Document:

Exhibit

Exhibit 10.5

SECOND AMENDMENT 
TO
LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this 29th day of January, 2016, by and between Silicon Valley Bank (“Bank”) and MINDBODY, INC., a Delaware corporation (“Borrower”) whose address is 4051 Broad Street, Suite 220, San Luis Obispo, CA 93401.

RECITALS

A.     Bank and Existing Borrower have entered into that certain Loan and Security Agreement dated as of January 12, 2015, (as the same may from time to time be further amended, modified, supplemented or restated, including by that certain First Amendment to Loan and Security Agreement dated as of March 9, 2015, the “Loan Agreement”).

B.     Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

C.    Borrower has requested that Bank amend the Loan Agreement to (i) modify the financial covenant and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.

D.    Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.    Amendments to Loan Agreement.

2.1    Section 6.2 (Financial Statements, Reports, Certificates). Section 6.2 of the Loan Agreement hereby is amended and restated in its entirety and replaced with the following:

“6.2    Financial Statements, Reports, Certificates.  Provide Bank with the following:

(a)a Transaction  Report (and any schedules related thereto) within (i) when Credit Extensions are outstanding, twenty (20) days after 

the end of each month and (ii) when no Credit Extensions are outstanding, twenty (20) days after the end of each quarter;

(b)(i) when Credit Extensions are outstanding, as soon as available, but no later than within thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet and income statement, covering Borrower’s and each of its Subsidiary’s operations for such month certified by a Responsible Officer and in a form acceptable to Bank (the “Monthly Financial Statements”) and (ii) when no Credit Extensions are outstanding, as soon as available, but no later than within the five (5) days of filing with the SEC, a company prepared (I) consolidated and consolidating balance sheet and income statement and (II) consolidated cash flow statement, covering Borrower’s and each of its Subsidiary’s operations for such quarter certified by a Responsible Officer and in a form acceptable to Bank (the “Quarterly Financial Statements”);

(c)(i) when Credit Extensions are outstanding, within thirty (30)  days  after  the  last  day  of  each  month  and  (ii)  when  no  Credit Extensions are outstanding, within thirty (30) days after the last day of each quarter, and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such period, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request, including, without limitation, a statement that at the end of such period there were no held checks (other than held checks disclosed in the Compliance Certificate);

(d)(i) when Credit Extensions are outstanding, within  thirty (30) days after the last day of each month and (ii) when no Credit Extensions are outstanding, within thirty (30) days after the last day of each quarter, a SaaS based metrics report including Annualized Churn Rate and MRR;

(e)within thirty (30) days following the end of each fiscal year of Borrower, annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower, as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annual financial projections;

(f)within  five (5) days of filing, copies of all periodic  and other reports, proxy statements and other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or all of the functions  of  the  SEC  or  with  any  national  securities  exchange,  or

distributed to its shareholders, as the case may be. Documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the Internet at Borrower’s website address; provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents;

(g)within five (5) days of delivery, copies of all material statements, reports and notices made generally available to Borrower’s security holders or to holders of Subordinated Debt;

(h)prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Five Hundred Thousand Dollars ($500,000) or more; and

		
	(i)
	other financial information reasonably requested by Bank.”

2.2    Section 6.6 (Access to Collateral; Books and Records). Section 6.6 of the Loan Agreement hereby is amended and restated in its entirety and replaced with the following:

“6.6 Access to Collateral; Books and Records. Subject to the terms and conditions of this Section 6.6, at reasonable times, on three (3) Business Days’ notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy Borrower’s Books. The foregoing inspections and audits shall be conducted at Borrower’s expense. The first such audit shall be conducted in connection with the initial Advance hereunder and such audit shall be completed (i) within ninety (90) days of the initial Advance, if on the date Borrower requests the initial Advance, Borrower’s balance of unrestricted cash at Bank, minus, the aggregate amount of all outstanding Obligations, is greater than or equal to Forty Million Dollars ($40,000,000) or (ii) prior to the initial Advance, if on the date Borrower requests the initial Advance, Borrower’s balance of unrestricted cash at Bank, minus, the aggregate amount of all outstanding Obligations, is less than Forty Million Dollars ($40,000,000). Thereafter, only when Credit Extensions are outstanding, Bank may conduct such audits once every twelve (12) months unless an Event of Default has occurred and is continuing in which case such inspections and audits shall occur as often as Bank shall determine is necessary. The charge therefor shall be Eight Hundred Fifty Dollars ($850) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-

pocket expenses. In the event Borrower and Bank schedule an audit more than ten (I0) days in advance, and Borrower cancels or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a fee of One Thousand Dollars ($1,000) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.”

