Document:

Exhibit 10.14

 

Silicon Valley Bank

 

U.S. Small Business Administration

Paycheck Protection Program

Note

 

	SBA Loan No.	6608117303
	SBA Loan Name	Borrower

                                                                                Legal Name
	Aziyo Biologics, Inc.
	 	DBA	 
	Date	5/7/2020
	Loan Amount	$ 2995265
	Interest Rate	1.0% per annum
	Borrower	Aziyo Biologics, Inc.
	Operating Company	Not applicable
	Lender	Silicon Valley Bank

 

1.       PROMISE TO PAY.

 

In return for the Loan, Borrower promises to pay to the order
of Lender the amount of $ 2995265 Dollars, interest on the unpaid principal balance, and all other amounts required by this
Note.

 

2.       DEFINITIONS.

 

“Collateral” means any property taken as security
for payment of this Note or any guarantee of this Note.

 

“CARES Act” means the Coronavirus Aid, Relief, and
Economic Security Act.

 

“Guarantor” means each person or entity that signs
a guarantee of payment of this Note.

 

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to
this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

“Paycheck Protection Program” means loan program
created by Section 1102 of the CARES Act.

 

    	 	1	 

     

    

 

“Per Annum” means for a year deemed to be comprised
of 360 days.

 

“SBA” means the Small Business Administration, an
Agency of the United States of America.

 

		3.	PAYMENT TERMS: Borrower must make all payments at the place Lender designates. The payment terms for this Note are:

 

		A.	Conditions Precedent
to Disbursement of Loan Proceeds.

 

Before the funding of the Loan, the following conditions
must be satisfied:

 

1.       Lender
has approved the request for the Loan.

 

2.       Lender
has received approval from SBA to fund the Loan.

 

		B.	No Payments During Deferral Period. There shall be no payments due by Borrower during the six-month period beginning
on the date of this Note (the “Deferral Period”). However, during the Deferral Period interest will accrue at the Interest
Rate on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.

 

		C.	Principal and Interest Payments. Commencing one month after the expiration of the Deferral Period, and continuing on
the same day of each month thereafter until the Maturity Date, Borrower shall pay to Lender monthly payments of principal and interest,
each in such equal amount required to fully amortize the principal amount outstanding on the Note on the last day of the Deferral
Period by the Maturity Date.

 

		D.	Maturity Date. On the date which is twenty-four (24) months from the date of this Note (the “Maturity Date”),
Borrower shall pay to Lender any and all unpaid principal plus accrued and unpaid interest plus interest accrued during the Deferral
Period. This Note will mature on the Maturity Date.

 

		E.	Not a Business Day. If any payment is due on a date for which there is no numerical equivalent in a particular calendar
month then it shall be due on the last day of such month. If any payment is due on a day that is a Saturday, Sunday or any other
day on which California chartered banks are authorized to be closed, the payment will be made on the next business day.

 

		F.	Payment Allocation. Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise
agreed or required by applicable law (including the CARES Act). Notwithstanding, in the event the Loan, or any portion thereof,
is forgiven pursuant to the Paycheck Protection Program under the federal CARES Act, the amount so forgiven shall be applied to
principal.

 

		F.	Prepayments. Borrower may prepay this Note at any time without payment of any penalty or premium.

 

    	 	2	 

     

    

 

		G.	Borrower Certifications.

 

Borrower certifies to Lender as follows:

 

		1.	Current economic uncertainty makes this Loan necessary to support the ongoing operations of Borrower.

 

		2.	Loan funds will be used by Borrower to retain its workers and maintain its payroll or make its mortgage payments, lease payments,
and utility payments.

 

		3.	For the period beginning on February 15, 2020 and ending on December 31, 2020, Borrower did not receive, and agrees it will
not apply for or receive, another loan under the Paycheck Protection Program.

 

		4.	Borrower was in operation on February 15, 2020 and (i) had employees for whom it paid salaries and payroll taxes or (ii) paid
independent contractors as reported on a 1099-Misc.

 

		5.	Borrower has reviewed and understands Sections 1102 and 1106 of the CARES Act and the related guidelines and has completed
the Application, including Borrower’s eligibility in conformity with those provisions.

 

		6.	Borrower has taken its “affiliates” (as defined by the SBA) into account when determining the number of employees
and the total amount of loans permitted under the Paycheck Protection Program.

 

		7.	Borrower is a small business concern or is otherwise eligible to receive a covered loan.

 

		8.	The person who has completed and signed the application, this Note and the Loan Documents has been validly authorized by Borrower
to enter into borrowings on behalf of Borrower.

 

H.           Agreements.

 

Borrower understands and agrees, and waives and releases Lender,
its affiliates and their respective directors, officers, agents and employees, as follows:

 

		1.	The Loan will be made under the SBA’s Paycheck Protection Program. Accordingly, this Note and the other Loan Documents
must be submitted to and approved by the SBA. There is limited funding available under the Paycheck Protection Program and accordingly,
all applications submitted will not be approved by the SBA.

 

		2.	Lender is participating in the Payroll Protection Program to help businesses impacted by the economic impact from COVID-19.
However, Lender anticipates high volumes and there may be processing delays and system failures along with other issues that interfere
with submission of Borrower’s application to SBA. Lender does not represent or guarantee that it will submit the application
while SBA funding remains available under the Payroll Protection Program or at all. Borrower hereby agrees that Lender is not responsible
or liable to Borrower or any of its affiliates (i) if the Lender does not submit Borrower’s application to the SBA until
after the date that SBA stops approving applications under the Paycheck Protection Program,
for any reason or (ii) if the application is not processed by Lender. Borrower forever releases and waives any claims against Lender,
its affiliates and their respective directors, officers, agents and employees concerning failure to obtain the Loan. This release
and waiver applies to, but is not limited to, any claims concerning Lender’s (i) pace, manner or systems for processing or
prioritizing applications, or (ii) representations by Lender regarding the application process, the Paycheck Protection Program,
or availability of funding. This agreement to release and waiver supersedes any prior communications, understandings, agreements
or communications on the issues set forth herein.

 

    	 	3	 

     

    

 

		3.	Forgiveness of the Loan is only available for principal that is used for the limited purposes that expressly qualify for forgiveness
under SBA requirements, and that to obtain forgiveness, Borrower must request forgiveness from the Lender, provide documentation
in accordance with the SBA requirements, and certify that the amounts Borrower is requesting to be forgiven qualify under those
requirements. Borrower also understands that Borrower shall remain responsible under the Loan for any amounts not forgiven, and
that interest payable under the Loan will not be forgiven, but that the SBA may pay the Loan interest on forgiven amounts.

 

		4.	Forgiveness of the Loan is not automatic and Borrower must request forgiveness of the Loan from Lender. Borrower is not relying
on Lender for its understanding of the requirements for forgiveness such as eligible expenditures, necessary records/documentation,
or possible reductions due to changes in number of employees or compensation. Borrower agrees that will consult the SBA’s
program materials and consult with its own counsel regarding the criteria forgiveness.

 

		5.	The Loan Documents are subject to review, and Borrower may not receive the Loan. The Loan also remains subject to availability
of funds under the SBA’s Payment Protection Program, and to the SBA issuing an SBA loan number.

 

		6.	Borrower’s liability under this Note will continue with respect to any amounts SBA may pay Bank based on an SBA guarantee
of this Note. Any agreement with Bank under which SBA may guarantee this Note does not create any third party rights or benefits
for Borrower and, if SBA pays Bank under such an agreement, SBA or Bank may then seek recovery from Borrower of amounts paid by
SBA.

 

		7.	Lender reserves the right to modify the Note Amount based on documentation received from Borrower.

 

		8.	Borrower’s execution of this Note has been duly authorized by all necessary actions of its governing body. The person
signing this Note is duly authorized to do so on behalf of Borrower.

 

		9.	This Note shall not be governed by any existing or future credit agreement or loan agreement with Lender. The liabilities guaranteed
pursuant to any existing or future guaranty in favor of Lender shall not include this Note. The liabilities secured by any existing
or future security instrument in favor of Lender shall not include the Loan.

 

    	 	4	 

     

    

 

		10.	The proceeds of the Loan will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments,
and utility payments, as specified under the Paycheck Protection Program Rule. Borrower understands that if the funds are knowingly
used for unauthorized purposes, the federal government may hold Borrower legally liable, such as for charges of fraud.

 

Electronic Execution of Loan Documents.

 

The words “execution,” “signed,” “signature”
and words of like import in this Note and any Loan Document shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed
signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable
law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.

 

4.    DEFAULT:

 

Borrower is in default under this Note if Borrower does not
make a payment when due under this Note, or if Borrower or Operating Company:

 

		A.	Fails to do anything required by this Note and other Loan Documents;

 

		B.	Defaults on any other loan with Lender;

 

		C.	Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;

 

		D.	Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

 

		E.	Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

 

		F.	Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s
ability to pay this Note;

 

		G.	Fails to pay any taxes when due;

 

		H.	Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

		I.	Has a receiver or liquidator appointed for any part of their business or property;

 

		J.	Makes an assignment for the benefit of creditors;

 

		K.	Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s
ability to pay this Note;

 

		L.	Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written
consent; or

 

    	 	5	 

     

    

 

		M.	Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay
this Note.

 

5.    LENDER’S RIGHTS
IF THERE IS A DEFAULT.

 

Without notice or demand and without giving up any of its rights,
Lender may:

 

		A.	Require immediate payment of all amounts owing under this Note;

 

		B.	Collect all amounts owing from any Borrower or Guarantor;

 

		C.	File suit and obtain judgment.

 

		D.	Take possession of any Collateral; or

 

		E.	Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

 

6.    LENDER’S GENERAL
POWERS.

 

Without notice and without Borrower’s consent, Lender
may:

 

		A.	Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

 

		B.	Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve
or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance,
appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses, it
may demand immediate repayment from Borrower or add the expenses to the principal balance;

 

		C.	Release anyone obligated to pay this Note;

 

		D.	Compromise, release, renew, extend or substitute any of the Collateral; and

 

		E.	Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

7.    WHEN FEDERAL LAW
APPLIES; GOVERNING LAW; FORUM SELECTION.

 

When SBA is the holder, this Note will be interpreted and enforced
under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents,
giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state
or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state
law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

    	 	6	 

     

    

 

8.    SUCCESSORS AND ASSIGNS.

 

Under this Note, Borrower and Operating Company includes its
successors, and Lender includes its successors and assigns.

