Document:

EXHIBIT 10.3

 

Investor
Rights Agreement

 

This Investor
Rights Agreement, dated as of February 14, 2018 (this “Agreement”), by and among Xtant Medical Holdings,
Inc. (the “Company”), OrbiMed Royalty Opportunities II, LP (“OrbiMed”), ROS Acquisition Offshore
LP (“ROS” and, together with OrbiMed, the “Investors”) and Park West Partners International,
Limited and Park West Investors Master Fund, Limited (collectively, the “Park West Funds”).

 

WHEREAS, on January
11, 2018, the Company, the Investors and the Consenting Noteholders (as defined in the Restructuring Agreement) entered into a
Restructuring and Exchange Agreement (the “Restructuring Agreement”), pursuant to which the Company, the Investors
and the Consenting Noteholders agreed that the Investors would convert certain of the Company convertible notes they owned into
shares of Company common stock (the “Common Stock”), and the Company would hold a stockholder vote to allow
the Investors and the Consenting Noteholders to exchange the remainder of their Company convertible notes into shares of Common
Stock, on the terms and subject to the conditions set forth in the Restructuring Agreement;

 

WHEREAS, the Company
has held the stockholder vote, the Company stockholders have approved (1) the exchange of Company convertible notes held by the
Investors and the Consenting Noteholders for shares of Common Stock and (2) the election of new Company directors, and the Investors
and Consenting Noteholders have exchanged their Company convertible notes for shares of Common Stock; and

 

WHEREAS, it is a
condition to the closing of the transactions contemplated by the Restructuring Agreement that the Company, the Investors and the
Park West Funds enter into this Agreement.

 

NOW, THEREFORE,
in consideration of the foregoing and the agreements contained in this Agreement, and intending to be legally bound by this Agreement,
the Company, the Investors and the Park West Funds agree as follows:

 

Article
I

DEFINITION

 

Capitalized terms used
and not otherwise defined in this Agreement that are defined in the Restructuring Agreement shall have the meanings given such
terms in the Restructuring Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth
in this Article I:

 

“Change of Control”
shall mean, with respect to any Person, as applicable, (a) a merger or consolidation in which such Person is not the surviving
corporation or in which, if such Person is the surviving corporation, the stockholders of such Person immediately prior to the
consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, possess, directly
or indirectly through one or more intermediaries, a majority of the voting power of all of the surviving entity’s outstanding
stock and other securities and the power to elect a majority of the members of such Person’s board of directors; or (b) a
transaction or series of related transactions (which may include a tender offer for such Person’s stock or the issuance,
sale or exchange of stock of such Person) if the stockholders of such Person immediately prior to the initiation of such transaction
do not, immediately after consummation of such transaction or any of such related transactions, own, directly or indirectly through
one or more intermediaries, stock or other securities of the entity that possess a majority of the voting power of all of such
Person’s outstanding stock and other securities and the power to elect a majority of the members of such Person’s board
of directors.

 

     

     

    

 

“Indebtedness”
means (i) indebtedness for borrowed money whether or not evidenced by bonds, notes, debentures or other similar instruments, including
purchase money obligations or other obligations relating to the deferred purchase price of property, (ii) obligations as lessee
under leases which have been recorded as capital leases or (iii) obligations under guaranties in respect of indebtedness or obligations
of others of the kind referred to in clauses (i) through (ii) above, as reported in accordance with GAAP; provided that
Indebtedness shall not include (A) trade payables and accrued expenses arising in the ordinary course of business and (B) indebtedness,
obligations under guaranties and other liabilities owed by the Company to its Subsidiaries or among the Company’s Subsidiaries.

 

“Investor Affiliates”
means an Affiliate of either Investor. For the avoidance of doubt, the Company shall not be considered an Affiliate of either Investor.

 

“New Securities”
means any shares of capital stock of the Company, including Common Stock and preferred shares, whether authorized or not by the
Board or any committee of the Board, and any rights, options, or warrants to purchase shares of capital stock, and securities of
any type whatsoever that are, or may become, convertible, exchangeable or exercisable into capital stock; provided, however,
that the term “New Securities” shall not include: (i) securities issued to employees, consultants, officers
and directors of the Company, pursuant to any arrangement approved by the Board or the Board’s Compensation Committee; (ii)
securities issued to the sellers pursuant to the acquisition of another business entity by the Company by merger, purchase of substantially
all of the assets or shares, or other reorganization whereby the Company will own equity securities of the surviving or successor
corporation; (iii) securities issued in an underwritten registered public offering, provided that the Company shall have
complied with Article III with respect to such securities; (iv) securities issued pursuant to any rights or agreements,
including, without limitation, convertible securities, options and warrants, provided that either (x) the Company shall
have complied with Article III with respect to the initial sale or grant by the Company of such rights or agreements or
(y) such rights or agreements existed on or prior to the Closing Date (it being understood that any modification or amendment to
any such pre-existing right or agreement subsequent to the Closing Date with the effect of increasing the percentage of the Company's
fully-diluted securities underlying such rights agreement shall not be included in this clause (iv)); (v) securities issued in
connection with any stock split, stock dividend or recapitalization by the Company and (vi) any right, option, or warrant to acquire
any security convertible into the securities excluded from the definition of New Securities pursuant to clauses (i) through (v)
above.

 

“Ownership Percentage”
means the percentage equal to (i) the aggregate number of shares of Common Stock held by the Investors, divided by (ii) the total
number of shares of Common Stock then outstanding.

 

    	 	2	 

     

    

 

“Ownership Threshold”
means the Investors and the Investor Affiliates taken together holding in aggregate at least 40% of the Common Stock.

 

“Reorganization
Event” means (a) any consolidation or merger of the Company with or into another Person or of another Person with or
into the Company, (b) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or
substantially as an entirety, (c) any statutory share exchange of the Company with another Person (other than in connection with
a merger or acquisition), or (d) any tender offer or exchange offer which, in combination with any related transactions, would
result in a Change of Control of the Company (in which case, the Reorganization Event for such purposes shall be all such transactions
taken together).

 

Article
II

GOVERNANCE MATTERS

 

Section 2.1.          Board
Composition.

 

(a)          Concurrently
with the execution of this Agreement, each member of the board of directors of the Company (the “Board”) shall
resign from the Board, effective immediately, and immediately upon the Company Stockholder Approval having been obtained, the Board
shall consist of the individuals set forth on Schedule 1 hereto until the 2018 annual meeting of the Company’s
stockholders or such individual’s earlier resignation, death or removal. After the date hereof,

 

i.            for
so long as the Ownership Threshold is met the Investors shall be entitled to nominate such number of individuals to the Board constituting
a majority of directors,

 

ii.         (1)
for so long as the Ownership Threshold is not met, but the Investors’ Ownership Percentage exceeds 30% of the Common Stock,
then the Investors shall be entitled to nominate the greater of: (x) such number of individuals to the Board in relative proportion
to the Ownership Percentage (rounded down) and (y) three directors, (2) for so long as the Investors’ Ownership Percentage
is in the aggregate at least 20%, but less than 30% of the Common Stock, then the Investors shall be entitled to nominate the greater
of: (x) such number of individuals to the Board in relative proportion to the Ownership Percentage (rounded down) and (y) two directors,
and (3) for so long as the Investors’ Ownership Percentage is in the aggregate at least 10%, but less than 20% of the Common
Stock, then the Investors shall be entitled to nominate the greater of: (x) such number of individuals to the Board in relative
proportion to the Ownership Percentage (rounded down) and (y) one director (each, an “Investor Designee,” and
collectively, the “Investor Designees”).

