Document:

EXECUTION VERSION

 

SECURITIES
PURCHASE AGREEMENT

 

Dated as of April 14, 2106

Xtant Medical Holdings, Inc.

600 Cruiser Lane

Belgrade, Montana 59714

Ladies and Gentlemen:

 

Each of the undersigned (each, an “Investor”)
hereby confirms its agreement with you as follows:

		1.	This Securities Purchase Agreement (the “Agreement”) is made as of
the date hereof between Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), and the Investors
listed on the signature pages hereto (the “Investors”).

		2.	The Company is proposing to issue and sell to the Investors $2,238,166.45 aggregate
principal amount of convertible senior notes due 2021 (the “Securities”), which are convertible into
shares of the Company’s common stock, par value $0.000001 per share (the “Common Stock”). The Securities
will be entitled to the benefits of a Registration Rights Agreement (the “Registration Rights Agreement”), to be entered
into among the Company and the Investors, pursuant to which the Company will agree, among other thing, to file and cause to become
effective under the Securities Act of 1933, as amended (the “Securities Act”), a registration statement covering the
resale of the Securities and the Common Stock issuable upon conversion of the Securities.

		3.	The Securities shall have the terms set forth in each of the convertible promissory notes (the
“Notes”) in the form attached hereto as Exhibit A, to be issued on the date hereof to each of the Investors.

		4.	The Company and each Investor agrees that, upon the terms and subject to the conditions set
forth herein, each Investor will purchase from the Company and the Company will issue and sell to each Investor the aggregate principal
amount of Securities set forth below on such Investor’s signature page for the aggregate purchase price set forth below on such
Investor’s signature page. The Securities shall be purchased pursuant to the Terms and Conditions for Purchase of Securities attached
hereto as Annex A and incorporated herein by reference as if fully set forth herein.

 

    	 

     

    
EXECUTION VERSION

 

Aggregate Principal Amount of Securities the Investor
Agrees to Purchase:

 

$1,428,552.78

 

Aggregate Purchase Price of such Securities:
$1,428,552.78

 

Please confirm that the foregoing correctly
sets forth the agreement between us by signing in the space provided below for that purpose.

 

	AGREED AND ACCEPTED BY:	
	 	 
	 	 
	
        

 

         

         

	 	 
	
        Xtant Medical Holdings, Inc.

        a Delaware corporation

         

         
	
        Name of Investor: ROS Acquisition Offshore LP

         

	By: /s/ Daniel Goldberger	By: /s/ Samuel D. Isaly
	Name: Daniel Goldberger	Print Name: Samuel D. Isaly
	Title: Chief Executive Officer	Title: Managing Member
	 	Address: 601 Lexington Avenue, 5th Floor
	 	New York, NY 10022
	 	Tax ID No.: 98-1023042
	 	Settlement Contact Name: J. Christopher LiPuma
	 	Telephone: 212-739-6415
	 	Email Address: Lipumac@orbimed.com

 

    	 

     

    

Aggregate Principal Amount of Securities
the Investor Agrees to Purchase:

$809,613.67

Aggregate Purchase Price of such Securities:
$809,613.67

Please confirm that the foregoing correctly
sets forth the agreement between us by signing in the space provided below for that purpose.

	AGREED AND ACCEPTED BY:	
         

         

         

         

	
         

 

         

         

	 	 
	
        Xtant Medical Holdings, Inc.

        a Delaware corporation

         

         
	
        Name of Investor: OrbiMed Royalty Opportunities II,
        LP

         

	By:  /s/ Daniel Goldberger	By: /s/ Samuel D. Isaly
	Name: Daniel Goldberger	Print Name: Samuel D. Isaly
	Title: Chief Executive Officer	Title: Managing Member
	 	Address: 601 Lexington Avenue, 5th Floor
	 	New York, NY 10022                              
	 	Tax ID No.: 32-0457118

 

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ANNEX
A TO THE SECURITIES PURCHASE AGREEMENT

TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES

		1.	Authorization and Sale of Securities. The Company is proposing to sell $2,238,166.45
aggregate principal amount of the Securities to the Investors.

		2.	Agreement to Sell and Purchase the Securities.

		2.1	Upon the terms and subject to the conditions hereinafter set forth, at the Closing (as defined in Section 3), the Company will
sell to each Investor, and each Investor will purchase from the Company, the aggregate principal amount of Securities set forth
on such Investor’s signature page hereto at the purchase price set forth on such signature page.

		3.	Closings and Delivery of Securities and Funds.

		3.1	The completion of the purchase and sale of the Securities (the
                                         “Closing”) shall occur on April 14, 2016 (the “Closing Date”).

		3.2	The Company’s obligation to issue and sell the Securities to the Investors shall be subject to the following conditions, any
one or more of which may be waived by the Company: (a) the accuracy of the representations and warranties made by the Investors
and (b) the fulfillment of those undertakings of the Investors to be fulfilled prior to the Closing.

		3.3	Each Investor’s obligation to accept delivery of the Securities and to pay for the Securities shall be subject to the
following conditions: (a) each of the representations and warranties of the Company made in Section 4 hereof shall be accurate
in all material respects as of the Closing Date; (b) delivery of an officer’s certificate dated as of the Closing Date regarding
the accuracy in material respects of the Company’s representations and warranties and addressing such other matters as are
customarily addressed in closing certificates; (c) delivery to the Investors of a customary secretary’s certificate in form
reasonably acceptable to the Investors; (d) the Company and the Investors shall have executed the Registration Rights Agreement;
(e) the Company shall have issued a Note, in form and substance satisfactory to the Investors, to each of the Investors and (f)
the Company shall have furnished to the Investors such further certificates and documents as the Investors may reasonably request.

		3.4	At the Closing, each Investor shall remit by wire transfer the amount of funds equal to the aggregate purchase price for the
Securities being purchased by such Investor to the following account designated by the Company:

	 	Bank Name:	SIL VLY BK SJ
	 	Bank Address:	3003 Tasman Drive, Santa Clara, CA 95054
	 	Beneficiary Name:  	Bacterin International Inc.
	 	Account Number:  	3301057621
	 	Routing Number:  	121140399

 

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		4.	Representations, Warranties and Covenants of the Company.

 

The Company hereby represents and warrants to, and covenants with, each Investor that:

 

		4.1	When the Notes are issued and delivered pursuant to this Agreement, such Notes will not be of the same class
(within the meaning of Rule 144A under the Securities Act) as securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or that are quoted in a U.S. automated inter-dealer quotation system.

		4.2	Assuming the accuracy of each Investor’s representations and warranties in Section 5, the purchase and
resale of the Notes pursuant hereto are exempt from the registration requirements of the Securities Act.

		4.3	No form of general solicitation or general advertising within the meaning of Regulation D under the Securities
Act (including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) (each, a “General Solicitation”) was used by the Company, any of
its affiliates or any of its representatives (other than you, as to whom the Company makes no representation) in connection with
offer and sale of the Notes.

		4.4	None of the Company or any other person acting on its behalf has sold or issued any securities that would
be integrated with the offering of the Notes contemplated by this Agreement pursuant to the Securities Act, the rules and regulations
thereunder or the interpretations thereof by the Securities
and Exchange Commission (the “Commission”) in a manner that would require the registration, under the Securities
Act, of the sale of the Notes contemplated by this Agreement.

		4.5	Each of the Company and its subsidiaries has been duly organized, is validly existing and in good standing as a corporation,
partnership or limited liability company, as applicable, under the laws of its jurisdiction of organization and is duly qualified
to do business and in good standing as a foreign corporation or other business entity in each jurisdiction in which its ownership
or lease of property or the conduct of its businesses requires such qualification, except where the failure to be so qualified
or in good standing could not, individually or in the aggregate, reasonably be expected to (i) have a material adverse effect on
the condition (financial or otherwise), results of operations, stockholders’ equity, properties, business or prospects of
the Company and its subsidiaries taken as a whole or (ii) materially interfere with the consummation of the transactions contemplated
hereby (collectively, a “Material Adverse Effect”). Each of the Company and its subsidiaries has all
power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged. As of the date
of this Agreement, the Company has no subsidiaries other than Bacterin International, Inc., X-spine Systems Inc., X-spine Sales
Corporation and Xtant Medical, Inc. and no “significant subsidiaries” (as defined in Rule 405 under the Securities
Act) other than Bacterin International, Inc. and X-spine Systems Inc.

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		4.6	The Company has an authorized capitalization as set forth in the publicly available Annual Report on Form 10-K filed with the
Commission for the fiscal year ended December 31, 2015 (the “2015 Annual Report”), and all of the issued
shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. All
of the issued shares of capital stock or other ownership interest of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except for such liens, encumbrances, equities or claims as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

		4.7	The Company has all requisite corporate power and authority to execute, issue, sell and perform its obligations under the Notes.
The Notes have been duly authorized by the Company and, when duly executed by the Company, will be validly issued and delivered
and will constitute valid and binding obligations of the Company entitled to the benefits of the Registration Rights Agreement,
enforceable against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and
by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

		4.8	The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Company, and upon its execution
and delivery and, assuming due authorization, execution and delivery by the other parties thereto, will constitute the valid and
binding agreement of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may
be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

		4.9	The Company has all the requisite corporate power and authority to issue the Common Stock issuable upon conversion of the Notes
(the “Underlying Common Stock”). The Underlying Common Stock has been duly and validly authorized by
the Company and, and when issued upon conversion of the Notes, in accordance with the terms of the Notes, will be validly issued,
fully paid and non-assessable, and the issuance of the Underlying Common Stock will not be subject to any preemptive or similar
rights.

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		4.10	The Company has all requisite corporate power to execute, deliver and perform its obligations under this Agreement. This Agreement
has been duly and validly authorized, executed and delivered by the Company

		4.11	The issue and sale of the Notes, the issuance of the Underlying Common Stock upon conversion of the Notes, the execution, delivery
and performance by the Company of the Notes, the Registration Rights Agreement and this Agreement and the consummation of the transactions
contemplated hereby and thereby, will not (i) conflict with or result in a breach or violation of any of the terms or provisions
of, impose any lien, charge or encumbrance upon any property or assets of the Company or its subsidiaries, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, license, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them is bound or to which any of their respective properties or assets
is subject, (ii) result in any violation of the provisions of the charter or by-laws (or similar organizational documents) of the
Company or any of its subsidiaries, or (iii) result in any violation of any statute or any judgment, order, decree, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their respective
properties or assets, except, with respect to clauses (i) and (iii), conflicts or violations that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

		4.12	No consent, approval, authorization or order of, or filing, registration or qualification with any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties or assets is required
for the issue and sale of the Notes, the issuance of the Underlying Common Stock upon conversion of the Notes, the execution, delivery
and performance by the Company of the Notes, the Registration Rights Agreement and this Agreement, and the consummation of the
transactions contemplated hereby, except for such consents, approvals, authorizations, orders, filings, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection with the purchase of the Notes.

		4.13	The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the
Exchange Act) that complies with the requirements of the Exchange Act and that has been designed by, or under the supervision of,
the Company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles in the United States. The Company maintains internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions
are recorded as necessary to permit preparation of the Company’s financial statements in conformity with accounting principles
generally accepted in the United States and to maintain accountability for its assets, (iii) access to the Company’s assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for the Company’s assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. As of the date of the most recent balance sheet of the Company and its consolidated subsidiaries reviewed or
audited by EKS&H LLP and the audit committee of the board of directors of the Company, there were no material weaknesses in
the Company’s internal controls.

    	 	A-4	 

     

    

 

		4.14	The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act),
(ii) such disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company
and its subsidiaries in the reports they file or submit under the Exchange Act is accumulated and communicated to management of
the Company and its subsidiaries, including their respective principal executive officers and principal financial officers, as
appropriate, to allow timely decisions regarding required disclosure to be made; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for which they were established.

		4.15	Since the date of the most recent balance sheet of the Company and its consolidated subsidiaries reviewed or audited by EKS&H
LLP and the audit committee of the board of directors of the Company, (i) the Company has not been advised of or become aware of
(A) any significant deficiencies in the design or operation of internal controls, that could adversely affect the ability of the
Company or any of its subsidiaries to record, process, summarize and report financial data, or any material weaknesses in internal
controls, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in
the internal controls of the Company and each of its subsidiaries; and (ii) there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.

		4.16	There is and has been no failure on the part of the Company and any of its directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

		4.17	Since the date of the latest audited financial statements included in the Public Disclosure Documents (as defined below) and
except as disclosed therein, neither the Company nor any of its subsidiaries has (i) sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute
or court or governmental action, order or decree, (ii) issued or granted any securities (other than pursuant to (x) employee benefit
plans, qualified stock option plans, other employee compensation plans or non-employee director compensation programs (collectively,
“Compensation Plans”) in existence on the date hereof and described in the Public Disclosure Documents
or (y) options, warrants or rights outstanding on the date hereof, (iii) incurred any liability or obligation, direct or contingent,
other than liabilities and obligations that were incurred in the ordinary course of business, (iv) entered into any transaction
not in the ordinary course of business (other than as described in the Public Disclosure Documents (without giving effect to any
supplements or amendments thereto after the execution and delivery of this Agreement), or (v) declared or paid any dividend on
its capital stock, and, since such date, there has not been any change in the capital stock, partnership or limited liability company
interests, as applicable, or long-term debt of the Company or any of its subsidiaries (other than as described in the Public Disclosure
Documents (without giving effect to any supplements or amendments thereto after the execution and delivery of this Agreement))
or any adverse change, or any development involving a prospective adverse change, in or affecting the condition (financial or otherwise),
results of operations, stockholders’ equity, properties, management, business or prospects of the Company and its subsidiaries,
taken as a whole, in each case except as could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The reports required to be filed by the Company under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, together with any materials filed or furnished by the Company under the Exchange Act, whether or not any such reports
were required, are referred to herein, collectively, as the “Public Disclosure Documents”.

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		4.18	The Company and each of its subsidiaries has good and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects, except to the
extent such liens, encumbrances and defects do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company or any of its subsidiaries. All assets held under lease
by the Company or any of its subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions
as do not materially interfere with the use made and proposed to be made of such assets by the Company or any of its subsidiaries.

		4.19	The Company and each of its subsidiaries have, and have operated in compliance with, such permits, licenses, patents, franchises,
certificates of need, exemptions, clearances and other approvals or authorizations of governmental or regulatory authorities (“Permits”)
as are necessary under applicable law to own their properties and conduct their businesses in the manner described in the Public
Disclosure Documents, except for any of the foregoing that could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The Company and each of its subsidiaries have fulfilled and performed all of its obligations
with respect to the Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other impairment of the rights of the holder or any such Permits, except for any of the foregoing
that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Company,
nor any of its subsidiaries has received written notice of any revocation, termination or modification of any such Permits or otherwise
has any reason to believe that any such Permits will be revoked, terminated or modified or not be renewed in the ordinary course.

