RTI SURGICAL, INC. (Form: 10-Q, Received: 11/03/2017 10:59:09)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-31271

RTI Surgical, Inc.

(Exact name of registrant as specified in its charter)


Delaware		59-3466543
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11621 Research Circle Alachua, Florida		32615
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (386) 418-8888

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

Shares of common stock, $0.001 par value, outstanding on October 27, 2017: 60,832,446

RTI SURGICAL, INC.

FORM 10-Q For the Quarter Ended September 30, 2017

Index


	Page #
Part I Financial Information

Item 1 Unaudited Condensed Consolidated Financial Statements		3 – 18

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		19 – 26

Item 3 Quantitative and Qualitative Disclosures About Market Risk		27

Item 4 Controls and Procedures		27

Part II Other Information

Item 1 Legal Proceedings		28

Item 1A Risk Factors		28

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3 Defaults Upon Senior Securities		28

Item 4 Mine Safety Disclosures		28

Item 5 Other Information		28

Item 6 Exhibits		28

Signatures		30

Part I Financial Information

Item 1.

Unaudited Condensed Consolidated Financial Statements

RTI SURGICAL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share data)


	September 30, 2017			December 31, 2016
Assets
Current Assets:
Cash and cash equivalents	$	17,744		$	13,849
Accounts receivable—less allowances of $1,859 at September 30, 2017 and $1,728 at December 31, 2016		36,188			41,488
Inventories—net		114,568			119,743
Prepaid and other current assets		9,806			5,213
Assets held for sale		1,750			—

Total current assets		180,056			180,293
Property, plant and equipment—net		82,794			83,298
Deferred tax assets—net		18,543			24,968
Goodwill		46,242			54,887
Other intangible assets—net		23,806			23,994
Other assets—net		1,841			591

Total assets	$	353,282		$	368,031

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	24,445		$	26,112
Accrued expenses		20,482			22,030
Current portion of deferred revenue		4,793			4,742
Current portion of short and long-term obligations		4,268			6,080

Total current liabilities		53,988			58,964
Long-term obligations—less current portion		45,643			77,267
Other long-term liabilities		2,144			256
Deferred revenue		4,959			6,612

Total liabilities		106,734			143,099
Preferred stock Series A, $.001 par value: 5,000,000 shares authorized; 50,000 shares issued and outstanding		62,925			60,016
Stockholders’ equity:
Common stock, $.001 par value: 150,000,000 shares authorized; 60,544,896 and 58,433,397 shares issued and outstanding, respectively		59			58
Additional paid-in capital		420,503			417,428
Accumulated other comprehensive loss		(6,469	)		(8,316	)
Accumulated deficit		(229,413	)		(243,338	)
Less treasury stock, 410,396 and 368,949 shares, respectively, at cost		(1,057	)		(916	)

Total stockholders’ equity		183,623			164,916

Total liabilities and stockholders’ equity	$	353,282		$	368,031

See notes to unaudited condensed consolidated financial statements.

RTI SURGICAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in thousands, except share and per share data)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues	$	66,688		$	66,547		$	208,747		$	201,518
Costs of processing and distribution		33,177			32,273			102,494			97,270

Gross profit		33,511			34,274			106,253			104,248

Expenses:
Marketing, general and administrative		27,678			28,724			86,845			84,678
Research and development		2,801			3,789			10,229			12,034
Severance charges		2,820			328			10,623			1,039
Restructuring charges		—			—			—			1,107
Strategic review costs		—			650			—			650
CEO Retirement and transition costs		—			4,107			—			4,107
Contested proxy expenses		—			—			—			2,680
Gain on cardiothoracic closure business divestiture		(34,090	)		—			(34,090	)		—

Total operating (gain) expenses		(791	)		37,598			73,607			106,295

Operating income (loss)		34,302			(3,324	)		32,646			(2,047	)

Other (expense) income:
Interest expense		(741	)		(308	)		(2,475	)		(1,061	)
Interest income		—			1			—			8
Foreign exchange gain (loss)		60			(67	)		5			(59	)

Total other expense—net		(681	)		(374	)		(2,470	)		(1,112	)

Income (loss) before income tax (provision) benefit		33,621			(3,698	)		30,176			(3,159	)
Income tax (provision) benefit		(16,135	)		92			(16,251	)		(338	)

Net Income (loss)		17,486			(3,606	)		13,925			(3,497	)

Convertible preferred dividend		(938	)		(883	)		(2,772	)		(2,611	)

Net income (loss) applicable to common shares		16,548			(4,489	)		11,153			(6,108	)

Other comprehensive income (loss):
Unrealized foreign currency translation gain		434			241			1,847			147

Comprehensive income (loss)	$	16,982		$	(4,248	)	$	13,000		$	(5,961	)

Net income (loss) per common share—basic	$	0.28		$	(0.08	)	$	0.19		$	(0.10	)

Net income (loss) per common share—diluted	$	0.23		$	(0.08	)	$	0.19		$	(0.10	)

Weighted average shares outstanding—basic		59,704,533			58,353,110			59,045,372			58,173,580

Weighted average shares outstanding—diluted		75,188,161			58,353,110			59,954,964			58,173,580

See notes to unaudited condensed consolidated financial statements.

RTI SURGICAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Stockholders’ Equity

For the Nine Months Ended September 30, 2017

(Unaudited, in thousands)


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Treasury Stock			Total
Balance, December 31, 2016	$	58	$	417,428		$	(8,316	)	$	(243,338	)	$	(916	)	$	164,916
Net income		—		—			—			13,925			—			13,925
Foreign currency translation adjustment		—		—			1,847			—			—			1,847
Exercise of common stock options		1		1,871			—			—			—			1,872
Stock-based compensation		—		4,113			—			—			—			4,113
Purchase of treasury stock		—		—			—			—			(141	)		(141	)
Amortization of preferred stock Series A issuance costs		—		(137	)		—			—			—			(137	)
Preferred stock Series A dividend		—		(2,772	)		—			—			—			(2,772	)

Balance, September 30, 2017	$	59	$	420,503		$	(6,469	)	$	(229,413	)	$	(1,057	)	$	183,623

See notes to unaudited condensed consolidated financial statements.

RTI SURGICAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Cash flows from operating activities:
Net income (loss)	$	17,486		$	(3,606	)	$	13,925		$	(3,497	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization expense		3,575			4,393			10,704			13,087
Provision for bad debts and product returns		256			451			816			946
Provision for inventory write-downs		735			2,052			4,488			4,422
Amortization of deferred revenue		(1,141	)		(1,216	)		(3,601	)		(3,650	)
Deferred income tax provision		5,873			485			5,312			366
Stock-based compensation		2,203			1,975			4,011			3,075
Gain on cardiothoracic closure business divestiture		(34,090	)		—			(34,090	)		—
Other		602			316			1,475			580
Change in assets and liabilities:
Accounts receivable		2,642			(1,668	)		4,770			7,872
Inventories		(998	)		(6,164	)		(831	)		(10,736	)
Accounts payable		(6,725	)		(3,400	)		(5,727	)		1,095
Accrued expenses		(728	)		(3,042	)		(2,112	)		(11,360	)
Deferred revenue		—			—			2,000			2,000
Other operating assets and liabilities		(3,161	)		6,249			(3,998	)		5,834

Net cash (used in) provided by operating activities		(13,471	)		(3,175	)		(2,858	)		10,034

Cash flows from investing activities:
Purchases of property, plant and equipment		(3,198	)		(3,371	)		(10,358	)		(12,774	)
Patent and acquired intangible asset costs		(279	)		(804	)		(2,124	)		(2,195	)
Cardiothoracic closure business divestiture		51,000			—			51,000			—

Net cash provided by (used in) investing activities		47,523			(4,175	)		38,518			(14,969	)

Cash flows from financing activities:
Proceeds from exercise of common stock options		297			—			1,872			14
Proceeds from long-term obligations		2,000			8,000			6,000			15,000
Net payments from short-term obligations		—			(662	)		—			(1,511	)
Payments on long-term obligations		(32,000	)		(1,125	)		(39,375	)		(9,424	)
Other financing activities		(315	)		—			(457	)		(108	)

Net cash (used in) provided by financing activities		(30,018	)		6,213			(31,960	)		3,971

Effect of exchange rate changes on cash and cash equivalents		35			7			195			(26	)

Net increase (decrease) in cash and cash equivalents		4,069			(1,130	)		3,895			(990	)
Cash and cash equivalents, beginning of period		13,675			12,754			13,849			12,614

Cash and cash equivalents, end of period	$	17,744		$	11,624		$	17,744		$	11,624

Supplemental cash flow disclosure:
Cash paid for interest	$	329		$	435		$	2,632		$	1,224
Cash paid for income taxes, net of refunds		12,000			106			12,032			282
Non-cash acquisition of property, plant and equipment		473			1,212			498			1,445
Stock-based compensation related to sale of CT business		102			—			102			—
Increase in accrual for dividend payable		938			883			2,772			2,611

See notes to unaudited condensed consolidated financial statements.

RTI SURGICAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

1. Operations and Organization

The Company is a leader in the use of natural tissues, metals and synthetics to produce orthopedic and other surgical implants that repair and promote the natural healing of human bone and other human tissues and improve surgical outcomes. The Company processes donated human musculoskeletal and other tissue, including bone, cartilage, tendon, ligament, fascia lata, pericardium, sclera and dermal tissue, and bovine and porcine animal tissue in producing allograft and xenograft implants utilizing proprietary BIOCLEANSE ^® , TUTOPLAST ^® and CANCELLE ^® SP sterilization processes, and manufactures metal and synthetic implants for distribution to hospitals and surgeons. The Company processes tissue at two operating facilities in Alachua, Florida and one operating facility in Neunkirchen, Germany, and manufactures metal and synthetic implants in Marquette, Michigan and Greenville, North Carolina. The Company distributes its implants and services in all 50 states and in over 40 countries worldwide.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, which the Company considers necessary for a fair presentation of the results of operations for the periods shown. The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations, comprehensive income (loss) and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

The condensed consolidated financial statements include the accounts of RTI Surgical, Inc. and its wholly owned subsidiaries, Pioneer Surgical Technology, Inc. (“Pioneer”), Tutogen Medical, Inc. (“TMI”), RTI Surgical, Inc. – Cardiovascular (inactive), Biological Recovery Group, Inc. (inactive) and RTI Services, Inc. (inactive). The condensed consolidated financial statements also include the accounts of RTI Donor Services, Inc. (“RTIDS”), which is a controlled entity.

