Document:

EX-10.1

 Exhibit 10.1 
 This instrument or other agreement and the indebtedness, rights and obligations evidenced hereby and any liens or other security interests securing such rights and obligations are subordinate in the
manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as amended, restated, supplemented or modified from time to time, the “Subordination Agreement”), dated as of August 14, 2012, by and among
the Subordinated Obligee identified therein and MidCap Financial SBIC, LP, in its capacity as agent for certain lenders (together with its successors and assigns, “Agent”), to certain indebtedness, rights and obligations of AxoGen, Inc.
and AxoGen Corporation, to Agent and Lenders (as defined therein) and all liens and security interests of Agent securing the same all as described in the Subordination Agreement, and each holder and transferee of this instrument, by its acceptance
hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement. 
 INTERIM REVENUE INTERESTS
PURCHASE AGREEMENT 
 Dated as of August 14, 2012 
 between 
 AxoGen, Inc. 

and 
 PDL
BioPharma, Inc. 

 Table of Contents 

 

							
	 	    	 	  	Page	 
		
	 ARTICLE I DEFINITIONS
	  	 	1	  
			
	 Section 1.01
	    	Definitions	  	 	1	  
		
	 ARTICLE II PURCHASE OF INTERESTS
	  	 	10	  
			
	 Section 2.01
	    	Purchase	  	 	10	  
	 Section 2.02
	    	Payments by the Company	  	 	10	  
	 Section 2.03
	    	Closing; Payment Purchase Price; Closing Deliveries	  	 	11	  
	 Section 2.04
	    	No Assumed Obligations	  	 	11	  
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY
	  	 	11	  
			
	 Section 3.01
	    	Organization	  	 	11	  
	 Section 3.02
	    	Authorization	  	 	12	  
	 Section 3.03
	    	Governmental Authorization	  	 	12	  
	 Section 3.04
	    	Ownership	  	 	12	  
	 Section 3.05
	    	Financial Statements	  	 	13	  
	 Section 3.06
	    	No Undisclosed Liabilities	  	 	13	  
	 Section 3.07
	    	Solvency	  	 	13	  
	 Section 3.08
	    	Litigation	  	 	13	  
	 Section 3.09
	    	Compliance with Laws	  	 	13	  
	 Section 3.10
	    	Conflicts	  	 	14	  
	 Section 3.11
	    	Subordination	  	 	14	  
	 Section 3.12
	    	Intellectual Property	  	 	14	  
	 Section 3.13
	    	Regulatory Approval	  	 	16	  
	 Section 3.14
	    	Material Contracts	  	 	17	  
	 Section 3.15
	    	Place of Business	  	 	17	  
	 Section 3.16
	    	Broker’s Fees	  	 	17	  
	 Section 3.17
	    	Other Information	  	 	18	  
	 Section 3.18
	    	Insurance	  	 	18	  
	 Section 3.19
	    	Taxes	  	 	18	  
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
	  	 	18	  
			
	 Section 4.01
	    	Organization	  	 	18	  
	 Section 4.02
	    	Authorization	  	 	18	  
	 Section 4.03
	    	Broker’s Fees	  	 	19	  
	 Section 4.04
	    	Conflicts	  	 	19	  

  
 - i -

 Table of Contents 

(continued) 
  

							
	 	    	 	  	Page	 
		
	 ARTICLE V COVENANTS
	  	 	19	  
			
	 Section 5.01
	    	Consents and Waivers	  	 	19	  
	 Section 5.02
	    	Access; Information	  	 	19	  
	 Section 5.03
	    	Material Contracts	  	 	21	  
	 Section 5.04
	    	Confidentiality; Public Announcement	  	 	21	  
	 Section 5.05
	    	Efforts; Further Assurance	  	 	22	  
	 Section 5.06
	    	Change of Control/Financing Event; Put Option	  	 	22	  
	 Section 5.07
	    	Intellectual Property	  	 	23	  
	 Section 5.08
	    	Negative Covenants	  	 	24	  
	 Section 5.09
	    	Insurance	  	 	24	  
	 Section 5.10
	    	Notice	  	 	24	  
	 Section 5.11
	    	Use of Proceeds	  	 	25	  
	 Section 5.12
	    	Taxes	  	 	25	  
		
	 ARTICLE VI TERMINATION
	  	 	25	  
			
	 Section 6.01
	    	Termination Date	  	 	25	  
	 Section 6.02
	    	Effect of Termination	  	 	25	  
		
	 ARTICLE VII MISCELLANEOUS
	  	 	26	  
			
	 Section 7.01
	    	Survival	  	 	26	  
	 Section 7.02
	    	Specific Performance; Limitations on Damages	  	 	26	  
	 Section 7.03
	    	Notices	  	 	26	  
	 Section 7.04
	    	Successors and Assigns	  	 	27	  
	 Section 7.05
	    	Indemnification	  	 	28	  
	 Section 7.06
	    	No Implied Representations and Warranties	  	 	29	  
	 Section 7.07
	    	Independent Nature of Relationship	  	 	29	  
	 Section 7.08
	    	Entire Agreement	  	 	30	  
	 Section 7.09
	    	Amendments; No Waivers	  	 	30	  
	 Section 7.10
	    	Interpretation	  	 	30	  
	 Section 7.11
	    	Headings and Captions	  	 	30	  
	 Section 7.12
	    	Counterparts; Effectiveness	  	 	31	  
	 Section 7.13
	    	Severability	  	 	31	  

  
 - ii -

 Table of Contents 

(continued) 
  

							
	  	    	 	  	Page	 
			
	 Section 7.14
	    	Expenses	  	 	31	  
	 Section 7.15
	    	Governing Law; Jurisdiction	  	 	31	  
	 Section 7.16
	    	Waiver of Jury Trial	  	 	32	  

  
 - iii -

 INTERIM REVENUE INTERESTS PURCHASE AGREEMENT 

This INTERIM REVENUE INTERESTS PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this
“Agreement”) is made and entered into as of August 14, 2012, by and between AxoGen, Inc., a Minnesota corporation (the “Company”), and PDL BioPharma, Inc., a Delaware corporation (“Purchaser”).

 WHEREAS, the Company wishes to obtain financing in respect of the commercialization of the Product (as hereinafter
defined) and to sell, assign, convey and transfer to Purchaser in consideration for its payment of the Purchase Price (as hereinafter defined), and Purchaser wishes to purchase from the Company, the Assigned Interests (as hereinafter defined), all
upon and subject to the terms and conditions hereinafter set forth; and 
 WHEREAS, the Company and Purchaser desire to
enter into this Agreement, pursuant to which, Purchaser shall pay $1,750,000 for the acquisition of certain of the Company’s revenue rights. 
 NOW, THEREFORE, in consideration of the mutual covenants, agreements representations and warranties set forth herein, the parties hereto agree as follows: 

ARTICLE I 

DEFINITIONS 
 Section 1.01 Definitions. 
 The following terms, as used herein,
shall have the following meanings: 
 “Adjustment Payment” shall have the meaning set forth in
Section 5.02(f). 
 “Affiliate” shall mean any Person that controls, is controlled by, or is under
common control with another Person. For purposes of this definition, “control” shall mean (i) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (ii) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of
such non-corporate entities. 
 “Agreement” shall have the meaning set forth in the first paragraph hereof.

 “Amendment” shall mean the First Amendment to Loan and Security Agreement entered into by and among the
Company the Senior Creditors, which shall be substantially in the form of Exhibit B. 
 “Assigned
Interests” shall mean the following amounts of the Company’s Net Revenues, the payment of which shall be subject to those Liens held by Senior Creditors under the Senior Loan Documents other than the limited release of such Liens by
the Senior Creditors in respect of any Permitted Subordination Obligation Payments as provided in the Subordination Agreement: 

(a) for each calendar month starting on the Counting Date until December 31, 2012, an amount equal to three percent (3%) of the
Company’s Net Revenues for each such calendar month; and 

  
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 (b) for each of the following twenty (20) calendar months thereafter, the greater of
(i) five (5%) of the Company’s Net Revenues for such calendar month or (ii) one hundred twelve thousand two hundred-fifty seven dollars ($112,257.00). 
 “Audit Costs” shall mean, with respect to any audit of the books and records of the Company with respect to amounts payable or paid under this Agreement, the reasonable out-of-pocket cost
of such audit, including all fees, costs and expenses incurred in connection therewith. 
 “Bankruptcy Event”
shall mean the occurrence of any of the following: 
 (i) the Company shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, relief of debtors or the like, seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any portion of its assets, or the Company shall make a general assignment for the benefit of its creditors; 
 (ii) there shall be commenced against the Company any case, proceeding or other action of a nature referred to in clause (i) above which remains undismissed, undischarged or unbonded for a period of
sixty (60) Business Days; 
 (iii) there shall be commenced against the Company any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar process against (A) all or any substantial portion of its assets and/or (B) the Product or any substantial portion of the Intellectual Property related to the
Product, which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within sixty (60) Business Days from the entry thereof; 

(iv) the failure of the Company to take action to object to any of the acts set forth in clause (ii) or (iii) above within ten
(10) days of the Company receiving written notice of such act; or 
 (v) the Company shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its respective debts as they become due. 
 “Bill of
Sale” shall mean the Bill of Sale pursuant to which the Company shall assign to Purchaser all of its rights and interests in and to the Assigned Interests purchased hereunder, except those Liens (subject to any Permitted Subordination
Obligation Payments) held by Senior Creditors under the Senior Loan Documents, which Bill of Sale shall be substantially in the form of Exhibit A. 
 “BLA” shall mean a biologics license application and all amendments and supplements thereto, submitted to the FDA with respect to Avance® Nerve Graft. 

  
 - 2 -

 “Business Day” shall mean any day other than a Saturday, a Sunday, any day
which is a legal holiday under the laws of the State of New York, or any day on which banking institutions located in the State of New York are required by law or other governmental action to close. 

“Change of Control” shall mean: 
 (a) the acquisition by any Person or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of beneficial ownership of any capital stock of the
Company, if after such acquisition, such Person or group would be the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; 
 (b) a merger or consolidation of the Company, with any other Person, other than a merger or consolidation which would result in the Company’s voting securities outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the Company’s voting securities or such surviving
entity’s voting securities outstanding immediately after such merger or consolidation; 
 (c) the bona fide sale, lease,
transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any of its Subsidiaries of all or substantially all the assets of the Company and its Subsidiaries, taken as a whole, or
the sale or disposition (whether by merger or otherwise) of one or more Subsidiaries of the Company if substantially all of the assets of the Company and its Subsidiaries, taken as a whole, are held by such Subsidiary or Subsidiaries, except where
such sale, lease, transfer, exclusive license or other disposition is to a wholly owned (direct or indirect) Subsidiary of the Company. 
 “Closing” shall have the meaning set forth in Section 2.03(a). 
 “Closing Date” shall have the meaning set forth in Section 2.03(a). 
 “Company” shall have the meaning set forth in the first paragraph hereof. 
 “Company Indemnified Party” shall have the meaning set forth in Section 7.05(a). 
 “Confidential Information” shall mean, as it relates to the Company and its Affiliates and the Product, the Intellectual Property, confidential business information, financial data and
other like information (including ideas, research and development, know-how, formulas, schematics, compositions, technical data, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and
proposals), inventory, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), client lists and tangible or intangible proprietary information or material, or such other information that
either party identifies to the other as confidential or the nature of which or the circumstances of the disclosure of which would reasonably indicate that such information is confidential. Notwithstanding the foregoing definition, Confidential
Information shall not include information that (i) is already in the public domain at the time the information is disclosed, (ii) thereafter becomes lawfully obtainable from other sources who, to the knowledge

  
 - 3 -

 
of the recipient, have no obligation of confidentiality, (iii) can be shown to have been independently developed by the recipient or its representatives without reference to any Confidential
Information of the other party, or (iv) is required to be disclosed under securities laws, rules and regulations applicable to the Company or its Affiliates or the Purchaser or its Affiliates, as the case may be, or pursuant to the rules and
regulations of any securities exchange or trading system or pursuant to any other laws, rules or regulations of any Governmental Authority having jurisdiction over the Company and its Affiliates or Purchaser and its Affiliates. 

“Controlled” or “Control” shall mean, with respect to Intellectual Property, the right, possession of
the right, whether directly or indirectly, and whether by ownership, license or otherwise, to grant a license, sublicense or other right to or under such Intellectual Property without violating the terms of any agreement with a third party related
to such Intellectual Property. 
 “Counting Date” shall mean August 1, 2012. 

“Default” shall mean the occurrence of any event or circumstance that would, with the giving of notice, lapse of time,
or both, be an Event of Default. 
 “Delinquent Assigned Interests Payment” shall mean, with respect to any
Assigned Interests Payment and, if owed by the Company to Purchaser, any Adjustment Payment that is not paid when due shall, in each case, an amount equal to the product of the amount so owed multiplied by the lower of (i) the highest rate
permitted by applicable law, and (ii) one and one-half percent (1.5%) per month, compounded monthly. 

“Dispute” shall have the meaning set forth in Section 3.12(e). 

“Early Repurchase Price” shall mean the sum of (a) the balance amount stated on Schedule 1 for the
corresponding calendar month on which such payment is made, (b) all amounts due for such calendar month on which such payment is made, (c) any Delinquent Assigned Interests Payment owed and (d) $150,000.00. 

“Event of Default” shall mean the occurrence of any Put Option Event (other than pursuant to clause of (a) of said
definition) and any material breach by the Company of this Agreement, whether or not constituting a Put Option Event. 

“Excluded Liabilities and Obligations” shall have the meaning set forth in Section 2.04. 

“FDA” shall mean the United States Food and Drug Administration or any successor federal agency thereto. 

“Financial Statements” shall mean (i) the audited consolidated balance sheets of the Company and its Subsidiary as
of December 31, 2012 and 2011, and the related audited consolidated statements of operations, cash flows and shareholders’ equity for the Fiscal Years then ended and (ii) the unaudited consolidated balance sheet of the Company and its
Subsidiary as of March 31, 2012, and the related unaudited consolidated statements of operations, cash flows and shareholders’ equity for the three (3) month periods then ended. 

  
 - 4 -

 “Financing Event” shall mean the Company receives, other than from
Purchaser, an equity investment or debt placement (including a credit facility) in an amount greater than $5,000,000 in the aggregate measured during any consecutive sixty (60) day period after the Closing Date. 

“Fiscal Quarter” shall mean each calendar quarter. 

