Document:

EX-4.2

 Exhibit 4.2 

FORM OF RISK RETENTION AGREEMENT 

RISK RETENTION AGREEMENT, dated as of April 25, 2017 (this “Agreement”), by and among FIRST NATIONAL BANK OF OMAHA,
a national banking association (“FNBO”), FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company (the “Transferor”) and FIRST NATIONAL MASTER NOTE TRUST, a Delaware statutory trust (the
“Issuer”).  
 WITNESSETH: 

WHEREAS, FNBO and the Transferor have entered into a Second Amended and Restated Receivables Purchase Agreement, dated as of
September 23, 2016 (as amended, restated, supplemented or otherwise modified, the “Receivables Purchase Agreement”) and as acknowledged and accepted by U.S. Bank National Association, as Indenture Trustee (the “Indenture
Trustee”), pursuant to which FNBO sells to the Transferor certain Receivables arising in specified Accounts owned by FNBO; 
 WHEREAS,
the Transferor, FNBO, in its capacity as Servicer (the “Servicer”), and the Issuer have entered into a Second Amended and Restated Transferor and Servicing Agreement, dated as of September 23, 2016 (as amended, restated, supplemented
or otherwise modified, the “Transfer and Servicing Agreement”) and as acknowledged and accepted by the Indenture Trustee, pursuant to which the Transferor transfers Receivables to the Issuer and the Issuer has engaged the Servicer to
administer the Receivables; 
 WHEREAS, the Issuer and the Indenture Trustee have entered into a Second Amended and Restated Master
Indenture, dated as of September 23, 2016 (as amended, restated, supplemented or otherwise modified, the “Master Indenture”), and as acknowledged and accepted by the Transferor and the Servicer, pursuant to which the Issuer has issued
and may from time to time issue notes; and 
 WHEREAS, the Transferor intends to cause the Issuer to issue Class A Asset Backed Notes,
Series 2017-1 (the “Class A Notes”) pursuant to the Master Indenture and a Series 2017-1 Indenture Supplement, dated as of April 25, 2017 (as amended, restated, supplemented or otherwise modified, the “Indenture
Supplement”), between the Issuer and the Indenture Trustee and as acknowledged and accepted by the Transferor and the Servicer. 
 NOW,
THEREFORE, it is hereby agreed by and between FNBO, the Transferor, the Issuer and the Indenture Trustee, as follows: 
 1.
Definitions. All capitalized terms used but not defined herein shall have the meanings given to such terms in Appendix A to the Master Indenture or the Indenture Supplement, as applicable. The following capitalized terms shall have the
following meanings: 
 “AIFM Regulation” means Article 17 of the European Union’s Alternative Investment Fund
Managers Directive (2011/61/EU) and Articles 50-56 of the Alternative Investment Managers Fund Regulation ((EU) No. 231/2013). 

 “Applicable Investor” means each holder of a beneficial interest in any
Class A Note that is (i) an EEA credit institution or investment firm subject to the CRR, including any consolidated group affiliate thereof; (ii) an EEA insurer or reinsurer subject to the Solvency II Regulation; or
(iii) an EEA alternative investment fund manager to which the AIFM Regulation applies. 
 “CRR” means Regulation (EU)
No. 575/2013 of the European Parliament and of the Council (as supplemented by EU secondary legislation, including the CRR Delegated Regulation). 

“CRR Delegated Regulation” means Commission Delegated Regulation (EU) No. 625/2014 of the European Parliament and of the
Council. 
 “EEA” means the European Economic Area. 

“EU Risk Retention Rules” means: (i) Articles 404 – 410 of CRR; (ii) Articles 50 – 56
of the AIFM Regulation; and (iii) Articles 254 – 257 of the Solvency II Regulation, each as in effect as of the date hereof, together with any guidance published in relation thereto including any regulatory and/or implementing
technical standards in effect as of the date hereof. 
 “Solvency II Regulation” means Commission Delegated Regulation
((EU) No. 2015/35). 
 1. Representations. FNBO represents and warrants to the Issuer and the Indenture Trustee (solely for
the benefit of the Applicable Investors) that as of the date hereof: 
 (a) FNBO has full corporate power and authority to
execute and deliver this Agreement and perform the terms and provisions hereof; 
 (b) The execution, delivery and
performance of this Agreement have been duly authorized by all necessary corporate action, and do not require any approval or consent of any governmental agency or authority; and 

(c) This Agreement is the valid, binding and enforceable obligation of FNBO, except as the same may be limited by receivership,
insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles. 