 

For so long as the Ownership
Threshold is met, (A) the Investors shall be entitled to designate the chairperson of the Board and (B) except as otherwise directed
or agreed by the Investors and to the extent required by applicable listing standards (including any requirements for initial listing),
the Company agrees to cause all members of the Board that are not Investor Designees (other than the chief executive officer of
the Company) to be “independent” as defined in the listing standards of the NYSE American (or other United States national
securities exchange that the Common Stock is listed upon, if any) and applicable law (and all non-Investor Designees listed on
Schedule 1 have agreed to resign if necessary to effectuate the foregoing). The Company, at any annual or special meeting
of stockholders of the Company at which directors are to be elected, subject to the fulfillment of the requirements set forth in
Section 2.1(b), shall nominate the Investor Designees for election to the Board and use all commercially reasonable efforts
to cause the Investor Designees to be elected as directors of the Board.

 

    	 	3	 

     

    

 

(b)          The
Company shall require that all directors comply in all respects with applicable law (including with respect to confidentiality)
and the Company’s corporate governance guidelines, code of business conduct and ethics and confidentiality and trading policies
and guidelines as in effect from time to time. The Investors shall notify the Company of any proposed Investor Designee in writing
no later than the latest date on which the Company stockholders may make nominations to the Board in accordance with the bylaws
of the Company and the Securities Act, together with all information concerning such nominee required to be delivered to the Company
by the bylaws of the Company and such other information reasonably requested by the Company; provided that in each such
case, all such information is generally required to be delivered to the Company by the other outside directors of the Company (the
“Nominee Disclosure Information”); provided, further that in the event the Investors fail to provide
any such notice, the Investor Designee shall be the person then serving as the Investor Designee as long as the Investors provide
the Nominee Disclosure Information to the Company promptly upon request by the Company.

 

(c)          In
the event of the death, disability, resignation or removal of an Investor Designee, the Board will promptly elect to the Board
a replacement director designated by the Investors, subject to the fulfillment of the requirements set forth in Section 2.1(b),
to fill the resulting vacancy, and such individual shall then be deemed an Investor Designee for all purposes under this Agreement.

 

Section 2.2.          Committee
Membership. After the date hereof, and subject to applicable law and the listing standards of the NYSE American (or other
United States national securities exchange that the Common Stock is listed upon, if any), the Company will offer the Investor
Designees an opportunity to, at Investors’ option, either sit on each regular committee of the Board in relative proportion
to the number of Investor Designees on the Board or attend (but not vote) at the meetings of such committee as an observer. If
an Investor Designee fails to satisfy the applicable qualifications under law or stock exchange listing standards to sit on any
committee of the Board, then the Board shall offer such Investor Designee the opportunity to attend (but not vote) at the meetings
of such committee as an observer.

 

Section 2.3.          Compensation
and Benefits. Each of the Investor Designees will be entitled to receive similar compensation, benefits, reimbursement (including
of travel expenses), indemnification and insurance coverage for their service as directors as the other outside directors of the
Company. For so long as the Company maintains directors and officers liability insurance, the Company shall include each Investor
Designee as an “insured” for all purposes under such insurance policy for so long as such Investor Designee is a director
of the Company and for the same period as for other former directors of the Company when such Investor Designee ceases to be a
director of the Company.

 

    	 	4	 

     

    

 

Section 2.4.          Special
Approval Matters.

 

(a)          For
so long as the Ownership Threshold is met, the following matters will require the approval of the Investors to proceed with such
a transaction (excluding any such transaction between the Company and its wholly owned Subsidiaries or among the Company’s
wholly owned Subsidiaries):

 

i.          the
issuance of any New Securities;

 

ii.         the
incurrence of any Indebtedness in excess of $250,000 in the aggregate during any fiscal year (other than refinancings of existing
Indebtedness);

 

iii.        the
sale, transfer or other disposition of assets or businesses of the Company or its Subsidiaries with a value in excess of $250,000
in the aggregate during any fiscal year (other than sales of inventory or supplies in the ordinary course of business, sales of
obsolete assets (excluding real estate), sale-leaseback transactions and accounts receivable factoring transactions);

 

iv.        the
acquisition of any assets or properties (in one or more related transactions) for cash or otherwise for an amount in excess of
$250,000 in the aggregate during any fiscal year (other than acquisitions of inventory and equipment in the ordinary course of
business);

 

v.         capital
expenditures in excess of $125,000 individually (or in the aggregate if related to an integrated program of activities) or in excess
of $1,500,000 in the aggregate during any fiscal year;

 

vi.        the
approval of the Company's annual budget;

 

vii.       the
hiring or termination of the Company’s chief executive officer;

 

viii.      the
appointment or removal of the chairperson of the Board; and

 

ix.         making,
or permitting any Subsidiary to make, loans to, investments in, or purchasing, or permitting any Subsidiary to purchase, any stock
or other securities in another corporation, joint venture, partnership or other entity in excess of $250,000 in the aggregate during
any fiscal year.

 

(b)          For
so long as the Ownership Threshold is met, increasing the size of the Board beyond seven (7) directors will require the approval
of a majority of the Investor Designees.

 

Section 2.5.          Books
and Records; Access. For so long as the Investors’ Ownership Percentage is 10% or more, the Company shall permit the
Investors and their respective designated representatives (that, for the avoidance of doubt, cannot include any transferee (other
than an Investor Affiliate) or customer of the Company), at reasonable times and upon reasonable prior notice to the Company,
to review the books and records of the Company and the Company’s Subsidiaries and to discuss the affairs, finances and condition
of the Company or any of the Company’s Subsidiaries with the officers of the Company or any such Subsidiary of the Company.

 

    	 	5	 

     

    

 

Article
III

RIGHT OF FIRST OFFER

 

Section 3.1.          Right
to Purchase. Subject to the terms and conditions set forth in this Article III, the Investors and the Park West Funds
have the right to purchase from the Company an amount of any New Securities that the Company may, from time to time, propose to
issue and sell equal to applicable Ownership Percentage of each of the Investors and the Park West Funds (calculated as of the
date of delivery of such Notice of Issuance), to the extent such New Securities are actually issued.