3. Recently Issued Accounting Standards

Compensation—Stock Compensation — In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, “Compensation—Stock Compensation” (Topic 718): Scope of Modification Accounting. The requirement provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. For public business entities, this ASU should be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. The Company is evaluating the impact of adopting this new accounting guidance on its condensed consolidated financial statements.

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets — In February 2017, the FASB issued ASU 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets” (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU requires all entities to derecognize a business or nonprofit activity in accordance with Topic 810, and also requires that all entities derecognize an equity method investment in accordance with Topic 860. The amendments in this ASU eliminate the scope exceptions, and simplifies GAAP. This ASU is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of adopting this new accounting guidance on its condensed consolidated financial statements.

Simplifying the Test for Goodwill Impairment — In January 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment” (Topic 350) (“ASU No. 2017-04”). The amendments in ASU No. 2017-04 are intended to reduce the cost and complexity of the goodwill impairment test by eliminating Step 2 from the impairment test. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. Under the amendments in ASU No. 2017-04, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting

unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments in ASU No. 2017-04 are effective for the Company’s annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted ASU No. 2017-04 on January 1, 2017, and it did not have a material impact on the Company’s results of operations, financial position and disclosures.

Compensation – Stock Compensation — In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation” (Topic 718) (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows.

ASU 2016-09 requires recognition through opening retained earnings of any pre-adoption date net operating loss carryforwards from share-based payments, as well as recognition of all income tax effects from share based-payments in income tax expense. In addition, under ASU 2016-09 excess tax benefits no longer represent financing activities, but instead represent operating activities in the statement of cash flow. ASU 2016-09 allows companies to recognize excess tax benefits as an operating activity on a prospective or retrospective basis. The Company adopted ASU 2016-09 on January 1, 2017. The Company has decided to recognize this requirement on a prospective basis and has not adjusted prior periods. For the nine months ended September 30, 2017, there was no material impact on the Company’s condensed consolidated financial statements, apart from income tax expense of $451 recorded relating to tax deficiencies from share-based payment transactions.

Simplifying the Measurement of Inventory — In July 2015, the FASB issued ASU No. 2015-11, “Inventory Simplifying the Measurement of Inventory” (Topic 330). Update No. 2015-11 more closely aligns the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards by requiring companies using the first-in, first-out and average costs methods to measure inventory using the lower of cost and net realizable value, where net realizable value is the estimated distribution prices of the inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Update No. 2015-11 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years. Update No. 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company adopted ASU 2015-11 effective January 1, 2017. Adoption of ASU 2015-11 had no material impact on the Company’s condensed consolidated financial statements.

Revenue from Contracts with Customers — In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” . ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. As updated in August 2015, the effective date of ASU 2014-09 will be annual reporting periods beginning after December 15, 2017, using one of two retrospective application methods.

In March and April 2016, the FASB issued two updates to the revenue recognition guidance: ASU 2016-08 “Principal Versus Agent Considerations” (Topic 606) (Reporting Revenue Gross Versus Net), and ASU 2016-10, “Identifying Performance Obligations and Licensing” (Topic 606).

In May 2016, the FASB issued ASU Update No. 2016-12 (“ASU 2016-12”) which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition.

The Company has not determined the impact ASU 2014-09, ASU 2016-08, ASU 2016-10 and ASU 2016-12 will have on its condensed consolidated financial statements and footnote disclosures. However, an implementation project team has been identified, and has developed a plan to adopt the ASUs and assess the impact on the Company’s condensed consolidated financial statements and footnote disclosures. Currently, the Company has analyzed its global revenue and categorized its revenue contracts based on distribution channel. Based on this analysis, the Company has identified revenue contracts that it will individually assess. The Company has begun assessing the selected revenue contracts.

4. Cardiothoracic Closure Business Divestiture

The Company completed the sale of substantially all of the assets related to its Cardiothoracic closure business (the “CT Business”) to A&E Advanced Closure Systems, LLC (a subsidiary of A&E Medical Corporation) (“A&E”) pursuant to an Asset Purchase Agreement between the Company and A&E, dated August 3, 2017 (the “Asset Purchase Agreement”). The total consideration received by the Company under the Asset Purchase Agreement was composed of $54,000 in cash consideration, $3,000 of which is being held in escrow for up to twelve months to satisfy possible indemnification obligations, if any (the “Escrow Amount”), plus an additional $5,000 in contingent cash consideration if A&E reaches certain revenue milestones (the “Contingent Consideration”). The Company is also entitled to an additional $1,000 in consideration if the Company successfully obtains a certain FDA regulatory clearance. As a part of the transaction, the Company also entered into a multi-year Contract Manufacturing Agreement with A&E (the “Contract Manufacturing Agreement”). Under the Contract Manufacturing Agreement, the Company agreed to continue to support the CT Business by manufacturing existing products and engineering, developing, and manufacturing potential future products for A&E. The Company elected to account for the Contingent Consideration arrangement including the Escrow Amount, as a gain contingency in accordance with ASC 450 Contingencies. As such, the Contingent Consideration and Escrow Amount were excluded in measuring the fair value of the consideration to be received in connection with the transaction.

The calculation of the gain on the CT Business divestiture is as follows:


Proceeds from cardiothoracic closure business divestiture	$	51,000
Inventories—net		(2,893	)
Property, plant and equipment—net		(1,299	)
Goodwill		(8,645	)
Other intangible assets—net		(280	)
Cardiothoracic closure business divestiture expenses		(3,793	)

Gain on cardiothoracic closure business divestiture	$	34,090

5. Stock-Based Compensation

The Company’s policy is to grant stock options at an exercise price equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s stock options generally have five to ten-year contractual terms and vest over a one to five-year period from the date of grant. The Company’s policy is to grant restricted stock awards at a fair value equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s restricted stock awards generally vest over one to three-year periods.

2015 Incentive Compensation Plan – On April 14, 2015, the Company’s stockholders approved and adopted the 2015 Incentive Compensation Plan, (the “2015 Plan”). The 2015 Plan provides for the grant of incentive and nonqualified stock options and restricted stock to key employees, including officers and directors of the Company and consultants and advisors. The 2015 Plan allows for up to 4,656,587 shares of common stock to be issued with respect to awards granted.

Stock Options

As of September 30, 2017, there was $3,532 of total unrecognized stock-based compensation related to nonvested stock options. The expense related to these stock options is expected to be recognized over a weighted-average period of 2.25 years.

Stock options outstanding, exercisable and available for grant at September 30, 2017, are summarized as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2017		5,764,607		$	4.28
Granted		2,506,038			3.49
Exercised		(504,312	)		3.74
Forfeited or expired		(789,847	)		5.79

Outstanding at September 30, 2017		6,976,486		$	3.86		5.55	$	6,224

Vested or expected to vest at
September 30, 2017		6,495,458		$	3.88		5.40	$	5,760

Exercisable at September 30, 2017		3,726,630		$	4.06		4.33	$	2,992

Available for grant at September 30, 2017		2,427,543

The aggregate intrinsic value in the tables above represents the total pre-tax intrinsic value of stock options for which the fair market value of the underlying common stock exceeded the respective stock option exercise price.

Other information concerning stock options are as follows:


	For the Nine Months Ended September 30,
	2017		2016
Weighted average fair value of stock options granted	$	1.54	$	1.55
Aggregate intrinsic value of stock options exercised		641		6

The aggregate intrinsic value of stock options exercised in a period represents the pre-tax cumulative difference, for the stock options exercised during the period, between the fair market value of the underlying common stock and the stock option exercise prices.

Restricted Stock Awards

During the first quarter of 2017, the Company granted 187,500 shares of time-based restricted stock, which vest over a three-year period, with a weighted-average grant date fair value of $3.15 per share and the Company granted 6,331 shares of time-based restricted stock with a weighted-average grant date fair value of $3.70 per share which vest over a one-year period. During the second quarter of 2017, the Company granted 218,000 shares of time-based restricted stock, which vest over a three-year period, with a weighted-average grant date fair value of $4.60 per share and the Company granted 148,356 shares of time-based restricted stock with a weighted-average grant date fair value of $4.55 per share which vest over a one-year period. During the third quarter of 2017, the Company granted 50,000 shares of time-based restricted stock, which vest over a three-year period, with a weighted-average grant date fair value of $5.65 per share. As of September 30, 2017, there was $3,973 of total unrecognized stock-based compensation related to time-based and performance-based, nonvested restricted stock. The expense related to these restricted stock awards is expected to be recognized on a straight-line basis over a weighted-average period of 3.30 years.

For the three and nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Stock-based compensation:
Costs of processing and distribution	$	33	$	33	$	78	$	99
Marketing, general and administrative		2,257		1,927		4,001		2,931
Research and development		15		15		34		45

Total	$	2,305	$	1,975	$	4,113	$	3,075

Inducement Grant

On January 26, 2017 (the “Grant Date”), the Company issued an inducement grant to its President and Chief Executive Officer, Mr. Camille Farhat. This grant was in the form of: (1) a restricted stock award agreement (the “Restricted Stock Agreement #1”); (2) another restricted stock award agreement (the “Restricted Stock Agreement #2”); and (3) a stock option agreement (the “Option Agreement”).

Under the Restricted Stock Agreement #1, the Company granted Mr. Farhat 850,000 shares of restricted common stock. On the first anniversary of the Grant Date, 170,000 shares will vest. The remaining shares will vest on the last day of each calendar quarter at a rate of 42,500 shares per calendar quarter commencing after the first anniversary of the Grant Date and continuing for four years after. Vesting of these shares may accelerate upon the occurrence of either of two performance conditions.

