Document:

Execution Version

 

FOURTEENTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

This FOURTEENTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made and entered into as of May
11, 2017 (the “Amendment Closing Date”) by and among Bacterin
International, Inc., a Nevada corporation (the “Borrower”), ROS
acquisition offshore lp, a Cayman Islands Exempted Limited Partnership (“ROS”), ORBIMED ROYALTY
OPPORTUNITIES II, LP, a Delaware limited partnership (“Royalty Opportunities”), and, in their capacity as
Guarantors under the Credit Agreement (as defined below), XTANT MEDICAL HOLDINGS, INC., a Delaware corporation (“Holdings”),
X-SPINE SYSTEMS, INC., an Ohio corporation (“X-Spine” or the “Additional Delayed Draw Borrower”)
and XTANT MEDICAL, INC., a Delaware corporation (“Xtant” and, along with Holdings and X-Spine, collectively,
the “Guarantors”).

WHEREAS, the
Borrower, ROS and Royalty Opportunities are party to that certain Amended and Restated Credit Agreement, dated as of July 27, 2015,
as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of March 31, 2016, that certain Second
Amendment to Amended and Restated Credit Agreement, dated as of May 25, 2016, that certain Third Amendment to Amended and Restated
Credit Agreement, dated as of June 30, 2016, that certain Fourth Amendment to Amended and Restated Credit Agreement, dated as of
July 29, 2016, that certain Fifth Amendment to the Amended and Restated Credit Agreement, dated as of August 12, 2016, that certain
Sixth Amendment to the Amended and Restated Credit Agreement, dated as of September 27, 2016, that certain Seventh Amendment to
the Amended and Restated Credit Agreement, dated as of December 31, 2016, that certain Eighth Amendment to Amended and Restated
Credit Agreement, dated as of January 13, 2017, that certain Ninth Amendment to Amended and Restated Credit Agreement, dated as
of January 31, 2017, that certain Tenth Amendment to Amended and Restated Credit Agreement, dated as of February 14, 2017, that
certain Eleventh Amendment to Amended and Restated Credit Agreement, dated as of February 28, 2017, that certain Twelfth Amendment
and Waiver to Amended and Restated Credit Agreement, dated as of March 31, 2017, and that certain Thirteenth Amendment to Amended
and Restated Credit Agreement, dated as of April 30, 2017 (the “Credit Agreement”), pursuant to which (i) ROS
and Royalty Opportunities, as Lenders under the Credit Agreement, have extended credit to the Borrower on the terms set forth therein
and (ii) each Lender has appointed ROS as the administrative agent (the “Administrative Agent”) for the Lenders;

WHEREAS, the
Guarantors and the Administrative Agent entered into an Amended and Restated Guarantee, dated as of July 31, 2015 and supplemented
on September 11, 2015, pursuant to which the Guarantors have agreed to guarantee the Obligations of the Borrower under the Credit
Agreement;

WHEREAS, pursuant
to Section 11.1 of the Credit Agreement, the Credit Agreement may be amended by an instrument in writing signed by each of the
Borrower and the Administrative Agent (acting on behalf of the Lenders);

    	 

     

    

WHEREAS, the
Borrower and the Lenders desire to amend certain provisions of the Credit Agreement as provided in this Amendment.

NOW, THEREFORE,
in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1.                 
Definitions; Loan Document. Capitalized terms used herein without definition shall have the meanings assigned
to such terms in the Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement
and the other Loan Documents.

2.                 
Amendments.

(a)              
Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions in alphabetical order:

“Additional
Delayed Draw Borrower” means X-Spine Systems, Inc., an Ohio corporation.

“Additional
Delayed Draw Closing Date” means the date of the making of each Additional Delayed Draw Loan hereunder.

“Additional
Delayed Draw Commitment Amount” means $15,000,000, in the aggregate for all Lenders, allocated $9,574,950 to ROS and
$5,425,050 to Royalty Opportunities.

“Additional
Delayed Draw Loan” is defined in Section 2.6.

“Closing
Budget” means the initial 13-week cash flow budget provided by the Borrower to the Administrative Agent in conjunction
with the closing of the Fourteenth Amendment hereto.

“Weekly
Budget” is defined in Section 7.1(n).

(b)              
The following definitions in Section 1.1 of the Credit Agreement are hereby amended and restated in their entirety as follows:

“Commitment”
means (i) the Initial Commitment Amount, (ii) the Tranche A Commitment and (iii) the Additional Delayed Draw Commitment Amount.

“Loans”
means (i) the Continuing Loans, (ii) the New Loans, (iii) the Tranche A Loan and (iv) the Additional Delayed Draw Loans.

    	 	-2-	 

     

    

(c)              
Article II of the Credit Agreement is hereby amended by adding the following as a new Section 2.6:

Section
2.6Additional Delayed Draw Loans.