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		4.20	The Company and its subsidiaries own, or have obtained valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered), tradenames, service names, copyrights, trade secrets
and other proprietary information described in Public Disclosure Documents as being owned or licensed by them or which are necessary
for the conduct of their respective businesses as currently conducted or as proposed to be conducted (including the commercialization
of products or services described in the Public Disclosure Documents as under development), except where the failure to own, license
or have such rights could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (collectively,
“Intellectual Property”); except as disclosed in Public Disclosure Documents, and except as could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) there are no third parties who
have or, to the Company’s knowledge, will be able to establish rights to any Intellectual Property, except for, and to the
extent of, the ownership rights of the owners of the Intellectual Property which the Public Disclosure Documents disclose is licensed
to the Company or any of its subsidiaries; (ii) to the Company’s knowledge, there is no infringement by third parties of
any Intellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the Company’s or its subsidiaries’ rights in or to any Intellectual Property, and the
Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iv) there
is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity,
enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis
for any such action, suit, proceeding or claim; (v) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company or any of its subsidiaries infringes or otherwise violates (or would, upon
the commercialization of any product or service described in the Public Disclosure Documents as under development, infringe or
violate) any patent, trademark, tradename, service name, copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (vi) the Company
and its subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to
the Company or any of its subsidiaries, and all such agreements are in full force and effect; (vii) to the Company’s knowledge,
there is no patent or patent application that contains claims that interfere with the issued or pending claims of any of the Intellectual
Property or that challenges the validity, enforceability or scope of any of the Intellectual Property; and (viii) to the Company’s
knowledge, there is no prior art that may render any patent application within the Intellectual Property unpatentable that has
not been disclosed to the U.S. Patent and Trademark Office.

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		4.21	There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company or any of its subsidiaries is the subject that could, individually or in the aggregate, reasonably
be expected to (i) have a Material Adverse Effect, except as described in the Public Disclosure Documents, or (ii) have a material
adverse effect on the performance by the Company of this Agreement, the Notes or the Registration Rights Agreement or on the consummation
of any of the transactions contemplated hereby or thereby. To the Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities or others.

		4.22	Neither the Company nor any of its subsidiaries (i) is in violation of its charter or by-laws (or similar organizational documents),
(ii) is in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant, condition or other obligation contained in any indenture, mortgage, deed of
trust, loan agreement, license or other agreement or instrument to which it is a party or by which it is bound or to which any
of its properties or assets is subject, or (iii) is in violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or assets or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct
of its business, except in the case of clauses (ii) and (iii), to the extent any such default, violation or failure could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

		4.23	The Company and its subsidiaries and their respective properties, assets and operations are in compliance with, and the Company
and each of its subsidiaries hold all permits, authorizations and approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such permits, authorizations or approvals could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’ knowledge, there are no past,
present or reasonably anticipated future events, conditions, circumstances, activities, practices, actions, omissions or plans
that, individually or in the aggregate, could reasonably be expected to give rise to any material costs or liabilities to the Company
or any of its subsidiaries under, or to interfere with or prevent compliance by the Company or any of its subsidiaries with, Environmental
Laws; except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, neither
the Company nor any of its subsidiaries (i) is the subject of any investigation, (ii) has received any notice or claim, (iii) is
a party to or affected by any pending or, to the Company’s knowledge, threatened action, suit or proceeding, (iv) is bound
by any judgment, decree or order or (v) has entered into any agreement, in each case relating to any alleged violation of any Environmental
Law or any actual or alleged release or threatened release or cleanup at any location of any Hazardous Materials (as defined below)
(as used herein, “Environmental Law” means any federal, state, local or foreign law, statute, ordinance,
rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the environment or natural resources, including those relating
to the distribution, processing, generation, treatment, storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “Hazardous Materials” means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic substances or wastes) that is regulated by or may give rise to liability under any
Environmental Law).

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		4.24	The Company and each of its subsidiaries have filed all federal, state, local and foreign tax returns required to be filed
through the date hereof, subject to permitted extensions, and have paid all taxes due, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries, nor does the Company have any knowledge of any tax deficiencies that have
been, or could reasonably be expected to be asserted against the Company and each of its subsidiaries, that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

		4.25	Neither the Company nor any of its subsidiaries is, and, after giving effect to the offer and sale of the Notes and the application
of the proceeds therefrom, none of them will be, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

		4.26	The Company and its affiliates have not taken, directly or indirectly, any action designed to or that has constituted or that
could reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Notes.

		4.27	Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, after due inquiry, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, has in the course
of its actions for, or on behalf of, the Company or any of its subsidiaries: (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official, “foreign office” (as defined in the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”)) or employee from
corporate funds; (iii) violated or is in violation of any provision of the FCPA, the Bribery Act 2010 of the United Kingdom, as
amended, or any other applicable anti-corruption or anti-bribery laws or statutes; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any domestic government official, foreign official or employee; and the Company
and its subsidiaries and, to the knowledge of the Company, the Company’s affiliates have conducted their respective businesses
in compliance with the FCPA, the Bribery Act 2010 of the United Kingdom, as amended, and any other applicable anti-corruption or
anti-bribery laws or statutes, and have instituted and maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.

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		4.28	The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company, threatened.

		4.29	Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, after due inquiry, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries (i) is currently subject to or the target of any sanctions
administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of State,
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively,
“Sanctions”); or (ii) located, organized or resident in a country that is the subject of Sanctions (including,
without limitation, Cuba, Iran, North Korea, Sudan, and Syria); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person, or in any country or territory, that currently is
the subject or target of Sanctions or in any other manner that will result in a violation by any person (including any person participating
in the transaction whether as an underwriter, advisor, investor or otherwise) of Sanctions. The Company and its subsidiaries have
not knowingly engaged in for the past five years, are not now knowingly engaged in, and will not engage in, any dealings or transactions
with any individual or entity, or in any country or territory, that at the time of the dealing or transaction is or was the subject
or target of Sanctions.

		4.30	There are no contracts or other documents that would be required to be described in a registration statement filed under the
Securities Act or filed as exhibits to a registration statement of the Company pursuant to Item 601(b)(10) of Regulation S-K that
have not been described in the Public Disclosure Documents.

		4.31	No relationship, direct or indirect, that would be required to be described in a registration statement of the Company pursuant
to Item 404 of Regulation S-K, exists between or among the Company and its subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company and its subsidiaries, on the other hand, that has not been described in the
Public Disclosure Documents.

    	 	A-10	 

     

    

 

		4.32	No labor disturbance by or dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is imminent that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

		4.33	None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale
of the Notes), will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System.

		4.34	The Company and each of its subsidiaries carry, or are covered by, insurance from insurers of recognized financial responsibility
in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in similar industries. All policies of insurance of
the Company and its subsidiaries are in full force and effect; the Company and each of its subsidiaries are in compliance with
the terms of such policies in all material respects; and neither the Company nor any of its subsidiaries has received notice from
any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order
to continue such insurance. Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect, there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause; and neither the Company nor any such subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

		4.35	Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Security Act of 1974,
as amended (“ERISA”)) for which the Company or any member of its “Controlled Group” (defined
as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) would have any liability (each a “Plan”)
has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules and regulations including
ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) with
respect to each Plan subject to Title IV of ERISA (A) no “reportable event” (within the meaning of Section 4043(c)
of ERISA) has occurred or is reasonably expected to occur, (B) no Plan is or is reasonably expected to be “at risk”
status (within the meaning of Section 430 of the Code or Section 303 of ERISA) (C) there has been no filing pursuant to Section
412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any
Plan or the receipt by the Company or any member of its Controlled Group from the Pension Benefit Guaranty Corporation or the plan
administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any
Plan, (D) no conditions contained in Section 303(k)(1)(A) of ERISA for imposition of a lien shall have been met with respect to
any Plan and (E) neither the Company or any member of its Controlled Group has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation in the ordinary
course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(c)(3)
of ERISA) (“Multiemployer Plan”); (iv) no Multiemployer Plan is, or is expected to be, “insolvent”
(within the meaning of Section 4245 of ERISA), in “reorganization” (within the meaning of Section 4241 of ERISA), or
in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 304 of ERISA);
and (v) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such qualification.

    	 	A-11	 

     

    

 

		4.36	No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary’s capital stock or other ownership interests, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets
to the Company or any other subsidiary of the Company, except as described in the Public Disclosure Documents.

		4.37	Immediately after the consummation of the issuance of the Notes, the Company will be Solvent. As used in this paragraph, the
term “Solvent” means, with respect to a particular date, that on such date (i) the present fair market
value (or present fair saleable value) of the assets of the Company are not less than the total amount required to pay the probable
liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute
and matured, (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of business, (iii) assuming the sale of the Notes as contemplated
herein, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (iv)
the Company is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which
its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry
in which the Company is engaged, and (v) the Company is not a defendant in any civil action that would result in a judgment that
the Company is or would become unable to satisfy. In computing the amount of such contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or matured liability.

    	 	A-12	 

     

    

 

		4.38	Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other
than this Agreement) that could give rise to a valid claim against any of them for a brokerage commission, finder’s fee or
like payment in connection with the sale of the Notes.

		4.39	Neither the Company nor any of its subsidiaries is in violation of or has received notice of any violation with respect to
any federal or state law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or
state wage and hour laws, nor any state law precluding the denial of credit due to the neighborhood in which a property is situated,
the violation of any of which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

    	 	A-13	 

     

    

 

		4.40	Except as described in the Public Disclosure Documents, and except, in each case, where such event could not, individually
or in the aggregate, reasonably be expect to have a Material Adverse Effect, the Company and each of its subsidiaries: (i) has
not received any unresolved U.S. Food and Drug Administration (“FDA”) or similar governmental agency
or body (“Governmental Authority”) written notice of inspectional observations, Form 483, written notice
of adverse filing, warning letter, untitled letter or other similar correspondence or notice from the FDA, or any other court or
arbitrator or federal, state, local or foreign governmental or regulatory authority, alleging or asserting material noncompliance
with the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), or received any written requests or requirements to
make material changes to the Company products by the FDA or any other Governmental Authority, (ii) is and has been in compliance
with applicable health care laws, including, the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the federal
Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal
False Claims Law (42 U.S.C. § 1320a-7b(a)), the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the Physician Payment
Sunshine Act (42 U.S.C. § 1320a-7h), all criminal laws relating to health care fraud and abuse, including but not limited
to 18 U.S.C. Sections 286 and 287, and the health care fraud criminal provisions under the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. § 1320d et seq.) (“HIPAA”), the exclusion laws (42 U.S.C. § 1320a-7),
Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act of 2009, and the regulations promulgated pursuant to such laws, and
comparable state laws, and all other foreign, federal, state and local laws relating to the regulation of the Company and its subsidiaries
(collectively, “Health Care Laws”), (iii) has not engaged in activities which are, as applicable, cause
for false claims liability, civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any other state health
care program or federal health care program, (iv) possesses all Permits and supplements or amendments thereto required by any such
Health Care Laws and/or to carry on its businesses as currently conducted as described in the Public Disclosure Documents (“Authorizations”),
and such Authorizations are valid and in full force and effect and neither the Company nor any of its subsidiaries is in violation
of any term of any such Authorizations, (v) has not received written notice of any ongoing claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any Governmental Authority alleging that any product, operation or
activity is in material violation of any Health Care Laws or Authorizations and has no knowledge that any such Governmental Authority
has threatened any such claim, litigation, arbitration, action, suit, investigation or proceeding, (vi) has not received written
notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations
and has no knowledge that any such Governmental Authority has threatened such action, (vii) has filed, obtained, maintained or
submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments thereto
as required by any Health Care Laws or Authorizations and all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete, correct and not misleading on the date filed (or were corrected or supplemented
by a subsequent submission), (viii) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to
be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety, efficacy or regulatory compliance of any product or any
alleged product defect or violation and, to the Company’s knowledge, there are no facts which are reasonably likely to cause,
and the Company has not received any written notice from the FDA or any other Governmental Authority regarding, a material recall,
market withdrawal or replacement of any Company product sold or intended to be sold by the Company, a material change in the marketing
classification or a material adverse change in the labeling of any such Company products, or a termination or suspension of the
manufacturing, marketing, or distribution of such Company products, (ix) is not a party to any corporate integrity agreement, deferred
prosecution agreement, monitoring agreement, consent decree, settlement order, or similar agreements, or has any reporting obligations
pursuant to any such agreement, plan or correction or other remedial measure entered into with any Governmental Authority, (x)
has not, nor has any officer, director, employee, agent or, to the knowledge of the Company, any distributor of the Company, made
an untrue statement of a material fact or a fraudulent statement to the FDA or any other Governmental Authority, failed to disclose
a material fact required to be disclosed to the FDA or any other Governmental Authority, or committed an act, made a statement,
or failed to make a statement, in each such case, related to the business of the Company that, at the time such disclosure was
made, would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements
of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the FDA
or any other Governmental Authority to invoke any similar policy, (xi) has not, nor has any officer, director, employee, or, to
the knowledge of the Company, any agent or distributor of the Company, been debarred or convicted of any crime or engaged in any
conduct for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar law or authorized by 21 U.S.C. § 335a(b)
or any similar law applicable in other jurisdictions in which Company products or Company product candidates are sold or intended
by the Company to be sold, and (xii) neither the Company, its subsidiaries nor their officers, directors, employees, agents or
contractors has been or is currently debarred, suspended or excluded from participation in the Medicare and Medicaid programs or
any other state or federal health care program.

    	 	A-14	 

     

    

 

		4.41	The preclinical tests and clinical trials conducted or sponsored by, or on behalf of the Company and its subsidiaries were
and, if still pending, are being conducted in all material respects in accordance with protocols filed with the appropriate regulatory
authorities for each such test or trial, as the case may be, and with standard medical and scientific research procedures and applicable
laws, regulations and Authorizations, including without limitation, those of the FDA; each description of the results of such tests
and trials contained in the Public Disclosure Documents is accurate and complete in all material respects and fairly presents the
data derived from such tests and trials, and the Company and its subsidiaries have no knowledge of any other studies or tests the
results of which are inconsistent with, or otherwise call into question, the results described or referred to in the Public Disclosure
Documents; and neither the Company nor any of its subsidiaries has received any notices or other correspondence from the FDA, the
U.S. Department of Health and Human Services or any committee thereof or from any other U.S. or foreign government or drug or medical
device regulatory agency requiring the termination, suspension or modification of any clinical trials..

		4.42	So long as any of the Notes or the Underlying Common Stock are outstanding, the Company will furnish at its expense, upon request,
to the holders of the Notes or the Underlying Common Stock and prospective purchasers of the Notes or the Underlying Common Stock
the information, if any, required by Rule 144A(d)(4) under the Securities Act.

		4.43	The Company and its affiliates will not take, directly or indirectly, any action designed to or that has constituted or that
reasonably could be expected to cause or result in the stabilization or manipulation of the price of any security of the Company
in connection with the sale of the Notes.

		4.44	The Company agrees not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security”
(as defined in the Securities Act) that would be integrated with the sale of the Notes in a manner that would require the registration
under the Securities Act of the sale of the Notes to the Investors. The Company will take any reasonable precautions designed to
insure that any offer or sale, direct or indirect of any Notes or any substantially similar security issued by the Company, within
six months subsequent to the date on which the distribution of the Notes has been completed, is made under restrictions and other
circumstances reasonably designed not to affect the status of the sale of the Notes contemplated by this Agreement, as transactions
exempt from the registration provisions of the Securities Act, including any sales pursuant to Rule 144A under, or Regulation D
of, the Securities Act.

    	 	A-15	 

     

    

 

		4.45	In connection with any offer or sale of the Notes, the Company will not engage, and will cause its affiliates and any person
acting on its behalf not to engage in any form of general solicitation or general advertising (within the meaning of Regulation
D of the Securities Act), or any “public offering” within the meaning of Section 4(a)(2) of the Securities Act in connection
with any sale of the Notes.

		4.46	The Company agrees to reserve and keep available at all times, free of preemptive rights, a sufficient number of Underlying
Common Stock to enable the Company to satisfy any obligations to issue Underlying Common Stock upon conversion of the Notes.

