.

 

“Acquisition Agreement”
is defined in the preamble.

 

“Additional PIK Interest”
is defined in Section 3.4(b)(ii).

 

“Administrative Agent”
is defined in the Section 10.1.1(a).

 

“Affiliate” of any Person
means any other Person which, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. “Control”
(and its correlatives) by any Person means the power of such Person, directly or indirectly, (i) to vote 10% or more of the Voting
Securities (determined on a fully diluted basis) of another Person or (ii) to direct or cause the direction of the management and
policies of such other Person (whether by contract or otherwise).

 

“Agreement” is defined
in the preamble.

 

“Applicable Margin” means
14.00%.

 

“Authorized Officer”
means, relative to Holdings, the Borrower or any of the Subsidiaries, those of its officers, general partners or managing members
(as applicable) whose signatures and incumbency shall have been certified to the Lenders pursuant to Section 5.1.1.

 

“Benefit Plan” means
any employee benefit plan, as defined in section 3(3) of ERISA, that either: (i) is a “multiemployer plan,” as defined
in section 3(37) of ERISA, (ii) is subject to section 412 of the Code, section 302 of ERISA or Title IV of ERISA or (iii) provides
welfare benefits to terminated employees, other than to the extent required by section 4980B(f) of the Code and the corresponding
provisions of ERISA.

 

“BLA” means (a)
(i) a biologics license application (as defined in the Public Health Services Act, 42 U.S.C. § 262) for authorization
to introduce, or deliver for introduction, a biologic product into commerce in the U.S., or any successor application or procedure;
and (ii) any similar application or functional equivalent relating to market authorization for biologics applicable to or required
by any country, jurisdiction or Governmental Authority other than the U.S.; and (b) all supplements and amendments that may be
filed with respect to the foregoing.

 

    	- 2 -

    	 

    

 

“Borrower” is defined
in the preamble.

 

“Business Day” means
any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York, or the Cayman Islands.

 

“Capital Securities”
means, with respect to any Person, all shares of, interests or participations in, or other equivalents in respect of (in each case
however designated, whether voting or non-voting), of such Person’s capital stock, whether now outstanding or issued after
the Restatement Date; provided that the Convertible Notes shall be deemed not to be Capital Securities for all purposes hereof.

 

“Capitalized Lease Liabilities”
means, with respect to any Person, all monetary obligations of such Person and its Subsidiaries under any leasing or similar arrangement
which have been (or, in accordance with GAAP, should be) classified as capitalized leases, and for purposes of each Loan Document
the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a premium or a penalty.

 

“Cash Equivalent Investment”
means, at any time:

 

(a) any direct obligation of (or
unconditionally guaranteed by) the United States (or any agency or political subdivision thereof, to the extent such obligations
are supported by the full faith and credit of the United States) maturing not more than one year after such time;

 

(b) commercial paper maturing
not more than 270 days from the date of issue, which is issued by a corporation (other than an Affiliate of the Borrower or any
of its Subsidiaries) organized under the laws of any state of the United States or of the District of Columbia and rated A-1 or
higher by S&P or P-1 or higher by Moody’s; or

 

(c) any certificate of deposit,
time deposit or bankers acceptance, maturing not more than 180 days after its date of issuance, which is issued by any bank organized
under the laws of the United States (or any state thereof) and which has (x) a credit rating of A2 or higher from Moody’s
or A or higher from S&P and (y) a combined capital and surplus greater than $500,000,000.

 

“Casualty Event” means
the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries.

 

“cGTP” means Current
Good Tissue Practices, including the requirements for registration, donor eligibility screening, and the processing and distribution
of tissue-based products, as set forth in 21 C.F.R. § 1271 and guidance documents.

 

    	- 3 -

    	 

    

 

“Change in Control” means
and shall be deemed to have occurred if (i) any “person” or “group” (within the meaning of Rule 13d-5
of the Securities Exchange Act of 1934 as in effect on the date hereof) shall own, directly or indirectly, beneficially or of record,
determined on a fully diluted basis, more than 35% of the Voting Securities of Holdings; (ii) a majority of the seats (other
than vacant seats) on the board of directors (or equivalent) of Holdings shall at any time be occupied by persons who were neither
(x) nominated by the board of directors of Holdings nor (y) appointed by directors so nominated; or (iii) Holdings shall
cease to own, directly or indirectly, beneficially and of record, 100% of the issued and outstanding Capital Securities of the
Borrower or the Subsidiaries. The Acquisition and the transactions contemplated by the Acquisition Agreement (including under the
“Escrow Agreement,” as defined in the Acquisition Agreement) shall not be deemed to be a “Change in Control.”

 

“Change in Law” means
the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule,
regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation
or application thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive
(whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

 

“Code” means the Internal
Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time.

 

“Commitment” means, with
respect to each Lender, its obligations (if any) to make New Loans hereunder on the Restatement Date.

 

“Commitment Amount”
means $18,000,000.

 

“Commitment Termination Date”
means the earlier to occur of (i) the Restatement Date (immediately after the making of the Loans on such date) and (ii) August
3, 2015, if the Loans shall not have been made hereunder prior to such date.

 

“Compliance Certificate”
means a certificate duly completed and executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit C
hereto, together with such changes thereto as the Administrative Agent may from time to time request for the purpose of monitoring
the Borrower’s compliance with the financial covenants contained herein.

 

“Confidential Information”
means any and all information or material (whether written or oral, or in electronic or other form) that, at any time before, on
or after the Restatement Date, has been or is provided or communicated to the Receiving Party by or on behalf of the Disclosing
Party pursuant to this Agreement or in connection with the transactions contemplated hereby or any discussions or negotiations
with respect thereto.

 

    	- 4 -

    	 

    

 

“Consolidated EBITDA”
shall mean, for Holdings and its Subsidiaries, for any period, an amount equal to the sum of (i) Consolidated Net Income for such
period plus (ii) solely to the extent deducted in determining Consolidated Net Income for such period, and without duplication,
(A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation
and amortization determined on a consolidated basis in accordance with GAAP, (D) compensation paid solely in Capital Securities
of Holdings that are not Disqualified Capital Securities, and (E) all other non-cash charges approved by the Administrative Agent
in its sole discretion, determined on a consolidated basis in accordance with GAAP, in each case for such period.

 

“Consolidated Interest Expense”
shall mean, for Holdings and its Subsidiaries, for any period, the consolidated total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP and capitalized interest), in each case whether or not paid in cash during
such period.

 

“Consolidated Net Income”
shall mean, for Holdings and its Subsidiaries for any period, the net income (or loss) of Holdings and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein)
(i) extraordinary or non-recurring gains, losses or charges (such losses or charges to be approved by the Administrative Agent
in its sole discretion), (ii) any non-cash gains or losses attributable to write-ups or write-downs of assets, (iii) any Capital
Securities of Holdings or any of its Subsidiaries in the unremitted earnings of any Person that is not a Subsidiary, to the extent
received by Holdings or any Subsidiary in cash, (iv) any income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with Holdings or any Subsidiary on the date that such Person’s assets are acquired
by Holdings or any Subsidiary, (v) the income (but not loss) of any Subsidiary to the extent there is a legal or contractual restriction
which limits distributions from such Subsidiary to Holdings and (vi) any non-cash gains or losses attributable to any increase
or decrease of the warrant derivative liability of Holdings relating to changes in the fair value of warrants to purchase common
stock of Holdings.

 

“Consolidated Senior Debt”
shall mean, as of any date, all Indebtedness of Holdings and its Subsidiaries (other than the Indebtedness under the Convertible
Notes Documents and any Permitted Subordinated Indebtedness) measured on a consolidated basis as of such date.

 

“Consolidated Senior Leverage Ratio”
shall mean the ratio of (a) Consolidated Senior Debt to (b) the following, as applicable: (i) with respect to the four Fiscal
Quarter period ending on September 30, 2016, four multiplied by Consolidated EBITDA for the Fiscal Quarter ended September 30,
2016; (ii) with respect to the four Fiscal Quarter period ending on December 31, 2016, two multiplied by the aggregate Consolidated
EBITDA for the Fiscal Quarters ended September 30, 2016 and December 31, 2016; (iii) with respect to the four Fiscal Quarter period
ending on March 31, 2017, four-thirds (4/3) multiplied by the aggregate Consolidated EBITDA for the Fiscal
Quarters ended September 30, 2016, December 31, 2016 and March 31, 2017; and (iv) starting with the four Fiscal Quarter period
ended June 30, 2017 and thereafter, Consolidated EBITDA for the most recently ended four Fiscal Quarters for which financial statements
are required to have been delivered (or for which financial statements are not yet required to be delivered but have already been
delivered) pursuant to this Agreement.

 

    	- 5 -

    	 

    

 

“Contingent Liability”
means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise
to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements
of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Securities
of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation
set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

 

“Continuing Lender” means
each Lender under the Existing Credit Agreement on the Restatement Date that is listed as a Continuing Lender on Schedule 2.1.

 

“Continuing Loans” means
the term loans made to the Borrower pursuant to the Existing Credit Agreement and continued under this Agreement pursuant to Section
2.1.

 

“Control” is defined
within the definition of “Affiliate”.

 

“Controlled Account”
is defined in Section 7.13(a).

 

“Convertible Notes” means
the $65,000,000 of 6.00% Convertible Senior Notes due 2021 of Holdings to be issued on the Restatement
Date pursuant to the Convertible Notes Indenture.

 

“Convertible Notes Documents”
means (i) the Convertible Notes, (ii) the Convertible Notes Indenture and (iii) the Registration Rights Agreement, to be dated
as of the Restatement Date, by and among Holdings and the purchasers party thereto.

 

“Convertible Notes Indenture”
means the Indenture, to be dated as of the Restatement Date, by and between Holdings and Wilmington Trust, National Association,
as trustee.

 

“Copyrights” means all
copyrights, whether statutory or common law, and all exclusive and nonexclusive licenses from third parties or rights to use copyrights
owned by such third parties, along with any and all (i) renewals, revisions, extensions, derivative works, enhancements, modifications,
updates and new releases thereof, (ii) income, royalties, damages, claims and payments now and hereafter due and/or payable with
respect thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iii) rights
to sue for past, present and future infringements thereof and (iv) foreign copyrights and any other rights corresponding thereto
throughout the world.

 

“Copyright Security Agreement”
means any Copyright Security Agreement executed and delivered by Holdings, the Borrower or any of the Subsidiaries in substantially
the form of Exhibit C to the Security Agreement, as amended, supplemented, amended and restated or otherwise modified from time
to time.

 

“CTA” means a clinical
trial application filed with any regulatory authority in the European Union.

 

    	- 6 -

    	 

    

 

“Default” means any Event
of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

 

“Designated Jurisdiction”
means any country or territory to the extent that such country or territory is the subject of any Sanction.

 

“Device” means any instrument,
apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component,
part, or accessory, which is (a) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement
to them, (b) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention
of disease, in man or other animals or (c) intended to affect the structure or any function of the body of man or other animals;
and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals
and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

 

“Device Approval Application”
means a premarket approval application (PMA) submitted under Section 515 of the FD&C Act (21 U.S.C. § 360e), a de novo
request submitted under Section 513(f) of the FD&C Act (21 U.S.C. § 360c(f)), or premarket notification submitted under
Section 510(k) of the FD&C Act (21 U.S.C. § 360(k)) seeking clearance from FDA for a device that is substantially equivalent
to a legally marketed predicate device (“510(k)”), as defined in the FD&C Act, or any corresponding foreign application
in the Territory, including, with respect to the European Union, a submission to a Notified Body for a Certificate of Conformity
under EU Directive 93/42/EEC concerning medical devices.

 

“Disclosing Party” means
the party disclosing Confidential Information.

 

“Disposition” (or similar
words such as “Dispose”) means any sale, transfer, lease, license, contribution or other conveyance (including
by way of merger) of, or the granting of options, warrants or other rights to, any of Holdings, the Borrower’s or the Subsidiaries’
assets (including accounts receivable and Capital Securities of Subsidiaries) to any other Person (other than to the Borrower or
any of its Subsidiaries) in a single transaction or series of transactions.

 

“Disqualified Capital Securities”
shall mean any Capital Securities that, by their terms (or by the terms of any security or other Capital Securities into which
they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily
redeemable (other than solely for Qualified Capital Securities), pursuant to a sinking fund obligation or otherwise (except as
a result of a Change in Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change in Control
or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and
payable and the termination of the Commitment), (b) are redeemable at the option of the holder thereof (other than solely for Qualified
Capital Securities) (except as a result of a Change in Control or asset sale so long as any rights of the holders thereof upon
the occurrence of a Change in Control or asset sale event shall be subject to the prior repayment in full of the Loans and all
other Obligations that are accrued and payable and the termination of the Commitment), in whole or in part, (c) provide for the
scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Capital
Securities that would constitute Disqualified Capital Securities, in each case, prior to the date that is one hundred and eighty-one
(181) days after the Maturity Date; provided that if such Capital Securities are issued pursuant to a plan for the benefit
of employees of Holdings or any of its Subsidiaries, or by any such plan to such employees, such Capital Securities shall not constitute
Disqualified Capital Securities solely because they may be required to be repurchased by Holdings or its Subsidiaries in order
to satisfy applicable statutory or regulatory obligations.

 

    	- 7 -

    	 

    

 

“EMA” means the European
Medicines Agency or any successor entity.

 

“Environmental Laws”
means all federal, state, local or international laws, statutes, rules, regulations, codes, directives, treaties, requirements,
ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, natural resources, Hazardous Material or health and safety matters.

 

“Environmental Liability”
means any liability, loss, claim, suit, action, investigation, proceeding, damage, commitment or obligation, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of or affecting the
Borrower or any Subsidiary directly or indirectly arising from, in connection with or based upon (i) any Environmental Law or Environmental
Permit, (ii) the generation, use, handling, transportation, storage, treatment, recycling, presence, disposal, Release or threatened
Release of, or exposure to, any Hazardous Materials or (iii) any contract, agreement, penalty, order, decree, settlement, injunction
or other arrangement (including operation of law) pursuant to which liability is assumed, entered into, inherited or imposed with
respect to any of the foregoing.

 

“Environmental Permit”
is defined in Section 6.7(c).

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means,
as applied to any Person, (i) any corporation that is a member of a controlled group of corporations within the meaning of section
414(b) of the Code of which that Person is a member, (ii) any trade or business (whether or not incorporated) that is a member
of a group of trades or businesses under common control within the meaning of section 414(c) of the Code of which that Person is
a member and (iii) any member of an affiliated service group within the meaning of section 414(m) or 414(o) of the Code of which
that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member.

 

“Event of Default” is
defined in Section 9.1.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended.

 

“Existing Credit Agreement”
means that certain Credit Agreement, dated as of August 24, 2012, as amended by that certain First Amendment to Credit Agreement,
dated as of May 16, 2013, as further amended by that certain Waiver and Second Amendment to Credit Agreement, dated as of August
12, 2013, as further amended by that certain Waiver and Third Amendment to Credit Agreement, dated as of August 12, 2013, as further
amended by that certain Fourth Amendment to Credit Agreement, dated as of August 30, 2013, as further amended by that certain Waiver
and Fifth Amendment to Credit Agreement, dated as of November 14, 2013, and as further amended by that certain Sixth Amendment
to Credit Agreement, dated as of March 6, 2014.

 

    	- 8 -

    	 

    

 

“FATCA” means Sections
1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable
and not more onerous to comply with), any regulations or official interpretations thereof, any agreement entered into pursuant
to Section 1471(b)(1) of the Code, and any applicable intergovernmental agreement and local implementing law, regulation or official
guidance with respect to the foregoing.

 

“FDA” means the U.S.
Food and Drug Administration and any successor entity.

 

“FD&C Act” means
the U.S. Food, Drug and Cosmetic Act (or any successor thereto), as amended from time to time, and the rules, regulations, guidelines,
guidance documents and compliance policy guides issued or promulgated thereunder. For purposes of this Agreement, “FD&C
Act” includes provisions of the Public Health Services Act that apply to biological products and products derived from human
tissue.

 

“Fiscal Quarter” means
a quarter ending on the last day of March, June, September or December.

 

“Fiscal Year” means any
period of 12 consecutive calendar months ending on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the “2011 Fiscal Year”) refer to the Fiscal Year ending on December 31 of such calendar
year.

 

“F.R.S. Board” means
the Board of Governors of the Federal Reserve System or any successor thereto.

 

“GAAP” means generally
accepted accounting principles in the United States.

 

“Governmental Authority”
means any national, supranational, federal, state, county, provincial, local, municipal or other government or political subdivision
thereof (including any Regulatory Agency), whether domestic or foreign, and any agency, authority, commission, ministry, instrumentality,
regulatory body, court, tribunal, arbitrator, central bank or other Person exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to any such government.

 

“Guarantee” means the
guarantee executed and delivered by an Authorized Officer of Holdings and each Subsidiary, substantially in the form of Exhibit D
hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“Guarantors” means, collectively,
Holdings and each Subsidiary.

 

    	- 9 -

    	 

    

 

“Hazardous Material”
means any material, substance, chemical, mixture or waste which is capable of damaging or causing harm to any living organism,
the environment or natural resources, including all explosive, special, hazardous, polluting, toxic, industrial, dangerous, biohazardous,
medical, infectious or radioactive substances, materials or wastes, noise, odor, electricity or heat, and including petroleum or
petroleum products, byproducts or distillates, asbestos or asbestos-containing materials, urea formaldehyde, polychlorinated biphenyls,
radon gas, ozone-depleting substances, greenhouse gases and all other substances or wastes of any nature regulated pursuant to
any Environmental Law or as to which any Governmental Authority requires investigation, reporting or remedial action.

 

“Hedging Obligations”
means, with respect to any Person, all liabilities of such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or currency exchange rates.

 

“herein”, “hereof”,
“hereto”, “hereunder” and similar terms contained in any Loan Document refer to such Loan
Document as a whole and not to any particular Section, paragraph or provision of such Loan Document.

 

“Holdings” means Bacterin
International Holdings, Inc., a Delaware corporation.

 

“IDE” means an application,
including an application filed with a Regulatory Authority, for authorization to commence human clinical studies, including (a)
an Investigational Device Exemption as defined in the FD&C Act or any successor application or procedure filed with the FDA,
(b) an abbreviated IDE as specified in FDA regulations in 21 C.F.R. § 812.2(b), (c) any equivalent of a United States IDE
in other countries or regulatory jurisdictions, (d) all amendments, variations, extensions and renewals thereof that may be filed
with respect to the foregoing and (e) all related documents and correspondence thereto, including documents and correspondence
with Institutional Review Boards (IRBs).

 

“Impermissible Qualification”
means any qualification or exception to the opinion or certification of any independent public accountant as to any financial statement
of the Borrower (i) which is of a “going concern” or similar nature, (ii) which relates to the limited scope of examination
of matters relevant to such financial statement or (iii) which relates to the treatment or classification of any item in such financial
statement and which, as a condition to removal of such qualification or exception, would require an adjustment to such item the
effect of which would be to cause the Borrower to be in Default.

 

“including” and “include”
means including without limiting the generality of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned.