(a)       On
the terms and subject to the conditions of this Agreement, each Lender may, in its sole discretion, make term loans (each, an “Additional
Delayed Draw Loan” and collectively the “Additional Delayed Draw Loans”) to the Additional Delayed
Draw Borrower on each Additional Delayed Draw Closing Date in an amount determined by each Lender (but in no event shall the aggregate
amount of all such Additional Delayed Draw Loans exceed the Additional Delayed Draw Commitment Amount).

(b)       The
Additional Delayed Draw Borrower may irrevocably request that an Additional Delayed Draw Loan be made by delivering to the Administrative
Agent a Loan Request on or before 1:00 p.m. Eastern Time on a day that is at least two Business Days prior to each Additional Delayed
Draw Closing Date (or such other time as may be agreed by the Administrative Agent), which Loan Request shall specify the amount
of Additional Delayed Draw Loans requested by the Additional Delayed Draw Borrower. Unless otherwise agreed by the Administrative
Agent, such Loan Request shall be made in accordance with the most recent Weekly Budget (or the Closing Budget, if such Additional
Delayed Draw Loan is made prior to the delivery of the first Weekly Budget).

(c)       The
Lenders may, in their sole collective discretion, on each Additional Delayed Draw Closing Date and subject to the terms and conditions
hereof, make the Additional Delayed Draw Loan in the amount determined by the Lenders (and pro rata in accordance to their share
of the Additional Delayed Draw Commitment Amount), but not greater than the amount requested in the applicable Loan Request, available
to the Additional Delayed Draw Borrower, as applicable, by wire transfer to the account the Additional Delayed Draw Borrower, as
applicable, shall have specified in the applicable Loan Request.

(d)       The
Additional Delayed Draw Borrower shall become a “Borrower” under this Agreement and each other Loan Document with the
same force and effect as if originally named as a Borrower therein, and each reference to the “Borrower” under this
Agreement and each other Loan Document shall also be a reference to the Additional Delayed Draw Borrower.

(d)              
Section 3.6 of the Credit Agreement is hereby amended by deleting the last sentence from such Section 3.6 in its entirety
and inserting the following as the last sentence thereof:

“Notwithstanding the foregoing,
interest accrued on the Loans for the Fiscal Quarters ended on December 31, 2016 and March 31, 2017 and otherwise required to be
paid in cash on January 2, 2017 and March 31, 2017, respectively, shall instead be required to be paid in cash on June 30, 2017,
plus interest accrued on such interest from January 2, 2017 and March 31, 2017, as applicable, to the date of payment thereof at
a rate equal to the Applicable Margin plus the higher of (i) the LIBO Rate for the Fiscal Quarter ended on December 31, 2016 or
the Fiscal Quarter ended on March 31, 2017, as applicable, and (ii) 1.00%.”

    	 	-3-	 

     

    

(e)              
Article V of the Credit Agreement is hereby amended by adding the following as a new Section 5.2:

Section
5.2Conditions to Additional Delayed Draw Loans. The making of each Additional Delayed Draw Loan by the Lenders shall
be in the sole and absolute discretion of the Lenders, collectively, and subject to the satisfaction (or waiver in writing by each
Lender) of each of the following conditions precedent and such other conditions as each Lender may require in its sole and absolute
discretion:

(a)       The
Administrative Agent shall have received a Closing Certificate, dated as of each Additional Delayed Draw Closing Date, as the case
may be, and duly executed and delivered by the Chief Restructuring Officer of Holdings as well as by the Additional Delayed Draw
Borrower, the Borrower and the Guarantors, in which certificate such parties shall agree and acknowledge that the statements made
therein shall be deemed to be true and correct representations and warranties of such parties as of such date, and, at the time
such certificate is delivered, such statements shall in fact be true and correct, and such statements shall include that (i) the
representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all respects (in the
case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the
case of any representation or warranty not qualified by materiality or Material Adverse Effect), before and after giving effect
to the making of the Additional Delayed Draw Loan and to the application of the proceeds thereof, as though made on and as of the
date hereof, (ii) no Default shall have then occurred and be continuing, or would result from the Loan to be advanced on the Additional
Delayed Draw Closing Date, as the case may be, and (iii) all of the conditions set forth in this Section 5.2 have been satisfied.
All documents and agreements required to be appended to the Closing Certificate, if any, shall be in form and substance satisfactory
to each Lender in its sole and absolute discretion, shall have been executed and delivered by the requisite parties, and shall
be in full force and effect.

(b)       Holdings,
the Additional Delayed Draw Borrower, the Borrower and the Guarantors shall have delivered to the Administrative Agent the Weekly
Budget (or the Closing Budget, if such Additional Delayed Draw Loan is made prior to the delivery of the first Weekly Budget);
it being understood that the Lenders will not make an Additional Delayed Draw Loan to the Additional Delayed Draw Borrower if such
Weekly Budget (or Closing Budget) shows a projected cash balance for the upcoming two-week period of $500,000 or greater.