“Fiscal Year” shall mean the calendar year. 
 “GAAP” shall mean generally accepted accounting principles in the United States in effect from time to time. 
 “Governmental Authority” shall mean any government, court, regulatory or administrative agency or commission, or other governmental authority, agency or instrumentality, whether foreign,
federal, state or local (domestic or foreign), including the United States Patent and Trademark Office, the FDA, or the United States National Institutes of Health. 
 “Gross Product Revenues” means, for any period of determination, the sum of the following for such period: (i) the amounts invoiced and recognized as revenue in accordance with GAAP
by the Company, its Subsidiaries or any of their Affiliates with respect to the sale of Product to a Third Party by the Company, its Subsidiaries or any of their Affiliates, (ii) the amounts invoiced and recognized as revenue in accordance with
GAAP by the Company, its Subsidiaries or any of their Affiliates from a Third Party with respect to the sale, distribution or other use of the Product by such Third Party in connection with any marketing, royalty, manufacturing, co-promotion,
co-development, equity investment, cost sharing or other strategic arrangements, and (iii) any collections in respect of write-offs or allowances for bad debts in respect of items described in the preceding clauses (i) and (ii). For
purposes of prevention of duplication, “Gross Product Revenue” shall not include amounts invoiced by distributors, wholesalers or other Persons acting in similar capacities. 

“Intellectual Property” shall mean all proprietary information; technical data; laboratory notebooks; clinical data;
priority rights; trade secrets; know-how; confidential information; inventions (whether patentable or unpatentable and whether or not reduced to practice or claimed in a pending patent application) and improvements thereto; Patents; registered or
unregistered trademarks, trade names, service marks, including all goodwill associated therewith; registered and unregistered copyrights and all applications thereof; in each case that are owned, Controlled by, generated by, issued to, licensed to,
licensed by or hereafter acquired by or licensed by the Company, in each case relating to, or otherwise relevant or desirable, now or in the future, for the manufacture and sale of the Product. 

“Knowledge” shall mean the actual knowledge, or that which would or should have been known after reasonable inquiry, of
any officer, director or employee of the Company or its Subsidiaries relating to a particular matter. 
 “License
Agreement” shall mean any existing or future license, commercialization, co-promotion, collaboration, distribution, marketing or partnering agreement entered into before or during the Revenue Interest Period by the Company or any of its
Affiliates relating to the Product and/or under the Intellectual Property. 

  
 - 5 -

 “Licensees” shall mean, collectively, the licensees, sublicensees or
distributors under the License Agreements; each a “Licensee”. 
 “Liens” shall mean any lien,
hypothecation, charge, instrument, license, preference, priority, security agreement, security interest, interest, mortgage, deed of trust, option, privilege, pledge, liability, covenant, order, tax, right of recovery, trust or deemed trust (whether
contractual, statutory or otherwise arising) or any encumbrance, right or claim of any other person of any kind whatsoever whether choate or inchoate, filed or unfiled, noticed or unnoticed, recorded or unrecorded, contingent or non-contingent,
material or non-material, known or unknown, including, without limitation, any conditional sale or other title retention agreement, any lease having the same financial effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the UCC. 
 “Losses” shall mean collectively, any and all claims, damages, losses,
judgments, awards, penalties, liabilities, costs and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses incurred in connection with investigating, preparing for or defending any action, suit or
proceeding). 
 “Major Countries” shall mean the United States. 

“Material Adverse Change” shall mean, with respect to the Company and its Subsidiaries, any event, change, circumstance,
occurrence, effect or state of facts that has caused or is reasonably likely to cause a material adverse change on the business, operations, assets, condition (financial or otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole. 
 “Material Adverse Effect” shall mean (i) the effect of a Material
Adverse Change, (ii) a material adverse effect on the validity or enforceability of any of the Transaction Documents, (iii) material adverse effect on the ability of the Company to perform any of its obligations under the Transaction
Documents, (iv) the inability or failure of Company to make payment of the Assigned Interests or any other amounts in violation of this Agreement, and (v) any material adverse effect on the Product or the ability of the Company to
distribute, market and/or sell the Product. 
 “Material Contract” shall mean: (i) any marketing
agreement, co-promotion agreement or partnering agreement related to the manufacture, sale or distribution of the Product in any of the Major Countries; or (ii) any agreement relating to any Intellectual Property, including any license,
assignment, or agreement related to Control of such Intellectual Property. 
 “Material Patents” shall have the
meaning set forth in Section 3.12(d). 
 “Monthly Report” shall mean, with respect to the relevant
calendar month, (i) a report showing Gross Profit Revenues for such calendar month and the adjustments and other reconciliations used to arrive at Net Revenues. 
 “Net Revenues” shall mean, for any period of determination, the difference of 
 (a) Gross Product Revenues for such period, less 

  
 - 6 -

 (b) the sum, with respect to the items described in clauses (i) and (ii) of the
definition of Gross Product Revenues, of 
 (i) cash, trade discounts and rebates actually granted or paid Third Parties in
accordance with customary industry standards, 
 (ii) allowances and adjustments actually credited to customers for Product that
is spoiled, damaged, outdated, obsolete, returned or otherwise recalled, but only if and to the extent the same are in accordance with sound business practices and not in excess of customary industry standards, 

(iii) charges for freight, postage, shipping, delivery, service and insurance charges, to the extent invoiced, 

(iv) taxes, duties or other governmental charges to the extent invoiced, 

(v) write-offs or allowances for bad debts, 
 (vi) rebates and chargebacks and other price reduction programs granted to managed care entities, Governmental Authorities, group purchasing organizations or pharmaceutical benefit management companies,
and 
 (vii) other payments required by law to be made under Medicaid, Medicare or other government special medical assistance
programs. 
 Net Revenues shall be determined in accordance with GAAP as applied by the Company and its Subsidiary on the date
of this Agreement. 
 “Obligations” shall mean any and all obligations of the Company under the Transaction
Documents. 
 “Patents” shall mean all patents, patent rights, patent applications, patent disclosures and
invention disclosures issued or filed, together with all reissues, divisions, continuations, continuations-in-part, revisions, term extensions, substitutes, supplementary protection certificates and reexaminations, including the inventions claimed
in any of the foregoing and any priority rights arising therefrom, covering or related to the manufacture, use and sale of the Product that are issued or filed as of the date hereof or during the Revenue Interest Period, including, without
limitation, those identified in Schedule 3.12 in each case, which are owned, Controlled by, issued to, licensed to or licensed by the Company, its Subsidiary or any of its Affiliates. 

“Permitted Subordination Obligation Payments” shall have the meaning given it in the Subordination Agreement.

 “Person” shall mean an individual, corporation, partnership, limited liability company, association, trust
or other entity or organization, but not including a government or political subdivision or any agency or instrumentality of such government or political subdivision. 

  
 - 7 -

 “Product” shall mean Avance® Nerve Graft, AXOGUARD® Nerve Protector and AXOGUARD®
Nerve Connector, regardless of the purpose for which such products are marketed or sold, and any and all future iterations of such products developed or licensed by the Company as a solution to repair or protect nerves as marketed in any
jurisdiction. 
 “Purchase Price” shall mean $1,750,000. 

“Purchaser” shall have the meaning set forth in the first paragraph hereof. 

“Purchaser Indemnified Party” shall have the meaning set forth in Section 7.05(b). 

“Put Option” shall have the meaning set forth in Section 5.06(b). 

“Put Option Closing Date” shall have the meaning set forth in Section 5.06(b). 

“Put Option Event” shall mean any one of the following events: 

(a) any Bankruptcy Event; 
 (b) occurrence of a Material Adverse Effect; 
 (c) any Transfer by the Company of
its interests in the Revenue Interests or substantially all of its interest in the Product; 
 (d) any material breach of any
representation or warranty made by the Company in this Agreement or any breach of or default under any covenant or agreement by the Company in this Agreement, which breach is not cured within thirty (30) days after written notice thereof is
delivered by Purchaser to the Company; or 
 (e) acceleration of the Senior Loan. 

“Quarterly Report” shall mean, with respect to the relevant Fiscal Quarter of the Company, (i) a report showing on
a monthly basis the Gross Profit Revenues for each month in such quarter and the adjustments and other reconciliations used to arrive at Net Revenues for each month, with the aggregate quarterly amounts reconciled, in each case, to the most
applicable line item in the Company’s consolidated statements of operations as most recently filed or to be filed with the Securities and Exchange Commission or furnished to Purchaser pursuant to Section 5.02(h) and (ii) a
reconciliation of all Assigned Interest Payments made by the Company to Purchaser pursuant to this Agreement during such quarter. 
 “Regulatory Agency” shall mean a Governmental Authority with responsibility for the approval of the marketing and sale of pharmaceuticals in the United States or other regulation of
pharmaceuticals. 
 “Regulatory Approval” shall mean all approvals (including, without limitation, where
applicable, pricing and reimbursement approval and schedule classifications), product and/or establishment licenses, registrations or authorizations of any Governmental Authority necessary for the manufacture, use, storage, import, export,
transport, offer for sale, or sale of the Product in a regulatory jurisdiction. 

  
 - 8 -

 “Revenue Interest Period” shall mean the period from and including the
Counting Date through the earliest of: 
 (a) August 31, 2014; and 

(b) payment of the Early Repurchase Price. 
 “Revenue Interests” shall mean all of the Company’s interest in the Gross Product Revenues. 
 “Secretary’s Certificate” shall mean the duly executed Secretary’s and Officer’s Certificate, dated as of the Closing Date, in form and substance reasonably satisfactory to
Purchaser, (W) attaching certified copies of the Company’s organizational documents (together with any and all amendments thereto); (X) attaching certified copies of the resolutions adopted by the board of directors of the Company
authorizing and approving the execution, delivery and performance by the Company of the Agreement and the Bill of Sale and the transactions contemplated herein and therein; (Y) setting forth the incumbency of the officer or officers of the
Company who have executed and delivered the Agreement and the Bill of Sale; and (Z) attaching copies, certified by such officer as true and complete, of a certificate of the appropriate Governmental Authority of the Company’s jurisdiction
of formation, stating that the Company is in good standing under the laws of the State of Minnesota. 
 “Senior
Creditors” shall mean MidCap Financial SBIC, LP, the Lenders (as defined in the Senior Loan Agreement) from time to time party to the Senior Loan Agreement and any other holder or holders of the Senior Loan as may from time to time exist.

 “Senior Loan” shall have the meaning set forth in the Subordination Agreement. 

“Senior Loan Agreement” shall have the meaning set forth in the Subordination Agreement. 

“Senior Loan Documents” shall have the meaning set forth in the Subordination Agreement. 

“Subordination Agreement” shall mean that Subordination and Intercreditor Agreement by and among Company, Purchaser,
AxoGen Corporation, and MidCap Financial SBIC, LP on August 14, 2012, as the same may be amended, restated, supplemented or otherwise modified from time to time. 
 “Subsidiary” shall mean, with respect to any Person, any other Person controlled by such first Person, directly or indirectly, through one or more intermediaries. 

“Tax” or “Taxes” means any federal, state, local or foreign tax, levy, impost, duty, assessment, fee,
deduction or withholding or other charge, including all excise, sales, use, value added, transfer, stamp, documentary, filing, recordation and other fees imposed by any taxing authority (and interest, fines, penalties and additions related thereto).

 “Tax Return” means any report, return, form (including elections, declarations, statements, amendments,
claims for refund, schedules, information returns or attachments thereto) or other information supplied or required to be supplied to a Governmental Authority with respect to Taxes. 

  
 - 9 -

 “Term” shall have the meaning set forth in Section 6.01.

 “Term Sheet” shall mean the Term Sheet between the Company and Purchaser, dated July 26, 2012.

 “Third Party” shall mean any Person other than the Company. 

“Transaction Documents” shall mean, collectively, this Agreement, the Bill of Sale and the Secretary’s Certificate
and any related ancillary documents or agreements. 
 “Transfer” shall mean any sale, conveyance, assignment,
disposition, pledge, hypothecation or transfer. 
 “United States” shall mean the United States of America.

 ARTICLE II 
 PURCHASE OF INTERESTS 
 Section 2.01 Purchase.

 Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the Company agrees to sell,
assign, transfer and convey to Purchaser, and Purchaser agrees to purchase from the Company, free and clear of all Liens (except those Liens held by the Senior Creditors (subject to the Permitted Subordination Obligation Payments)), all of the
Company’s rights and interests in and to the Assigned Interests. Purchaser’s ownership interest in each of the Assigned Interests so acquired shall vest immediately upon the Company’s receipt of payment for such Assigned Interests
pursuant to Section 2.03(a). 
 Section 2.02 Payments by the Company. 

(a) Payments in Respect of the Assigned Interests. In connection with the purchase of the Assigned Interest, Purchaser shall be
entitled to receive the Assigned Interests in respect of Net Revenues earned during the Revenue Interest Period in accordance with subsection (b) below. 
 (b) Monthly Report/Disbursement. During the Term, the Company shall, within twenty (20) days after the end of each calendar month (i) produce and deliver to Purchaser a Monthly Report,
together with a certificate of the Company, certifying that to the best Knowledge of the Company (x) such Monthly Report is a true and complete copy and (y) any statements and any data and information therein prepared by the Company are
true, correct and accurate in all material respects, and (ii) a payment (the “Assigned Interest Payment”) equal to the Assigned Interest owed for such calendar month. 

(c) Payment Procedure. All payments to be made by the Company to Purchaser hereunder, including any Delinquent Assigned Interests
Payment and Adjustment Payment, shall be made by wire transfer of immediately available funds. 

  
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 Section 2.03 Closing; Payment Purchase Price; Closing Deliveries.

 (a) Closing. The closing of the purchase of the Assigned Interests pursuant to this Agreement (the
“Closing”) will take place concurrently with the execution of this Agreement on the date hereof (the “Closing Date”) and will be held at the offices of PDL or at such other time and place as shall be agreed upon by
the Company and PDL. 
 (b) Payment of Purchase Price. At the Closing, Purchaser shall pay to the Company the Purchase
Price by wire transfer of immediately available funds to the account designated by the Company prior to the date hereof. 
 (c)
Closing Deliveries. At the Closing, (i) the Company will deliver to Purchaser (X) its duly executed counterpart to the Bill of Sale, (Y) a fully executed copy of the Amendment by the Company and the required Senior Creditors,
and (Z) a fully executed and complete Secretary’s Certificate, and (ii) Purchaser will deliver to the Company its duly executed counterpart to the Bill of Sale. 
 Section 2.04 No Assumed Obligations. 
 Notwithstanding any
provision in this Agreement or any other writing to the contrary, Purchaser is acquiring only the Assigned Interests and is not assuming any liability or obligation of the Company or any of its Affiliates of whatever nature, whether presently in
existence or arising or asserted hereafter, whether under any Transaction Document or otherwise. All such liabilities and obligations shall be retained by and remain obligations and liabilities of the Company or its Affiliates (the “Excluded
Liabilities and Obligations”). 
 ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF COMPANY 

For purposes of all the representations and warranties contained in Article III, the term “Product”
shall mean Avance® Nerve Graft, AXOGUARD® Nerve Protector and AXOGUARD®
Nerve Connector as such products currently exist and are marketed in any jurisdiction, and no broader definition shall be implied. The Company hereby represents and warrants to Purchaser, as of the Closing Date, the following: 

Section 3.01 Organization. 
 Each of the Company and its Subsidiary is a corporation duly incorporated, validly existing and in good standing under the laws of the States of Minnesota and Delaware, respectively, and has all corporate
powers and all licenses, authorizations, consents and approvals required to carry on its respective business as now conducted and as proposed to be conducted in connection with the transactions contemplated by the Transaction Documents. Each of the
Company and its Subsidiary is duly qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which the failure to do so would have a Material Adverse Effect. The Company has no direct or indirect
Subsidiaries, other than AxoGen Corporation, a Delaware corporation. 