 

“IND” means (a)
(i) an investigational new drug application (as defined in the FD&C Act) that is required to be filed
with the FDA before beginning clinical testing in human subjects, or any successor application or procedure; and (ii) any similar
application or functional equivalent relating to any investigational new drug application applicable to or required by any country,
jurisdiction or Governmental Authority other than the U.S. (including any CTA); and (b) all supplements and amendments that may
be filed with respect to the foregoing.

 

    	- 10 -

    	 

    

 

“Indebtedness” of any
Person means:

 

(a) all obligations of such Person
for borrowed money or advances and all obligations of such Person evidenced by bonds, debentures, notes or similar instruments;

 

(b) all obligations, contingent
or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued
for the account of such Person;

 

(c) all Capitalized Lease Liabilities
of such Person and all obligations of such Person arising under Synthetic Leases;

 

(d) net Hedging Obligations of
such Person;

 

(e) all obligations of such Person
in respect of Disqualified Capital Securities;

 

(f) whether or not so included
as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable in the ordinary course of business which are not overdue for a period of more than 90 days or,
if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established
on the books of such Person), and indebtedness secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on property owned or being acquired by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; and

 

(g) all Contingent Liabilities
of such Person in respect of any of the foregoing.

 

The Indebtedness of any Person shall include the Indebtedness
of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such Person, except to the extent the terms
of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Liabilities”
is defined in Section 11.4.

 

“Indemnified Parties”
is defined in Section 11.4.

 

“Infringement” and “Infringes”
mean the misappropriation or other violation of know-how, trade secrets, confidential information, and/or Intellectual Property.

 

“Intellectual Property”
means all (i) Patents; (ii) Trademarks; (iii) Copyrights and other works of authorship (registered or unregistered), and all applications,
registrations and renewals therefor; (iv) Product Authorizations; (v) Product Agreements; (vi) computer software, databases, data
and documentation; (vii) trade secrets and confidential business information, whether patentable or unpatentable and whether or
not reduced to practice, know-how, inventions, manufacturing processes and techniques, research and development information, data
and other information included in or supporting Product Authorizations; (vii) financial, marketing and business data, pricing and
cost information, business, finance and marketing plans, customer and prospective customer lists and information, and supplier
and prospective supplier lists and information; (viii) other intellectual property or similar proprietary rights; (ix) copies and
tangible embodiments of any of the foregoing (in whatever form or medium); and (x) any and all improvements to any of the foregoing.

 

    	- 11 -

    	 

    

 

“Interest Period” means,
(a) initially, the period beginning on (and including) the date on which the Loans are made hereunder pursuant to Section 2.4
and ending on (and including) the last day of the Fiscal Quarter in which the Loans were made, and (b) thereafter, the period beginning
on (and including) the first day of each succeeding Fiscal Quarter and ending on the earlier of (and including) (x) the last day
of such Fiscal Quarter and (y) the Maturity Date.

 

“Investment” means, relative
to any Person, (i) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by
such Person of any bonds, notes, debentures or other debt securities of any other Person, (ii) Contingent Liabilities in favor
of any other Person and (iii) any Capital Securities held by such Person in any other Person. The amount of any Investment shall
be the original principal or capital amount thereof less all returns of principal or equity thereon and shall, if made by the transfer
or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair
market value of such property at the time of such Investment.

 

“Key Permits” means all
Permits relating to the Products (including all Product Authorizations).

 

“knowledge” of the Borrower
means the knowledge of any executive officer or the most senior legal officer of Holdings, the Borrower or any Subsidiary.

 

“Lender” and “Lenders”
are each defined in the preamble.

 

“LIBO Rate” means the
three-month London Interbank Offered Rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London, England time), quoted
by the Administrative Agent from the appropriate Bloomberg or Reuters page selected by the Administrative Agent (or any successor
thereto or similar source determined by the Administrative Agent from time to time), which shall be that three-month London Interbank
Offered Rate for deposits in U.S. Dollars in effect two Business Days prior to the last Business Day of the relevant Fiscal Quarter,
adjusted for any reserve requirement in effect on such Business Day (including, basic, supplemental, marginal and emergency reserves)
under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D
of the Board) maintained by a member bank of the Federal Reserve System), such rate to be rounded up to the nearest 1/16 of 1%
and such rate to be reset quarterly as of the first Business Day of each Fiscal Quarter. If the Loans are advanced other than on
the first Business Day of a Fiscal Quarter, the initial LIBO Rate shall be that three-month London Interbank Offered Rate for deposits
in U.S. Dollars in effect two Business Days prior to the date of the Loans, which rate shall be in effect until (and including)
the last Business Day of the Fiscal Quarter next ending. The Administrative Agent’s internal records of applicable interest
rates shall be determinative in the absence of manifest error.

 

    	- 12 -

    	 

    

 

“Lien” means any security
interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge
against or interest in property, or other priority or preferential arrangement of any kind or nature whatsoever, to secure payment
of a debt or performance of an obligation.

 

“Liquidity” means, at
any time, an amount determined for Holdings and its Subsidiaries incorporated or organized under the laws of the United States
of America, or any state or other political subdivision thereof equal to the sum of unrestricted cash-on-hand and Cash Equivalent
Investments of Holdings and such Subsidiaries, to the extent held in a Controlled Account located in the United States.

 

“Loan Documents” means,
collectively, this Agreement, the Notes, the Security Agreement, each other agreement pursuant to which the Lender is granted a
Lien to secure the Obligations (including any mortgages entered into pursuant to Section 7.8), the Guarantee, and each other
agreement, certificate, document or instrument delivered in connection with any Loan Document, whether or not specifically mentioned
herein or therein.

 

“Loan Request” means
a Loan request and certificate duly executed by an Authorized Officer of the Borrower substantially in the form of Exhibit B
hereto.

 

“Loans” means (i) the
Continuing Loans and (ii) the New Loans.

 

“MAA” means a marketing
authorization application filed with any regulatory authority in the European Union.

 

“Material Adverse Effect”
means a material adverse effect on (i) the business, condition (financial or otherwise), operations, performance, properties or
prospects of Holdings and its Subsidiaries taken as a whole, (ii) the rights and remedies of the Administrative Agent or any Lender
under any Loan Document or (iii) the ability of Holdings, the Borrower or any Subsidiary to perform its material Obligations under
any Loan Document.

 

“Material Agreements”
means (i) each contract or agreement to which Holdings, the Borrower or any Subsidiary is a party involving annual aggregate payments
of more than $500,000, whether such payments are being made by Holdings, the Borrower or any Subsidiary to a non-Affiliated Person,
or by a non-Affiliated Person to Holdings, the Borrower or any Subsidiary and (ii) all other contracts or agreements which are,
individually or in the aggregate, material to the business, condition (financial or otherwise), operations, performance, properties
or prospects of Holdings, the Borrower or any Subsidiary.

 

“Maturity Date” means
July 31, 2020.

 

“Moody’s” means
Moody’s Investors Service, Inc.

 

“NDA” means (a) (i) a new
drug application (as defined in the FD&C Act) and (ii) any similar application or functional equivalent relating
to any new drug application applicable to or required by any country, jurisdiction or Governmental Authority other than the U.S.
(including any MAA); and (b) all supplements and amendments that may be filed with respect to the foregoing.

 

    	- 13 -

    	 

    

 

“Net Casualty Proceeds”
means, with respect to any Casualty Event, the amount of any insurance proceeds or condemnation awards received by Holdings or
any of its Subsidiaries in connection with such Casualty Event in excess of $2,000,000 in the aggregate through the Termination
Date (net of all reasonable and customary collection expenses thereof, attorney’s fees and taxes), but excluding any proceeds
or awards required to be paid to a creditor (other than the Administrative Agent or a Lender under the Loan Documents) which holds
a first priority Lien permitted by clause (e) of Section 8.3 on the property which is the subject of such Casualty
Event.

 

“Net Equity Proceeds”
means with respect to the sale or issuance after the Restatement Date by Holdings to any Person of any Capital Securities, warrants
or options or the exercise of any such warrants or options, the excess of:

 

(a) the gross cash proceeds received
by Holdings from such sale, exercise or issuance in excess of $50,000,000, individually or in the aggregate through the Termination
Date, over

 

(b) all reasonable and customary
underwriting commissions and legal, investment banking, brokerage and accounting and other professional fees, sales commissions
and disbursements actually incurred in connection with such sale or issuance which have not been paid to Affiliates of Holdings
in connection therewith.

 

“New Loans” means Loans
made by Lenders on the Restatement Date pursuant to Section 2.1.

 

“Net Sales” means, with
respect to each Product, the gross invoiced amount on sales of, and distribution income, stocking orders, transfer payments and
other consideration received, directly or indirectly, by Holdings or any of its Subsidiaries in respect of any such Product in
any applicable Territory from any Third Party after deduction of: (i) normal and customary trade, quantity or prompt settlement
discounts (including chargebacks, shelf stock adjustments and allowances) with respect to customers actually allowed; (ii) amounts
repaid or credited by reason of rejection, returns or recalls of goods, rebates or bona fide price reductions; (iii) rebates and
similar payments actually made with respect to sales paid for by Federal or state Medicaid, Medicare or similar programs in the
Territory; and (iv) excise taxes, customs duties, customs levies and import fees imposed on the sale, importation, use or distribution
of such Product (to the extent included in the gross invoiced amount), in each case as calculated (x) in a manner consistent with
the Borrower’s customary practice for its Products and (y) consistent with GAAP. Net Sales with respect to sales of such
Product that are not made on an arm’s length basis or that are made for consideration other than cash shall be calculated
based on the average per-unit Net Sales of such Product during the applicable period without regard to such non-arm’s length
or non-cash sales.

 

    	- 14 -

    	 

    

 

“Non-Excluded Taxes”
means any Taxes other than (i) net income and franchise Taxes imposed with respect to the Administrative Agent or any Lender by
any Governmental Authority under the laws of which the Administrative Agent or such Lender is organized or in which it maintains
its applicable lending office, (ii) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other
jurisdiction, (iii) any other tax imposed on the Administrative Agent or any Lender and any business activity of the Administrative
Agent or such Lender that is not directly related to the Loans or the business of the Borrower, Holdings or any Subsidiary, (iv)
in the case of a Lender resident in or organized under the laws of a jurisdiction other than the jurisdiction where the Borrower
is resident for tax purposes, any U.S. federal withholding Tax that is imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect at the time such Lender acquires
such interest in the Loan or Commitment (or designates a new lending office), except to the extent that such Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding Tax pursuant to Section 4.3 (provided that such Lender has complied with
Section 4.3(e)), (v) Taxes attributable to a Lender’s failure or inability to comply with Section 4.3(e), and
(vi) any U.S. federal withholding Taxes imposed under FATCA.

 

“Note” means a promissory
note of the Borrower payable to a Lender, in the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from the
outstanding amount of the Loans, and also means all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.

 

“Notified Body” means
an entity licensed, authorized or approved by the applicable government agency, department or other authority to assess and certify
the conformity of a medical device with the requirements of EU Directive 93/42/EEC concerning medical devices, and applicable harmonized
standards.

 

“Observer” is defined
in Section 7.16(a).

 

“Obligations” means all
obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of Holdings, the Borrower and each Subsidiary
arising under or in connection with a Loan Document and the principal of and premium, if any, and interest (including interest
accruing during the pendency of any proceeding of the type described in Section 9.1.8, whether or not allowed in such proceeding)
on the Loans.

 

“OFAC” means the Office
of Foreign Assets Control of the United States Department of the Treasury.

 

“Optional PIK Interest”
is defined in Section 3.4(c).

 

“Organic Document” means,
relative to Holdings, the Borrower or any Subsidiary, its certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement, operating agreement and all shareholder agreements, voting trusts
and similar arrangements applicable to Holdings’, the Borrower’s or any Subsidiary’s Capital Securities.

 

“Other Taxes” means any
and all stamp, documentary or similar Taxes, or any other excise or property Taxes or similar levies that arise on account of any
payment made or required to be made under any Loan Document or from the execution, delivery, registration, recording or enforcement
of any Loan Document.

 

    	- 15 -

    	 

    

 

“Other Administrative Proceeding”
means any administrative proceeding relating to a dispute involving a patent office or other relevant intellectual property registry
which relates to validity, opposition, revocation, ownership or enforceability of the relevant Intellectual Property.

 

“Patent” means any patent,
patent application or invention disclosure, including all divisions, continuations, continuations in-part, provisionals, continued
prosecution applications, substitutions, reissues, reexaminations, renewals, extensions, restorations, supplemental protection
certificates and other additions in connection therewith, whether in or related to the United States or any foreign country or
other jurisdiction.

 

“Patent Security Agreement”
means any Patent Security Agreement executed and delivered by Holdings, the Borrower or any of the Subsidiaries in substantially
the form of Exhibit A to the Security Agreement, as amended, supplemented, amended and restated or otherwise modified from
time to time.

 

“Permits” means all permits,
licenses, registrations, certificates, orders, approvals, clearances, authorizations, consents, waivers, franchises, variances
and similar rights issued by or obtained from any Governmental Authority or any other Person, including, without limitation, those
relating to Environmental Laws.

 

“Permitted Subordinated Indebtedness”
means Indebtedness incurred after the Restatement Date by Holdings, the Borrower or the Subsidiaries that is (i) subordinated to
the Obligations and all other Indebtedness owing from Holdings, the Borrower or the Subsidiaries to the Administrative Agent or
the Lenders pursuant to a written subordination agreement satisfactory to the Administrative Agent in its sole discretion and (ii)
in an amount and on terms approved by the Administrative Agent in its sole discretion.

 

“Person” means any natural
person, corporation, limited liability company, partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.

 

“PIK Interest” is defined
in Section 3.4(a)(ii).

 

“Product” means any current
or future product developed, manufactured, licensed, marketed, sold or otherwise commercialized by Holdings or any of its Subsidiaries,
including any such product in development or which may be developed.

 

“Product Agreement” means
each agreement, license, document, instrument, interest (equity or otherwise) or the like under which one or more parties grants
or receives any right, title or interest with respect to any Product Development and Commercialization Activities in respect of
one or more Products specified therein or to exclude third parties from engaging in, or otherwise restricting any right, title
or interest as to any Product Development and Commercialization Activities with respect thereto, including each contract or agreement
with suppliers (including human tissue supply agreements), manufacturers, distributors, clinical research organizations, hospitals,
group purchasing organizations, wholesalers, pharmacies or any other Person related to any such entity.

 

    	- 16 -

    	 

    

 

“Product Authorizations”
means any and all approvals (including applicable supplements, amendments, pre and post approvals, clearances, drug master
files, governmental price and reimbursement approvals and approvals of applications for regulatory exclusivity), licenses, notifications,
registrations, certifications or authorizations of any Governmental Authority, any Standard Body or any Notified Body necessary
for the manufacture, development, distribution, use, storage, import, export, transport, promotion, marketing, sale or other commercialization
of a Product in any country or jurisdiction, including without limitation registration and listing (including registration and
listing of 361 Products), IDEs, INDs, NDAs, Device Approval Applications and BLAs or similar applications.

 

“Product Development and Commercialization
Activities” means, with respect to any Product, any combination of research, development, manufacture, import, use, sale,
importation, storage, labeling, marketing, promotion, supply, distribution, testing, packaging, purchasing or other commercialization
activities, receipt of payment in respect of any of the foregoing, or like activities the purpose of which is to commercially exploit
such Product.

 

”Product Standards” means
all safety, quality and other specifications and standards applicable to any Products, including all medical device and other standards
promulgated by Standard Bodies.

 

“Projections” is defined
in Section 6.5.

 

“Proportionate Share”
means with respect to all matters (including, without limitation, the indemnification obligations arising under Section 11.4)
arising under or in connection with this Agreement or any other Loan Document, 63.8% for ROS and 36.2% for Royalty Opportunities,
such percentages to be adjusted commensurate with any permitted assignment by any Lender of its rights and interests hereunder.

 

“Qualified Capital Securities”
shall mean any Capital Securities that are not Disqualified Capital Securities.

 

“Receiving Party” means
the party receiving Confidential Information.

 

“Recipients” is defined
in Section 11.14.

 

“Register” is defined
in Section 10.3.

 

“Regulatory Agencies”
means any Governmental Authority that is concerned with the use, control, safety, efficacy, reliability, manufacturing, marketing,
distribution, sale or other Product Development and Commercialization Activities relating to any Product of Holdings, the Borrower
or any of the Subsidiaries, including the FDA and all similar agencies in other jurisdictions, and includes Standard Bodies.

 

“Regulatory Authorizations”
means all approvals, clearances, notifications, authorizations, orders, exemptions, registrations, certifications, licenses and
permits granted by, submitted to or filed with any Regulatory Agencies or Notified Bodies, including all Product Authorizations.

 

    	- 17 -

    	 

    

 

“Related Parties” means
the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of Holdings,
the Borrower and the Subsidiaries.

 

“Release” means any releasing,
disposing, discharging, injecting, spilling, leaking, leaching, pumping, pouring, dumping, depositing, emitting, escaping, emptying,
seeping, dispersal, migrating or placing, including movement through, into or upon the environment or any natural or man-made structure.

 

“Restatement Date” means
the date of the making of the Loans hereunder.

 

“Restatement Date Certificate”
means a restatement date certificate executed and delivered by an Authorized Officer of the Borrower in form and substance satisfactory
to the Lenders.

 

“Restricted Payment”
means (i) the declaration or payment of any dividend on, or the making of any payment or distribution on account of, or setting
apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of,
any class of Capital Securities of Holdings, the Borrower or any Subsidiary or the Convertible Notes or any warrants, options or
other right or obligation to purchase or acquire any such Capital Securities or the Convertible Notes, whether now or hereafter
outstanding (other than the payment of scheduled interest payments on the Convertible Notes in accordance with their terms, issuance
of common stock of Holdings upon exercise thereof, and cash in lieu of fractional shares) or (ii) the making of any other distribution
in respect of such Capital Securities or the Convertible Notes or any warrants, options or other right or obligation to purchase
or acquire any such Capital Securities or the Convertible Notes, in each case either directly or indirectly, whether in cash, property
or obligations of Holdings, the Borrower or any Subsidiary or otherwise (other than the payment of scheduled interest payments
on the Convertible Notes in accordance with their terms, issuance of common stock of Holdings upon exercise thereof, and cash in
lieu of fractional shares).

 

“Revenue Base” means,
with respect to any period, the Net Sales of all Products for such period.

 

“ROS” is defined in the
preamble.

 

“Royalty Opportunities”
is defined in the preamble.

 

“S&P” means Standard
& Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.

 

“Sanctions” means any
international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC),
the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

 

    	- 18 -

    	 

    

  

“SEC” means the Securities
and Exchange Commission.

 

“Security Agreement”
means the Amended And Restated Pledge and Security Agreement executed and delivered by each of the parties thereto, substantially
in the form of Exhibit E hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“Solvent” means, with
respect to any Person on a particular date, that on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present fair saleable value of the
assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured, (iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities
beyond its ability to pay as such debts and liabilities mature, (iv) such Person is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which the property of such Person would constitute an unreasonably
small capital and (v) such Person has not executed this Agreement or any other Loan Document, or made any transfer or incurred
any obligations hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future creditors. The
amount of Contingent Liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances
existing at such time, can reasonably be expected to become an actual or matured liability.

 

“Standard Bodies” means
any of the organizations that create, sponsor or maintain safety, quality or other standards, including ISO, ANSI, CEN and SCC
and the like.