		4.47	On and after the date hereof to, and including, the Closing Date, the Company will not do or authorize any act that would result
in an adjustment of the conversion rate of the Notes.

 

		5.	Representations, Warranties and Covenants of the Company.

The Company hereby represents and warrants
to, and covenants with, each Investor that:

		5.1	(1)	Each Investor is (a)
either a QIB as defined in Rule 144A under the Securities Act, or an institutional accredited investor as defined in Rule 501(a)(1),
(a)(2), (a)(3), or (a)(7) under the Securities Act, as presently in effect, (b) aware that the sale to it is being made in reliance
on a private placement exemption from registration under the Securities Act, and (c) acquiring the Securities for its own account
or for the account of a QIB or an institutional accredited investor.

		(2)	Each Investor understands and agrees on behalf of itself and on behalf of any investor account for which it is purchasing the
Securities and Common Stock issuable upon conversion of the Securities, that the Securities and Common Stock issuable upon conversion
of the Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act,
that the Securities and Common Stock issuable upon conversion of the Securities have not been, and will not be, registered under
the Securities Act and that (a) if it decides to offer, resell, pledge or otherwise transfer any of the Securities or Common Stock
issued upon conversion of the Securities, such Securities and Common Stock may be offered, resold, pledged or otherwise transferred
only (i) to a person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii)
pursuant to any other exemption from the registration requirements of the Securities Act, including Rule 144 under the Securities
Act (if available), (iii) pursuant to an effective registration statement under the Securities Act, or (iv) to the Company, or
one of its subsidiaries, in each of cases (i) through (iv) in accordance with any applicable securities laws of any state of the
United States.

		(3)	Each Investor understands that the Securities and Common Stock issued upon conversion of the Securities will, unless sold pursuant
to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144, and will
bear a legend that reflects the restricted nature of the securities.

    	 	A-16	 

     

    

 

		(4)	Each Investor:

		(a)	is able to fend for itself in the transactions contemplated hereby;

		(b)	has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of
its prospective investment in the Securities; and

		(c)	has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.

		(5)	Each Investor acknowledges that (a) it has conducted its own investigation of the Company and the terms of the Securities,
(b) it has had access to, and has had an adequate opportunity to review, (i) all information the Company has filed with and furnished
to the Commission, (ii) all information set forth in such filings and (iv) such financial and other information as it deems necessary
to make its decision to purchase the Securities, and (c) it has been offered the opportunity to ask questions of the Company, and
received such answers thereto, as it deemed necessary in connection with the decision to purchase the Securities.

		(6)	Each Investor understands that the Company, and others will rely upon the truth and accuracy of the foregoing representations,
acknowledgements and agreements and agrees that if any of the representations and acknowledgements deemed to have been made by
it by its purchase of the Securities are no longer accurate, such Investor shall promptly notify the Company. If such Investor
is acquiring the Securities as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make the foregoing representations, acknowledgements and
agreements on behalf of such account.

		5.2	Each Investor acknowledges that no action has been or will be taken in any jurisdiction outside
the United States by the Company that would permit an offering of the Securities, or possession or distribution of offering materials
in connection with the issue of the Securities (including any filing of a registration statement),
in any jurisdiction outside the United States where action for that purpose is required. Each
Investor outside the United States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its possession or distributes
any offering material, in all cases at its own expense.

    	 	A-17	 

     

    

 

		5.3	Each Investor has full right, power, authority and capacity to enter into this Agreement and
to consummate the transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and this Agreement constitutes
a valid, binding and enforceable obligation of such Investor, except as the enforceability
of the Agreement may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium or other
similar laws relating to or affecting the rights of creditors generally.

		5.4	The entry into and performance of this Agreement by each Investor and the consummation by such Investor of the transactions
contemplated hereby and thereby will not (i) result in a violation of the organizational documents of Investor, (ii) conflict with,
or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement,
indenture or instrument to which such Investor is party, or (iii) result in the violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to such Investor, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the ability of such Investor to perform its obligations hereunder.

		5.5	Each Investor understands that nothing in this Agreement, information the Company has filed with and furnished to the Commission
or any other materials presented to such Investor in connection with the purchase and sale of the Securities constitutes legal,
tax or investment advice. Each Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Securities and has made its own assessment and has satisfied
itself concerning the relevant tax and other economic considerations relevant to its investment in the Securities.

		6.	Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to
this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investors herein shall survive
the execution of this Agreement, the delivery to the Investors of the Securities being purchased and the payment therefor.

		7.	Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be delivered
(A) if within the domestic United States, by first-class registered or certified mail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile, or (B) otherwise by International Federal Express or facsimile, and shall be deemed
given (i) if delivered by first-class registered or certified mail, three business days after so mailed, (ii) if delivered by a
nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express,
two business days after so mailed and (iv) if delivered by facsimile, upon electronic confirmation of receipt and shall be delivered
as addressed as follows:

(a) if to the Company, to:

Xtant Medical Holdings, Inc.

600 Cruiser Lane

Belgrade, Montana 59714

Attention: General Counsel

(b) if to the Investors, at each Investor’s
address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in writing.

 

    	 	A-18	 

     

    

 

		8.	Changes. Except as contemplated herein, this Agreement may not be modified or amended except pursuant to an instrument
in writing signed by the Company and each Investor.

		9.	Headings. The headings of the various sections of this Agreement have been inserted for convenience or reference
only and shall not be deemed to be part of this Agreement.

		10.	Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected
or impaired thereby.

		11.	Applicable Law; Venue. This Agreement will be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed within the State of New York. Each of the Company and each Investor
agrees that any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby
may be instituted only in any State or U.S. federal court in The City of New York and County of New York and waives any
objection that such party may now or hereafter have to the laying of venue of any such suit, action or proceeding, and irrevocably
submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

		12.	Waiver of Jury Trial. Each of the Company and each Investor 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
or the transactions contemplated hereby.

		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.	Payment of Expenses. The Company agrees to pay on demand all expenses of the Investors (including, without limitation,
the fees and out-of-pocket expenses of Covington & Burling LLP, counsel to the Investors) incurred in connection with the Investors’
review, consideration and evaluation of this Agreement, the Securities and the Registration Rights Agreement, including the rights
and remedies available to it in connection therewith, and the negotiation, preparation, execution and delivery of this Agreement,
the Securities and the Registration Rights Agreement.

 

    	 	A-19THE SALE OF THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
THIS NOTE (AND ANY BENEFICIAL INTEREST HEREIN) MAY NOT BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED, EXCEPT:

		(A)	TO THE COMPANY OR ANY SUBSIDIARY THEREOF;

		(B)	PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT; OR

		(C)	UNDER ANY AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING,
IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

PRIOR TO ANY TRANSFER
PURSUANT TO THE FOREGOING CLAUSE (C), THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE SECURITIES
LAWS OF ANY OTHER JURISDICTION. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.

XTANT MEDICAL HOLDINGS,
INC.

CONVERTIBLE PROMISSORY
NOTE

	$1,428,552.78	Date
of Issuance: April 14, 2016

 

FOR VALUE RECEIVED,
Xtant Medical Holdings, Inc., a Delaware corporation (the “Company”), promises to pay to ROS Acquisition
Offshore LP, and its assigns, (the “Holder”) the principal sum of $1,428,552.78 (the “Principal
Amount”), in the manner provided herein. Commencing on the date hereof, and continuing until such time as the Principal
Amount is repaid in full, interest shall accrue on the Principal Amount outstanding at the rate of six percent (6.00%) per annum.
This Note is subject to the following terms and conditions.

 

    	 	 -1-	 

     

    

TABLE
OF CONTENTS

Page

	Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE	4
	Section 1.01   Definitions	4
	Section 1.02   Other Definitions	8
	Section 1.03   Rules of Construction	8
	Article 2 PAYMENT TERMS, TRANSFER RESTRICTIONS AND NOTE REPLACEMENT	9
	Section 2.01   Payments	9
	Section 2.02   Replacement Note	10
	Article 3 REPURCHASE AT THE OPTION OF THE HOLDER	11
	Section 3.01   Fundamental Change Permits Holder to Require the Company to Repurchase this Note	11
	Section 3.02   Fundamental Change Notice	12
	Section 3.03   Fundamental Change Repurchase Notice	13
	Section 3.04   Withdrawal of Fundamental Change Repurchase Notice	14
	Section 3.05   Effect of Fundamental Change Repurchase Notice	14
	Section 3.06   Note Repurchased in Part	14
	Section 3.07   Covenant to Comply With Securities Laws Upon Repurchase of Note	15
	Article 4 COVENANTS	15
	Section 4.01   Payment of Note.	15
	Section 4.02   144A Information	15
	Section 4.03   Reports	15
	Section 4.04   Additional Interest	15
	Section 4.05   Compliance Certificate	16
	Section 4.06   Corporate Existence	16
	Section 4.07   Par Value Limitation.	17
	Section 4.08   Stay, Extension and Usury Laws	17
	Section 4.09   Further Instruments and Acts	17
	 	 

 

    	 	 -2-	 

     

    

	Article 5 CONSOLIDATION, MERGER AND SALE OF ASSETS	17
	Section 5.01   Company May Consolidate, Merge or Sell Its Assets Only on Certain Terms	17
	Section 5.02   Successor Substituted	18
	Article 6 DEFAULTS AND REMEDIES	18
	Section 6.01   Events of Default	18
	Section 6.02   Acceleration	20
	Section 6.03   Other Remedies	21
	Section 6.04   Sole Remedy for Failure to Report	21
	Section 6.05   Waiver of Past Defaults	22
	Article 7 SATISFACTION AND DISCHARGE	22
	Section 7.01   Discharge of Liability on Note	22
	Article 8 CONVERSIONS	22
	Section 8.01   Right To Convert	22
	Section 8.02   Conversion Procedures	22
	Section 8.03   Settlement Upon Conversion	24
	Section 8.04   Common Stock Issued Upon Conversion	25
	Section 8.05   Adjustment of Conversion Rate	25
	Section 8.06   Voluntary Adjustments	34
	Section 8.07   Adjustments Upon Certain Fundamental Changes	34
	Section 8.08   Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale	36
	Article 9 NO RIGHT OF REDEMPTION AT THE OPTION OF THE COMPANY	38
	Article 10	38
	Section 10.01   Notices	38
	Section 10.02   Separability Clause	39
	Section 10.03   Governing Law and Waiver of Jury Trial	39
	Section 10.04   No Recourse Against Others	39
	Section 10.05   Calculations	39
	Section 10.06   Successors	39
	Section 10.07   Table of Contents; Headings	39
	Section 10.08   Submission to Jurisdiction	39
	Section 10.09   Legal Holidays	40
	Section 10.10   No Security Interest Created	40
	Section 10.11   Benefits of Note	40
	Section 10.12   Withholding Taxes	40
	Section 10.13   Amendment and Waiver.  .	40

 

    	 	 -3-	 

     

    

Article
1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section
1.01        Definitions.

“Additional
Interest” has the meaning ascribed to it in the Registration Rights Agreement.

“Affiliate”
of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control,” when used with respect
to any specified Person, means the power to direct or cause the direction of the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.

“Bankruptcy
Law” means Title 11, United States Code, or any similar U.S. federal, state or non-U.S. law for the relief of debtors.

“Board
of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it.

“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.

“Capital
Stock” means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participations or
other equivalents of, or interests in (however designated), the equity of such Person, but excluding any debt securities convertible
into such equity.

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

“Common
Stock” means the shares of the common stock of the Company, $0.000001 par value per share.

“Company”
means the party named as such in the first paragraph of this Note until a successor or assignee replaces it pursuant to the applicable
provisions hereof and, thereafter, means the successor or assignee.

“Conversion
Price” means, at any time, (i) $1,000 divided by (ii) the Conversion Rate in effect at such time.

“Conversion
Rate” means, initially, 344.8276 shares of Common Stock per $1,000 principal amount of this Note, subject to adjustment
as provided herein, or in the case of a principal amount or portion of a principal amount that is not a multiple of $1,000, an
equivalent pro rata number of shares.

    	 	 -4-	 

     

    

“Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

“Default”
means any event which is (or after notice, passage of time or both would be) an Event of Default.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

“Fundamental
Change” means an event that will be deemed to occur if any of the following occurs:

(a)                
a “person” or “group” within the meaning of Section 13(d) of the Exchange
Act, other than the Company or the Subsidiaries, has become the direct or indirect “beneficial owner” (as defined below)
of shares of the Company’s common equity representing more than 50% of the voting power of the Company’s common equity;

(b)                
the consummation of:

(i)                  
any sale, lease or other transfer in one transaction or a series of transactions of all or
substantially all of the consolidated assets of the Company and the Subsidiaries to any person; or

(ii)                
any transaction or series of related transactions in connection with which (whether by means
of exchange, liquidation, consolidation, merger, combination, reclassification, recapitalization, acquisition or otherwise) all
of the Common Stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities,
other property, assets or cash, but excluding any merger, consolidation, share exchange or acquisition of the Company with or by
another Person pursuant to which the Persons that “beneficially owned” (as defined below), directly or indirectly,
the shares of the Company’s Voting Stock immediately prior to such transaction beneficially own, directly or indirectly,
immediately after such transaction, shares of the surviving, continuing or acquiring corporation’s Voting Stock representing
more than 50% of the total outstanding voting power of all outstanding classes of Voting Stock of the surviving, continuing or
acquiring corporation in substantially the same proportions vis-à-vis each other as immediately prior to such transaction;
or

(c)                
the Company’s stockholders approve any plan or proposal for the liquidation or dissolution
of the Company.

A transaction or event
described in clause (a) or (b) above will not constitute a Fundamental Change, however, if at least 90% of the consideration received
or to be received by the holders of the Common Stock, excluding cash payments for fractional shares or dissenters rights, in connection
with the transaction or transactions, consists of shares of common stock traded on any of the NASDAQ Capital Market, the NASDAQ
Global Market, the NASDAQ Global Select Market, the NYSE MKT LLC or the New York Stock Exchange (or any of their respective successors)
or which will be so traded or quoted when issued or exchanged in connection with such transaction or event and as a result of such
transaction or event, this Note become convertible or exchangeable solely into such consideration (excluding cash payable in lieu
of any fractional share) in accordance with Section 8.08 hereof.

    	 	 -5-	 

     

    

For the purposes
of this definition of “Fundamental Change,” whether a person is a “beneficial owner” or whether
shares are “beneficially owned” will be determined in accordance with Rule 13d-3 under the Exchange Act.

“Holder”
means the party named as such in the first paragraph of this Note.

“Issue
Date” means April 14, 2016.

“Last Reported
Sale Price” of the Common Stock on any date means the closing sale or trading price (or, if no closing sale or trading
price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average
last bid and the average last ask prices) per share on such date as reported in composite transactions for the principal U.S. national
or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national
or regional securities exchange on such date, the “Last Reported Sale Price” of the Common Stock will be the last quoted
bid price per share for the Common Stock in the over-the-counter market on such date as reported by OTC Markets Group Inc. or a
similar organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” will be the average of the
mid-point of the last bid and last ask prices per share for the Common Stock on the relevant date from each of at least three (3)
nationally recognized independent investment banking firms selected by the Company for this purpose. The “Last Reported Sale
Price” will be determined without regard to after-hours trading or any other trading outside of regular trading session hours.

“Market
Disruption Event” means the occurrence or existence during the one-half hour period ending on the scheduled close of
trading on the principal U.S. national or regional securities exchange or other market on which the Common Stock is listed for
trading or trades of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to
the Common Stock.