  
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 Section 3.02 Authorization. 

The Company has all necessary power and authority to enter into, execute and deliver the Transaction Documents and to perform all of the
obligations to be performed by it hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The Transaction Documents have been duly authorized, executed and delivered by the Company and each Transaction
Document constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ rights generally or general equitable principles. 
 Section 3.03 Governmental
Authorization. 
 The execution and delivery by the Company of the Transaction Documents, and the performance by the
Company of its obligations hereunder and thereunder, does not require any notice to, action or consent by, or in respect of, or filing with, any Governmental Authority. 
 Section 3.04 Ownership. 
 (a) The Company owns, Controls, or
holds a valid license under, all of the Intellectual Property and the Regulatory Approvals which it currently purports to own related to the Product free and clear of all Liens, except those Liens held by Senior Creditors under the Senior Loan
Documents, and no license, either direct or implied, or covenant not to sue under any Intellectual Property has been granted to or exists in any Third Party. Neither the Company nor its Subsidiary has granted, nor does there exist, any Lien on the
Revenue Interests or the Assigned Interests, except those Liens held by the Senior Creditors under the Senior Loan Documents (subject to the Permitted Subordination Obligation Payments). 

(b) The Company, immediately prior to the purchase of the Assigned Interests, owns, and is the sole holder of, all the Revenue Interests;
and the Company owns, and is the sole holder of, and/or has and holds a valid, enforceable and subsisting license to, all of those other assets that are required to produce or receive any payments from any Licensee or payor under and pursuant to,
and subject to the terms of any License Agreement, in each case free and clear of any and all Liens, except those Liens held by Senior Creditors under the Senior Loan Documents. The Company has not transferred, sold, or otherwise disposed of, or
agreed to transfer, sell, or otherwise dispose of any portion of the Revenue Interests other than as contemplated by this Agreement. No Person other than the Company and the Senior Creditors has any right to receive the payments payable under any
License Agreement, other than Purchaser’s rights with respect to the Assigned Interests, from and after the Closing Date. The Company has the full right to sell, transfer, convey and assign to Purchaser all of the Company’s rights and
interests in and to the Assigned Interests being sold, transferred, conveyed and assigned to Purchaser pursuant to this Agreement without any requirement to obtain the consent of any Person, which has not already been obtained. At the Closing, and
upon delivery of the Bill of Sale to Purchaser by the Company, Purchaser shall have acquired good and valid rights and interests of the Company in and to the Assigned Interests being sold, transferred, conveyed and assigned to Purchaser pursuant to
this Agreement, free and clear of any and all Liens, except those Liens held by Senior Creditors under the Senior Loan Documents (subject to the Permitted Subordination Obligation Payments). 

  
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 Section 3.05 Financial Statements. 

The Financial Statements are complete and accurate in all material respects, were prepared in conformity with GAAP and present fairly in
all material respects the financial position and the financial results of the Company and its Subsidiary as of the dates and for the periods covered thereby. 
 Section 3.06 No Undisclosed Liabilities. 
 Except for those
liabilities (a) specifically identified on the face of the Financial Statements, (b) incurred by the Company in the ordinary course of business since March 31, 2012, or (c) in connection with the Obligations under the Transaction
Documents, there are no material liabilities of the Company or its Subsidiary of any kind whatsoever, whether accrued, contingent, absolute, determined or determinable. 
 Section 3.07 Solvency. 
 The Company and its Subsidiary, taken
as a whole, are not insolvent as defined in any statute of the United States Bankruptcy Code or in the fraudulent conveyance or fraudulent transfer statutes of the States of Delaware, Florida, Minnesota or New York. Assuming consummation of the
transactions contemplated by the Transaction Documents, (a) the present fair saleable value of the Company’s and its Subsidiary’s assets and the fair value of the Company’s and its Subsidiary’s assets are each greater than
the total amount of liabilities (including contingent and unliquidated liabilities) of the Company and its Subsidiary as such liabilities mature, (b) neither the Company nor its Subsidiary has unreasonably small capital with which to engage in
its respective business, and (c) neither the Company nor its Subsidiary has incurred, nor does either have present plans to or intend to incur, debts or liabilities beyond their respective ability to pay such debts or liabilities as they become
absolute and matured. 
 Section 3.08 Litigation. 

There is no (a) action, suit, arbitration proceeding, claim, investigation or other proceeding pending or, to the Knowledge of the
Company, threatened against the Company or its Subsidiary or (b) any governmental inquiry pending or, to the Knowledge of the Company, threatened against the Company or its Subsidiary, in each case with respect to clauses (a) and
(b) above, which, if adversely determined, would question the validity of, or could adversely affect the transactions contemplated by the Transaction Documents or could reasonably be expected to have a Material Adverse Effect. There is no
action, suit, arbitration proceeding, claim, investigation or other proceeding pending or, to the Knowledge of the Company, threatened against the Company, its Subsidiary or any other Person relating to the Product, the Intellectual Property, the
Regulatory Approvals, the Revenue Interests or the Assigned Interests. 
 Section 3.09 Compliance with Laws.

 Neither the Company nor its Subsidiary (a) is in violation of, has violated, or to the Knowledge of the Company, is
under investigation with respect to, and, (b) has been threatened to be charged with or been given notice of any violation of any law, rule, ordinance or regulation of, or any judgment, order, writ, decree, permit or license entered by any
Governmental Authority applicable to the Company, the Assigned Interests or the Revenue Interests which would reasonably be expected to have a Material Adverse Effect. 

  
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 Section 3.10 Conflicts. 

Neither the execution and delivery of any of this Agreement or the other Transaction Documents to which the Company is a party nor the
performance or consummation of the transactions contemplated hereby or thereby will: (a) contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the performance provided by, in any material
respects any provisions of: (i) any law, rule, ordinance or regulation of any Governmental Authority, or any judgment, order, writ, decree, permit or license of any Governmental Authority, to which the Company or its Subsidiary or any of their
respective assets or properties may be subject or bound; or (ii) any contract, agreement, commitment or instrument to which the Company or its Subsidiary is a party or by which the Company or its Subsidiary or any of their respective assets or
properties is bound or committed; (b) contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the performance provided by, any provisions of the articles or certificate of incorporation or bylaws
(or other organizational or constitutional documents) of the Company or its Subsidiary; (c) require any notification to, filing with, or consent of, any Person or Governmental Authority other than those that have been obtained; (d) give
rise to any right of termination, cancellation or acceleration of any right or obligation of the Company, its Subsidiary or any other Person or to a loss of any benefit relating to the Revenue Interests or the Assigned Interests; or (e) result
in the creation or imposition of any Lien on (i) the assets or properties of the Company or its Subsidiary or (ii) the Assigned Interests or the Revenue Interests, except, in the case of the foregoing clauses (a), (c), (d) or (e), for
any such breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Material Adverse Effect. 
 Section 3.11 Subordination. 
 The claims and rights of Purchaser
created by any Transaction Document in and to the Assigned Interests and the Revenue Interests are (a) subordinated to the Senior Creditors as provided in the Subordination Agreement and (b) not and shall not be subordinated to any
creditor of the Company or any other Person other than the Senior Creditors as provided in the Subordination Agreement. 

Section 3.12 Intellectual Property. 
 (a) Schedule 3.12(a) sets forth an accurate, true and complete list of all (i) Patents and utility models, (ii) trade names, registered trademarks, registered service marks, and
applications for trademark registration or service mark registration, (iii) registered copyrights and (iv) domain name registrations and websites, in each case with respect to clauses (i), (ii), (iii) and (iv) above in this
subsection (a) that the Company owns or licenses and which are necessary to make, have made, use, sell, have sold, offer for sale, import, develop, promote, market, distribute, manufacture, commercialize or otherwise exploit the Product in the
jurisdictions where the Product marketed and sold. For each item of Intellectual Property listed on Schedule 3.12(a), the Company has identified (x) the owner, (y) the countries in which such listed item is patented or registered or
in which an application for Patent or registration is pending and (z) the application number, the Patent number or registration number. To the Company’s Knowledge, except as disclosed therein, each Patent and trademark listed on
Schedule 3.12(a) is valid, enforceable and subsisting and none has lapsed, expired, been cancelled or become abandoned. The Patent applications listed in Schedule 3.12(a) have been prosecuted by competent patent counsel in a

  
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diligent manner. After due inquiry, the Company has determined that there are no published patents, patent applications, articles, prior art references, public uses, undisclosed information
(including best mode) or other grounds, factors or circumstances that could adversely affect the validity or enforceability of any of the Patents listed in Schedule 3.12(a). After due inquiry, the Company has determined that all Persons
relevant to the prosecution of any of the Material Patents or applications related thereto have complied with the duty to disclose information and/or the duty of candor, including obligations to the United States Patent and Trademark Office
specified under Rule 56. To the Company’s Knowledge, each of the Material Patents and Material Patent applications correctly identifies each and every inventor of the claims thereof as determined in accordance with the laws of the jurisdiction
in which such Material Patent is issued or such Material Patent application is pending. To the Company’s Knowledge, each Person who has or has had any rights in or to the Intellectual Property listed on Schedule 3.12(a) that are owned
by, or licensed to, the Company, including, each inventor named on the Patents and Patent applications listed in Schedule 3.12(a), has executed an agreement assigning his, her or its entire right, title and interest in and to such
Intellectual Property, and the inventions embodied, described and/or claimed therein, to the purported owner and no such Person has any contractual or other obligation that would preclude or conflict with any such assignment or otherwise conflict
with the obligations of such Person to the applicable owner of each listed Intellectual Property. To the Company’s Knowledge, all Persons having a claim to inventorship to any pending or issued claim of the Patents are currently listed as
inventors with respect to such Patents, and that the Company has performed an appropriate inquiry with respect to such inventorship. 
 (b) Except for Intellectual Property licensed to and owned by the Company and set forth on Schedule 3.12(a), no other Intellectual Property is necessary to make, have made, offer to sell, sell,
have sold, use, import, distribute, commercialize or market the Product in the Major Countries. The use, manufacture, import, export, offer for sale, distribution, marketing and sale of the Product does not infringe any patents that are owned by a
Third Party in the Major Countries. 
 (c) The Company has the full right, power and authority to grant all of the rights and
interests granted to Purchaser in this Agreement. 
 (d) To the Company’s Knowledge, there are no unpaid maintenance,
annuity or renewal fees currently overdue for any of the Patents that cover the manufacture, use or sale of the Product or which cover compositions of matter and/or processes which relate to the Product or alternatives thereto (“Material
Patents”). 
 (e) There is, and has been, no pending, decided or settled opposition, interference proceeding,
reexamination proceeding, cancellation proceeding, injunction, claim, lawsuit, declaratory judgment, administrative post-grant review proceeding, other administrative or judicial proceeding, hearing, investigation, complaint, arbitration, mediation,
International Trade Commission investigation, decree, or any other filed claim (collectively referred to hereinafter as “Disputes”) related to any of the Material Patents, nor, to the Knowledge of the Company, has any such Dispute
been threatened challenging the legality, validity, enforceability or ownership of any Material Patents or which would give rise to a credit against the revenues or royalties due to the Company for the manufacture, sale offer for sale, use,
importation or exportation of the Product and the Company has no notice of any facts that would form the basis for such a 

  
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Dispute. There are no Disputes by any Person or Third Party against the Company, its Licensees or its licensor, and the Company has not received any written notice or claim of any such Dispute as
pertaining to the Product. Neither the Company nor its licensor has sent any notice of any such Dispute to a Third Party. The Company is not subject to any outstanding injunction, judgment, order, decree, ruling charge, settlement or other
disposition of Dispute which relates to the Product or the Patents. 
 (f) There is no pending or threatened action, suit, or
proceeding, or any investigation or claim by any Governmental Authority to which the Company is a party (1) that would be the subject of a claim for indemnification by any Person or Third Party under any agreement, or (2) that the
marketing, sale or distribution of the Product worldwide by the Company or its by Licensees pursuant to the related License Agreement, as applicable, does or will infringe on any patent of any other Person, and there is no basis for any such action,
suit, proceeding, investigation or claim of the type described in clause (1) or (2) above. To the Company’s Knowledge, there are no pending published or unpublished United States, international or foreign patent applications owned by
any other Person, which, if issued, would limit or prohibit, in any material respect, the use of the Product or the licensed Intellectual Property relating to the Product. 
 (g) The Company has taken all commercially reasonable measures and precautions necessary to protect and maintain (1) the confidentiality of all Intellectual Property that it owns and (2) the
value of all Intellectual Property related to the Product, except where such failure to take action would not have a Material Adverse Effect. 
 (h) No material trade secret of the Company has been published or disclosed to any Person except pursuant to a written agreement requiring such Person to keep such trade secret confidential, except where
such disclosure would not have a Material Adverse Effect. 
 (i) Each Product, or its manufacture or use, is covered by one or
more claims of an issued Patent in the United States. 
 Section 3.13 Regulatory Approval. 

(a) The Company and its Subsidiary have made available to Purchaser any written reports or other written communications received from a
Governmental Authority that would indicate that any Regulatory Agency (A) is not likely to approve the BLA, (B) is likely to revise or revoke any current Regulatory Approval granted by any Regulatory Agency with respect to the Product, or
(C) is likely to pursue any material compliance actions against the Company. 
 (b) The Company and its Subsidiary possess
all Regulatory Approvals issued or required by the appropriate Regulatory Agencies, which Regulatory Approvals are necessary to conduct the current clinical trials relating to the Product, and neither the Company nor its Subsidiary has received any
notice of proceedings relating to the revocation, suspension, termination or modification of any such Regulatory Approvals. 