 

“Subsidiary” means, with
respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other Person (irrespective
of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and
one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person. Unless the context otherwise
specifically requires, the term “Subsidiary” shall be a reference to a Subsidiary of Holdings, which shall include
the Borrower and its Subsidiaries and, effective on and as of the Restatement Date, the Target and its respective Subsidiaries.

 

“Synthetic Lease” means,
as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether
real, personal or mixed) (i) that is not a capital lease in accordance with GAAP and (ii) in respect of which the lessee retains
or obtains ownership of the property so leased for federal income tax purposes, other than any such lease under which that Person
is the lessor.

 

“Target” is defined in
the preamble.

 

“Taxes” means all income,
stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with
respect thereto.

 

    	- 19 -

    	 

    

 

“Termination Date” means
the date on which all Obligations have been paid in full in cash and the Commitment shall have terminated.

 

“Territory” means all
of the countries and territories of the world.

 

“Trademark” means any
trademark, service mark, trade name, logo, symbol, trade dress, domain name, corporate name or other indicator of source or origin,
and all applications and registrations therefor, together with all of the goodwill associated therewith.

 

“Trademark Security Agreement”
means any Trademark Security Agreement executed and delivered by Holdings, the Borrower or any of the Subsidiaries substantially
in the form of Exhibit B to the Security Agreement, as amended, supplemented, amended and restated or otherwise modified from
time to time.

 

“UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York; provided that, if, with respect to any financing
statement or by reason of any provisions of law, the perfection or the effect of perfection or non-perfection of the security interests
granted to the Administrative Agent for the benefit of the Lenders pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, then “UCC” means the
Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Loan Document
and any financing statement relating to such perfection or effect of perfection or non-perfection.

 

“United States” or “U.S.”
means the United States of America, its fifty states and the District of Columbia.

 

“U.S. Tax Compliance Certificate”
is defined in Section 4.3(e)(b)(3).

 

“Voting Securities” means,
with respect to any Person, Capital Securities of any class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.

 

SECTION 1.2 Use of Defined Terms. Unless
otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings
when used in each other Loan Document and the schedules attached hereto.

 

SECTION 1.3 Cross-References. Unless
otherwise specified, references in a Loan Document to any Article or Section are references to such Article or Section of such
Loan Document, and references in any Article, Section or definition to any clause are references to such clause of such Article,
Section or definition.

 

SECTION 1.4 Accounting and Financial
Determinations. Unless otherwise specified, all accounting terms used in each Loan
Document shall be interpreted, and all accounting determinations and computations thereunder (including under Section 8.4
and the definitions used in such calculations) shall be made, in accordance with GAAP, as in effect from time to time; provided
that, if either the Borrower or the Administrative Agent requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or the application thereof on the operation of such provision, regardless
of whether any such notice is given before or after such change in GAAP or the application thereof, then such provision shall
be interpreted on the basis of GAAP in effect and applied immediately before such change shall have become effective until such
request shall have been withdrawn or such provision amended in accordance herewith. Unless otherwise expressly provided, all financial
covenants and defined financial terms shall be computed on a consolidated basis for Holdings and its Subsidiaries, in each case
without duplication.

 

    	- 20 -

    	 

    

 

Article
II

COMMITMENT and BORROWING procedures

 

SECTION 2.1 Restatement Date Transactions. Subject
to the terms and conditions set forth herein, (a) the Continuing Lender will continue as a Lender under this Agreement holding
on the Restatement Date, after giving effect to the transactions provided for herein, a Loan in the amount set forth as a Continuing
Loan opposite the name of such Lender on Schedule 2.1 and (b) each Lender having a Commitment as set forth in Schedule
2.1 agrees to make a New Loan to the Borrower on the Restatement Date in a principal amount equal to its Commitment, with
the result that each Lender will hold on the Restatement Date, after giving effect to the transactions provided for herein, Loans
in the amount set forth opposite its name on Schedule 2.1. Amounts paid or prepaid in respect of Loans may not be reborrowed.
The Commitments of the Lenders shall expire at 5:00 p.m., New York City time, on the Restatement Date.

 

SECTION 2.2 Loans and Borrowing. Each
Loan outstanding on the Restatement Date, after giving effect to the transactions provided for in Section 2.1, shall be
part of a borrowing consisting of Loans held ratably by the Lenders in accordance with the percentages that their respective Loans
bear to the aggregate principal amount of the outstanding Loans. The failure of any Lender having a Commitment to make any New
Loan required to be made by it on the Restatement Date shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to
make New Loans as required.

 

SECTION 2.3 Borrowing Procedure. The
Borrower may irrevocably request that the New Loans be made by delivering to the Administrative Agent a Loan Request on or before
10:00 a.m. on the Restatement Date.

 

SECTION 2.4 Funding. After
receipt of the Loan Request for the New Loans, the Lenders shall, on the Restatement Date and subject to the terms and conditions
hereof, make the requested proceeds of the New Loans available to the Borrower by wire transfer to the account the Borrower shall
have specified in its Loan Request.

 

SECTION 2.5 Reduction of the Commitment
Amounts. The Commitment Amount shall automatically and permanently be reduced to
zero on the Commitment Termination Date.

 

    	- 21 -

    	 

    

 

Article
III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

 

SECTION 3.1 Repayments and Prepayments;
Application. The Borrower agrees that the Loans, and any fees or interest accrued
or accruing thereon, shall be repaid and prepaid solely in U.S. dollars pursuant to the terms of this Article III.

 

SECTION 3.2 Repayments and Prepayments. The
Borrower shall repay in full the unpaid principal amount of the Loans on the Maturity Date. Prior thereto, payments and prepayments
of the Loans shall be made as set forth below.

 

(a) Except as otherwise provided
in this Section 3.2, no payments or prepayments, including voluntary prepayments, of principal of the Loan shall be permitted.

 

(b) Within three Business Days
of receipt by Holdings of any Net Equity Proceeds, or receipt by Holdings, the Borrower or any Subsidiary of any Net Casualty Proceeds,
the Borrower shall notify the Administrative Agent thereof. If requested by the Administrative Agent, the Borrower shall within
three Business Days of such request make a mandatory prepayment of the Loans, in an amount equal to 50% of such Net Equity Proceeds
or 100% of such Net Casualty Proceeds (or, in each case, such lesser amount as the Administrative Agent may specify on the date
of such request), as the case may be, to be applied as set forth in Section 3.3; provided, however, that no
such payment shall be required (and the Administrative Agent shall not make a request for any such payment) on account of Net Casualty
Proceeds that are intended to be reinvested within 360 days in the repair or replacement of the property subject to the applicable
Casualty Event; provided, further, that if such Net Casualty Proceeds are at any time no longer intended to be so
reinvested or have not in fact been so re-invested at the expiration of such 360 day period then any such Net Casualty Proceeds
shall be paid to Lenders as provided herein at such time.

 

(c) The Borrower shall repay
the Loans in full immediately upon any acceleration of the Maturity Date thereof pursuant to Section 9.2 or Section 9.3,
unless, pursuant to Section 9.3, only a portion of the Loans is so accelerated (in which case the portion so accelerated
shall be so repaid).

 

(d) Subject to the terms of this
Section 3.2, (i) during the period from the Restatement Date to and including the date that is 36 months after the Restatement
Date, the Borrower shall not voluntarily prepay, in whole or in part, any unpaid principal amount of the Loans and (ii) at any
time following the date that is 36 months after the Restatement Date, the Borrower may, in its sole discretion, voluntarily prepay,
in whole or in part, any unpaid principal amount of the Loans.

 

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 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 each Lender, a fee in the amount equal to 7.5% of the aggregate principal amount of such payment, prepayment
or repayment to such Lender.

 

    	- 22 -

    	 

    

 

SECTION 3.3 Application. Except
as provided in Section 4.4(b), amounts repaid or prepaid in respect of the outstanding principal amount of the Loans pursuant
to Section 3.2 shall be applied pro rata to the Loans.

 

SECTION 3.4 Interest Rate.

 

(a) From and after the Restatement
Date until June 30, 2018:

 

(i)          interest payable in cash
by the Borrower shall accrue on the Loans during such period at a rate per annum equal to 9.00%; and

 

(ii)         additional interest
(“PIK Interest”) shall accrue on the Loans during such period at a rate per annum equal to the difference of
(A) the sum of (1) the Applicable Margin plus (2) the higher of (x) the LIBO Rate for such Interest Period and (y) 1.00% minus
(B) 9.00%, and such PIK Interest shall be added to the outstanding principal amount of the Loans on the last day of each Fiscal
Quarter until June 30, 2018.

 

(b) From and after June 30, 2018:

 

(i)          interest payable in cash
by the Borrower shall accrue on the Loans during such period at a rate per annum equal to 12.00%; and

 

(ii)         additional interest
(“Additional PIK Interest”) shall accrue on the Loans during such period at a rate per annum equal to the difference
of (A) the sum of (1) the Applicable Margin plus (2) the higher of (x) the LIBO Rate for such Interest Period and (y) 1.00% minus
(B) 12.00%, and such Additional PIK Interest shall be added to the outstanding principal amount of the Loans on the last day of
each Fiscal Quarter until the Maturity Date.

 

(c) Notwithstanding anything
in Section 3.4(a) to the contrary, from and after the Restatement Date until December 31, 2015, the Borrower may elect,
in its sole discretion and in lieu of interest payments pursuant to Section 3.4(a) during such period, by delivering written
notice to the Administrative Agent prior to the date on which the first cash interest payment would be payable pursuant to Section
3.4(a)(i) and Section 3.6(c), to have all or any portion (as the Borrower shall so elect) of interest on the Loans accrue
on the Loans during such period at a rate per annum equal to the sum of (i) the Applicable Margin plus (ii) the higher of (x) the
LIBO Rate for such Interest Period and (y) 1.00% (“Optional PIK Interest”), and such Optional PIK Interest shall
be added to the outstanding principal amount of the Loans on the last day of each Fiscal Quarter until December 31, 2015.

 

(d) The interest rate shall be
recalculated and, if necessary, adjusted for each Interest Period, in each case pursuant to the terms hereof.

 

    	- 23 -

    	 

    

 

(e) All references hereunder
to the principal amount of the Loans shall include any PIK Interest, Additional PIK Interest or Optional PIK Interest, if any,
so added to the principal.

 

(f) Notwithstanding anything
in this Section 3.4 to the contrary, the Borrower may, in its sole discretion, and in lieu of PIK Interest, Additional PIK
Interest and/or Optional PIK Interest payments pursuant to Sections 3.4(a), (b) or (c), by delivering written
notice to the Administrative Agent prior to the date on which any such payment-in-kind interest payment would have been payable
pursuant to Section 3.4(a), (b) or (c) and Section 3.6(c), elect to pay such aggregate principal amount
of PIK Interest, Additional PIK Interest and/or Optional PIK Interest in cash instead of making payment-in-kind, in which case
the Borrower shall be required to make such PIK Interest, Additional PIK Interest, and/or Optional PIK Interest payment in cash
at the time such payment-in-kind interest would have been payable pursuant to Section 3.4(a), (b) or (c) and
Section 3.6(c).

 

SECTION 3.5 Default Rate. At
all times commencing upon the date any Event of Default occurs, and continuing until such Event of Default is no longer continuing,
the Applicable Margin shall be increased by 3% per annum. Notwithstanding anything in Section 3.4 to the contrary, upon
the occurrence and during the continuation of an Event of Default, the increased amount of the Applicable Margin shall be payable
only in cash and not as PIK Interest, Additional PIK Interest or Optional PIK Interest.

 

SECTION 3.6 Payment Dates. Interest
accrued on the Loans shall be payable in cash, without duplication:

 

(a) on the Maturity Date therefor;

 

(b) on the date of any payment
or prepayment, in whole or in part, of principal outstanding on such Loan on the principal amount so paid or prepaid;

 

(c) on the last day of each Fiscal
Quarter; provided that if such day is not a Business Day, then such payment shall be made on the next succeeding Business
Day; and

 

(d) on that portion of the Loans
that is accelerated pursuant to Section 9.2 or Section 9.3, immediately upon such acceleration.

 

Interest accrued on the Loans or other monetary Obligations
after the date such amount is due and payable (whether on the Maturity Date, upon acceleration or otherwise) shall be payable upon
demand.

 

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Article
IV

LIBO RATE AND OTHER PROVISIONS

 

SECTION 4.1 Increased Costs, Etc. The
Borrower agrees to reimburse each Lender for any increase in the cost to such Lender of, or any reduction in the amount of any
sum receivable by such Lender in respect of, such Lender’s Commitment and the making, continuation or maintaining of the
Loans hereunder that may arise in connection with any Change in Law, except for such changes with respect to increased capital
costs and Taxes which are governed by Section 4.2 and Section 4.3, respectively and except for any changes with
respect to Taxes described in (i) through (vi) of the definition of Non-Excluded Taxes. Each Lender shall notify the Borrower
in writing of the occurrence of any such event, stating the reasons therefor and the additional amount required fully to compensate
such Lender for such increased cost or reduced amount. Such additional amounts shall be payable by the Borrower directly to such
Lender within five days of its receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 4.1
shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section 4.1 for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

SECTION 4.2 Increased Capital Costs. If
any Change in Law affects or would affect the amount of capital required or expected to be maintained by any Lender or any Person
controlling any Lender, and such Lender determines (in good faith but in its sole and absolute discretion) that the rate of return
on its or such controlling Person’s capital as a consequence of the Commitment or the Loans made by it hereunder is reduced
to a level below that which such Lender or such controlling Person could have achieved but for the occurrence of any such circumstance,
then upon notice from time to time by such Lender to the Borrower, the Borrower shall within five days following receipt of such
notice pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of any Lender as to any such additional amount or amounts shall, in the absence of manifest
error, be conclusive and binding on the Borrower. In determining such amount, a Lender may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem applicable. Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 4.2 shall not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this Section 4.2 for any such compensation
suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such claim for compensation is retroactive, then the nine-month period referred to above shall be extended
to include the period of retroactive effect thereof).

 

SECTION 4.3 Taxes. The
Borrower covenants and agrees as follows with respect to Taxes.

 

(a) Any and all payments by the
Borrower under each Loan Document shall be made without setoff, counterclaim or other defense, and free and clear of, and without
deduction or withholding for or on account of, any Non-Excluded Taxes. In the event that any Taxes are imposed and required to
be deducted or withheld from any payment required to be made by Holdings, the Borrower or any of the Subsidiaries to or on behalf
of the Administrative Agent or any Lender under any Loan Document, then:

 

    	- 25 -

    	 

    

 

(i) the amount of such payment shall
be increased as may be necessary so that such payment is made, after withholding or deduction for or on account of such Non-Excluded
Taxes, in an amount that is not less than the amount provided for in such Loan Document; and

 

(ii) the Borrower shall withhold
the full amount of such Non-Excluded Taxes from such payment (as increased pursuant to clause (a)(i) and shall pay such
amount to the Governmental Authority imposing such Taxes in accordance with applicable law.

 

(b) In addition, the Borrower
shall pay all Other Taxes imposed to the relevant Governmental Authority imposing such Other Taxes in accordance with applicable
law.

 

(c) As promptly as practicable
after the payment of any Non-Excluded Taxes or Other Taxes, and in any event within 45 days of any such payment being due, the
Borrower shall furnish to the Administrative Agent a copy of an official receipt (or a certified copy thereof) evidencing the payment
of such Non-Excluded Taxes or Other Taxes.

 

(d) The Borrower shall indemnify
the Administrative Agent and each Lender for any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on (and whether
or not paid directly by) the Administrative Agent and each Lender whether or not such Non-Excluded Taxes or Other Taxes are correctly
or legally asserted by the relevant Governmental Authority. Promptly upon having knowledge that any such Non-Excluded Taxes or
Other Taxes have been levied, imposed or assessed, and promptly upon notice thereof by the Administrative Agent, the Borrower shall
pay such Non-Excluded Taxes or Other Taxes directly to the relevant Governmental Authority (provided that, neither the Administrative
Agent nor any Lender shall be under any obligation to provide any such notice to the Borrower). In addition, the Borrower shall
indemnify the Administrative Agent and each Lender for any incremental Non-Excluded Taxes that may become payable by the Administrative
Agent or any such Lender as a result of any failure of the Borrower to pay any Non-Excluded Taxes when due to the appropriate Governmental
Authority or to deliver to the Administrative Agent, pursuant to clause (c), documentation evidencing the payment of Non-Excluded
Taxes or Other Taxes. With respect to indemnification for Non-Excluded Taxes and Other Taxes actually paid by the Lender or the
indemnification provided in the immediately preceding sentence, such indemnification shall be made within 30 days after the date
the Administrative Agent or any Lender makes written demand therefor. The Borrower acknowledges that any payment made to the Administrative
Agent, any Lender or any Governmental Authority in respect of the indemnification obligations of the Borrower provided in this
clause shall constitute a payment in respect of which the provisions of clause (a) and this clause shall apply.

 

    	- 26 -

    	 

    

 

(e) Any Lender that is entitled
to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by
the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested
by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not
such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set
forth in Section (A), (B) and (D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution
or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender. Without limiting the generality of the foregoing, (i) any Lender that is a U.S. Person (as
defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent on or prior to the date
on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the
Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax.

 

Without limiting the generality
of the foregoing,

 

(A) any Lender that is a U.S. Person
shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed
copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

 

(B) any Lender this is not a U.S.
Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following
is applicable:

 

(1) in the case of a Lender claiming
the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan
Document, executed copies of IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant
to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

 

(2) executed copies of IRS Form
W-8ECI;

 

(3) in the case of a Lender claiming
the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form
of Exhibit F hereto to the effect that such Lender is not a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or
a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”)
and (y) executed copies of IRS Form W-8BEN-E; or

 

    	- 27 -

    	 

    

 

(4) to the extent a Lender is not
the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit G hereto or Exhibit H hereto, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the Lender is a partnership and one or more direct
or indirect partners of such Lender are claiming the portfolio interest exemption, such Lender may provide a U.S. Tax Compliance
Certificate substantially in the form of Exhibit I hereto on behalf of each such direct and indirect partner;

 

(C) any Lender this is not a U.S.
Person shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of
any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax,
duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or
the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D) if a payment made to a Lender
under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply
with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable),
such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time
or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or
the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form
or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

    	- 28 -

    	 

    

 

(f) If any party determines,
in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 4.3 (including by the payment of additional amounts pursuant to this Section 4.3), it shall
pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section
4.3 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified
party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant
to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event
that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to
this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified
party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or
otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph
(f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating
to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

SECTION 4.4 Payments, Computations;
Proceeds of Collateral, Etc. The parties hereto agree as follows:

 

(a) Unless otherwise expressly
provided in a Loan Document, all payments by the Borrower pursuant to each Loan Document shall be made without setoff, deduction
or counterclaim not later than 1:00 p.m. on the date due in same day or immediately available funds to the Administrative
Agent for the pro rata account of the Lenders entitled to receive such payment. Funds received after 1:00 p.m. on any day shall
be deemed to have been received by the Administrative Agent or the Lenders on the next succeeding Business Day. All interest and
fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over a year comprised of 360 days. Payments due on other than
a Business Day shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest
and fees in connection with that payment.