2. Covenants. FNBO hereby confirms, represents and warrants to and agrees with, and irrevocably and unconditionally undertakes to the
Issuer and the Indenture Trustee, solely for the benefit of each Applicable Investor, in connection with the EU Risk Retention Rules, on an ongoing basis, so long as any Class A Note remains Outstanding: 

(a) FNBO, as “originator” for the purposes of the EU Risk Retention Rules, currently retains, and on an ongoing
basis will retain, a material net economic interest that is not less than five percent of the nominal value of the securitized exposures, in the form of an originator’s interest as provided in option (b) of each of Article 405(1) of
the CRR, Article 51(1) of the AIFM Regulation and Article 254(2) of the Solvency II Regulation, by indirectly holding all the membership interests in the Transferor which in turn holds all or part of the Transferor Interest (the
“Retained Interest”); 

  
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 (b) FNBO will not change the manner in which it retains its net economic interest
in the securitized exposures while the Class A Notes are outstanding, except under exceptional circumstances in accordance with Article 405(1) of the CRR (as supplemented by Article 10 of the CRR Delegated Regulation, Article 51(1) of
the AIFM Regulation and Article 254(2) of the Solvency II Regulation; and 
 (c) FNBO will not (and will not permit
the Transferor or any of its other affiliates to) allow the Retained Interest to be subject to any credit risk mitigation, short position or other hedge or to be sold if, as a result, FNBO would not retain a material net economic interest in an
amount that is not less than 5% of the nominal value of the securitized exposures, except to the extent permitted in accordance with Article 405(1) of the CRR (as supplemented by Article 12 of the CRR Delegated Regulation), Article 51(1)
of the AIFM Regulation and Article 254 of the Solvency II Regulation; 
 (d) FNBO will provide ongoing confirmation
of FNBO’s continued compliance with its obligations described in (a) and (c) above in or concurrently with the delivery of each monthly report to the Noteholders. 

3. Agreements of Transferor. Transferor hereby acknowledges the terms and conditions of this Agreement and, further, covenants that it
will not allow the Retained Interest to be subject to any credit risk mitigation, short position or other hedge or to be sold other than as directed by FNBO and as permitted in accordance with the terms of this Agreement. 

4. Limitation of Liability. 

(a) It is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by
Wilmington Trust Company not individually or personally but solely as Owner Trustee under the Second Amended and Restated Trust Agreement, dated as of September 23, 2016 (the “Trust Agreement”), between the Transferor and Wilmington
Trust Company, and in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal
representation, undertaking or agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained will be construed as creating any liability on the Wilmington Trust Company
individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under them and
(iv) under no circumstances will Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under this Agreement or any related documents. 
 (b) NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN OR IN ANY OTHER DOCUMENT OR AGREEMENT RELATING TO THE CLASS A NOTES, IN NO EVENT SHALL FNBO OR THE TRANSFEROR BE LIABLE TO THE INDENTURE TRUSTEE, THE ISSUER, THE 

  
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OWNER TRUSTEE, ANY APPLICABLE INVESTOR OR ANY OTHER NOTEHOLDER, OR RESPONSIBLE FOR, LOSSES IN RESPECT OF THE CLASS A NOTES OR ANY INTEREST THEREIN, INCLUDING, WITHOUT LIMITATION ANY LOSS OF VALUE
OF ANY CLASS A NOTE OR ANY INTEREST THEREIN, DUE TO THE FAILURE OF THE RETAINED INTEREST AND COMPLIANCE BY FNBO AND THE TRANSFEROR WITH THE TERMS OF THIS AGREEMENT TO SATISFY THE EU RISK RETENTION RULES OR OTHER SIMILAR OR EQUIVALENT
PROVISIONS NOW OR HEREAFTER IN EFFECT. 
 5. Miscellaneous.  