(c) The Company and its Subsidiary are in material compliance with, and has materially complied with, all applicable federal, state,
local and foreign laws, rules, regulations, standards, orders and decrees governing its business, including all regulations promulgated by each Regulatory Agency, the failure of compliance with which could reasonably be expected to

  
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result in a Material Adverse Effect; the Company and its Subsidiary have not received any notice citing action or inaction by any of them that would constitute any material non-compliance with
any applicable federal, state, local and foreign laws, rules, regulations, or standards, which could reasonably be expected to result in a Material Adverse Effect; and to the Company’s Knowledge, no prospective change in any applicable federal,
state, local or foreign laws, rules, regulations or standards has been adopted which, when made effective, could reasonably be expected to result in a Material Adverse Effect. 
 (d) Preclinical and clinical trials conducted on behalf of the Company or its Subsidiary relating to the Product were conducted in compliance with applicable laws and, in all material respects, in
accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards; the descriptions of the results of such trials provided to Purchaser are accurate in all material
respects. Neither the Company nor its Subsidiary has received any notices or correspondence from any Regulatory Agency or comparable authority requiring the termination, suspension, or material modification or clinical hold of any clinical trials
conducted by or on behalf of the Company or its Subsidiary with respect to the Product, which termination, suspension, material modification or clinical hold could reasonably be expected to result in a Material Adverse Effect. 

Section 3.14 Material Contracts. 
 Neither the Company nor its Subsidiary is in breach of or in default under any Material Contract which default, individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. To the Knowledge of the Company, nothing has occurred and no condition exists that would permit any other party thereto to terminate any Material Contract. Neither the Company nor its Subsidiary has received any notice or, to the
Knowledge of the Company, any threat of termination of any such Material Contract. To the Knowledge of the Company, no other party to a Material Contract is in breach of or in default under such Material Contract. All Material Contracts are valid
and binding on the Company or its Subsidiary and, to the Knowledge of the Company, on each other party thereto, and are in full force and effect. The Company is in compliance with all obligations of the Amended and Restated Standard Exclusive
License Agreement with Sublicensing Terms between AxoGen Corporation and the University of Florida Research Foundation dated February 21, 2006, and the Patent License Agreement between AxoGen Corporation and the Board of Regents of The
University of Texas System dated July 19, 2005. 
 Section 3.15 Place of Business. 

The Company’s principal place of business and chief executive office are set forth on Schedule 3.15. 

Section 3.16 Broker’s Fees. 
 The Company and its Subsidiary have not taken any action that would entitle any Person to any commission or broker’s fee in connection with this Agreement except fees, commissions and expenses to be
paid to JMP Securities LLC, all of which will be paid by the Company. 

  
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 Section 3.17 Other Information. 

No written statement, information, report or materials prepared by or on behalf of the Company or its Subsidiary and furnished to
Purchaser by or on behalf of the Company or its Subsidiary in connection with any Transaction Document or any transaction contemplated hereby or thereby, no written representation, warranty or statement made by the Company or its Subsidiary in any
Transaction Document, and no Schedule or Exhibit hereto or thereto, in each case taken in the aggregate, contains any untrue statement of a material fact or omits any statement of material fact necessary in order to make the statements made therein
in light of the circumstances under which they were made not misleading. 
 Section 3.18 Insurance.

 There are in full force and effect insurance policies maintained by the Company with an insurance company rated not less
than “A-” by A.M. Best Company, Inc., with coverages and in amounts customary for companies of comparable size and condition similarly situated in the same industry as the Company, including product liability insurance, directors and
officers insurance and insurance against litigation liability, subject only to such exclusions and deductible items as are usual and customary in insurance policies of such type. All material insurable risks in respect of the business and assets of
the Company and its Subsidiary are covered by such insurance policies. A schedule of the Company’s insurance policy or insurance policies is attached hereto as Schedule 3.18. 

Section 3.19 Taxes. 
 The Company has timely filed (taking into account all extensions of due dates) all Tax returns required to be filed by, or on behalf of, it and has timely paid all Taxes required to be paid with such
returns. To Company Knowledge, (a) all Tax Returns filed by the Company (or on its behalf) have been true, correct and complete; (b) there is no outstanding or threatened action, claim or other examination or proceeding with respect to
Taxes of the Company or its assets (including with respect to the Assigned Interests and the Revenue Interests); and (c) there are no Taxes of the Company that form or could form the basis for an encumbrance (other than encumbrances for current
taxes not yet past due) on any of its assets (including the Assigned Interests and the Revenue Interests). 
 ARTICLE IV

 REPRESENTATIONS AND WARRANTIES OF PURCHASER 

Purchaser represents and warrants to the Company the following: 
 Section 4.01 Organization. 
 Purchaser is a corporation duly
incorporated and validly existing under the laws of the State of Delaware. 
 Section 4.02 Authorization.

 Purchaser has all necessary power and authority to enter into, execute and deliver the Transaction Documents and to
perform all of the obligations to be performed by it hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The Transaction Documents have been duly authorized, executed and delivered by Purchaser and

  
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each Transaction Document constitutes the valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with their respective terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equitable principles. 
 Section 4.03 Broker’s Fees. 
 Purchaser has not taken any
action that would entitle any Person to any commission or broker’s fee in connection with the transactions contemplated by the Transaction Documents. 
 Section 4.04 Conflicts. 
 Neither the execution and delivery of
this Agreement or any other Transaction Document to which Purchaser is a party nor the performance or consummation of the transactions contemplated hereby will: (a) contravene, conflict with, result in a breach or violation of, constitute a
default under, or accelerate the performance provided by, in any material respects any provisions of: (i) any law, rule or regulation of any Governmental Authority, or any judgment, order, writ, decree, permit or license of any Governmental
Authority, to which Purchaser or any of its assets or properties may be subject or bound; or (ii) any contract, agreement, commitment or instrument to which Purchaser is a party or by which Purchaser or any of its assets or properties is bound
or committed; (b) contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the performance provided by, any provisions of the organizational or constitutional documents of Purchaser; or
(c) require any notification to, filing with, or consent of, any Person or Governmental Authority, except, in the case of the foregoing clauses (a) or (c), for any such breaches, defaults or other occurrences that would not, individually
or in the aggregate, have a material adverse effect on the ability of Purchaser to perform any of its obligations under the Transaction Documents. 
 ARTICLE V 
 COVENANTS 

From the date hereof through and including the end of the Revenue Interest Period, the following covenants shall apply: 

Section 5.01 Consents and Waivers. 
 The Company shall use its commercially reasonable efforts to obtain and maintain any required consents, acknowledgements, certificates or waivers so that the transactions contemplated by this Agreement or
any other Transaction Document may be consummated and shall not result in any default or breach or termination of any of the Material Contracts. 
 Section 5.02 Access; Information. 
 (a) License Notices.
Subject to any applicable confidentiality restrictions, the Company shall promptly provide Purchaser with copies of any material written notices received or given by the Company under any Material Contract, and to the extent the Company is barred
from providing Purchaser with copies of such notices due to any applicable confidentiality restrictions, the Company shall (i) inform Purchaser of the existence of such notice accompanied by a written description of the substance contained in
such notice and (ii) promptly seek the 

  
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removal or waiver of any such confidentiality restrictions so as to permit a free exchange of information with the Purchaser regarding the substance of such notice. The Company shall promptly
notify Purchaser of any breaches or alleged breaches under any Material Contracts and of any other events with respect to any Material Contract or the subject matter thereof which could reasonably be expected to have a Material Adverse Effect.

 (b) Litigation or Investigations. The Company shall promptly notify Purchaser of (i) any action, demand, suit,
claim, cause of action, proceeding or investigation pending or, to the best knowledge of the Company, threatened by or against the Company, or (ii) proceeding or inquiry of any Governmental Authority pending or, to the best knowledge of the
Company, threatened against the Company, related to any Material Contract, the Product, the Patents or any Transaction Document. 
 (c) Maintenance of Books and Records. The Company shall keep and maintain, or cause to be kept and maintained, at all times accurate and complete books and records. During the Term, the Company
shall keep and maintain, or cause to be kept and maintained, at all times full and accurate books of account and records adequate to correctly reflect all payments paid and/or payable with respect to the Revenue Interests and Assigned Interests.

 (d) Inspection Rights. Purchaser and any of Purchaser’s representatives shall have the right, once a year (and at
any other time a Default or Event of Default shall have occurred or be continuing), to visit the Company and its Subsidiaries’ offices and properties where the Company and its Subsidiaries keep and maintain their books and records relating or
pertaining to the Revenue Interests and the Assigned Interests for purposes of conducting an audit of such books and records, and to inspect, copy and audit such books and records, during normal business hours, and, upon five (5) Business
Days’ written notice given by Purchaser to the Company (provided one (1) Business Day’s notice shall be required if a Default or Event of Default shall have occurred and be continuing), the Company will provide Purchaser and any of
Purchaser’s representatives reasonable access to such books and records, and shall permit Purchaser and any of Purchaser’s representatives to discuss the business, operations, properties and financial and other condition of the Company or
any of its Affiliates including, but not limited to, matters relating or pertaining to the Revenue Interests and the Assigned Interests with officers of such parties, and with their independent certified public accountants. 

(e) Audit Costs. In the event any audit of the books and records of the Company and its Subsidiaries relating to the Revenue
Interests and Assigned Interests by Purchaser and/or any of Purchaser’s representatives reveals that the amounts paid to Purchaser hereunder for the period of such audit have been understated by more than five percent (5%) of the amounts
determined to be due for the period subject to such audit, then the Audit Costs in respect of such audit shall be borne by the Company; and in all other cases, such Audit Costs shall be borne by Purchaser. 

(f) Quarterly Reports. During the Term, the Company shall, promptly after the end of each Fiscal Quarter of the Company (but in no
event later than forty-five (45) days following the end of such quarter (unless such Fiscal Quarter is the last Fiscal Quarter of a Fiscal Year in which case no later than ninety (90) days after the end of such Fiscal Quarter)), produce
and deliver to Purchaser a Quarterly Report for such quarter, together with a certificate of the Company, certifying that to the best Knowledge of the Company (i) such Quarterly Report is a

  
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true and complete copy and (ii) any statements and any data and information therein prepared by the Company are true, correct and accurate in all material respects. Following the
Company’s delivery of each Quarterly Report to Purchaser, Purchaser shall have 30 days to review such Quarterly Report and dispute the amount of any of the Assigned Interests Payments that were paid or are to be paid for the particular Fiscal
Quarter. The Company and Purchaser in good faith shall seek to resolve in writing any differences that they may have with respect to the computation of the applicable Assigned Interests Payments. Any additional payments (the “Adjustment
Payment”), whether owed to the Company or Purchaser, shall be paid by the party owing such Adjustment Payment within five (5) days of the final determination of the amount of the Adjustment Payment. 

(g) GAAP Accounting. The Company shall maintain a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity with GAAP. 
 (h) Periodic Reports. In the
event that the Company is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Company shall deliver to Purchaser the following financial statements: 

(i) Within forty-five (45) days after the end of each Fiscal Quarter, copies of the unaudited consolidated financial statements of
the Company and its Subsidiaries for such Fiscal Quarter; and 
 (ii) Within ninety (90) days after the end of each Fiscal
Year, copies of the audited consolidated financial statements of the Company and its Subsidiaries for such Fiscal Year. 

Section 5.03 Material Contracts. 
 The Company shall comply with all material terms and conditions of and fulfill all of its obligations under all the Material Contracts. The Company shall not amend, modify or supplement any Material
Contract in a manner which would adversely affect Purchaser or issue any waivers, consents, or other approvals under any Material Contract in a manner which would adversely affect Purchaser without the prior written consent of Purchaser. Upon the
occurrence of a material breach of any Material Contract by any Third Party thereto, which is not cured pursuant to the express terms as provided therein (disregarding any rights of waiver or extensions of time or other rights or consents that are
excisable at the discretion of the Company), the Company shall, in its discretion but in accordance with its sound business judgment, use its commercially reasonable efforts to enforce its rights and remedies thereunder. 

Section 5.04 Confidentiality; Public Announcement. 

(a) All Confidential Information furnished by Purchaser to the Company or by the Company to Purchaser in connection with this Agreement
and the transactions contemplated hereby, as well as the terms, conditions and provisions of this Agreement, shall be kept confidential by the Company and Purchaser. Notwithstanding the foregoing, the Company and Purchaser may disclose such
Confidential Information to their partners, directors, employees, managers, officers, investors, bankers, advisors, trustees and representatives, provided that such Persons shall be informed of the confidential nature of such information and
shall be obligated to 

  
 - 21 -

 
keep such information confidential pursuant to the terms of this Section 5.04(a). The Company will consult with Purchaser, and Purchaser will consult with the Company, on the form,
content and timing of any such disclosures of Confidential Information, including, without limitation, any disclosures made pursuant to applicable securities laws or made to investment or other analysts. 

(b) Except as required by law or the rules and regulations of any securities exchange or trading system or the FDA or any Governmental
Authority with similar regulatory authority, or except with the prior written consent of the other party (which consent shall not be unreasonably withheld), no party shall issue any press release or make any other public disclosure with respect to
the transactions contemplated by this Agreement; provided, however, that the Company and Purchaser may jointly prepare a press release for dissemination promptly following the Closing Date. 

Section 5.05 Efforts; Further Assurance. 
 (a) Subject to the terms and conditions of this Agreement, each of Purchaser and the Company will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary under applicable laws and regulations to consummate the transactions contemplated by this Agreement. Purchaser and the Company agree to execute and deliver such other documents, certificates, agreements and other
writings (including any financing statement filings requested by Purchaser) and to take such other actions as may be reasonably necessary in order to consummate or implement expeditiously the transactions contemplated by this Agreement and to vest
in Purchaser good, valid and marketable rights and interests in and to the Assigned Interests free and clear of all Liens, except those Liens held by Senior Creditors under the Senior Loan Documents (subject to the Permitted Subordination Obligation
Payments). 
 (b) Purchaser and the Company shall execute and deliver such additional documents, certificates and instruments,
and perform such additional acts, as may be reasonably requested and necessary or appropriate to carry out and effectuate all of the provisions of this Agreement and to consummate all of the transactions contemplated by this Agreement. 

(c) Purchaser and the Company shall cooperate and provide assistance as reasonably requested by the other party in connection with any
Third Party litigation, arbitration or other Third Party proceeding (whether threatened, existing, initiated, or contemplated prior to, on or after the date hereof) to which any party hereto or any of its officers, directors, shareholders, agents or
employees is or may become a party or is or may become otherwise directly or indirectly affected or as to which any such Persons have a direct or indirect interests, in each case relating to this Agreement, the Assigned Interests, or the
transactions described herein. 
 Section 5.06 Change of Control/Financing Event; Put Option. 

(a) Change of Control/Financing Event. In the event that a Change of Control or a Financing Event shall occur during the Revenue
Interest Period, the Company shall repurchase the Assigned Interests from Purchaser for a repurchase price equal to the Early Repurchase Price on the date of the Change of Control or Financing Event, respectively. Such payment shall be made by wire
transfer of immediately available funds to the account designated by Purchaser. 