“Officer”
means the Chairman of the Board, the Vice Chairman, the Chief Executive Officer, the President, the Chief Financial Officer, any
Executive Vice President, any Senior Vice President, any Vice President, the Treasurer or the Secretary of the Company.

“Officers’
Certificate” means a written certificate containing the information specified in Sections 4.05, 5.01 or 7.01 hereof,
signed in the name of the Company by any two Officers, and delivered to the Holder; provided, that, if such certificate
is given pursuant to Section 4.05 hereof, one of the Officers signing such certificate must be the Chief Financial Officer of the
Company.

“Open of
Business” means 9:00 a.m., New York City time.

“Opinion
of Counsel” means a written opinion containing the information specified in Sections 5.01 and 7.01 hereof, from legal
counsel satisfactory to the Holder. The counsel may be an employee of, or counsel to, the Company who is satisfactory to the Holder.

    	 	 -6-	 

     

    

“Person”
means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political subdivision thereof.

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, among the Company and the Holder.

“Rule 144”
means Rule 144 under the Securities Act (or any successor provision), as it may be amended from time to time.

“Rule 144A”
means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

“SEC”
means the Securities and Exchange Commission.

“Securities
Act” means the Securities Act of 1933, as amended.

“Significant
Subsidiary” means any Subsidiary that is a “significant subsidiary” of the Company within the meaning of
Rule 1-02(w) of Regulation S-X promulgated under the Exchange Act.

“Stock
Price” means, for any Make-Whole Fundamental Change, (i) if the holders of the Common Stock receive only cash in consideration
for their shares of Common Stock in such Make-Whole Fundamental Change and such Make-Whole Fundamental Change is of the type described
in clause (b) of the definition of Fundamental Change, the amount of cash paid per share of the Common Stock in such Make-Whole
Fundamental Change; and (ii) otherwise, the average of the Last Reported Sale Price per share of the Common Stock over the five
consecutive Trading Days ending on, and including, the Trading Day immediately preceding the Make-Whole Fundamental Change Effective
Date for such Make-Whole Fundamental Change.

“Subsidiary”
means a Person more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company, or by the Company and one or more other Subsidiaries of the Company.

“Trading
Day” means a day on which (i) trading in the Common Stock (or other security for which a Last Reported Sale Price must
be determined) generally occurs on the NASDAQ Global Market or, if the Common Stock (or such other security) is not then listed
on the NASDAQ Global Market, on the principal other U.S. national or regional securities exchange on which the Common Stock (or
such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional
securities exchange, on the principal other market (including, without limitation, the OTCQX marketplace) on which the Common Stock
(or such other security) is then listed or admitted for trading; and (ii) there is no Market Disruption Event; provided,
however, that if the Common Stock (or such other security) is not so listed or traded, then “Trading Day” means
a Business Day.

“Uniform
Commercial Code” means the New York Uniform Commercial Code as in effect on the Issue Date.

    	 	 -7-	 

     

    

“Voting
Stock” of a Person means Capital Stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees
of such Person (irrespective of whether or not at the time Capital Stock of any other class or classes will have or might have
voting power by reason of the happening of any contingency).

Section
1.02        Other
Definitions.

	
        Term:
	
        Section
        Defined in:

	“Additional Shares”	8.07(a)
	“Averaging Period”	8.05(e)
	“Conversion Consideration”	8.03(a)(i)
	“Conversion Date” 	8.02(a)
	“Conversion Notice”	8.02(a)
	“Defaulted Amount”	2.01(b)
	“Default Interest” 	2.01(b)
	“Effective Date”	1.01(a)(x)(III)
	“Event of Default”	6.01(a)
	“Ex-Dividend Date”	1.01(a)(x)(IV)
	“Expiration Date”	8.05(e)
	“Expiration Time”	8.05(e)
	“Fundamental Change Notice”	3.02(a)
	“Fundamental Change Notice Date”	3.02(a)
	“Fundamental Change Repurchase Date”	3.01(c)
	“Fundamental Change Repurchase Notice”	3.03(a)(i)
	“Fundamental Change Repurchase Price”	3.01(b)
	“Interest Payment Date”	2.01(a)(ii)
	“Make-Whole Fundamental Change”	8.07(a)
	“Make-Whole Fundamental Change “Effective Date”	8.07(b)
	“Maturity Date”	2.01(a)(i)
	“Reference Property”	8.08(a)
	“Reference Property Unit”	8.08(a)
	“Regular Record Date”	2.01(a)(ii)
	“Reorganization Event”	5.01
	“Reorganization Successor Corporation”	5.01(a)(ii)
	“Reporting Event of Default”	6.04(a)
	“Special Interest”	6.04(a)
	“Spin-Off”	8.05(c)(ii)
	“Successor Person”	8.08(a)
	“Valuation Period”	8.05(c)(ii)

  

Section
1.03        Rules
of Construction. In this Note:

(a)                
a term has the meaning assigned to it;

    	 	 -8-	 

     

    

(b)                
an accounting term not otherwise defined has the meaning assigned to it and will be construed
in accordance with U.S. generally accepted accounting principles;

(c)                
“or” is not exclusive;

(d)                
“including” means including, without limitation;

(e)                
words in the singular include the plural, and words in the plural include the singular, unless
the context requires otherwise;

(f)                 
“herein,” “hereof” and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or other subdivision of this Indenture,
unless the context requires otherwise;

(g)                
all references to $, dollars, cash payments or money refer to United States currency; and

(h)                
unless the context requires otherwise, all references to interest on this Note will (i) include
any Additional Interest payable pursuant to the Registration Rights Agreement and any Special Interest payable pursuant to Section
6.04 hereof; and (ii) for the avoidance of doubt, not include any Default Interest payable on a Defaulted Amount pursuant to Article
2 hereof.

Article
2

PAYMENT TERMS, TRANSFER RESTRICTIONS AND NOTE REPLACEMENT

Section
2.01        Payments.

(a)                
General.

(i)                                 
Payment at Maturity. Unless earlier paid or deemed paid pursuant to any of Sections
3.05 or 8.03 hereof, this Note will mature on July 15, 2021 (the “Maturity Date”) and, on the Maturity Date,
the Company will pay the Holder $1,000 in cash for each $1,000 principal amount of this Note (and in the case of a principal amount
or portion of a principal amount that is not a multiple of $1,000, an equivalent pro rata amount), together with accrued and unpaid
interest to, but not including, the Maturity Date (with such interest to be payable to the Holder as of the Close of Business on
the Regular Record Date immediately preceding the Maturity Date).

(ii)                               
Payment of Interest. This Note will accrue interest at a rate equal to 6.00% per annum
from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided
for, the Issue Date until, subject to Section 2.01(b), the date the principal amount of this Note is paid or deemed to be paid,
as the case may be, pursuant to clause (i) of this Section 2.01(a) or any of Sections 3.05 or 8.03 hereof. Additional Interest
will accrue on this Note to the extent provided in the Registration Rights Agreement and Special Interest will accrue on this Note
to the extent provided in Section 6.04 hereof, in each case in addition to interest accruing on this Note pursuant to the immediately
preceding sentence.

    	 	 -9-	 

     

    

Except as otherwise
provided herein (including Section 3.01(b) and Section 8.02(d)), interest will be payable in arrears on July 15, 2016 and, thereafter,
semi-annually in arrears on January 15 and July 15 of each year (each, an “Interest Payment Date”) to the Holder
as of the Close of Business on the January 1 or July 1, as the case may be, and whether or not on a Business Day, immediately preceding
the applicable Interest Payment Date (each such date, a “Regular Record Date”). Interest on this Note that has
been converted or repurchased after a Regular Record Date and on or before the related Interest Payment Date will be paid in the
manner set forth in Section 3.01(b) and Section 8.02(d), as applicable. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.

(iii)                                                      
Method of Payment. The Company will pay the principal of and the Fundamental Change
Repurchase Price for this Note by check or wire transfer, in the manner set forth below, to the Holder on the relevant payment
date upon surrender thereof to the Company and, if applicable, satisfaction of any other requirements therefor set forth in Article
3. The Company will pay interest due, on an Interest Payment Date, on (and, subject to the immediately preceding sentence, the
principal of or the Fundamental Change Repurchase Price for) this Note to the Holder (i) by check mailed to the Holder’s
registered address; or (ii) if the Holder delivers, not later than the Regular Record Date relating to such Interest Payment Date
(or, with respect to the payment of the principal of or the Fundamental Change Repurchase Price for such Note, the date that is
fifteen (15) days immediately preceding the Maturity Date or related Fundamental Change Repurchase Date, as applicable), a written
request to the Company that the Company make such payments by wire transfer to an account of the Holder within the United States,
by wire transfer of immediately available funds to such account, which request shall remain in effect until the Holder notifies
the Company, in writing, to the contrary.

(b)                
Defaulted Amounts. Whenever any amount payable on this Note (including, the principal
of, the Fundamental Change Repurchase Price for, and interest on, this Note) has become due and payable, but the Company fails
to punctually pay or to duly provide for such amount (any such amount, a “Defaulted Amount”), in each case regardless
of whether such failure constitutes an Event of Default, then such Defaulted Amount will accrue interest (“Default Interest”)
at a rate equal to 6.00% per annum plus 100 basis points from, and including, such payment date and to, but excluding, the date
on which such Defaulted Amount is paid by the Company, which Default Interest shall be payable by the Company on demand. 

(c)                
Acknowledgement and Agreement by the Holder. The Holder, by accepting this Note, acknowledges
and agrees to comply with the restrictions set forth in this Note’s legend.

Section
2.02        Replacement
Note.

If (a)(i) this Note
is mutilated and surrendered to the Company; or (ii) the Holder claims that this Note has been lost, destroyed or stolen and provides
the Company with (A) evidence of such loss, theft or destruction that is reasonably satisfactory to the Company; and (B) any amount
or kind of security or indemnity that the Company requests to protect itself from any loss that it may suffer upon replacement
of this Note; and, in either case, (b) such Holder satisfies any other reasonable requirements of the Company, including the payment
of any tax or other governmental charge that may be imposed in connection with the replacement of this Note, then, unless the Company
receives notice that this Note has been acquired by a bona fide purchaser, the Company will promptly execute and deliver to the
Holder a replacement Note having the same aggregate principal amount as this Note that was mutilated or claimed to be lost, destroyed
or stolen.

    	 	 -10-	 

     

    

Every new Note issued
pursuant to this Section 2.02 in exchange for a mutilated Note, or in lieu of a destroyed, lost or stolen Note, will constitute
an original contractual obligation of the Company and any other obligor upon this Note, regardless of whether the mutilated, destroyed,
lost or stolen Note will be at any time enforceable by anyone, and will be entitled to all of the benefits, and subject to all
the limitations, set forth herein.

Article
3

REPURCHASE AT THE OPTION OF THE HOLDER

Section
3.01        Fundamental
Change Permits Holder to Require the Company to Repurchase this Note.

(a)                
General. If a Fundamental Change occurs at any time prior to the Maturity Date, the
Holder will have the right, at its option, to require the Company to repurchase this Note, or any portion thereof, on the Fundamental
Change Repurchase Date for such Fundamental Change for an amount of cash equal to the Fundamental Change Repurchase Price for such
Fundamental Change Repurchase Date and this Note.

(b)                
Fundamental Change Repurchase Price. The “Fundamental Change Repurchase Price”
means, for this Note to be repurchased on any Fundamental Change Repurchase Date, a price equal to 100% of the principal amount
of this Note, plus accrued and unpaid interest, if any, on this Note to, but excluding, such Fundamental Change Repurchase Date;
provided, however, that if such Fundamental Change Repurchase Date occurs after a Regular Record Date, but on or
prior to the Interest Payment Date corresponding to such Regular Record Date, the Fundamental Change Repurchase Price for this
Note will be 100% of the principal amount of this Note, and accrued and unpaid interest, if any, on this Note to, but excluding,
such Interest Payment Date (assuming, solely for these purposes, that this Note remained outstanding through such Interest Payment
Date) will be payable, on such Fundamental Change Repurchase Date, to the Holder as of the Close of Business on such Regular Record
Date.

(c)                
Fundamental Change Repurchase Date. The “Fundamental Change Repurchase Date”
means, for any Fundamental Change, the date specified by the Company in the Fundamental Change Notice for such Fundamental Change,
which date will be not less than twenty (20) Business Days, nor more than thirty five (35) Business Days, immediately following
the Fundamental Change Notice Date for such Fundamental Change.

    	 	 -11-	 

     

    

Section
3.02                        
Fundamental Change Notice.

(a)                
General. On or before the Business Day immediately following the effective date of
a Fundamental Change, the Company will deliver to the Holder written notice of such Fundamental Change and of the resulting repurchase
right (the “Fundamental Change Notice,” and the date of such delivery, the “Fundamental Change Notice
Date”). 

The Fundamental Change
Notice for each Fundamental Change will specify, as applicable:

(A)            
briefly, the events causing such Fundamental Change;

(B)             
the effective date of such Fundamental Change;

(C)             
the last date on which the Holder may exercise its right to require the Company to repurchase
this Note as a result of such Fundamental Change under this Article 3;

(D)            
the procedures that the Holder must follow to require the Company to repurchase this Note;

(E)             
the Fundamental Change Repurchase Price for each $1,000 principal amount this Note for such
Fundamental Change (and in the case of a principal amount or portion of a principal amount that is not a multiple of $1,000, the
equivalent pro rata amount);

(F)              
the Fundamental Change Repurchase Date for such Fundamental Change;

(G)            
in the event that a Fundamental Change Repurchase Notice has been duly tendered in respect
of this Note and not validly withdrawn, the Fundamental Change Repurchase Price which will be paid promptly following the later
of the Fundamental Change Repurchase Date and the time this Note is surrendered for repurchase;

(H)            
the Conversion Rate in effect on the Fundamental Change Notice Date for such Fundamental Change
and the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Fundamental Change Notice Date;

(I)               
if applicable, any adjustments that will be made to the Conversion Rate as a result of such
Fundamental Change, including any Additional Shares by which the Conversion Rate will be increased pursuant to Section 8.07 hereof
in the event that the Holder converts this Note “in connection with” such Fundamental Change;

(J)               
that in the event that a Fundamental Change Repurchase Notice has been delivered by the Holder,
this Note may be converted only if the Holder withdraws such Fundamental Change Repurchase Notice in accordance with the terms
of this Note or to the extent any portion of this Note are not subject to such Fundamental Change Repurchase Notice;

    	 	 -12-	 

     

    

(K)            
the procedures for withdrawing a Fundamental Change Repurchase Notice;

(L)             
that if this Note or portion of this Note is subject to a validly delivered Fundamental Change
Repurchase Notice, unless the Company defaults in paying the Fundamental Change Repurchase Price for this Note or portion of this
Note, interest, if any, on this Note or portion of this Note will cease to accrue on and after the Fundamental Change Repurchase
Date; and

(b)                
Failure or Defect. Notwithstanding anything provided elsewhere in this Note, neither
the failure of the Company to deliver a Fundamental Change Notice nor a defect in a Fundamental Change Notice delivered by the
Company will limit the repurchase rights of the Holder under this Article 3 or impair or otherwise affect the validity of any proceedings
relating to the repurchase of this Note pursuant to this Article 3.

Section
3.03        Fundamental
Change Repurchase Notice.