 

9.    GENERAL PROVISIONS.

 

		A.	All individuals and entities signing this Note are jointly and severally liable.

 

		B.	Borrower waives all suretyship defenses.

 

		C.	Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect,
or maintain Lender’s liens on Collateral.

 

		D.	Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or
forgo enforcing any of its rights without giving up any of them. E. Borrower may not use an oral statement of Lender or SBA to
contradict or alter the written terms of this Note.

 

		E.	If any part of this Note is unenforceable, all other parts remain in effect.

 

		F.	To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment,
demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any
guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market
value of Collateral at a sale.

 

10.  STATE-SPECIFIC
PROVISIONS:

 

If the SBA is not the holder, this Note shall be governed by
and construed in accordance with the laws of the State of California where the main office of Lender is located. MATTERS REGARDING
INTEREST TO BE CHARGED BY LENDER AND THE EXPORTATION OF INTEREST SHALL BE GOVERNED BY FEDERAL LAW (INCLUDING WITHOUT LIMITATION
12 U.S.C. SECTIONS 85 AND 1831(u) AND THE LAW OF THE STATE OF CALIFORNIA. Borrower agrees that any legal action or proceeding with
respect to any of its obligations under this Note may be brought by Lender in any state or federal court located in the State of
California, as Lender in its sole discretion may elect. Borrower submits to and accepts in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of those courts. Borrower waives any claim that the State of California is not
a convenient forum or the proper venue for any such suit, action or proceeding. The extension of credit that is the subject of
this Note is being made by Lender in California.

 

    	 	7	 

     

    

 

11.  BORROWER’S
NAME(S) AND SIGNATURE(S).

 

BORROWER CERTIFIES THAT THE INFORMATION PROVIDED IN THIS APPLICATION
AND THE INFORMATION PROVIDED IN ALL SUPPORTING DOCUMENTS AND FORMS IS TRUE AND ACCURATE IN ALL MATERIAL RESPECTS. BORROWER UNDERSTANDS
THAT KNOWINGLY MAKING A FALSE STATEMENT TO OBTAIN A GUARANTEED LOAN FROM SBA IS PUNISHABLE UNDER THE LAW, INCLUDING UNDER 18 USC
1001 AND 3571 BY IMPRISONMENT OF NOT MORE THAN FIVE YEARS AND/OR A FINE OF UP TO $250,000; UNDER 15 USC 645 BY IMPRISONMENT OF
NOT MORE THAN TWO YEARS AND/OR A FINE OF NOT MORE THAN $5,000; AND, IF SUBMITTED TO A FEDERALLY INSURED INSTITUTION, UNDER 18 USC
1014 BY IMPRISONMENT OF NOT MORE THAN THIRTY YEARS AND/OR A FINE OF NOT MORE THAN $1,000,000.

 

By signing below, each individual or entity becomes obligated
under this Note as Borrower.

Funds will be credited to your Deposit

Account Number ending in:

 

	5366	BORROWER:
	 	 	 
	 	By:	/s/ Jeffrey Hamet
	 	 	 
	 	Name:	Jeffrey Hamet
	 	 	 
	 	Title:	Authorized Signer
	 	 	 
	 	Date:	5/7/2020

 

    	 	8Exhibit 10.15

 

EXECUTION VERSION

 

 

ROYALTY AGREEMENT

 

dated as of

 

May 31, 2017

 

by and between

 

AZIYO MED, LLC

 

and

 

LIGAND PHARMACEUTICALS INCORPORATED

 

     

     

    

 

TABLE OF CONTENTS

 

Page

 
	ARTICLE I - Definitions	1
	 	 	 	 	 	 
	SECTION 1.01.	 	Defined Terms.	 	 	1
	 	 	 	 	 	 
	ARTICLE II -
    Payments by the Company;	9
	 	 	 	 	 	 
	SECTION 2.01.	 	Buydown Payment.	 	 	9
	SECTION 2.02.	 	Periodic Royalties.	 	 	9
	SECTION 2.03.	 	Milestone Payments.	 	 	10
	SECTION 2.04.	 	Consent to Sale Transaction; No
    Assumed Obligations.	 	 	11
	 	 	 	 	 	 
	ARTICLE III -
    Representations and Warranties of the Company	11
	 	 	 	 	 	 
	SECTION 3.01.	 	Organization.	 	 	11
	SECTION 3.02.	 	Authorization.	 	 	11
	SECTION 3.03.	 	Governmental Authorization.	 	 	11
	SECTION 3.04.	 	Ownership.	 	 	11
	SECTION 3.05.	 	Litigation.	 	 	12
	SECTION 3.06.	 	Compliance with Laws.	 	 	12
	SECTION 3.07.	 	Conflicts.	 	 	12
	SECTION 3.08.	 	Current Indebtedness.	 	 	13
	SECTION 3.09.	 	 Financial Statements.	 	 	13
	 	 	 	 	 	 
	ARTICLE IV -
    Representations and Warranties of Ligand	13
	 	 	 	 	 	 
	SECTION 4.01.	 	Organization.	 	 	13
	SECTION 4.02.	 	No Assignment; Authorization.	 	 	13
	SECTION 4.03.	 	Conflicts.	 	 	13
	 	 	 	 	 	 
	ARTICLE V - Covenants	14
	 	 	 	 	 	 
	SECTION 5.01.	 	Access; Information.	 	 	14
	SECTION 5.02.	 	Confidentiality; Press Release.	 	 	15
	SECTION 5.03.	 	Efforts; Further Assurance.	 	 	15
	SECTION 5.04.	 	Remedies Event.	 	 	15
	SECTION 5.05.	 	Indebtedness; Sale of Revenue
    Interests.	 	 	16
	SECTION 5.06.	 	Remittance of Funds to Accounts.	 	 	16
	 	 	 	 	 	 
	ARTICLE VI -
    Term and Termination	16
	 	 	 	 	 	 
	SECTION 6.01.	 	Term.	 	 	16
	SECTION 6.02.	 	Extension of the Term.	 	 	16
	SECTION 6.03.	 	Effect of Termination.	 	 	17

 

     

     

    

 

	ARTICLE VII	17
	 	 	 	 	 	 
	SECTION 7.01.	 	Survival.	 	 	17
	SECTION 7.02.	 	Notices.	 	 	17
	SECTION 7.03.	 	Successors and Assigns.	 	 	18
	SECTION 7.04.	 	Indemnification.	 	 	19
	SECTION 7.05.	 	No Implied Representations and Warranties.	 	 	20
	SECTION 7.06.	 	Independent Nature of Relationship.	 	 	20
	SECTION 7.07.	 	Entire Agreement.	 	 	20
	SECTION 7.08.	 	Amendments; No Waivers.	 	 	21
	SECTION 7.09.	 	Interpretation.	 	 	21
	SECTION 7.10.	 	Headings and Captions.	 	 	21
	SECTION 7.11.	 	Counterparts; Effectiveness	 	 	21
	SECTION 7.12.	 	Severability	 	 	21
	SECTION 7.13.	 	Expenses.	 	 	21
	SECTION 7.14.	 	Governing Law; Jurisdiction.	 	 	22
	 	 	 	 	 	 
	ARTICLE VIII
    - Intercreditor Matters and Guarantee	22
	 	 	 	 	 	 
	SECTION 8.01.	 	Ligand Interests; Recharacterization.	 	 	22
	SECTION 8.02.	 	Other Ligand Security.	 	 	23
	SECTION 8.03.	 	Priority.	 	 	24
	SECTION 8.04.	 	Other Intercreditor Matters.	 	 	24
	SECTION 8.05.	 	Control Agreements.	 	 	24
	SECTION 8.06.	 	Termination or Release.	 	 	24
	 	 	 	 	 	 
	ARTICLE IX -
    Remedies	25
	 	 	 	 	 	 
	SECTION 9.01.	 	Remedies.	 	 	25
	SECTION 9.02.	 	Acceleration.	 	 	25

 

    -ii -

     

    

 

ROYALTY AGREEMENT

 

This ROYALTY AGREEMENT
(as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated
as of May 31, 2017, by and between AZIYO MED, LLC, a Delaware limited liability company (the “Company”);
and LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation (“Ligand”).

 

RECITALS

 

Whereas,
the Company wishes (i) to acquire from CorMatrix Cardiovascular, Inc. (the “Seller”) all of
its assets related or applicable to, or used in connection with, its business of developing, manufacturing and commercializing
the Products described herein (the “Sale Transaction”), and (ii) in connection with such Sale Transaction,
to obtain the consent of Ligand to the Sale Transaction and enter into an agreement with Ligand setting forth the obligations of
the Company to Ligand with respect to such acquired interests and the sale of the Products; and

 

Whereas,
as a condition precedent to Ligand’s entering into this Agreement, Aziyo Biologics, Inc., a Delaware corporation and
the parent of the Company (the “Guarantor”), has agreed to enter into a Guaranty Agreement guarantying
the obligations of the Company under Section 2.01, in substantially the form attached hereto as Exhibit A;

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements and representations and warranties set forth herein, the parties hereto agree
as follows:

 

ARTICLE I
- Definitions

 

SECTION 1.01. Defined
Terms. As used in this Agreement, the following terms shall have the meanings specified below:

 

“Affiliate”
shall mean any Person that controls, is controlled by, or is under common control with another Person. For purposes of this definition,
 “control” shall mean direct or indirect ownership of a majority of the stock or other equity interests having the right
to vote for the election of directors or other members of the governing body of the entity.

 

“Applicable
Royalty Percentage” shall mean (i) prior to the first $5,000,000 payment of the Buydown Payment, twenty
percent (20.0%) or (ii) following such payment, five percent (5.0%), provided that if the second $5,000,000 installment
of the Buydown Payment is not made on or before December 15, 2017, then the Applicable Royalty Percentage shall be twenty
percent (20.0%) from December 15, 2017, until such second payment is made.