  
 - 22 -

 (b) Put Option. In the event that a Put Option Event shall occur during the Term,
Purchaser shall have the right, but not the obligation (the “Put Option”) to require the Company to repurchase from Purchaser the Assigned Interests at the Early Repurchase Price. In the event Purchaser elects to exercise its Put
Option, Purchaser shall deliver written notice to the Company specifying the closing date (the “Put Option Closing Date”), which notice must be given within sixty (60) Business Days of Purchaser’s receipt of written notice
from the Company of a Put Option Event. Failure to provide notice by such times will be deemed an irrevocable waiver of the right to exercise the Put Option. On the Put Option Closing Date, the Company shall repurchase from Purchaser the Assigned
Interests at the Early Repurchase Price in cash, the payment of which shall be made by wire transfer of immediately available funds to the account designated by Purchaser. Notwithstanding anything to the contrary contained herein, immediately upon
the occurrence of a Bankruptcy Event, Purchaser shall be deemed to have automatically and simultaneously elected to have the Company repurchase from Purchaser the Assigned Interests for the Early Repurchase Price in cash and the Early Repurchase
Price shall be immediately due and payable without any further action or notice by any party. 
 Section 5.07
Intellectual Property. 
 (a) The Company shall, at its sole expense, either directly or by causing any Licensee to do
so, take any and all actions (including taking legal action to specifically enforce the applicable terms of any License Agreement), and prepare, execute, deliver and file any and all agreements, documents or instruments which are necessary to
diligently maintain the Material Patents. The Company shall ensure that all patent applications corresponding to the Material Patents are diligently prosecuted with the intent to protect the Product. In the exercise of its reasonable business
discretion, the Company shall diligently defend or assert such Intellectual Property and such Patents against infringement or interference by any other Persons, and against any claims of invalidity or unenforceability, in any jurisdiction
(including, without limitation, by bringing any legal action for infringement or defending any counterclaim of invalidity or action of a Third Party for declaratory judgment of non-infringement or non-interference). The Company shall not, and shall
use its commercially reasonable efforts to cause any Licensee not to, disclaim or abandon, or fail to take any action necessary or desirable to prevent the disclaimer or abandonment of, the Material Patents. 

(b) In the event that the Company becomes aware that any intellectual property licensed by it to a Licensee under any License Agreement
infringes or violates any Third Party intellectual property, the Company shall, in the exercise of its reasonable business discretion, use commercially reasonable efforts to attempt to secure the right to use such intellectual property on behalf of
itself and the affected Licensee and shall pay all costs and amounts associated with obtaining any such license, without any reduction in the Assigned Interests. 
 (c) The Company shall directly, or through a Licensee, take any and all actions and prepare, execute, deliver and file any and all agreements, documents or instruments that are necessary or commercially
reasonable or desirable to secure and maintain, all Regulatory Approvals in the United States. 
 (d) The Company shall notify
PDL regarding any material developments with the Intellectual Property, including new filings, allowance and issuance, abandonment, or the initiation of any interference, reexamination, reissue, post-grant review proceeding and litigation, and shall
provide PDL with an updated patent schedule upon request, but at least once per year. 

  
 - 23 -

 Section 5.08 Negative Covenants. 

The Company shall not, without the prior written consent of Purchaser: 

(a) Forgive, release or compromise any amount owed to the Company or its Subsidiary and relating to the Assigned Interests; 

(b) Waive, amend, cancel or terminate, exercise or fail to exercise, any of its material rights constituting or relating to the Revenue
Interests (including any rights under any License Agreement); 
 (c) Amend, modify, restate, cancel, supplement, terminate or
waive any material provision of any Material Contract, or grant any consent thereunder, or agree to do any of the foregoing, including, without limitation, entering into any agreement with any Person under the provisions of such Material Contract;

 (d) Enter into any agreement that would be reasonably expected to have a Material Adverse Effect; 

(e) Create, incur, assume or suffer any interference with the direction of payments set for in Section 5.08; or 

(f) Create, incur, assume or suffer to exist any Lien, except those Liens held by Senior Creditors under the Senior Loan Documents, or
exercise any right of rescission, offset, counterclaim or defense, upon or with respect to the Assigned Interests or the Revenue Interests, or agree to do or suffer to exist any of the foregoing, except for any Lien or agreements in favor of
Purchaser granted under or pursuant to this Agreement. 
 Section 5.09 Insurance. 

The Company shall maintain the current insurance policies with its current insurance companies or with companies having at the least the
same rating from A.M. Best Company, Inc., including product liability insurance and directors and officers insurance and insurance against litigation, liability, subject only to such exclusions and deductible items as are usual and customary in
insurance policies of such type. From time to time (with reasonable frequency) the Company will revise its insurance policy so as to maintain coverage in amounts customary for companies of comparable size and condition similarly situated in the same
industry as the Company. 
 Section 5.10 Notice. 

The Company shall provide Purchaser with written notice as promptly as practicable (and in any event within two (2) Business Days)
after becoming aware of any of the following: 
 (a) any material breach or default by the Company of any covenant, agreement or
other provision of this Agreement; 

  
 - 24 -

 (b) any representation or warranty made or deemed made by the Company in this Agreement or
in any certificate delivered to Purchaser pursuant hereto shall prove to be untrue, inaccurate or incomplete in any material respect on the date as of which made or deemed made; 

(c) the occurrence of a Change of Control; or 
 (d) the occurrence of a Put Option Event. 
 Section 5.11 Use of
Proceeds. 
 The Company shall use proceeds received from Purchaser in support of the business plan for the Product,
including sales operation and expansion and additional clinical studies. The Company shall take commercially reasonable measures to support the sales of the Product. 
 Section 5.12 Taxes.  
 The Company shall timely file
(taking into account all extensions of due dates) all Tax Returns required by it and will pay all Taxes required to be paid with such returns. 
 ARTICLE VI 
 TERMINATION 

Section 6.01 Termination Date. 
 This Agreement shall terminate upon the earlier of expiration or termination of the Revenue Interest Period, in each case after full satisfaction of any amounts due under this Agreement by Company to the
Purchaser (the “Term”). 
 Section 6.02 Effect of Termination. 

In the event of the termination of this Agreement pursuant to Section 6.01, this Agreement shall forthwith
become void and have no effect without any liability on the part of any party hereto or its Affiliates, directors, officers, stockholders, partners, managers or members other than the provisions of this Section 6.02 and Sections
5.04, 7.01, 7.04 and 7.05 hereof, which shall survive any termination as set forth in Section 6.01. Nothing contained in this Section 6.02 shall relieve any party from liability for any breach of
this Agreement.1 

 

	1 	 Subject to update upon finalization of the Agreement. 

  
 - 25 -

 ARTICLE VII 
 MISCELLANEOUS 
 Section 7.01 Survival. 

(a) All representations and warranties made herein and in any other Transaction Document, any certificates or in any
other writing delivered pursuant hereto or thereto shall survive the execution and delivery of this Agreement and shall continue to survive until the termination of this Agreement in accordance with Article VI. Notwithstanding anything in
this Agreement or implied by law to the contrary, all the agreements contained in Sections 5.04, 7.01, 7.02, 7.03, 7.04, 7.05, 7.15 and 7.16 shall survive indefinitely following the execution
and delivery of this Agreement and the Closing and the termination of this Agreement.2 
 (b) Any investigation or other examination that may have been made or may be
made at any time by or on behalf of the party to whom representations and warranties are made shall not limit, diminish or in any way affect the representations and warranties in the Transaction Documents, and the parties may rely on the
representations and warranties in the Transaction Documents irrespective of any information obtained by them by any investigation, examination or otherwise. 
 Section 7.02 Specific Performance; Limitations on Damages. 
 (a)
Each of the parties hereto acknowledges that the other party will have no adequate remedy at law if it fails to perform any of its obligations under any of the Transaction Documents. In such event, each of the parties agrees that the other party
shall have the right, in addition to any other rights it may have (whether at law or in equity), to specific performance of this Agreement. 
 (b) Notwithstanding anything to the contrary in this Agreement, in no event shall either party be liable for special, indirect, incidental, punitive or consequential damages of the other party, whether or
not caused by or resulting from the actions of such party or the breach of its covenants, agreements, representations or warranties hereunder, even if such party has been advised of the possibility of such damages. 

Section 7.03 Notices. 
 All notices, consents, waivers and communications hereunder given by any party to the other shall be in writing (including facsimile transmission) and delivered personally, by telegraph, telecopy, telex
or facsimile, by a recognized overnight courier, or by dispatching the same by certified or registered mail, return receipt requested, with postage prepaid, in each case addressed: 

If to Purchaser to: 
 PDL BioPharma, Inc. 
 932 Southwood Blvd. 

Attention: General Counsel 
 Facsimile No.: (775) 832-8501 
  

	2 	 Subject to update upon finalization of the Agreement. 

  
 - 26 -

 with a copy to: 
 Gibson, Dunn & Crutcher LLP 
 333 South Grand Avenue 

Los Angeles, CA 90071-3197 
 Attention: Dhiya El-Saden 
 Facsimile No.: (213) 229-7520 

If to the Company to: 
 AxoGen, Inc. 
 AxoGen Corporation 

13859 Progress Blvd. 
 Alachua, FL 32615 
 Attention: Karen Zaderej 

Fax: (386) 462-6803 
 with a copy to: 
 Morgan, Lewis & Bockius LLP 

1701 Market Street 
 Philadelphia, Pennsylvania 19103 
 Attention: Fahd M.T. Riaz 

Fax: (215) 963-5001 
 or to
such other address or addresses as Purchaser or the Company may from time to time designate by notice as provided herein, except that notices of changes of address shall be effective only upon receipt. All such notices, consents, waivers and
communications shall: (a) when posted by certified or registered mail, postage prepaid, return receipt requested, be effective three (3) Business Days after dispatch, unless such communication is sent trans-Atlantic, in which case they
shall be deemed effective five (5) Business Days after dispatch, (b) when telegraphed, telecopied, telexed or facsimiled, be effective upon receipt by the transmitting party of confirmation of complete transmission, or (c) when
delivered by a recognized overnight courier or in person, be effective upon receipt when hand delivered. 
 Section 7.04
Successors and Assigns. 
 The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Company may not assign any of its obligations and rights under the Transaction Documents (other than to the Senior Creditors) without the prior written consent of Purchaser. Upon the
consent of the Company (which consent may not be unreasonably withheld) and subject to any requirement that an assignee execute subordination documentation reasonably requested by the Senior Creditors, Purchaser may assign any of its obligations or
rights under the Transaction Documents without restriction; provided, however that Purchaser, notwithstanding such assignment, will remain liable under Section 7.05. 

  
 - 27 -

 Section 7.05 Indemnification. 

(a) The Company hereby indemnifies and holds Purchaser and its Affiliates and any of their respective partners, directors, managers,
members, officers, employees and agents (each, a “Purchaser Indemnified Party”) harmless from and against any and all Losses (including all Losses in connection with any product liability claims or claims of infringement or
misappropriation of any Intellectual Property rights of any Third Parties) incurred or suffered by any Purchaser Indemnified Party arising out of any breach of any representation, warranty or certification made by the Company in any of the
Transaction Documents or certificates given by the Company in writing pursuant hereto or thereto or any breach of or default under any covenant or agreement by the Company pursuant to any Transaction Document, including any failure by the Company to
satisfy any of the Excluded Liabilities and Obligations. 
 (b) Purchaser hereby indemnifies and holds the Company, its
Affiliates and any of their respective partners, directors, managers, officers, employees and agents (each, a “Company Indemnified Party”) harmless from and against any and all Losses incurred or suffered by a Company Indemnified
Party arising out of any breach of any representation, warranty or certification made by Purchaser in any of the Transaction Documents or certificates given by Purchaser in writing pursuant hereto or thereto or any breach of or default under any
covenant or agreement by Purchaser pursuant to any Transaction Document. 
 (c) If any claim, demand, action or proceeding
(including any investigation by any Governmental Authority) shall be brought or alleged against an indemnified party in respect of which indemnity is to be sought against an indemnifying party pursuant to the preceding paragraphs, the indemnified
party shall, promptly after receipt of notice of the commencement of any such claim, demand, action or proceeding, notify the indemnifying party in writing of the commencement of such claim, demand, action or proceeding, enclosing a copy of all
papers served, if any; provided, that the omission to so notify such indemnifying party will not relieve the indemnifying party from any liability that it may have to any indemnified party under the foregoing provisions of this
Section 7.05 unless, and only to the extent that, such omission results in the forfeiture of, or has a material adverse effect on the exercise or prosecution of, substantive rights or defenses by the indemnifying party. In case any such
action is brought against an indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7.05 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, an indemnified party shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the indemnifying party has assumed
the defense of such proceeding and has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties by the same 

  
 - 28 -

 
counsel would be inappropriate due to actual or potential conflicts of interests between them based on the advice of such counsel. It is agreed that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm (in addition to local counsel where necessary) for all such indemnified parties. The
indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding. 
 (d) To the extent that any breach by the Company of this Agreement
does not trigger a Put Option Event, Purchaser’s sole remedy shall be to recover any monetary damages associated with such breach, subject to the other terms and provisions contained in this Agreement. 

Section 7.06 No Implied Representations and Warranties. 

Each party acknowledges and agrees that, other than the representations and warranties specifically contained in any of the Transaction
Documents or certificates given in writing by a party hereto or thereto, there are no representations or warranties of either party or any other Person either expressed or implied with respect to the Assigned Interests or the transactions
contemplated hereby. Without limiting the foregoing, Purchaser acknowledges and agrees that (i) Purchaser and its Affiliates, together with its and its Affiliates’ representatives, have made their own investigation of the Product and the
Intellectual Property and are not relying on any implied warranties or upon any representation or warranty whatsoever as to the future amount or potential amount of the Assigned Interests or as to the creditworthiness of Company and (ii) except
as expressly set forth in any representation or warranty in a Transaction Document, Purchaser shall have no claim or right to indemnification pursuant to Section 7.05 (or otherwise) with respect to any information, documents or materials
furnished to Purchaser, any of its Affiliates, or any of its or its Affiliates’ representatives, including any information, documents or material made available to Purchaser and its Affiliates and its Affiliates’ representatives in any
data room, presentation, interview or any other form relating to the transactions contemplated hereby. 
 Section 7.07
Independent Nature of Relationship. 
 (a) The relationship between the Company and its Subsidiary, on the one hand,
and Purchaser, on the other, is solely that of seller and purchaser, and neither Purchaser, on the one hand, nor the Company and its Subsidiary, on the other, has any fiduciary or other special relationship with the other or any of their respective
Affiliates. Nothing contained herein or in any other Transaction Document shall be deemed to constitute the Company and its Subsidiary and Purchaser as a partnership, an association, a joint venture or other kind of entity or legal form. 