2.3     Section 6.9 (Performance to Plan; Revenue). Section 6.9 of the Loan Agreement hereby is amended and restated in its entirety and replaced with the following:

“6.9   Financial Covenants.  Maintain, measured (i) monthly on a trailing three (3) month basis when Credit Extensions are outstanding and (ii) quarterly on a trailing three (3) month basis when no Credit Extensions are outstanding, on a consolidated basis with respect to Borrower and its Subsidiaries, one of the following:

(a)Performance to Plan; Revenue. Revenue, of at least eighty- one percent (81.0%) of Borrower’s projected revenue for the applicable measuring period as set forth in Borrower’s Board of Directors-approved business plan for the 2015 fiscal year separately provided to and approved in writing by Bank as of the Effective Date. Covenant levels for subsequent measuring periods shall be set by the mutual agreement of Borrower and Bank based on Borrower’s projections delivered to Bank pursuant to Section 6.2(e); provided that, if such mutual agreement cannot be reached for years subsequent to 2015, Borrower shall maintain revenue, measured monthly on a trailing three (3) month basis, of at least  the amount equal to seventeen and one half of one percent (17.5%) above Borrower’s actual revenue for the fiscal year prior to the applicable measuring period or

(b)Minimum Cash at Bank. A balance of unrestricted cash at Bank, minus, the aggregate amount of outstanding Obligations, of at least Forty Million Dollars ($40,000,000).”

2.4     Section 7.2 (Changes in Business, Management, Control, or Business Locations). Section 7.2 of the Loan Agreement hereby is amended and restated in its entirety and replaced with the following:

“7.2 Changes in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and   such   Subsidiary,   as  applicable,   or  reasonably   related   thereto; (b) liquidate or dissolve; (c) (i) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower within five

(5) days after his/her/their  departure  from  Borrower;  or  (d) permit  or suffer any Change in Control.

Borrower shall not, without at least fifteen (15) days prior written notice to Bank: (I) add any new offices or business locations, including warehouses (unless such new offices or business  locations contain less than One Hundred Thousand Dollars ($100,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank.”

2.1     Section 13 (Definitions). The following terms and their respective definitions hereby are added or amended and restated in their entirety in Section 13.1 of the Loan Agreement, as appropriate, as follows:

“Change in Control” means (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of forty percent (40%) or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted basis) other than by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction; (b) during any period of 12 consecutive months,  a majority of the members of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other

equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (c) at any time, Borrower shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding capital stock of each subsidiary of Borrower free and clear of all Liens (except Liens created by this Agreement).

“Quarterly Financial Statements” is defined in Section 6.2(b).

2.2    Exhibit D to the Loan Agreement hereby is replaced with Exhibit D attached hereto.

		
	3.
	Limitation of Amendments.

3.1    The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

3.2    This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

		
	4.
	Representations and Warranties.    To induce Bank  to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

4.1    Immediately after giving effect to this Amendment and except as otherwise set forth herein, (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

4.2    Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

4.3  The organizational documents of Borrower delivered to Bank upon execution thereof remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

4.4    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

4.5    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority,  or  subdivision  thereof,  binding  on  Borrower,  or  (d)  the  organizational documents of Borrower;

4.6    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either Borrower, except as already has been obtained or made; and

4.7    This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

5.Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

6.Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) the due execution and delivery to Bank of updated Borrowing Resolutions for Borrower and (c) Borrower’ s payment of all Bank Expenses incurred through the date hereof, which may be debited from any of Borrowers’ accounts at Bank.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

BANK                            BORROWER

Silicon Valley Bank                        MINDBODY, INC.

By: /s/ Victor Le                        By: /s/ Brett T. White
Name:    Victor Le                                         Name:    Brett T. White                                
Title:    VP                                                         Title:    CFO                                                 

[Signature Page to Second Amendment to Loan and Security Agreement]

WEST\266090722.7 
354271-000275

EXHIBIT D 
COMPLIANCE CERTIFICATE

TO:        SILICON VALLEY BANK                             Date: January __, 2016
FROM:      MINDBODY, INC.

The undersigned authorized officer of MINDBODY, INC. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”):

(I) Borrower is in complete compliance for the period ending _____ with all required covenants except as noted below; (2) there are no Events of Default; (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except  as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement; and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.

Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

	
			
	Reporting Covenants
	Required
	Complies

	 
	 
	 

	Monthly/quarterly financial statements with Compliance Certificate
	(i) when Credit Extensions are outstanding, monthly within 30 days
(ii) when no Credit Extensions are outstanding, within 5 days after filing  w
SEC
	Yes   No

	10-Q, 10-K and 8-K
	Within 5 days after filing with SEC
	Yes   No

	Transaction Report
	(i) when Credit Extension are outstanding, monthly within 20 days and
(ii) when no Credit Extensions are outstanding, quarterly within 20 days
	Yes   No

	SaaS metrics report
	(i) when Credit Extensions are outstanding, monthly within 30 days and
(ii) when no Credit Extensions are outstanding, quarterly within 30 days
	Yes   No

	Annual Projections (Board Approved)
	FYE within 30 days
	Yes   No

	 
	 
	 

	The following Intellectual Property was registered (or a registration application submitted) after the Effective Date (if no registrations, state “None”)

WEST\266090722.7 354271-000275

	
				
	Financial Covenants
	Required
	Actual
	Complies

	Borrower must be in compliance with one (1) of the following financial covenants, each, measured (i) monthly on a trailing three (3) month basis when Credit Extensions are outstanding a
(ii) quarterly on a trailing three (3) month basis when no Credit Extensions are outstanding
	 
	 
	 

	Performance to Plan; Revenue
	81% of projected revenue*
	$______________
	Yes   No

	Cash at Bank, minus, aggregate amount of outstanding
Obligations
	$40,000,000
	$______________
	Yes  No

* Covenant levels for subsequent measuring periods shall be set by the mutual agreement of Borrower and Bank based on Borrower’s projections delivered to Bank pursuant to Section 6.2(e); provided that, if such mutual agreement cannot be reached for years subsequent to 2015, Borrower shall maintain revenue, measured monthly on a trailing three (3) month basis, of at least the amount equal to seventeen and one half of one percent (17.5%) above Borrower’s actual revenue for the fiscal year prior to   the applicable measuring period.

Other Matters
	
		
	Have there been any amendments of or other changes to the capitalization table of Borrower and to the Operating Documents of Borrower or any of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Certificate.
	Yes             No

The following are the exceptions with respect to the certification above: (lf no exceptions exist, state ‘‘No exceptions to note.”)

MINDBODY, INC                        BANK USE ONLY

By:    ____________________                    Received by:_____________________________
Name:__________________                            AUTHORIZED SIGNER
Title:___________________    
Date:____________________________________

Verified:_________________________________
AUTHORIZED SIGNER

Date:____________________________________

Compliance Status:    Yes    No

WEST\266090722.7
354271·000275    
2

BORROWING RESOLUTIONS

CORPORATE BORROWING CERTIFICATE

BORROWER:  MINDBODY, INC.                        DATE:  January_, 2016
BANK:    Silicon Valley Bank

I hereby certify as follows, as of the date set forth above:

		
	1.
	I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below.

2.Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Delaware.

3.Attached hereto are true, correct and complete copies of Borrower’s Articles of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth above. Such Articles of Incorporation have not been amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of the date hereof.

4.The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action). Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and Silicon Valley Bank (“Bank”) may rely on them until Bank receives written notice of revocation from Borrower.

RESOLVED, that any one of the following officers or employees of Borrower,
whose names, titles and signatures are below, may act on behalf of Borrower:

Authorized 
to Add or 
Remove 
Name            Title             Signature            Signatories
__________________    ___________________    ___________________________        ☐
__________________    ___________________    ___________________________        ☐
__________________    ___________________    ___________________________        ☐
__________________    ___________________    ___________________________        ☐

WEST\266090722.7 
354271·000275

RESOLVED FURTHER, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.

RESOLVED FURTHER, that such individuals may, on behalf of Borrower: 

Borrow Money.  Borrow money from Bank.
Execute Loan Documents.  Execute any Joan documents Bank requires.
Grant Security.  Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount a11 drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
Apply for Letters of Credit.  Apply for letters of credit from Bank.
Enter Derivative Transactions.    Execute  spot  or forward  foreign  exchange contracts,
interest rate swap agreements, or other derivative transactions.
Issue Warrants. Issue warrants for Borrower’s capital stock.
Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effect these resolutions.

RESOLVED FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.

		
	5.
	The persons listed above are Borrower’s officers or employees with their titles and signatures

sho’M1 next to their names.

By:  ____________________
Name:   _________________
Title:    __________________

*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

I, the _________________________________of Borrower, hereby certify as to paragraphs 1 through 5 above, as of the date set forth above.