 

“Asset Purchase
Agreement” shall mean that certain Asset Purchase Agreement, dated as of May 31, 2017, by and among the Seller,
the Company and the Guarantor setting forth the terms and conditions of the Sale Transaction.

 

“Audit
Costs” shall mean, with respect to any audit of the books and records of the Company or its Subsidiaries with
respect to amounts payable or paid under this Agreement, the reasonable out-of-pocket cost of such audit, including all fees, costs
and expenses incurred in connection therewith.

 

     

     

    

 

“Bankruptcy
Event”. shall mean the occurrence of any proceeding being instituted by or against the Company
seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial
part of its property, or the Company taking any action to authorize any of the actions set forth above. Notwithstanding the foregoing,
if such proceeding is instituted against the Company, no Bankruptcy Event shall have occurred unless such proceeding remains undismissed,
undischarged or unbonded for a period of sixty (60) days.

 

“Books”
shall mean all of the books and records of a Person, including ledgers, federal and state tax returns, records regarding the Person’s
assets or liabilities, the General Collateral, business operations or financial condition, and all computer programs or storage
or any equipment containing such information.

 

“Business
Day” shall mean any day other than a Saturday, a Sunday, any day which is a legal holiday under the laws of the State
of New York, or any day on which banking institutions located in the State of New York are required by law or other governmental
action to close.

 

“Buydown
Payment” shall have the meaning set forth in Section 2.01(a).

 

“CanGaroo
Product Change of Control” shall mean the first to occur of any Product Change of Control in respect of the CanGaroo
Products.

 

“Collateral”
means the Royalty Related Collateral and the General Collateral.

 

“Company”
shall have the meaning set forth in the preamble.

 

“Company
Change of Control” shall mean, with respect to the Company, the first to occur of any of the
following transactions:

 

(a)            the
acquisition by any Person or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended) of beneficial ownership of any capital stock of the Company, if after such acquisition, such Person or group
would be the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
but assuming that any convertible securities owned by such Person or group or any controlled affiliates thereof are immediately
exercisable), directly or indirectly, of securities of the Company representing a majority of the voting power of the Company;

 

(b)            a
merger or consolidation of the Company, with any other Person, other than a merger or consolidation which would result in the Company's
voting securities outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) a majority of voting power of the Company immediately after such merger or consolidation;
or

 

    - 2 -

     

    

 

(c)            the
bona fide sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions,
by the Company or any of its Subsidiaries of all or substantially all the assets of the Company and its Subsidiaries, taken as
a whole.

 

“Confidential
Information” shall mean, as it relates to the Company and its Affiliates and any of the Products, the Intellectual
Property related to any of the Products, confidential business information, financial data and other like information (including
ideas, research and development, know-how, formulas, schematics, compositions, technical data, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and proposals), inventory, ideas, algorithms, processes,
computer software programs or applications (in both source code and object code form), client lists and tangible or intangible
proprietary information or material, or such other information that either Party identifies to the other as confidential or the
nature of which or the circumstances of the disclosure of which would reasonably indicate that such information is confidential
or proprietary. Notwithstanding the foregoing definition, Confidential Information shall not include information that (a) is
already in the public domain at the time the information is disclosed, (b) thereafter becomes lawfully obtainable from other
sources who, to the knowledge of the recipient, have no obligation of confidentiality, (c) can be shown to have been independently
developed by the recipient or its representatives without reference to any Confidential Information of the other Party or (d) is
required to be disclosed under laws, rules and regulations of any Governmental Authority applicable to the Company or its
Affiliates or Ligand or its Affiliates, as the case may be, or pursuant to the rules and regulations of any securities exchange
or trading system or pursuant to any other laws, rules or regulations of any Governmental Authority having jurisdiction over
the Company and its Affiliates or Ligand and its Affiliates.

 

“Depository
Bank” shall mean Silicon Valley Bank.

 

“Effective
Date” shall mean the date of the closing of the Sale Transaction.

 

“Excluded
Assets” shall mean (i) any deposit accounts exclusively used by the Company for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of the Company’s employees, (ii) the Permitted CD
Collateral Accounts (as defined in the MidCap Credit Facility), (iii) any fee interest in owned or leased real property (including
fixtures related thereto), (iv) any “intent to use” trademark application for which a statement of use has not
been filed with the United States Patent and Trademark Office, (v) any motor vehicles or other assets subject to certificates
of title, (vi) any equity interests of subsidiaries that are not wholly-owned subsidiaries to the extent a security interest
on such equity interests is prohibited by the organizational or joint venture documents relating to such equity interests, (vii) any
voting equity interests of foreign subsidiaries in excess of 65% of the outstanding voting equity interests of such subsidiaries
and (viii) any assets over which the granting of a security interest in such assets would be prohibited by applicable law
or contract or that would require governmental consent, approval, license or authorization, in each case after giving effect to
Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code in the applicable jurisdiction or any other applicable
law or principle of equity.

 

    - 3 -

     

    

 

“Excluded
Costs” shall mean the following items to the extent permitted by generally accepted accounting principles: (i) value
added or any other similar transaction taxes accrued on sales invoices, (ii) sales discounts and all kinds of rebates, (iii) any
orders or parts thereof which are subsequently returned to the Company (or an Affiliate, agent or sublicensee thereof, as applicable)
and refunded to the customer or wholesaler, (iv) charges for late payment collected from customers, registration charges and
other service charges and (v) applicable shipping charges.

 

“Existing
Liens” shall mean (i) any liens or other security interests upon any assets of the Company for the benefit
of the lenders and other secured parties under the MidCap Credit Facility, and (ii) the rights of the Seller and Cook Biotech
Incorporation, an Indiana corporation, under the respective cross license agreements entered into by the Company and each of them
in connection with the Sale Transaction, as they may be amended or modified from time to time.

 

“Fiscal
Quarter” shall mean each three (3) month period commencing January 1, April l, July 1
or October 1, provided however that (a) the first Fiscal Quarter after the Effective Date shall commence on the
day after the Effective Date and continue to the end of the first full Fiscal Quarter thereafter and (b) the last Fiscal Quarter
of the Term shall end upon the expiration or termination of this Agreement.

 

“Fiscal
Year” shall mean the calendar year.

 

“General
Collateral” shall have the meaning set forth in Section 8.02.

 

“Governmental
Authority” shall mean any government, court, regulatory or administrative agency or commission, or other governmental
authority, agency or instrumentality, whether foreign, federal, state or local (domestic or foreign).

 

“Guarantor”
shall have the meaning set forth in the Recitals.

 

“Intellectual
Property” shall mean all proprietary information; technical data; laboratory notebooks; clinical data; priority
rights; trade secrets; know-how; confidential information; inventions (whether patentable or unpatentable and whether or not reduced
to practice or claimed in a pending patent application); Patents; registered or unregistered trademarks, trade names, service marks,
including all goodwill associated therewith; registered and unregistered copyrights and all applications thereof; in each case
that are owned, controlled by, generated by, issued to, licensed to, licensed by or hereafter acquired by or licensed by the Company
or any of its Subsidiaries.

 

“Intercreditor
Agreement” shall mean that certain Intercreditor Agreement, by and among the MidCap Credit Facility Agent,
Ligand and the Company, dated as of May 31, 2017, as it may be amended, supplemented or otherwise modified from time to time.

 

“Knowledge
of the Company” shall mean the current actual knowledge, information or belief held by Lode
Debrabandere, Kevin Rakin and Michelle LeRoux Williams after reasonable inquiry by such person into the relevant subject matter.

 

    - 4 -

     

    

 

“Ligand”
shall have the meaning set forth in the preamble.

 

“Ligand
Account” shall mean the following account (or such other account as Ligand may designate in writing (such
designation to be made at least two (2) Business Days prior to any payment owing to Ligand under this Agreement)):

 

Ligand Pharmaceuticals, Inc.

[XXX]

Account No. [XXX]

Routing No. [XXX]

 

“Ligand Purchase
Agreement” shall mean the Interest Purchase Agreement, dated as of May 3, 2016, between the Seller and Ligand.

 

“Losses”
shall mean collectively, any and all claims, damages, losses, judgments, awards, penalties, liabilities, costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with defending any action, suit or proceeding.

 

“Main
Account” shall mean the deposit account maintained by the Company at the Depository Bank with account number
[XXX].

 

“Material
Adverse Change"” shall mean, with respect to the Company and its Subsidiaries, any event, change, circumstance,
occurrence, effect or state of facts that has caused or is reasonably likely to cause a material adverse change in the business,
operations, assets or financial condition of the Company and its Subsidiaries, taken as a whole.

 

“Material
Adverse Effect” shall mean (a) the effect of a Material Adverse Change, (b) a material adverse effect
on the validity or enforceability of this Agreement, (c) the inability or failure of the Company to make the payments provided
in this Agreement, (d) a material adverse effect on the ability of the Company to perform any of its other material obligations
under this Agreement or (e) any material adverse effect on the Products or the ability of the Company and its Subsidiaries
to distribute, market and/or sell the Products.

 

“MidCap
Credit Facility” shall mean that certain Credit and Security Agreement (Revolving Loan) and that certain Credit and
Security Agreement (Term Loan), as each may be amended, amended and restated, supplemented or otherwise modified as of the date
hereof, and as each may be further amended, amended and restated. supplemented or otherwise modified from time to time as permitted
by the Intercreditor Agreement, by and among the Company and the Guarantor, as Borrowers (as defined therein), MidCap Credit Facility
Agent and the Lenders (as defined therein) party thereto.

 

“MidCap
Credit Facility Agent” shall mean MidCap Financial Trust, a Delaware statutory trust, in its capacity as administrative
agent under the MidCap Credit Facility or any successor thereto in such capacity.