(a) THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEBRASKA WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 

(b) EACH OF THE PARTIES HERETO (AND EACH APPLICABLE INVESTOR BY ACCEPTING THE BENEFITS HEREOF) HEREBY AGREES TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEBRASKA. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. 

(c) All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including
telecopies, email, telegraphic, telex or cable communication) and mailed, emailed (with “PDF” attachment in the case of any signed notice or communication), telecopied with receipt confirmed by telephone, telegraphed, telexed, cabled or
delivered, as to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and communications shall, when mailed, emailed,
telecopied, telegraphed, telexed or cabled, be effective when deposited in the mail, emailed, telecopied, delivered to the telegraph company, confirmed by telex answer back or delivered to the cable company, respectively. 

  
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	If to FNBO:	  	First National Bank of Omaha
		  	1620 Dodge Street
		  	Stop Code 3395
		  	Omaha, Nebraska 68197-3395
		  	Attention: Treasurer
		
	If to the Transferor:	  	First National Funding LLC
		  	1620 Dodge Street
		  	Stop Code 3395
		  	Omaha, Nebraska 68197-3395
		  	Attention: President
		
	If to the Issuer:	  	c/o Wilmington Trust Company
		  	Rodney Square North
		  	1100 North Market Street
		  	Wilmington, DE 19890
		  	Attention: Corporate Trust Administration

 (d) Neither this Agreement nor any term or provision hereof may be changed, waived, discharged
or terminated except by a writing signed by a duly authorized officer of the party against whom enforcement of such change, waiver, discharge or termination is sought to be enforced. 

(e) Any part, provision, representation, warranty or covenant of this Agreement that is prohibited or is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. 

Any part, provision, representation, warranty or covenant of this Agreement that is prohibited or is held to be void or
unenforceable in any particular jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in
any particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 To the
extent permitted by applicable law, the parties hereto waive any provision of law which prohibits or renders void or unenforceable any provision hereof. 

(f) This Agreement constitutes the entire agreement and understanding of the parties with respect to the matters addressed
herein, and this Agreement supersedes any prior agreements and/or understandings, written or oral, with respect to such matters. 

(g) The Issuer is a party to this Agreement solely for the purposes of obtaining the benefit of the representations, warranties
and covenants contained therein and under no circumstances shall it be deemed to have undertaken any obligations thereunder or by virtue of its entry into this Agreement. 

  
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 (h) The Indenture Trustee is a third party beneficiary of this Agreement solely
for the purpose of obtaining the benefit of the representations, warranties and covenants contained herein and under no circumstances shall it be deemed to have undertaken any obligations hereunder. For the avoidance of doubt, in no event shall the
Indenture Trustee have any responsibility to monitor compliance with or be charged with knowledge of the EU Risk Retention Rules, nor shall it be liable to any Applicable Investor, Noteholder or any party whatsoever for any violation of such
EU Risk Retention Rules or such similar provisions now or hereafter in effect or for any breach of any term of this Agreement. 

  
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 FNBO, the Transferor and the Issuer have caused this Agreement to be duly executed by their
respective officers as of the date first above written. 
  

			
	FIRST NATIONAL BANK OF OMAHA
		
	By	 	 
		 	Timothy D. Hart
		 	Senior Vice President and Treasurer
	
	FIRST NATIONAL FUNDING LLC
		
	By:	 	First National Funding Corporation,its Managing Member
		
	By	 	 
		 	Lori L. Niemeyer
		 	Senior Vice President
	
	FIRST NATIONAL MASTER NOTE TRUST
		
	By	 	Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee

 

			
	By	 	 

 
			
	Name	 	 

 
			
	Title	 	 

  
 7EXHIBIT 10.1

 

FORBEARANCE AGREEMENT

This Forbearance
Agreement (this “Forbearance Agreement”) is entered into as of April 17, 2017, by and between (a) SILICON
VALLEY BANK, a California corporation (“Bank”), and (b) (i) XTANT MEDICAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), (ii) BACTERIN INTERNATIONAL, INC., a Nevada corporation (“Bacterin”),
(iii) X-SPINE SYSTEMS, INC., an Ohio corporation (“X-spine”), and (iv) XTANT MEDICAL, INC., a
Delaware corporation (“Xtant”, and together with Holdings, Bacterin and X-spine, individually and collectively,
jointly and severally, the “Borrower”).