 

(b) All amounts received as a
result of the exercise of remedies under the Loan Documents (including from the proceeds of collateral securing the Obligations)
or under applicable law shall be applied upon receipt to the Obligations as follows: (i) first, to the payment in full in cash
of all interest (including interest accruing after the commencement of a proceeding in bankruptcy, insolvency or similar law, whether
or not permitted as a claim under such law) and fees owing under the Loan Documents, and all costs and expenses owing to the Administrative
Agent and the Lenders pursuant to the terms of the Loan Documents, until paid in full in cash, (ii) second, after payment in full
in cash of the amounts specified in clause (b)(i), to the payment of the principal amount of the Loans then outstanding,
(iii) third, after payment in full in cash of the amounts specified in clauses (b)(i) and (b)(ii), to the payment
of all other Obligations owing to the Administrative Agent and the Lenders, and (iv) fourth, after payment in full in cash of the
amounts specified in clauses (b)(i) through (b)(iii), and following the Termination Date, to the Borrower or
any other Person lawfully entitled to receive such surplus.

 

    	- 29 -

    	 

    

  

SECTION 4.5 Setoff. The
Administrative Agent and each Lender shall, upon the occurrence and during the continuance of any Event of Default, have the right
to appropriate and apply to the payment of the Obligations owing to it (whether or not then due), and (as security for such Obligations)
the Borrower hereby grants to the Administrative Agent and each Lender a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with or on behalf of the Administrative Agent
or any such Lender, as applicable. The Administrative Agent and each Lender agrees promptly to notify the Borrower after any such
appropriation and application made by the Administrative Agent or any such Lender; provided that, the failure to give such
notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent and each Lender under
this Section 4.5 are in addition to other rights and remedies (including other rights of setoff under applicable law or
otherwise) which the Administrative Agent and such Lender may have.

 

SECTION 4.6 LIBO Rate Not Determinable. If
prior to the commencement of any Interest Period, adequate and reasonable means do not exist for ascertaining the LIBO Rate for
such Interest Period, then the Administrative Agent shall give notice thereof to the Borrower as promptly as practicable. In the
event of any such determination, the Loans shall, until the Administrative Agent has advised the Borrower that the circumstances
giving rise to such notice no longer exist, bear interest at the interest rate in effect for the immediately preceding Interest
Period.

 

Article
V

CONDITIONS TO Making the LOANs

 

SECTION 5.1 Credit Extensions. The
obligation of each Lender to make a New Loan and the Continuing Lender to cause its Continuing Loan to remain outstanding hereunder
shall be subject to the execution and delivery of this Agreement by the parties hereto, the delivery of a Loan Request as requested
pursuant to Section 2.4, and the satisfaction of each of the conditions precedent set forth below in this Article V.

 

SECTION 5.1.1 Secretary’s Certificate,
Etc. The Administrative Agent shall have received from Holdings, the Borrower and
each Subsidiary party to a Loan Document, (i) a copy of a good standing certificate, dated a date reasonably close to the
Restatement Date, for each such Person and (ii) a certificate, dated as of the Restatement Date, duly executed and delivered
by such Person’s Secretary or Assistant Secretary, managing member or general partner, as applicable, as to:

 

(a) resolutions of each such
Person’s Board of Directors (or other managing body, in the case of other than a corporation) then in full force and effect
authorizing the execution, delivery and performance of each Loan Document to be executed by such Person and the transactions contemplated
hereby and thereby;

 

    	- 30 -

    	 

    

 

(b) the incumbency and signatures
of those of its officers, managing member or general partner, as applicable, authorized to act with respect to each Loan Document
to be executed by such Person; and

 

(c) the full force and validity
of each Organic Document of such Person and copies thereof;

 

upon which certificates the Administrative Agent may conclusively
rely until it shall have received a further certificate of the Secretary, Assistant Secretary, managing member or general partner,
as applicable, of any such Person cancelling or amending the prior certificate of such Person.

 

SECTION 5.1.2 Restatement Date Certificate. The
Administrative Agent shall have received a Restatement Date Certificate, dated as of the Restatement Date, and duly executed and
delivered by an Authorized Officer of the Borrower, in which certificate the Borrower shall agree and acknowledge that the statements
made therein shall be deemed to be true and correct representations and warranties of the Borrower as of such date, and, at the
time such certificate is delivered, such statements shall in fact be true and correct, and such statements shall include that
(i) the representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material
respects (except for any such representations qualified by materiality or Material Adverse Effect, which shall be true and correct
in all respects), (ii) no Default shall have then occurred and be continuing, or would result from the Loan to be advanced on
the Restatement Date and (iii) all of the conditions set forth in this Article V have been satisfied (other than to the
extent satisfaction of any such conditions are subject to the satisfaction of the Administrative Agent, any Lender or any of their
respective advisors or representatives). All documents and agreements required to be appended to the Restatement Date Certificate,
if any, shall be in form and substance reasonably satisfactory to the Administrative Agent, shall have been executed and delivered
by the requisite parties, and shall be in full force and effect.

 

SECTION 5.1.3 Payment of Outstanding Indebtedness,
Etc. On the Restatement Date, all Indebtedness identified in Schedule 8.2(b),
together with all interest, all prepayment premiums and all other amounts due and payable with respect thereto, shall have been
paid in full from the proceeds of the Loans and the commitments and obligations in respect of such Indebtedness (other than any
continuing reimbursement and indemnification obligations under the agreements governing such Indebtedness) shall have been terminated,
and all Liens securing payment of any such Indebtedness shall have been released and the Administrative Agent shall have received
all Uniform Commercial Code Form UCC-3 termination statements or other instruments (including customary payoff letters) as may
be suitable or appropriate in connection therewith.

 

SECTION 5.1.4 Delivery of Note. Each
Lender shall have received a Note duly executed and delivered by an Authorized Officer of the Borrower.

 

    	- 31 -

    	 

    

 

SECTION 5.1.5 Financial Information,
Etc. The Administrative Agent shall have received:

 

(a) audited consolidated financial
statements of Holdings and its Subsidiaries for each of the fiscal years ended December 31, 2013 and December
31, 2014;

 

(b) audited consolidated financial
statements of the Target and its Subsidiaries for each of the fiscal years ended December 31, 2012, December 31, 2013 and December
31, 2014;

 

(c) unaudited consolidated balance
sheets of Holdings and its Subsidiaries for each fiscal quarter ended after December 31, 2014, together with the related consolidated
statement of operations, shareholder’s equity and cash flows for the quarterly periods then ended;

 

(d) unaudited consolidated balance
sheets of the Target and its Subsidiaries for each fiscal quarter ended after December 31, 2014, together with the related statement
of operations, shareholder’s equity and cash flows for the quarterly periods then ended;

 

(e) unaudited pro forma combined
statements of operations of Holdings, the Borrower and the Target for (x) the fiscal year ended December 31, 2014 and (y) the fiscal
quarter ended March 31, 2015; and

 

(f) unaudited
pro forma combined balance sheet of Holdings, the Borrower and the Target for the fiscal quarter ended March 31, 2015.

 

SECTION 5.1.6 Compliance Certificate. The
Administrative Agent shall have received an initial pro forma Compliance Certificate, dated as of the Restatement Date, duly executed
(and with all schedules thereto duly completed) and delivered by the chief financial or accounting Authorized Officer of the Borrower.

 

SECTION 5.1.7 Solvency, Etc. The
Administrative Agent shall have received a solvency certificate duly executed and delivered by the chief financial or accounting
Authorized Officer of the Borrower, dated as of the Restatement Date, in form and substance reasonably satisfactory to the Administrative
Agent.

 

SECTION 5.1.8 Guarantee. The
Administrative Agent shall have received executed counterparts of the Guarantee, dated as of the Restatement Date, duly executed
and delivered by Holdings and each Subsidiary.

 

SECTION 5.1.9 Security Agreements. The
Administrative Agent shall have received executed counterparts of the Security Agreement, dated as of the Restatement Date, duly
executed and delivered by Holdings, the Borrower and each Subsidiary, together with:

 

(a) certificates (in the case
of Capital Securities that are securities (as defined in the UCC)) evidencing all of the issued and outstanding Capital Securities
owned by Holdings, the Borrower or any Subsidiary in the Borrower and the Subsidiaries, which certificates in each case shall be
accompanied by undated instruments of transfer duly executed in blank, or, in the case of Capital Securities that are uncertificated
securities (as defined in the UCC), confirmation and evidence satisfactory to the Administrative Agent that the security interest
therein has been transferred to and perfected by the Administrative Agent in accordance with Articles 8 and 9 of the UCC and all
laws otherwise applicable to the perfection of the pledge of such Capital Securities;

 

    	- 32 -

    	 

    

 

(b) financing statements suitable
in form for naming Holdings, the Borrower and each Subsidiary as a debtor and the Administrative Agent as the secured party, or
other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the security interests of the Lenders pursuant to the Security Agreement;

 

(c) UCC Form UCC-3 termination
statements, if any, necessary to release all Liens and other rights of any Person (i) in any assets of Holdings, the Borrower or
any Subsidiary, and (ii) securing any of the Indebtedness identified in Schedule 8.2(b), together with such other UCC Form
UCC-3 termination statements as the Administrative Agent may reasonably request from Holdings, the Borrower or any Subsidiary;

 

(d) landlord access agreements
and bailee letters in form and substance satisfactory to the Administrative Agent from each landlord to and mortgagee of Holdings,
the Borrower or any Subsidiary; and

 

(e) evidence that all deposit
accounts, lockboxes, disbursement accounts, investment accounts or other similar accounts of Holdings, the Borrower and each Subsidiary
are Controlled Accounts.

 

SECTION 5.1.10 Intellectual Property Security
Agreements. The Administrative Agent shall have received a Patent Security Agreement,
a Copyright Security Agreement and a Trademark Security Agreement, as applicable, each dated as of the Restatement Date, duly
executed and delivered by the Borrower or any Subsidiary that, pursuant to the Security Agreement, is required to provide such
intellectual property security agreements to the Lenders.

 

SECTION 5.1.11 [Intentionally Omitted.]

 

SECTION 5.1.12 Opinions of Counsel. The
Administrative Agent shall have received opinions, dated the Restatement Date and addressed to the Lenders, from:

 

(a) Morrison & Foerster LLP,
counsel to Holdings and the Borrower, in form and substance satisfactory to the Lenders;

 

(b) Calfee, Halter & Griswold LLP,
Ohio counsel to Holdings and the Borrower, in form and substance satisfactory to the Lenders; and

 

    	- 33 -

    	 

    

 

(c) Holland & Hart LLP,
Nevada counsel to Holdings and the Borrower, in form and substance satisfactory to the Lenders.

 

SECTION 5.1.13 Insurance. The
Administrative Agent shall have received certified copies of the insurance policies (or binders in respect thereof), from one
or more insurance companies satisfactory to the Administrative Agent, evidencing coverage required to be maintained pursuant to
each Loan Document, with the Administrative Agent, on behalf of the Lenders, named as loss payee or additional insured, as applicable.

 

SECTION 5.1.14 Closing Fees, Expenses,
Etc. The Administrative Agent and each Lender shall have received for its own account
all fees, costs and expenses due and payable pursuant to Section 11.3.

 

SECTION 5.1.15 Anti-Terrorism Laws. The
Administrative Agent shall have received, as applicable, all documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot
Act.

 

SECTION 5.1.16 Satisfactory Legal Form. All
documents executed or submitted pursuant hereto by or on behalf of Holdings, the Borrower or any Subsidiary shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel, and the Administrative Agent and its counsel shall
have received all information, approvals, resolutions, opinions, documents or instruments as the Lenders or their counsel may
reasonably request.

 

SECTION 5.1.17 Convertible Notes.
Holdings shall have received net proceeds of at least $62,800,000 from its issuance of
the Convertible Notes. The Convertible Notes Documents and the purchase agreement for the Convertible Notes shall be reasonably
satisfactory to the Administrative Agent in form and substance.

 

SECTION 5.1.18 Acquisition. The Acquisition
Agreement shall have been duly executed and delivered by the respective parties thereto on the date hereof and shall be in full
force and effect on the date hereof and the Restatement Date, all conditions precedent to the consummation of the Acquisition shall
have been satisfied and not waived (except such waivers as are not adverse to the interests of the Lenders, as determined by each
Lender in its sole discretion) on the Restatement Date, neither the Target nor the Borrower shall have consented to any action
that requires their consent under the Acquisition Agreement (except such consents as are not adverse to the interests of the Lenders,
as determined by each Lender in its sole discretion) and the Acquisition shall be consummated concurrently with the funding of
the Loans. The Administrative Agent shall have received a copy of the Acquisition Agreement, the terms of which shall not have
not been amended, supplemented, modified or waived after the date hereof in any respect that is adverse to the interests of the
Lenders, as determined by each Lender in its sole discretion.

 

SECTION 5.1.19 Perfection Certificates. The
Administrative Agent shall have received duly completed Perfection Certificates with respect to Holdings, the Borrower and the
Target, each dated as of the Restatement Date, duly executed with all attachments contemplated thereby and delivered by the applicable
party.

 

    	- 34 -

    	 

    

 

Article
VI

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Administrative Agent
and the Lenders to enter into this Agreement and to make the Loans hereunder, the Borrower represents and warrants to each Lender
as set forth in this Article VI (it being understood and agreed that (i) the representations and warranties made on the
Restatement Date are deemed to be made concurrently with the making of the New Loans and the consummation of the Acquisition and
(ii) references to Holdings, the Borrower and each Subsidiary in this Article VI include the Target).

 

SECTION 6.1 Organization, Etc. Holdings
and each of its Subsidiaries (a) is validly organized and existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, (b) is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction
where the nature of its business requires such qualification, except where the failure to do so would not reasonably be expected
to result in a Material Adverse Effect, (c) has full power and authority and holds all requisite governmental licenses, permits
and other approvals to enter into and perform its Obligations under each Loan Document to which it is a party and (d) has full
power and authority and holds all requisite material governmental licenses, permits and other approvals to own and hold under
lease its property and to conduct its business substantially as currently conducted by it.

 

SECTION 6.2 Due Authorization, Non-Contravention,
Etc. The execution, delivery and performance by Holdings and each of its Subsidiaries
of each Loan Document executed or to be executed by it are in each case within such Person’s powers, have been duly authorized
by all necessary action, and do not:

 

(a) contravene (i) Holdings’,
the Borrower’s or any Subsidiary’s Organic Documents, (ii) any court decree or order binding on or affecting Holdings,
the Borrower or any Subsidiary or (iii) any law or governmental regulation binding on or affecting Holdings, the Borrower or any
Subsidiary; or

 

(b) result in (i) or require
the creation or imposition of any Lien on Holdings’, the Borrower’s or any Subsidiary’s properties (except as
permitted by this Agreement) or (ii) a default under any contract, agreement, or instrument binding on or affecting Holdings, the
Borrower or any Subsidiary.

 

SECTION 6.3 Government Approval, Regulation,
Etc. No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority or other Person (other than those that have been, or on the Restatement Date will be, duly obtained
or made and which are, or on the Restatement Date will be, in full force and effect) is required for the due execution, delivery
or performance by Holdings, the Borrower or any Subsidiary of any Loan Document to which it is a party.

 

SECTION 6.4 Validity, Etc. Each
Loan Document to which Holdings or any of its Subsidiaries is a party constitutes the legal, valid and binding obligations of
such Person enforceable against such Person in accordance with its respective terms (except, in any case, as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally
and by principles of equity).

 

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SECTION 6.5 Financial Information. The
financial statements of Holdings and its Subsidiaries furnished to the Administrative Agent pursuant to Section 5.1.5 have
been prepared in accordance with GAAP, consistently applied, and present fairly the consolidated financial condition of the Persons
covered thereby as at the dates thereof and the results of their operations for the periods then ended. The projections and pro
forma financial information (the “Projections”) included in such materials are based upon good faith estimates
and assumptions believed by the Borrower to be reasonable at the time made; it being recognized by the Administrative Agent and
the Lenders that such Projections as to future events are not to be viewed as fact and that actual results during the period or
periods covered by the Projections may differ from such projected results and such differences may be material and adverse.

 

SECTION 6.6 No Material Adverse Change. Except
as set forth on Schedule 6.6, there has been no material adverse change in the business, financial performance or condition,
operations (including the results thereof), assets, properties or prospects of Holdings, the Borrower or any Subsidiary since
December 31, 2014.

 

SECTION 6.7 Litigation, Labor Matters
and Environmental Matters. 

 

(a) Except as described on Schedule
6.7(a), there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or,
to the knowledge of the Borrower, threatened against or affecting Holdings or any of its Subsidiaries (i) as to which there is
a reasonable likelihood of an adverse determination and that, if adversely determined, would reasonably be expected, individually
or in the aggregate, to result in liabilities to Holdings, the Borrower and/or any Subsidiary in excess of $500,000 or (ii) that
would reasonably be likely to adversely affect this Agreement or the transactions contemplated hereby in any material respect.

 

(b) Except as described on Schedule
6.7(b), there are no labor controversies pending against or, to the knowledge of the Borrower, threatened against or affecting
Holdings or any of its Subsidiaries (i) that would reasonably be expected, individually or in the aggregate, to result in liabilities
to Holdings, the Borrower and/or any Subsidiary in excess of $500,000 or (ii) that would reasonably be likely to result in a Material
Adverse Effect or adversely affect this Agreement or the transaction contemplated hereby in any material respect.

 

(c) None of Holdings or any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any Permit under or
in connection with any Environmental Law (“Environmental Permit”) where such failure to comply would reasonably
be expected, individually or in the aggregate, to result in liabilities to Holdings or any of its Subsidiaries in excess of $500,000,
(ii) is or has been subject to any Environmental Liability reasonably expected to be in excess of $500,000, individually or in
the aggregate, (iii) has received written notice of any Environmental Liability that would reasonably be expected, individually
or in the aggregate, to result in liabilities to Holdings or any of its Subsidiaries in excess of $500,000, or (iv) knows of any
basis for any Environmental Liability that would reasonably be expected, individually or in the aggregate, to result in liabilities
to Holdings, the Borrower and/or any Subsidiary in excess of $500,000.

 

    	- 36 -

    	 

    

 

SECTION 6.8 Subsidiaries. Holdings
has no Subsidiaries except those Subsidiaries which are identified in Schedule 6.8 (which Schedule also identifies the
direct and indirect owners of the Capital Securities of such Subsidiaries) or which are permitted to have been organized or acquired
after the Restatement Date in accordance with Section 8.5 or Section 8.7.

 

SECTION 6.9 Ownership of Properties. Holdings
and its Subsidiaries own (i) in the case of owned real property, good and marketable fee title to, and (ii) in the case
of owned personal property, good and valid title to, or, in the case of leased real or personal property, valid and enforceable
leasehold interests (as the case may be) in, all of its properties and assets, tangible and intangible, of any nature whatsoever,
free and clear in each case of all Liens or claims, except for Liens permitted pursuant to Section 8.3, except defects
in title which are not material.

 

SECTION 6.10 Taxes. Holdings
and each of its Subsidiaries has filed all tax returns and reports required by law to have been filed by it and has paid all Taxes
due and owing, except (i) any such Taxes which are being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its books and (ii) any Taxes that do not exceed,
individually or in the aggregate, $500,000.