 

    - 5 -

     

    

 

“Minimum
Annual Royalty” shall mean with respect to (a) calendar year 2017, zero, (b) calendar year 2018,
$1,250,000, (c) calendar year 2019, $2,200,000, and (d) calendar year 2020 and each calendar year thereafter during the
Term, $2,750,000; provided, however, that for the final Fiscal Year of the Term, the “Minimum Annual Royalty”
shall mean the applicable Minimum Annual Royalty multiplied by the fraction of such Fiscal Year that is within the Term;
provided, further, that if any Product, or any product enumerated in the definition of any Product (or in any Schedule
referenced in any such definition), is divested as a result of a Product Change of Control or if any Product is withdrawn from
the market for regulatory or safety reasons, the Minimum Annual Royalty shall be reduced by an amount that is the product of (a) the
applicable Minimum Annual Royalty for the Fiscal Year in which such Product Change of Control or withdrawal takes place and for
each Fiscal Year thereafter times (b) the fraction representing (x) the total sales of such Product or enumerated
product subject to such Product Change of Control or withdrawal in the twelve (12) calendar months immediately preceding such Product
Change of Control or withdrawal over (y) the aggregate total sales of all Products in the twelve (12) calendar months immediately
preceding such Product Change of Control or withdrawal. For the avoidance of doubt, the Minimum Annual Royalty shall be adjusted
according to the foregoing proviso immediately as of any Product Change of Control or withdrawal.

 

“Minimum
Quarterly Payment” shall mean, with respect to any Fiscal Quarter during the Term, an amount equal to the
difference between (i) the applicable Minimum Quarterly Royalty and (ii) the aggregate Monthly Royalties paid to Ligand
with respect to such Fiscal Quarter.

 

“Minimum
Quarterly Royalty” shall mean the applicable Minimum Annual Royalty divided by four; provided, however,
that for the final Fiscal Quarter of the Term, the “Minimum Quarterly Royalty” shall mean the applicable Minimum Annual
Royalty divided by four multiplied by the fraction of such Fiscal Quarter that is within the Term.

 

“Minimum
Quarterly Royalty Overpayment” shall have the meaning set forth in Section 2.02(b)(ii).

 

“Monthly
Report” shall mean, with respect to the relevant Payment Month of the Company, a report showing (a) the
gross revenues of the Products for such Payment Month, (b) the Net Sales Proceeds for such Payment Month, (c) the Excluded
Costs for such Payment Month, and (d) a reasonable calculation of the amount to which Ligand is entitled for such Payment
Month pursuant to Section 2.02(a) of this Agreement.

 

“Monthly
Royalty” shall mean, with respect to each Payment Month, the amount due to Ligand pursuant to Section 2.02(a) for
such Payment Month.

 

“Net Sales
Proceeds” shall mean the aggregate amount of sales proceeds received by the Company (or an Affiliate, agent or sublicensee
thereof, as applicable) and its Subsidiaries for Products in any Payment Month during the Term, less Excluded Costs.

 

“Obligations”
shall mean any and all payment obligations of the Company under this Agreement.

 

“Pari
Passu Collateral” shall have the meaning set forth in the Intercreditor Agreement.

 

    - 6 -

     

    

 

“Parties”
shall mean Ligand, the Company and any other Person from time to time made party to this Agreement, each a “Party.”

 

“Patent”
shall mean all patents, patent rights, patent applications, patent disclosures and invention disclosures issued or filed, together
with all reissues, divisions, continuations, revisions, term extensions, substitutes, supplementary protection certificates, reexaminations,
inter-partes reviews, post-grant oppositions or similar post-grant review proceedings, including the inventions claimed in any
of the foregoing and any priority rights arising therefrom, that are issued or filed prior to the date hereof or during the remainder
of the Term, which are owned by the Company or any Subsidiary.

 

“Payment
Month” shall mean each month-long period commencing on the first day of each calendar month during the Term,
provided however that (a) the first Payment Month after the Effective Date shall commence on the day after the Effective
Date and continue until the end of the first full Payment Month thereafter and (b) the last Payment Month of the Term shall
end upon the expiration or termination of this Agreement.

 

“Permitted
Liens” shall mean (i) the Existing Liens, (ii) the security interests granted to Ligand pursuant to Article VIII,
and (iii) any liens for taxes or other governmental charges arising by operation of law in the ordinary course of business
for sums which are not yet due and payable.

 

“Permitted
Transaction” shall mean any transaction (a) contemplated by the MidCap Credit Facility, as in effect
on the Effective Date, or any refinancing facility with respect thereto and (b) during the Term whereby the Company incurs,
creates, assumes or permits to exist any indebtedness for borrowed money; provided that such transaction (x) does not,
except to the extent expressly contemplated by Section 8.06, result in any security interest granted hereunder ceasing
to be a valid and perfected security interest and (y) could not reasonably be expected to impair the ability of the Company
to comply with the requirements to make the payments set forth in Section 2.01, Section 2.02 or Section 2.03.

 

“Person”
shall mean an individual, corporation, partnership, limited liability company, association, trust or other entity or organization,
but not including a government or political subdivision or any agency or instrumentality of such government or political subdivision.

 

“Product
Change of Control” shall mean, with respect to any Product, or any product enumerated in the definition of any Product
(or in any Schedule referenced in any such definition), any sale or other transfer by the Company of substantially all of the assets
primarily used to commercialize such Product or such enumerated product or of the exclusive right to commercialize such Product
or such enumerated product.

 

    - 7 -

     

    

 

“Products”
shall mean (a) SIS tissue sheet products that were (i) marketed or sold by the Seller under the trade name CorMatrix
Carotid Repair, CorMatrix Vascular Repair, CorMatrix Pericardial Repair & Reconstruction, Tyke or CorMatrix Cardiac Tissue
Repair and (ii) described in a Section 510(k) premarket notification cleared by the FDA on or prior to the Closing
Date, (b) SIS encasement structures for encapsulation of any cardiac implantable electronic device (CIED) that were (i) marketed
or sold by the Seller under the trade name CanGaroo or CorMatrix CanGaroo and (ii) described in a Section 510(k) premarket
notification cleared by the FDA on or prior to the Closing Date (the “CanGaroo Products”), and (c) any
products substantially similar in design and application to the Products specified in clauses (a) and (b) commercialized
after the Closing Date during the Term, including in each case specified in clauses (a) - (c), any modifications and improvements
made to the tissue sheet structures or the encasement structures of such Products that are to be commercialized for the applications
in the Aziyo Fields of Use, as defined in the Asset Purchase Agreement. For the purposes hereof, the term “Products”
shall also mean and include (x) CanGaroo Products for encasement of neurologic devices and other subcutaneous implantable
device applications, and (y) CanGaroo Products composed of SIS plus antibiotics. Schedule A sets forth a complete list
of all of the Products at the Closing Date.

 

“Recharacterization”
shall have the meaning set forth in the recitals to the Intercreditor Agreement.

 

“Regulatory
Agency” shall mean a Governmental Authority with responsibility for the approval of the marketing and sale
of surgical implants or other regulation of surgical implants.

 

“Regulatory
Approvals” shall mean all approvals (including, without limitation, where applicable, pricing and reimbursement
approval and schedule classifications), product and/or establishment licenses, registrations or authorizations of any Governmental
Authority necessary for the manufacture, use, storage, import, export, transport, offer for sale, or sale of any of the Products.

 

“Remedies
Event” shall mean (x) a Bankruptcy Event, (y) a failure by the Company to make a payment pursuant
to Section 2,01, Section 2.02 or Section 2.03, provided that no such failure shall constitute
a Remedies Event unless such failure shall remain uncured for thirty (30) days or (z) an Event of Default (as defined in the
MidCap Credit Facility) under the MidCap Credit Facility.

 

“Royalty
Interests” shall mean the right to receive on a monthly basis cash in an amount equal to the product of the Applicable
Royalty Percentage multiplied by the Net Sales Proceeds during the Term, pursuant to the terms and conditions of this Agreement.
For the avoidance of doubt, Royalty Interests shall not constitute accounts or payment intangibles (as each term is defined in
the UCC) giving rise to such cash amounts.

 

“Royalty
Related Collateral” means (a) any accounts (as defined in Article 9 of the UCC) with respect to
the Products and the proceeds of such accounts, (b) the Special Account, (c) any intellectual property acquired by the
Company from the Seller and necessary for the production, marketing or sale of the Products, including those set forth on Schedule
B hereto and (c) any Equipment and Inventory (as defined in Article 9 of the UCC) used in connection with the production
of any Product.

 

“Sale Transaction”
shall have the meaning set forth in the Recitals.

 

“SEC”
shall mean the U.S. Securities and Exchange Commission.

 

    - 8 -

     

    

 

“SIS”
shall mean a solid sheet extracellular matrix composition prepared from intestinal tissue.

 

“Special
Account” shall mean the deposit account maintained by the Company at the Depository Bank with account number
[XXX].

 

“Subsidiary”
shall mean, with respect to the Company, a corporation, partnership, joint venture, limited liability company or other business
entity of which a majority of the voting power (other than securities or interests having such power only by reason of the happening
of a contingency) are at the time owned beneficially or of record by the Company.

 

“Sweep
Event” shall have the meaning set forth in the Intercreditor Agreement.

 

“Term”
shall have the meaning set forth in Section 6.01.

 

“Third
Party” shall mean any Person other than Ligand and any Affiliate of Ligand or the Company or any Subsidiary
of the Company.

 

“Transfer”
shall have the meaning set forth in Section 8.06(c).

 

“UCC”
shall mean the Uniform Commercial Code as in effect in the State of New York from time to time.

 

ARTICLE II
- Payments by the Company;

 

SECTION 2.01.
Buydown Payment.

 

The Company shall make
a payment to Ligand in the amount of $10,000,000 (the “Buydown Payment”) in two (2) installments,
the first installment in the amount of $5,000,000 payable within thirty (30) days after the Effective Date but no later than June 30,
2017, and the second installment in the amount of $5,000,000 payable on or before December 15, 2017, each of which shall be
paid by wire transfer of immediately available funds to the Ligand Account.

 

SECTION 2.02.
Periodic Royalties.

 

(a)            Monthly
Royalties. The Company shall pay to Ligand, by wire transfer of immediately available funds (i) within thirty (30) days
after the end of each Payment Month, an amount equal to the Applicable Royalty Percentage multiplied by the Net Sales Proceeds
(if any) received by the Company during such Payment Month, and (ii) on the Closing Date, the monthly royalty amounts
due and owing by Seller under the Ligand Purchase Agreement for the Payment Months of March and
April 2017 and when due the monthly royalty amount of Seller thereunder for the Payment Month of May 2017.

