Document:

Executive Separation Agreement

 Exhibit 10.40 

EXECUTIVE SEPARATION AGREEMENT 

This Executive Separation Agreement (the “Agreement”), effective January 31, 2017, is by and between Caroline A. Hartill (“Hartill”)
and RTI Surgical, Inc. (“RTI” or the “Company”). 
 RECITALS 

WHEREAS, Hartill has served as the Executive Vice President and Chief Scientific Officer of RTI since June 2010 and has been an officer of RTI since 2003;

 WHEREAS, Hartill and RTI are parties to the RTI Biologics, Inc. Executive Transition Agreement with Caroline A. Hartill, dated August 29, 2012 and
extended on December 3, 2015 for a term to expire on December 31, 2018 (collectively, the “Transition Agreement”); 
 WHEREAS, without
prejudicing, altering or eliminating any rights or obligations Hartill has under the Transition Agreement, Hartill and RTI have agreed that Hartill shall separate from employment “without cause” as Executive Vice President and Chief
Scientific Officer; 
 WHEREAS, Hartill and RTI agree that it is desirable to restate and clarify the rights and responsibilities of Hartill and RTI to each
other; and 
 WHEREAS, simultaneously with the execution of this Agreement, Hartill and the Company are entering into a Consultant Agreement (the
“Consultant Agreement”). 
 NOW, THEREFORE, the parties, intending to be legally bound hereby and in consideration of the mutual promises
contained herein, agree as follows: 
 TERMS 

1. Recitals. The Recitals are true and correct and are incorporated into this Agreement. 

2. Separation from Employment. Hartill will separate from employment at RTI on January 31, 2017 (it is understood that such date shall be the
“Termination Date” for the purposes of paragraph 1(f) of the Transition Agreement). Prior to that time Hartill shall continue to perform the duties of Executive Vice President and Chief Scientific Officer of RTI, retain all power and
authority to execute her duties, and will be paid or receive all compensation and benefits due her during this period based on the schedule of compensation and benefits attached as Exhibit A. Hartill agrees that her separation from employment with
RTI will be stated as a “separation,” provided however that for all purposes Hartill’s separation from employment is and shall be treated as a “Severance Event” “by the Company without Cause” pursuant to
Section 1(e) of the Transition Agreement. Unless specifically stated herein, nothing in this Agreement alters, affects, voids or supersedes any rights Hartill has or are available to her under the Transition Agreement as a result of a Severance
Event occurring. 
 3. Obligations of RTI to Hartill Pursuant to the Transition Agreement. Section 3 of the Transition Agreement (relating to
Severance Protection) defines and specifies the Severance Protection 

 
Benefits for Hartill in the event of a Severance Event. RTI will pay or cause to be paid the Severance Protection amounts and benefits to Hartill. The salary, bonus opportunity, and health
insurance amounts to be used for computing certain Severance Protection benefits are specified in Exhibit A. 
 4. Additional Benefits to Hartill. In
addition to (and not in lieu of) any benefit available to Hartill under the Transition Agreement, RTI shall provide Hartill with or allow or permit the following: 

(a) Attached as Exhibit B is an Option and Award Summary dated January 31, 2017 for Hartill. All stock options and restricted stock awards shall become
fully vested as of the date of this Agreement. Notwithstanding anything to the contrary in any applicable plan(s), the last date by which such stock options can be exercised is the close of business on the 90th day following the end of her services under the Consultant Agreement (currently expected to be December 31, 2017), but if the Company terminates the Consultant Agreement before
September 30, 2017 (other than for breach of the Consultant Agreement), the date such options can be exercised shall be extended to the close of business on December 31, 2017. For the avoidance of doubt, if Hartill (or Hartill’s
permitted assignee) terminates the Consultant Agreement or if RTI terminates the Consultant because of Hartill’s breach (or Hartill’s permitted assignee’s breach), the options may be exercised only for 90 days following the
termination of the Consultant Agreement. 
 (b) RTI agrees that except as required by applicable law, it will not directly or indirectly: (i) disparage
or say or write negative things about Hartill; or (ii) initiate or participate in any discussion or communication that reflects negatively on Hartill. A disparaging or negative statement is any communication, oral or written, which would tend
to cause the recipient of the communication to question the business condition, integrity, competence, fairness, or good character of the person or entity to whom the communication relates. 