(a)                
General. To exercise its repurchase rights under Section 3.01(a) hereof with respect
to this Note pursuant to a Fundamental Change, the Holder must:

(i)                                 
deliver to the Company, by the Close of Business on the second (2nd) Business Day immediately
preceding the Fundamental Change Repurchase Date, subject to extension to comply with applicable law, a duly completed “Fundamental
Change Repurchase Notice,” substantially in the form set forth in Exhibit A hereto (a “Fundamental Change
Repurchase Notice”) setting forth that the Holder is tendering this Note for repurchase; and

(ii)                               
deliver this Note to the Company by physical delivery together with any endorsements or other
documents reasonably requested by the Company.

(b)                
Contents of Fundamental Change Repurchase Notice. The Fundamental Change Repurchase
Notice for this Note must state:

(i)                                 
if this Note is to be repurchased in part, the portion of the principal amount of this Note
to be repurchased; and

(ii)                               
that this Note will be repurchased by the Company pursuant to the provisions of this Article
3.

(c)                
Effect of Improper Notice. Unless and until the Company receives a validly delivered
Fundamental Change Repurchase Notice with respect to this Note, together with this Note, in a form that conforms in all material
aspects with the description contained in such Fundamental Change Repurchase Notice, the Holder will not be entitled to receive
the Fundamental Change Repurchase Price for this Note.

    	 	 -13-	 

     

    

Section
3.04       Withdrawal
of Fundamental Change Repurchase Notice 

(a)               
General. After the Holder delivers a Fundamental Change Repurchase Notice with respect
to this Note, the Holder may withdraw such Fundamental Change Repurchase Notice (in whole or in part) with respect to this Note
or any portion of this Note by delivering to the Company a written notice of withdrawal prior to the Close of Business on the second
(2nd) Business Day immediately preceding the Fundamental Change Repurchase Date. Any such withdrawal notice must state the principal
amount of this Note, if any, that remains subject to the Fundamental Change Repurchase Notice.

(b)              
Return of Note. Upon receipt of a validly delivered withdrawal notice, the Company
will promptly return this Note or portion of this Note to the Holder, in the amount specified in such withdrawal notice.

Section
3.05        Effect
of Fundamental Change Repurchase Notice 

(a)                
General. If the Holder validly delivers to the Company a Fundamental Change Repurchase
Notice (together with all necessary endorsements) with respect to this Note, the Holder may no longer convert this Note unless
and until the Holder validly withdraws such Fundamental Change Repurchase Notice in accordance with Section 3.04 hereof.

(b)                
Timing of Payment. Upon the Company’s receipt of (i) a valid Fundamental Change
Repurchase Notice (together with all necessary endorsements); and (ii) this Note to which such Fundamental Change Repurchase Notice
pertains, the Holder will be entitled, except to the extent the Holder has validly withdrawn such Fundamental Change Repurchase
Notice in accordance with Section 3.04 hereof, to receive the Fundamental Change Repurchase Price with respect to this Note on
the later of the following (subject to extension to comply with applicable law): (x) the Fundamental Change Repurchase Date; and
(y) the date of delivery of this Note to the Company, duly endorsed.

(c)                
Effect of Payment. Upon receipt by the Holder of the Fundamental Change Repurchase
Price:

(A)            
this Note will cease to be outstanding and interest (except Default Interest) will cease to
accrue on this Note, except to the extent provided in the proviso to Section 3.01(b); and

(B)             
all other rights of the Holder with respect to this Note (other than the right to receive
payment of the Fundamental Change Repurchase Price upon delivery or transfer of this Note and any Defaulted Amounts or Default
Interest with respect to this Note, and other than as provided in the proviso to Section 3.01(b)) will terminate.

Section
3.06        Note
Repurchased in Part. If this Note is to be repurchased only in part, the Holder must surrender this Note to the Company, whereupon
the Company will promptly deliver to the Holder a new Note of any denomination or denominations equal to the portion of the principal
amount of this Note so surrendered which is not repurchased.

    	 	 -14-	 

     

    

Section
3.07        Covenant
to Comply With Securities Laws Upon Repurchase of Note. In connection with any repurchase offer pursuant to a Fundamental
Change Repurchase Notice under this Article 3, the Company will comply with any applicable United States federal and state securities
laws so as to permit the Holder to exercise its rights and obligations under Article 3 hereof in the time and in the manner specified
in Sections 3.01 and 3.03 hereof.

Article
4

COVENANTS

Section
4.01        Payment
of Note. The Company will pay or cause to be paid the principal of, Fundamental Change Repurchase Price for, and any accrued
and unpaid interest (including, for the avoidance of doubt, any Additional Interest or Special Interest) on, this Note on the
dates and in the manner required under this Note. To the extent lawful, the Company will also pay Default Interest on any Defaulted
Amounts in accordance with Section 2.01 hereof.

Section
4.02        144A
Information. Whenever the Company is not subject to Section 13 or Section 15(d) of the Exchange Act, if this Note or shares
of Common Stock, if any, issuable upon the conversion of this Note constitute “restricted securities” within the meaning
of Rule 144, the Company will, upon the request of the Holder or beneficial owner of this Note, or a holder or beneficial owner
of the Common Stock, if any, issuable upon the conversion of this Note, (i) promptly furnish or cause to be furnished to the applicable
Holder, beneficial owner, or any prospective purchaser designated by the applicable Holder or beneficial owner, of this Note,
or any holder, beneficial owner, or any prospective purchaser designated by the applicable holder or beneficial owner, of the
Common Stock, as applicable, all of the information that a prospective purchaser of this Note or the Common Stock, as applicable,
is required to receive under Rule 144A(d)(4) of the Securities Act for this Note or shares of Common Stock, as applicable, to
be resold to such prospective purchaser pursuant the exemption from registration provided by Rule 144A and (ii) make publicly
available such information as necessary to permit sales pursuant to Rule 144, as the case may be. 

Section
4.03        Reports.
The Company will deliver to the Holder copies of all quarterly and annual reports that the Company is required to deliver to the
SEC on Forms 10-Q and 10-K, respectively, and any other documents, information or other reports that the Company is required to
file with the SEC under Sections 13 or 15(d) of the Exchange Act no later than the date that the Company is required to file such
quarterly and annual reports, other documents, information or other reports with the SEC (after giving effect to any grace period
provided by Rule 12b-25 under the Exchange Act). Any document filed by the Company with the SEC via the EDGAR system (or any successor
thereto) will be deemed to be delivered to the Holder at the time such document is filed via the EDGAR system (or such successor).
Notwithstanding anything to the contrary in the foregoing, nothing in this paragraph shall require the Company to deliver to any
Holder any material for which the Company has sought and received, or is seeking and has not been denied, confidential treatment
by the SEC. 

Section
4.04        Additional
Interest.

(a)                
General. Additional Interest will accrue on this Note to the extent provided in the
Registration Rights Agreement, and the Company’s obligation to pay any such Additional Interest will be deemed to be obligations
under this Note with the same force and effect as if the relevant provisions of the Registration Rights Agreement were reproduced
in this Note.

    	 	 -15-	 

     

    

Section
4.05        Compliance
Certificate.

(a)                
Annual Compliance Certificate. Within 90 days after the end of each fiscal year of
the Company, beginning with the fiscal year ending on December 31, 2015, the Company will deliver to the Holder an Officers’
Certificate, which Officers’ Certificate will state (i) that the Officers signing such Officers’ Certificate have supervised
a review of the activities of the Company and the Subsidiaries with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Note during the preceding fiscal year; and (ii) to the best knowledge of each
of the Officers signing such Officers’ Certificate, (A) whether the Company has kept, observed, performed and fulfilled each
and every covenant contained in this Note and is not in default in the performance or observance of any of the terms, provisions
and conditions of this Note (without regard to any period of grace or requirement of notice provided under this Note) or, if one
or more Defaults or Events of Default have occurred, what events triggered such Defaults or Events of Default and what actions
the Company is taking or proposes to take with respect to such Defaults or Events of Default; and (B) whether any event has occurred
and remains in existence by reason of which any payment of the principal of, the Fundamental Change Repurchase Price for, or interest
on, or any delivery of any of the consideration due upon conversion of, this Note is prohibited, and, if any such event has occurred
and remains in existence, a description, in reasonable detail, of such event or events and what actions the Company is taking or
proposes to take with respect to such event or events.

(b)                
Certificate of Default or Event of Default. Within five (5) Business Days after a Default
or Event of Default occurs, the Company will deliver Holder an Officers’ Certificate describing such Default or Event of
Default, its status and a description, in reasonable detail, of what action the Company is taking or proposes to take with respect
to such Default or Event of Default.

Section
4.06        Corporate
Existence. Subject to Article 5 hereof, the Company will do or cause to be done all things necessary to preserve and keep
in full force and effect:

(a)                
its corporate existence, and the corporate, partnership or other existence of each of the
Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary; and

(b)                
the rights (charter and statutory), licenses and franchises of the Company and the Subsidiaries;

provided, however,
that the Company will not be required to preserve or keep in full force and effect any such right, license or franchise, or the
corporate, partnership or other existence of any of the Subsidiaries, if the Board of Directors determines that the preservation
thereof is no longer desirable in the conduct of the business of the Company and the Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holder.

    	 	 -16-	 

     

    

Section
4.07        Par
Value Limitation.

The Company will not
take any action that, after giving effect to any adjustment pursuant to Section 8.05 or 8.07, would result in the Conversion Price
becoming less than the par value of one share of Common Stock. In addition, the Company will not engage in any transaction that
would require an adjustment to the Conversion Rate pursuant to Section 8.06 that would cause the Conversion Price to be less than
the par value of one share of Common Stock.

Section
4.08        Stay,
Extension and Usury Laws. The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Note.

Section
4.09        Further
Instruments and Acts. Upon request of the Holder, the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more effectively the terms of this Note.

Article
5

CONSOLIDATION, MERGER AND SALE OF ASSETS

Section
5.01        Company
May Consolidate, Merge or Sell Its Assets Only on Certain Terms. The Company will not (1) consolidate with or merge with or
into; or (2) sell, lease or otherwise transfer all or substantially all of the consolidated assets of the Company and its Subsidiaries
to, another Person (any such transaction, a “Reorganization Event”), unless:

(a)                
either:

(i)                                 
the Company is the surviving corporation; or

(ii)                               
the resulting, surviving or transferee Person (if other than the Company) of such Reorganization
Event (the “Reorganization Successor Corporation”):

(I)               
is a corporation organized and validly existing under the laws of the United States of America,
any State thereof or the District of Columbia; and

(II)            
expressly assumes all of the obligations of the Company under this Note;

(b)                
immediately after giving effect to such Reorganization Event, no Default will have occurred
and be continuing; and

(c)                
prior to the effective date of such Reorganization Event, the Company delivers to the Holder
an Officers’ Certificate and an Opinion of Counsel, each stating that:

    	 	 -17-	 

     

    

(i)                                 
such Reorganization Event complies with Section 5.01(a) hereof;

(ii)                               
all conditions precedent to such Reorganization Event provided in this Note have been satisfied;
and

(iii)                              
this Note constitutes the legal, valid and binding obligation of the Reorganization Successor
Corporation (subject to customary limitations);

Section
5.02        Successor
Substituted. If any Reorganization Event occurs that complies with Sections 5.01(a)(ii) and 5.01(b) hereof, and the Company
has complied with Section 5.01(c) hereof:

(a)                
 from and after the date of such Reorganization Event, the Reorganization Successor Corporation
for such Reorganization Event will succeed to, and be substituted for, and may exercise every right and power of, and shall assume
all obligations of, the Company under this Note with the same effect as if such Reorganization Successor Corporation had been named
as the Company herein.

(b)                
except in the case of a Reorganization Event that is a conveyance, transfer or lease of all
or substantially all of the Company’s assets, the Person named as the “Company” in the first paragraph of this
Note or any successor (other than such Reorganization Successor Corporation that will thereafter have become such in the manner
prescribed in this Article 5) will be discharged from its obligations under this Note and may be dissolved, wound up and liquidated
at any time.

Article
6

DEFAULTS AND REMEDIES

Section
6.01        Events
of Default.

(a)                
General. Each of the following events will be an “Event of Default”:

(i)              
the Company fails to pay the principal of this Note (including any Fundamental Change Repurchase
Price) when due at maturity or upon repurchase upon a Fundamental Change or declaration of acceleration or otherwise;

(ii)              
the Company fails to pay any interest on this Note when due and such failure continues for
a period of thirty (30) days after the applicable due date;

(iii)            
the Company fails to give any Fundamental Change Notice or notice of a Make-Whole Fundamental
Change, in each case, when due;

(iv)            
the Company fails to comply with its obligation to convert this Note in accordance with Article
8 hereof upon the Holder’s exercise of its conversion rights with respect to this Note;

(v)              
the Company fails to comply with its obligations under Article 5 hereof;

    	 	 -18-	 

     

    

(vi)            
the Company fails to perform or observe any of its covenants or warranties in this Note (other
than a covenant or agreement specifically addressed in clauses (i) through (v) above) and such failure continues for a period of
sixty (60) days after days after written notice to the Company by the Holder;

(vii)          
the default by the Company or any Subsidiary with respect to any mortgage, agreement or other
instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed
by the Company and/or any Subsidiary in excess of one million dollars ($1,000,000) in the aggregate, whether such indebtedness
exists as of the Issue Date or is later created, if that default:

(A)            
results in such indebtedness becoming or being declared due and payable (prior to its express
maturity); or

(B)             
constitutes a failure to pay the principal of, or interest on, such indebtedness when due
and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and after the expiration
of any applicable grace period,

and, such acceleration
shall not have been rescinded or annulled or such failure to pay shall not have been cured, as the case may be, within thirty (30)
days after written notice to the Company by the Holder;

(viii)        
a final judgment for the payment of in excess of one million dollars ($1,000,000) (excluding
any amounts covered by insurance) is rendered against the Company or any Subsidiary, and such judgment is not discharged or stayed
within sixty (60) days after (i) the date on which all rights to appeal such judgment have expired if no appeal has commenced;
or (ii) the date on which all rights to appeal have been extinguished;

(ix)            
the Company or any Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy
Law:

(A)            
commences a voluntary case;

(B)             
consents to the entry of an order for relief against it in an involuntary case;

(C)             
consents to the appointment of a Custodian of it or for any substantial part of its property;

(D)            
makes a general assignment for the benefit of its creditors;

(E)             
takes any comparable action under any foreign laws relating to insolvency; or

(F)              
generally is not paying its debts as they become due; or

    	 	 -19-	 

     

    

(x)              
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A)            
is for relief against Company or any Significant Subsidiary in an involuntary case or proceeding;

(B)             
appoints a Custodian of the Company or any Significant Subsidiary, or for any substantial
part of the property of the Company or any Significant Subsidiary;

(C)             
orders the winding up or liquidation of the Company or any Significant Subsidiary; or

(D)            
grants any similar relief under any foreign laws,

and, in each
such case, the order or decree remains unstayed and in effect for sixty (60) days.

(b)                
Cause Irrelevant. Each of the events enumerated in Section 6.01(a) hereof will constitute
an Event of Default whatever the cause and regardless of whether voluntary or involuntary or effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

Section
6.02        Acceleration.

(a)                
Automatic Acceleration in Certain Circumstances. If an Event of Default specified in
Sections 6.01(a)(ix) or 6.01(a)(x) hereof occurs with respect to the Company, the principal amount of, and all accrued and unpaid
interest, if any, on this Note will immediately become due and payable without any further action or notice by any party.