 

    - 9 -

     

    

 

(b)         Minimum
Quarterly Payments.

 

(i)            Subject
to clause (b)(ii), if, with respect to any Fiscal Quarter that begins after December 31, 2017, the sum of (1) the aggregate
Monthly Royalties paid to Ligand during the Fiscal Year that includes such Fiscal Quarter plus (2) the Minimum Quarterly Payments
made to Ligand during such Fiscal Year is less than the Minimum Quarterly Royalty multiplied by the number of completed Fiscal
Quarters in such Fiscal Year, then the Company shall pay to Ligand, by wire transfer of immediately available funds within thirty
(30) days after the end of such Fiscal Quarter, an amount equal to the difference between (A) the Minimum Quarterly Royalty
multiplied by the number of completed Fiscal Quarters in such Fiscal Year and (B) the sum of (1) the aggregate Monthly
Royalties paid to Ligand with respect to such Fiscal Year plus (2) the Minimum Quarterly Payments made to Ligand with respect
to such Fiscal Year.

 

(ii)            Notwithstanding
clause (b)(i), if, with respect to any Fiscal Year that begins after December 31, 2017 in respect of which any Minimum
Quarterly Payment was made to Ligand, the aggregate Monthly Royalties paid in respect of such Fiscal Year exceed the applicable
Minimum Annual Royalty (the amount of any such Minimum Quarterly Payments made in any such Fiscal Year, the “Minimum
Royalty Overpayment”), then any subsequent payment obligation owing by the Company pursuant to this
Agreement shall be automatically reduced and offset in the amount of such Minimum Royalty Overpayment until such Minimum Royalty
Overpayment is extinguished.

 

(c)        
  Payments to Ligand.

 

(i)            Within
thirty (30) days following the end of each Payment Month, the Company shall disburse from the Special Account to the Ligand Account
an amount equal to the amount to which Ligand is entitled pursuant to Section 2.02(a) of this Agreement (if any)
for such Payment Month.

 

(ii)            Within
sixty (60) days following the end of each Fiscal Quarter, the Company shall remit by wire transfer of immediately available funds
to the Ligand Account an amount equal to the amount to which Ligand is entitled pursuant to Section 2.02(b) of
this Agreement (if any) for such Fiscal Quarter.

 

(iii)            If,
after any Sweep Event occurs, the "notice of exclusive control" giving rise to such Sweep Event is revoked prior to a
Bankruptcy Event, to the extent any Minimum Quarterly Royalty came due and was not paid pursuant to [Section 2.1(b)] of the
lntercreditor Agreement prior to such revocation, the Company shall pay such Minimum Quarterly Royalty within thirty (30) days
of such revocation.

 

SECTION 2.03.
Milestone Payments.

 

(a)           If
and when the aggregate amount of Net Sales Proceeds received by the Company during the Term equals $100,000,000, the Company shall
pay $5,000,000 to Ligand, which payment shall be made within forty-five (45) days thereof by wire transfer of immediately available
funds to the Ligand Account.

 

    - 10 -

     

    

 

(b)            If
and when the aggregate amount of Net Sales Proceeds received by the Company during the Term equals $300,000,000 or the occurrence
of a CanGaroo Product Change of Control during the Term, whichever is sooner, the Company shall pay an additional $5,000,000 to
Ligand, which payment shall be made within forty-five (45) days thereof by wire transfer of immediately available funds to Ligand
Account.

 

SECTION 2.04.
Consent to Sale Transaction; No Assumed Obligations.

 

Ligand
hereby consents to the Sale Transaction on the terms and conditions set forth in the Asset Purchase Agreement. Notwithstanding
any provision in this Agreement or any other writing to the contrary, Ligand acknowledges and agrees that (i) Ligand does
not have any right, title or interest in or to any of the Products or any other assets acquired the Company in the Sales Transaction,
except for its interest in and to the Royalty Interests (and the security interests granted to Ligand hereunder) during the Term,
all as set forth herein, and (ii) neither the Company nor any of its Affiliates have assumed or agreed to pay any liabilities
or other obligations of the Seller or any of its Affiliates to Ligand or its Affiliates of whatever nature, whether presently in
existence or arising or asserted hereafter, including without limitation, any obligations or liabilities of the Seller or its Affiliates
under the Ligand Purchase Agreement. All such liabilities and obligations shall be retained by and remain obligations and liabilities
of the Seller and its Affiliates.

 

ARTICLE III
- Representations and Warranties of the Company

 

SECTION 3.01. Organization. The
Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of
Delaware and has all limited liability company power and all licenses, authorizations, consents and approvals required to
carry on its business as proposed to be conducted in connection with this Agreement. The Company has no Subsidiaries.

 

SECTION 3.02. Authorization.
The Company has all necessary power and authority to enter into, execute and deliver this Agreement and to perform all of the
obligations to be performed by it hereunder and to consummate the transactions contemplated hereunder. This Agreement has
been duly authorized, executed and delivered by the Company and constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or general equitable principles.

 

SECTION 3.03. Governmental
Authorization. The execution and delivery by the Company of this Agreement, and the performance by the Company
of its obligations hereunder, does not require any notice to, action or consent by, or in respect of, or filing with, any
Governmental Authority.

 

SECTION 3.04.
Ownership.

 

(a)          As
of the date hereof, the Company owns or holds a valid license under all of the Intellectual Property and the Regulatory Approvals
which it currently purports to own related to any of the Products, free and clear of all liens, except Permitted Liens. As of the
date hereof, the Company has not granted, nor does there exist, any lien on the Products except Permitted Liens.

 

    - 11 -

     

    

 

(b)          There
is no filed and served on the Company or, to the Knowledge of the Company, threatened against the Company in writing any action,
suit, proceeding, investigation or claim by any Person to which the Company is a party that claims that the Intellectual Property
or the manufacture, use, marketing, sale, offer for sale, importation or distribution of any Product infringes on any Person’s
trade secrets or other intellectual property. The Company has not received any written communication containing an offer to license
to the Company, or a request that the Company consider whether it wishes to obtain a license, under any intellectual property owned
by a third party, in each case, to make, use or sell a Product. To the Knowledge of the Company, without any independent investigation
or inquiry, there are no pending unlicensed patent applications owned by any other Person that if a patent were to issue thereon
without modification or amendment, would limit or prohibit, in any material respect, the manufacture, use or sale of any Product.

 

SECTION 3.05. Litigation.
As of the date hereof, there is no (a) action, suit, arbitration proceeding, claim, investigation or other proceeding
pending or, to the Knowledge of the Company, threatened against the Company or (b) any governmental inquiry pending or,
to the Knowledge of the Company, threatened against the Company, in each case with respect to clause (a) or
(b) above, which, if adversely determined, would question the validity of, or could reasonably be expected to have a
material adverse effect on the transactions contemplated by this Agreement or could reasonably be expected to have a Material
Adverse Effect. As of the date hereof, there is no action, suit, arbitration proceeding, claim, investigation or other
proceeding pending or, to the Knowledge of the Company, threatened in writing against the Company relating to any of the
Products, the Intellectual Property related to any of the Products or the Regulatory Approvals.

 

SECTION 3.06. Compliance
with Laws. To the Knowledge of the Company, the Company (a) is not in violation of, has not violated and is not
under investigation with respect to, and (b) has not been threatened to be charged with or been given written notice of
any violation of, any law, rule, ordinance or regulation of, or any judgment, order, writ, decree, permit or license entered
by any Governmental Authority applicable to the Company which would reasonably be expected to have a Material Adverse
Effect.

 

SECTION 3.07. Conflicts. Neither
the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby by
the Company will: (a) contravene, conflict with, result in a breach or violation of, constitute a default under, or
accelerate the performance provided by, in any material respects any provision of (i) any law, rule, ordinance or
regulation of any Governmental Authority, or any judgment, order, writ, decree, permit or license of any Governmental
Authority, to which the Company or any of its assets or properties are subject or bound or (ii) any contract, agreement,
commitment or instrument to which the Company is a party or by which the Company, or any of its assets or property’s is
bound or committed; (b) contravene, conflict with, result in a breach or violation of, constitute a default under, or
accelerate the performance provided by, any provisions of the certificate of formation or limited liability company agreement
(or other organizational or constitutional documents) of the Company; (c) require any notification to, filing with, or
consent of, any Person or Governmental Authority, except such consents that have been obtained at or prior to the date
hereof; or (d) give rise to any right of termination, cancellation or acceleration of any right or obligation of the
Company or to a loss of any right of the Company to distribute, market and/or sell any of the Products, except, in the case
of clause (a), (c) or (d) above, for any such breaches, defaults or other occurrences that would not, individually
or in the aggregate, have a Material Adverse Effect.

 

    - 12 -

     

    

 

SECTION 3.08. Current
Indebtedness. Other than as set forth on Schedule 3.08, there is no indebtedness (other than trade
indebtedness in the ordinary course of business) for borrowed money of the Company.

 

SECTION 3.09. Financial
Statements. All financial statements for the Company and Guarantor delivered to Ligand fairly present, in conformity
with generally accepted accounting principles, in all material respects, the consolidated financial condition and
consolidated results of operations of the Company and Guarantor.

 

ARTICLE IV
- Representations and Warranties of Ligand

 

SECTION 4.01. Organization. Ligand
is a corporation duly incorporated and validly existing under the laws of the State of Delaware.

 

SECTION 4.02. No
Assignment; Authorization. Ligand has not assigned, transferred, pledged, granted a security
interest in or otherwise disposed of any of its obligations or rights under the Ligand Purchase Agreement, or any right,
title or interest in or to the Products, any Intellectual Property related to the Products or any revenues related to the
Products, except as provided herein, and has all necessary power and authority to enter into, execute and deliver this
Agreement and to perform all of the obligations to be performed by it hereunder and to consummate the transactions
contemplated hereunder. This Agreement has been duly authorized, executed and delivered by Ligand and constitutes the valid
and binding obligation of Ligand, enforceable against Ligand in accordance with its respective terms, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights
generally or general equitable principles.