5. Hartill’s Obligation. 
 (a) Hartill agrees to
comply with all obligations under the Transition Agreement, including executing the Release Agreement attached as Exhibit A to the Transition Agreement. 

(b) Hartill agrees that except as required by applicable law, she will not directly or indirectly: (i) disparage or say or write negative things about
the Company; or (ii) initiate or participate in any discussion or communication that reflects negatively on the Company. A disparaging or negative statement is any communication, oral or written, which would tend to cause the recipient of the
communication to question the business condition, integrity, competence, fairness, or good character of the person or entity to whom the communication relates. 

(c) Hartill represents that she does not now have pending any claims or lawsuits against RTI, she has not suffered an on-the-job injury for which she has not
already filed a claim, and she will not commence or join in any lawsuit against RTI or its personnel in the future. 
 (d) Upon service on Hartill, or
anyone acting on her behalf, of any subpoena, order, directive, or other legal process requiring Hartill to disclose any information about RTI, Hartill or her attorney shall promptly notify RTI of such service and of the content of any testimony or
information to be provided pursuant to such subpoena, order, directive, or other legal process and within five business days send to the designated representative of RTI via overnight delivery a copy of said documents. 

  
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 6. Non-Competition Restriction. Except as may later be agreed upon in writing by Hartill and the Company,
the entities listed below (hereinafter the “Excluded Entities”) shall be subject to the full restrictions provided for in Section 4 of Exhibit B to the Transition Agreement, and are not subject to the exceptions set forth herein.
Other than the Excluded Entities, and anything in Section 4 of Exhibit B to the Transition Agreement notwithstanding, Executive may be employed by or contract with persons or entities for the limited purpose of providing such persons or
entities with regulatory and quality assurance advice and strategy services (the “Permitted Services”), provided, however, that no Confidential Information is used or relied upon by Executive in rendering the Permitted Services. 

(a) The Excluded Entities are the following, including their subsidiary or controlled entities: 

 

	 	(1)	Musculoskeletal Transplant Foundation (including Biocon Inc.) 

  

	 	(2)	LifeNet Health 

  

	 	(3)	AlloSource 

  

	 	(4)	University of Miami Tissue Bank (or its successor organization) 

  

	 	(5)	Community Tissue Services 

  

	 	(6)	LifeLink 

  

	 	(7)	Joint Research Foundation (JRF) 

  

	 	(8)	CellectCell, Inc. 

  

	 	(9)	Vivex Biomedical 

 7. EEOC and SEC. Nothing in this Agreement shall be construed to prohibit Hartill
from (a) filing a charge or complaint with the United States Equal Employment Opportunity Commission (“EEOC”) or other fair employment practices agency; (b) communicating directly with the United States Securities and Exchange
Commission (“SEC”) or any member of its staff, about any possible violation federal securities laws; (c) making any disclosure protected under the whistleblower provisions of federal laws or regulations; or (d) participating in
any investigation or proceeding conducted by the EEOC or the SEC or any such agency. The approval of RTI or any RTI officer, employee or agent is not necessary prior to communicating directly with the EEOC or the SEC or their staff. However, if
Hartill files a charge with the EEOC or similar agency, or if such a charge is filed on her behalf, Hartill forever waives and relinquishes any rights to recover damages resulting from any such charge. 

8. Attorneys’ Fees. RTI and Hartill agree that in the event it becomes necessary to enforce any provision of this Agreement, the prevailing party
in such action shall be entitled to recover all of their costs and attorneys’ fees, including those associated with appeals. Notwithstanding the above, the Company will reimburse Hartill for up to $5,000 in attorneys fees in connection with the
negotiation of this Agreement. 
 9. Entire Agreement. Unless specified herein, nothing in this Agreement supersedes or voids the Transition
Agreement. The Transition Agreement shall remain in place as originally written or as modified by this Agreement. 
 10. Capitalized Terms. All
capitalized terms used in this Agreement and not defined herein shall have the meaning given to them in the Transition Agreement. 