  
 - 29 -

 (b) No officer or employee of Purchaser will be located at the premises of the Company or
any of its Affiliates, except in connection with an audit performed pursuant to Section 5.02. No officer, manager or employee of Purchaser shall engage in any commercial activity with the Company or any of its Affiliates other than as
contemplated herein and in the other Transaction Documents. 
 (c) The Company and/or any of its Affiliates shall not at any
time obligate Purchaser, or impose on Purchaser any obligation, in any manner or respect to any Person not a party hereto. 

Section 7.08 Entire Agreement. 
 This Agreement, together with the Exhibits and Schedules hereto (which are incorporated herein by reference), and the other Transaction Documents constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements (including the Term Sheet), understandings and negotiations, both written and oral, between the parties with respect to the subject matter of this Agreement. No representation,
inducement, promise, understanding, condition or warranty not set forth herein (or in the Exhibits, Schedules or other Transaction Documents) has been made or relied upon by either party hereto. None of this Agreement, nor any provision hereof, is
intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 
 Section 7.09
Amendments; No Waivers. 
 (a) This Agreement or any term or provision hereof may not be amended, changed or modified
except with the written consent of the parties hereto. No waiver of any right hereunder shall be effective unless such waiver is signed in writing by the party against whom such waiver is sought to be enforced. 

(b) No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law. 
 Section 7.10 Interpretation. 

When a reference is made in this Agreement to Articles, Sections, Schedules or Exhibits, such reference shall be to an Article, Section,
Schedule or Exhibit to this Agreement unless otherwise indicated. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation”.
Neither party hereto shall be or be deemed to be the drafter of this Agreement for the purposes of construing this Agreement against one party or the other. 
 Section 7.11 Headings and Captions. 
 The headings and captions
in this Agreement are for convenience and reference purposes only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 

  
 - 30 -

 Section 7.12 Counterparts; Effectiveness. 

This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which together shall constitute
one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Any counterpart may be executed by facsimile or pdf signature and such facsimile
or pdf signature shall be deemed an original. 
 Section 7.13 Severability. 

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall nevertheless be given full force
and effect. 
 Section 7.14 Expenses. 

The Company will pay all of its own fees and expenses in connection with entering into and consummating the transactions contemplated by
this Agreement. The Company shall, promptly (and, in any event, within five (5) Business Days) upon demand, reimburse Purchaser up to $50,000 for its reasonable legal fees and expenses incurred in connection with the transactions contemplated
by the Transaction Documents. 
 Section 7.15 Governing Law; Jurisdiction. 

(a) This Agreement shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the state of New York,
without giving effect to the principles of conflicts of law thereof. 
 (b) Any legal action or proceeding with respect to this
Agreement or any other Transaction Document may be brought in any state or federal court of competent jurisdiction sitting in the State of Nevada, Washoe County and city of Reno. By execution and delivery of this Agreement, each party hereto hereby
irrevocably consents to and accepts, for itself and in respect of its property, generally and unconditionally the non-exclusive jurisdiction of such courts. Each party hereto hereby further irrevocably waives any objection, including any objection
to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of any Transaction Document. 

(c) Each party hereto hereby irrevocably consents to the service of process out of any of the courts referred to in subsection
(b) of this Section 7.16 in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at its address set forth in this Agreement. Each party hereto hereby
irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any suit, action or proceeding commenced hereunder or any other Transaction Document that service of process was in any
way invalid or ineffective. Nothing herein shall affect the right of a party to serve process on the other party in any other manner permitted by law. 

  
 - 31 -

 Section 7.16 Waiver of Jury Trial. 

Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
action, proceeding, claim or counterclaim arising out of or relating to any Transaction Document or the transactions contemplated under any Transaction Document. This waiver shall apply to any subsequent amendments, renewals, supplements or
modifications to any Transaction Document. 
 [SIGNATURE PAGE FOLLOWS] 

  
 - 32 -

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

									
	COMPANY:	 		 	AXOGEN, INC.
				
		 		 	By:	 	 
		 		 		 	Name:	 	Karen Zaderej
		 		 		 	Title:	 	Chief Executive Officer
			
	 PURCHASER:
	 		 	PDL BIOPHARMA, INC.
				
		 		 	By:	 	 
		 		 		 	Name:	 	John P. McLaughlin
		 		 		 	Title:	 	President and Chief Executive Officer

 Exhibit A 

Bill of Sale 
 See
attached. 

 Exhibit B 

First Amendment to Loan and Security Agreement 
 See attached. 

 Schedule 1 

 

																																																	
		  	 	8/12	  	  	 	9/12	  	  	 	10/12	  	  	 	11/12	  	  	 	12/12	  	  				  				  				  				  				  				  			
													
	 Balance -2012
	  	$	1,750,000	  	  	$	1,750,000	  	  	$	1,750,000	  	  	$	1,750,000	  	  	$	1,750,000	  	  				  				  				  				  				  				  			
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  				  				  				  				  				  				  			
		  	 	1/13	  	  	 	2/13	  	  	 	3/13	  	  	 	4/13	  	  	 	5/13	  	  	 	6/13	  	  	 	7/13	  	  	 	8/13	  	  	 	9/13	  	  	 	10/13	  	  	 	11/13	  	  	 	12/13	  
													
	 Balance -2013
	  	$	1,681,493	  	  	$	1,611,272	  	  	$	1,539,297	  	  	$	1,465,522	  	  	$	1,389,902	  	  	$	1,312,392	  	  	$	1,232,945	  	  	$	1,151,511	  	  	$	1,068,041	  	  	$	982,485	  	  	$	894,789	  	  	$	804,901	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  				  				  				  			
		  	 	1/14	  	  	 	2/14	  	  	 	3/14	  	  	 	4/14	  	  	 	5/14	  	  	 	6/14	  	  	 	7/14	  	  	 	8/14	  	  				  				  				  			
													
	 Balance -2014
	  	$	712,767	  	  	$	618,328	  	  	$	521,529	  	  	$	422,310	  	  	$	320,610	  	  	$	216,368	  	  	$	109,519	  	  	$	—EX-10.2

 Exhibit 10.2 
 EXECUTION COPY 
 SUBORDINATION AND INTERCREDITOR AGREEMENT

 THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this “Agreement”) is entered into as of this
14th day of August, 2012, by and among PDL BioPharma, Inc. a Delaware corporation (“Subordinated Obligee”), AXOGEN, INC. (f/k/a LecTec Corporation), a Minnesota corporation, and AXOGEN CORPORATION, a Delaware
corporation (individually and collectively as the context may require, “Borrower”), and MIDCAP FINANCIAL SBIC, LP, a Delaware limited partnership, as administrative agent for the financial institutions or other entities from
time to time parties to the Senior Loan Agreement (as hereinafter defined) (acting in such capacity, “Agent”), and as a Lender, or such then present holder or holders of the Senior Loan (as hereinafter defined) as may from time to
time exist (the “Lenders,” and collectively with the Agent, the “Senior Lenders”). 

RECITALS 

A. Borrower and Senior Lenders have entered into a Loan and Security Agreement dated as of September 30, 2011 (as the same
has been and may further be amended, restated, supplemented or otherwise modified from time to time, the “Senior Loan Agreement”) pursuant to which, among other things, Senior Lenders have agreed, subject to the terms and conditions
set forth in the Senior Loan Agreement, to make certain loans and financial accommodations to Borrower and the other Loan Parties. All of Borrower’s obligations to Senior Lenders under the Senior Loan Agreement and the other Senior Loan
Documents (as hereinafter defined) are secured by liens on and security interests in substantially all of the now existing and hereafter acquired personal property of Borrower (all collateral, real and personal, now or hereafter encumbered by the
lien of any Senior Loan Document is herein referred to collectively as the “Collateral”). Borrower and any other Loan Party (as defined in the Senior Loan Agreement) may each be referred to herein as a “Loan Party”
and collectively as “Loan Parties”. All other capitalized terms used but not defined herein shall have the meanings set forth in the Senior Loan Agreement. 
 B. Subordinated Obligee is non-affiliated with Borrower, and Borrower and Subordinated Obligee have entered into that certain Interim Revenue Interests Purchase Agreement, dated as of
August 14, 2012 (the “IRA”), pursuant to which Borrower has agreed to sell, and Subordinated Obligee has agreed to purchase a certain percentage of revenues referred to as Assigned Interests (as defined in the IRA on the date
hereof; and as used herein, the “Assigned Interests”) as set forth therein, and Borrower is obligated to pay to the Subordinated Obligee the Assigned Interests pursuant to the terms and conditions thereof. 

C. As an inducement to and as one of the conditions precedent to the agreement of Agent and Senior Lenders to consent to the
consummation of the transactions contemplated by the Subordinated IRA Documents (as hereinafter defined), Agent and Senior Lenders have required the execution and delivery of this Agreement by Subordinated Obligee and Borrower in order to set forth
the relative rights and priorities of Senior Lenders and Subordinated Obligee under the Senior Loan Documents and the Subordinated IRA Documents (as hereinafter defined). 
 AGREEMENT 
 NOW, THEREFORE, in order to induce Senior Lenders to
consent to the consummation of the transactions contemplated by the Subordinated IRA Documents, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby covenant and agree
as follows: 

 1. Definitions. In addition to the terms defined elsewhere in this
Agreement or in the recitals hereto, the following terms shall have the following meanings in this Agreement: 

“Bankruptcy Code” shall mean Chapter 11 of Title 11 of the United States Code, as amended from time to time, and any
successor statute and all rules and regulations promulgated thereunder. 
 “Distribution” means, with respect
to any indebtedness or obligation, (a) any payment or distribution by any Person of cash, securities or other property, by set-off or otherwise, on account of such indebtedness or obligation, including, without limitation, at maturity of such
indebtedness or obligation, (b) any redemption, purchase or other acquisition of such indebtedness or obligation by any Person, or (c) the granting of any lien or security interest to or for the benefit of the holders of such indebtedness
or obligation in or upon any property of any Person. Without limiting the foregoing and for the avoidance of doubt “Distribution” shall include any and all payments under the Subordinated IRA Documents. 

“Enforcement Action” shall mean (a) to take from or for the account of any Loan Party or any guarantor of the
Subordinated Obligations, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by any Loan Party or any such guarantor with respect to the Subordinated Obligations (provided, that, in no event
shall the acceptance of any Permitted Subordinated Obligation Payments made in accordance with and expressly permitted by this Agreement in and of itself constitute an Enforcement Action); (b) to sue for payment of, or to initiate or
participate with others in any suit, action or proceeding against any Loan Party or any such guarantor to (i) enforce payment of or to collect the whole or any part of the Subordinated Obligations (which shall include, for the avoidance of
doubt, any demand or collection of payment at maturity), or (ii) commence judicial enforcement of any of the rights and remedies under the Subordinated IRA Documents or applicable law with respect to the Subordinated Obligations; (c) to
accelerate the Subordinated Obligations; (d) to exercise any put option or to cause any Loan Party or any such guarantor to honor any redemption, repurchase or mandatory prepayment obligation under any Subordinated IRA Document; (e) to
notify account debtors or directly collect accounts receivable or other payment rights (including the payment of the Assigned Interests) of any Loan Party or any such guarantor; or (f) take any action under the provisions of any state or
federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of any Loan Party or any such guarantor including the
Collateral. 
 “Paid in Full” or “Payment in Full” shall mean, with respect to the Senior
Loans, the full and indefeasible payment in cash and satisfaction in full of all of the obligations under the Senior Loan Documents (other than inchoate indemnity obligations for which a claim has not yet been made in writing and any other
obligations which, by their terms, are to survive the termination of the Senior Loan Documents), and the termination of all obligations of Agent and Senior Lenders under the Senior Loan Documents (including, without limitation, any commitment to
lend), and the termination of the Senior Loan Documents. 
 “Permitted Subordinated Obligation Payments” means
(a) regularly scheduled payments of the Assigned Interests due and payable on a non-accelerated basis and without giving effect to any default interest or penalties (including Delinquent Assigned Interests Payments (as defined in the IRA)) in
accordance with the terms of Subordinated IRA Documents as in effect as of the date hereof and (b) payments of Subordinated IRA Costs and Expenses. 

  
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 “Person” means any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity. 

“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation,
dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person.

 “Senior Covenant Default” shall mean any “Event of Default” under the Senior Loans Documents
(other than a Senior Payment Default), or any condition or event that, after notice or lapse of time or both, would constitute such an Event of Default (other than a Senior Payment Default) if that condition or event were not cured or removed within
any applicable grace or cure period set forth therein. 
 “Senior Default” shall mean any Senior Covenant
Default or any Senior Payment Default. 
 “Senior Default Notice” shall mean a written notice from Agent to
Subordinated Obligee pursuant to which Subordinated Obligee is notified of the occurrence of a Senior Default, which notice incorporates a reasonably detailed description of such Senior Default. 

“Senior Loan(s)” shall mean all obligations, liabilities and indebtedness of every nature of any Loan Party from time to
time owed to Senior Lenders under the Senior Loan Documents or otherwise, whether now existing or hereafter created, including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees,
costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the Bankruptcy Code, together
with (a) any amendments, modifications, renewals or extensions thereof, and (b) any interest accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest is an allowed claim; provided, however,
that in no event shall the aggregate principal amount of the Senior Loans exceed $6,000,000 (exclusive of any protective advances or costs and expenses that are capitalized to the principal balance of the Senior Loans) minus the amount of any
principal repayments under the Senior Loan Documents. 
 “Senior Loan Documents” shall mean the promissory note
or other instruments evidencing the Senior Loan or the obligation to pay the Senior Loan, any guaranty with respect to the Senior Loan, any security agreement or other collateral document securing the Senior Loan (including, without limitation, the
Senior Loan Agreement) and all other documents, agreements and instruments now existing or hereafter entered into evidencing or pertaining to all or any portion of the Senior Loan. 

“Senior Payment Default” shall mean any “Event of Default” under the Senior Loans Documents resulting from the
failure of the Company to pay, on a timely basis, any principal, interest, fees or other obligations under the Senior Loan Documents including, without limitation, any default in payment of the Senior Loans after acceleration thereof, or any
condition or event that, after notice or lapse of time or both, would constitute such an Event of Default if that condition or event were not cured or removed within any applicable grace or cure period set forth therein. 

“Subordinated IRA Costs and Expenses” shall mean reasonable out-of-pocket costs and expenses payable by the Borrower to
Subordinated Obligee pursuant to the terms of the Subordinated IRA Documents as in effect on the date of this Agreement in an aggregate amount not to exceed $50,000. 