Under the Restricted Stock Agreement #2, the Company granted Mr. Farhat 150,000 shares of restricted common stock. These 150,000 restricted shares will become fully vested on the latest date (the “Purchase Date”) on which the fair market value of the cumulative amount of shares that Mr. Farhat purchases on the open market equals $500,000, so long as the Purchase Date is on or before March 15, 2018. After vesting, the shares will be non-transferable for a period of one year following the Purchase Date. During the second quarter of 2017, Mr. Farhat purchased $572,313 worth of the Company’s shares on the open market. Accordingly, the 150,000 restricted shares of common stock granted to Mr. Farhat pursuant to the Restricted Stock Award #2 became fully vested, effective May 18, 2017.

Under the Option Agreement, the Company granted Mr. Farhat the option to purchase 1,950,000 shares of common stock (the “Stock Options”). The exercise price for the Stock Options is $3.20. The Stock Options will expire on January 26, 2022. The Stock Options will vest based on the Company’s attainment of three average stock price benchmarks. The first 650,000 shares will vest if the Company’s average publicly traded stock price is over $6.00 for a sixty-consecutive calendar day period. The next 650,000 shares will vest if the Company’s average publicly traded stock price is over $7.00 for a sixty-consecutive calendar day period. The final 650,000 shares will vest if the Company’s average publicly traded stock price is over $8.00 for a sixty-consecutive calendar day period. The vesting of the Stock Options is cumulative.

6. Net Income Per Common Share

A reconciliation of the number of shares of common stock used in the calculation of basic and diluted net income per common share is presented below:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Basic shares		59,704,533		58,353,110		59,045,372		58,173,580
Effect of dilutive securities:
Stock options		1,244,082		—		909,592		—
Preferred stock Series A		14,239,546		—		—		—

Diluted shares		75,188,161		58,353,110		59,954,964		58,173,580

For the three months ended September 30, 2017 and 2016, approximately 1,418,182 and 4,854,771, respectively, and for the nine months ended September 30, 2017 and 2016, approximately 1,474,461 and 4,787,572, respectively, of issued stock options were not included in the computation of diluted net income per common share because they were anti-dilutive because

their exercise price exceeded the market price. For the three months ended September 30, 2016, options to purchase 278,766 and for the nine months ended September 30, 2016, options to purchase 306,527 of common stock were not included in the computation of diluted loss per share because dilutive shares are not factored into this calculation when a net loss is reported.

For the three months ended September 30, 2017, 50,000 shares of convertible preferred stock or 14,239,546 of converted common stock and accrued but unpaid dividends were dilutive on an as if-converted basis and were included in the computation of diluted net income per common share.

7. Inventories

Inventories by stage of completion are as follows:


	September 30, 2017		December 31, 2016
Unprocessed tissue, raw materials and supplies	$	23,026	$	31,745
Tissue and work in process		42,014		38,552
Implantable tissue and finished goods		49,528		49,446

	$	114,568	$	119,743

For the three months ended September 30, 2017 and 2016, the Company had inventory write-downs of $735 and $2,052, respectively, and for the nine months ended September 30, 2017 and 2016, the Company had inventory write-downs of $4,488 and $4,422, respectively, relating primarily to product obsolescence.

8. Property, Plant and Equipment

Property, plant and equipment are as follows:


	September 30, 2017			December 31, 2016
Land	$	2,374		$	2,324
Buildings and improvements		57,350			59,187
Processing equipment		41,906			38,387
Surgical instruments		20,602			18,394
Office equipment, furniture and fixtures		1,561			1,701
Computer equipment and software		18,836			11,852
Construction in process		11,677			17,554

		154,306			149,399
Less accumulated depreciation		(71,512	)		(66,101	)

	$	82,794		$	83,298

For the three months ended September 30, 2017 and 2016, the Company had depreciation expense in connection with property, plant and equipment of $2,623 and $3,459, respectively, and for the nine months ended September 30, 2017 and 2016, the Company had depreciation expense in connection with property, plant and equipment of $7,947 and $10,295, respectively.

Owned property previously used for administrative, distribution and marketing functions with a cost basis of $1,750, to be disposed of, as of September 30, 2017, as a result of improving operational efficiencies were included in “Assets held for sale” on the Condensed Consolidated Balance Sheet as of September 30, 2017, are not included in the table above. On July 21, 2017, the Company entered into a sale agreement with a third party for the owned property. The transaction closed on October 20, 2017 for $1,818 net of selling costs.

9. Goodwill


	September 30, 2017		December 31, 2016
Balance at January 1	$	54,887	$	54,887
Goodwill disposed of related to sale of CT business		8,645		—

	$	46,242	$	54,887

10. Other Intangible Assets

Other intangible assets are as follows:


	September 30, 2017				December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents	$	11,938	$	4,811	$	11,559	$	4,159
Acquired licensing rights		14,497		8,841		12,204		8,302
Marketing and procurement intangible assets		20,181		9,158		20,694		8,002

Total	$	46,616	$	22,810	$	44,457	$	20,463

Marketing and procurement intangible assets include the following: procurement contracts, trademarks, selling and marketing relationships, customer lists and non-compete agreements.

For the three months ended September 30, 2017 and 2016, the Company had amortization expense of other intangible assets of $952 and $934, respectively, and for the nine months ended September 30, 2017 and 2016, the Company had amortization expense of other intangible assets of $2,757 and $2,792, respectively. At September 30, 2017, management’s estimates of future amortization expense for the next five years are as follows:


	Amortization Expense
2017	$	925
2018		3,800
2019		3,800
2020		3,700
2021		3,700
2022		3,500

	$	19,425

11. Accrued Expenses

Accrued expenses are as follows:


	September 30, 2017		December 31, 2016
Accrued compensation	$	5,689	$	4,904
Accrued severance charges		3,634		410
Accrued restructuring charges		—		95
Accrued CEO retirement and transition costs		822		2,406
Accrued distributor commissions		3,364		4,422
Accrued donor recovery fees		2,499		6,350
Other		4,474		3,443

	$	20,482	$	22,030

The Company accrues for the estimated donor recovery fees due to third party recovery agencies as tissue is received.

12. Short and Long-Term Obligations

Short and long-term obligations are as follows:


	September 30, 2017			December 31, 2016
Term loan	$	24,911		$	50,347
Credit facility		25,000			33,000

Total		49,911			83,347
Less current portion		(4,268	)		(6,080	)

Long-term portion	$	45,643		$	77,267

The Company entered into a Third Amended and Restated Loan Agreement, dated as of August 3, 2017 (the “2017 Loan Agreement”), among the Company, TD Bank, N.A. and First Tennessee Bank National Association, as Lenders (together with the various financial institutions as in the future may become parties thereto, the “Lenders”), and TD Bank, N.A., as administrative agent for the Lenders. The 2017 Loan Agreement represents a modification of the Second Amended and Restated Loan Agreement dated July 16, 2013 between the Company, TD Bank, N.A. and Regions Bank (as amended, the “2013 Loan Agreement”).

The 2017 Loan Agreement provides for a revolving credit facility (the “Revolving Credit Facility”), in the aggregate principal amount of $42,500 which is unchanged from the final Amendment to the 2013 Loan Agreement. The Company used $22,000 of the proceeds from the sale of the CT Business to partially pay down amounts owed under the 2013 Loan Agreement, and $10,000 to pay down amounts owed under the Revolving Credit Facility. Subsequent to the pay down, the outstanding principal balance on the 2013 Loan Agreement Term Loan amounted to $25,375 which became the principal amount of the 2017 Loan Agreement (the “Term Loan Facility” and, together with the Revolving Credit Facility the “Facility”). The Facility is secured by substantially all the assets of the Company and its domestic subsidiaries and is guaranteed by the Company’s domestic subsidiaries, as well as 65% of the stock of the Company’s foreign subsidiaries.

Borrowings made under the 2017 Loan Agreement initially will bear interest at a rate per annum equal to monthly LIBOR plus a margin of up to 3.50%. Interest is payable quarterly in arrears, and principal on the Term Loan Facility is payable in quarterly payments of $1,125, each commencing October 1, 2017. The maturity date of the Facility is September 15, 2019, which represents an extension from the 2013 Loan Agreement maturity date of July 16, 2018. The Company may make optional prepayments on the Facility without penalty at the end of any LIBOR interest period.

At September 30, 2017, the interest rate for the Term Loan and Revolving Credit Facility is 4.74%. As of September 30, 2017, there was $25,000 outstanding on the revolving credit facility. The term loan facility requires aggregate principal payments of $7,875 from September 30, 2017 through June 30, 2019, with a final balloon principal payment of $17,500 on September 15, 2019. The credit agreement also contains various restrictive covenants which limit, among other things, indebtedness and liens, as well as payment of dividends, while requiring a minimum cash balance on hand of $10,000 and certain financial covenant ratios.

The total available credit on the Company’s revolving credit facility at September 30, 2017 was $17,500. The Company’s ability to access its revolving credit facility is subject to and can be limited by the Company’s compliance with the Company’s financial and other covenants. The Company was in compliance with the financial covenants related to its revolving credit facility as of September 30, 2017.

For the three months ended September 30, 2017 and 2016, interest expense associated with the amortization of debt issuance costs was $88 and $46, respectively, and for the nine months ended September 30, 2017 and 2016, interest expense associated with the amortization of debt issuance costs was $350 and $85, respectively.

As of September 30, 2017, contractual maturities of long-term obligations are as follows:


	Term Loan		Credit Facility		Total
2017	$	1,068	$	—	$	1,068
2018		4,272		—		4,272
2019		19,571		25,000		44,571

	$	24,911	$	25,000	$	49,911

13. Income Taxes

The Company expects its deferred tax assets of $18,543, net of the valuation allowance at September 30, 2017 of $6,501, to be realized through the generation of future taxable income and the reversal of existing taxable temporary differences.

The Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. The Company utilizes a rolling three years of actual results as the primary measure of cumulative losses in recent years.

On a rolling three years, the Company’s consolidated U.S. operations are in a cumulative income position. However, one U.S. entity (“Entity”) is in a three year cumulative loss position. Future taxable income exclusive of reversing temporary differences and carryforwards is one source of taxable income available that can be used to realize tax benefits. During 2017, the Company has undertaken various cost reduction activities to reduce complexity and increase operational excellence within the organization. The Entity anticipates generating significant cost savings from the various cost reduction activities. After adjusting the Entity’s cumulative losses to include the projected costs savings, the Entity’s operations project future profits sufficient to utilize the Entity’s separate state deferred tax assets before expiration. The Company considers this objectively verifiable evidence that all its U.S. deferred tax assets are more likely than not realizable.