  
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 11. Counterparts and Facsimile. This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. This Agreement may be signed and delivered by facsimile or other electronic transmission which will be deemed the same as an
original. 
 12. Assignment. This Agreement may be assigned, sold or otherwise conveyed by RTI to a successor or any other entity without
Hartill’s authorization or agreement, provided, however that in the event of non-payment to Hartill by the assignee, or any such successor, RTI shall remain responsible for such payments under this Agreement. This Agreement shall be enforceable
by any such successor or assign. This Agreement will survive a merger, restructure, change of control or sale of the companies involved in this Agreement. Hartill does not have the ability to assign, sell or otherwise convey this Agreement, and any
attempt to do so shall be null and void ab initio. If Hartill should die while any payment or benefit is due to her hereunder, such payment or benefit shall pass to her designated beneficiary (or if there is no designated beneficiary, to her
estate), including, without limitation, the exercise of her options. 
 13. Voluntary Agreement. Each party to this Agreement acknowledges and
represents that she or it (a) has fully and carefully read this Agreement prior to signing it, (b) has been, or has had the opportunity to be, advised by independent legal counsel of her or its own choice as to the legal effect and meaning
of each of the terms and conditions of this Agreement, and (c) is signing and entering into this Agreement as a free and voluntary act without duress or undue pressure or influence of any kind or nature whatsoever and has not relied on any
promises, representations or warranties regarding the subject matter hereof other than as set forth in this Agreement. 
 14. Governing Law. This
Agreement shall be governed by the laws of the State of Florida, excluding its conflict of law rules. 
 [Signature Page
Follows] 

  
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 IN WITNESS WHEREOF, the Parties have set their hands and seals to this Executive Separation Agreement of
the date set forth above.  
  

			
	RTI SURGICAL, INC.
		
	By:	 	 /s/ Robert P. Jordhein

	Name:	 	Robert P. Jordhein
	Title:	 	Interim President and Chief Executive Officer
		
	By:	 	 /s/ Caroline A. Hartill

	Name:	 	Caroline A. Hartill

  
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 EXHIBIT A 

Severance Protection Benefits 

 

 Carrie Hartill – Compensation & Benefits 

Base Salary 
 Annual Base Salary: $361,238.51 

Annual Employee Share of Benefits: 

	 	•	 	Medical - $3,835.26 

	 	•	 	Dental - $430.82 

	 	•	 	Vision - $122.98 

	 	•	 	ID Theft Protection - $227.50 

	 	•	 	Total - $4,616.56 

 Annual Base Salary + Gross up for Benefits: $365,855.07 

Short Term Incentive 
 Annual Bonus Opportunity @ Plan:
50% of base salary 
 Annual Bonus Amount @ Plan: $180,619.26 

 

									
	COBRA cost would be as follows as RTI currently pays
approximately 75% of the total cost on employee + spouse
coverage for full time employees.	 
	  
 COBRA Costs

 
	 
  

	 Benefit
	  	Monthly
Cost	 	  	18 Month
Total Cost	 
	Medical	  	$	1,309.07	 	  	$	23,563.26	 
	Dental	  	$	74.01	 	  	$	1,332.18	 
	Vision	  	$	10.46	 	  	$	188.28	 
	ID Theft Protection	  	$	18.95	 	  	$	341.10	 
		  	  
	  
	 	  	  
	  
	 
	Total	  	$	1,412.49	 	  	$	25,424.82	 
		  	  
	  
	 	  	  
	  
	 

 
 