(b)                
Optional Acceleration. If any Event of Default other than an Event of Default specified
in Section 6.01(a)(ix) or 6.01(a)(x) occurs and is continuing, the Holder, by delivering a written notice to the Company, may declare
the principal amount of, and all accrued and unpaid interest, if any, on this Note immediately due and payable, and upon such declaration,
the principal amount of, and all accrued and unpaid interest, if any, on this Note will immediately become due and payable.

(c)                
Rescission of Acceleration. Notwithstanding anything to the contrary in this Note,
the Holder may rescind any acceleration of this Note and its consequences hereunder by delivering written notice to the Company
if (i) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (ii) all existing
Events of Default (other than the nonpayment of the principal of, interest, if any, on, or the Fundamental Change Repurchase Price
for, this Note that has become due solely as a result of acceleration) have been cured or waived. No such rescission will affect
any subsequent Default or impair any right consequent thereto.

    	 	 -20-	 

     

    

Section
6.03        Other
Remedies. If an Event of Default occurs and is continuing, the Holder may pursue any available remedy to collect the payment
of principal, accrued and unpaid interest, if any, or payment of the Fundamental Change Repurchase Price for, this Note or to
enforce the performance of any provision of this Note regarding any other matter.

A delay or omission
by the Holder in exercising any right or remedy accruing upon an Event of Default will not impair the right or remedy or constitute
a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.

Section
6.04        Sole
Remedy for Failure to Report.

(a)                
General. Notwithstanding anything to the contrary in this Note, the Company may elect
that the sole remedy for any Event of Default specified in Section 6.01(a)(vi) hereof relating to the Company’s failure to
comply with Section 4.03 hereof (a “Reporting Event of Default”) will, for the period beginning on the date
on which such Reporting Event of Default first occurred and ending on the earlier of (A) the date on which such Reporting Event
of Default (i) is cured; or (ii) is validly waived in accordance with Section 6.05 hereof; and (B) the sixtieth (60th) calendar
day immediately following the date on which such Reporting Event of Default first occurred, consist exclusively of the right to
receive additional interest (the “Special Interest”) on this Note at a rate equal to 0.50% per annum on the
principal amount of this Note. Any Special Interest will be payable in the same manner and on the same dates as the stated interest
payable on this Note and will accrue in addition to any Additional Interest that the Company is obligated to pay. 

(b)                
Limitation on Remedy. If (i) a Reporting Event of Default occurs and the Company elects
that the sole remedy with respect to such Reporting Event of Default will be the Special Interest; and (ii) on the sixty first
(61st) day immediately following, and including, the date on which such Reporting Event of Default first occurred, such Reporting
Event of Default has not been cured or validly waived in accordance with Section 6.05 hereof, then this Note will become subject
to acceleration under Section 6.02(a) hereof on account of such Reporting Event of Default. For the avoidance of doubt, Special
Interest will cease to accrue from such sixty first (61st) day, without limiting the generality of this Section 6.04 as it may
apply to any subsequent Reporting Event of Default.

(c)                
Company Election Notice. To elect to pay the Special Interest as the sole remedy for
a Reporting Event of Default, the Company must deliver written notice of such election to the Holder prior to the date on which
such Reporting Event of Default first occurs. Any such notice must include a brief description of the report that the Company failed,
or will fail, to file, a statement that the Company is electing to pay the Special Interest and the date on which such Reporting
Event of Default will occur.

If a Reporting Event
of Default occurs and the Company fails to timely deliver such notice for such Reporting Event of Default or fails to pay the Special
Interest, this Note will be subject to acceleration under Section 6.02(a) hereof on account of such Reporting Event of Default.

(d)                
Other Events of Default. Notwithstanding anything to the contrary herein, if the Company
elects to pay Special Interest with respect to any Reporting Event of Default, the Company’s election will not affect the
rights of the Holder with respect to any other Event of Default, including with respect to any other Reporting Event of Default;
provided, that, for the avoidance of doubt, in no event will the Company be obligated to pay Special Interest at a rate greater
than 0.50% per annum on the principal amount of this Note.

    	 	 -21-	 

     

    

Section
6.05        Waiver
of Past Defaults. If an Event of Default or a Default that would lead to such an Event of Default occurs and is continuing,
such Event of Default or Default may be waived only with the consent of the Holder. Whenever any Event of Default is so waived,
it will cease to exist, and whenever any Default is so waived, it will be deemed cured and any Event of Default arising therefrom
will be deemed not to occur. However, no such waiver will extend to any subsequent or other Default or Event of Default or impair
any consequent right.

Article
7

SATISFACTION AND DISCHARGE

Section
7.01        Discharge
of Liability on Note. When (a) this Note becomes due and payable, and the Company delivers to the Holder, as applicable, cash
(or, solely to satisfy amounts due and owing as a result of conversions of this Note, Conversion Consideration), sufficient to
pay all amounts due and owing on this Note and (b) the Company pays all other sums payable by it under this Note, this Note will
cease to be of further effect and the Holder will acknowledge the satisfaction and discharge of this Note.

Article
8

CONVERSIONS

Section
8.01        Right
To Convert.

(a)                
In General. Subject to, and upon compliance with, the provisions of this Article 8,
at any time prior to the Close of Business on the second (2nd) Business Day immediately preceding the Maturity Date, the Holder
may, at its option, convert this Note (or any portion thereof) into Conversion Consideration, as provided in this Article 8. This
Note may not be converted after the Close of Business on the second (2nd) Business Day immediately preceding the Maturity Date.

(b)                
Closed Periods. Notwithstanding anything to the contrary in this Note, if the Holder
tenders a Repurchase Notice with respect to this Note in accordance with Article 3 hereof, this Note may not be converted except
to the extent (i) this Note is not subject to such Repurchase Notice, (ii) such Repurchase Notice is withdrawn in accordance with
Article 3 hereof or (iii) the Company fails to pay the Fundamental Change Repurchase Price for this Note in accordance with Section
3.05(b) hereof.

Section
8.02        Conversion
Procedures.

(a)                
General. To exercise its conversion right with respect to this Note, the Holder must
(i) complete and manually sign a conversion notice in the form set forth in Exhibit A hereto, or a facsimile of such conversion
notice (such notice, or such facsimile, the “Conversion Notice”); (ii) deliver such signed and completed Conversion
Notice, which shall be irrevocable, and this Note to the Company; (iii) furnish any endorsements and transfer documents that the
Company may require; and (iv) pay any amounts due pursuant to Section 8.02(d) or 8.02(e).

    	 	 -22-	 

     

    

The first Business
Day on which the Holder satisfies the foregoing requirements with respect to this Note and on which conversion of this Note is
not otherwise prohibited hereunder will be the “Conversion Date” for this Note. If the Holder has delivered
a Fundamental Change Repurchase Notice with respect to this Note, the Holder may not surrender this Note for conversion until the
Holder has withdrawn such Fundamental Change Repurchase Notice in accordance with Section 3.04.

The conversion of
this Note will be deemed to occur at the Close of Business on the Conversion Date for this Note, and this converted Note or portion
thereof will cease to be outstanding upon conversion.

(b)                
Holder of Record. If the Holder surrenders the entire principal amount of this Note
for conversion, the Holder will no longer be the Holder of this Note as of the Close of Business on the Conversion Date for this
Note.

The person in whose
name any shares of Common Stock are issuable upon conversion of this Note will become the holder of record of such shares as of
the Close of Business on the Conversion Date for such conversion.

(c)                
Conversions in Part. If the Holder surrenders only a portion of the principal amount
of this Note for conversion, promptly after the Conversion Date for such portion, the Company will deliver to the Holder a new
Note, having a principal amount equal to the aggregate principal amount of the unconverted portion of the Note surrendered for
conversion.

(d)                
Reimbursement of Interest upon Conversion. If the Holder converts this Note after the
Close of Business on a Regular Record Date, but prior to the Open of Business on the Interest Payment Date corresponding to such
Regular Record Date, then (x) the Holder at the Close of Business on such Regular Record Date shall be entitled, notwithstanding
such conversion, to receive, on the date the Company delivers (or is required to deliver) the Conversion Consideration due in respect
of such conversion, the unpaid interest that would have accrued on such Note to, but excluding, such Interest Payment Date (assuming,
solely for these purposes, that such Note remained outstanding through such Interest Payment Date); and (y) the Holder must, upon
surrender of this Note for conversion, accompany this Note with an amount of cash equal to the amount of such interest referred
to in clause (x) above; provided, however, that the Holder need not make such payment (A) for conversions following
the Regular Record Date immediately preceding the Maturity Date; (B) if the Company has specified a Fundamental Change Repurchase
Date that is after such Regular Record Date and on or prior to the Business Day immediately following such Interest Payment Date;
or (C) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to this Note.
For the avoidance of doubt, the Holder at the Close of Business on the Regular Record Date immediately preceding the Maturity Date
will be entitled to receive interest that accrues (or would have accrued) on this Note to, but excluding, the Maturity Date notwithstanding
any conversion of this Note.

    	 	 -23-	 

     

    

(e)                
Taxes and Duties. If the Holder converts this Note, the Company will pay any documentary,
stamp or similar issue or transfer tax due on the issue of any shares of the Common Stock upon the conversion; provided,
however, that if any tax is due because the Holder requested that shares of Common Stock be issued in a name other than
its own, the Holder will pay such tax and the Company, until having received a sum sufficient to pay such tax, may refuse to deliver
any certificates representing the shares of Common Stock being issued in a name other than that of the Holder

(f)                 
Restrictions on Conversion. Notwithstanding anything to the contrary in this Note,
this Note will not be convertible by the Holder, and the Company will not effect any conversion of this Note, in each case to the
extent (and only to the extent) that such convertibility or conversion would result in the Holder or any of its Affiliates beneficially
owning in excess of 9.99% of the then-outstanding shares of Common Stock. For these purposes, beneficial ownership and all determinations
and calculations (including with respect to calculations of percentage ownership) will be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For the avoidance of doubt, if the convertibility
of this Note is restricted pursuant to this Section 8.02(f), this Note will continue to be outstanding, and its convertibility
will be reinstated if and when the convertibility and conversion will not violate the limitations set forth in this Section 8.02(f).

Section
8.03        Settlement
Upon Conversion.

(a)                
Conversion Obligation.

(i)                                 
Conversion Consideration. Subject to the terms hereof, upon conversion of this Note,
the consideration (the “Conversion Consideration”) due in respect of each $1,000 principal amount of this Note
to be converted will consist of (I) a whole number of shares of Common Stock equal to the Conversion Rate in effect on the Conversion
Date for such conversion (which, if not a whole number, will be rounded down to the nearest whole number); (II) in the case of
a principal amount or portion of a principal amount that is not a multiple of $1,000, an equivalent pro rata number of shares and
(III) if such Conversion Rate is not a whole number, cash in lieu of the related fractional share in an amount equal to the product
of (x) the Last Reported Sale Price per share of Common Stock on such Conversion Date (or, if such Conversion Date is not a Trading
Day, the immediately preceding Trading Day) and (y) the fractional portion of such Conversion Rate.

(ii)                               
Delivery of Conversion Consideration. Except as set forth in Section 8.05, the Company
will pay or deliver, as the case may be, the Conversion Consideration due upon the conversion of this Note to the Holder on the
third (3rd) Business Day immediately following the Conversion Date for such conversion.

(b)                
Settlement of Accrued Interest and Deemed Payment of Principal. If the Holder converts
this Note, the Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on this Note, and, except
as provided in Section 8.02(d), the Company’s delivery of the Conversion Consideration due upon such conversion will be deemed
to satisfy and discharge in full the Company’s obligation to pay the principal of this Note and accrued and unpaid interest,
if any, on, this Note to, but excluding the Conversion Date. As a result, except as provided in Section 8.02(d), any accrued and
unpaid interest with respect to this Note, in the event that it is converted, will be deemed to be paid in full rather than cancelled,
extinguished or forfeited.

    	 	 -24-	 

     

    

Section
8.04        Common
Stock Issued Upon Conversion.

(a)                
The Company will reserve out of its authorized but unissued shares of Common Stock, and keep
available to satisfy conversion of this Note, a number of shares of Common Stock sufficient to permit the conversion this Note,
after giving effect to the largest number of Additional Shares that may from time to time be added to the Conversion Rate as provided
in Section 8.07.

(b)                
Any shares of Common Stock delivered upon the conversion of this Note will be newly issued
shares or treasury shares, duly and validly issued, fully paid, nonassessable, free from preemptive rights and free of any lien
or adverse claim (except to the extent of any lien or adverse claim created by the action or inaction of the Holder or other Person
to whom such shares of Common Stock will be delivered). In addition, the Company will endeavor to comply promptly with all federal
and state securities laws regulating the offer and delivery of any shares of Common Stock issuable upon conversion of this Note.
The Company will also use its best efforts to cause any shares of Common Stock issuable upon conversion of this Note to be listed
on whatever stock exchange(s) the Common Stock is listed on the date the Holder becomes a record holder of such Common Stock.

Section
8.05        Adjustment
of Conversion Rate. The Company will adjust the Conversion Rate from time to time as described in this Section 8.05, except
that the Company will not make an adjustment to the Conversion Rate if the Holder participates (other than in a share split or
share combination), at the same time and upon the same terms as holders of the Common Stock, and solely as a result of holding
this Note, in the relevant transaction described in this Section 8.05 without having to convert its Note and as if it held a number
of shares of the Common Stock equal to the product of (i) the Conversion Rate in effect on the applicable record date, Effective
Date or expiration date; and (ii) the aggregate principal amount of this Note (expressed in thousands) on such date.

(a)                
Stock Dividends and Share Splits. If the Company exclusively issues to all or substantially
all holders of the Common Stock shares of Common Stock as a dividend or distribution on shares of the outstanding Common Stock,
or if the Company effects a share split of the Common Stock or a share combination of the Common Stock (excluding an issuance solely
pursuant to a Common Stock Change Event, as to which the provisions set forth in Section 8.08(a) hereof will apply), the Conversion
Rate will be adjusted based on the following formula:

 

where:

    	 	 -25-	 

     

    

CR0=the
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date of such dividend or distribution, or
immediately prior to the Open of Business on the Effective Date of such share split or share combination, as applicable;

CR1=the
Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or Effective Date, as applicable;

OS0=the
number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date or Effective Date,
as applicable; and

OS1=the
number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share
combination, as applicable.

Such adjustment shall
become effective immediately after the Open of Business on such Ex-Dividend Date or Effective Date, as applicable. If any dividend,
distribution, share split or share combination of the type described in this Section 8.05(a) is declared, but not so paid or made,
the Conversion Rate will be immediately readjusted, effective as of the date the Board of Directors determines not to pay such
dividend or distribution or to effect such share split or share combination, to the Conversion Rate that would then be in effect
if such dividend, distribution, share split or share combination had not been declared or announced.

(b)                
Rights, Options and Warrants. If the Company issues, to all or substantially all holders
of its outstanding Common Stock, rights, options or warrants entitling such holders, for a period of not more than sixty (60) calendar
days after the record date of such issuance, to subscribe for, or purchase, shares of Common Stock, at a price per share less than
the average of the Last Reported Sale Prices per share of the Common Stock for the 10 consecutive Trading Day period ending on,
and including, the Trading Day immediately preceding the date of announcement of such issuance, then, subject to the provisions
described below with respect to rights issued pursuant to a stockholder rights plan, the Conversion Rate will be increased based
on the following formula:

where:

CR0=the
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such issuance;

CR1=the
Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;

OS0=the
number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date;

    	 	 -26-	 

     

    

X=the
total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

Y=the
number of shares of Common Stock equal to the quotient of (i) the aggregate price payable to exercise such rights, options or warrants,
over (ii) the average of the Last Reported Sale Prices per share of the Common Stock over the 10 consecutive Trading Day period
ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options
or warrants.