The Company’s German and French operations are in three year cumulative loss positions. As a result, the Company has recorded a full valuation allowance on its German and French subsidiaries’ deferred tax assets.

As such, valuation allowances of $6,501 and $4,916 have been established at September 30, 2017 and December 31, 2016, respectively, against a portion of the deferred tax assets.

The Company will continue to regularly assess the realizability of our deferred tax assets. Changes in historical earnings performance and future earnings projections, among other factors, may cause the Company to adjust its valuation allowance, which would impact the Company’s income tax expense in the period the Company determines that these factors have changed.

The Company’s 2015 U.S. federal income tax return is under examination by the Internal Revenue Service (“IRS”). Currently, there are no proposed adjustments by the IRS.

14. Preferred Stock

On June 12, 2013, the Company and WSHP Biologics Holdings, LLC, an affiliate of Water Street Healthcare Partners, a leading healthcare-focused private equity firm (“Water Street”), entered into an investment agreement. Pursuant to the terms of the investment agreement, the Company issued $50,000 of convertible preferred equity to Water Street in a private placement which closed on July 16, 2013, with preferred stock issuance costs of $1,290. The preferred stock accrues dividends at a rate of 6% per annum. To the extent dividends are not paid in cash in any quarter, the dividends which have accrued on each outstanding share of preferred stock during such three-month period will accumulate until paid in cash or converted to common stock. Our credit agreement with TD Bank and First Tennessee Bank contains various covenants of financial conditions which, if not met, would restrict the Company from paying dividends.

Preferred stock is as follows:


	Preferred Stock Liquidation Value		Preferred Stock Issuance Costs			Net Total
Balance at January 1, 2017	$	60,676	$	(660	)	$	60,016
Accrued dividend payable		2,772		—			2,772
Amortization of preferred stock issuance costs		—		137			137

Balance at September 30, 2017	$	63,448	$	(523	)	$	62,925

15. Severance Charges

The Company recorded severance charges to reduce headcount and improve operational efficiencies, which resulted in $2,820 and $10,623 of expenses for the three and nine months ended September 30, 2017, respectively. The total severance charges are expected to be paid in full by the fourth quarter of 2018. Severance payments are made to terminated employees over periods ranging from one month to twelve months and are not expected to have a material impact on cash flows of the Company in any quarterly period. The following table includes a rollforward of severance charges included in accrued expenses, see Note 11.


Accrued severance charges at January 1, 2017	$	410
Employee separation expenses accrued in 2017		10,623

Subtotal severance charges		11,033
Severance cash payments		(6,246	)
Stock based compensation		(1,153	)

Accrued severance charges at September 30, 2017	$	3,634

16. CEO Retirement and Transition Costs

In the third quarter of 2016, the Company recorded Chief Executive Officer retirement and transition costs related to the retirement of our former Chief Executive Officer pursuant to the Executive Transition Agreement dated August 29, 2012 (as amended and extended to date), which resulted in $4,404 of expenses for the year ended December 31, 2016. The total Chief Executive Officer retirement and transition costs are expected to be paid in full prior to the first quarter of 2019. The following table includes a rollforward of CEO retirement and transition costs included in accrued expenses, see Note 11.


Accrued CEO retirement and transition costs at January 1, 2017	$	2,406
Cash payments		(1,001	)
Other long-term liabilities portion		(583	)

Accrued CEO retirement and transition costs at September 30, 2017	$	822

17. Legal Actions

The Company is, from time to time, involved in litigation relating to claims arising out of its operations in the ordinary course of business. The Company believes that none of these claims that were outstanding as of September 30, 2017, will have a material adverse impact on its financial position or results of operations.

Coloplast — The Company is presently named as co-defendant along with other companies in a small percentage of the transvaginal surgical mesh (“TSM”) mass tort claims being brought in various state and federal courts. The TSM litigation has as its catalyst various Public Health Notifications issued by the U.S. Food and Drug Administration (“FDA”) with respect to the placement of certain TSM implants that were the subject of 510k regulatory clearance prior to their distribution. The Company does not process or otherwise manufacture for distribution in the U.S. any implants that were the subject of these FDA Public Health Notifications. The Company denies any allegations against it and intends to continue to vigorously defend itself.

In addition to claims made directly against the Company, Coloplast, a distributor of TSM’s and certain allografts processed and private labeled for them under a contract with the Company, has also been named as a defendant in individual TSM cases in various federal and state courts. Coloplast requested that the Company indemnify or defend Coloplast in those claims which allege injuries caused by the Company’s allograft implants, and on April 24, 2014, Coloplast sued RTI Surgical, Inc. in the Fourth Judicial District of Minnesota for declaratory relief and breach of contract. On December 11, 2014, Coloplast entered into a settlement agreement with RTI Surgical, Inc. and Tutogen Medical, Inc. (the “Company Parties”)

resulting in dismissal of the case. Under the terms of the settlement agreement, the Company Parties are responsible for the defense and indemnification of two categories of present and future claims: (1) tissue only (where Coloplast is solely the distributor of Company processed allograft tissue and no Coloplast-manufactured or distributed synthetic mesh is identified) (“Tissue Only Claims”), and (2) tissue plus non-Coloplast synthetic mesh (“Tissue-Non-Coloplast Claims”) (the Tissue Only Claims and the Tissue-Non-Coloplast Claims being collectively referred to as “Indemnified Claims”). As of September 30, 2017, there are a cumulative total of 1,257 Indemnified Claims for which the Company Parties are providing defense and indemnification. The defense and indemnification of these cases are covered under the Company’s insurance policy subject to a reservation of rights by the insurer.

Based on the current information available to the Company, it is not possible to evaluate and estimate with reasonable certainty the impact that current or any future TSM litigation may have on the Company.

The Company’s accounting policy is to accrue for legal costs as they are incurred.

18. Regulatory Actions

On September 30, 2014, the Company received a letter from the FDA regarding our map3 ^® cellular allogeneic bone graft. The letter addresses some technical aspects of the processing of the map3 ^® allograft, as well as language included on the Company’s website. The Company has ongoing dialogue with the FDA where comprehensive packages of data have been provided to address the FDA’s comments and clarifying information has been provided regarding the technical components of the implant processing. The Company believes that in both the developing and processing of map3 ^® , the Company has properly considered the relevant regulatory requirements. Additionally, the Company has removed certain information from the Company’s website. The Company is committed to resolving the concerns raised by the FDA. However, it is not possible to predict the specific outcome or timing of a resolution at this time.

19. Segment Data

The Company distributes human tissue, bovine and porcine animal tissue, metal and synthetic implants through various distribution channels. The Company operates in one reportable segment composed of six lines of business. The reporting of the Company’s lines of business is composed primarily of six categories: spine; sports medicine and orthopedics; surgical specialties; cardiothoracic; international; and global commercial. Discrete financial information is not available for these six lines of business. The following table presents revenues from these six categories and other revenues for the three and nine months ended September 30, 2017 and 2016, respectively:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
	(In Thousands)
Revenues:
Spine	$	18,131	$	17,775	$	57,888	$	52,514
Sports medicine and orthopedics		11,286		11,874		37,179		36,956
Surgical specialties		1,437		1,168		4,673		2,985
Cardiothoracic		1,340		2,893		8,164		8,332
International		5,077		4,352		16,739		15,532

Subtotal direct		37,271		38,062		124,643		116,319
Global commercial		26,807		25,297		76,225		75,396
Other revenues		2,610		3,188		7,879		9,803

Total revenues	$	66,688	$	66,547	$	208,747	$	201,518

Domestic revenues		60,973		60,959		189,808		183,192
International revenues		5,715		5,588		18,939		18,326

Total revenues	$	66,688	$	66,547	$	208,747	$	201,518

The following table presents percentage of total revenues derived from the Company’s largest distributors and international distribution:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Percent of revenues derived from:
Distributor
Zimmer Biomet Holdings, Inc.		15	%		18	%		17	%		16	%
Medtronic, PLC		8	%		8	%		9	%		9	%
International		10	%		8	%		9	%		9	%

The following table presents property, plant and equipment—net by significant geographic location:


	September 30, 2017		December 31, 2016
Property, plant and equipment—net:
Domestic	$	76,516	$	77,596
International		6,278		5,702

Total	$	82,794	$	83,298

20. Subsequent Events

The Company evaluated subsequent events as of the issuance date of the condensed consolidated financial statements as defined by FASB ASC 855 Subsequent Events, and identified no subsequent events that require adjustment to, or disclosure of, in these condensed consolidated financial statements, except for:

1. Effective October 2, 2017, the Company appointed Jonathon Singer, a previous member of the Company’s board of directors, as Chief Financial and Administrative Officer. On September 18, 2017, the Company entered into an employment agreement, restricted stock award agreement and stock option agreement with Mr. Singer in which the Company agreed to an inducement payment award and equity. The aforementioned agreements are filed as exhibits with this quarterly report.

2. On October 20, 2017, the Company sold an owned property previously used for administrative, distribution and marketing functions for $1,818 net of selling costs.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Relating to Forward Looking Statements

Information contained in this filing contains “forward-looking statements” which can be identified by the use of forward-looking terminology such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “requires,” “hopes,” “assumes” or comparable terminology, or by discussions of strategy. There can be no assurance that the future results covered by these forward-looking statements will be achieved. Some of the matters described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2016 or in subsequent Quarterly Reports on Form 10-Q (including this one), constitute cautionary statements which identify some of the factors regarding these forward-looking statements, including certain risks and uncertainties, that could cause actual results to vary materially from the future results indicated in these forward-looking statements. Other factors could also cause actual results to vary materially from the future results indicated in such forward-looking statements.