													
	 	  	Threshold for payout	 	 	Target	 	 	Maximum	 
	Performance	  	$	251,316	 	 	$	264,543	 	 	$	290,997	 
	% of Performance Target	  	 	95	% 	 	 	100	% 	 	 	110	% 
	Payout %	  	 	50	% 	 	 	100	% 	 	 	150	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	Individual Opportunity	  	$	18,062	 	 	$	36,124	 	 	$	54,186	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Base Revenue (20.0% of Bonus Calculation)
  
	  
 

	 	  	Threshold for payout	 	 	Target	 	 	Maximum	 
	Performance	  	$	26,163	 	 	$	30,780	 	 	$	33,858	 
	% of Performance Target	  	 	85	% 	 	 	100	% 	 	 	110	% 
	Payout %	  	 	75	% 	 	 	100	% 	 	 	150	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	Individual Opportunity	  	$	13,546	 	 	$	18,062	 	 	$	27,093	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Focus Products Revenue (10% of Bonus Calculation)

 
	 
	 	  	Threshold for Payout	 	 	Target	 	 	Maximum	 
	Performance	  	 	8.2	% 	 	 	9.1	% 	 	 	10.5	% 
	% of Performance Target	  	 	90	% 	 	 	100	% 	 	 	115	% 
	Payout %	  	 	50	% 	 	 	100	% 	 	 	150	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	Individual Opportunity	  	$	27,093	 	 	$	54,186	 	 	$	81,279	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating Margin % (30% of Bonus Calculation)
  
	  
 

	 	  	Threshold for Payout	 	 	Target	 	 	Maximum	 
	Performance	  	$	15,653	 	 	$	17,392	 	 	$	20,001	 
	% of Performance Target	  	 	90	% 	 	 	100	% 	 	 	115	% 
	Payout %	  	 	50	% 	 	 	100	% 	 	 	150	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	Individual Opportunity	  	$	36,124	 	 	$	72,248	 	 	$	108,372	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	Free Cash Flow Improvement (40% of Bonus Calculation)	 	 				 			
			
		  	   
	Total Target Opportunity  
	  
	 	   
	 $180,619 
	   

		  				 				 	  
	  
	 

  
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 Welfare Benefits 
  

					
	 Benefit
	 	 Coverage Level
	 	 Description

	 Medical/Rx Insurance
	 	Employee + Spouse	 	Traditional PPO Plan w/ Florida Blue 80/20 coinsurance
			
	 Dental Insurance
	 	Employee + Spouse	 	Traditional PPO Plan w/ Delta Dental
			
	 Benefit
	 	 Coverage Level
	 	 Description

	 Vision Insurance
	 	Employee + Spouse	 	Traditional PPO Plan w/ Humana
			
	 Identity Theft Protection
	 	Family Coverage	 	ID Theft Protection and Restoration through Legal Shield
			
	 Short Term Disability
	 	60% of earnings	 	Max weekly benefit $800
			
	 Long Term Disability
	 	66 2/3rds% of earnings	 	Max monthly benefit $8,000
			
	 Group Life Insurance
	 	$50,000 Term/AD&D	 	Group Policy for all full time employees
			
	 401k Retirement Plan
	 	5% deferral elected	 	Company matches $1 for $1 up to 6%
			
	 Personal Life Insurance
	 	$500,000 Term Life	 	Term Life Policy – RTI reimburses as a TBF annual premium w/ Genworth Life and Annuity $720
			
	 Mayo Clinic Annual Physical
	 	 Approx. Annual Cost:
 $8,820
	 	Mayo Clinic Executive Health Program

  
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 EXHIBIT B 

Option and Award Summary 
 Outstanding
Stock Options 
  

																					
	 	  	 	 	  	 	 	  	Total Options	 
	 Type
	  	Grant Date	 	  	Price	 	  	Issued	 	  	Vested	 	  	Unvested (1)	 
	 Stock Options
	  				  				  				  				  			