(c)       All
documents executed or submitted pursuant hereto by or on behalf of Holdings, the Borrower, the Additional Delayed Draw Borrower
or any Subsidiary shall be satisfactory in form and substance to the Administrative Agent and its counsel, and the Administrative
Agent and its counsel shall have received all information, approvals, resolutions, opinions, documents or instruments as the Administrative
Agent or its counsel may reasonably request.

    	 	-4-	 

     

    

(f)               
Section 7.1 is hereby amended by (i) deleting “and” at the end of Section 7.1(l), (ii) replacing the period
at the end of Section 7.1(m) with “; and” and (iii) adding the following as new Section 7.1(n):

(n)       by
1:00 p.m. Eastern Time on each Wednesday, commencing on May 10, 2017, a weekly budget, in form and substance satisfactory to each
Lender in its sole discretion (the “Weekly Budget”), including (i) a cash flow projection for the following
13 weeks (inclusive of the current week), (ii) the prior week’s financial performance, including as compared to the projection
of such week’s financial performance included in the Closing Budget and most recent Weekly Budget delivered pursuant hereto,
(iii) the prior week’s sales results, including as compared to the sales results in the prior Fiscal Quarter and the prior
year; (iv) a borrowing base certificate, in substantially the same form as the borrowing base certificates delivered under the
SVB Loan Agreement, including summary accounts receivable and accounts payable agings and inventory certificates, and (v) any additional
supporting documentation that may be requested by each Lender in its sole and absolute discretion.

3.                 
Conditions to Effectiveness of Amendment. This Amendment shall become effective upon the satisfaction (or
waiver in writing by each Lender) of each of the following conditions precedent:

(a)              
receipt by the Borrower, the Additional Delayed Draw Borrower, the Guarantors, the Administrative Agent and the Lenders
of a counterpart signature of the others to this Amendment duly executed and delivered by each of the Borrower, the Additional
Delayed Draw Borrower, the Guarantors, the Administrative Agent and the Lenders;

(b)              
the hiring by Holdings of a Chief Restructuring Officer acceptable to each Lender in its sole and absolute discretion (the
“CRO”), reporting directly to the special restructuring committee of the board of directors of Holdings, to
(i) oversee all aspects of daily and weekly cash flows, including both receivables and payables management (ii) be granted sole
approval rights over all cash disbursements and (iii) develop and ensure compliance with the Weekly Budget;

(c)              
receipt by the Administrative Agent of the Closing Budget in a form acceptable to the Lenders, collectively, in their sole
and absolute discretion;

(d)              
receipt by the Administrative Agent of all notices, certificates, and other documentation provided by the Borrower or any
of its Affiliates, or any of its or their officers or directors, to Silicon Valley Bank pursuant to the SVB Loan Agreement since
April 1, 2017, including any borrowing base certificates, summary accounts receivable and accounts payable agings, and inventory
certificates;

(e)              
receipt by the Administrative Agent of a payoff letter from Silicon Valley Bank, in form and substance satisfactory to each
Lender in its sole and absolute discretion;

(f)               
receipt by the Administrative Agent of a Secretary’s Certificate, with respect to the Borrower, the Additional Delayed
Draw Borrower and the Guarantors, in substantially the form delivered on the Restatement Date, in each case attaching resolutions
of each such Person’s Board of Directors (or other managing body, in the case of other than a corporation) then in full force
and effect authorizing the execution, delivery and performance of this Amendment and the transactions contemplated hereby;

    	 	-5-	 

     

    

(g)              
receipt by the Administrative Agent of a copy of a good standing certificate for each of the Borrower, the Additional
Delayed Draw Borrower and the Guarantors, dated within 30 days of the date hereof, from the jurisdiction of formation for each
such Person; and

(h)              
receipt by the Administration Agent of an opinion of counsel to the Borrower, the Additional Delayed Draw Borrower and the
Guarantors, in form and substance reasonably satisfactory to the Lenders in their sole discretion.

4.                 
Joinder of Additional Delayed Draw Borrower. By executing and delivering this Amendment, the Additional Delayed
Draw Borrower hereby agrees to become a “Borrower” under the Credit Agreement and each other Loan Document with the
same force and effect as if originally named as a Borrower therein and agrees to be bound by all the terms and conditions therein.

5.                 
Expenses. The Borrower agrees to pay on demand all expenses of the Administrative Agent (including, without
limitation, the fees and out-of-pocket expenses of Covington & Burling LLP, counsel to the Administrative Agent) incurred in
connection with the Administrative Agent’s review, consideration and evaluation of this Amendment, including the rights and
remedies available to it in connection therewith, and the negotiation, preparation, execution and delivery of this Amendment.

6.                 
Representations and Warranties. The Borrower, the Additional Delayed Draw Borrower and the Guarantors represent
and warrant to each Lender as follows:

(a)              
After giving effect to this Amendment, the representations and warranties of the Borrower, the Additional Delayed Draw Borrower
and the Guarantors contained in the Credit Agreement or any other Loan Document shall, (i) with respect to representations and
warranties that contain a materiality qualification, be true and correct in all respects on and as of the date hereof, and (ii)
with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material
respects on and as of the date hereof, and except that the representations and warranties limited by their terms to a specific
date shall be true and correct as of such date.