 

SECTION 6.11 Benefit Plans, Etc. None
of Holdings or any of its Subsidiaries or any of their respective ERISA Affiliates sponsors, maintains, contributes to, is required
to contribute to, or has any actual or potential liability with respect to, any Benefit Plan. None of Holdings or any of its Subsidiaries
is a party to any collective bargaining agreement, and none of the employees of Holdings or any of its Subsidiaries are subject
to any collective bargaining agreement. Each “employee benefit plan” as defined in section 3(3) of ERISA that provides
retirement benefits and that is sponsored by Holdings or any of its ERISA Affiliates intended to be tax qualified under section
401 or 501 of the Code has a determination letter or opinion letter from the Internal Revenue Service on which it is entitled
to rely, and no assets of any such plan are invested in Capital Securities of Holdings or the Borrower. Each employee benefit
plan, program or arrangement sponsored, maintained, contributed to or required to be contributed to by Holdings or any of its
Subsidiaries has complied in all material respects with its terms and applicable law.

 

SECTION 6.12 Accuracy
of Information. None of the information heretofore or contemporaneously furnished
in writing to the Administrative Agent or any Lender by or on behalf of Holdings or any of its Subsidiaries in connection with
any Loan Document or any transaction contemplated hereby, taken as a whole, contains any untrue statement of a material fact,
or omits to state any material fact necessary to make any information not misleading.

 

SECTION 6.13 Regulations
U and X. None of Holdings or any of its Subsidiaries is engaged in the business
of extending credit for the purpose of buying or carrying margin stock, and no proceeds of the Loans will be used to purchase
or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U
or Regulation X. Terms for which meanings are provided in F.R.S. Board Regulation U or Regulation X or any regulations substituted
therefor, as from time to time in effect, are used in this Section 6.13 with such meanings.

 

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SECTION 6.14 Solvency. Both
immediately before and after giving effect to the making of the New Loans, Holdings and its Subsidiaries, taken as a whole, on
a consolidated basis, are Solvent.

 

SECTION 6.15 Intellectual
Property.

 

(a) Schedule 6.15(a) sets
forth a complete and accurate list as of the Restatement Date of all (i) Patents, (ii) registered and material unregistered Trademarks
(including domain names) and any pending registrations for Trademarks and (iii) any other registered Intellectual Property, in
each case owned or licensed by Holdings, the Borrower or any of the Subsidiaries. For each item of Intellectual Property listed
on Schedule 6.15(a), the Borrower has, where relevant, indicated (A) the countries in each case in which such item is registered,
(B) the application numbers, (C) the registration or patent numbers, (D) with respect to the Patents, the expected expiration date
of the issued Patents, (E) the owner of such item of Intellectual Property and (F) with respect to Intellectual Property owned
by any third party, the agreement pursuant to which that Intellectual Property is licensed to Holdings, the Borrower or any Subsidiary.

 

(b) With respect to all Intellectual
Property listed on Schedule 6.15(a):

 

(i) Holdings, the Borrower or a
Subsidiary owns or has a valid license to such Intellectual Property free and clear of any and all Liens other than Liens permitted
pursuant to Section 8.3 and all such Intellectual Property is in full force and effect, and have not expired, lapsed or
been forfeited, cancelled or abandoned;

 

(ii) each of Holdings, the Borrower
and the Subsidiaries, as applicable, has taken commercially reasonable actions to maintain and protect such Intellectual Property
and, to the Borrower’s knowledge, there are no unpaid maintenance or renewal fees payable by Holdings, the Borrower or any
of the Subsidiaries that are currently overdue for any of such registered Intellectual Property;

 

(iii) except as described on Schedule
6.15(b), there is no proceeding challenging the validity or enforceability of any such Intellectual Property, none of Holdings,
the Borrower or any of the Subsidiaries is involved in any such proceeding with any Person and none of the Intellectual Property
is the subject of any Other Administrative Proceeding;

 

(iv) to the knowledge of the Borrower,
(A) such Intellectual Property is valid, enforceable and subsisting and (B) no event has occurred, and nothing has been done or
omitted to have been done, that would affect the validity or enforceability of such Intellectual Property; and

 

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(v) except as otherwise indicated
on Schedule 6.15(a), each of Holdings, the Borrower and each Subsidiary is the sole and exclusive owner of all right, title
and interest in and to all such Intellectual Property that is owned by it.

 

(c) Except as described on Schedule
6.15(c), the Borrower has not given notice to any third party alleging that such third party is committing any act of Infringement
of any Intellectual Property listed on Schedule 6.15(a).

 

(d) With respect to each license
agreement listed on Schedule 6.15(a), such license agreement (i) is in full force and effect and is binding upon and enforceable
against Holdings, the Borrower and the Subsidiaries party thereto and all other parties thereto in accordance with its terms, (ii)
has not been amended or otherwise modified and (iii) has not suffered a default or breach thereunder. To the Borrower’s knowledge,
none of Holdings, the Borrower or any of the Subsidiaries has taken any action that would permit any other Person party to any
such license agreement to have, and no such Person otherwise has, any defenses, counterclaims or rights of setoff thereunder.

 

(e) Except as set forth on Schedule
6.15(e), none of Holdings, the Borrower or any of the Subsidiaries has received written notice from any third party alleging
that the conduct of its business (including the development, manufacture, use, sale or other commercialization of any Product)
Infringes any Intellectual Property of that third party and, to the knowledge of the Borrower, the conduct of its business and
the business of Holdings and the Subsidiaries (including the development, manufacture, use, sale or other commercialization of
any Product) does not Infringe any Intellectual Property of any third party.

 

(f) Holdings, the Borrower and
the Subsidiaries have used commercially reasonable efforts and precautions to protect their respective commercially significant
unregistered Intellectual Property.

 

SECTION 6.16 Material
Agreements. Set forth on Schedule 6.16 is a complete and accurate
list as of the Restatement Date of all Material Agreements, with an adequate description of the parties thereto, subject matter
thereof and amendments and modifications thereto. Each such Material Agreement (i) is in full force and effect and is binding
upon and enforceable against (a) Holdings and each of its Subsidiaries party thereto, as the case may be, and (b) to the knowledge
of the Borrower, all other parties thereto, in each case in accordance with its terms (except, in each case, as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally
and by principles of equity), and (ii) no material breach or default thereunder exists on the part of Holdings or any of its Subsidiaries
or, to the knowledge of the Borrower, any other party thereto.

 

SECTION 6.17 Permits. Holdings
and its Subsidiaries have all Permits, including Environmental Permits, necessary or required for the ownership, operation and
conduct of their business and the distribution of the Products, except where the failure to do so would not reasonably be expected
to be material to the business of Holdings and its Subsidiaries, taken as a whole. All such Permits are validly held and there
are no defaults thereunder.

 

    	- 39 -

    	 

    

 

Regulatory
Matters.

 

(a) Set forth on Schedule
6.18(a) is a complete and accurate list as of the Restatement Date of all material Regulatory Authorizations relating to Holdings,
the Borrower or any Subsidiary and the Products (on a per Product basis). All such Regulatory Authorizations are (i) legally and
beneficially owned exclusively by Holdings, the Borrower or one of the Subsidiaries, free and clear of all Liens other than Liens
permitted pursuant to Section 8.3, and (ii) validly registered and on file with the applicable Governmental Authority or
Notified Body, in compliance with all filing and maintenance requirements (including any fee requirements) thereof, and are in
good standing, valid and enforceable with the applicable Governmental Authority or Notified Body. No proceeding is pending against
Holdings or any of its Subsidiaries or, to the Borrower’s knowledge, threatened to revoke or amend any of the Regulatory
Authorizations nor are there facts or circumstances of which the Borrower is aware which form a basis upon which a Governmental
Authority or Notified Body reasonably could seek to revoke or amend any Regulatory Authorization. All required notices, registrations
and listings, supplemental applications or notifications, reports (including field alerts, medical device reports or other reports
of adverse experiences) and other required filings with respect to the Products have been filed with the FDA and all other applicable
Governmental Authorities and Notified Bodies.

 

(a) Except as set forth on Schedule
6.18(b) and without limiting the generality of any other representations and warranties made by the Borrower, (i) the Products
comply in all material respects with (A) all applicable laws, rules, regulations, orders, injunctions and decrees of the FDA and
other applicable Governmental Authorities, including all applicable requirements of state authorities and the FD&C Act and
(B) all Product Authorizations and other Regulatory Authorizations; (ii) Holdings, the Borrower, the Subsidiaries and their respective
suppliers have not received any notification from any Governmental Authority asserting that any 361 Product lacks a required Product
Authorization; (iii) there is no pending regulatory action, investigation or inquiry (other than non-material routine or periodic
inspections or reviews) against Holdings, the Borrower or any of the Subsidiaries or any of their respective suppliers with respect
to the Products, and to the Borrower’s knowledge there is no basis for any adverse regulatory action against Holdings, the
Borrower or any of the Subsidiaries or, to the knowledge of the Borrower, their respective suppliers with respect to the Products;
and (iv) without limiting the foregoing, (A) no product recalls, safety alerts, corrections, withdrawals, marketing suspensions,
removals or the like have been voluntarily initiated within the five years preceding the Restatement Date or requested, demanded
or ordered by any Governmental Authority with respect to any Products, and there is no basis for the issuance of any such product
recalls, safety alerts, corrections, withdrawals, marketing suspensions, removals or the like by any Person with respect to any
Products and (B) no criminal, injunctive, seizure, detention or civil penalty actions have at any time been commenced or threatened
in writing by any Governmental Authority with respect to or in connection with any Products, there are no consent decrees (including
plea agreements) which relate to any Products, and there is no basis for the commencement for any criminal injunctive, seizure,
detention or civil penalty actions by any Governmental Authority relating to the Products or for the issuance of any consent decrees.
None of Holdings, the Borrower, any of the Subsidiaries or, to the Borrower’s knowledge, any of their respective suppliers
is employing or utilizing the services of any individual who has been debarred or temporarily suspended under any applicable law,
rule or regulation.

 

    	- 40 -

    	 

    

 

(b) Except as set forth in Schedule
6.18(c), in all material respects with respect to Products, (i) all design, manufacturing, storage, distribution, packaging,
labeling, recordkeeping and other supply activities by Holdings, the Borrower, the Subsidiaries and, to the Borrower’s knowledge,
their respective suppliers relating to such Products have been conducted, and are currently being conducted, in compliance with
the applicable requirements of the FD&C Act and other requirements of the FDA and all other Governmental Authorities, including
current good manufacturing practices, cGTPs and quality system regulations, (ii) none of Holdings, the Borrower, any of the Subsidiaries,
or, to the knowledge of the Borrower, any of their respective suppliers has received written notice or threat of commencement of
action by any Governmental Authority to withdraw its approval of or to enjoin production of the Products at any facility and (iii)
all applicable post-approval and post-clearance procedures and activities have been carried out, and have been carried out in accordance
with the requirements of the Regulatory Authorizations and all applicable laws, rules and regulations. No Product sold by or in
the inventory of Holdings, the Borrower or any of the Subsidiaries is adulterated or misbranded, all labeling, packaging (including
inserts), product information, advertising and promotional materials and activities are in compliance in all material respects
with applicable FDA and other Governmental Authority requirements, and the Products are in compliance with all classification,
registration, listing, marking, tracking and audit requirements of the FDA and any other Governmental Authority.

 

(c) Except as set forth in Schedule
6.18(d), all activities of Holdings, the Borrower, the Subsidiaries and, to the Borrower’s knowledge, their respective
suppliers related to the procurement, use, and transplantation of tissue, including allograft bone tissue, have been conducted,
and are currently being conducted in material compliance with the applicable requirements of the National Organ Transplant Act.

 

(d) The Borrower has made available
to the Administrative Agent complete and accurate copies of all Product Authorizations and regulatory dossiers relating thereto,
all medical device reports and communications to or from the FDA and other relevant Governmental Authorities and Notified Bodies,
including inspection reports, warning letters, and material reports, studies and other correspondence, other than opinions of counsel
that are attorney-client privileged, with respect to regulatory matters relating to Holdings, the Borrower or any of the Subsidiaries,
the conduct of their business and the Products.

 

(e) All studies, tests and preclinical
and clinical trials conducted relating to the Products, in all material respects, by or on behalf of Holdings, the Borrower and
the Subsidiaries and, to the knowledge of the Borrower, their respective licensees, licensors and third party services providers
and consultants, have been conducted, and are currently being conducted, in accordance with experimental protocols, procedures
and controls pursuant to, where applicable, current good clinical practices and current good laboratory practices and other applicable
laws, rules regulations. All results of such studies, tests and trials, and all other material information related to such studies,
tests and trials, have been made available to the Administrative Agent. The summaries and descriptions of any of the foregoing
provided to the Administrative Agent are accurate and contain no material omissions. None of Holdings, the Borrower, any of the
Subsidiaries, or, to the knowledge of the Borrower, any of their respective licensees, licensors or third party services providers
or consultants, has received from the FDA or other applicable Governmental Authority any notices or correspondence requiring the
termination, suspension, material modification or clinical hold of any studies, tests or clinical trials in any material respect
with respect to or in connection with the Products.

 

    	- 41 -

    	 

    

 

(f) There has been no material
untrue statement of fact and no fraudulent statement made by Holdings, the Borrower, any of the Subsidiaries, or, to the knowledge
of the Borrower, any of their respective agents or representatives to the FDA or any other Governmental Authority, and there has
been no failure to disclose any material fact required to be disclosed to the FDA or any other Regulatory Agency.

 

(g) The transactions contemplated
by the Loan Documents (or contemplated by the conditions to effectiveness of any Loan Document) will not impair Holdings’,
the Borrower’s or any of the Subsidiaries’ ownership of or rights under (or the license or other right to use, as the
case may be) any Regulatory Authorizations relating to the Products in any material manner.

 

SECTION 6.19 Transactions
with Affiliates. Except as set forth on Schedule 6.19, (i) other than any
transaction between Holdings, the Borrower or any Subsidiaries, none of Holdings, the Borrower or any Subsidiary has entered into,
renewed, extended or been a party to, any transaction (including the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any of its Affiliates during the two-year period immediately
prior to the Restatement Date and (ii) no such transaction is in existence as of the date hereof or the Restatement Date.

 

SECTION 6.20 Investment
Company Act. None of Holdings, the Borrower or any Subsidiary is an “investment
company” or is “controlled” by an “investment company,” as such terms are defined in, or subject
to regulation under, the Investment Company Act of 1940, as amended.

 

SECTION 6.21 OFAC. Except
as set forth on Schedule 6.21, none of Holdings or any of its Subsidiaries or, to the knowledge of the Borrower,
any Related Party (a) is currently the subject of any Sanctions, (b) is located, organized or residing in any Designated Jurisdiction
or (c) is or has been (within the previous five years) engaged in any transaction with any Person who is now or was then the subject
of Sanctions or who is located, organized or residing in any Designated Jurisdiction. No Loan, nor the proceeds from any Loan,
has been or will be used, directly or indirectly, to lend, contribute or provide to, or has been or will be otherwise made available
to fund, any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized
or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in
any violation by Holdings or any of its Subsidiaries or, to the knowledge of the Borrower, any other Person (including the Lenders
and their Affiliates) of Sanctions.

  

    	- 42 -

    	 

    

 

SECTION 6.22 Holdings. Holdings
(i) is a holding company with no activities (other than activities customarily carried out or required of a publicly-owned passive
holding company, including the entry into customary and ordinary course insurance programs and agreements concerning the Capital
Securities of Holdings), (ii) has no operations, assets (other than Capital Securities of the Borrower and Subsidiaries) or liabilities
(other than Obligations under the Loan Documents, the Convertible Notes Documents and liabilities arising in the ordinary course)
and (iii) is not party to any contracts or agreements, in each case other than (a) the Convertible Notes Documents, (b) the Acquisition
Agreement, (c) employment and employee benefit contracts, (d) customary contracts with accountants, lawyers and other advisors
and (e) activities, operations, assets, liabilities, contracts and agreements that do not exceed, and would not reasonably be
expected to result in liabilities to Holdings, the Borrower and any Subsidiaries that exceed, $500,000 individually or $1,000,000
in the aggregate.

 

SECTION 6.23 Deposit
and Disbursement Accounts. Set forth on Schedule 6.23 is a complete
and accurate list as of the Restatement Date of all banks and other financial institutions at which Holdings, the Borrower or
any Subsidiary maintains deposit accounts, lockboxes, disbursement accounts, investment accounts or other similar accounts, such
Schedule correctly identifies the name, address and telephone number of each bank or financial institution, the name in which
each such account is held, the type of each such account, and the complete account number for each such account, and each such
account is a Controlled Account.

 

Article
VII

AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees with the Lenders that until
the Termination Date has occurred, the Borrower and Holdings will, and will cause the Subsidiaries to, perform or cause to be performed
the obligations set forth below.