		  	 	3/2/2007	 	  	$	7.25	 	  	 	30,000	 	  	 	30,000	 	  	 	—  	 
		  	 	1/28/2008	 	  	$	7.45	 	  	 	30,000	 	  	 	30,000	 	  	 	—  	 
		  	 	2/10/2009	 	  	$	2.98	 	  	 	60,000	 	  	 	60,000	 	  	 	—  	 
		  	 	4/20/2010	 	  	$	4.30	 	  	 	80,000	 	  	 	80,000	 	  	 	—  	 
		  	 	2/28/2011	 	  	$	2.69	 	  	 	60,000	 	  	 	60,000	 	  	 	—  	 
		  	 	2/9/2012	 	  	$	4.02	 	  	 	60,000	 	  	 	48,000	 	  	 	12,000	 
		  	 	2/25/2013	 	  	$	3.60	 	  	 	60,000	 	  	 	36,000	 	  	 	24,000	 
		  	 	2/25/2014	 	  	$	3.78	 	  	 	60,000	 	  	 	24,000	 	  	 	36,000	 
		  	 	2/17/2015	 	  	$	5.23	 	  	 	60,000	 	  	 	12,000	 	  	 	48,000	 
		  	 	2/24/2016	 	  	$	3.31	 	  	 	38,710	 	  	 	—  	 	  	 	38,710	 
		  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total Options
	  				  				  	 	538,710	 	  	 	380,000	 	  	 	158,710	 
		  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Outstanding Restricted Stock Awards 

 

																					
	 	  	 	 	  	 	 	  	Total RSAs	 
	 	  	Grant Date	 	  	Price	 	  	Issued	 	  	Vested	 	  	Unvested (1)	 
	 Restricted Stock
	  				  				  				  				  			
		  	 	2/25/2014	 	  	$	3.78	 	  	 	20,000	 	  	 	13,333	 	  	 	6,667	 
		  	 	2/17/2015	 	  	$	5.23	 	  	 	20,000	 	  	 	6,666	 	  	 	13,334	 
		  	 	2/24/2016	 	  	$	3.31	 	  	 	30,211	 	  	 	—  	 	  	 	30,211	 
		  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total Restricted Stock
	  				  				  	 	70,211	 	  	 	19,999	 	  	 	50,212	 
		  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	(1)	Subject to accelerated vesting under the Executive Transition Agreement 

  
 Page 8
of 8Release Agreement

 Exhibit 10.41 

RELEASE AGREEMENT 

This Release Agreement (“Agreement”) is made as of February 1, 2017 by and between Caroline A. Hartill
(“Executive”) and RTI Surgical, Inc. (the “Company”). 
 BACKGROUND 

The Company and Executive previously entered into an Executive Transition Agreement, dated August 29, 2012 and extended on
December 3, 2015 (the “Executive Transition Agreement”), that (among other things) requires Executive to deliver a release in the form of this Agreement in order to receive and retain the consideration set forth in the
Executive Transition Agreement. 
 The Company and the Executive entered into an Executive Separation Agreement dated January 31, 2016
(“the Executive Separation Agreement”), that also requires Executive to deliver a release in the form of this Agreement in order to receive and retain consideration set forth in the Executive Transition Agreement and the Executive
Separation Agreement. Accordingly, in consideration of the covenants and agreements in this Agreement, the Executive Transition Agreement and the Executive Separation Agreement, the receipt and sufficiency of which are acknowledged, the Company and
Executive agrees as follows: 
 TERMS 