(b)              
Before and after giving effect to this Amendment, no Default or Event of Default under the Credit Agreement has occurred
or will occur or be continuing.

(c)              
(i) Each of the Borrower, the Additional Delayed Draw Borrower and the Guarantors has taken all necessary action to authorize
the execution, delivery and performance of this Amendment; (ii) this Amendment has been duly executed and delivered by each such
Person and constitutes each such Person’ legal, valid and binding obligation, enforceable in accordance with its terms (except,
in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally and by principles of equity), and (iii) no authorization or other action by, and no notice to
or filing with, any Governmental Authority or other Person is required for the due execution, delivery or performance by any such
Person of this Amendment.

    	 	-6-	 

     

    

7.                 
No Implied Amendment or Waiver. Except as expressly set forth in this Amendment, this Amendment shall not,
by implication or otherwise, limit, impair, constitute a waiver of or otherwise affect any rights or remedies of the Administrative
Agent or the Lenders under the Credit Agreement or the other Loan Documents, or alter, modify, amend or in any way affect any of
the terms, obligations or covenants contained in the Credit Agreement or the other Loan Documents, all of which shall continue
in full force and effect. Nothing in this Amendment shall be construed to imply any willingness on the part of the Administrative
Agent or the Lenders to agree to or grant any similar or future amendment, consent or waiver of any of the terms and conditions
of the Credit Agreement or the other Loan Documents.

8.                 
Reaffirmation of Security Interests. The the Borrower, the Additional Delayed Draw Borrower and the Guarantors
each individually (i) affirms that each of the security interests and liens granted in or pursuant to the Loan Documents are valid
and subsisting and (ii) agrees that this Amendment and the amended and restated Note shall in no manner impair or otherwise adversely
affect any of the security interests and liens granted in or pursuant to the Loan Documents.

9.                 
Reaffirmation of Guarantee. Each Guarantor (a) acknowledges and consents to all of the terms and conditions
of this Amendment, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Amendment and all documents
executed in connection herewith do not operate to reduce or discharge the Guarantor’s obligations under the Loan Documents.

10.             
Waiver and Release. TO INDUCE THE ADMINISTRATIVE AGENT, ACTING ON BEHALF OF THE LENDERS, TO AGREE TO THE TERMS
OF THIS AMENDMENT, THE BORROWER, THE ADDITIONAL DELAYED DRAW BORROWER AND THE GUARANTORS AND THEIR AFFILIATES (COLLECTIVELY, THE
RELEASING PARTIES”) REPRESENT AND WARRANT THAT AS OF THE DATE HEREOF THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS
OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO THEIR OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH
THEY:

(a)              
WAIVE ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING
PRIOR TO THE DATE HEREOF; AND

(b)              
FOREVER RELEASE, RELIEVE, AND DISCHARGE THE ADMINISTRATIVE AGENT, THE LENDERS, THEIR OFFICERS, DIRECTORS, SHAREHOLDERS,
MEMBERS, PARTNERS, PREDECESSORS, SUCCESSORS, ASSIGNS, ATTORNEYS, ACCOUNTANTS, AGENTS, EMPLOYEES, AND REPRESENTATIVES (COLLECTIVELY,
THE “RELEASED PARTIES”), AND EACH OF THEM, FROM ANY AND ALL CLAIMS, LIABILITIES, DEMANDS, CAUSES OF ACTION, DEBTS,
OBLIGATIONS, PROMISES, ACTS, AGREEMENTS, AND DAMAGES, OF WHATEVER KIND OR NATURE, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED,
CONTINGENT OR FIXED, LIQUIDATED OR UNLIQUIDATED, MATURED OR UNMATURED, WHETHER AT LAW OR IN EQUITY, WHICH THE RELEASING PARTIES
EVER HAD, NOW HAVE, OR MAY, SHALL, OR CAN HEREAFTER HAVE, DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY BASED UPON, CONNECTED
WITH, OR RELATED TO MATTERS, THINGS, ACTS, CONDUCT, AND/OR OMISSIONS AT ANY TIME FROM THE BEGINNING OF THE WORLD THROUGH AND INCLUDING
THE DATE HEREOF, INCLUDING WITHOUT LIMITATION ANY AND ALL CLAIMS AGAINST THE RELEASED PARTIES ARISING UNDER OR RELATED TO THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

    	 	-7-	 

     

    