  
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 “Subordinated IRA Documents” shall mean any agreement, promissory note or
other instrument evidencing the Subordinated Obligation or the obligation to pay the Subordinated Obligation, any guaranty with respect to the Subordinated Obligation and all other documents, agreements and instruments now existing or hereafter
entered into evidencing or pertaining to all or any portion of the Subordinated Obligations, including, without limitation, the IRA. 
 “Subordinated Obligation(s)” shall mean the obligation to pay the Assigned Interests and any and all other obligations, liabilities and indebtedness of every nature of any Loan Party from
time to time owed to Subordinated Obligee, whether now existing or hereafter created, including, without limitation, the principal amount of all debts, claims (including, without limitation, indemnification rights arising in Subordinated
Obligee’s capacity as a shareholder, officer, director, member and/or partner of any Loan Party and any right of Subordinated Obligee to a return of any capital contributed to any Loan Party) and indebtedness, payment obligations, accrued and
unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the
Bankruptcy Code together with any amendments, modifications, renewals or extensions thereof. 
 “Subordinated Payment
Default” shall mean a default in the payment of the Assigned Interests under the Subordinated IRA Documents. 

“Subordinated Payment Default Notice” shall mean a written notice from Subordinated Obligee to Agent pursuant to which
Agent is notified of the occurrence of a Subordinated Payment Default, which notice incorporates a reasonably detailed description of such Subordinated Payment Default. 
 2. Subordination. 
 2.1. Subordination of Subordinated
Obligations to Senior Loans. Each Loan Party covenants and agrees, and Subordinated Obligee likewise covenants and agrees, notwithstanding anything to the contrary contained in any of the Subordinated IRA Documents, that the payment of any
and all of the Subordinated Obligations shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the Payment in Full of all Senior Loans. Each holder of the Senior Loans, whether now
outstanding or hereafter created, incurred, assumed or guaranteed, shall be deemed to have acquired the Senior Loans in reliance upon the provisions contained in this Agreement. Except as otherwise permitted under subsection 2.2 below, until the
Senior Loans have been Paid in Full, Borrower shall not make and Subordinated Obligee shall not accept any Distribution, whether in cash, securities or other property, on account of any Subordinated Obligation. 

2.2. Permitted Subordinated Obligation Payments Restrictions. 

(a) Notwithstanding the provisions of subsection 2.1 hereinabove and subject to subsection 2.9, the Borrower shall be permitted to make,
and the Subordinated Obligee shall be permitted to accept, Permitted Subordinated Obligation Payments; provided, that no such Permitted Subordinated Obligation Payment shall be made if, at the time of such payment: 

(i) a Senior Payment Default exists and such Senior Payment Default shall not have been cured or waived; or 

  
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(ii) (A) the Borrower and Subordinated Obligee shall have received a Senior Default Notice from Agent stating that a Senior Covenant Default exists or would be created by the making of such payment under the Senior Loan Documents, (B) each
such Senior Covenant Default shall not have been cured or waived and (C) 180 days shall not have elapsed since the date such Senior Default Notice was received by either the Borrower or the Subordinated Obligee, which 180 day period shall be
tolled (x) in the event the Senior Lenders have commenced an Enforcement Action for so loan as the Senior Lenders are actively pursuing such Enforcement Action in good faith and (y) in the event of the occurrence of a Proceeding.

 (b) The Company may resume Permitted Subordinated Obligation Payments (and may make any Permitted Subordinated Obligation
Payments missed due to the application of paragraph (a) of this subsection 2.2) in respect of the Subordinated Obligations or any judgment with respect thereto: 
 (i) in the case of a Senior Payment Default referred to in clause (i) of paragraph (a) this subsection 2.2, upon a cure or waiver thereof; or 

(ii) in the case of a Senior Covenant Default referred to in clause (ii) of paragraph (a) of this subsection 2.2, upon the
earliest to occur of (A) the cure or waiver of all such Senior Covenant Defaults, (B) the expiration of such period of 180 days (which 180 day period shall be tolled (x) in the event the Senior Lenders have commenced an Enforcement
Action for so loan as the Senior Lenders are actively pursuing such Enforcement Action in good faith and (y) in the event of the occurrence of a Proceeding) or (C) Payment in Full of all Senior Loans. 

(c) No Senior Default shall be deemed to have been waived for purposes of this subsection 2.2 unless and until the Borrower shall have
received a written waiver from Agent or the “Required Lenders” under the Senior Loan Agreement (or, to the extent such Required Lenders cannot waive such Senior Default in accordance with the Senior Loan Agreement, all “Lenders”
under the Senior Loan Agreement). 
 2.3. Subordinated Obligation Standstill. Until the Senior Loans are Paid in
Full, Subordinated Obligee shall not, without the prior written consent of Agent, take any Enforcement Action with respect to the Subordinated Obligations; provided, that, Subordinated Obligee may take Enforcement Action upon the passage of
180 days (which 180 day period shall be tolled (a) in the event the Senior Lenders have commenced an Enforcement Action for so loan as the Senior Lenders are actively pursuing such Enforcement Action in good faith and (b) in the event of
the occurrence of a Proceeding) from the delivery of a Subordinated Payment Default Notice to Agent if any Subordinated Payment Default described therein shall not have been cured or waived within such period, but in any event no earlier than ten
(10) days after Agent’s receipt of separate written notice of such Subordinated Creditor’s intention to take any such Enforcement Action. Notwithstanding the foregoing, subject to Section 2.9, the Subordinated Creditor may file
proofs of claims with respect to the Subordinated Obligations against the Borrower in any Proceeding involving Borrower, and so long as in each case any such action is not adverse to the Senior Lenders in any respect, may vote its claims in respect
of the Subordination Obligations and otherwise act in any Proceeding as a holder of the Subordinated Obligations (including the right to accept or reject any plan of reorganization). 

2.4. Incorrect Payments. If any Distribution on account of the Subordinated Obligation not permitted to be made by Borrower
or any Loan Party or accepted by Subordinated Obligee under this Agreement is made and received by Subordinated Obligee, such Distribution shall not be 

  
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commingled with any of the assets of Subordinated Obligee, shall be held in trust by Subordinated Obligee for the benefit of Senior Lenders and shall be promptly paid over to Agent for the
benefit of Senior Lenders for application in accordance with the Senior Loan Documents to the payment of the Senior Loans then remaining unpaid, until all of the Senior Loans are Paid in Full. 

2.5. Subordination of Liens and Security Interests; Agreement Not to Contest; Agreement to Release any Liens. Subordinated
Obligee hereby acknowledges, agrees, represents and warrants that none of the Subordinated Obligations nor any portion thereof is as of the date hereof, or at any time in the future until Payment in Full of the Senior Loans shall be, secured by any
lien or security interest in any of the Collateral, the equity interests in any Loan Party or any other asset of a Loan Party, or guaranteed by any Loan Party. Without limiting the foregoing, until the Senior Loans have been Paid in Full, all liens
and security interests of Subordinated Obligee in the Collateral, if any, shall be and hereby are subordinated for all purposes and in all respects to the liens and security interests of Senior Lenders in the Collateral, regardless of the time,
manner or order of perfection of any such liens and security interests and regardless of any failure, whether intervening or continuing, of Senior Lenders’ liens and security interests to be perfected; provided, however, that each of the
parties hereto acknowledges and agrees that the existence of any lien or security interest of Subordinated Obligee in any of the Collateral prior to the Payment in Full of the Senior Loans would constitute an automatic and immediate Event of Default
under the Senior Loan Agreement and a breach of this Agreement. Subordinated Obligee agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior Loans, the Senior Loan Documents, or the liens and
security interests of Senior Lenders in the Collateral securing the Senior Loans. In the event that any lien or security interest in any of the Collateral arises in favor of Subordinated Obligee, immediately upon Agent’s request, Subordinated
Obligee shall (or shall cause its agent to) promptly execute and deliver to Agent such termination statements and releases as Agent shall reasonably request to effect the release of the liens and security interests of Subordinated Obligee in any
such Collateral. In furtherance of the foregoing, Subordinated Obligee hereby irrevocably appoints Agent its attorney-in-fact, with full authority in the place and stead of Subordinated Obligee and in the name of Subordinated Obligee or otherwise,
to execute and deliver any document or instrument which Subordinated Obligee may be required to deliver pursuant to this subsection 2.5. 
 2.6. Application of Proceeds from Sale or other Disposition of the Collateral; Agreement to Release Liens. 
 (a) In the event of any sale, transfer or other disposition (including a casualty loss or taking through eminent domain) of the Collateral, the proceeds resulting therefrom (including insurance proceeds)
shall be applied in accordance with the terms of the Senior Loan Documents or as otherwise consented to by Agent until the Senior Loans are Paid in Full. 
 (b) Without affecting the rights of Agent or Senior Lenders under this Agreement, Subordinated Obligee agrees and consents that any Collateral securing the Subordinated Obligations, in whole or in part,
may be exchanged, sold or surrendered by Agent for other Collateral as it may deem advisable, and that any balance or balances of funds with Agent at any time outstanding to the credit of Borrower may, from time to time, in whole or in part, be
surrendered or released by Agent as it may deem advisable, subject, however, to the terms of the Senior Loan Documents. In the event that Agent has determined to enforce its rights against any Collateral, then promptly upon Agent’s request,
Subordinated Obligee shall promptly execute and deliver to Agent such termination statements and releases as Agent shall reasonably request to effect the release of the liens and security interests of Subordinated Obligee in any such Collateral. In
furtherance of the foregoing, Subordinated Obligee hereby irrevocably appoints Agent its attorney-in-fact, with full authority in the place and stead of Subordinated Obligee and in the name of Subordinated Obligee or otherwise, to execute and
deliver any document or instrument which Subordinated Obligee may be required to deliver pursuant to this subsection 2.6. 

  
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 2.7. Sale, Transfer or other Disposition of Subordinated Obligation.
Subordinated Obligee shall not sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Subordinated Obligation or any Subordinated IRA Document without the prior written consent of Agent, which consent may be withheld in its
sole and absolute discretion. 
 2.8. Legends. Until the termination of this Agreement in accordance with
Section 8 hereof, Subordinated Obligee will cause to be clearly, conspicuously and prominently inserted on the face of each Subordinated IRA Document, the following legend: 

“This instrument or other agreement and the indebtedness, rights and obligations evidenced hereby and any liens or other security
interests securing such rights and obligations are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as amended, restated, supplemented or modified from time to time, the
“Subordination Agreement”), dated as of August 14, 2012 by and among the Subordinated Obligee identified therein and MidCap Financial SBIC, LP, in its capacity as agent for certain lenders (together with its successors and
assigns, “Agent”), to certain indebtedness, rights and obligations of AxoGen, Inc. and AxoGen Corporation, to Agent and Lenders (as defined therein) and all liens and security interests of Agent securing the same all as described in
the Subordination Agreement, and each holder and transferee of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.” 

2.9. Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding involving Borrower: 

(a) Any Distribution, whether in cash, securities or other property which would otherwise, but for the terms hereof, be payable or
deliverable in respect of the Subordinated Obligation shall be paid or delivered directly to Agent (to be held and/or applied by Senior Lenders in accordance with the terms of the Senior Loan Documents) until the Senior Loans are Paid in Full.
Subordinated Obligee irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Agent.
Subordinated Obligee also irrevocably authorizes and empowers Agent, in the name of Subordinated Obligee, to demand, sue for, collect and receive any and all such Distributions. 

(b) Subordinated Obligee agrees that Agent may consent to the use of cash collateral or provide financing to any Loan Party on such
terms and conditions and in such amounts as Agent, in its sole discretion, may decide and, in connection therewith, any Loan Party may grant to Agent for the benefit of Senior Lenders liens and security interests upon all of the property of any Loan
Party, which liens and security interests (i) shall secure payment of the Senior Loans (whether such Senior Loans arose prior to the commencement of any Proceeding or at any time thereafter) and all other financing provided by Senior Lenders
during the Proceeding, and (ii) shall be superior in priority to the liens and security interests, if any, in favor of Subordinated Obligee on the property of any Loan Party. Subordinated Obligee agrees that it will not object to or oppose a
sale or other disposition of any property securing all of any part of the Senior Loans free and clear of security interests, liens or other claims of Subordinated Obligee under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code if Agent has consented to such sale or disposition. Subordinated Obligee agrees not to assert any right it may have to “adequate protection” of Subordinated Obligee’s interest in any Collateral

  
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in any Proceeding and agrees that it will not seek to have the automatic stay lifted with respect to any Collateral without the prior written consent of Agent. Subordinated Obligee waives any
claim it may now or hereafter have arising out of Agent’s election, in any Proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or any borrowing or grant of a security
interest under Section 364 of the Bankruptcy Code by Borrower, as debtor in possession. Subordinated Obligee further agrees that it will not seek to participate or participate on any creditor’s committee without Agent’s prior written
consent. 
 (c) Notwithstanding anything contained herein to the contrary, Subordinated Obligee may file proofs of claim with
respect to the Subordinated Obligations against the Borrower in any Proceeding involving the Borrower. Subordinated Obligee agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Obligations requested by Agent
in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Agent its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Obligee promptly
to do so prior to thirty (30) days before the expiration of the time to file any such proof of claim, and (ii) vote such claim in any such Proceeding upon the failure of Subordinated Obligee to do so prior to fifteen (15) days before
the expiration of the time to vote any such claim; provided, however, that Agent shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim. In the event that Agent votes any claim in accordance with the
authority granted hereby, Subordinated Obligee shall not be entitled to change or withdraw such vote. Subordinated Obligee hereby assigns to Agent or its nominee (and will, upon request of Agent, reconfirm in writing the assignment to Agent or its
nominee of) all rights of Subordinated Obligee under such claims. 
 (d) The Senior Loans shall continue to be treated as the
Senior Loans and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Lenders and Subordinated Obligee even if all or part of the Senior Loans or the security interests securing the Senior Loans are
subordinated, set aside, avoided, invalidated or disallowed in connection with any such Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Loans is rescinded or must otherwise be returned by any holder
of the Senior Loans or any representative of such holder. 
 2.10 Characterization of Subordinated Obligations; Assigned
Interests. Subordinated Obligee and Borrower each acknowledges and agrees that, notwithstanding anything in the Subordinated IRA Documents to the contrary, (a) the Subordinated Obligations shall constitute indebtedness of the Borrower
and the Assigned Interests shall not be deemed assigned or otherwise transferred to the Subordinated Obligee, and shall remain assets of the Borrower and Collateral (as defined in the Senior Loan Agreement) of the Senior Lenders securing payment of
the Senior Loans, until such time as such Assigned Interests are paid to Subordinated Obligee as Permitted Subordinated Obligation Payments in accordance with the terms of this Agreement or the Senior Loans are Paid in Full, (b) Agent and
Senior Lenders shall be entitled to take all such actions or exercise such remedies with respect to the Assigned Interests as they are permitted to take with respect to any other Collateral (as defined in the Senior Loan Agreement) under the Senior
Loan Documents and (d) neither Subordinated Obligee, nor the Borrower shall challenge the nature of the Assigned Interests and Subordinated Obligations as indebtedness of the Borrower in any Proceeding of the Borrower or otherwise. 