By:  ____________________
Name:   _________________
Title:   __________________

WEST\266090722.7
354271-000275Exhibit 4.1

 

FORM OF WARRANT CERTIFICATE

 

Number ____________

 

Warrants

 

THE WARRANTS SHALL BE VOID IF NOT EXERCISED
PRIOR TO

 

THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR

 

IN THE WARRANT AGREEMENT DESCRIBED BELOW

 

XTANT MEDICAL HOLDINGS, INC.

 

Incorporated Under the Laws of the State
of Delaware

 

CUSIP: [____________]

 

Warrant Certificate

 

This Warrant
Certificate certifies that _______________, or its registered assigns, is the registered holder of warrant(s) (the “Warrants”
and each, a “Warrant”) to purchase shares of Common Stock, $0.000001 par value per share (“Common Stock”),
of Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon
exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully
paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the “Exercise Price”),
as determined pursuant to the Warrant Agreement, payable in lawful money of the United States of America (or through “cashless
exercise” as provided for in the Warrant Agreement), subject to the conditions set forth herein and in the Warrant Agreement.
Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement
(as defined on the reverse hereof).

 

Each Warrant is initially
exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common Stock issuable upon exercise
of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

 

The initial Exercise
Price per share of Common Stock for any Warrant is equal to $0.90 per share. The Exercise Price is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.

 

Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised
by the end of such Exercise Period, such Warrants shall become void.

 

Reference is hereby
made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for
all purposes have the same effect as though fully set forth at this place.

 

    	 	 	 

     

    

  

This Warrant Certificate
shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

 

This Warrant Certificate
shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to conflicts of
laws principles thereof.

 

[Signature Page Follows.]

 

    	 	 	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Warrant Certificate to be duly executed as of the date first
above written.

 

	 	XTANT MEDICAL HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	 
	 	Corporate Stock Transfer, Inc.,
	 	as Warrant Agent
	 	 	 
	 	By:	 
	 	Name:
	 	Title:

 

[Signature Page to Warrant Certificate]

 

    	 	 	 

     

    

 

[Form of Warrant Certificate]

 

[Reverse]

 

The Warrants evidenced
by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares
of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of ___________, 2016 (the “Warrant
Agreement”), duly executed and delivered by the Company to Corporate Stock Transfer, Inc., as warrant agent (the “Warrant
Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant
Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered
Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company.
Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

 

Warrants may be exercised
at any time during the Exercise Period set forth in Section 3.2 of the Warrant Agreement.

 

The Warrant Agreement
provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants
set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof
would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to
the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.

 

Warrant Certificates,
when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by
legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided
in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of
like tenor evidencing in the aggregate a like number of Warrants.

 

Upon due presentation
for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for
any tax or other governmental charge imposed in connection therewith.

 

The Company and the
Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of
any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any
rights of a stockholder of the Company.

 

    	 	 	 

     

    

 

Election to Purchase

 

(To Be Executed Upon Exercise of Warrant)

 

The undersigned hereby
irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith
tenders payment for such shares to the order of Xtant Medical Holdings, Inc. (the “Company”) in the amount
of $0.90 in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the
name of ______________, whose address is _____________________________, and that such shares be delivered to ______________, whose
address is _____________________________. If said number of shares is less than all of the shares of Common Stock purchasable hereunder,
the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the
name of ______________, whose address is _____________________________, and that such Warrant Certificate be delivered to ______________,
whose address is _____________________________.

 

In the event that the
Warrant is to be exercised on a “cashless” basis pursuant to Section 3.3.2 of the Warrant Agreement, the
number of shares that the Warrants are exercisable for shall be determined in accordance with Section 3.3.2 of the
Warrant Agreement.

 

a “Cash Exercise”
with respect to ______________ Warrant Shares; and/or

 

a “Cashless Exercise”
with respect to _____________ Warrant Shares, resulting in a delivery obligation by the Company to the Holder of shares of Common
Stock representing the applicable Net Number, subject to adjustment.

 

In the event that the
Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares
that the Warrants are exercisable for shall be determined in accordance with the relevant section of the Warrant Agreement which
allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant
Agreement, to receive shares of Common Stock. If said number of shares is less than all of the shares of Common Stock purchasable
hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of ______________, whose address is _____________________________,
and that such Warrant Certificate be delivered to ______________, whose address is _____________________________.

 

	Date: __________, 20__	(Signature)
	 	 
	 	(Address)
	 	 
	 	(Tax Identification Number)

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