 

Section 3.2.          Notice
of Issuance. In the event the Company proposes to undertake an issuance of New Securities, it shall give the Investors and
the Park West Funds written notice of its intention, describing the type of New Securities and the price and terms upon which
the Company proposes to issue such New Securities (a “Notice of Issuance”). The Investors and the Park West
Funds shall have thirty (30) days from the date of delivery of a Notice of Issuance thereto to agree to purchase a portion of
the New Securities equal to the applicable Ownership Percentage of each of the Investors and the Park West Funds (calculated as
of the date of delivery of such Notice of Issuance), for the price and upon the terms specified in the Notice of Issuance. On
or prior to the expiration of such thirty (30) day period, the Investors and/or the Park West Funds, as the case may be, shall
deliver a written notice to the Company stating the quantity of New Securities to be purchased by the Investors and/or the Park
West Funds (the “ROFO Response”), which written notice shall be binding on the Company, on the one hand, and
the Investors and/or the Park West Funds, as applicable, on the other hand, subject only to the completion of the issuance of
New Securities described in the applicable Notice of Issuance; provided, however, that, notwithstanding anything herein
to the contrary, no notice shall be required to be delivered to the Park West Funds and the Park West Funds shall have no rights
under this Article III with respect to an issuance of New Securities that the Investors elect not to purchase any of. If
either the Investors or the Park West Funds fail to provide a ROFO Response within the required thirty (30) day period, such party
shall be deemed to have elected not to purchase any of the New Securities described in the Notice of Issuance.

 

Section 3.3.          Sale
of New Securities. The Company shall have one hundred twenty (120) days following the earlier of (i) the expiration of the
thirty (30) day period described in Section 3.2 and (ii) the delivery of the ROFO Response to sell or enter into an
agreement to sell the New Securities with respect to which the Investors’ and/or the Park West Funds’ right to purchase
was not (or was deemed not to be) exercised, at a price and upon terms no more favorable than those specified in the Notice of
Issuance. If the Company does not sell such New Securities or enter into an agreement to sell such New Securities within such
one hundred twenty (120)-day period, then the Company shall not thereafter issue or sell any New Securities without first offering
such New Securities to the Investors and the Park West Funds in the manner provided in Section 3.2.

 

    	 	6	 

     

    

 

Article
IV

TERMINATION

 

Other than the termination
provisions applicable to particular Sections of this Agreement that are specifically provided elsewhere in this Agreement, this
Agreement shall terminate (a) upon the mutual written agreement of the Company and the Investors, (b) upon written notice
of either the Company or the Investors at such time as the Investors’ Ownership Percentage is less than 10% or (c) upon written
notice of the Investors to the Company. Article III of this Agreement shall terminate as to the Park West Funds at such
time as the Park West Funds’ aggregate Ownership Percentage is less than 8.5%.

 

Article
V

SECTION 16B-3

 

So long as the Investors
have the right to designate an Investor Designee, the Board shall take such action as is reasonably necessary to cause the exemption
of any acquisition or disposition of Common Stock or New Securities by the Investors from the liability provisions of Section 16(b)
of the Exchange Act pursuant to Rule 16b-3 so long as such exemption is not prohibited by applicable law. For the avoidance of
doubt, the Company shall pass one or more exemptive resolutions by the Board each time there is any purported acquisition or disposition
of Common Stock or New Securities by the Investors with requisite specificity to exempt from the liability provisions of Section
16(b) of the Exchange Act pursuant to Rule 16b-3.

 

Article
VI

MISCELLANEOUS

 

Section 6.1.          Governing
Law. This Agreement shall be governed by, construed and enforced in accordance with, and the rights of the parties hereto
shall be governed by, the laws of the State of New York, excluding choice-of-law principles of the law of such State that would
require application of the laws of a jurisdiction other than such State.

 

Section 6.2.          Jurisdiction;
Venue; Enforcement.

 

(a)          If
any action, proceeding or litigation shall be brought in order to enforce any right or remedy under this Agreement, each party
hereto hereby consents and will submit, and will cause each of their respective Subsidiaries, and, in the case of the Investors,
the Investor Affiliates, and, in the case of the Park West Funds, the Park West Funds and their Affiliates, to submit, to the jurisdiction
of any state or federal court of competent jurisdiction sitting in the State of New York, borough of Manhattan, on the date of
this Agreement. Each party hereto hereby irrevocably waives, and will cause each of their respective Subsidiaries, and, in the
case of the Investors, the Investor Affiliates, and, in the case of the Park West Funds, the Park West Funds and their Affiliates,
to waive, any objection, including, but not limited to, any objection to the laying of venue or based on the grounds of forum non
conveniens, which they may now or hereafter have to the bringing of any such action, proceeding or litigation in such jurisdiction.
Each party hereto further agrees that they shall not, and shall cause their respective Subsidiaries, and, in the case of the Investors,
the Investor Affiliates, and, in the case of the Park West Funds, the Park West Funds and their Affiliates, not to, bring any action,
proceeding or litigation arising out of this Agreement in any state or federal court other than any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New York on the date of this Agreement.

 

    	 	7	 

     

    

 

(b)          Each
party hereto irrevocably consents, and will cause each of their respective Subsidiaries, and, in the case of the Investors, the
Investor Affiliates, to consent, to the service of process of any of the applicable aforementioned courts in any such action, proceeding
or litigation by the mailing of copies thereof by registered or certified mail, postage prepaid, to the address set forth in Section
6.6, such service to become effective thirty (30) days after such mailing.

 

(c)          EACH
PARTY HERETO HEREBY WAIVES, AND WILL CAUSE EACH OF THEIR RESPECTIVE SUBSIDIARIES, AND, IN THE CASE OF THE INVESTORS, THE INVESTOR
AFFILIATES, AND, IN THE CASE OF THE PARK WEST FUNDS, THE PARK WEST FUNDS AND THEIR AFFILIATES, TO WAIVE, ANY AND ALL RIGHTS ANY
OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH, THIS AGREEMENT.

 

Section 6.3.          Successors
and Assigns. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by any Investor or any Park West Fund without the prior written
consent of the Company or its successors, and any such assignment without such prior written consent shall be null and void; provided,
however, that no assignment shall limit the assignor’s obligations hereunder. Subject to the preceding sentence,
this Agreement (and the rights, duties and obligations of the parties to this Agreement) will be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective successors and assigns.

 

Section 6.4.          No
Third-Party Beneficiaries. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties to this Agreement any rights, remedies, obligations
or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner,
member, shareholder, director, officer, employee or other beneficial owner of any party, in its own capacity as such or in bringing
a derivative action on behalf of a party) shall have any standing as third-party beneficiary with respect to this Agreement or
the transactions contemplated by this Agreement.

 

Section 6.5.          Entire
Agreement. This Agreement, the Restructuring Agreement and the other documents delivered pursuant to the Restructuring Agreement
(including the Registration Rights Agreement, as defined therein), constitute the full and entire understanding and agreement
between and among the parties with regard to the subjects of this Agreement and such other agreements and documents. All Schedules,
Exhibits and Annexes attached to this Agreement constitute a part of this Agreement and are incorporated herein for all purposes.