(c)              
IN CONNECTION WITH THE RELEASE CONTAINED HEREIN, THE RELEASING PARTIES ACKNOWLEDGE THAT THEY ARE AWARE THAT THEY MAY HEREAFTER
DISCOVER CLAIMS PRESENTLY UNKNOWN OR UNSUSPECTED, OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH THEY KNOW OR BELIEVE TO
BE TRUE, WITH RESPECT TO THE MATTERS RELEASED HEREIN. NEVERTHELESS, IT IS THE INTENTION OF THE RELEASING PARTIES, THROUGH THIS
AGREEMENT AND WITH ADVICE OF COUNSEL, FULLY, FINALLY, AND FOREVER TO RELEASE ALL SUCH MATTERS, AND ALL CLAIMS RELATED THERETO,
WHICH DO NOW EXIST, OR HERETOFORE HAVE EXISTED. IN FURTHERANCE OF SUCH INTENTION, THE RELEASES HEREIN GIVEN SHALL BE AND REMAIN
IN EFFECT AS A FULL AND COMPLETE RELEASE OR WITHDRAWAL OF SUCH MATTERS NOTWITHSTANDING THE DISCOVERY OR EXISTENCE OF ANY SUCH ADDITIONAL
OR DIFFERENT CLAIMS OR FACTS RELATED THERETO.

(d)              
THE RELEASING PARTIES COVENANT AND AGREE NOT TO BRING ANY CLAIM, ACTION, SUIT, OR PROCEEDING AGAINST THE RELEASED PARTIES,
DIRECTLY OR INDIRECTLY, REGARDING OR RELATED IN ANY MANNER TO THE MATTERS RELEASED HEREBY, AND FURTHER COVENANT AND AGREE THAT
THIS AGREEMENT IS A BAR TO ANY SUCH CLAIM, ACTION, SUIT, OR PROCEEDING.

(e)              
THE RELEASING PARTIES REPRESENT AND WARRANT TO THE RELEASED PARTIES THAT THEY HAVE NOT HERETOFORE ASSIGNED OR TRANSFERRED,
OR PURPORTED TO ASSIGN OR TRANSFER, TO ANY PERSON OR ENTITY ANY CLAIMS OR OTHER MATTERS HEREIN RELEASED.

11.             
Counterparts; Governing Law. This Amendment may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of such when so executed and delivered shall be an original, but all of such counterparts
shall together constitute but one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment
by fax transmission or other electronic mail transmission (e.g., “pdf” or “tif”) shall be effective as
delivery of a manually executed counterpart of this Amendment. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK).

[Remainder
of Page Intentionally Left Blank]

    	 	-8-	 

     

    

IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year
first above written.

	 	BACTERIN INTERNATIONAL, INC.,
	 	as the Borrower
	 	 
	 	 
	 	By:  /s/ John Gandolfo                    
	 	Name:  John Gandolfo
	 	Title:    Secretary
	 	 
	 	 
	 	XTANT MEDICAL HOLDINGS, INC.,
	 	(fka: Bacterin International Holdings, Inc.)
	 	as a Guarantor
	 	 
	 	 
	 	By:  /s/ John Gandolfo                    
	 	Name:  John Gandolfo
	 	Title:    Secretary
	 	 
	 	 
	 	X-SPINE SYSTEMS, INC.,
	 	as a Guarantor and the Additional Delayed Draw Borrower
	 	 
	 	 
	 	By:  /s/ John Gandolfo                     
	 	Name:  John Gandolfo
	 	Title:    Secretary
	 	 
	 	 
	 	XTANT MEDICAL, INC.,
	 	as a Guarantor
	 	 
	 	 
	 	By:  /s/ John Gandolfo                    
	 	Name:  John Gandolfo
	 	Title:    Secretary
	 	 

 

Signature Page to Fourteenth Amendment to
A&R Credit Agreement

 

    	 

     

    

 

	 	ROS Acquisition Offshore LP,

as a Lender and as the Administrative Agent
	 	 
	 	By OrbiMed Advisors LLC, solely in its
	 	capacity as Investment Manager
	 	 
	 	By:  /s/
    W. Carter Neild                   
	 	Name: W. Carter Neild
	 	Title:    Member
	 	 
	 	 
	 	 
	 	ORBIMED ROYALTY OPPORTUNITIES II, LP,

as a Lender 
	 	 
	 	By OrbiMed ROF II LLC,
	 	its General Partner
	 	By OrbiMed Advisors LLC,
	 	its Managing Member
	 	 
	 	 
	 	By:  /s/ W. Carter Neild                    
	 	Name: W. Carter Neild
	 	Title:    Member

 

Signature Page to Fourteenth Amendment to
A&R Credit AgreementAurora
Management Partners Inc.

112 South Tryon St. Ste 1770

Charlotte, NC 28284

O: 704-377-6010

C: 828-638-5744

f: 828-324-6518

www.auroramp.com

 

 

 

May 8, 2017

 

Mr. Carl O’ Connell

Chief Executive Officer

Xtant Medical Holdings Inc.