Management Overview

RTI Surgical, Inc. together with its subsidiaries, designs, develops, manufactures and distributes surgical implants for use in a variety of surgical procedures. We are a leader in providing tissue implants as well as metal and synthetic implants for the benefit of surgeons and patients worldwide. We process donated human musculoskeletal and other tissues including bone, cartilage, tendons, ligaments, fascia lata, pericardium, sclera, cornea and dermal tissues, as well as bovine and porcine animal tissues to produce allograft and xenograft implants. We process the majority of our tissue implants using our proprietary BIOCLEANSE ^® , TUTOPLAST ^® and CANCELLE ^® SP sterilization processes. In addition, we manufacture, market and distribute metal and synthetic implants for treatment of spinal and other orthopedic disorders. Our implants are used in the fields of spine, ortho fixation, sports medicine, bone graft substitutes and general orthopedic, surgical specialties, and dental. We distribute our implants to hospitals and surgeons in the United States and internationally through a direct distribution organization, as well as through a network of independent distributors. We were founded in 1997 and are headquartered in Alachua, Florida.

Domestic distributions and services accounted for 91% of total revenues in the first nine months of 2017. Most of our implants are distributed directly to healthcare providers, hospitals and other healthcare facilities through a direct distribution force and through various strategic relationships.

International distributions and services accounted for 9% of total revenues in the first nine months of 2017. Our implants are distributed in over 40 countries through a direct distribution force in Germany and through stocking distributors in the rest of the world outside of Germany and the U.S.

Our business is generally not seasonal in nature; however, the number of orthopedic implant surgeries and elective procedures generally declines during the summer months. During the third quarter of 2017, our operations in Florida experienced losses related to a hurricane. Based on our preliminary assessment, the negative impact to revenue and net income for both the three and nine months ended September 30, 2017, was $1.2 million and $0.5 million, respectively.

Our principal goals are as follows: 1) provide safe, high quality, surgical implants to surgeons for the benefit of their patients; 2) invest in areas that provide the best opportunities for profitable growth and cash flow; and 3) generate predictable and sustainable operating results for the benefit of shareholders.

In line with our principal goals, we completed the sale of substantially all of the assets related to our Cardiothoracic closure business (the “CT Business”) to A&E Advanced Closure Systems, LLC (a subsidiary of A&E Medical Corporation) (“A&E”) pursuant to an Asset Purchase Agreement between us and A&E, dated August 3, 2017 (the “Asset Purchase Agreement”). The total consideration received by us under the Asset Purchase Agreement was composed of $54 million in cash consideration, $3 million of which is being held in escrow for up to twelve months to satisfy possible indemnification obligations, if any (the “Escrow Amount”), plus an additional $5 million in contingent cash consideration if A&E reaches certain revenue milestones (the “Contingent Consideration”). We are also entitled to an additional $1 million in consideration if we successfully obtain a certain FDA regulatory clearance. As a part of the transaction, we also entered into a multi-year Contract Manufacturing Agreement with A&E (the “Contract Manufacturing Agreement”). Under the Contract Manufacturing Agreement, we agreed to continue to support the CT Business by manufacturing existing products and engineering, developing, and manufacturing potential future products for A&E. We believe this is a significant step toward focusing our business and advancing our efforts to generate predictable and sustainable operating results through disciplined execution and building scale to extend distribution of our products in those areas that offer the greatest opportunities to benefit our patients and shareholders.

We continue to maintain our commitment to research and development and the introduction of new strategically targeted allograft, xenograft, metal and synthetic implants as well as focused clinical efforts to support their acceptance in the marketplace. In addition, we consider strategic acquisitions from time to time for new implants and technologies intended to augment our existing implant offerings, as well as strategic dispositions from time to time in response to market trends or industry developments.

Results of Operations

Consolidated Financial Results

The following table reflects revenues for the three and nine months ended September 30, 2017 and 2016, respectively.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
	(In Thousands)
Revenues:
Spine	$	18,131	$	17,775	$	57,888	$	52,514
Sports medicine and orthopedics		11,286		11,874		37,179		36,956
Surgical specialties		1,437		1,168		4,673		2,985
Cardiothoracic		1,340		2,893		8,164		8,332
International		5,077		4,352		16,739		15,532

Subtotal direct		37,271		38,062		124,643		116,319
Global commercial		26,807		25,297		76,225		75,396
Other revenues		2,610		3,188		7,879		9,803

Total revenues	$	66,688	$	66,547	$	208,747	$	201,518

Domestic revenues		60,973		60,959		189,808		183,192
International revenues		5,715		5,588		18,939		18,326

Total revenues	$	66,688	$	66,547	$	208,747	$	201,518

Three Months Ended September 30, 2017 Compared With Three Months Ended September 30, 2016

Total Revenues

Our total revenues of $66.7 million for the three months ended September 30, 2017, were comparable to the three months ended September 30, 2016. Our direct revenues decreased by $791,000, or 2.1%, to $37.3 million primarily as a result of an estimated $1.2 million loss in revenue due to a hurricane in Florida, and our global commercial revenues increased by $1.5 million, or 6.0%, to $26.8 million, primarily as a result of higher orders from certain commercial distributors, primarily in the trauma market.

Direct Revenues

Spine— Revenues from spinal implants increased $356,000, or 2.0%, to $18.1 million for the three months ended September 30, 2017, compared to $17.8 million for the three months ended September 30, 2016. Spine revenues increased primarily as a result of increased distributions of our map3 ^® implant, partially offset by lower spine hardware distributions.

Sports Medicine and Orthopedics— Revenues from sports medicine and orthopedics allografts decreased $588,000, or 5.0%, to $11.3 million for the three months ended September 30, 2017, compared to $11.9 million for the three months ended September 30, 2016. Sports medicine and orthopedics revenues decreased primarily as a result of decreased distributions of our BioCleanse ^® processed tendons.

Surgical Specialties— Revenues from surgical specialty allografts increased $269,000, or 23.0%, to $1.4 million for the three months ended September 30, 2017, compared to $1.2 million for the three months ended September 30, 2016. Surgical specialties revenues increased primarily as a result of new customers and increased distributions of our Cortiva ^TM implants.

Cardiothoracic— Revenues from cardiothoracic implants decreased $1.6 million, or 53.7%, to $1.3 million for the three months ended September 30, 2017, compared to $2.9 million for the three months ended September 30, 2016. This decrease was primarily the result of the August 3, 2017, sale of substantially all of the assets of our CT Business to A&E. Additionally, we have entered into a multi-year Contract Manufacturing Agreement with A&E whereby we will continue to support the CT Business under A&E’s ownership through the manufacturing of existing products, which will generate revenue for our global commercial business.

International Revenues— International revenues include distributions from our foreign affiliates as well as domestic export revenues. International revenues increased $725,000, or 16.7%, to $5.1 million for the three months ended September 30, 2017, compared to $4.4 million for the three months ended September 30, 2016. International revenues increased primarily as a result of higher distributions in Europe and Asia Pacific due to expanded distribution channels.

Global Commercial

Revenues from global commercial increased $1.5 million, or 6.0%, to $26.8 million for the three months ended September 30, 2017, compared to $25.3 million for the three months ended September 30, 2016. Global commercial revenues increased primarily as a result of higher orders from certain commercial distributors, primarily in the trauma market.

Other Revenues

Revenues from other sources consisting of service processing, tissue recovery fees, biomedical laboratory fees, recognition of previously deferred revenues, shipping fees, distribution of reproductions of our allografts to distributors for demonstration purposes and restocking fees decreased $578,000, or 18.1%, to $2.6 million for the three months ended September 30, 2017, compared to $3.2 million for the three months ended September 30, 2016. Other revenues decreased primarily as a result of lower tissue recovery fees.

Costs of Processing and Distribution

Costs of processing and distribution increased $904,000, or 2.8%, to $33.2 million for the three months ended September 30, 2017, compared to $32.3 million for the three months ended September 30, 2016. Costs of processing and distribution increased as a percentage of revenues from 48.5% for the three months ended September 30, 2016 to 49.7% for the three months ended September 30, 2017. The increase was primarily due to changes in distribution mix. In addition, our costs of processing and distribution was negatively impacted by an estimated $0.4 million by a hurricane in Florida.

Marketing, General and Administrative Expenses

Marketing, general and administrative expenses decreased $1.0 million, or 3.6%, to $27.7 million for the three months ended September 30, 2017, from $28.7 million for the three months ended September 30, 2016. The decrease was primarily due to lower variable compensation and distributor commission expenses on direct revenue distributions. Marketing, general and administrative expenses decreased as a percentage of revenues from 43.2% for the three months ended September 30, 2016 to 41.5% for the three months ended September 30, 2017.

Research and Development Expenses

Research and development expenses decreased $1.0 million, or 26.1%, to $2.8 million for the three months ended September 30, 2017, from $3.8 million for the three months ended September 30, 2016. The decrease was primarily due to lower compensation and research study related expenses. Research and development expenses decreased as a percentage of revenues from 5.7% for the three months ended September 30, 2016, to 4.2% for the three months ended September 30, 2017.

Severance Charges

Severance charges related to a reduction in headcount and improvement in operational efficiencies resulted in $2.8 million of expenses for the three months ended September 30, 2017 as compared to $328,000 of expenses for the three months ended September 30, 2016. This increase was driven largely by the departure of certain former executives during the three months ended September 30, 2017.

Gain on Cardiothoracic closure business divestiture

The Company completed the sale of substantially all of the assets related to its CT Business to A&E, which resulted in a $34.1 million gain for the three months ended September 30, 2017.

Net Other Expense

Net other expense, which includes interest expense, interest income and foreign exchange gain, increased $307,000, or 82.1%, to $681,000 for the three months ended September 30, 2017 from $374,000 for the three months ended September 30, 2016. The increase in net other expense is primarily attributable to higher interest expense of $433,000, as a result of higher interest rate and higher amortization of debt issuance costs as compared to $308,000 for the three months ended September 30, 2016.

Income Tax (Provision) Benefit

Income tax provision for the three months ended September 30, 2017, was $16.1 million compared to income tax benefit of $92,000 for the three months ended September 30, 2016. Our effective tax rate for the three months ended September 30, 2017, was 48.0% compared to 2.5% for the three months ended September 30, 2016. Our effective tax rate increased as a result of disposing of non-deductible goodwill relating to the sale of substantially all of the assets of the CT business to A&E. In addition, our effective tax rate for the three months ending September 30, 2016, was relatively low due to the Company recording a full valuation allowance of $1.2 million on its German subsidiary’s deferred tax assets for the three months ended September 30, 2016.