 

SECTION 4.03. Conflicts. Neither
the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby by
Ligand will: (a) contravene, conflict with, result in a breach or violation of, constitute a default under, or
accelerate the performance provided by, in any material respects any provision of (i) any law, rule or regulation
of any Governmental Authority, or any judgment, order, writ, decree, permit or license of any Governmental Authority, to
which Ligand or any of its assets or properties may be subject or bound or (ii) any contract, agreement, commitment or
instrument to which Ligand is a party or by which Ligand or any of its assets or properties is bound or committed;
(b) contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the
performance provided by, any provisions of the certificate of incorporation or bylaws (or other organizational or
constitutional documents) of Ligand; or (c) require any notification to, filing with, or consent of, any Person or
Governmental Authority, except, in the case of the foregoing clause (a) or (c), for any such breaches, defaults or other
occurrences that would not, individually or in the aggregate, have a material adverse effect on the ability of Ligand to
perform any of its obligations under this Agreement.

 

    - 13 -

     

    

 

ARTICLE V
- Covenants

 

SECTION 5.01.
Access; Information.

 

(a)          Maintenance
of Books and Records. During the Term, the Company shall keep and maintain, or cause to be kept and maintained, at all times
books of account and records consistent with good business practices and customary industry standards adequate to correctly reflect
all payments paid and/or payable to Ligand with respect to the Products.

 

(b)          Inspection
Rights. During the Term, Ligand shall have the right to designate a Third Party independent
public accounting firm (the “Ligand Representative”) to visit the Company’s and its Subsidiaries’
offices and properties where the Company and its Subsidiaries keep and maintain their books and records relating or pertaining
to the Products for the purpose of conducting an audit of such books and records with respect the payments due and payable to Ligand
under Section 2.02 or Section 2.03, and to inspect and audit such books and records for such purpose, during normal business
hours, and, upon at least ten (10) Business Days’ written notice given by Ligand to the Company, the Company will provide
such Ligand Representative reasonable access to such books and records; provided, however, such inspection and audit rights may
only be exercised by Ligand once in each calendar year.

 

(c)          Audit
Costs. In the event any audit of the books and records of the Company and its Subsidiaries relating to the the gross revenues
of the Products or Net Sales Proceeds conducted by Ligand and/or any of Ligand’s representatives reveals that the amounts
paid to Ligand hereunder for the period of such audit have been understated by more than ten percent (10%) of the undisputed amounts
due for the period subject to such audit, then the Audit Costs in respect of such audit shall be borne by the Company; and in all
other cases, such Audit Costs shall be borne by Ligand.

 

(d)          Monthly
Reports. During the Term, the Company shall, promptly after the end of each Payment Month of the Company (but in no event later
than thirty (30) days following the end of such Payment Month), produce and deliver to Ligand a Monthly Report for such Payment
Month.

 

(e)          Periodic
Reports. The Company shall deliver to Ligand the following financial statements:

 

(i)            Within
forty-five (45) days after the end of each Fiscal Quarter after the Effective Date, copies of the unaudited financial statements
of the Company for such Fiscal Quarter; and

 

(ii)            Within
one hundred twenty (120) days after the end of each Fiscal Year after the Effective Date, copies of the audited consolidated financial
statements of the Guarantor and the Company for such Fiscal Year.

 

    - 14 -

     

    

 

(f)           Notice
of Deposits Following a Sweep Event. Following a Sweep Event, on the first Business Day of each week, the Company shall provide
Ligand with notice of the amount and the source of all deposits made during the preceding week into the Main Account.

 

SECTION 5.02.
Confidentiality; Press Release.

 

(a)            All
Confidential Information furnished by the Company or Seller to Ligand or by Ligand to the Company in connection with this Agreement
and the transactions contemplated hereby, as well as the terms, conditions and provisions of this Agreement, shall be kept confidential
by Ligand and the Company. Notwithstanding the foregoing, (i) the Company and Ligand may disclose such Confidential Information
to their partners, directors, employees, managers, officers, investors, bankers, advisors, trustees and representatives, (ii) the
Company may disclose the terms, conditions and provisions of this Agreement to any Third Party in connection with (and only in
connection with) a transaction with such Third Party that could reasonably be expected to result in (X) a Company Change of
Control, (Y) a Product Change of Control or (Z) a sale by the Company of a Subsidiary, division, product line, or other
significant portion of its business, and (iii) the Company and Ligand may disclose such Confidential Information as may otherwise
be required by applicable law, including filing this Agreement with the SEC; provided, in the case of the foregoing clauses
(i) and (ii) that such Persons and such Third Parties shall be informed of the confidential nature of such information
and shall be obligated to keep such information confidential pursuant to the terms of this Section 5.02(a); provided,
further, that in the case of the foregoing clause (iii) Ligand shall provide at least five (5) Business Days’
notice to the Company of any filing with the SEC and consider in good faith a request for confidential treatment of any portion
of this Agreement prior to filing with the SEC.

 

(b)            Notwithstanding
the foregoing clause (a), Ligand may make a press release or other announcement or public disclosure concerning this Agreement,
provided that such press release shall be (x) subject to prior review by the Company and (y) in form and substance reasonably
satisfactory to the Company taking into account any commercial sensitivities of the Company.

 

SECTION 5.03. Efforts;
Further Assurance. Subject to the terms and conditions of this Agreement, each of Ligand and the Company will use its
commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary under applicable laws and regulations to consummate the transactions contemplated by this Agreement. Ligand and the
Company agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other
actions as may be reasonably necessary in order to consummate or implement expeditiously the transactions contemplated by
this Agreement.

 

SECTION 5.04. Remedies
Event. During the Term, if a Remedies Event shall have occurred and be continuing, subject to the Intercreditor
Agreement, the Company shall not, without the consent of Ligand, make a distribution to its member or members, or retire any
indebtedness for borrowed money, other than in connection with a Permitted Transaction, or engage in any transaction that
would result in a Company Change of Control.

 

    - 15 -

     

    

 

SECTION 5.05. Indebtedness;
Sale of Revenue Interests. Prior to the time that the Buydown Payment is paid in full, unless Ligand shall otherwise
consent in writing, the Company shall not, other than in connection with any Permitted Transaction, (x) incur, create,
assume or permit to exist any indebtedness for borrowed money of the Company other than indebtedness of the Company as of the
Effective Date or (y) sell, assign, transfer or convey any interests in the revenues generated by the Products to any
Third Party other than by the terms of this Agreement.

 

SECTION 5.06.
Remittance of Funds to Accounts.

 

(a)          Weekly
Sweep to Special Account. The Company shall instruct the Depository Bank to sweep any funds arising from the Royalty Interests
contained in the Main Account, no less frequently than once every week, into the Special Account, in accordance with further instructions
to be provided by the Company on a weekly basis, it being understood that, in respect of the sweep contemplated under this Section 5.06(a),
at the end of each Payment Month, the Company may retain from disbursement from the Special Account to Ligand any Excluded Costs
deriving from any week covered by such Payment Month so long as such Excluded Costs are reflected in the Monthly Report in respect
of such Payment Month.

 

(b)          Special
Account. The funds in the Special Account shall be held in trust solely for the benefit of Ligand. The Company shall not take
any action with respect to the Special Account other than making (i) the instructions to the Depository Bank necessary to
effectuate the sweep contemplated in clause (a) of this Section 5.06, (y) any adjustment (and corresponding
withdrawal of excess funds) for Excluded Costs as necessary to reconcile the balance of the Special Account with the amount to
which Ligand is entitled pursuant to Section 2.02(a), provided that such adjustment shall occur only in accordance
with and upon delivery of a Monthly Report calculating such Excluded Costs and (z) any disbursement of funds from the Special
Account to the Ligand Account in accordance with Section 2.02(c)(i).

 

ARTICLE VI
- Term and Termination

 

SECTION 6.01. Term.
This Agreement shall commence on the Effective Date and shall continue through and including the tenth anniversary of the
Effective Date (the “Term”).

 

SECTION 6.02. Extension
of the Term. If any payments are accrued hereunder on or prior to the end of the Term and are required to be made by
one of the Parties hereunder, this Agreement shall remain in full force and effect until any and all such payments have been
made in full. Upon expiration or termination of this Agreement in accordance with its terms, all right, title and interest in
and to the Royalty Interests shall automatically revert to the Company (and the security interests granted to Ligand
hereunder shall automatically terminate), and Ligand will have no further rights in or with respect to the Royalty Interests
or other Collateral and all other rights and interests of Ligand hereunder shall terminate (other than any contingent
indemnification obligations with respect to which no claim has been made).

 

    - 16 -

     

    

 

SECTION 6.03. Effect
of Termination. In the event of the termination of this Agreement pursuant to Section 6.02, this
Agreement shall forthwith become void, impose no liability on the part of any Party hereto or its Affiliates, directors,
officers, stockholders, partners, managers or members and have no effect other than the provisions of this Section 6.03,
and Section 5.02, Section 6.02 and Article VII hereof, which shall survive any such
termination.

 

ARTICLE VII Miscellaneous

 

SECTION 7.01. Survival.
All representations and warranties made herein or in any other writing delivered pursuant hereto shall survive the execution
and delivery of this Agreement and shall continue to survive until the expiration or termination of this Agreement in
accordance with Article VI.

 

SECTION 7.02. Notices. All
notices, consents, waivers and communications hereunder given by any Party to the other shall be in writing (including
facsimile transmission) and delivered personally, by telegraph, telecopy, telex or facsimile, by a recognized overnight
courier, or by dispatching the same by certified or registered mail, return receipt requested, with postage prepaid, in each
case addressed (with a copy by email):

 

If to Ligand to:

 

Ligand Pharmaceuticals Incorporated

11119 North Torrey Pines Road, Suite 200

La Jolla, CA 92037

Attention: [XXX]

Email:
[XXX]

 

With a copy to:

 

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, CA 92130

Attention: [XXX]

Email: [XXX]

 

If to the Company to:

 

Aziyo Med, LLC

12510 Prosperity Drive, Suite 370

Silver Spring, MD 20904

Attention: [XXX]

Email: [XXX]

 

    - 17 -

     

    

 

With a copy to:

 

Shipman & Goodwin LLP

One Constitution Plaza

Hartford, CT 06103

Attention: [XXX]

Email: [XXX]

 

or to such other address or addresses as
Ligand or the Company may from time to time designate by notice as provided herein, except that notices of changes of address shall
be effective only upon receipt. All such notices, consents, waivers and communications shall: (a) when posted by certified
or registered mail, postage prepaid, return receipt requested, be effective three (3) Business Days after dispatch, (b) when
telegraphed, telecopied, telexed or facsimiled, be effective upon receipt by the transmitting party of confirmation of complete
transmission, or (c) when delivered by a recognized overnight courier or in person, be effective upon receipt when hand delivered.