 

Section 6.6.          Notices.
Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective
(a) when delivered, including via email (except that if the day of delivery is not a Business Day, then the next Business
Day), (b) when transmitted via telecopy (or other facsimile device) on a Business Day during normal business hours to the
number set out below if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), (c) the day following the day (except that if such day is not a Business Day, then the next Business Day)
on which the same has been delivered prepaid to a reputable national overnight air courier service, or (d) the third Business
Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective
parties at the address set forth below, or at such other address as such party hereto may specify by written notice to the other
parties hereto:

 

    	 	8	 

     

    

 

i.            if
to the Investors, to: the Investors, c/o OrbiMed Advisors LLC, 601 Lexington Avenue, 54th Floor, New York, NY 10022, Attention:
Matthew Rizzo, Partner, and Michael Eggenberg, Managing Director, with a copy (which copy shall not constitute notice) to: Covington
& Burling LLP, 620 Eighth Avenue, The New York Times Building, New York, NY 10018, Attention: Peter Schwartz, Esq.;

 

ii.         if
to the Park West Funds, to the address indicated on their signature page to this Agreement;

 

iii.         if
to the Company, to: Xtant Medical Holdings, Inc., 600 Cruiser Lane, Belgrade, MT 59714, Attention: Carl O’Connell, Chief
Executive Officer, with a copy (which copy shall not constitute notice) to: Ballard Spahr LLP, 1 East Washington Street, Phoenix,
AZ 85004, Attention: Karen McConnell; and

 

iv.         if
to the Reorganized Company, to: Xtant Medical Holdings, Inc., 600 Cruiser Lane, Belgrade, MT 59714, Attention: Carl O’Connell,
Chief Executive Officer.

 

Section 6.7.          No
Waiver of Remedies; Remedies Cumulative. No failure or delay on the part of any party hereto in exercising any right, power
or privilege hereunder and no course of dealing between the Company or its Subsidiaries, on the one hand, and the Investors and
the Investor Affiliates or the Park West Funds and their Affiliates, on the other hand, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies that the parties hereto would otherwise have. No notice to or demand on the Company or its
Subsidiaries in any case shall entitle the Company or its Subsidiaries to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the other parties hereto to any other or further action in any circumstances
without notice or demand.

 

Section 6.8.          Amendments
and Waivers of Terms. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is
in writing and signed, in the case of an amendment, by the Company and the Investors or, in the case of a waiver, by the party
against whom the waiver is to be effective. Any amendment or waiver effected in accordance with this paragraph shall be binding
upon the Investors and the Company. Notwithstanding the foregoing, until the Park West Funds’ aggregate Ownership Percentage
is less than 8.5%, no amendment with respect to the rights and obligations set forth in Article III or that otherwise treats
the Park West Funds in an adverse manner shall be effective without the prior written consent of the Park West Funds.

 

    	 	9	 

     

    

 

Section 6.9.          Counterparts.
This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format,
each of which may be executed by less than all the parties, each of which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one instrument.

 

Section 6.10.         Severability.
If any provision of this Agreement becomes or is determined by a court of competent jurisdiction to be illegal, invalid, unenforceable
or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement
and the remaining provisions (or portion of the provision) shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid, unenforceable or void provisions (or portions thereof).

 

Section 6.11.         Titles
and Subtitles; Interpretation. The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement. When a reference is made in this Agreement to a Section, Article,
Schedule or Annex, such reference shall be to a Section, Article, Schedule or Annex of this Agreement unless otherwise indicated.
Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall
be deemed to be followed by the words “without limitation.” The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of
such term. Any agreement, instrument or statute defined or referred to in this Agreement means such agreement, instrument or statute
as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent
and (in the case of statutes) by succession of comparable successor statutes. Each of the parties has participated in the drafting
and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed
as if it is drafted by each of the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of authorship of any of the provisions of this Agreement. For purposes of this Agreement, the Investors and the Park
West Funds shall not be deemed to be Affiliates of the Company.

 

[signature
page follows]

 

    	 	10	 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	XTANT MEDICAL HOLDINGS, INC.
	 	 
	 	By:	/s/ Carl D. O’Connell
	 	 	Name: Carl D. O’Connell
	 	 	Title: Chief Executive Officer

 

[Signature Page to Investor Rights Agreement]

 

     

     

    

 

	 	INVESTORS:
	 	 
	 	ORBIMED ROYALTY OPPORTUNITIES II, LP
	 	 
	 	By OrbiMed ROF II LLC,
	 	its General Partner
	 	 
	 	By OrbiMed Advisors LLC,
	 	its Managing Member
	 	 	 
	 	By:	/s/  W. Carter Neild
	 	 	Name: W. Carter Neild
	 	 	Title: Member
	 	 	 
	 	ROS ACQUISITION OFFSHORE LP
	 	 
	 	By OrbiMed Advisors LLC, solely in its
	 	capacity as Investment Manager
	 	 	 
	 	By:	/s/ W. Carter Neild
	 	 	Name: W. Carter Neild
	 	 	Title: Member

 

[Signature Page to Investor Rights Agreement]

 

     

     

    

 

	 	PARK WEST FUNDS:
	 	 
	 	PARK WEST INVESTORS MASTER FUND, LIMITED
	 	 
	 	By: Park West Asset Management LLC
	 	Its: Investment Manager
	 	 
	 	By:	/s/ Grace Jimenez
	 	Name:	Grace Jimenez
	 	Title:	Chief Financial Officer
	 	 
	 	PARK WEST PARTNERS INTERNATIONAL, LIMITED
	 	 
	 	By: Park West Asset Management LLC
	 	Its: Investment Manager
	 	 
	 	By:	/s/ Grace Jimenez
	 	Name:	Grace Jimenez
	 	Title:	Chief Financial Officer
	 	 
	 	Address for Notices:
	 	 
	 	Park West Asset Management LLC
	 	900 Larkspur Landing Cir.
	 	Suite 165
	 	Larkspur, CA 94939

 

[Signature Page to Investor Rights Agreement]

 

     

     

    

 

Schedule 1

Directors

 

		·	Matthew Rizzo

		·	Michael Eggenberg

		·	Jeffrey Peters

		·	John K. Bakewell

		·	Michael Mainelli

		·	Robert McNamaraEXHIBIT 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

February 14, 2018

 

ORBIMED ROYALTY OPPORTUNITIES II, LP

ROS ACQUISITION OFFSHORE LP

c/o OrbiMed Advisors LLC,

601 Lexington Avenue, 54th Floor

New York, NY 10022 

 

TELEMETRY SECURITIES, L.L.C.

545 Fifth Avenue, 1108

New York, NY 10017

 

BRUCE FUND, INC.