Nine Months Ended September 30, 2017 Compared With Nine Months Ended September 30, 2016

Total Revenues

Our total revenues of $208.7 million for the nine months ended September 30, 2017, increased $7.2 million, or 3.6%, compared to $201.5 million for the nine months ended September 30, 2016. Our direct revenues increased by $8.3 million, or 7.2%, to $124.6 million due to increased distributions, offset primarily as a result of an estimated $1.2 million loss in revenue due to a hurricane in Florida, and our global commercial revenues increased by $829,000, or 1.1%, to $76.2 million, primarily as a result of higher orders from certain commercial distributors, primarily in the dental and trauma markets.

Direct Revenues

Spine - Revenues from spinal implants increased $5.4 million, or 10.2%, to $57.9 million for the nine months ended September 30, 2017, compared to $52.5 million for the nine months ended September 30, 2016. Spine revenues increased primarily as a result of increased distributions of our map3 ^® implant.

Sports Medicine and Orthopedics— Revenues from sports medicine and orthopedics allografts increased $223,000, or 0.6%, to $37.2 million for the nine months ended September 30, 2017, compared to $37.0 million for the nine months ended September 30, 2016. Sports medicine and orthopedics revenues increased primarily as a result of increased distributions of our map3 ^® implants, offset by lower BioCleanse ^® processed tendons distributions.

Surgical Specialties— Revenues from surgical specialty allografts increased $1.7 million, or 56.5%, to $4.7 million for the nine months ended September 30, 2017, compared to $3.0 million for the nine months ended September 30, 2016. Surgical specialties revenues increased primarily as a result of new customers and increased distributions of our Cortiva ^TM implants.

Cardiothoracic— Revenues from cardiothoracic implants decreased $168,000, or 2.0%, to $8.2 million for the nine months ended September 30, 2017, compared to $8.3 million for the nine months ended September 30, 2016. This decrease was primarily the result of the August 3, 2017, sale of substantially all of the assets of the CT Business to A&E, which was partially offset by the increased distribution of sternal cables and sternal closure plates prior to the sale of the CT Business due to expanded investment in distribution channels. In addition, we have entered into a multi-year Contract Manufacturing Agreement with A&E whereby we will continue to support the CT Business under A&E’s ownership through the manufacturing of existing products , which will generate revenue for our global commercial business.

International Revenues— International revenues include distributions from our foreign affiliates as well as domestic export revenues. International revenues increased $1.2 million, or 7.8%, to $16.7 million for the nine months ended September 30, 2017, compared to $15.5 million for the nine months ended September 30, 2016. International revenues increased primarily as a result of higher distributions in Asia Pacific and Latin America due to expanded distribution channels.

Global Commercial

Revenues from global commercial increased $829,000, or 1.1%, to $76.2 million for the nine months ended September 30, 2017, compared to $75.4 million for the nine months ended September 30, 2016. Global commercial revenues increased primarily as a result of higher orders from certain commercial distributors, primarily in the dental and trauma markets.

Other Revenues

Revenues from other sources consisting of service processing, tissue recovery fees, biomedical laboratory fees, recognition of previously deferred revenues, shipping fees, distribution of reproductions of our allografts to distributors for demonstration purposes and restocking fees decreased $1.9 million, or 19.6%, to $7.9 million for the nine months ended September 30, 2017, compared to $9.8 million for the nine months ended September 30, 2016. Other revenues decreased primarily as a result of lower tissue recovery and service processing fees.

Costs of Processing and Distribution

Costs of processing and distribution increased $5.2 million, or 5.4%, to $102.5 million for the nine months ended September 30, 2017, compared to $97.3 million for the nine months ended September 30, 2016. Costs of processing and distribution increased as a percentage of revenues from 48.3% for the nine months ended September 30, 2016, to 49.1% for the nine months ended September 30, 2017. The increase was primarily due to changes in distribution mix. In addition, our costs of processing and distribution was negatively impacted by an estimated $0.4 million by a hurricane in Florida.

Marketing, General and Administrative Expenses

Marketing, general and administrative expenses increased $2.2 million, or 2.6%, to $86.8 million for the nine months ended September 30, 2017, from $84.7 million for the nine months ended September 30, 2016. The increase was primarily due to higher variable compensation and distributor commission expenses on direct revenue distributions. Marketing, general and administrative expenses decreased as a percentage of revenues from 42.0% for the nine months ended September 30, 2016 to 41.6% for the nine months ended September 30, 2017.

Research and Development Expenses

Research and development expenses decreased $1.8 million, or 15.0%, to $10.2 million for the nine months ended September 30, 2017, from $12.0 million for the nine months ended September 30, 2016. The decrease was primarily due to lower compensation and research study related expenses. Research and development expenses decreased as a percentage of revenues from 6.0% for the nine months ended September 30, 2016 to 4.9% for the nine months ended September 30, 2017.

Severance Charges

Severance charges related to a reduction in headcount and improvement in operational efficiencies resulted in $10.6 million of expenses for the nine months ended September 30, 2017 as compared to $1.0 million of expenses for the nine months ended September 30, 2016. This increase was driven largely by the departure of certain former executives during the nine months ended September 30, 2017.

Gain on Cardiothoracic closure business divestiture

The Company completed the sale of substantially all of the assets related to its CT Business to A&E, which resulted in a $34.1 million gain for the nine months ended September 30, 2017.

Net Other Expense

Net other expense, which includes interest expense, interest income and foreign exchange gain, increased $1.4 million, or 122.1%, to $2.5 million for the nine months ended September 30, 2017 from $1.1 million for the nine months ended September 30, 2016. The increase in net other expense is primarily attributable to higher interest expense of $1.4 million as a result of higher interest rate and higher amortization of debt issuance costs as compared to $1.1 million for the nine months ended September 30, 2016.

Income Tax Provision

Income tax provision for the nine months ended September 30, 2017, was $16.3 million compared to $338,000 for the nine months ended September 30, 2016. Our effective tax rate for the nine months ended September 30, 2017, was 53.9% compared to 10.7% for the nine months ended September 30, 2016. Our effective tax rate increased as a result of disposing of non-deductible goodwill relating to the sale of substantially all of the assets of the CT business to A&E. In addition, our effective tax rate for the nine months ending September 30, 2016, was relatively low due to the Company recording a full valuation allowance of $1.2 million on its German subsidiary’s deferred tax assets for the nine months ended September 30, 2016.

Non-GAAP Financial Measures

We utilize certain financial measures that are not calculated based on GAAP. Certain of these financial measures are considered “non-GAAP” financial measures within the meaning of Item 10 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (“SEC”). We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with the GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business. These non-GAAP financial measures are also used by our management to evaluate financial results and to plan and forecast future periods. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may differ from the non-GAAP measures used by other companies, including our competitors.

To supplement our unaudited condensed consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures that exclude certain amounts, including non-GAAP net income (loss) applicable to common shares, adjusted. The calculation of the tax effect on the adjustments between GAAP net income (loss) applicable to common shares and non-GAAP net income (loss) applicable to common shares is based upon our estimated annual GAAP tax

rate, adjusted to account for items excluded from GAAP net income (loss) applicable to common shares in calculating non-GAAP net income (loss) applicable to common shares. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measures are included in the reconciliation below:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(In thousands)
Net income (loss) applicable to common shares, as reported	$	16,548		$	(4,489	)	$	11,153		$	(6,108	)
Severance charges		2,820			328			10,623			1,039
Restructuring charges		—			—			—			1,107
Strategic review costs		—			650			—			650
CEO Retirement and transition costs		—			4,107			—			4,107
Contested proxy expenses		—			—			—			2,680
European net operating loss valuation reserve		—			1,224			—			1,224
Gain on cardiothoracic closure business divestiture		(34,090	)		—			(34,090	)		—
Tax effect on adjustments		15,159			(1,773	)		13,855			(3,128	)

Non-GAAP net income applicable to common shares, adjusted	$	437		$	47		$	1,541		$	1,571

The following is an explanation of the adjustments that management excluded as part of the non-GAAP measures for the three and nine months ended September 30, 2017 and 2016 as well as the reasons for excluding the individual items:

Severance charges—This adjustment represents charges relating to the termination of former employees. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Restructuring charges—This adjustment represents the closure of our French distribution and tissue procurement office. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Strategic review costs—This adjustment represents charges relating to a comprehensive strategic review of the Company’s business lines and operations intended to leverage the Company’s expertise, technology and products and identify opportunities to increase stockholder value. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

CEO Retirement and transition costs—This adjustment represents charges relating to the retirement of our former Chief Executive Officer, and the resulting financial impact of such resignation under the Executive Transition Agreement dated August 29, 2012 and Executive Separation Agreement dated August 15, 2016. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

Contested proxy expenses—This adjustment represents charges relating to contested proxy expenses. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Gain on cardiothoracic closure business divestiture – This adjustment represents the gain relating to the sale of substantially all of the assets of our CT Business to A&E. Management removes the amount of this gain from our operating results to supplement a comparison to our past operating performance.

Liquidity and Capital Resources

Our working capital at September 30, 2017, increased $3.0 million to $124.3 million from $121.3 million at December 31, 2016, primarily as a result of the sale of the CT business and its associated working capital. We used $32 million of the proceeds from the sale of the CT Business to partially pay down our long-term obligations and $12 million of the proceeds to pay estimated income taxes associated with the aforementioned sale.

At September 30, 2017, we had 47 days of revenues outstanding in trade accounts receivable, a decrease of 8 days compared to December 31, 2016. The decrease was due to higher cash receipts from customers than shipments and corresponding billings to customers during the nine months ended September 30, 2017.

At September 30, 2017, we had 287 days of inventory on hand, a decrease of 24 days compared to December 31, 2016. The decrease in inventory days is primarily due to higher distributions during the nine months ended September 30, 2017. We believe that our inventory levels will be adequate to support our on-going operations for the next twelve months.

We had $17.7 million of cash and cash equivalents at September 30, 2017. At September 30, 2017, our foreign subsidiaries held $1.8 million in cash which is not available for use in the U.S. without incurring U.S. taxes. U.S. income taxes have not been paid or accrued for on the undistributed earnings of our foreign subsidiaries. We intend to indefinitely reinvest the earnings of our foreign subsidiaries. We do not believe that this policy of indefinitely reinvesting the earnings of our foreign subsidiaries will have a material adverse effect on the business as a whole.