664 Cruiser Lane

Belgrade MT 59714

 

Dear Mr. O’Connell

 

This letter along with the attached Schedules
A and B (this “Agreement”) set forth the agreement between Xtant Medical Holdings, Inc. (the “Company”),
on the one hand, and Aurora Management Partners Inc. (“Aurora”), on the other, (the Company and Aurora each,
a “Party”) under which Aurora agrees to provide personnel to serve as the Company’s Chief Restructuring
Officer, and, if the Company and Chief Restructuring Officer deem appropriate, Deputy Restructuring Officers.

 

Aurora will provide David Baker to serve as
the Company’s Chief Restructuring Officer (the “CRO”) and Wayne Tanner as a Deputy Restructuring Officer.
The CRO may also designate additional Aurora professionals as Deputy Restructuring Officers to further fulfill the obligations
of this Agreement.

 

In completing this assignment, the CRO and
Aurora personnel assisting on this engagement will report to the special restructuring committee of the Board of Directors of the
Company and will provide periodic updates on progress made in fulfilling the scope of services.

 

In its capacity as the CRO, Aurora will have
the authority during this engagement to discuss directly with the Company’s lenders, the Company’s business, finances
and operations and other matters that come to the attention of the CRO.

 

Scope of Services. Aurora will
provide services to fulfill the CRO role as defined below:

		1.	Provide the services of Chief Restructuring Officer (CRO), which
would be equal to the services typically provided by the office of the chief operating officer, and Deputy Restructuring Officers
(CROs) to assist the CRO;

		2.	Assist with the day-to-day operations of the Company;

		3.	Assist the Company in implementation of the Operating Business Plan,
cash flows, budgets and any other financial work deemed necessary to evaluate the Business Plan regarding any proposed ongoing
operations;

		4.	Oversee all aspects of daily and weekly cash flows, including both
receivables and payables management;

 

    	 

     

    

 

		5.	The CRO will be granted sole approval rights over all cash disbursements;

		6.	Develop and ensure compliance with any required Company weekly budgets,
including but not limited to cash flow projections, prior week’s financial performance, prior week’s sales results,
and calculations of the aggregate amount borrowed and to be borrowed under the indebtedness arrangements;

		7.	Assist with the Company’s Capital Infusion and other debt and
equity transactions to maximize compliance with the Company’s business plan;

		8.	Manage the development, evaluation, negotiation, and execution of
any restructuring, debt or equity transactions, liquidation or sale transaction;

		9.	Negotiate with existing lenders, creditors, and other parties in
interest in the implementation of a chosen transaction; 

		10.	Provide timely updates to the Company’s directors and lender’s
and supplement with written materials and schedules as needed; and

		11.	All other items as agreed from time to time between the Company and
Aurora.

Compensation. The compensation for work
performed will be based on Aurora’s hourly rates as noted in Schedule A. Invoices will include detailed descriptions
of the work performed for the period covered. Invoices will be rendered weekly for work performed during the seven-day period of
the prior week. Each invoice is due via wire transfer within three (3) days of presentation by Aurora. Aurora’s fees are
not contingent on the outcome of the matters. A normal and customary initial retainer in the amount of $50,000 will be requested
before work commences. This retainer shall remain in place until completion of work and shall not be offset against Aurora weekly
billings. The remaining retainer shall be returned to the Company upon completion of the engagement.

 

Expenses. Aurora’s invoices will
also include billings for all customary out-of-pocket expenses incurred by Aurora, billed at the actual cost incurred, and such
expenses shall be reimbursed by the Company on a weekly basis.

 

The Parties further agree:

 

Indemnification; Contribution; Limitation
of Liability. In connection with engagements of the type covered by this Agreement, Aurora requires the client to provide rights
to indemnification and contribution, and a limitation of liability. Therefore, by signing this Agreement, the Company agrees to
all provisions contained in Schedule B attached hereto, which provisions are expressly incorporated herein by this reference.

 

Term; Termination. The term of this
Agreement shall commence as of May XX, 2017, and the term continues until the engagement is completed, or earlier if the engagement
is terminated by either Party. This Agreement may be terminated by either Party, in its sole discretion, for any reason. The termination
is effective immediately upon the other Party’s receipt of written notice of the termination. Upon any termination of this
Agreement, Aurora shall be entitled to all fees and expenses incurred pursuant to this Agreement prior to the Party’s receipt
of such notice, and all such fees and expenses will be immediately due and payable by the Company; however, this paragraph does
not limit any payment obligations of the Company under this Agreement.

 

    	 	 	2

     

    

Client Cooperation; Reliance on Client’s
Information. The Company acknowledges and agrees that the ability of Aurora to perform the engagement hereunder requires the
full cooperation and assistance by the Company and its personnel. The Company therefore agrees to furnish to Aurora all information,
documents and other materials requested by Aurora and to make available to Aurora for meetings, conference calls and otherwise
all personnel identified by Aurora. The Company will enable Aurora to receive on a timely basis all information requested by Aurora
related to the engagement under this Agreement. The Company acknowledges and agrees that Aurora, in performance of the engagement
hereunder, will be relying on the truth, completeness and accuracy of all written documentation delivered and the verbal communications
made by the Company and its representatives, to Aurora.