Suite 2414

20 North Wacker Drive

Chicago, IL 60606

 

PARK WEST INVESTORS MASTER FUND, LIMITED

PARK WEST PARTNERS INTERNATIONAL, LIMITED

c/o Park West Asset Management LLC

900 Larkspur Landing Cir.

Suite 165

Larkspur, CA 94939

 

Ladies and Gentlemen:

 

Xtant Medical Holdings, Inc., a Delaware
corporation (the “Company”), proposes to issue to the undersigned (the “Exchange Parties”)
shares of common stock of the Company, $0.000001 par value per share (the “Common Stock”), upon the conversion
or exchange, as the case may be, of the Notes (as defined below), and pursuant to the Private Placement (as defined below), in
each case, in accordance with the terms set forth in the Restructuring and Exchange Agreement among the Company, OrbiMed Royalty
Opportunities II, LP, ROS Acquisition Offshore LP and the Consenting Noteholders parties thereto, dated January 11, 2018 (the “Restructuring
Agreement”). To induce the Exchange Parties to enter into the Restructuring Agreement and to satisfy the Company’s
obligations thereunder, the holders of the Notes will have the benefit of this registration rights agreement (this “Agreement”)
pursuant to which the Company agrees with the Exchange Parties for the benefit of the Exchange Parties and for the benefit of the
holders (the “Holders”) from time to time of the Registrable Securities (as defined below), as follows:

 

1.       Definitions.
As used in this Agreement, the following capitalized defined terms shall have the following meanings:

 

“Affiliate”
has the meaning set forth in Rule 405 under the Securities Act.

 

     

     

    

 

“Broker-Dealer”
means any broker or dealer registered as such under the Exchange Act.

 

“Business
Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized
or required by law or executive order to close or be closed.

 

“Close of
Business” means 5:00 p.m., New York City time.

 

“Closing Date”
means the date hereof.

 

“Company”
has the meaning set forth in the preamble hereto.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common Stock”
has the meaning set forth in the preamble hereto.

 

“Control”
has the meaning set forth in Rule 405 under the Securities Act, and the terms “controlling” and “controlled”
shall have meanings correlative thereto.

 

“Deferral
Period” has the meaning indicated in Section 3(i).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.

 

“Exchange
Parties” has the meaning set forth in the preamble hereto.

 

“FINRA Rules”
means the Conduct Rules and the By-Laws of the Financial Industry Regulatory Authority, Inc.

 

“Holder”
has the meaning set forth in the preamble hereto.

 

“Losses”
has the meaning set forth in Section 5(d).

 

“Majority
Holders” means, on any date, Holders of a majority of the Registrable Securities.

 

“Managing
Underwriters” means the investment bank(s) and manager(s) that administer an underwritten offering, if any, conducted
pursuant to Section 6.

 

“Notes”
means the 2015 Notes, 2016 Notes and 2017 Notes, in each case, as defined in the Restructuring Agreement.

 

“Notice and
Questionnaire” means a written notice delivered to the Company substantially in the form attached as Annex A hereto.

 

“Notice Holder”
means, on any date, any Holder that has delivered a completed Notice and Questionnaire to the Company on or before such date.

 

“Private Placement”
has the meaning set forth in the Restructuring Agreement.

 

    - 2 - 

     

    

 

“Prospectus”
means a prospectus included in the Shelf Registration Statement (including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A or Rule 430B
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Shelf Registration Statement, and all amendments and supplements thereto,
including any and all exhibits thereto and any information incorporated by reference therein.

 

“Registrable
Securities” means the Common Stock issued to the Exchange Parties pursuant to (i) the transactions described in the Restructuring
Agreement upon conversion and/or exchange of Notes, as the case may be, and (ii) the Private Placement, and, in each case, any
securities for which such shares have been exchanged, and any security issued with respect thereto upon any stock dividend, split
or similar event; provided, however, that each such security will cease to constitute Registrable Securities upon
the earliest to occur of (i) such security being sold pursuant to a registration statement that is effective under the Securities
Act; and (ii) such security ceasing to be outstanding.

 

“Restructuring
Agreement” has the meaning set forth in the preamble hereto.

 

“SEC Guidance”
means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii)
the Securities Act.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Shelf Registration
Period” has the meaning set forth in Section 2(b).

 

“Shelf Registration
Statement” means a “shelf” registration statement of the Company prepared pursuant to Section 2 that
covers the resale, from time to time pursuant to Rule 415 under the Securities Act (or any successor thereto), of some or all of
the Registrable Securities on an appropriate form under the Securities Act, including all post-effective and other amendments and
supplements to such registration statement, the related Prospectus, all exhibits thereto and all material incorporated by reference
therein (including, without limitation, the Initial Registration Statement, any New Registration Statement and any Remainder Registration
Statement).

 

“Underwriter”
means any underwriter of Registrable Securities for an offering thereof under the Shelf Registration Statement.

 

    - 3 - 

     

    

 

2.       Shelf
Registration. (a) The Company will, no later than the ninetieth (90th) day after the Closing Date, file with the Commission
a Shelf Registration Statement (which, initially, will be on Form S-1 and, as soon as the Company is eligible, will be on Form
S-3) providing for the registration of the offer and sale, from time to time on a continuous or delayed basis, of the Registrable
Securities by the Holders in accordance with the methods of distribution elected by such Holders, pursuant to Rule 415 (or any
successor thereto) under the Securities Act (the “Initial Registration Statement”) and will use its best efforts
to cause such Initial Registration Statement to become effective under the Securities Act no later than the one hundred and eightieth
(180th) day after the Closing Date; provided, that if the Commission has notified the Company that it will not review or
has no comments to such Initial Registration Statement within one hundred and ten (110) days after the Closing Date, the Company
will use its best efforts to cause such Initial Registration Statement to become effective under the Securities Act no later than
the one hundred and twentieth (120th) day after the Closing Date. Notwithstanding the registration obligations set forth in this
Section 2, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application
of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly
(i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration
Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement
(a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted
to be registered by the Commission, on Form S-3 or, if the Company is ineligible to register the Registrable Securities on Form
S-3, or such other form available to register for resale the Registrable Securities as a secondary offering; provided, however,
that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable
efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance,
including without limitation, the Securities Act Rules Compliance and Disclosure Interpretations Question 612.09. Notwithstanding
any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted
to be registered on a particular Shelf Registration Statement as a secondary offering (and notwithstanding that the Company used
diligent efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless
otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered
on such Shelf Registration Statement will first be reduced by securities to be included other than Registrable Securities, and
second be reduced by Registrable Securities applied to the Holders on a pro rata basis based on the total number of unregistered
Common Shares held by such Holders, subject to a determination by the Commission that certain Holders must be reduced first based
on the number of Common Shares held by such Holders. In the event the Company amends the Initial Registration Statement or files
a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable
efforts to file with the Commission, as promptly as allowed by the Commission or SEC Guidance provided to the Company or to registrants
of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those
Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration
Statement (the “Remainder Registration Statements”).

 

(b)       The
Company will use its best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as
required by the Securities Act, in order to permit the related Prospectus to be usable by Holders for a period (the “Shelf
Registration Period”) from the date the Shelf Registration Statement becomes effective to, and including, the date upon
which no Registrable Securities are outstanding and constitute “restricted securities” (as defined in Rule 144 under
the Securities Act).