 

SECTION 7.1 Financial Information, Reports,
Notices, Etc. The Borrower will furnish the Administrative Agent copies of the following
financial statements, reports, notices and information:

 

(a) as soon as available and
in any event within 30 days after the end of each calendar month, in each case with supporting detail and certified as complete
and correct by the chief financial or accounting Authorized Officer of the Borrower (subject to normal year-end audit adjustments),
for each of (1) the Borrower, (2) Target and (3) Holdings and its consolidated Subsidiaries, (i) unaudited reports of the Consolidated
EBITDA and Revenue Base for such calendar month and the Liquidity at the end of such calendar month and (ii) unaudited reports
of (x) the Revenue Base and Consolidated EBITDA for the period commencing at the end of the previous Fiscal Year and ending with
the end of such calendar month, and including in comparative form the figures for the corresponding calendar month in, and the
year to date portion of, the immediately preceding Fiscal Year and (y) the Liquidity for the corresponding calendar month in the
preceding Fiscal Year, in comparative form;

 

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(b) as soon as available and
in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, an unaudited consolidated
balance sheet of Holdings, the Borrower and the Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of
income and cash flow of Holdings, the Borrower and the Subsidiaries for such Fiscal Quarter and for the period commencing at the
end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and including (in each case) in comparative form
the figures for the corresponding Fiscal Quarter in, and the year to date portion of, the immediately preceding Fiscal Year, certified
as complete and correct by the chief financial or accounting Authorized Officer of the Borrower (subject to normal year-end audit
adjustments); provided, that consolidated financial information in this clause (b) shall be deemed furnished to the
Administrative Agent when Holdings files with the SEC a publicly available Quarterly Report on Form 10-Q containing such information;

 

(c) as soon as available and
in any event within 90 days after the end of each Fiscal Year, a copy of the consolidated balance sheet of Holdings, the Borrower
and the Subsidiaries, and the related consolidated statements of income and cash flow of Holdings, the Borrower and the Subsidiaries
for such Fiscal Year, setting forth in comparative form the figures for the immediately preceding Fiscal Year, audited (without
any Impermissible Qualification) by independent public accountants acceptable to the Administrative Agent (for the avoidance of
doubt, the current independent public accountant of Holdings and the Borrower shall be considered acceptable to the Administrative
Agent), which shall include a calculation of the financial covenants set forth in Section 8.4 and stating that, in performing
the examination necessary to deliver the audited financial statements of the Borrower, no knowledge was obtained of any Event of
Default; provided, that information in this clause (c) shall be deemed furnished to the Administrative Agent when
Holdings files with the SEC a publicly available Annual Report on Form 10-K containing such information;

 

(d) concurrently with the delivery
of the financial information pursuant to clauses (a), (b) or (c), a Compliance Certificate, executed
by the chief financial or accounting Authorized Officer of the Borrower, (i) showing compliance with the financial covenants set
forth in Section 8.4 and stating that no Default has occurred and is continuing (or, if a Default has occurred, specifying
the details of such Default and the action that Holdings, the Borrower or any of the Subsidiaries has taken or proposes to take
with respect thereto), (ii) stating that no Subsidiary has been formed or acquired since the delivery of the last Compliance
Certificate (or, if a Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate, a statement
that such Subsidiary has complied with Section 7.8); (iii) stating that no real property has been acquired by Holdings,
the Borrower or any of the Subsidiaries since the delivery of the last Compliance Certificate (or, if any real property has been
acquired since the delivery of the last Compliance Certificate, a statement that the Borrower has complied with Section 7.8
with respect to such real property); and (iv) listing any new Material Agreements entered into, and any amendments or terminations
of Material Agreements, in each case since the last Compliance Certificate delivered hereunder;

 

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(e) concurrently with the delivery
of the financial information pursuant to clauses (b) or (c), copies of the unaudited consolidating balance sheets
and unaudited consolidating statements of income and cash flow for Holdings and each of its Subsidiaries, prepared by the management
of Holdings and certified as complete and correct by the chief financial or accounting Authorized Officer of the Borrower;

 

(f) as soon as possible and in
any event within three days after the Borrower obtains knowledge of the occurrence of a Default, a statement of an Authorized Officer
of the Borrower setting forth details of such Default and the action which Holdings, the Borrower or any of the Subsidiaries has
taken or proposes to take with respect thereto;

 

(g) as soon as possible and in
any event within ten days after the Borrower obtains knowledge of (i) the occurrence of any material adverse development with
respect to any litigation, action, proceeding or labor controversy described in Schedule 6.7(a) or Schedule 6.7(b)
or (ii) the commencement of any litigation, action, proceeding or labor controversy of the type and materiality described
in Section 6.7, notice thereof and, to the extent the Administrative Agent requests, copies of all documentation relating
thereto; provided, that information in this clause (f) shall be deemed furnished to the Administrative Agent when
Holdings files with the SEC a publicly available Quarterly Report on Form 10-Q or Annual Report on Form 10-K containing such information;

 

(h) as soon as possible and in
any event within ten days after the Borrower obtains knowledge of any return, recovery, dispute or claim related to Product or
inventory that involves more than $500,000;

 

(i) as soon as possible and in
any event within ten days after the Borrower obtains knowledge of (i) any claim that Holdings, the Borrower, any of the Subsidiaries
or one of their ERISA Affiliates has actual or potential liability under a Benefit Plan, (ii) any effort to unionize the employees
of Holdings, the Borrower or any Subsidiary or (iii) correspondence with the Internal Revenue Service regarding the qualification
of a retirement plan under Section 401(a) of the Code;

 

(j) as soon as possible and in
any event within ten days after receipt thereof, copies of all “management letters” (or equivalent) submitted to Holdings,
the Borrower or any of the Subsidiaries by the independent public accountants referred to in clause (b) in connection with
each audit made by such accountants;

 

(k) as soon as possible and in
any event within ten days after the sending or filing thereof, copies of all reports, notices, prospectuses and registration statements
which Holdings, the Borrower or any of the Subsidiaries files with the SEC or any national securities exchange (to the extent they
are not publicly available on EDGAR);

 

(l) as soon as possible and in
any event within ten days upon receipt thereof, copies of all subpoenas, requests for information and other notices regarding any
active or potential investigation of, or claim or litigation against, Holdings, the Borrower or any of the Subsidiaries by any
Governmental Authority, and the results of any inspections of any manufacturing facilities of Holdings, the Borrower or any of
the Subsidiaries or any third party suppliers of Holdings, the Borrower or any of the Subsidiaries by any Governmental Authority
(including any Form FDA 483s);

 

    	- 45 -

    	 

    

  

(m) such other financial and
other information as the Administrative Agent may from time to time reasonably request (including information and reports in such
detail as the Administrative Agent may request with respect to the terms of and information provided pursuant to the Compliance
Certificate).

 

SECTION 7.2 Maintenance of Existence;
Compliance with Contracts, Laws, Etc. Holdings and each of its Subsidiaries will
(a) preserve and maintain its legal existence (except as otherwise permitted by Section 8.7), (b) perform in all material
respects its obligations under Material Agreements to which Holdings, the Borrower or any of the Subsidiaries is a party, and
(c) comply in all material respects with all applicable material laws, rules, regulations and orders, including the payment (before
the same become delinquent), of all Taxes, imposed upon Holdings, the Borrower or any of the Subsidiaries or upon their property
except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on the books of Holdings, the Borrower or any of the Subsidiaries, as applicable.

 

SECTION 7.3 Maintenance of Properties. Each
of Holdings, the Borrower and the Subsidiaries will maintain, preserve, protect and keep its and their respective properties in
good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements
so that the business carried on by Holdings, the Borrower or any of the Subsidiaries may be properly conducted at all times, unless
Holdings, the Borrower or any of the Subsidiaries determines in good faith that the continued maintenance of such property is
no longer economically desirable, necessary or useful to the business of Holdings, the Borrower or any of the Subsidiaries or
the Disposition of such property is otherwise permitted by Section 8.7 or Section 8.8.

 

SECTION 7.4 Insurance. Each
of Holdings, the Borrower and each of the Subsidiaries will maintain:

 

(a) insurance on its property
with financially sound and reputable insurance companies against business interruption, loss and damage in at least the amounts
(and with only those deductibles) customarily maintained, and against such risks as are typically insured against in the same general
area, by Persons of comparable size engaged in the same or similar business as Holdings, the Borrower and the Subsidiaries; and

 

(b) all worker’s compensation,
employer’s liability insurance or similar insurance as may be required under the laws of any state or jurisdiction in which
it may be engaged in business.

 

Without limiting the foregoing, all insurance policies required
pursuant to this Section 7.4 shall (i) name the Administrative Agent (for its benefit and the benefit of each Lender)
as mortgagee and loss payee (in the case of property insurance) and additional insured (in the case of liability insurance), as
applicable, and provide that no cancellation or modification of the policies will be made without at least 30 days’ prior
written notice to the Administrative Agent and (ii) be in addition to any requirements to maintain specific types of insurance
contained in the other Loan Documents.

 

    	- 46 -

    	 

    

 

SECTION 7.5 Books and Records. Each
of Holdings, the Borrower and each of the Subsidiaries will keep books and records in accordance with GAAP which accurately reflect
all of its business affairs and transactions and permit the Administrative Agent or any of its representatives, at reasonable
times and intervals upon reasonable notice to the Borrower, to visit Holdings’, the Borrower’s or any of the Subsidiaries’
offices, to discuss Holdings’, the Borrower’s or any of the Subsidiaries’ financial or other matters with its
officers and employees, and its independent public accountants (and the Borrower hereby authorizes such independent public accountant
to discuss Holdings’, the Borrower’s and any of the Subsidiaries’ financial and other matters with the Administrative
Agent or its representatives whether or not any representative of Holdings, the Borrower or any of the Subsidiaries is present)
and to examine (and photocopy extracts from) any of its books and records. The Borrower shall pay any fees of such independent
public accountant incurred in connection with the Administrative Agent’s exercise of its rights pursuant to this Section
7.5.

 

SECTION 7.6 Environmental Law Covenant. Each
of Holdings, the Borrower and each of the Subsidiaries will (i) use and operate all of its and their businesses, facilities and
properties in material compliance with all Environmental Laws, and keep and maintain all Environmental Permits and remain in compliance
therewith, and (ii) promptly notify the Administrative Agent of, and provide the Administrative Agent with copies of all material
claims, complaints, notices or inquiries relating to, any actual or alleged non-compliance with any Environmental Laws or Environmental
Permits or any actual or alleged Environmental Liabilities. Holdings, the Borrower and each of the Subsidiaries will promptly
resolve, remedy and mitigate any such non-compliance or Environmental Liabilities, and shall keep the Administrative Agent informed
as to the progress of same.

 

SECTION 7.7 Use of Proceeds. The
Borrower will apply the proceeds of the Loans in accordance with Schedule 7.7.

 

SECTION 7.8 Future Guarantors, Security,
Etc. Holdings, the Borrower and each Subsidiary will execute any documents, financing
statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Administrative
Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority (subject to Liens permitted by Section 8.3) of the Liens
created or intended to be created by the Loan Documents (including by obtaining landlord access agreements in form and substance
reasonably satisfactory to the Administrative Agent in respect of any leased real property). Prior to or upon acquiring or organizing
any new Subsidiary, the Borrower shall cause such Subsidiary to execute a supplement (in form and substance reasonably satisfactory
to the Administrative Agent) to the Guarantee, Security Agreement and each other applicable Loan Document in favor of the Administrative
Agent and the Lenders. The Borrower will promptly notify the Administrative Agent of any subsequently acquired real property and
will provide the Administrative Agent with a description of such real property, the acquisition date thereof and the purchase
price therefor. In addition, from time to time, each of Holdings, the Borrower and each of the Subsidiaries will, at its cost
and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected Liens with
respect to such of its assets and properties as the Administrative Agent shall designate, it being agreed that it is the intent
of the parties that the Obligations shall be secured by, among other things, substantially all the assets of Holdings, the Borrower
and the Subsidiaries (including real property and personal property acquired subsequent to the Restatement Date). Such Liens will
be created under the Loan Documents in form and substance reasonably satisfactory to the Administrative Agent, and Holdings, the
Borrower and each of the Subsidiaries shall deliver or cause to be delivered to the Administrative Agent all such instruments
and documents (including mortgages, legal opinions, title insurance policies and lien searches) as the Administrative Agent shall
reasonably request to evidence compliance with this Section 7.8.

 

    	- 47 -

    	 

    

  

SECTION 7.9 Obtaining of Permits, Etc. With
respect to Products, Holdings and each of its Subsidiaries will obtain, maintain and preserve, and take all necessary action to
timely renew all material Permits and accreditations which are necessary for the conduct of its business.

 

SECTION 7.10 Product Licenses. Holdings
and each of its Subsidiaries shall (i) maintain each material Permit, including each Regulatory Authorization, from, or file any
notice or registration in, each jurisdiction in which Holdings or any of its Subsidiaries are required to obtain any Permit or
Regulatory Authorization or to file any notice or registration, in order to sell or distribute the Products (excluding Products
in development (other than those requiring an IDE) or discontinued Products) and (ii) upon request of the Administrative Agent,
promptly provide evidence of same.

 

SECTION 7.11 Maintenance of
Regulatory Authorizations, Contracts, Intellectual Property, Etc. With respect to the Products, Holdings and each of its
Subsidiaries will (i) maintain in full force and effect all Regulatory Authorizations (including the Product Authorizations)
and material contract rights, authorizations or other rights necessary for the operations of its business; (ii) notify the
Administrative Agent, promptly after learning thereof, of any Product recalls, safety alerts, corrections, withdrawals,
marketing suspensions, removals or the like conducted, to be undertaken or issued, by Holdings or any of its Subsidiaries or
their respective suppliers whether or not at the request, demand or order of any Governmental Authority or otherwise with
respect to any Product, or any basis for undertaking or issuing any such action or item; (iii) maintain in full force and
effect, and pay all costs and expenses relating to, all material Intellectual Property owned or controlled by Holdings, the
Borrower or any of the Subsidiaries and all Material Agreements; (iv) notify the Administrative Agent, promptly after
learning thereof, of any Infringement or other material violation by any Person of its Intellectual Property; (v) use
commercially reasonable efforts to pursue and maintain in full force and effect legal protection for all material new
Intellectual Property developed or controlled by Holdings or any of its Subsidiaries; and (vi) notify the Administrative
Agent, promptly after learning thereof, of any claim by any Person that the conduct of Holdings’ or any of its
Subsidiaries’ business (including the development, manufacture, use, sale or other commercialization of any
Product) Infringes any Intellectual Property of that Person.

 

    	- 48 -

    	 

    

  

SECTION 7.12 Inbound Licenses. Holdings
and each of its Subsidiaries will, promptly after entering into or becoming bound by any material inbound license or
agreement (other than over-the-counter software that is commercially available to the public): (i) provide written notice to
the Administrative Agent of the material terms of such license or agreement with a description of its anticipated and
projected impact on Holdings’ and its Subsidiaries’ business and financial condition; and (ii) take such
commercially reasonable actions as the Administrative Agent may reasonably request to obtain the consent of, or waiver by,
any Person whose consent or waiver is necessary for the Administrative Agent to be granted and perfect a valid security
interest in such license or agreement and to fully exercise its rights under any of the Loan Documents in the event of a
disposition or liquidation of the rights, assets or property that is the subject of such license or agreement.

 

SECTION 7.13 Cash Management. Holdings
and each of its Subsidiaries will:

 

(a) maintain a current and complete
list of all accounts (of the type initially set forth on Schedule 6.23) and promptly deliver any updates to such list to
the Administrative Agent; execute and maintain an account control agreement for each such account, in form and substance reasonably
acceptable to the Administrative Agent (each such account, a “Controlled Account”); and maintain each such account
as a cash collateral account, with all cash, checks and other similar items of payment in such account securing payment of the
Obligations (and in which Holdings, the Borrower and the Subsidiaries shall have granted a Lien to the Administrative Agent and
the Lenders); provided that any accounts with an end-of-day balance less than $50,000 individually, or $100,000 in the aggregate
(or such other interim balance, on deposit for no more than three Business Days, used exclusively for the purposes of making payroll
in the ordinary course of business), used exclusively for payroll, payroll taxes or employee benefits, to the extent legal requirements
prohibit the granting of a Lien thereon, need not be Controlled Accounts;

 

(b) deposit promptly, and in
any event no later than two Business Days after the date of receipt thereof, all cash, checks, drafts or other similar items of
payment relating to or constituting payments made in respect of any and all accounts and other rights and interests into Controlled
Accounts; and

 

(c) at any time after the occurrence
and during the continuance of an Event of Default, at the request of the Administrative Agent, promptly cause all payments constituting
proceeds of accounts to be directed into lockbox accounts under agreements in form and substance satisfactory to the Administrative
Agent.

 

SECTION 7.14 [Intentionally Omitted.]

 

SECTION 7.15 [Intentionally Omitted.]

 

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SECTION 7.16 Board Observation Rights.

 

(a) Holdings and the Subsidiaries
shall permit up to two people representing the Lenders (the “Observers”) to attend and observe (but not vote)
at all meetings of Holdings’ (or the Borrower’s or any Subsidiary’s, as applicable) board of directors or any
committee thereof, whether in person, by telephone or otherwise as requested by any Observer. Holdings and the Subsidiaries shall
notify the Observers in writing at least five Business Days in advance (or, if a shorter notice period is reasonably necessary
given the circumstances, as soon as possible and in all circumstances at least 24 hours in advance) of (i) the date and time for
each general or special meeting of any such board of directors or any committee thereof and (ii) the adoption of any resolutions
or actions by any such board of directors or any committee thereof by written consent (describing, in reasonable detail, the nature
and substance of such action). The general meetings of Holdings’ board of directors shall take place no less than three times
per year. Holdings and the Subsidiaries shall concurrently deliver to the Observers all notices and any materials delivered to
any such board of directors or any committee thereof in connection with a meeting or action to be taken by written consent, including
a draft of any material resolutions or actions proposed to be adopted by written consent. The Observers shall be free prior to
such meeting or adoption by written consent to contact the applicable board of directors and/or committee and discuss the pending
actions to be taken. As long as Holdings is listed on the NYSE MKT, New York Stock Exchange or any other stock exchange which requires
that such board of directors or committees have the ability to exclude the Observers in order to be in compliance with applicable stock exchange rules and policies, any such board of directors or committee thereof
may meet in executive session without the Observers present at any time. In the event that Holdings ceases to be listed on
a stock exchange which requires, or the stock exchange on which Holdings is listed no longer requires, that such board of
directors or committees have the ability to exclude the Observers in order to be in compliance with applicable
stock exchange rules and policies, any such board of directors or committee thereof may meet in executive session without the Observers present to the extent such board of directors or committee determines in good
faith that each of the issues to be discussed at such session is not appropriate to be discussed with the Observers because (i)
such issue directly involves the Loan Documents and discussion thereof would result in a conflict of interest with the Lenders
with respect thereto or (ii) the discussion of such issue in the presence of the Observers would result in the disclosure of trade
secrets or the loss of attorney-client privilege. In the event Holdings or the Borrower excludes the Observers from any meeting
or portion thereof or withholds any information or materials related thereto, Holdings and the Borrower shall promptly provide
to the Observers a general description, which shall be true and correct in all material respects, of the matters discussed during
such meeting or portion thereof at which the Observers were excluded and any such withheld information or materials.

 

(b) Holdings (or the Borrower
or a Subsidiary, as applicable) shall pay the Observers’ reasonable out-of-pocket expenses (including the cost of travel,
meals and lodging) in connection with the attendance of such meetings.

 

(c) Notwithstanding anything
in this Section 7.16 to the contrary, in the event neither ROS nor any of its Affiliates is a Lender under this Agreement,
the number of Observers pursuant to this Section 7.16 shall decrease from two people to one person.

 

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Article
VIII

negativE COVENANTS

 

The Borrower covenants and agrees with each Lender that until
the Termination Date has occurred, Holdings, the Borrower and the Subsidiaries will perform or cause to be performed the obligations
set forth below.

 

SECTION 8.1 Business Activities. None
of Holdings, the Borrower or any of the Subsidiaries will engage in any business activity except those business activities engaged
in on the date of this Agreement and activities reasonably related thereto.

 

SECTION 8.2 Indebtedness. None
of Holdings, the Borrower or any of the Subsidiaries will create, incur, assume or permit to exist any Indebtedness, other than:

 

(a) Indebtedness in respect of
the Obligations;

 

(b) until the Restatement Date,
Indebtedness that is to be repaid in full as further identified in Schedule 8.2(b);

 

(c) Indebtedness existing as of
the Restatement Date which is identified in Schedule 8.2(c), and refinancing of such Indebtedness in a principal amount
not in excess of that which is outstanding on the Restatement Date (as such amount has been reduced following the Restatement Date);

 

(d) unsecured Indebtedness in
respect of performance, surety or appeal bonds provided in the ordinary course of business in an aggregate amount at any time outstanding
not to exceed $1,000,000;

 

(e) purchase money Indebtedness
and Capitalized Lease Liabilities in an aggregate amount at any time outstanding not to exceed $1,000,000;

 

(f) Permitted Subordinated Indebtedness;

 

(g) Indebtedness of Holdings under
the Convertible Notes Documents;

 

(h) Indebtedness of any Subsidiary,
Holdings or the Borrower owing to Holdings, the Borrower or any Subsidiary; and

 

(i) other Indebtedness of Holdings,
the Borrower and the Subsidiaries in an aggregate amount at any time outstanding not to exceed $1,000,000;

 

provided that, no Indebtedness otherwise permitted by
clauses (c), (f) or (i) shall be assumed, created or otherwise incurred if a Default has occurred and is then
continuing or would result therefrom.