 

Confidentiality. Aurora agrees to keep
all sensitive information pertaining to the Company confidential and not to disclose to third parties such information (to the
extent it has not become public without regard to disclosure by Aurora), absent the authorization of the Company. If Aurora receives
a subpoena or other court process compelling disclosure of any information pertaining to the engagement under this Agreement, Aurora
will provide the Company as much notice as is practicable in the circumstances so as to allow the Company to attempt to preclude
or condition the disclosure of any confidential information.

 

Independent Contractor Relationship.
Aurora shall serve as an independent contractor to the Company in rendering its services under this Agreement. This Agreement does
not create, and shall not be construed to create, a relationship of principal/agent, joint venture, partnership, employer/employee,
master/servant, or any comparable relationship, as between Aurora and the Company, and the Parties expressly deny the existence
of any such relationship.

 

Income Tax. The Company will not pay
any income taxes on account of Aurora. Nor will the Company be required to withhold any monies from the compensation of Aurora
for tax purposes.

 

Governing Law; Right to Attorneys’
Fees. The laws of the State of North Carolina shall govern this Agreement and any controversy arising under it, without regard
to conflicts of laws principles. The prevailing party in any dispute arising under this Agreement shall be entitled to recover
from the other all reasonable legal fees and costs, and the costs of any experts, incurred for or in any lawsuit on the dispute.

 

Mandatory Mediation. Prior to the commencement
of any court action by one Party against the other, any dispute or claim arising between them out of this Agreement or out of any
resulting transaction must be submitted to mediation. The mediation shall be conducted by one (1) mediator whose selection shall
be agreed to in good faith by both Parties. The mediation shall be held in Charlotte, NC. The fees and expenses of the mediation
service and/or mediator shall be shared equally between the Parties, and paid in advance to the extent required by the service
and/or mediator. The Parties agree to exercise their best efforts, and attempt in good faith, to resolve all disputes in such mediation.
For any dispute or claim to which this paragraph applies, should a Party commence court action against the other without first
attempting to resolve the dispute through such a mediation, or refuse to mediate after a request by the other has been made under
this paragraph, such Party will be precluded from any recovery of attorneys’ fees and/or expenses, whether recovery is based
on applicable law or this Agreement.

 

    	 	 	3

     

    

Waiver of Jury Trial. Each of the Parties
to this Agreement hereby waives any right to a jury trial with respect to any claim, action, suit or proceeding made or brought
by one of the Parties against the other in connection with or arising under this Agreement.

 

Conflicts of Interest. Nothing contained
in this Agreement or otherwise shall diminish or impair the right of Aurora to accept engagements, directly or indirectly, from
the Company’s lender(s) or from other professionals or other third parties, provided such engagements do not involve the
relationship of the lender(s), the other professionals or the other third parties, with the Company.

 

Assignment and Modification. This Agreement
may not be waived, amended, modified or assigned, in any way, in whole or in part, including by operation of law, without the prior
written consent of both Parties.

 

Entire Agreement. The Agreement constitutes
the full and entire understanding and agreement among the Parties with respect to the subject matter hereof and supersedes any
and all prior agreements, arrangements and understandings, both written and oral, with respect to the subject matter hereof.

 

Counterparts. This Agreement may be
executed in multiple counterparts, each of which together shall be deemed an original, but all of which together shall constitute
one and the same Agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

Headings. Headings in this Agreement
are set forth for convenience only and shall not be used to interpret or construe its provisions.

 

Authority. The undersigned represent
that they have authority to enter into the Agreement on behalf of their respective Parties.

 

All communications to Aurora should be directed
to:

 

Mr. David M. Baker, CTP

Aurora Management Partners Inc.

112 South Tryon Street, Suite 1770

Charlotte, NC 28284

Phone: (828) 638-5744 (direct)

Email: dbaker@auroramp.com

 

Thank you for allowing Aurora the opportunity
to assist you. If the Company agrees to the terms of this Agreement, please sign below and return the signature to us via facsimile
or electronic copy, retaining the original for your file.

 

    	 	 	4

     

    

IN WITNESS, THEREOF, the Parties hereto have
caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first written above.

 

 

AURORA MANAGEMENT PARTNERS INC.

 

	By:	 /s/ David M. Baker	 
	 	David M. Baker, CTP	 
	 	Managing Partner	 
	 	 	 
	 	Dated:	 5/8/17	 

 

 

Xtant Medical Holdings, Inc.

 

	By:	 /s/ Carl O’ Connell	 
	 	Carl O’ Connell	 
	 	Chief Executive Officer	 
	 	 	 
	 	Dated:	 5/8/17	 

 

    	 	 	5

     

    

SCHEDULE A

 

 

AURORA MANAGEMENT PARTNERS INC. HOURLY RATES

 

 

	Director through Managing Partner	 	$	350-695	 
	Consultant/Senior Consultant	 	$	250-350	 
	Analysts	 	$	175-250	 
	Administrative	 	$	85	 

 

Chargeable rates are subject to change effective
January 1 of each year, upon advance written notice to the Company. Travel time is invoiced at 50% of stated rates.