 

SECTION 7.03.
Successors and Assigns.

 

(a)         The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

(b)         Upon
the consent of Ligand (which consent may not be unreasonably withheld, delayed or conditioned for any proposed assignment to any
reasonably creditworthy proposed assignee), the Company may assign all or any applicable part of its rights and obligations under
this Agreement in respect of any Product Change of Control, subject to the assumption by such proposed assignee of the obligations
set forth in Section 2.01 and Section 2.02 with respect to such Product.

 

(c)          Solely
upon the consent of the Company (which consent may not be unreasonably withheld, delayed or conditioned, other than in respect
of any proposed assignment to any direct competitor of the Company, in respect of which such consent may be granted or withheld
by the Company in its sole discretion), Ligand may assign any of its obligations or rights under this Agreement without restriction;
provided that, notwithstanding the foregoing, Ligand may assign its rights and/or delegate its obligations under this Agreement
to an Affiliate, to any Person in a transaction in which Ligand also assigns all of its right, title and interest in all or substantially
all of its assets to the same party contemporaneous with the assignment of this Agreement, or to a successor, whether by way of
merger, sale of stock or otherwise, without the Company's prior written consent. In advance of any proposed assignment by Ligand
to any proposed assignee, Ligand shall provide to the Company any information concerning such proposed assignment and such proposed
assignee as may be reasonably requested by the Company.

 

    - 18 -

     

    

 

SECTION 7.04.
Indemnification.

 

(a)          The
Company hereby indemnifies and holds Ligand and its Affiliates and any of their respective partners, directors, managers, members,
officers, employees and agents (each, a “Ligand Indemnified Party”) harmless from and against any and
all Losses incurred or suffered by any Ligand Indemnified Party arising out of any breach of any representation or warranty made
by the Company in this Agreement.

 

(b)           Ligand
hereby indemnifies and holds the Company, its Affiliates and any of their respective partners, directors, managers, officers, employees
and agents (each, a “Company Indemnified Party”) harmless from and against any and all Losses incurred
or suffered by a Company Indemnified Party arising out of any breach of any representation or warranty made by Ligand in this Agreement.

 

(c)            If any claim, demand, action or proceeding (including any investigation by any
Governmental Authority) shall be brought or alleged against an indemnified party in respect of which indemnity is to be
sought against an indemnifying party pursuant to the preceding paragraphs, the indemnified party shall, promptly after
receipt of notice of the commencement of any such claim, demand, action or proceeding, notify the indemnifying party in
writing of the commencement of such claim, demand, action or proceeding, enclosing a copy of all papers served, if any; provided, that
the omission to so notify such indemnifying party will not relieve the indemnifying party from any liability that it may have
to any indemnified party under the foregoing provisions of this Section 7.04 unless, and only to the extent that,
such omission results in the forfeiture of, or has a material adverse effect on the exercise or prosecution of, substantive
rights or defenses by the indemnifying party. In case any such action is brought by a third party against an indemnified
party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 7.04 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding
by a third party, an indemnified party shall have the right to retain its own counsel, but the reasonable fees and expenses
of such counsel shall be at the expense of such indemnified party unless the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel. It is agreed that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate law firm (in addition to local counsel where necessary) for all such indemnified parties.
The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.

 

    - 19 -

     

    

 

 

(d)            Ligand's
sole remedy shall be to recover any monetary damages associated with a breach of a representation or warranty made by the Company
in this Agreement, subject to the other terms and provisions contained in this Agreement.

 

SECTION 7.05.  No
Implied Representations and Warranties. Each Party acknowledges and agrees that, other than the representations and
warranties specifically contained in this Agreement, there are no representations or warranties of either Party or any other
Person either expressed or implied with respect to the Products or the Sale Transaction or the other transactions
contemplated hereby. Without limiting the foregoing, Ligand acknowledges and agrees that (a) Ligand and its Affiliates,
together with its and its Affiliates’ representatives, have made their own investigation of the Products, the
Intellectual Property related to the Products and the Regulatory Approvals and are not relying on any implied warranties or
upon any other representation or warranty whatsoever, including any representation or warranty as to the future amount or
potential value of the Products or Net Sales Proceeds, the amount of any payments by the Company hereunder or as to the
creditworthiness of the Company and (b) except as expressly set forth in any representation or warranty in this
Agreement, Ligand shall have no claim or right to indemnification by the Company pursuant to Section 7.04 (or
otherwise) with respect to any information, documents or materials furnished by the Company or Seller or any of their
respective representatives to Ligand, any of its Affiliates, or any of its or its Affiliates’ representatives,
including any information, documents or material made available to Ligand, its Affiliates or any of its and its
Affiliates’ representatives in any data room, presentation, management presentation, interview or any other form
relating to the transactions contemplated hereby.

 

SECTION 7.06.  Independent
Nature of Relationship. (a)    The relationship
between the Company and Ligand is solely that of obligor and obligee, and neither Ligand nor the Company has any fiduciary or
other special relationship with the other or any of their respective Affiliates. Nothing contained herein shall be deemed to
constitute the Company and Ligand as a partnership, an association, a joint venture or other kind of entity or legal form for
any purposes, including any tax purposes.

 

(b)            No
officer or employee or agent of Ligand will be located at the premises of the Company or any of its Affiliates, except in connection
with an audit performed pursuant to Section 5.01. No officer, manager or employee of Ligand shall engage in any commercial
activity with the Company or any of its Affiliates other than as contemplated herein or as otherwise separately agreed in writing.

 

(c)            Ligand
and/or any of its Affiliates shall not at any time obligate the Company, or impose on the Company any obligation, in any manner
or respect to any Person not a party hereto. The Company and/or any of its Affiliates shall not at any time obligate Ligand, or
impose on Ligand any obligation, in any manner or respect to any Person not a party hereto.

 

SECTION 7.07. Entire
Agreement. This Agreement, together with the Exhibits and Schedules hereto (which are incorporated herein by
reference), constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all
prior agreements (including any term sheet), understandings and negotiations, both written and oral, between the Parties with
respect to the subject matter of this Agreement. Notwithstanding any other provision set forth herein, neither Seller nor
Guarantor is assuming any obligation or liability under the Ligand Purchase Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been made or relied upon by either Party hereto.
Neither this Agreement, nor any provision hereof, is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder or in respect hereof.

 

    - 20 -

     

    

 

SECTION 7.08.
Amendments; No Waivers.

 

(a)            Neither
this Agreement nor any term or provision hereof may be amended, changed or modified except with the written consent of all Parties.
No waiver of any right hereunder shall be effective unless such waiver is signed in writing by the Party against whom such waiver
is sought to be enforced.

 

(b)            No
failure or delay by either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided
by law.

 

SECTION 7.09. Interpretation. When
a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, such reference shall be to an Article,
Section, Schedule or Exhibit to this Agreement unless otherwise indicated. The words “include”,
 “includes” and “including” when used herein shall be deemed in each case to be followed by the words
 “without limitation.” Neither Party shall be or be deemed to be the drafter of this Agreement for the purposes of
construing this Agreement against one Party or the other.

 

SECTION 7.10. Headings
and Captions. The headings and captions in this Agreement are for convenience and reference
purposes only and shall not be considered a part of or affect the construction or interpretation of any provision of this
Agreement.

 

SECTION 7.11. Counterparts;
Effectiveness. This Agreement may be executed in two or more counterparts, each of which shall be an original,
but all of which together shall constitute one and the same instrument. Any counterpart may be executed by facsimile or pdf
signature and such facsimile or pdf signature shall be deemed an original.

 

SECTION 7.12. Severability. If
any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall nevertheless be given
full force and effect.

 

SECTION 7.13. Expenses.
Each of Ligand and the Company will pay all of its own fees and expenses in connection with entering into and consummating
the transactions contemplated by this Agreement.

 

    - 21 -

     

    

 

SECTION 7.14.
Governing Law; Jurisdiction.

 

(a)            This Agreement shall
be governed by, and construed, interpreted and enforced in accordance with, the laws of the State of New York, without giving effect
to the principles of conflicts of law thereof.

 

(b)            Any
legal action or proceeding with respect to this Agreement may be brought in any state or federal court of competent jurisdiction
in the State of New York, County of New York. By execution and delivery of this Agreement, each Party hereby irrevocably consents
to and accepts, for itself and in respect of its property, generally and unconditionally the exclusive jurisdiction of such courts.
Each Party hereby further irrevocably waives any objection, including any objection to the laying of venue or based on the grounds
of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction
in respect of this Agreement.

 

(c)            Each
Party hereby irrevocably consents to the service of process out of any of the courts referred to in clause (b) of this Section 7.14
in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it
at its address set forth in this Agreement. Each Party hereby irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any suit, action or proceeding commenced hereunder that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of a party to serve process on the other Party in
any other manner permitted by law.

 

ARTICLE VIII - Intercreditor
Matters and Guarantee

 

SECTION 8.01. Ligand
Interests; Recharacterization.

 

(a)            Notwithstanding
anything herein to the contrary, it is the intention of the Parties that the Royalty Interests are owned by Ligand, and such Royalty
Interests shall be treated as the property of Ligand for all purposes, other than federal and state income tax purposes. The provisions
of this Agreement shall be construed to further these intentions of the Parties.