 

SECTION 8.3 Liens. None
of Holdings, the Borrower or any of the Subsidiaries will create, incur, assume or permit to exist any Lien upon any of its property
(including Capital Securities of any Person), revenues or assets, whether now owned or hereafter acquired, except:

 

    	- 51 -

    	 

    

  

(a) Liens securing payment of
the Obligations;

 

(b) until the Restatement Date,
Liens securing payment of Indebtedness of the type described in clause (b) of Section 8.2;

 

(c) Liens existing as of the
Restatement Date and disclosed in Schedule 8.3(c) securing Indebtedness described in clause (c) of Section 8.2,
and refinancings of such Indebtedness; provided that, no such Lien shall encumber any additional property and the amount
of Indebtedness secured by such Lien is not increased from that existing on the Restatement Date (as such Indebtedness may have
been permanently reduced subsequent to the Restatement Date);

 

(d) Liens securing payment of
Permitted Subordinated Indebtedness that are (i) subordinate to the Liens securing payment of the Obligations and all other Indebtedness
owing from Holdings, the Borrower or the Subsidiaries to the Administrative Agent and the Lenders and (ii) subject to a written
subordination agreement satisfactory to the Administrative Agent in its sole discretion;

 

(e) Liens securing Indebtedness
of Holdings, the Borrower or the Subsidiaries permitted pursuant to Section 8.2(e) (provided that (i) such Liens
shall be created within 180 days of the acquisition of the assets financed with such Indebtedness and (ii) such Liens do not at
any time encumber any property other than the property so financed);

 

(f) Liens in favor of carriers,
warehousemen, mechanics, materialmen and landlords granted in the ordinary course of business for amounts not overdue or being
diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;

 

(g) Liens incurred or deposits
made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders, statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety and appeal bonds
or performance bonds;

 

(h) judgment Liens in existence
for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is
covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under Section 9.1.6;

 

(i) easements, rights-of-way,
zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect
with the value or use of the property to which such Lien is attached; and

 

    	- 52 -

    	 

    

 

(j) Liens for Taxes not at the
time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set aside on its books.

 

SECTION 8.4 Financial Covenants.

 

(a) Minimum Revenue Base. The
Revenue Base for any Fiscal Quarter shall not be less than the amount set forth below for such Fiscal Quarter:

 

	Fiscal Quarter Ending	 	Minimum Revenue Base	 
	September 30, 2015	 	$	17,500,000	 
	December 31, 2015	 	$	20,000,000	 
	March 31, 2016	 	$	20,000,000	 
	June 30, 2016	 	$	20,000,000	 
	September 30, 2016	 	$	25,000,000	 
	December 31, 2016	 	$	25,000,000	 
	March 31, 2017	 	$	25,000,000	 
	June 30, 2017	 	$	25,000,000	 
	September 30, 2017	 	$	27,500,000	 
	December 31, 2017	 	$	27,500,000	 
	March 31, 2018	 	$	27,500,000	 
	June 30, 2018	 	$	27,500,000	 
	September 30, 2018	 	$	30,000,000	 
	December 31, 2018	 	$	30,000,000	 
	March 31, 2019	 	$	30,000,000	 
	June 30, 2019	 	$	30,000,000	 
	September 30, 2019	 	$	30,000,000	 
	December 31, 2019	 	$	30,000,000	 
	March 31, 2020	 	$	30,000,000	 
	June 30, 2020	 	$	30,000,000	 

 

(b) Minimum Liquidity.
At all times prior to January 1, 2017, the Liquidity shall not be less than $2,500,000. At all
times after January 1, 2017, the Liquidity shall not be less than $5,000,000. Holdings and its Subsidiaries incorporated or organized
under the laws of the United States of America, or any state or other political subdivision thereof shall maintain an amount equal
to the amount required under this Section 8.4.2, along with their other cash and Cash Equivalent Investments, in Controlled
Accounts.

 

(c) Consolidated
Senior Leverage Ratio. The Consolidated Senior Leverage Ratio shall not be greater than the amount set forth below at any time,
in each case, other than as set forth in the definition thereof, with respect to the most recent period of four Fiscal Quarters
then ended (starting at the time that the financial statements for the most recent four Fiscal Quarters ended September 30, 2016
are required to have been delivered hereunder (or have been so delivered, if earlier)):

 

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	Four Fiscal 
 Quarters Ended	 	Consolidated Senior
 Leverage Ratio	 
	September 30, 2016	 	 	7.50:1.00	 
	December 31, 2016	 	 	7.50:1.00	 
	March 31, 2017	 	 	5.00:1.00	 
	June 30, 2017	 	 	5.00:1.00	 
	September 30, 2017	 	 	5.00:1.00	 
	December 31, 2017	 	 	5.00:1.00	 
	March 31, 2018	 	 	5.00:1.00	 
	June 30, 2018	 	 	5.00:1.00	 
	September 30, 2018	 	 	5.00:1.00	 
	December 31, 2018	 	 	5.00:1.00	 
	March 31, 2019	 	 	2.50:1.00	 
	June 30, 2019	 	 	2.50:1.00	 
	September 30, 2019	 	 	2.50:1.00	 
	December 31, 2019	 	 	2.50:1.00	 
	March 31, 2020	 	 	2.50:1.00	 
	June 30, 2020	 	 	2.50:1.00	 

 

SECTION 8.5 Investments. None
of Holdings or any of its Subsidiaries will purchase, make, incur, assume or permit to exist any Investment in any other Person,
except:

 

(a) Investments existing on the
Restatement Date and identified in Schedule 8.5(a);

 

(b) Cash Equivalent Investments;

 

(c) Investments received in connection
with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each
case in the ordinary course of business;

 

(d) Investments consisting of
any deferred portion of the sales price received by Holdings, the Borrower or any of the Subsidiaries in connection with any Disposition
permitted under Section 8.8;

 

(e) Investments constituting
(i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of business;

 

(f) loans and advances to officers,
directors, or employees of Holdings, the Borrower or any Subsidiary in the ordinary course of business (including for travel, entertainment
and relocation expenses) in an aggregate amount not to exceed $500,000 at any time outstanding;

 

(g) Investments by Holdings,
the Borrower or any Subsidiary in Holdings, the Borrower or any Subsidiary;

 

(h) the purchase of the Target
pursuant to the Acquisition Agreement; and

 

    	- 54 -

    	 

    

 

(i) other Investments in an aggregate
amount not to exceed $1,000,000 over the term of this Agreement;

 

provided that,

 

(i) any Investment which when
made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held
notwithstanding that such Investment if made thereafter would not comply with such requirements; and

 

(ii) no Investment otherwise permitted
by clause (i) shall be permitted to be made if any Default has occurred and is continuing or would result therefrom.

 

SECTION 8.6 Restricted Payments, Etc. None
of Holdings or any of its Subsidiaries will declare or make a Restricted Payment, or make any deposit for any Restricted Payment,
other than Restricted Payments made by the Borrower or Subsidiaries to Holdings, the Borrower or any Subsidiaries.

 

SECTION 8.7 Consolidation, Merger; Permitted
Acquisitions, Etc. Except as contemplated by the Acquisition Agreement, none of
Holdings or any of its Subsidiaries will liquidate or dissolve, consolidate with, or merge into or with, any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any Person (or any division thereof), except that, so
long as no Event of Default has occurred and is continuing (or would occur), any Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower or any Subsidiary.

 

SECTION 8.8 Permitted Dispositions. None
of Holdings or any of its Subsidiaries will Dispose of any of its assets (including accounts receivable and Capital Securities
of the Borrower or Subsidiaries) to any Person in one transaction or series of transactions, except:

 

(a) Dispositions of inventory
or obsolete, damaged, worn out or surplus property in the ordinary course of its business;

 

(b) Dispositions permitted
by Section 8.7;

 

(c) Dispositions of overdue accounts
receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

 

(d) Dispositions of equipment
to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or
(ii) the proceeds of such Disposition are promptly, and in any event within 60 days from the date of such Disposition, applied
to the purchase price of such replacement property;

 

(e) Dispositions of property
by Holdings or any of its Subsidiaries to Holdings or to a wholly-owned Subsidiary; and

 

    	- 55 -

    	 

    

  

(f) other Dispositions of assets
with an aggregate fair market value not to exceed $1,000,000 over the term of this Agreement.

 

SECTION 8.9 Modification of Certain
Agreements. None of Holdings or any of its Subsidiaries will consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to, the terms
or provisions contained in (i) any Organic Documents of Holdings or any of its Subsidiaries, if the result would have an adverse
effect on the rights or remedies of the Administrative Agent or any Lender or (ii) any agreement governing any Permitted Subordinated
Indebtedness, if the result would shorten the maturity date thereof or advance the date on which any cash payment is required
to be made thereon or would otherwise change any terms thereof in a manner adverse to the Administrative Agent or any Lender.

 

SECTION 8.10 Transactions with
Affiliates. None of Holdings or any of its Subsidiaries will enter into or
cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property
or the rendering of services) with any of its Affiliates, unless such arrangement, transaction or contract (i) is on
fair and reasonable terms no less favorable to Holdings or such Subsidiary than it could obtain in an arm’s-length
transaction with a Person that is not one of its Affiliates and (ii) is of the kind which would be entered into by a
reasonably prudent Person in its position with a Person that is not one of its Affiliates.

 

SECTION 8.11 Restrictive Agreements,
Etc. None of Holdings or any of its Subsidiaries will enter into any agreement prohibiting
(i) the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, (ii)
the ability of Holdings or any of its Subsidiaries to amend or otherwise modify any Loan Document or (iii) the ability of the
Borrower or any Subsidiary to make any payments, directly or indirectly, to the Borrower or Holdings, including by way of dividends,
advances, repayments of loans, reimbursements of management and other intercompany charges, expenses and accruals or other returns
on investments. The foregoing prohibitions shall not apply to restrictions contained (x) in any Loan Document or (y) in
the case of clause (i), any agreement governing any Indebtedness permitted by clause (e) of Section 8.2 as
to the assets financed with the proceeds of such Indebtedness.

 

SECTION 8.12 Sale and Leaseback. None
of Holdings or any of its Subsidiaries will directly or indirectly enter into any agreement or arrangement providing for the sale
or transfer by it of any property (now owned or hereafter acquired) to a Person and the subsequent lease or rental of such property
or other similar property from such Person.

 

SECTION 8.13 Product Agreements. None
of Holdings or any its Subsidiaries will enter into any amendment with respect to any existing Product Agreement or enter into
any new Product Agreement that contains (a) any provision which restricts or penalizes a security interest in, or the assignment
of, any Product Agreements, upon the sale, merger or other disposition of all or a material portion of a Product to which such
Product Agreement relates or (b) any other provision that has or is likely to adversely effect, in any material respect, any Product
to which such agreement relates or to the Administrative Agent or any Lender’s rights hereunder.

 

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SECTION 8.14 Change in Name, Location,
Executive Office, or Executive Management; Change in Fiscal Year. 

None of Holdings or any of
its Subsidiaries will (i) change its legal name or any trade name used to identify it in the conduct of its business or
ownership of its properties without providing the Administrative Agent with at least 30 days’ prior written notice of
such change, (ii) change its jurisdiction of organization or legal structure, (iii) relocate its chief executive office,
principal place of business or any office in which it maintains books or records relating to its business, (iv) change its
federal taxpayer identification number or organizational number (or equivalent) without 30 days’ prior written notice
to the Administrative Agent, (v) replace its chief executive officer or chief financial officer without written notification
to the Administrative Agent within 30 days thereafter or (vi) change its Fiscal Year or any of its Fiscal Quarters.
Notwithstanding anything in this Section 8.14 to the contrary, Holdings hereby advises the Administrative Agent that
Holdings’ certificate of incorporation will be amended, effective on or about the Restatement Date, to change
Holdings’ legal name to “Xtant Medical Holdings, Inc.”

 

SECTION 8.15 Benefit Plans. None
of Holdings, the Borrower or any Subsidiary will (i) become the sponsor of, incur any responsibility to contribute to or otherwise
incur actual or potential liability with respect to, any Benefit Plan, (ii) allow any “employee benefit plan” as defined
in section 3(3) of ERISA that provides retirement benefits and that is sponsored by Holdings, the Borrower, any Subsidiary or
any of their ERISA Affiliates intended to be tax qualified under section 401 or 501 of the Code to cease to be tax qualified,
(iii) allow the assets of any tax qualified retirement plan to become invested in Capital Securities of Holdings, the Borrower
or any Subsidiary or (iv) allow any employee benefit plan, program or arrangement sponsored, maintained, contributed to or required
to be contributed to by Holdings, the Borrower or any Subsidiary to fail to comply in all material respects with its terms and
applicable law.

 

SECTION 8.16 Holdings. Holdings
shall not (i) engage in any activities (other than activities customarily carried out or required of a publicly-owned passive
holding company, including the entry into customary and ordinary course insurance programs and agreements concerning the Capital
Securities of Holdings), (ii) have any operations, own any assets (other than Capital Securities of the Borrower and Subsidiaries)
or incur any liabilities (other than the Obligations under (or expressly permitted by) the Loan Documents) or (iii) be party to
any contract or agreement, in each case other than (a) the Convertible Notes Documents, (b) the Acquisition Agreement, (c) employment
and employee benefit contracts, (d) customary contracts with accountants, lawyers and other advisors, (e) activities, operations,
assets, liabilities, contracts and agreements that do not exceed, and would not reasonably be expected to result in liabilities
to Holdings or any of its Subsidiaries that exceed, $500,000 individually or, with respect to any such activities, operations,
assets, liabilities, contracts or agreements entered into or incurred after the Restatement Date, $1,000,000 in the aggregate
or (f) any other agreement entered into in connection with the Acquisition Agreement or the Convertible Notes Documents or
pursuant thereto and listed on Schedule 8.16.

 

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Article
IX

EVENTS OF DEFAULT

 

SECTION 9.1 Listing of Events of Default. Each
of the following events or occurrences described in this Article IX shall constitute an “Event of Default”.

 

SECTION 9.1.1 Non-Payment of Obligations. The
Borrower shall default in the payment or prepayment when due of (i) any principal of any Loan or (ii) any interest on any Loan
or any fee described in Article III or any other monetary Obligation, and in the case of clause (ii) such default
shall continue unremedied for a period of two Business Days after such amount was due.

 

SECTION 9.1.2 Breach of Warranty. Any
representation or warranty made or deemed to be made by Holdings, the Borrower or any of the Subsidiaries in any Loan Document
(including any certificates delivered pursuant to Article V) is or shall be incorrect when made or deemed to have been
made in any material respect.

 

SECTION 9.1.3 Non-Performance of Certain
Covenants and Obligations. Holdings, the Borrower or any Subsidiary shall default
in the due performance or observance of any of its obligations under Section 7.1, Section 7.7, Section 7.15
or Article VIII.

 

SECTION 9.1.4 Non-Performance of Other
Covenants and Obligations. Holdings, the Borrower or any Subsidiary shall default
in the due performance and observance of any other covenant, obligation or agreement contained in any Loan Document executed by
it, and such default shall continue unremedied for a period of 30 days after the earlier to occur of (i) notice thereof given
to the Borrower by the Administrative Agent or (ii) the date on which Holdings, the Borrower or any Subsidiary has knowledge of
such default.

 

SECTION 9.1.5 Default on Other Indebtedness. A
default shall occur in the payment of any amount when due (subject to any applicable grace period), whether by acceleration or
otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (other than the Obligations) of Holdings,
the Borrower or any of the Subsidiaries having a principal or stated amount, individually or in the aggregate, in excess of $1,000,000,
or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if
the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause or declare such Indebtedness to become due and payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity.

 

SECTION 9.1.6 Judgments. Any
judgment or order for the payment of money individually or in the aggregate in excess of $1,000,000 (exclusive of any amounts
fully covered by insurance (less any applicable deductible) and as to which the insurer has acknowledged its responsibility to
cover such judgment or order) shall be rendered against Holdings, the Borrower or any of the Subsidiaries and such judgment shall
not have been vacated or discharged or stayed or bonded pending appeal within 45 days after the entry thereof or enforcement
proceedings shall have been commenced by any creditor upon such judgment or order.

 

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SECTION 9.1.7 Change in Control. Any
Change in Control shall occur.

 

SECTION 9.1.8 Bankruptcy, Insolvency,
Etc. Holdings, the Borrower, or any of the Subsidiaries shall:

 

(a) become insolvent or generally
fail to pay, or admit in writing its inability or unwillingness generally to pay, debts as they become due;

 

(b) apply for, consent to, or
acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of
any thereof, or make a general assignment for the benefit of creditors;

 

(c) in the absence of such application,
consent or acquiescence in or permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian
for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be
discharged within 60 days; provided that, Holdings, the Borrower and each Subsidiary hereby expressly authorizes the
Administrative Agent to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and
defend its rights under the Loan Documents;

 

(d) permit or suffer to exist
the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency
law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced
by Holdings, the Borrower or any Subsidiary, such case or proceeding shall be consented to or acquiesced in by Holdings, the Borrower
or such Subsidiary, as the case may be, or shall result in the entry of an order for relief or shall remain for 60 days undismissed;
provided that, Holdings, the Borrower and each Subsidiary hereby expressly authorizes the Administrative Agent to appear
in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend its rights under
the Loan Documents; or

 

(e) take any action authorizing,
or in furtherance of, any of the foregoing.

 

SECTION 9.1.9 Impairment of Security,
Etc. Any Loan Document or any Lien granted thereunder shall (except in accordance
with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable
obligation of Holdings, the Borrower or any Subsidiary thereto; Holdings, the Borrower or any Subsidiary shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or enforceability; or, except as permitted under any Loan Document,
any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien other than due to the
Administrative Agent’s failure to file any financing statement or continuation statement required to perfect such Lien.

 

SECTION 9.1.10 Key Permit Events. Any
Key Permit or any of Holdings’, the Borrower’s or any Subsidiary’s material rights or interests thereunder is
terminated or amended in any manner adverse to Holdings, the Borrower or any Subsidiary in any material respect.

 

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SECTION 9.1.11 Material Adverse Change. Any
circumstance occurs that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 9.1.12 Key Person Event. If
any of Daniel Goldberger, John P. Gandolfo, or David Kirschman, or any replacement individual for any of the aforementioned individuals
or such person’s subsequent replacement, ceases to be employed full time by Holdings and the Borrower and actively working,
unless within 90 days after such individual ceases to be employed full time and actively working, Holdings or the Borrower hire
a replacement for such individual approved by the Administrative Agent, such approval not to be unreasonably withheld, delayed
or conditioned.

 

SECTION 9.1.13 Regulatory Matters. If
any of the following occurs: (i) the FDA, the EMA or any other Governmental Authority (A) issues a letter or other communication
asserting that any Product lacks a required Product Authorization (including an assertion that a 361 Product fails to meet the
criteria of 21 C.F.R. 1271.10) or (B) initiates enforcement action against, or issues a warning letter with respect to, Holdings,
the Borrower or any of the Subsidiaries, or any of their Products or the manufacturing facilities therefor, that causes Holdings,
the Borrower or such Subsidiary to discontinue marketing or withdraw any of its material Products, or causes a delay in the manufacture
of any of its material Products, which discontinuance, withdrawal or delay could reasonably be expected to last for more than
three months; (ii) a recall which could reasonably be expected to result in liability to Holdings, the Borrower and the Subsidiaries
in excess of $500,000; or (iii) Holdings, the Borrower or any of the Subsidiaries enters into a settlement agreement with the
FDA, the EMA or any other Governmental Authority that results in aggregate liability as to any single or related series of transactions,
incidents or conditions in excess of $500,000.