 

As discussed, Aurora will charge fees at rates
above not to exceed $125,000 per month plus travel expenses to the Company for the scope of work described and anticipated for
this type of engagement.

 

    	 	 	6

     

    

SCHEDULE B

 

Unless otherwise noted, all capitalized terms
used below shall have the meanings set forth above in the Agreement.

 

Indemnification; Reimbursement. As a
material part of the consideration for the agreement by Aurora to provide services under the Agreement, the Company agrees:

 

(i)       to
indemnify and hold harmless Aurora and its affiliates, and their respective past, present and future directors, officers, shareholders,
partners, members, employees, agents, representatives, advisors, consultants, analysts, subcontractors and controlling persons
(collectively, the “Indemnified Parties”), to the fullest extent that applicable law permits, from and against any
and all losses, claims, damages or liabilities (or actions in respect thereof), joint or several, (A) arising out of or based on
any untrue statement (or alleged untrue statement) of any material fact contained in materials or any other information (written
or oral) provided to any third party by or on behalf of the Company, or the omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary in order to make the statements therein not misleading, or (B) otherwise arising
out of and/or relating to the Agreement, any transaction or proposed transaction, or any actions taken or omitted to be taken by
an Indemnified Party or the Company in connection with the Agreement, however, the Company shall not be liable under clause (i)(B)
for any loss, claim, damage or liability finally judicially determined by a court of competent jurisdiction to have resulted solely
from the willful misconduct or gross negligence by such Indemnified Party; and

 

(ii)       to
reimburse each Indemnified Party for all expenses (including, without limitation, the reasonable fees and expenses of counsel)
as they are incurred in connection with investigating, preparing, pursuing, defending, settling or compromising any action, suit,
dispute, inquiry, investigation or proceeding, pending or threatened, brought by or against any person (including, without limitation,
any shareholder or derivative action), arising out of or relating to the Agreement, or such engagement, transaction or actions.

 

Contribution. If, for any reason, the
foregoing indemnification or reimbursement is unavailable to any Indemnified Party, or insufficient to fully indemnify any such
party or to hold it harmless regarding any losses, claims, damages, liabilities or expenses referred to in such indemnification
or reimbursement provisions, then the Company shall contribute to the amount paid or payable by the Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and Aurora, on the other, in connection with the matters contemplated by the Agreement.
If, however, the allocation provided by the preceding sentence is not permitted by applicable law, then the Company shall contribute
to such amount paid or payable by any Indemnified Party in such proportion as is appropriate to reflect not only such relative
benefits, but also the relative fault, of the Company, on the one hand, and such Indemnified Party, on the other, in connection
therewith, as well as any other relevant equitable considerations. Notwithstanding the foregoing, in no event shall the Indemnified
Parties be required to contribute an aggregate amount in excess of the amount of fees actually received by Aurora from the Company
under the Agreement. Relative benefits to the Company, on the one hand, and Aurora, on the other, shall be deemed to be in the
same proportion as (i) the total value paid or received, or contemplated to be paid or received, by the Company, and its security
holders, creditors, and other affiliates, as the case may be, pursuant to the transaction(s) (whether or not consummated) contemplated
by the engagement hereunder, bears to (ii) the fees received by Aurora under the Agreement.

 

    	 	 	7

     

    

Settlements. The Company shall not settle
or compromise or consent to the entry of any judgment in, or otherwise seek to terminate, any pending or threatened action, suit,
dispute, inquiry, investigation or proceeding for which indemnification may be sought hereunder (whether or not an Indemnified
Party is an actual or potential party), unless such settlement, compromise, consent or termination includes a release in favor
of the Indemnified Parties reasonably satisfactory to Aurora.

 

Limitation of Liability. The Company
further agrees that neither Aurora nor any other Indemnified Party shall have any liability (whether direct or indirect and regardless
of the legal theory advanced) to the Company, or any person or entity asserting claims on behalf of or in right of the Company,
related to or arising out of the Agreement, any transaction or proposed transaction, or any actions taken or omitted to be taken
by an Indemnified Party or the Company in connection with the Agreement, except for losses, claims, damages or liabilities incurred
by the Company finally judicially determined by a court of competent jurisdiction to have resulted solely from the willful misconduct
or gross negligence of such Indemnified Party.

 

The indemnity and reimbursement and the other
obligations and agreements of the Company set forth in this schedule (i) shall apply to any services provided by Aurora in connection
with its engagement prior to the date hereof, and to any modifications or amendments to the Agreement, (ii) shall be in addition
to any obligation or liability which the Company may otherwise have to any Indemnified Party, (iii) shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf of the Company or any Indemnified Party or any person
controlling any of them, and (iv) shall survive the completion of the services under, and any termination of, the Agreement.

 

    	 	 	8

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