 

(b)            The
Royalty Interests and any amounts received by the Company in respect of the Royalty Interests and, without limiting the foregoing,
any cash deposited into the Special Account in accordance with the terms hereof and any cash deposited into the Main Account in
respect of or consisting of the Royalty Interests (subject to any adjustments for Excluded Costs) is not, and is not intended to
be, the property of the Company (or, in the event of a Bankruptcy Event, any estate created thereby by operation of applicable
law or otherwise) but is possessed by the Company in trust solely on behalf of Ligand pending disbursement to Ligand or as otherwise
provided in Section 5.06, in each case, as contemplated hereby.

 

(c)            If,
notwithstanding subparagraph (b), the Royalty Interests are subject to a Recharacterization, the Parties intend that the Company
shall be deemed hereunder to have granted, and the Company does hereby grant, to Ligand a first priority security interest in favor
of Ligand, to secure the obligations to make the payments under Section 2.01, Section 2.02, and Section 2.03,
including in respect of any acceleration thereof pursuant to Section 9.02, in the Royalty Interests and all proceeds
and products thereof, and the Special Account and any cash or other funds, amounts or financial assets held therein or credited
thereto.

 

    - 22 -

     

    

 

(d)            No
other liens or security interests (including any liens or security interests in favor of the MidCap Credit Facility Agent) shall
exist on the Special Account or the cash or other funds, amounts or financial assets held therein or credited thereto other than
any customary liens of the Depository Bank.

 

(e)            lf,
notwithstanding clause (b), the conveyance of the Royalty Interests is subject to a Recharacterization, the Parties intend that
the Company shall be deemed hereunder to have granted, and the Company does hereby grant (subject to the priorities specified in
the Intercreditor Agreement) a security interest in favor of Ligand, to secure the obligations to make payments under Section 2.01,
Section 2.02, and Section 2.03, including for the avoidance of doubt any acceleration of any payments pursuant
to Section 9.02, in the Pari Passu Collateral.

 

SECTION 8.02. Other
Ligand Security.

 

(a)            In
addition to the special rights and security interests provided in Section 8.01, as security for the Company’s
payment obligations in respect of any Minimum Quarterly Royalties payable hereunder (including in respect of any acceleration thereof
pursuant to Section 9.02), the Company hereby grants (subject to the priorities specified in the Intercreditor Agreement)
a security interest in all of the following assets of the Company that constitute “Collateral” under the MidCap Credit
Facility (the “General Collateral”):

 

(i)            All
goods, Accounts (including health-care insurance receivables), Equipment, Inventory, contract rights or rights to payment
of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments
(including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, investment accounts,
commodity accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not
the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial
assets, whether now owned or hereafter acquired, wherever located (each capitalized term in this clause (i) not otherwise
defined in this Agreement or the MidCap Credit Facility, as defined in the UCC); and

 

(ii)            all
the Company's Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions
for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds
of any or all of the foregoing.

 

(b)            Notwithstanding
the foregoing, no security interest is or will be granted pursuant to this Agreement in any right, title or interest of the Company
under or in, and “Collateral” shall not include, any Excluded Assets.

 

    - 23 -

     

    

 

SECTION 8.03. Priority. (a) 
Pursuant and subject to the Intercreditor Agreement, the security interest granted in Section 8.01(c) shall
be for all purposes senior in right to any other lien other than any customary liens of the Depository Bank.

 

(b)            Pursuant
and subject to the Intercreditor Agreement, the security interest granted in Section 8.01(e) shall be pari
passu with the Existing Liens.

 

(c)            Pursuant
and subject to the Intercreditor Agreement, the security interest granted in Section 8.02 shall be for all purposes
junior and subordinate (on a "silent second" basis) to the Existing Liens.

 

SECTION 8.04. Other
Intercreditor Matters. Ligand acknowledges that, the MidCap Credit Facility Agent will not file any partial
UCC-3 termination statement in respect of the liens held by the MidCap Credit Facility Agent or otherwise release any of its
Collateral (as such term is defined under the MidCap Credit Facility) under the MidCap Credit Facility. However, the
Intercreditor Agreement shall contain an express acknowledgement by the MidCap Credit Facility Agent that it has no security
interest in or other rights in respect of the Special Account or any cash held therein.

 

SECTION 8.05. Control
Agreements.

 

(a)            The
Company agrees, with respect to the Special Account (upon request of Ligand), to use commercially reasonable efforts to cause the
Depository Bank to agree to comply at any time with instructions from Ligand to the Depository Bank directing the disposition of
funds from time to time credited to the Special Account, without further consent of the Company, pursuant to a customary deposit
account control agreement in form and substance satisfactory to Ligand. However, Ligand shall not give any such instructions or
withhold any withdrawal rights from the Company, unless a Remedies Event has occurred and is continuing.

 

(b)            Nothing
herein is intended to affect or shall be construed as affecting the rights of the MidCap Credit Facility Agent under any deposit
account control agreement in favor of it in respect of the Main Account.

 

SECTION 8.06. Termination
or Release.

 

(a)            Upon
receipt by Ligand of an aggregate amount of $15,027,342 on or after the Closing Date pursuant to this Agreement, all right, title
and interest in and to the Royalty Interest and the Collateral shall automatically revert to the Company, and Ligand will have
no further rights in or with respect to the Royalty Interest or the Collateral and all security interests granted hereunder shall
terminate and be released; provided, however, the other terms and conditions of this Agreement shall remain in full
force and effect, including without limitation, the Company’s obligation to make the payments described in Article II
during the remainder of the Term.

 

(b)            Upon
the withdrawal of any Excluded Costs or other amounts from the Special Account in accordance with the terms hereof, Ligand's security
interest in such amounts granted pursuant to Section 8.01(c) shall be automatically terminated and released.

 

    - 24 -

     

    

 

(c)            Subject
to the Intercreditor Agreement, upon the sale, lease, transfer, assignment or other disposition (a “Transfer”) of any
assets of the Company (other than the Royalty Interests and the Royalty Related Collateral) permitted under the MidCap Credit Facility,
all of Ligand's security interests in such assets shall be automatically terminated and released.

 

(d)            Subject
to the Intercreditor Agreement, at the Company's request, Ligand shall subordinate its liens and other rights with respect to any
such assets or property or terminate and release its liens with respect to any such assets or property (in each case other than
the Royalty Interests and the Royalty Related Collateral) in connection with any Permitted Transaction.

 

(e)            Upon
the termination of the MidCap Credit Facility (or, if the MidCap Credit Facility is refinanced by another debt facility secured
by all Collateral (other than the Royalty Interests and the Royalty Related Collateral), upon the termination of such refinancing
debt facility), Ligand's security interest in all Collateral (other than the Royalty Interests and the Royalty Related Collateral)
shall automatically be terminated and released.

 

(f)             In
connection with any termination or release pursuant to this Section 8.06, Ligand shall execute and deliver to the Company
all documents that the Company shall reasonably request to evidence such termination or release. Ligand further agrees that with
respect to any deposit account (other than the Special Account) over which it has control, it shall not give any instruction to
the applicable bank until a Remedies Event has occurred and is continuing.

 

ARTICLE IX
- Remedies

 

SECTION 9.01. Remedies. If
any Remedies Event shall occur and be continuing, subject to the terms of the Intercreditor Agreement, Ligand may exercise
all rights and remedies of a secured party under the UCC or under any other applicable law and in equity, provided that
Ligand shall exercise any such remedy against the Special Account prior to the exercise of any such remedy against any other
Collateral.

 

SECTION 9.02. Acceleration. If
any Remedies Event shall occur and be continuing, subject to the terms of the Intercreditor Agreement, upon notice to the
Company, Ligand may declare all Minimum Quarterly Royalties required to be paid by the Company from the date of such Remedies
Event until the expiration of the Term to be due and payable forthwith, whereupon the same shall immediately become due and
payable.

 

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left blank]

 

    - 25 -

     

    

 

IN WITNESS WHEREOF, the
parties hereto have caused this Royalty Agreement to be duly executed by their respective authorized officers as of the day and
year first above written to become effective on the Effective Date.

 

	 	AZIYO MED, LLC
	 	 
	 	 
	 	By 	/s/ Jeffrey D. Hamet
	 	 	Name: Jeffrey D. Hamet
	 	 	Title: Vice President, Finance and Treasurer

 

[Signature Page to the Royalty
Agreement]

 

     

     

    

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first
above written to become effective on the Effective Date.

 

	 	LIGAND PHARMACEUTICALS, INCORPORATED
	 	 
	 	 
	 	By 	/s/ Charles Berkman
	 	 	Name: Charles Berman
	 	 	Title: VP, General Counsel & Secretary

 

[Signature Page to the Royalty Agreement]

 

     

     

    

 

Exhibit A 

to the Royalty Agreement

 

GUARANTY AGREEMENT

 

     

     

    

 

Schedule
A 

to the Royalty Agreement

 

PRODUCTS

 

	Aziyo Fields of Use	Product Applications
	
        SIS for the repair of the pericardial sac

         
	CorMatrix® ECM® for Pericardial Closure
	
        SIS for repair of myocardial tissue

         
	CorMatrix® ECM® for Cardiac Tissue Repair
	
        SIS to repair Carotid Arteries

         
	
        CorMatrix® ECM®
        for Carotid Repair

         

	
        Co-Exclusive Vascular Patch using SIS to
        repair the wall of peripheral veins and arteries

         
	CorMatrix® ECM® for Vascular Repair
	SIS for repair of myocardial tissue	
        CorMatrix® TYKE®
        Patch, Pledget and Intracardiac or TYKE® Patch, Pledget and Intracardiac

         

	
        SIS pouch devices into which implantable
        cardiac pacemaker or defibrillator devices are inserted

         
	CorMatrix® CanGaroo®  ECM® Envelope or CanGaroo® ECM® Envelope

 

     

     

    

 

Schedule
B 

to the Royalty Agreement

 

ROYALTY RELATED COLLATERAL

 

US Patents and Patent Applications

 

     

     

    

 

Non-US Patents and Patent Applications

 

     

     

    

 

Schedule 3.08

to the Royalty Agreement

 

MidCap
Credit Facility:

 

Credit and Security Agreement (Revolving Loan) providing
for a revolving loan in the maximum principal amount of $8,000,000.

 

Credit and Security Agreement (Term Loan) providing
for a term loan in the maximum principal amount of $12,000,000.

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