 

SECTION 9.2 Action if Bankruptcy. If
any Event of Default described in clauses (a) through (d) of Section 9.1.8 with respect to the Borrower shall
occur, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the
Loans and all other Obligations shall automatically be and become immediately due and payable, without notice or demand to any
Person.

 

SECTION 9.3 Action if Other Event of
Default. If any Event of Default (other than any Event of Default described in clauses
(a) through (d) of Section 9.1.8) shall occur for any reason, whether voluntary or involuntary, and be continuing,
the Administrative Agent may, by notice to the Borrower declare all or any portion of the outstanding principal amount of the
Loans and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon
the full unpaid amount of the Loans and other Obligations which shall be so declared due and payable shall be and become immediately
due and payable, without further notice, demand or presentment, and the Commitments shall terminate.

 

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Article
X

THe Administrative agent

 

SECTION 10.1  Administrative Agent;
Actions, Etc. 

 

SECTION 10.1.1 Appointments. The
parties hereto agree as follows:

 

(a) Each Lender hereby appoints
ROS as the administrative agent (the “Administrative Agent”) for the Lenders and for purposes of this Agreement
and each other Loan Document, and the Borrower acknowledges and consents to such appointment. Each Lender authorizes the Administrative
Agent to act on its behalf under this Agreement and each other Loan Document and to exercise such powers hereunder and thereunder
as are specifically delegated to it or required of it by the terms hereof and thereof or as directed from time to time by the Lenders,
together with such powers as may be incidental thereto (including the prosecution and defense of claims for and on behalf of the
Lenders, the enforcement of rights and remedies, including foreclosure in respect of collateral, Liens and claims, the waiver of
Defaults or obligations of the Borrower, the release of Liens on assets Disposed of in accordance with the terms of the Loan Documents
and the delivery of notices, etc. to the Borrower); provided, however, that in no event may the Administrative Agent take
any action on behalf of any Lender that, pursuant to Section 11.1, requires the express individual consent of such Lender,
unless such Lender has so consented.

 

(b) For purposes of this Agreement
and the other Loan Documents, the Administrative Agent may act as the “Collateral Agent”, “Security Agent”,
“Documentation Agent” or in any similar capacity as the Lenders may determine to be necessary to protect the Lenders’
interests under or pursuant to the Loan Documents or otherwise.

 

(c) Solely with respect to actions
or omissions of the Administrative Agent acting in its capacity as the Administrative Agent, the Borrower hereby indemnifies (which
indemnity shall survive any termination of this Agreement) and holds harmless the Administrative Agent from and against any and
all obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against the Administrative Agent under or pursuant to this Agreement or any other Loan Document by any
Person (including attorneys’ fees), except for any such obligation, losses, damages, claims or expenses resulting from the
wilful misconduct or gross negligence of the Administrative Agent, as determined in a final non-appealable judgment by a court
of competent jurisdiction.

 

(d) Solely with respect to actions
or omissions of the Administrative Agent acting in its capacity as the Administrative Agent and solely to the extent that the Administrative
Agent is not reimbursed by the Borrower pursuant to clause (b) above, each Lender (acting in its respective capacity as a Lender)
hereby indemnifies (which indemnity shall survive any termination of this Agreement) and holds harmless the Administrative Agent,
pro rata according to such Lender’s Proportionate Share, from and against any and all obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against the Administrative
Agent under or pursuant to this Agreement or any other Loan Document by any Person (including attorneys’ fees).

 

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(e) The Administrative Agent
shall not be required to take any action under any Loan Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in favor of the Administrative shall be or become, in
the Administrative Agent’s determination, inadequate, the Administrative Agent may call for additional indemnification from
the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.

 

SECTION 10.1.2 Funding, Etc. In no
event shall the Administrative Agent (acting in its capacity as the Administrative Agent) be liable or responsible for funding
or advancing any obligation of any Lender or other Person owed or payable under or in connection with this Agreement, including
in respect of any claims, damages, reimbursements, indemnities or otherwise.

 

SECTION 10.1.3 Exculpation. Neither
ROS nor any of its directors, officers, employees, agents or Affiliates shall be liable to any Person for any action taken or omitted
to be taken by it, whether in its capacity as (or in connection with its capacity as) the Administrative Agent under or in connection
with any Loan Document, except for its own wilful misconduct or gross negligence, nor shall it be responsible for any recitals
or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of any Loan Document, nor
for the creation, perfection or priority of any Liens purported to be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance
by any Guarantor of its Obligations. The Administrative Agent shall be entitled to rely upon advice of counsel concerning legal
matters and upon any notice, consent, certificate, statement or writing which the Administrative Agent believes to be genuine and
to have been presented by a proper Person.

 

SECTION 10.1.4 Successor. The Administrative
Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all the Lenders. If the Administrative
Agent at any time shall resign, the Lenders may appoint another Lender as a successor Administrative Agent which shall thereupon
become the Administrative Agent hereunder, provided that, so long as no Event of Default shall exist, the Borrower’s
consent to such successor shall be required (such consent not to be unreasonably withheld or delayed). If no successor Administrative
Agent shall have been so appointed by the Lenders and shall have accepted such appointment within 30 days after the retiring Administrative
Agent’s giving notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which may be one of the Lenders (if such Lender consents to such appointment) or a commercial banking institution
organized under the laws of the United States (or any State thereof) or a United States branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least $250,000,000; provided that, if, such retiring Administrative
Agent is unable to find a commercial banking institution which is willing to accept such appointment and which meets the qualifications
set forth above, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders
shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Lenders appoint
a successor as provided for above. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from the retiring Administrative Agent such documents of
transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan Documents. After any retiring Administrative Agent’s resignation
hereunder as the Administrative Agent, the provisions of this Article X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under the Loan Documents, and Section 11.3 and Section
11.4 shall continue to inure to its benefit.

 

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SECTION 10.1.5 Loans, Etc. by ROS.
ROS shall have the same rights and powers with respect to the Loans and other Obligations owing to it under or pursuant to the
Loan Documents as any other Lender and may exercise all its rights and powers in respect thereof as if it were not the Administrative
Agent. ROS and its Affiliates may generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of
Holdings or any other Person (whether or not an Affiliate of Holdings or any other Person party hereto or to any other Loan Document)
as if ROS was not the Administrative Agent hereunder. Without limiting the foregoing, no Person acting as the Administrative Agent
hereunder shall have any fiduciary duty of any sort to the Borrower, any of its Subsidiaries or Affiliates, or to any other Person,
merely as a result of its actions or involvement as the Administrative Agent. The Borrower, for itself and each of its Subsidiaries
and Affiliates, hereby expressly waives to the fullest extent possible any claim (and any right to assert any claim) against the
Administrative Agent (or Person acting as the Administrative Agent) or any of its Affiliates asserting that such acts or involvement
of the Administrative Agent (or Person acting as the Administrative Agent) breaches any fiduciary or other duty or obligation owed
to the Borrower or any of its Subsidiaries or Affiliates, or asserting that any such acts or involvement constitutes a conflict
of interest by such Administrative Agent (or Person acting as the Administrative Agent) or any of its Affiliates with respect to
the Borrower or any of its Subsidiaries or Affiliates.

 

SECTION 10.1.6 Credit Decisions.
Each Lender acknowledges that it has, independently of the Administrative Agent and each other Lender, and based on such Lender’s
review of the financial information of the Borrower, the Loan Documents (the terms and provisions of which being satisfactory to
such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit
decision to extend its portion of the Loans. Each Lender also acknowledges that it will, independently of the Administrative Agent
and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available
to it under the Loan Documents.

 

SECTION 10.1.7 Copies, etc. The Administrative
Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to the Administrative
Agent by the Borrower pursuant to the terms of the Loan Documents (unless concurrently delivered to the Lenders by the Borrower).
The Administrative Agent will distribute to each Lender each document or instrument received for its account and copies of all
other communications received by the Administrative Agent from the Borrower for distribution to the Lenders by the Administrative
Agent in accordance with the terms of the Loan Documents.

 

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SECTION 10.1.8 Reliance by the Administrative
Agent. The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including
any thereof by telephone, telecopy, telegram or cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person, and upon advice and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided for by the Loan Documents, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting, thereunder in accordance with instructions given
by the Lenders, and such instructions of such Lenders and any action taken or failure to act pursuant thereto shall be binding
on all Lenders.

 

SECTION 10.1.9 Defaults. The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of a Default unless the Administrative Agent has received
a written notice from a Lender or the Borrower specifying such Default and stating that such notice is a “Notice of Default”.
In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 11.1) take such action with
respect to such Default as shall be directed by the Lenders; provided that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable in the best interest of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of
all the Lenders.

 

SECTION 10.2  Administrative Agent
Appointed Attorney-in-Fact. Each Lender hereby irrevocably authorizes, constitutes
and appoints the Administrative Agent as its true and lawful attorney-in-fact, with full power and authority, in the place and
stead of such Lender and in the name of such Lender or otherwise, to take any action and to execute any instrument which the Administrative
Agent may deem necessary or advisable in connection with any Loan Document (but subject to the terms of such Loan Document), including
any Security Agreement or the security interests created and the collateral pledged thereunder, including without limitation:

 

(a) to execute and deliver for
and on its behalf any Loan Documents or other agreements, instruments any notices related thereto or to the security interests
created thereunder;

 

(b) to execute and deliver any
other agreements or other instruments relating to any Loan Documents that are required to be delivered on the Restatement Date;
and

 

(c) to take any and all other
actions and measures on behalf of such Lender which the Administrative Agent deems necessary or appropriate in connection with
this Agreement, the Security Agreement, the collateral pledged under such Security Agreement, and the other Loan Documents, in
each case in order to consummate the transactions contemplated hereby and thereby in such manner as described therein.

 

Each Lender hereby acknowledges, consents and agrees that the
power of attorney granted pursuant to this Section 10.2 is irrevocable and coupled with an interest.

 

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SECTION 10.3 Register.
The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain a register for the recordation
of the names and addresses of the Lenders and principal amounts (and stated interest) of the Loans owing to each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

Article
XI

MISCELLANEOUS PROVISIONS

 

SECTION 11.1  Waivers, Amendments,
Etc. The provisions of each Loan Document may from time to time be amended, modified
or waived, if such amendment, modification or waiver is in writing and consented to by the Administrative Agent (acting on behalf
of the Lenders) and the Borrower.

 

No failure or delay on the part of any Lender
in exercising any power or right under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise
of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice
to or demand on Holdings, the Borrower or any of the Subsidiaries in any case shall entitle it or any of them to any notice or
demand in similar or other circumstances. No waiver or approval by any Lender under any Loan Document shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.

 

SECTION 11.2  Notices; Time. All
notices and other communications provided under any Loan Document shall be in writing or by facsimile and addressed, delivered
or transmitted, if to the Borrower or a Lender, to the applicable Person at its address or facsimile number set forth on Schedule
11.2 hereto, or at such other address or facsimile number as may be designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission
thereof is received by the transmitter. Unless otherwise indicated, all references to the time of a day in a Loan Document shall
refer to New York City time.

 

SECTION 11.3  Payment of Costs
and Expenses. The Borrower agrees to pay on demand all reasonable expenses of the
Administrative Agent (including the reasonable fees and out-of-pocket expenses of Covington & Burling LLP, counsel to the
Administrative Agent and each Lender, and of local counsel, if any, who may be retained by or on behalf of the Administrative
Agent or any such Lender) in connection with:

 

(a) the negotiation, preparation,
execution and delivery of each Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements
or other modifications to any Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated
hereby are consummated;

 

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(b) the filing or recording of
any Loan Document (including any financing statements) and all amendments, supplements, amendment and restatements and other modifications
to any thereof, searches made following the Restatement Date in jurisdictions where financing statements (or other documents evidencing
Liens in favor of the Administrative Agent or any Lender) have been recorded and any and all other documents or instruments of
further assurance required to be filed or recorded by the terms of any Loan Document; and

 

(c) the preparation and review
of the form of any document or instrument relevant to any Loan Document.

 

The Borrower further agrees to pay, and to hold the Administrative
Agent and each Lender harmless from all liability for, any stamp or other taxes which may be payable in connection with the execution
or delivery of each Loan Document, the Loans or the issuance of the Note. The Borrower also agrees to reimburse the Administrative
Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal
expenses of counsel to the Administrative Agent and each Lender) incurred by the Administrative Agent and each Lender in connection
with (x) the negotiation of any restructuring or “work-out” with the Borrower, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.

 

SECTION 11.4  Indemnification. In
consideration of the execution and delivery of this Agreement by the Administrative Agent and each Lender, the Borrower hereby
indemnifies, agrees to defend, exonerates and holds the Administrative Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the “Indemnified Parties”) free and harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities, obligations and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is
sought), including reasonable attorneys’ and professionals’ fees and disbursements, whether incurred in connection
with actions between the parties hereto or the parties hereto and third parties (collectively, the “Indemnified Liabilities”),
including, without limitation, Indemnified Liabilities arising out of or relating to (i) the entering into and performance of
its obligations under any Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of the
Borrower as the result of any determination by the Lenders pursuant to Article V not to fund any Loan), and (ii) any Environmental
Liability. If and to the extent that the foregoing indemnification may be unenforceable for any reason, the Borrower agrees to
make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. No Indemnified Party shall have a right to indemnification for Indemnified Liabilities resulting from its wilful
misconduct or gross negligence, as determined in a final non-appealable judgment by a court of competent jurisdiction.

 

SECTION 11.5  Survival. The
obligations of the Borrower under Section 4.1, Section 4.2, Section 4.3, Section 11.3 and Section
11.4, shall in each case survive any assignment by any Lender and the occurrence of the Termination Date. The representations
and warranties made by the Borrower in each Loan Document shall survive the execution and delivery of such Loan Document.

 

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SECTION 11.6  Severability. Any
provision of any Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 11.7  Headings. The
various headings of each Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of
such Loan Document or any provisions thereof.

 

SECTION 11.8  Execution in Counterparts,
Effectiveness, Etc. This Agreement may be executed by the parties hereto in several counterparts,
each of which shall be an original and all of which shall constitute together but one and the same agreement. This Agreement shall
become effective when counterparts hereof executed on behalf of the Borrower, the Administrative Agent and the Lenders,
shall have been received by the Administrative Agent. Delivery of an executed counterpart of a signature page to this Agreement
by email (e.g. “pdf” or “tiff”) or telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement.

 

SECTION 11.9  Governing Law; Entire
Agreement. EACH LOAN DOCUMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
CONTEMPLATED HEREBY AND THEREBY 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). The Loan
Documents constitute the entire understanding among the parties hereto with respect to the subject matter thereof and supersede
any prior agreements, written or oral, with respect thereto.

 

SECTION 11.10  Successors and Assigns. This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns;
provided that, the Borrower may not assign or transfer its rights or obligations hereunder without the consent of the Administrative
Agent; provided further that, unless an Event of Default has occurred and is continuing, no Lender may assign or
otherwise transfer its rights or obligations hereunder (i) in an aggregate principal amount less than $1,000,000, other than to
an Affiliate of a Lender, and (ii) to any industry competitor of Holdings or its Subsidiaries.

 

SECTION 11.11 Other Transactions. Nothing
contained herein shall preclude any Lender, from engaging in any transaction, in addition to those contemplated by the Loan Documents,
with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with
any other Person.

 

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SECTION 11.12 Forum Selection and Consent
to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, ANY LENDER OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK IN THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK; PROVIDED THAT, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT,
AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN
OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 11.2. THE BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

 

SECTION 11.13 Waiver of Jury Trial. THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT
PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR THE BORROWER IN CONNECTION THEREWITH. THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT
TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE LOAN DOCUMENTS.

 

    	- 68 -

    	 

    

 

SECTION 11.14 Confidentiality. Subject
to the provisions of Section 11.15, the Receiving Party shall keep confidential and shall not publish or otherwise disclose
any Confidential Information furnished to it by the Disclosing Party, except to those of the Receiving Party’s employees,
advisors or consultants who have a need to know such information to assist such Receiving Party in the performance of such Receiving
Party’s obligations or in the exercise of such Receiving Party’s rights hereunder and who are subject to reasonable
obligations of confidentiality (collectively, “Recipients”). Notwithstanding anything to the contrary set forth
herein, ROS may disclose this Agreement and the terms and conditions hereof and any information related hereto to (i) its Affiliates,
(ii) potential and actual permitted assignees of any of ROS’ rights hereunder (including the right to receive any payments
hereunder) and (iii) potential and actual investors in, or lenders to, ROS (including, in each of the foregoing cases, such Person’s
employees, advisors or consultants); provided that each such recipient shall be subject to reasonable obligations of confidentiality.

 

SECTION 11.15 Exceptions to Confidentiality. The
Receiving Party’s obligations set forth in this Agreement shall not extend to any Confidential Information of the Disclosing
Party:

 

(a)        that is or hereafter becomes part of
the public domain (other than as a result of a disclosure by the Receiving Party or its Recipients in violation of this Agreement);

 

(b)        that is received from a third party
without restriction on disclosure and without, to the knowledge of the Receiving Party, breach of any agreement between such third
party and the Disclosing Party;

 

(c)        that the Receiving Party can demonstrate
by competent evidence was already in its possession without any limitation on disclosure prior to its receipt from the Disclosing
Party;

 

(d)        that is generally made available to
third parties by the Disclosing Party without restriction on disclosure;

 

(e)        that the Receiving Party can demonstrate
by competent evidence was independently developed by the Receiving Party without the use of Confidential Information; or

 

(f)        that is, in the opinion of counsel
to the Receiving Party, required to be disclosed pursuant to Law or Judgment binding upon the Receiving Party or pursuant to the
requirement or request of any Governmental Authority; provided that, unless otherwise prohibited by Law, the Receiving
Party shall notify the Disclosing Party of such disclosure prior thereto and the Receiving Party shall use its commercially reasonable
best efforts (i) to limit the Confidential Information being disclosed to the extent possible and (ii) to require the
Person receiving such Confidential Information to agree to be subject to confidentiality obligations that are substantially similar
to the obligations set forth herein or, if not practicable, such other confidentiality obligations as may be reasonably practicable.

 

SECTION 11.16 Remedies. Each
party hereto agrees that the unauthorized disclosure of any Confidential Information by the Receiving Party in violation of this
Agreement will cause severe and irreparable damage to the Disclosing Party. In the event of any violation of Sections 11.14
or 11.15 hereof, the Receiving Party agrees that the Disclosing Party shall be authorized and entitled to obtain from
any court of competent jurisdiction injunctive relief, whether preliminary or permanent, without the necessity of proving irreparable
harm or monetary damages or posting any bond, as well as any other relief permitted by applicable Law.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement 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 Administrative Agent and as a 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
	 	 
	 	ORBIMED ROYALTY OPPORTUNITIES II, LP,

as a Lender
	 	 
	 	By OrbiMed ROF II LLC,
	 	its General Partner
	 	 
	 	By OrbiMed Advisors LLC,
	 	its Managing Member
	 	 
	 	By: 	/s/ Samuel D. Isaly 
	 	 	Name:  Samuel D. Isaly
	 	 	Title:    Managing Member

  

Signature Page to Amended And Restated
Credit Agreement

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