 

    - 4 - 

     

    

 

(c)       The
Company will cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with
the applicable requirements of the Securities Act; and (ii) not to contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus,
in the light of the circumstances under which they were made) not misleading.

 

(d)       Subject
to applicable law, the Company will provide written notice to the Holders of the anticipated effective date of the Shelf Registration
Statement at least ten (10) Business Days before such anticipated effective date. Each Holder, in order to be named in the Shelf
Registration Statement at the time of its initial effectiveness, will be required to deliver a Notice and Questionnaire and such
other information as the Company may reasonably request in writing, if any, to the Company on or before the fifth (5th) day before
the anticipated effective date of the Shelf Registration Statement as provided in the notice. Subject to Section 3(i), from
and after the effective date of the Shelf Registration Statement, the Company will, as promptly as is practicable after the date
a Holder’s Notice and Questionnaire is delivered, but in no event after the tenth (10th) day after such date, (i) file with
the Commission an amendment to the Shelf Registration Statement or prepare and, if permitted or required by applicable law, file
a supplement to the Prospectus or an amendment or supplement to any document incorporated therein by reference or file any other
required document so that such Holder delivering such Notice and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus, and so that such Holder is permitted to deliver such Prospectus to purchasers
of Registrable Securities in accordance with applicable law (except that the Company will not be required to file more than one
supplement or post-effective amendment in any thirty (30) day period in accordance with this Section 2(d)(i)) and, in the
case of a post-effective amendment to the Shelf Registration Statement, the Company will use its best efforts to cause such post-effective
amendment to become effective under the Securities Act as promptly as is practicable; (ii) provide such Holder, upon request, copies
of any documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i); provided, however,
that if such Notice and Questionnaire is delivered during a Deferral Period, then the Company will so inform the Holder delivering
such Notice and Questionnaire and will take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral
Period in accordance with Section 3(i). Notwithstanding anything to the contrary herein, the Company need not name any Holder
that is not a Notice Holder as a selling securityholder in the Shelf Registration Statement or Prospectus; provided, however,
that any Holder that becomes a Notice Holder pursuant to this Section 2(d) (whether or not such Holder was a Notice Holder
at the effective date of the Shelf Registration Statement) will be named as a selling securityholder in the Shelf Registration
Statement or Prospectus in accordance with this Section 2(d).

 

3.       Registration
Procedures. The following provisions will apply in connection with the Shelf Registration Statement.

 

(a)       The
Company will:

 

(i)       furnish
to the Exchange Parties and to counsel for the Notice Holders, not less than five (5) Business Days before the filing thereof with
the Commission, a copy of the Shelf Registration Statement and each amendment thereto and each amendment or supplement, if any,
to the Prospectus (other than amendments and supplements that do nothing more than name Notice Holders and provide information
with respect thereto and other than filings by the Company under the Exchange Act) and will use its best efforts to reflect in
each such document, when so filed with the Commission, such comments as the Exchange Parties reasonably propose within three (3)
Business Days of the delivery of such copies to the Exchange Parties; and

 

    - 5 - 

     

    

 

(ii)       include
information regarding the Notice Holders and the methods of distribution they have elected for their Registrable Securities provided
to the Company in Notices and Questionnaires as necessary to permit such distribution by the methods specified therein.

 

(b)       The
Company will ensure that:

 

(i)       the
Shelf Registration Statement and any amendment thereto, and any Prospectus and any amendment or supplement thereto, comply in all
material respects with the Securities Act; and

 

(ii)       the
Shelf Registration Statement and any amendment thereto do not, when each becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

(c)       The
Company will advise the Exchange Parties, the Notice Holders and any Underwriter that has provided in writing to the Company a
telephone or email or other address for notices, and confirm such advice in writing, if requested (which notice pursuant to clauses
(ii) to (v), inclusive, below will be accompanied by an instruction to suspend the use of the Prospectus until the Company has
remedied the basis for such suspension):

 

(i)       when
the Shelf Registration Statement and any amendment thereto have been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;

 

(ii)       of
any request by the Commission for any amendment or supplement to the Shelf Registration Statement or the Prospectus or for additional
information;

 

(iii)       of
the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the institution
or threatening of any proceeding for that purpose;

 

(iv)       of
the receipt by the Company of any notification with respect to the suspension of the qualification of the Common Stock included
therein for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose; and

 

(v)       of
the happening of any event that requires any change in the Shelf Registration Statement or the Prospectus so that they do not contain
any untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

 

    - 6 - 

     

    

 

(d)       The
Company will use its best efforts to prevent the issuance of any order suspending the effectiveness of the Shelf Registration Statement
or the qualification of the securities therein for sale in any jurisdiction and, if issued, to obtain as soon as practicable the
withdrawal thereof.

 

(e)       Upon
request, the Company will furnish, in electronic or physical form, to each Notice Holder, without charge, one copy of the Shelf
Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and,
if a Notice Holder so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

 

(f)       During
the Shelf Registration Period, the Company will promptly deliver to each Exchange Party, each Notice Holder, and any sales or placement
agents or underwriters acting on their behalf, without charge, as many copies of the Prospectus (including the preliminary Prospectus,
if any) relating to the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request.
Subject to the restrictions set forth in this Agreement, the Company consents to the use of the Prospectus or any amendment or
supplement thereto by each of the foregoing in connection with the offering and sale of the Registrable Securities.

 

(g)       Before
any offering of Registrable Securities pursuant to the Shelf Registration Statement, the Company will arrange for the qualification
of the Registrable Securities for sale under the laws of such U.S. jurisdictions as any Notice reasonably requests and will maintain
such qualification in effect so long as required; provided, however, that in no event will the Company be obligated
by this Agreement to qualify to do business or as a dealer of securities in any jurisdiction where it is not then so qualified
or to take any action that would subject it to taxation or service of process in suits in any jurisdiction where it is not then
so subject. If, at any time during the Shelf Registration Period, the Registrable Securities are not “covered securities”
within the meaning of Section 18 of the Securities Act, then the Company will arrange for such qualification (subject to the proviso
of the immediately preceding paragraph) in each U.S. jurisdiction of residence of each Notice Holder.

 

(h)       Upon
the occurrence of any event contemplated by subsections (c)(ii) to (v), inclusive, above, the Company will promptly (or within
the time period provided for by Section 3(i) hereof, if applicable) prepare a post-effective amendment to the Shelf
Registration Statement or an amendment or supplement to the Prospectus or file any other required document so that the Shelf Registration
Statement and the Prospectus will not include an untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances
under which they were made) not misleading.