1.               
DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing
by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of May 25, 2016, evidenced by, among
other documents, a certain Loan and Security Agreement, dated as of May 25, 2016, between Borrower and Bank, as amended by a certain
First Loan Modification Agreement, dated as of August 12, 2016 (as amended, the “Loan Agreement”). Capitalized
terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

2.               
DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by (a) the Collateral as described in the Loan
Agreement, and (b) the “Intellectual Property Collateral”, as such term is defined in that certain Intellectual Property
Security Agreement, executed and delivered by Borrower to Bank, dated as of May 25, 2016 (the “IP Agreement”).
Hereinafter, the Loan Agreement and the IP Agreement, together with all other documents executed in connection therewith evidencing,
securing or otherwise relating to the Obligations, shall be referred to as the “Existing Loan Documents”.

3.               
ACKNOWLEDGMENT OF DEFAULTS. Borrower acknowledges that (i) an Event of Default under Section 8.2(a) of the Loan Agreement
has occurred by virtue of Borrower failing to deliver an “unqualified” opinion from an independent certified public
accounting firm, on the annual financial statements of Borrower for the fiscal year ended December 31, 2016 (such opinion includes
a “going concern” qualification), and (ii) an Event of Default or Events of Default under Section 8.3, 8.6 and/or Section
8.9 of the Loan Agreement has occurred by virtue of Borrower’s events of default under the OrbiMed Loan Documents, that certain
Indenture, dated as of July 31, 2015, by and between Holdings and Wilmington Trust, National Association, as trustee, and certain
Convertible Promissory Notes issued by Holdings to ROS Acquisition Offshore LP on April 14, 2016 (in the aggregate principal amount
of $1,428,552.78) and January 17, 2017 (in the aggregate principal amounts of $995,700 and $42,856.59), and to OrbiMed Royalty
Opportunities II, LP on April 14, 2016 (in the aggregate principal amount of $809,613.67) and January 17, 2017 (in the aggregate
principal amounts of $564,300 and $24,288.41), as a result of such “going concern” qualification (the foregoing Events
of Default described in clause (i) and clause (ii) are collectively referred to as the “Stated Defaults”).

4.               
FORBEARANCE BY BANK.

		A.	In consideration of, among other things, Borrower’s compliance with each and every term of
this Forbearance Agreement, Bank hereby agrees to forbear from exercising its rights and remedies as a result of the Stated Defaults
until the earlier of (i) a Default or an Event of Default occurs under the Loan Agreement (with the sole exception of the Stated
Defaults), (ii) the failure of Borrower to promptly, punctually, or faithfully perform or comply with any term or condition of
this Forbearance Agreement as and when required, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE, or (iii)
3:00 p.m. Pacific time on April 21, 2017 (the period commencing as of the date of the effectiveness of this Forbearance Agreement
and ending on the earlier of (i), (ii) or (iii) above shall be referred to as the “Forbearance Period”).

    	 	  	 

     

    
		B.	Borrower hereby acknowledges and agrees that nothing contained in this section or in any other
section of this Forbearance Agreement shall be deemed or otherwise construed as a waiver by Bank of the Stated Defaults or any
other Default or Event of Default (whether now existing or hereafter arising) or of any of its rights and remedies pursuant to
the Existing Loan Documents, applicable law or otherwise. This Forbearance Agreement shall only constitute an agreement by Bank
to forbear from enforcing its rights and remedies based upon the Stated Defaults, upon the terms and conditions set forth herein.
Upon the expiration of the Forbearance Period, the agreement of Bank to forbear as set forth in this Forbearance Agreement shall
automatically terminate and Bank may immediately commence enforcing its rights and remedies pursuant to the Existing Loan Documents,
applicable law or otherwise, in such order and manner as Bank may determine appropriate.