Our short and long-term obligations at September 30, 2017, decreased $33.4 million to $49.9 million from $83.3 million at December 31, 2016. The decrease in short and long-term obligations was primarily due to principal payments on long-term obligations.

We completed the sale of substantially all of the assets related to our CT Business to A&E pursuant to an Asset Purchase Agreement between us and A&E, dated August 3, 2017. The total consideration received by us under the Asset Purchase Agreement was composed of $54 million in cash consideration, $3 million of which is being held in escrow for up to twelve months to satisfy possible indemnification obligations, if any, plus an additional $5 million in contingent cash consideration if A&E reaches certain revenue milestones. We are also entitled to an additional $1 million in consideration if we successfully obtain a certain FDA regulatory clearance.

Concurrent with the divestiture, we entered into a Third Amended and Restated Loan Agreement, dated as of August 3, 2017 (the “2017 Loan Agreement”), among the Company, TD Bank, N.A. and First Tennessee Bank National Association, as Lenders (together with the various financial institutions as in the future may become parties thereto, the “Lenders”), and TD Bank, N.A., as administrative agent for the Lenders. The 2017 Loan Agreement represents a restructuring of our former loan agreement with TD Bank, N.A. and another lender under the Second Amended and Restated Loan Agreement dated July 16, 2013 between the Company, TD Bank, N.A. and Regions Bank (as amended, the “2013 Loan Agreement”).

The 2017 Loan Agreement provides for a revolving credit facility (the “Revolving Credit Facility”), in the aggregate principal amount of $42.5 million. As of September 30, 2017, there was $25 million outstanding on the Revolving Credit Facility. The 2017 Loan Agreement also contains a term loan facility in the aggregate principal amount of $25.4 million (the “Term Loan Facility” and, together with the Revolving Credit Facility. We used $32 million of the proceeds from the sale of the CT Business to partially pay down $22 million of amounts owed under the 2013 Loan Agreement and $10 million of amounts owed under the Revolving Credit Facility. The Revolving Credit Facility is secured by substantially all of our assets and the assets of our domestic subsidiaries and is guaranteed by our domestic subsidiaries, as well as 65% of the stock of the Company’s foreign subsidiaries.

Borrowings made under the 2017 Loan Agreement initially will bear interest at a rate per annum equal to monthly LIBOR plus a margin of up to 3.50%. As of September 30, 2017, the interest rate for the Term Loan Facility and the Revolving Credit Facility is 4.74%. Interest is payable quarterly in arrears, and principal on the Term Loan Facility is payable in quarterly payments of $1.1 million, each commencing October 1, 2017. The maturity date of the Facility is September 15, 2019.

As of September 30, 2017, we believe that our working capital, together with our borrowing ability under our revolving credit facility, will be adequate to fund our ongoing operations for the next twelve months.

As of September 30, 2017, we have no material off-balance sheet arrangements.

Certain Commitments.

Our short and long-term debt obligations and availability of credit as of September 30, 2017 are as follows:


	Outstanding Balance		Available Credit
	(In thousands)
Term loan	$	24,911	$	—
Credit facility		25,000		17,500

Total	$	49,911	$	17,500

The following table provides a summary of our debt obligations, operating lease obligations and other significant obligations as of September 30, 2017.


	Contractual Obligations Due by Period
	Total		2017		2018		2019		2020		2021 and Beyond
	(In thousands)
Short and long-term obligations	$	49,911	$	1,068	$	4,272	$	44,571	$	—	$	—
Operating leases		3,332		487		1,249		926		553		117
Other significant obligations (1)		11,323		11,323		—		—		—		—
Unrecognized tax benefits		926		—		—		—		—		926

Total	$	65,492	$	12,878	$	5,521	$	45,497	$	553	$	1,043

(1)

These amounts consist of contractual obligations for capital expenditures and open purchase orders.

We were in compliance with the financial covenants related to our senior secured credit facility as of September 30, 2017.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risk from exposure to changes in interest rates based upon our financing, investing and cash management activities. We are exposed to interest rate risk in the United States and Germany. Changes in interest rates affect interest income earned on cash and cash equivalents and interest expense on revolving credit arrangements. We have not entered into derivative transactions related to cash and cash equivalents or debt. Our borrowings under our term loan and credit facility expose us to market risk related to changes in interest rates. As of September 30, 2017, our outstanding floating rate indebtedness totaled $49.9 million. The primary base interest rate is LIBOR. Other outstanding debt consists of fixed rate instruments. We do not expect changes in interest rates to have a material adverse effect on our income or our cash flows in 2017. However, we can give no assurance that interest rates will not significantly change in the future.

The value of the U.S. dollar compared to the Euro affects our financial results. Changes in exchange rates may positively or negatively affect revenues, gross margins, operating expenses and net income. Our international operations currently transact business primarily in the Euro. Assets and liabilities of foreign subsidiaries are translated at the period end exchange rate while revenues and expenses are translated at the average exchange rate for the period. Intercompany transactions are translated from the Euro to the U.S. dollar. We do not expect changes in exchange rates to have a material adverse effect on our income or our cash flows for the remainder of 2017. However, we can give no assurance that exchange rates will not significantly change in the future.

Item 4.

Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Disclosure controls and procedures include controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting during our last fiscal quarter that materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

The Company is, from time to time, involved in litigation relating to claims arising out of its operations in the ordinary course of business. The Company believes that none of these claims that were outstanding as of September 30, 2017 will have a material adverse impact on its financial position or results of operations.

For a further description, we refer you to Part I, Item 1, Note 17 entitled “Legal Actions” to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a description of current legal proceedings.

Item 1A.

Risk Factors

There has been no material change in our risk factors as previously disclosed in Part I, Item 1.A., Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 13, 2017.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

Not applicable.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

Not applicable.

Item 6.

Exhibits



3.1 ⁽¹⁾		Amended and Restated Certificate of Incorporation of RTI Surgical, Inc.

3.2 ⁽²⁾		Amended and Restated Bylaws of RTI Surgical, Inc.

10.1 ^* †		Asset Purchase Agreement dated as of August 3, 2017 by and between RTI Surgical, Inc. and A&E Advanced Closure Systems, LLC.

10.2 ^* †		Contract Manufacturing Agreement dated as of August 3, 2017 by and between RTI Surgical, Inc. and A&E Advanced Closure Systems, LLC.

10.3 ^* †		Third Amended and Restated Loan Agreement, dated as of August 3, 2017 by and among RTI Surgical, Inc., TD Bank, N.A. and First Tennessee Bank National Association, as Lenders (together with the various financial institutions as in the future may become parties thereto, the Lenders), and TD Bank, N.A., as administrative agent for the Lenders.

10.4 ^*		Employment Agreement, dated September 18, 2017, by and between Jonathon M. Singer and RTI Surgical, Inc.

10.5 ^*		Restricted Stock Award Agreement, dated September 18, 2017, by and between Jonathon M. Singer and RTI Surgical, Inc.

10.6 ^*		Stock Option Agreement, dated September 18, 2017, by and between Jonathon M. Singer and RTI Surgical, Inc.



31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

⁽¹⁾	Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-31271) filed by the Registrant on March 7, 2016.

⁽²⁾	Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-31271) filed by the Registrant on July 11, 2016.

^†	Confidential treatment requested as to certain portions, which portions were omitted and filed separately with the Commission.

^*	Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


RTI SURGICAL, INC. (Registrant)

By:		/s/ Camille Farhat
		Camille Farhat
		President and Chief Executive Officer

By:		/s/ Jonathon M. Singer
		Jonathon M. Singer
		Chief Financial and Administrative Officer

Date: November 3, 2017

Exhibit 10.1

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY [****] ARE SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

ASSET PURCHASE AGREEMENT

between

RTI SURGICAL, INC.,

A&E ADVANCED CLOSURE SYSTEMS, LLC

and

ALTO DEVELOPMENT CORP. (as Guarantor)

dated as of

August 3, 2017

TABLE OF CONTENTS



		Page

ARTICLE I DEFINITIONS			1

ARTICLE II PURCHASE, SALE, AND LICENSE			10

2.01	P URCHASE AND S ALE OF A SSETS		10

2.02	R ETENTION OF C ERTAIN R IGHTS TO THE I NTELLECTUAL P ROPERTY A SSETS AND G RANT OF C ERTAIN R IGHTS TO T RADEMARKS		12