Such adjustment shall
become effective immediately after the Open of Business on such Ex-Dividend Date. To the extent that shares of Common Stock are
not delivered after the expiration of such rights, options or warrants, including because the issued rights, options or warrants
were not exercised, the Conversion Rate will be readjusted to the Conversion Rate that would then be in effect had the increase
with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares
of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate will be readjusted
to the Conversion Rate that would then be in effect if the Ex-Dividend Date for such issuance had not occurred.

For purposes of this
Section 8.05(b), in determining whether any rights, options or warrants entitle holders of the Common Stock to subscribe for, or
purchase, shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices per share of Common
Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement
for an issuance, and in determining the aggregate price payable to exercise such rights, options or warrants, there will be taken
into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise
thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

(c)                
Spin-Offs and Other Distributed Property.

(i)                                 
If the Company distributes shares of its Capital Stock, evidences of its indebtedness or other
assets or property of the Company, or rights, options or warrants to acquire Capital Stock of the Company or other securities,
to all or substantially all holders of the Common Stock, excluding:

(A)            
dividends, distributions, rights, options or warrants for which an adjustment was effected
pursuant to Section 8.05(a) hereof or Section 8.05(b) hereof, as applicable;

(B)             
dividends or distributions paid exclusively in cash for which an adjustment was effected pursuant
to Section 8.05(d) hereof;

(C)             
Spin-Offs for which the provisions described in Section 8.05(c)(ii) hereof will apply; and

    	 	 -27-	 

     

    

(D)            
an issuance solely pursuant to a Common Stock Change Event, as to which the provisions set
forth in Section 8.08(a) hereof will apply,

then the Conversion
Rate will be increased based on the following formula:

where:

CR0=the
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such distribution;

CR1=the
Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;

SP0=the
average of the Last Reported Sale Prices per share of the Common Stock over the 10 consecutive Trading Day period ending on, and
including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV=the
fair market value (as determined by the Company’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness,
assets, property, rights, options or warrants distributed with respect to each outstanding share of Common Stock on the Ex-Dividend
Date for such distribution.

Such adjustment
shall become effective immediately after the Open of Business on such Ex-Dividend Date. Notwithstanding the foregoing, if “FMV”
(as defined above) is equal to or greater than the “SP0” (as defined above), in lieu of the foregoing increase,
the Holder will receive, for each $1,000 principal amount of this Note outstanding on the record date for the distribution, at
the same time and upon the same terms as holders of the Common Stock, the amount and kind of shares of Capital Stock, evidences
of indebtedness, assets or property, rights, options or warrants or other securities that the Holder would have received if the
Holder had owned a number of shares of Common Stock equal to the Conversion Rate in effect on the record date for such distribution
(or in the case of a principal amount or portion of a principal amount that is not a multiple of $1,000, an equivalent pro rata
amount).

If any distribution
of the type described in this Section 8.05(c)(i) is not so paid or made, or if any rights, options or warrants are not exercised
before their expiration date, the Conversion Rate will be readjusted to be the Conversion Rate that would then be in effect if
such distribution had not been declared.

    	 	 -28-	 

     

    

(ii)                               
With respect to an adjustment pursuant to this Section 8.05(c) where there has been a payment
of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest,
of or relating to an Affiliate, a Subsidiary or other business unit of the Company, and such Capital Stock or similar equity interest
is listed or quoted (or will be listed or quoted upon the consummation of the transaction) on a national securities exchange or
a reasonably comparable non-U.S. equivalent (a “Spin-Off”), but excluding an issuance solely pursuant to a Common
Stock Change Event as to which the provisions described in Section 8.08(a) hereof apply, the Conversion Rate will be increased
based on the following formula:

where:

CR0=the
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such Spin-Off;

CR1=the
Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;

FMV0=the
average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock
applicable to one share of Common Stock (determined for purposes of the definition of Last Reported Sale Price as if such Capital
Stock or similar equity interest were the Common Stock) over the first 10 consecutive Trading Day period after, and including,
the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and

MP0=the
average of the Last Reported Sale Prices per share of the Common Stock over the Valuation Period.

Such adjustment
shall become effective immediately after the Open of Business on such Ex-Dividend Date. The adjustment to the Conversion Rate under
this Section 8.05(c)(ii) will be calculated as of the Close of Business on the last Trading Day of the Valuation Period but will
be given effect as of immediately after the Open of Business on the Ex-Dividend Date of the Spin-Off. Notwithstanding anything
to the contrary herein or in this Note, if necessary, the Company shall delay the settlement of any conversion this Note where
the Conversion Date occurs during the Valuation Period until the third (3rd) Business Day after the last day of the Valuation Period.
If any distribution of the type described in this Section 8.05(c)(ii) is declared but not so made, the Conversion Rate shall be
immediately readjusted, effective as of the date the Board of Directors determines not to make such distribution, to the Conversion
Rate that would then be in effect if such distribution had not been declared.

    	 	 -29-	 

     

    

(d)                
Cash Dividends or Distributions. If any cash dividend or distribution (other than a
distribution as to which an adjustment to the Conversion Rate was effected pursuant to Section 8.05(e) hereof) is made to all or
substantially all holders of the Common Stock, the Conversion Rate will be increased based on the following formula:

where:

CR0=the
Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such dividend or distribution;

CR1=the
Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution;

SP0=the
Last Reported Sale Price per share of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend
or distribution; and

C=the
amount in cash per share the Company distributes to holders of Common Stock.

Such adjustment shall
become effective immediately after the Open of Business on such Ex-Dividend Date. Notwithstanding the foregoing, if “C”
(as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase,
the Holder will receive, for each $1,000 principal amount of this Note outstanding on the record date for such cash dividend or
distribution, at the same time and upon the same terms as holders of the Common Stock, the amount of cash that the Holder would
have received if the Holder had owned a number of shares of Common Stock equal to the Conversion Rate in effect on such record
date (or in the case of a principal amount or portion of a principal amount that is not a multiple of $1,000, an equivalent pro
rata number of shares). If any dividend or distribution of the type described in this Section 10.05(d) is declared but not so paid
or made, the Conversion Rate will be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.

(e)                
Tender Offers or Exchange Offers. If the Company or any Subsidiary makes a payment
in respect of a tender offer or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration
included in the payment per share of Common Stock exceeds the Last Reported Sale Price per share of the Common Stock on the Trading
Day next succeeding the last date (the “Expiration Date”) on which tenders or exchanges may be made pursuant
to such tender offer or exchange offer (as it may be amended), the Conversion Rate will be increased based on the following formula:

where:

    	 	 -30-	 

     

    

CR0=the
Conversion Rate in effect immediately prior to the Expiration Time (as defined below);

CR1=the
Conversion Rate in effect immediately after the Expiration Time;

AC=the
aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased
in such tender or exchange offer;

OS0=the
number of shares of Common Stock outstanding immediately prior to the time (the “Expiration Time”) on the date
such tender or exchange offer expires (prior to giving effect to the purchase of all shares accepted for purchase or exchange in
such tender or exchange offer);

OS1=the
number of shares of Common Stock outstanding immediately after the Expiration Time (after giving effect to the purchase of all
shares accepted for purchase or exchange in such tender or exchange offer); and

SP1=the
average of the Last Reported Sale Prices per share of the Common Stock over the 10 consecutive Trading Day period (the “Averaging
Period”) commencing on the Trading Day next succeeding the Expiration Date.

The adjustment to
the Conversion Rate pursuant to this Section 8.05(e) will be calculated as of the Close of Business on the last Trading Day of
the Averaging Period but will be given effect as of immediately after the Expiration Time. Notwithstanding anything to the contrary
herein, if necessary, the Company shall delay the settlement of any conversion of this Note where the Conversion Date occurs during
the Averaging Period until the third (3rd) Business Day after the last day of the Averaging Period.

(f)                 
Successive Adjustments. After an adjustment to the Conversion Rate under this Article
8, any subsequent event requiring an adjustment under this Article 8 will cause an adjustment to the Conversion Rate as so adjusted,
without duplication.

(g)                
Limitations Imposed by Stock Market Listing Standards. The Company will not enter into
any transaction, or take any other voluntary action, that would result in an adjustment to the Conversion Rate that would violate
the listing standards of any securities exchange on which any securities of the Company may be then listed, without complying,
if applicable, with the requirements of such listing standards.

(h)                
Special Settlement Provisions. Notwithstanding anything to the contrary herein, if:

(i)                                 
this Note is to be converted and, as of the Conversion Date for such conversion, any transaction
or other event that requires an adjustment to the Conversion Rate pursuant to Sections 8.05(a) through (e) has occurred but has
not yet resulted in an adjustment to the Conversion Rate;

(ii)                               
the consideration due upon such conversion consists of any shares of Common Stock; and

    	 	 -31-	 

     

    

(iii)                              
such shares of Common Stock are not entitled to participate in such transaction or event because
they were not held on the related record date or otherwise,

then, solely for purpose
of such conversion, the Company shall, without duplication, give effect to such adjustment on such Conversion Date.

In addition, notwithstanding
anything to the contrary herein, if:

(i)                               
a Conversion Rate adjustment for any transaction or other event becomes effective on any Ex-Dividend
Date pursuant to Sections 8.05(a) through (e);

(ii)                               
this Note is to be converted;

(iii)                              
the Conversion Date for such conversion occurs on or after such Ex-Dividend Date and on or
before the related record date;

(iv)                             
the consideration due upon such conversion includes any whole shares of Common Stock; and

(v)                               
the Holder would be treated, on such record date, as the record holder of such shares of Common
Stock based on a Conversion Rate that is adjusted for such event,

then such Conversion
Rate adjustment shall not be given effect for such conversion. Instead, the Holder will be treated as if the Holder were, as of
such record date, the record holder of such shares of Common Stock on an unadjusted basis and will participate in such transaction
or event.

(i)                  
Shareholder Rights Plans. If the Company has a rights plan in effect when the Holder
converts this Note, the Company will deliver to the Holder, to the extent the Holder receives any shares of Common Stock upon such
conversion of this Note, any rights that, under the rights plan, would be applicable to a share of Common Stock, unless prior to
the Conversion Date for this Note, the rights have separated from the Common Stock, in which case, and only in such case, the Conversion
Rate will be adjusted pursuant to Section 8.05(c)(i) as if, at the time of such separation, the Company had distributed to all
holders of the Common Stock shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company
or rights, options or warrants to acquire its Capital Stock or other securities, subject to readjustment in the event of the expiration,
termination or redemption of such rights.

(j)                 
Other Adjustments. Whenever any provision of this Note requires the calculation of
the Last Reported Sale Price or a function thereof over a period of multiple days (including the Stock Price for purposes of a
Make-Whole Fundamental Change), the Company will make appropriate adjustments to account for any adjustment to the Conversion Rate
that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date
or expiration date of the event occurs, at any time during such period.

(k)                
Restrictions on Adjustments. Except as a result of a reverse share split or a share
combination subject to Section 8.05(a), and except for readjustments pursuant to the last paragraph of Section 8.05(a), readjustments
pursuant to the penultimate paragraph of Section 8.05(b), readjustments pursuant to the last paragraph of Section 8.05(c)(i), readjustments
pursuant to the penultimate paragraph of Section 8.05(c)(ii) and readjustments pursuant to Section 8.05(d), in no event will the
Conversion Rate be adjusted downward pursuant to Sections 8.05(a), (b), (c), (d) or (e) hereof.

    	 	 -32-	 

     

    

In addition, notwithstanding
anything to the contrary elsewhere in this Note, the Conversion Rate will not be adjusted:

(i)                                 
upon the issuance of any shares of Common Stock pursuant to any present or future plan providing
for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional
amounts in shares of Common Stock under any plan;

(ii)                               
upon the issuance of any shares of Common Stock or options or rights to purchase those shares
pursuant to any present or future employee, director or consultant benefit plan or program of, or assumed by, the Company or any
of its Subsidiaries;

(iii)                              
upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security not described in the preceding clause and outstanding as of the date of the Issue
Date;

(iv)                             
upon the repurchase of any shares of Common Stock pursuant to an open-market share repurchase
program or other buy-back transaction that is not a tender offer or exchange offer subject to Section 10.05(e);

(v)                               
for a change in the par value of the Common Stock; or

(vi)                             
for accrued and unpaid interest.

(l)                  
Miscellaneous.

(i)                                 
Certain Definitions.

(II)            
For purposes of this Section 8.05, (1) the number of shares outstanding at any time will include
shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock; but, (2) so long as the
Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, will
not include shares of Common Stock held in the treasury of the Company.

(III)         
For purposes of this Section 8.05, the term “Effective Date” will mean
the first date on which the Common Stock trades on the applicable exchange or in the applicable market, regular way, reflecting
the relevant share split or share combination, as applicable.

(IV)         
For purposes of this Article 8, the term “Ex-Dividend Date” will mean the
first date on which the shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without
the right to receive the issuance, dividend or distribution in question.

    	 	 -33-	 

     

    

(ii)                               
Notices. Whenever the Company adjusts (or is required to adjust) the Conversion Rate
pursuant to this Section 8.05, the Company will promptly deliver to the Holder a written notice, which notice will include (i)
a brief description of the event requiring adjustment to the Conversion Rate pursuant to this Section 8.05; (ii) the effective
time of such adjustment; (iii) the Conversion Rate in effect immediately after such adjustment is made; and (iv) a schedule explaining,
in reasonable detail, how the Company calculated such adjustment.

(iii)                              
All calculations and other determinations in respect of the Conversion Rate will be made by
the Company to the nearest 1/10,000th of a share, with 5/100,000ths rounded upward.

Section
8.06        Voluntary
Adjustments.

(a)                
Best Interest Increases. The Company may, from time to time, to the extent permitted
by law and the applicable rules of any exchange on which the Common Stock is listed, increase the Conversion Rate by any amount
if (i) the Board of Directors determines that such increase is in the best interest of the Company; (ii) such increase is in effect
for a period of at least 20 Business Days; and (iii) during such period, such increase is irrevocable.

(b)                
Tax-Related Increases. To the extent permitted by law and the applicable rules of any
exchange on which the Common Stock is listed, the Company may (but is not required to) increase the Conversion Rate if the Board
of Directors determines that such increase is advisable to avoid, or diminish, any income tax imposed on holders of the Common
Stock or rights to purchase the Common Stock as a result of any dividend or distribution of shares (or rights to acquire shares)
or similar event treated as such for U.S. federal income tax purposes.

(c)                
Notices. Whenever the Board of Directors determines that the Company will increase
the Conversion Rate pursuant to this Section 8.06, the Company will deliver to the Holder notice of such increase at least fifteen
(15) Business Days before such increase will take effect, which notice will state the increase to be made and the period during
which such increase will be in effect.

Section
8.07        Adjustments
Upon Certain Fundamental Changes.

(a)                
General. If a Fundamental Change (determined after giving effect to the penultimate
paragraph of the definition thereof, but without regard to the exclusion in clause (b)(ii) of the definition thereof) occurs (a
“Make-Whole Fundamental Change”), and the Holder converts this Note “in connection with” such Make-Whole
Fundamental Change, the Company will, in the circumstances described in this Section 8.07, increase the Conversion Rate for this
Note by the number of additional shares of Common Stock (the “Additional Shares”) set forth in this Section
8.07. For purposes of this Section 8.07, a conversion of this Note will be deemed to be “in connection with” a Make-Whole
Fundamental Change if the applicable Conversion Date occurs during the period from, and including, the effective date of the Make-Whole
Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Repurchase Date (or,
in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the exclusion in clause (b)(ii)
of the definition thereof, the thirty fifth (35th) Trading Day immediately following the effective date of such Make-Whole Fundamental
Change).:

    	 	 -34-	 

     

    

As promptly as practicable,
but in no event later than the Business Day after the effective date of a Make-Whole Fundamental Change, the Company will notify
the Holder of such effective date.