 

(i)       Upon
the occurrence or existence of any pending corporate development, public filings with the Commission or any other material event
that, in the reasonable judgment of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement
and the Prospectus, the Company will give notice (without notice of the nature or details of such events) to the Notice Holders
that the availability of the Shelf Registration Statement is suspended and, upon receipt of any such notice, each Notice Holder
agrees: (i) not to sell any Registrable Securities pursuant to the Shelf Registration Statement until such Notice Holder receives
copies of the supplemented or amended Prospectus provided for in Section 3(i), or until it is advised in writing by the
Company that the Prospectus may be used; and (ii) to hold such notice in confidence. Except in the case of a suspension of the
availability of the Shelf Registration Statement and the Prospectus solely as the result of filing a post-effective amendment or
supplement to the Prospectus to add additional selling securityholders therein, the period during which the availability of the
Shelf Registration Statement and any Prospectus is suspended (the “Deferral Period”) will not exceed an aggregate
of (A) thirty (30) days (or, if the Shelf Registration Statement is on Form S-1 (or any successor thereto), sixty (60) days) in
any calendar quarter; or (B) sixty (60) days (or, if the shelf registration statement is on Form S-1 (or any successor thereto),
ninety (90) days) in any calendar year.

 

    - 7 - 

     

    

 

(j)       The
Company will comply with all applicable rules and regulations of the Commission and will make generally available to its securityholders
an earnings statement (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act as soon as practicable
after the effective date of the Shelf Registration Statement and in any event no later than forty five (45) days after the end
of the twelve (12) month period (or ninety (90) days, if such period is a fiscal year) beginning with the first month of the Company’s
first fiscal quarter commencing after the effective date of the Shelf Registration Statement.

 

(k)       The
Company may require each Holder of Registrable Securities to be sold pursuant to the Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such Registrable Securities as the Company may from time
to time reasonably require for inclusion in the Shelf Registration Statement in order to comply with the Securities Act. The Company
may exclude from the Shelf Registration Statement the Registrable Securities of any Holder that unreasonably fails to furnish such
information within a reasonable time after receiving a request from the Company for such information.

 

(l)       Subject
to Section 6, the Company will enter into customary agreements (including, if requested by the Majority Holders, an underwriting
agreement in customary form that, for the avoidance of doubt, will provide for customary representations and warranties, legal
opinions, comfort letters and other documents and certifications) and take all other necessary actions in order to expedite or
facilitate the registration or the disposition of the Registrable Securities, and in connection therewith, if an underwriting agreement
is entered into, cause the same to contain customary indemnification provisions and procedures.

 

(m)       Subject
to Section 6, for persons who are or may be “underwriters” with respect to the Registrable Securities within
the meaning of the Securities Act and who make appropriate requests for information to be used solely for the purpose of taking
reasonable steps to establish a due diligence or similar defense in connection with the proposed sale of such Registrable Securities
pursuant to the Shelf Registration, the Company will:

 

(i)       make
reasonably available during business hours for inspection by the Holders, any Underwriter participating in any disposition pursuant
to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders or any such Underwriter
all relevant financial and other records and pertinent corporate documents of the Company and its subsidiaries; and

 

    - 8 - 

     

    

 

(ii)       cause
the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested
by the Holders or any such Underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement as is
customary for similar due diligence examinations.

 

(n)       In
the event that any Broker-Dealer underwrites any Registrable Securities or participates as a member of an underwriting syndicate
or selling group or “participates in an offering” (within the meaning of the FINRA Rules) thereof, whether as a Holder
or as an underwriter, placement, sales agent or broker or dealer in respect thereof, or otherwise, the Company will, upon the reasonable
request of such Broker-Dealer, comply with any reasonable request of such Broker-Dealer in complying with the FINRA Rules.

 

(o)       The
Company will use its best efforts to take all other steps necessary to effect the registration of the offer and sale of the Registrable
Securities covered by the Shelf Registration Statement.

 

4.       Registration
Expenses. The Company will bear all expenses incurred in connection with the performance of its obligations under Sections
2 and 3. The Company will reimburse the Exchange Parties and the Holders for the reasonable fees and disbursements of
one firm or counsel (which may be a nationally recognized law firm experienced in securities matters designated by the Majority
Holders) to act as counsel for the Holders in connection therewith.

 

5.       Indemnification
and Contribution.

 

(a)        The
Company agrees to indemnify and hold harmless each Holder, the directors, officers, employees, Affiliates and agents of each Holder
and each person who controls any Holder within the meaning of the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Shelf Registration Statement as originally filed or in any amendment thereof, or in any preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or caused by the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of any
preliminary Prospectus or the Prospectus, in the light of the circumstances under which they were made) not misleading, and agrees
to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the party claiming indemnification specifically for inclusion
therein.

 

    - 9 - 

     

    

 

The Company also agrees
to provide customary indemnities to, and to contribute as provided in Section 5(d) to Losses of, any underwriters of the
Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning
of the Securities Act or the Exchange Act) to the same extent as provided herein with respect to the Holders.

 

(b)       Each
Holder of securities covered by the Shelf Registration Statement (including each Exchange Party that is a Holder, in such capacity)
severally and not jointly agrees to indemnify and hold harmless the Company, each of the Company’s directors, each of the
Company’s officers who sign the Shelf Registration Statement and each person who controls the Company within the meaning
of the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each such Holder,
but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be acknowledged
by each Notice Holder that is not an Exchange Party in such Notice Holder’s Notice and Questionnaire and will be in addition
to any liability that any such Notice Holder may otherwise have.

 

(c)       Promptly
after receipt by an indemnified party under this Section 5 or notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the
indemnifying party in writing of the commencement thereof, but the failure so to notify the indemnifying party (i) will not relieve
it from liability under paragraph (a) or (b), as applicable, above unless and to the extent it has been materially prejudiced through
the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b),
as applicable, above. If any action is brought against an indemnified party and it has notified the indemnifying party thereof,
the indemnifying party will be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at
the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in
which case, the indemnifying party will not thereafter be responsible for the fees and expenses of any separate counsel, other
than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties, except as set forth
below); provided, however, that such counsel will be reasonably satisfactory to the indemnified party. Notwithstanding
the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action,
the indemnified party will have the right to employ separate counsel (including local counsel), and the indemnifying party will
bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from
or additional to those available to the indemnifying party; (iii) the indemnifying party has not employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action;
or (iv) the indemnifying party has authorized the indemnified party to employ separate counsel at the expense of the indemnifying
party. The indemnifying party will not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable
for the fees and expenses of more than one (1) separate law firm (in addition to any local counsel) for all indemnified persons.
An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include an admission of fault, culpability or a failure to act,
by or on behalf of any such indemnified party.