1.     This will confirm that a Severance Event as described in Section 1(e) of Executive Transition Agreement has
occurred. In accordance with Section 4 of the Executive Transition Agreement and Section 5 of the Executive Separation Agreement, Executive’s right to receive and retain certain severance payments and benefits under Section 3 of
the Executive Transition Agreement, as well as Sections 3 and 4 of the Executive Separation Agreement, is conditioned upon the timely receipt by the Company of a general release by Executive in favor of the Company, its affiliates and their
officers, directors and employees, which is no longer subject to revocation. Accordingly, in consideration of the severance payments and benefits under the Executive Transition Agreement and the Executive Separation Agreement and other good and
valuable consideration, Executive for herself and for the executors and administrators of Executive’s estate, Executive’s heirs, successors and assigns, hereby releases and forever discharges the Company and its affiliates and each of its
or their current and former officers, directors, employees and stockholders (the “Releasees”) from any and all claims, actions, causes of action, suits, sums of money, debts, dues, accounts, reckonings, bonds, bills, covenants,
contracts, controversies, agreements, promises, demands or damages of any nature whatsoever or by reason of any matter, cause or thing regardless of whether known or unknown at present, which against the Releasees Executive ever had, now has or may
have arising out of or relating to any transaction, dealing, relationship, conduct, act or omission, or any other matters or things occurring or existing at any time prior to and including the date of this Release (collectively defined herein as
“Claims”). This Release includes, but is not limited to, all Claims Executive might have under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§2000e, et. seq.; 42 U.S.C. §§1981, et.
seq.; the Americans with Disabilities Act, 29 U.S.C. §§2000e, et. seq.; the Age Discrimination in Employment Act; the Older Workers Benefits Protection Act; the federal Family and Medical Leave Act; Section 451 et.
seq.; similar state laws, and any and all statutory and common law causes of action for defamation; slander; slander per se; defamation per se; false light; tortious interference with prospective business relationships; assault;
sexual assault; battery; sexual harassment; sexual discrimination; hostile work environment; discrimination; retaliation; workers’ compensation; wrongful termination; intentional infliction of emotional distress; breach of a duty or obligation
of any kind or description, including any implied covenant of good faith and fair dealing; and for breach of contract or any tort whatsoever, as well as any expenses or attorney’s fees associated with such Claims. The parties acknowledge that
this Release does not either affect the rights and responsibilities of the Equal Employment Opportunity Commission to enforce the Age Discrimination in Employment Act, or justify interfering with the protected right of an employee to file a charge
or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission under the Age Discrimination in Employment Act. In the event the Equal Employment Opportunity Commission commences a proceeding against the
Company in which Executive is a named party, Executive agrees to waive and forego any monetary claims which may be alleged by the Equal Employment Opportunity Commission to be owed to Executive. Notwithstanding the foregoing, nothing in the
provisions of this Release shall act as a release by Executive of any Claims against the Company with respect to (i) any amounts or benefits to which Executive may be entitled under and in accordance with the terms of the Executive Transition
Agreement or the 

 
Executive Separation Agreement, (ii) any right Executive may have to indemnification under the terms of the Executive Transition Agreement, the Executive Separation Agreement, or under the
terms of any other applicable indemnification agreement, the organizational documents of the Company, the terms of any insurance policy, the terms of any Company indemnification policy, the terms of applicable law or otherwise,
(iii) Executive’s rights under and in accordance with the terms of any employee benefit plan in which Executive participates, and (iv) any Claims arising with respect to acts, events or occurrences taking place after the date of this
Release, including any Claims arising with respect to any consultant agreement executed by the Company and the Executive. For the purposes hereof, the term “Company” shall include any direct or indirect successor to the Company. Executive
does not waive or release any claims which arise after the date Executive executes this Agreement. 
 2.     Executive
has been advised to consult with an attorney prior to executing this Agreement. By executing this Agreement, Executive acknowledges that (a) Executive has been provided with an opportunity to consult with an attorney or other advisor of
Executive’s choice regarding the terms of this Agreement, (b) this is a final offer and Executive has been given 45 days in which to consider whether Executive wishes to enter into this Agreement, (c) Executive has elected to enter
into this Agreement knowingly and voluntarily and (d) if Executive does so within fewer than 45 days from receipt of the final document Executive has knowingly and voluntarily waived the remaining time. This Agreement shall be fully effective
and binding upon all parties hereto immediately upon execution of this Agreement except as to rights or claims arising under the ADEA, in which case Executive has 7 days following execution of this Agreement to change Executive’s mind. 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. 

 

			
	 /s/ Caroline A. Hartill

	Caroline A. Hartill
	
	RTI SURGICAL, INC.
		
	By:	 	 /s/ Robert P Jordhein

		 	Robert P. Jordheim,
		 	Interim President and Interim Chief Executive Officer

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