(b)                
Determination of Additional Shares. The number of Additional Shares, if any, by which
the Conversion Rate will be increased if the Holder converts this Note in connection with a Make-Whole Fundamental Change will
be determined by reference to the table below, and will be based on the Make-Whole Fundamental Change Effective Date and the Stock
Price for such Make-Whole Fundamental Change. For any Make-Whole Fundamental Change, the “Make-Whole Fundamental Change
Effective Date” will mean the date on which such Make-Whole Fundamental Change occurs or becomes effective.

(c)                
Adjustment of Stock Prices and Additional Shares. The Stock Prices set forth in the
first row (i.e., the column headers) of the table below will be adjusted on each date on which the Conversion Rate must
be adjusted pursuant to Section 8.05. The adjusted Stock Prices will equal the Stock Prices in effect immediately prior to such
adjustment, multiplied by a fraction, (i) the numerator of which is the Conversion Rate in effect immediately prior to the adjustment
giving rise to the share price adjustment; and (ii) the denominator of which is the Conversion Rate in effect immediately after
the adjustment. The numbers of Additional Shares set forth in the table below will be adjusted in the same manner, at the same
time and for the same events for which the Conversion Rate is adjusted pursuant to Section 8.05 hereof.

(d)                
Additional Shares Table. The following table sets forth hypothetical Make-Whole Fundamental
Change Effective Dates, Stock Prices and the number of Additional Shares by which the Conversion Rate will be increased per $1,000
principal amount of this Note for the Holder that converts this Note in connection with a Make-Whole Fundamental Change having
such Make-Whole Fundamental Change Effective Date and Stock Price. In the case of a principal amount or portion of a principal
amount that is not a multiple of $1,000, the Conversion Rate will be increased by an equivalent pro rata number of shares.

	 	
        Stock
        Price

	
        Effective
        Date
	
        $2.37
	
        $2.90
	
        $3.50
	
        $3.88
	
        $5.00
	
        $6.00
	
        $8.00
	
        $12.00
	
        $16.00
	
        $24.00

	April 14, 2016	77.5021	51.6448	35.4286	28.5567	15.452	8.5383	1.5763	0.0000	0.0000	0.0000
	April 14, 2017	77.5021	45.4655	30.4371	24.4253	13.232	7.3117	1.2763	0.0000	0.0000	0.0000
	April 14, 2018	77.5021	38.6586	24.7543	19.7268	10.748	5.9733	0.9850	0.0000	0.0000	0.0000
	April 14, 2019	77.5021	30.7069	17.9429	14.1469	7.7980	4.8330	0.6725	0.0000	0.0000	0.0000
	April 14, 2020	77.5021	20.9414	9.69430	7.59020	4.2960	2.4700	0.3525	0.0000	0.0000	0.0000
	April 14, 2021	77.5021	0.3862	0.00000	0.00000	0.00000	0.00000	0.00000	0.0000	0.0000	0.0000

 

(e)                
Use of Additional Shares Table. If the Stock Price and/or Make-Whole Fundamental Change
Effective Date for a Make-Whole Fundamental Change are not set forth in the table above, then:

(A)            
if the Stock Price is between two Stock Prices in the table or the Make-Whole Fundamental
Change Effective Date is between two Make-Whole Fundamental Change Effective Dates in the table, the number of Additional Shares
by which the Conversion Rate will be increased for the Holder that converts this Note in connection with such Make-Whole Fundamental
Change will be determined by a straight-line interpolation between the numbers of Additional Shares set forth for the higher and
lower Stock Prices listed in the table and the earlier and later Make-Whole Fundamental Change Effective Dates listed in the table,
as applicable, based on a 365- or 366-day year, as applicable;

    	 	 -35-	 

     

    

(B)             
if the Stock Price is greater than $24.00, subject to adjustment in the same manner as the
Stock Prices set forth in the column headings of the table, no Additional Shares will be added to the Conversion Rate; and

(C)             
if the Stock Price is less than $2.37 per share, subject to adjustment in the same manner
as the Stock Prices set forth in the column headings of the table, no Additional Shares will be added to the Conversion Rate.

Notwithstanding the
foregoing, in no event will the Conversion Rate be increased as a result of this Section 8.07 to exceed 422.3297 shares of Common
Stock per $1,000 principal amount of this Note, subject to adjustment in the same manner, at the same time and for the same events
for which the Conversion Rate must be adjusted as set forth in Section 8.05 hereof.

(f)                 
Settlement or Conversion. If the Holder converts this Note in connection with a Make-Whole
Fundamental Change, the Company will settle such conversion by delivering Conversion Consideration in accordance with Section 8.03
hereof; provided, however, that notwithstanding anything to the contrary in Section 8.03 hereof, if the Holder converts
this Note in connection with a Make-Whole Fundamental Change described in clause (b)(ii) of the definition of Fundamental Change
in which the holders of the Common Stock receive only cash in consideration for their shares of Common Stock, the Company will
settle such conversion by delivering to the Holder, on the third (3rd) Business Day immediately following the Conversion Date for
this Note, an amount of cash, for each $1,000 principal amount of this Note so converted, equal to the product of (i) the Conversion
Rate on the Conversion Date applicable to this Note (including any Additional Shares added to such Conversion Rate pursuant to
this Section 8.07) and (ii) the Stock Price for such Make-Whole Fundamental Change, or in the case of a principal amount or portion
of a principal amount that is not a multiple of $1,000, an equivalent pro rata amount.

Section
8.08        Effect
of Recapitalization, Reclassification, Consolidation, Merger or Sale.

(a)                
General. If any of the following events occur:

		(1)	any recapitalization, reclassification or change of Common Stock (other than (x) a change only
in par value, from par value to no par value or no par value to par value; or (y) changes resulting from a stock split or combination
not involving the issuance of any other class or series of securities);

		(2)	any consolidation, merger, combination or similar transaction involving the Company;

    	 	 -36-	 

     

    
		(3)	any sale, lease or other transfer to a third party of all or substantially all of the consolidated
assets of the Company and its Subsidiaries substantially as an entirety; or

		(4)	any statutory share exchange,

and, in each case,
as a result of which the Common Stock would be converted into, or exchanged for, or represent solely the right to receive, stock
(including one or more series of the Common Stock), other securities, other property or assets (including cash or any combination
thereof) (any such event, a “Common Stock Change Event” and such stock, other securities, other property or
assets, the “Reference Property,” and the amount and kind of Reference Property that a holder of one share of
Common Stock would be entitled to receive on account of such Common Stock Change Event, a “Reference Property Unit”),
then, notwithstanding anything to the contrary, at the effective time of such transaction, the consideration due upon a conversion
of this Note will be determined in the same manner as if each reference to any number of shares of Common Stock in this Article
8 were instead a reference to the same number of Reference Property Units. For these purposes, the Last Reported Sale Price of
any Reference Property Unit or portion thereof that does not consist of a class of securities will be the fair value of such Reference
Property Unit or portion thereof, as applicable, determined in good faith by the Company (or, in the case of cash denominated in
U.S. dollars, the face amount thereof).

If the Reference Property
consists of more than a single type of consideration (determined based in part upon any form of stockholder election), then the
composition of the Reference Property Unit shall be deemed to be (a) the weighted average, per share of Common Stock, of the types
and amounts of consideration received by the holders of Common Stock that affirmatively make such an election; or (b) if no holders
of the Common Stock affirmatively make such an election, the types and amounts of consideration actually received, per share of
Common Stock, by the holders of the Common Stock. The Company shall notify the Holder of such weighted average (if applicable)
as soon as practicable after such determination is made.

None of the foregoing
provisions will affect the right of the Holder to convert this Note as set forth in Section 8.01 and Section 8.02 prior to the
effective date of such Common Stock Change Event.

(b)                
Notices.

(i)                                 
As soon as practicable upon learning of the anticipated or actual effective date of any Common
Stock Change Event, the Company will deliver written notice of such Common Stock Change Event to the Holder. Such Notice will include:

(A)            
a brief description of such Common Stock Change Event;

(B)             
the Conversion Rate in effect on the date the Company delivers such notice;

(C)             
the anticipated effective date for the Common Stock Change Event;

    	 	 -37-	 

     

    

(D)            
that, on and after the effective date for the Common Stock Change Event, this Note will be
convertible into Reference Property Units and cash in lieu of fractional Reference Property Units; and

(E)             
the composition of the Reference Property Unit for such Common Stock Change Event.

(c)                
Successive Common Stock Change Events. If more than one Common Stock Change Event occurs,
this Section 8.08 will apply successively to each Common Stock Change Event.

(d)                
Compliance Covenant. The Company will not become a party to any Common Stock Change
Event unless its terms are consistent with this Section 8.08.

Article
9

NO RIGHT OF REDEMPTION AT THE OPTION OF THE COMPANY

This Note will not
be redeemable prior to the Maturity Date at the Company’s election, and no sinking fund will be provided for this Note.

Article
10 

Section
10.01    Notices.
Any request, demand, authorization, notice, waiver, consent or communication will be in writing and delivered in Person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by electronic transmission or other similar means of
unsecured electronic methods to the following:

if to the Company:

 

Xtant Medical
Holdings, Inc.

600 Cruiser Lane

Belgrade, MT 59714

Facsimile: (406) 388-9724

Attn: General Counsel

 

If to the Holder:

 

ROS Acquisition
Offshore LP/OrbiMed Royalty Opportunities II, LP

c/o OrbiMed Advisors
LLC

601 Lexington
Avenue, 54th Floor

New York, NY
10022

Attention: Tadd Wessel
and Christopher LiPuma

 

The Company or the
Holder, by notice given to the other in the manner provided above, may designate additional or different addresses for subsequent
notices or communications. Any notice, direction, request or demand hereunder to or upon the Holder shall be deemed to have been
sufficiently given or made, for all purposes, if it is in writing and actually received by the Holder, addressed as provided above
or sent electronically in PDF format.

    	 	 -38-	 

     

    

Section
10.02    Separability
Clause. In case any provision in this Note will be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions will not in any way be affected or impaired thereby.

Section
10.03    Governing
Law and Waiver of Jury Trial. THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. THE COMPANY 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 NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section
10.04    No
Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company will not have any liability
for any obligations of the Company under this Note for for any claim based on, in respect of or by reason of such obligations
or their creation. By accepting this Note, the Holder will waive and release all such liability. The waiver and release will be
part of the consideration for the issuance of this Note.

Section
10.05    Calculations.
Except as otherwise provided in this Note, the Company will be responsible for making all calculations called for under this Note.
These calculations include, but are not limited to, determinations of the Last Reported Sale Price of the Common Stock or any
other security, accrued interest (including, for the avoidance of doubt, any Additional Interest, Default Interest or Special
Interest) payable on this Note and the Conversion Rate in effect on any Conversion Date.

The Company will make
all calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holder. The Company
will provide a schedule of its calculations to the Holder, and the Holder is entitled to rely conclusively upon the accuracy of
the Company’s calculations without independent verification.

All calculations will
be made to the nearest cent or to the nearest 1/10,000th of a share, as the case may be, with 5/100,000ths rounded upward.

Section
10.06    Successors.
All agreements of the Company in this Note will bind its successors.

Section
10.07    Table
of Contents; Headings. The table of contents and headings of the articles and sections of this Note have been inserted for
convenience of reference only, are not intended to be considered a part hereof, and will not modify or restrict any of the terms
or provisions hereof.

Section
10.08    Submission
to Jurisdiction. The Company: (a) agrees that any suit, action or proceeding against it arising out of or relating to this
Note as the case may be, may be instituted in any U.S. federal court with applicable subject matter jurisdiction sitting in The
City of New York; (b) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have
to the laying of venue of any such suit, action or proceeding, and any claim that any suit, action or proceeding in such a court
has been brought in an inconvenient forum; and (c) submits to the nonexclusive jurisdiction of such courts in any suit, action
or proceeding.

    	 	 -39-	 

     

    

Section
10.09    Legal
Holidays. If the Maturity Date or any Interest Payment Date or Fundamental Change Repurchase Date is not a Business Day (which,
solely for the purposes of any payment required to be made on this Note on any such date will be deemed not to include any day
on which the office where the place of payment is authorized or required by law to close), then any action to be taken on such
date need not be taken on such date, but may be taken on the immediately following Business Day, and no interest on such payment
will accrue as a result of such delay.

Section
10.10    No
Security Interest Created. Nothing in this Note, expressed or implied, will be construed to constitute a security interest under
the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

Section
10.11    Benefits
of Note. Nothing in this Note, expressed or implied, will give to any Person, other than the parties hereto, and
their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Note.

Section
10.12    Withholding
Taxes. The Holder agrees, and each beneficial owner of an interest in this Note, by its acquisition of such interest, is deemed
to agree, that if the Company or other applicable withholding agent pays withholding taxes or backup withholding on behalf of the
Holder or beneficial owner, as applicable, as a result of an adjustment to the Conversion Rate, then the Company or other applicable
withholding agent, as applicable, may, at its option, set off such payments against payments of cash and shares of Common Stock
on this Note.

Section
10.13    Amendment
and Waiver. Any term of this Note may be amended only with the written consent of the Company
and Holder. Any amendment or waiver effected in accordance with this Section 10.13 shall be binding upon the Company, the Holder
and each transferee of this Note.

 

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

    	 	 -40-	 

     

    

IN WITNESS WHEREOF,
the undersigned have executed this Note as of the day and year first written above.

	 	Xtant Medical Holdings, Inc.	 
	 	 	 	 
	 	By:  	/s/ Daniel Goldberger	 
	 	 	Name: Daniel Goldberger	 
	 	 	Title: Chief Executive Officer	 

 

[Signature Page to Note]

 

     

     

    

EXHIBIT A

CONVERSION NOTICE

XTANT MEDICAL HOLDINGS, INC.

6.00% CONVERTIBLE SENIOR NOTE
DUE 2021

 

To convert this Note, check
the box o

 

To convert the entire principal
amount of this Note, check the box o

 

To convert only a portion
of the principal amount of this Note, check the box o and here specify the principal
amount to be converted:

 

	$	 	 	 

 

 

ROS
Acquisition Offshore LP

  

 

	By:	 	 	 

 

Authorized Signatory

 

    	 	 D-1	 

     

    

FUNDAMENTAL CHANGE REPURCHASE
NOTICE

 

 

 

 

Xtant Medical Holdings, Inc.

600 Cruiser Lane

Belgrade, MT 59714

Attention: General
Counsel

 

The undersigned registered
owner of this Note hereby acknowledges receipt of a notice from Xtant Medical Holdings, Inc. (the “Company”)
as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date
and requests and instructs the Company to pay to the Holder hereof in accordance with the applicable provisions of this Note (1)
the entire principal amount of this Note, or the portion thereof below designated; and (2) if such Fundamental Change Repurchase
Date does not occur during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, accrued
and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase Date.

 

Principal amount to be repaid
(if less than all): $_______,000

 

 

ROS
Acquisition Offshore LP

 

 

By: ____________________________________________

Authorized Signatory

 

 

    	 	 D-2

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