 

    - 10 - 

     

    

 

(d)       In
the event that the indemnity provided in paragraph (a) or (b) of this Section 5 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each applicable indemnifying party will have a several, and not joint, obligation
to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending such losses, claims, damages, liabilities or actions) (collectively “Losses”)
to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by
such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the offering of the Registrable Securities
and the Shelf Registration Statement that resulted in such Losses; provided, however, that in no case will any underwriter
be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such
underwriter under the Shelf Registration Statement that resulted in such Losses. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, then the indemnifying party and the indemnified party will contribute in such
proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party,
on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions, or alleged statements
or omissions, that resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company
will be deemed to be equal to the total net proceeds from the offering of the Notes (before deducting expenses). Benefits received
by any Holder will be deemed to be equal to the value of having the offer and sale of such Holder’s Registrable Securities
registered under the Securities Act pursuant to the Shelf Registration Statement and hereunder. Benefits received by any underwriter
will be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus
relating to the Shelf Registration Statement that resulted in such Losses. Relative fault will be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other
hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission or alleged untrue statement or omission. The parties agree that it would not be just and equitable
if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any
other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding anything
to the contrary in this Section 5(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person who controls a Holder within the meaning of the Securities Act or the Exchange
Act and each director, officer, employee, Affiliate and agent of such Holder will have the same rights to contribution as such
Holder, and each person who controls the Company within the meaning of the Securities Act or the Exchange Act, each officer of
the Company who signed the Shelf Registration Statement and each director of the Company will have the same rights to contribution
as the Company, subject in each case to the applicable terms and conditions of this Section 5(d).

 

    - 11 - 

     

    

 

(e)       The
provisions of this Section 5 will remain in full force and effect, regardless of any investigation made by or on behalf
of any Exchange Party or Holder or the Company or any of the indemnified persons referred to in this Section 5, and will
survive the sale by a Holder of securities covered by the Shelf Registration Statement.

 

6.       Underwritten
Registrations. (a) Notwithstanding anything to the contrary herein, in no event will the method of distribution of Registrable
Securities take the form of an underwritten offering without the prior written consent of the Company. Consent may be conditioned
on waivers of any of the obligations in Section 3, 4 or 5.

 

(b)       If
any Registrable Securities are to be sold in an underwritten offering, the Managing Underwriters will be selected by the Company,
subject to the prior written consent of the Majority Holders, which consent will not be unreasonably withheld.

 

(c)       No
person may participate in any underwritten offering pursuant to the Shelf Registration Statement unless such person: (i) agrees
to sell such person’s Registrable Securities on the basis reasonably provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

 

7.       No
Inconsistent Agreements. The Company has not entered into, and agrees not to enter into, any agreement with respect to its
securities that is inconsistent with the registration rights granted to the Holders herein.

 

8.       Rule
144A and Rule 144. So long as any Registrable Securities remain outstanding, the Company will file the reports required to
be filed by it under Rule 144A(d)(4) under the Securities Act and the reports required to be filed by it under the Exchange Act
in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any
Holder of Registrable Securities, make publicly available other information so long as necessary to permit sales of such Holder’s
Registrable Securities pursuant to Rules 144 and 144A of the Securities Act. The Company covenants that it will take such further
action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities Act pursuant to Rule 144 or Rule 144A (including,
without limitation, satisfying the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding
anything to the contrary in this Section 8, nothing in this Section 8 will be deemed to require the Company to register
any of its securities pursuant to the Exchange Act.

 

    - 12 - 

     

    

 

9.       Amendments
and Waivers. The provisions of this Agreement may not be amended, qualified, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Holders of
a majority of the Registrable Securities (determined on an as-converted basis); provided, however, that this Section
9 may not be amended, qualified, modified or supplemented, and waivers of or consents to departures from this Section 9
may not be given, unless the Company has obtained the written consent of each Exchange Party and each Holder.

 

10.       Notices.
All notices and other communications provided for or permitted hereunder will be made in writing by hand-delivery, first-class
mail, telex, telecopier, email or air courier guaranteeing overnight delivery:

 

(a)       if
to a Holder, at the most current address given by such holder to the Company in accordance with the provisions of the Notice and
Questionnaire.

 

(b)       if
to any Exchange Party, initially at the address thereof set forth above; and

 

(c)       if
to the Company, initially at its address set forth in the Restructuring Agreement.

 

All such notices and
communications shall be deemed to have been duly given when received.

 

11.       Remedies.
Each Holder, in addition to being entitled to exercise all rights provided to it herein or in the Restructuring Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at
law would be adequate.

 

12.       Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, their respective successors and assigns, including,
without the need for an express assignment or any consent by the Company thereto, subsequent Holders, and the indemnified persons
referred to in Section 5. The Company hereby agrees to extend the benefits of this Agreement to any Holder, and any such
Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

 

13.       Counterparts.
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together
shall constitute one and the same agreement.

 

14.       Headings.
The section headings used herein are for convenience only and shall not affect the construction or interpretation hereof.

 

15.       Applicable
Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT THE TRANSACTION CONTEMPLATED HEREBY.

 

    - 13 - 

     

    

 

16.       Severability.
In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof will not be in any way impaired or affected thereby, it being intended
that all of the rights and privileges of the parties will be enforceable to the fullest extent permitted by law.

 

17.       Common
Stock Held by the Company, Etc. Whenever the consent or approval of Holders of a specified percentage of securities is required
hereunder, securities held by the Company or its Affiliates (other than subsequent Holders thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such securities) will not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

[Remainder of Page
Intentionally Left Blank; Signature Page Follows]

 

    - 14 - 

     

    

 

	 	Very truly yours,
	 	 
	 	Company:
	 	 
	 	Xtant Medical Holdings, Inc.
	 	 
	 	By:  	/s/ Carl O’Connell
	 	Name: Carl D. O’Connell
	 	Title: Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

EXCHANGE PARTIES:

 

	 	ORBIMED ROYALTY OPPORTUNITIES II, LP 
	 	 
	 	By OrbiMed ROF II LLC,
	 	its General Partner
	 	 
	 	By OrbiMed Advisors LLC,
	 	its Managing Member
	 	 	 
	 	By:	/s/ W. Carter Neild
	 	 	Name: W. Carter Neild
	 	 	Title: Member
	 	 	 
	 	ROS ACQUISITION OFFSHORE LP
	 	 
	 	By OrbiMed Advisors LLC, solely in its
	 	capacity as Investment Manager
	 	 	 
	 	By:	/s/ W. Carter Neild
	 	 	Name: W. Carter Neild
	 	 	Title: Member

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	TELEMETRY SECURITIES, L.L.C.
	 	 	 
	 	By:	/s/ Dan Sommers
	 	 	Name: Dan Sommers
	 	 	Title: Portfolio Manager

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	BRUCE FUND, INC.
	 	 	 
	 	By:	/s/ R. Jeffrey Bruce
	 	 	Name: R. Jeffrey Bruce
	 	 	Title: Vice President, Secretary

 

[Signature Page to Registration Rights Agreement]

 

     

     

    

 

	 	PARK WEST INVESTORS MASTER FUND, LIMITED
	 	 
	 	By: Park West Asset Management LLC
	 	Its: Investment Manager
	 	 	 
	 	By:	/s/ Grace Jimenez
	 	 	Name: Grace Jimenez
	 	 	Title: Chief Financial Officer
	 	 	 
	 	PARK WEST PARTNERS INTERNATIONAL, LIMITED
	 	 
	 	By: Park West Asset Management LLC
	 	Its: Investment Manager
	 	 	 
	 	By:	 /s/ Grace Jimenez
	 	 	Name: Grace Jimenez
	 	 	Title: Chief Financial Officer

 

[Signature Page to Registration Rights Agreement]

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