3. Modifications. 
 3.1. Modifications to Senior Loan Documents. Senior Lenders may at any time and from time to time without the consent of or notice to Subordinated Obligee, without incurring liability to
Subordinated Obligee and without impairing or releasing the obligations of Subordinated Obligee under 

  
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this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Loans, or amend in any manner any agreement, note, guaranty
or other instrument evidencing or securing or otherwise relating to the Senior Loans; provided, that, without the written consent of the Subordinated Creditor, Senior Lenders shall not agree to amend or modify the Senior Loan Documents to
(i) increase the principal amount of the Senior Loans (except as permitted by the definition of Senior Loans herein), (ii) extend the final maturity of the Senior Loans (as set forth in the Senior Loan Agreement in effect on the date
hereof) by more than one year past such maturity date or (iii) add any express prohibitions on the payment of the Subordinated Obligations that are more restrictive than those set forth in this Agreement. 

3.2. Modifications to Subordinated IRA Documents. Until the Senior Loans have been Paid in Full, and notwithstanding
anything to the contrary contained in the Subordinated IRA Documents, Subordinated Obligee shall not, without the prior written consent of Agent, agree to any amendment, modification or supplement to the Subordinated IRA Documents. Nothing herein,
including the provisions of this Agreement pertaining to subordination of liens on the Collateral, shall be construed to imply Agent’s or Senior Lenders’ consent to any Subordinated IRA Document which grants a lien upon any of the
Collateral or the making of any other loans or other advances by the Subordinated Obligee (other than the Subordinated Obligations made pursuant to the IRA as of the date of this Agreement). 

4. Waiver of Certain Rights by Subordinated Obligee. 

4.1. Marshaling. Subordinated Obligee hereby waives any rights it may have under applicable law to assert the doctrine of
marshaling or to otherwise require Agent or Senior Lenders to marshal any property of any Loan Party or any guarantor of the Senior Loans for the benefit of Subordinated Obligee. 

4.2. Rights Relating to Agent’s Actions with respect to the Collateral. Subordinated Obligee hereby waives, to the
extent permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing Agent from taking, or refraining from taking, any action with respect to all or any part of the Collateral.
Without limitation of the foregoing, Subordinated Obligee hereby agrees (a) that it has no right to direct or object to the manner in which Agent enforces its rights and remedies with respect to, or applies the proceeds of, the Collateral
resulting from the exercise by Agent of rights and remedies under the Senior Loan Documents to the Senior Loans, and (b) that Agent has not assumed any obligation to act as the agent for Subordinated Obligee with respect to the Collateral.

 4.3. Rights Relating to Disclosures. Subordinated Obligee hereby agrees that Senior Lenders has not assumed any
obligation or duty to disclose information regarding any Loan Party or the Senior Loans to Subordinated Obligee, and Senior Lenders shall have no special or fiduciary relationship to Subordinated Obligee. Subordinated Obligee hereby fully waives and
releases Senior Lenders from any affirmative disclosures which may be required of Senior Lenders under applicable law. 
 5.
Construction. The terms of this Agreement were negotiated among business persons sophisticated in the area of business finance, and accordingly, in construing the terms of this Agreement, no rule or law which would require that this
instrument be construed against the party who drafted this instrument shall be given any force or effect. 
 6.
Modification of this Agreement. Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in

  
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any event unless the same is in writing and signed by Agent and Subordinated Obligee to be bound thereby, and then such modification, waiver or consent shall be effective only in the specific
instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the
same, similar or other circumstances unless specifically required hereunder. For the avoidance of doubt, Borrower’s signature shall not be required to amend or otherwise modify this Agreement. 

7. Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and
agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the purposes of this Agreement. 

8. Continuing Agreement. This is a continuing agreement and will remain in full force and effect until all of the
obligations under the Senior Loan Documents have been Paid in Full. This Agreement will continue to be effective or will be reinstated retroactively as if it had never been terminated, as the case may be, if at any time payment of all or any part of
the Senior Loan Documents or the obligations thereunder is rescinded or must otherwise be returned by Agent and/or Senior Lenders upon insolvency, bankruptcy, or reorganization of any Loan Party or otherwise, all as though such payment had not been
made. Upon the foregoing, any and all Distributions that may have been made to Subordinated Obligee which would have otherwise been prohibited shall be paid to Agent for the benefit of the Senior Lenders in accordance with Section 2.4.

 9. Notices. Any notice or other communication required or permitted under this Agreement shall be in writing
and personally delivered, mailed by registered or certified mail (return .receipt requested and postage prepaid), sent by facsimile (with a confirming copy sent by regular mail), or sent by prepaid overnight courier service, and addressed to the
relevant party at its address set forth below, or at such other address as such party may, by written notice, designate as its address for purposes of notice under this Agreement: 

If to Senior Lenders, to Agent at: 
 MidCap Financial SBIC, LP 
 7255 Woodmont Avenue, Suite 200 

Bethesda, Maryland 20814 
 Attention: Portfolio Management- Life Sciences 
 Fax: (301) 941-1450 

with a copy to: 

Midcap Financial, LLC 
 7255 Woodmont Avenue, Suite 200 
 Bethesda, Maryland 20814 

Attention: General Counsel 
 Fax: (301) 941-1450 

  
 -10-

 If to Borrower or any other Loan Party, at: 

AxoGen, Inc. 

AxoGen Corporation 
 13859 Progress Blvd. 
 Alachua, FL 32615 

Attention: Karen Zaderej 
 Fax: (386) 462-6803 
 with a copy to: 

Morgan, Lewis & Bockius LLP 
 1701 Market Street 
 Philadelphia, Pennsylvania 19103 

Attention: Fahd M.T. Riaz, Esq. 
 Fax: (215) 963-5001 
 If to Subordinated Obligee: 

PDL BioPharma, Inc. 
 932 Southwood Blvd. 
 Incline Village, NV 89451 

Attention: General Counsel 
 Fax: (775) 832-8501 
 with a copy to: 

Gibson, Dunn & Crutcher LLP 
 333 South Grand Avenue 
 Los Angeles, CA 90071-3197 

Attention: Dhiya El-Saden 
 Fax: (213) 229-7520 
 If mailed, notice shall be deemed to be given five (5) days after being
sent, and if sent by personal delivery, facsimile or prepaid courier, notice shall be deemed to be given when delivered. 

10. Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective
successors and assigns of Senior Lenders, Subordinated Obligee and the Loan Parties; provided, however, that neither Subordinated Obligee nor any Loan Party may assign this Agreement or the Subordinated IRA Documents in whole or in part
without the prior written consent of Agent. Senior Lenders may, from time to time, without notice to Subordinated Obligee, assign or transfer any or all of the Senior Loans or any interest therein to any Person and, notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer, the Senior Loans shall, subject to the terms hereof, be and remain the Senior Loans for purposes of this Agreement, and every permitted assignee or transferee of any of the Senior
Loans or of any interest therein shall, to the extent of the interest of such permitted assignee or transferee in the Senior Loans, be entitled to rely upon the subordination provided under this Agreement and shall be entitled to enforce the terms
and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto. 
 11. No Waiver
or Novation. No waiver shall be deemed to have been made by any party to this Agreement of any of its rights under this Agreement unless the same shall be in writing and duly signed by its duly authorized officers, and each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of any party to this Agreement in any other respect at any time. No executory agreement shall be effective to change, modify or to discharge,
in whole or in part, this Agreement, unless such executory agreement is in writing and duly signed by the duly authorized officers of each party to this Agreement. 

  
 -11-

 12. CONSENT TO JURISDICTION. SUBORDINATED OBLIGEE AND EACH OF THE LOAN PARTIES
HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF MARYLAND AND IRREVOCABLY AGREES THAT, SUBJECT TO SENIOR LENDERS’ ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
SHALL BE LITIGATED IN SUCH COURTS. SUBORDINATED OBLIGEE AND EACH OF THE LOAN PARTIES EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. SUBORDINATED OBLIGEE AND EACH OF THE LOAN
PARTIES HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUBORDINATED OBLIGEE AND EACH OF THE LOAN PARTIES
AT THEIR RESPECTIVE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS
AGREEMENT, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF SUBORDINATED OBLIGEE, EACH LOAN PARTY OR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF SUBORDINATED OBLIGEE OR EACH LOAN PARTY, AS APPLICABLE, FOR
PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). SUBORDINATED OBLIGEE AND EACH OF THE LOAN PARTIES AGREES THAT SENIOR LENDERS’ COUNSEL
IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. SUBORDINATED OBLIGEE
AND EACH OF THE LOAN PARTIES IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY SENIOR LENDERS, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE,
ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE. 
 13. WAIVER OF JURY
TRIAL. SUBORDINATED OBLIGEE, EACH OF THE LOAN PARTIES AND SENIOR LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED IRA DOCUMENTS OR
ANY OF THE SENIOR LOAN DOCUMENTS. SUBORDINATED OBLIGEE, EACH OF THE LOAN PARTIES AND SENIOR LENDERS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE SENIOR LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. SUBORDINATED OBLIGEE, EACH OF THE LOAN PARTIES AND SENIOR LENDERS WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY
OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. 

  
 -12-

 14. Miscellaneous. 

14.1. Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term,
covenant or condition of any of the Subordinated IRA Documents, the provisions of this Agreement shall control and govern. 

14.2. Headings. The paragraph headings used in this Agreement are for convenience only and shall not affect the
interpretation of any of the provisions hereof. 
 14.3. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, but in making proof hereof, it shall only be necessary to produce one such counterpart containing signatures pages
signed by each party. 
 14.4. Severability. In the event that any provision of this Agreement is deemed to be
invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement
shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement. 

14.5. Governing Law. This Agreement shall be governed by and shall be construed and enforced in accordance with the
internal laws of the State of Maryland, without regard to conflicts of law principles. 
 14.6. Relative Rights.
This Agreement shall define the relative rights of Senior Lenders and Subordinated Obligee. Nothing in this Agreement shall (a) impair, as between the Loan Parties and Senior Lenders, the obligation of the Loan Parties with respect to the
payment of the Senior Loans and the Subordinated Obligations in accordance with their respective terms, or (b) affect the relative rights of Senior Lenders or Subordinated Obligee with respect to any other creditors of the Loan Parties

 14.7 Subrogation. Until Payment in Full of all Senior Loans, Subordinated Obligee shall not be subrogated to
the rights of Agent and Senior Lenders to receive Distributions with respect to the Senior Loans. Upon and subject to Payment in Full of all Senior Loans, Subordinated Obligee shall be subrogated to the rights of Agent and Senior Lenders to receive
Distributions with respect to the Senior Loans until the Subordinated Obligations are paid in full. Subordinated Obligee agrees that in the event that all or any part of a payment made with respect to the Senior Loans is recovered from the holders
of the Senior Loans in a Proceeding or otherwise, any Distribution received by Subordinated Obligee with respect to the Subordinated Obligations at any time after the date on which Subordinated Obligee is notified by Agent that such payment has been
recovered, whether pursuant to the right of subrogation provided for in this Agreement or otherwise, shall be deemed to have been received by Subordinated Obligee in trust as property of Agent and the Senior Loans and Subordinated Obligee shall
promptly upon receipt of such notice by Subordinated Obligee deliver the same to the Agent for the benefit of the Senior Lenders for application to the Senior Loans until the Senior Loans is Paid in Full. A Distribution made pursuant to this
Agreement to Agent or Senior Lenders which otherwise would have been made to Subordinated Obligee is not, as between the Borrower and Subordinated Obligee, a payment by the Borrower to or on account of the Senior Loans. Notwithstanding anything to
the contrary in any Senior Loan Document or any Subordinated IRA Document, this Section 14.7 shall survive the termination of any Senior Loan Document and the Payment in Full of the Senior Loans. 

  
 -13-

 14.8. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. 

[SIGNATURES APPEAR ON FOLLOWING PAGE] 

  
 -14-

 IN WITNESS WHEREOF, intending to be legally bound, and intending that this Agreement
constitute an instrument executed and delivered under seal, the parties have caused this Agreement to be executed under seal as of the date first written above. 

 

			
	AGENT AND SENIOR LENDERS;
	
	 MIDCAP FINANCIAL SBIC, LP,
 as Agent for Senior Lenders and as a Senior Lender

	
	By: Midcap Financial SBIC GP, LLC
		
	By: 	 	/s/ Luis Viera
	Name:	 	Luis Viera
	Title:	 	Managing Director

  

			
	 SILICON VALLEY BANK,
 as a Senior Lender

		
	By: 	 	 
	Name:	 	
	Title:	 	

  
 SUBORDINATION
AND INTERCREDITOR AGREEMENT 
 SIGNATURE PAGE 

 IN WITNESS WHEREOF, intending to be legally bound, and intending that this Agreement
constitute an instrument executed and delivered under seal, the parties have caused this Agreement to be executed under seal as of the date first written above. 

 

			
	AGENT AND SENIOR LENDERS:
	
	 MIDCAP FINANCIAL SBIC, LP,
 as Agent for Senior Lenders and as a Senior Lender

	
	By: MidCap Financial SBIC GP, LLC
		
	By: 	 	 
	Name:	 	 
	Title:	 	 

  

			
	 SILICON VALLEY BANK,
 as a Senior Lender

		
	By: 	 	/s/ Scott McCarty
	Name:	 	Scott McCarty
	Title:	 	Vice President

  
 SUBORDINATION
AND INTERCREDITOR AGREEMENT 
 SIGNATURE PAGE 

 
			
	SUBORDINATED OBLIGEE:
	
	PDL BIOPHARMA, INC.
		
	By: 	 	/s/ John P. McLaughlin
	Name:	 	John P. McLaughlin
	Title:	 	President and Chief Executive Officer

  
 SUBORDINATION
AND INTERCREDITOR AGREEMENT 
 SIGNATURE PAGE 

 
			
	BORROWER:
	
	AXOGEN, INC. (f/k/a LecTec Corporation)
		
	By: 	 	/s/ Karen Zaderej
	Name:	 	Karen Zaderej
	Title:	 	CEO

  

			
	AXOGEN CORPORATION
		
	By: 	 	/s/ Karen Zaderej
	Name:	 	Karen Zaderej
	Title:	 	CEO

  
 SUBORDINATION
AND INTERCREDITOR AGREEMENT 
 SIGNATURE PAGE

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