5.               
TERMS OF FORBEARANCE.

		A.	From and after the execution of this Forbearance Agreement, Borrower agrees that Bank shall have
no further obligation to make any Advances to Borrower, or to issue any other Credit Extensions for Borrower’s account, or
to provide any other extensions of credit of any kind (if an obligation exists in a particular instance) to Borrower. Notwithstanding
the foregoing, during the Forbearance Period and at the request of Borrower, Bank may, in its sole and absolute discretion, continue
to make Advances (hereinafter, such financial accommodations shall be referred to collectively as “Discretionary Financial
Accommodations” and singly as a “Discretionary Financial Accommodation”), subject, in all events,
to the terms and conditions of this Forbearance Agreement, the Loan Agreement, (including but not limited to, all limitations imposed
by the Availability Amount) and the other Loan Documents, as affected hereby. Borrower covenants and agrees that if, in the sole
and absolute discretion of Bank, Bank shall make any Discretionary Financial Accommodation during the Forbearance Period, such
act shall not constitute (i) a waiver of the Stated Defaults, or of any other Default or Event of Default which may now exist or
which may occur after the date of this Forbearance Agreement under any of the Loan Documents, or (ii) an agreement on the part
of Bank to make any further extensions of credit of any kind to Borrower at a later date.

    	 	 2	 

     

    
		B.	At all times during the Forbearance Period, Borrower shall comply with all terms and conditions
of the Loan Agreement and the other Loan Documents including, without limitation, all representations, warranties, affirmative
and negative covenants contained in the Loan Agreement and the other Loan Documents.

		C.	During the Forbearance Period, Borrower shall continue to remit all regularly scheduled payments
(whether due on account of any Credit Extension or otherwise, including all principal, interest, fees, costs and other amounts)
which may become due under the Loan Agreement, as and when such payments are due.

6.               
FEES. Borrower shall reimburse Bank for all legal fees and expenses incurred in connection with the Existing Loan
Documents and this Forbearance Agreement.

7.               
RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of the
Loan Documents and all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.

8.               
CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described
above.

9.               
RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of the
Loan Documents and all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.

10.            
NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any
offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby
expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

11.            
CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying
upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly
modified pursuant to this Forbearance Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and
effect. Bank’s agreement to forbear from enforcing it rights and remedies pursuant to this Forbearance Agreement in no way
shall obligate Bank to make any future forbearances or make any other modifications to the Obligations. Nothing in this Forbearance
Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties
all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by
virtue of this Forbearance Agreement.

12.            
JURISDICTION/VENUE/TRIAL WAIVER. Section 11 of the Loan Agreement is hereby incorporated by reference in its entirety.

13.            
COUNTERSIGNATURE. This Forbearance Agreement shall become effective only when it shall have been executed by Borrower
and Bank.

[Signature page
follows.]

 

    	 	 3	 

     

    

This Forbearance Agreement
is executed as of the date first written above.

	BANK:	 	 	 
	 	 	 	 	 	 
	SILICON VALLEY BANK	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By	/s/ Sam Subilia	 	 	 	 
	Name:  	Sam Subilia	 	 	 	 
	Title:	VP	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

BORROWER:

 

 

	XTANT MEDICAL HOLDINGS, INC.	 	BACTERIN INTERNATIONAL, INC.	 
	 	 	 	 	 	 
	By	/s/ John P. Gandolfo	 	By	/s/ John P. Gandolfo	 
	Name:  	John P. Gandolfo	 	Name:  	John P. Gandolfo	 
	Title:	CFO	 	Title:	CFO	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	X-SPINE SYSTEMS, INC.	 	XTANT MEDICAL, INC.	 
	 	 	 	 	 	 
	By	/s/ John P. Gandolfo	 	By	/s/ John P. Gandolfo	 
	Name:  	John P. Gandolfo	 	Name:  	John P. Gandolfo	 
	Title:	CFO	 	Title:	CFO	 
	 	 	 	 	 	 

 

2122782.2

 

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