2.03	E XCLUDED A SSETS		13

2.04	A SSUMED L IABILITIES		14

2.05	E XCLUDED L IABILITIES		14

2.06	P URCHASE P RICE		15

2.07	E SCROW A CCOUNT		16

2.08	A LLOCATION OF P URCHASE P RICE		17

2.09	N ON - ASSIGNABLE A SSETS		17

2.10	W ITHHOLDING T AXES		18

ARTICLE III CLOSING			18

3.01	C LOSING		18

3.02	C LOSING D ELIVERABLES		19

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER			21

4.01	O RGANIZATION AND Q UALIFICATION OF S ELLER		21

4.02	A UTHORITY OF S ELLER		21

4.03	N O C ONFLICTS ; C ONSENTS		21

4.04	M ATERIAL C ONTRACTS		22

4.05	A BSENCE OF C HANGES OR E VENTS		23

4.06	T ITLE TO P URCHASED A SSETS		24

4.07	I NTELLECTUAL P ROPERTY		24

4.08	L EGAL P ROCEEDINGS ; G OVERNMENTAL O RDERS		26

4.09	C OMPLIANCE WITH L AWS ; P ERMITS AND R EGISTRATIONS		26

4.10	T AXES		27

4.11	R EAL P ROPERTY		28

4.12	E NVIRONMENTAL M ATTERS		28



4.13	E MPLOYEES	29

4.14	E MPLOYEE B ENEFIT M ATTERS	29

4.15	F INANCIAL S TATEMENTS	31

4.16	I NVENTORY	31

4.17	A BSENCE OF U NDISCLOSED A SSUMED L IABILITIES	31

4.18	S UPPLIERS AND C USTOMERS	32

4.19	P RODUCT L IABILITY ; P RODUCT W ARRANTY	32

4.20	S UFFICIENCY OF A SSETS	32

4.21	F OOD AND D RUG R EGULATORY C OMPLIANCE	32

4.22	B ROKERS	33

4.23	510( K ) O WNERSHIP	34

4.24	N O O THER R EPRESENTATIONS AND W ARRANTIES	34

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER		34

5.01	O RGANIZATION AND A UTHORITY OF B UYER	34

5.02	A UTHORITY OF B UYER	33

5.03	N O C ONFLICTS ; C ONSENTS	35

5.04	B ROKERS	35

5.05	L EGAL P ROCEEDINGS	35

ARTICLE VI COVENANTS		35

6.01	E MPLOYEES AND E MPLOYEE B ENEFITS	35

6.02	C ONFIDENTIALITY	36

6.03	P UBLIC A NNOUNCEMENTS	37

6.04	T RANSFER T AXES	37

6.05	S TRADDLE P ERIODS	37

6.06	F URTHER A SSURANCES	38

6.07	N ON - COMPETITION ; N ON - SOLICITATION	38

6.08	M ISALLOCATION OF A SSETS	39

6.09	R EGULATORY C OMPLIANCE	39

6.10	A CCOUNTS R ECEIVABLE AND P AYABLE	41

6.11	T HORECON FDA C LEARANCE	41

6.12	T RANSFER OF S TERNAL P RODUCT F ILES	41



6.13	S UBORDINATION	41

ARTICLE VII INDEMNIFICATION		42

7.01	S URVIVAL	42

7.02	I NDEMNIFICATION BY S ELLER	42

7.03	I NDEMNIFICATION BY B UYER	42

7.04	C ERTAIN L IMITATIONS	43

7.05	I NDEMNIFICATION P ROCEDURES	44

7.06	E XCLUSIVE R EMEDIES	46

ARTICLE VIII MISCELLANEOUS		47

8.01	E XPENSES	47

8.02	N OTICES	47

8.03	I NTERPRETATION	48

8.04	H EADINGS	48

8.05	S EVERABILITY	48

8.06	E NTIRE A GREEMENT	48

8.07	S UCCESSORS AND A SSIGNS	48

8.08	N O T HIRD P ARTY B ENEFICIARIES	49

8.09	A MENDMENT AND M ODIFICATION ; W AIVER	49

8.10	G OVERNING L AW ; S UBMISSION TO J URISDICTION ; W AIVER OF J URY T RIAL	49

8.11	S PECIFIC P ERFORMANCE	50

8.12	C OUNTERPARTS	50

8.13	N ON - RECOURSE	50

8.14	O BLIGATIONS OF G UARANTOR	50

Exhibits



Exhibit A		Form of Bill of Sale

Exhibit B		Form of Assignment and Assumption Agreement

Exhibit C		Form of Contract Manufacturing Agreement

Exhibit D		Form of Transition Services Agreement

iii



Exhibit E		Form of IP Retention Agreement

Exhibit F		Form of Escrow Agreement

Exhibit G		Form of Quality Agreement

Exhibit I		Form of IP Assignment Agreement

Schedules

1.01(a)

1.01(b)

2.01

2.02(b)

2.03(o)

3.02

4.01

4.03

4.04

4.05

4.07

4.09(b)

4.10

4.13

4.14

4.15

4.16

4.17

4.18(b)

4.18(c)

4.19

4.20

4.21

5.03

6.01

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “ Agreement ”), dated as of August 3, 2017 (the “ Closing Date ”), is entered into between RTI Surgical, Inc., a Delaware corporation (“ Seller ”), A&E Advanced Closure Systems, LLC, a Delaware limited liability company (“ Buyer ”), solely in its capacity as guarantor of Buyer, Alto Development Corp., a New Jersey corporation (“ Guarantor ”), and solely for purposes of Section 6.13, Vance Street Capital II, L.P., a Delaware limited partnership.

RECITALS

WHEREAS , Seller is engaged in the business of designing, manufacturing, selling, and distributing cable or plate-based products involving the sternum or anterior ribs in humans (the “ Business ”); and

WHEREAS , Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, substantially all the assets of the Business, subject to the terms and conditions set forth herein.

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

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I:

“ 510(k) Option ” has the meaning set forth in Section 6.09(b).

“ Affiliate ” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, through the ownership of at least fifty-one percent (51%) of the voting securities.

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

“ Allocation Schedule ” has the meaning set forth in Section 2.08.

“ Assigned Contracts ” has the meaning set forth in Section 2.01(b).

“ Assignment and Assumption Agreement ” has the meaning set forth in Section 3.02(a)(ii).

“ Assumed Liabilities ” has the meaning set forth in Section 2.04.

“ Balance Sheet Assets ” has the meaning set forth in Section 4.15.

“ Balance Sheet Date ” has the meaning set forth in Section 4.15.

“ Benefit Plan ” has the meaning set forth in Section 4.14(a).

“ Bill of Sale ” has the meaning set forth in Section 3.02(a)(i).

“ BSI ” means the British Standards Institution.

“ [****] Escrow Release Amount ” has the meaning set forth in Section 2.07(e).

“ Business ” has the meaning set forth in the recitals.

“ Business Day ” means any day except Saturday, Sunday or any other day on which banks in California or Florida are authorized or required by Law to be closed for business.

“ Buyer ” has the meaning set forth in the preamble.

“ Buyer Benefit Plans ” has the meaning set forth in Section 6.01(b).

“ Buyer Indemnitees ” has the meaning set forth in Section 7.02.

[****]

“ Closing ” has the meaning set forth in Section 3.01.

“ Closing Date ” has the meaning set forth in the preamble.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Confidentiality Agreement ” means the Confidentiality Agreement, dated as of April 8, 2016, between Vance Street Capital II, L.P. and Seller.

“Confidential Information ” means all information involving or relating to the Business, regardless of the form in which it is communicated or maintained, whether or not the information has been marked as “confidential” or “proprietary”, which contains or otherwise reflects nonpublic information involving or relating to the Business or the Purchased Assets, including without limitation all financial data, business practices, business metrics, recruiting practices, employee lists and personnel information, trade secrets, operating and other data, reports, forecasts, services and product information, technical, strategic and customer information.

“ Contract Manufacturing Agreement ” has the meaning set forth in Section 3.02(a)(iii).

“ Contracts ” means all contracts, licenses, instruments, commitments, undertakings, indentures and other agreements and legally binding arrangements, whether oral or written.

“ Data Room ” means the electronic documentation site established by Firmex on behalf of Seller.

“ Deductible ” has the meaning set forth in Section 7.04(a).

“ Direct Claim ” has the meaning set forth in Section 7.05(c).

“ Disclosure Schedules ” means the Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery of this Agreement.

“ Dollars or $ ” means the lawful currency of the United States.

“ Earn-Out Amount ” has the meaning set forth in Section 2.06(c).

“ Employees ” means those Persons employed by Seller who worked primarily for the Business immediately prior to the Closing and listed in Section 6.01(a) of the Disclosure Schedules.

“ Encumbrance ” means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, community or other material property interest, lease, equitable interest, license, option, right of first refusal, right of way, easement, encroachment or other similar encumbrance, or any restriction or other encumbrance of any kind or nature whatsoever (whether absolute or contingent).

“ Engineering Services Agreement ” has the meaning set forth in Section 3.02(a)(viii).

“ Environmental Claim ” means any Governmental Order action, suit, claim, investigation or other legal proceeding by any Person alleging Liability (including responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

“ Environmental Law ” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including

their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

“ Environmental Notice ” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

“ Environmental Permit ” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“ ERISA Affiliate ” means any entity that is considered a single employer with the Seller or the Business under Section 4001(b) of ERISA or part of the same “controlled group” as the Seller or the Business for purposes of Section 302(d)(3) of ERISA.

“ Escrow Account ” has the meaning set forth in Section 2.07(a).

“ Escrow Agent ” means Citibank, N.A.

“ Escrow Agreement ” has the meaning set forth in Section 2.07(a).

“ Escrow Amount ” is $3,000,000.

“ Escrow Release Date” has the meaning set for in Section 2.07(c).

“ Excluded Assets ” has the meaning set forth in Section 2.03.

“ Excluded Liabilities ” has the meaning set forth in Section 2.05.

“ FDA ” means the United States Food and Drug Administration, and any successor agency(ies) or authority having substantially the same function.

“[****] Escrow Release Amount ” has the meaning set forth in Section 2.07(d).

“Field” means all use in humans of cable or plate-based products involving the sternum or anterior ribs.

“ Financial Statements ” has the meaning set forth in Section 4.15.

“Fundamental Representations ” has the meaning set forth in Section 7.01.

“ GAAP ” means United States generally accepted accounting principles in effect from time to time.

“ Governmental Authority ” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction. For the avoidance of doubt, notified bodies accredited by a member state of the European Union pursuant to Directive 93/42/EEC shall be deemed a Governmental Authority.

“ Governmental Order ” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Guarantor” has the meaning set forth in the preamble.

“ Hazardous Materials ” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

“ Indemnified Party ” has the meaning set forth in Section 7.04.

“ Indemnifying Party ” has the meaning set forth in Section 7.04.

“ Intellectual Property ” means any and all of the following in any jurisdiction throughout the world: (a) trademarks, service marks, logos, trade dress and other indicia of source, origin, sponsorship, endorsement or certification, including all registrations and applications to register the foregoing, and the goodwill connected with the use of and symbolized by the foregoing; (b) copyrights, including all registrations and applications to register copyrights, and works of authorship, whether or not copyrightable; (c) trade secrets and confidential know-how and other confidential information; (d) patents and patent applications; and (e) all other intellectual property and industrial property rights and assets and any associated registrations or applications, and all rights, interests and protections that are required for the exercise of any of the foregoing.

“ Intellectual Property Agreements ” means all licenses, sub-licenses and other agreements by or through which other Persons grant Seller or Seller grants any other Persons any exclusive or non-exclusive rights or interests in, to or under any Intellectual Property that is used in connection with the Business including those set forth in Section 4.07(a) of the Disclosure Schedules.

“ Intellectual Property Assets ” means all Intellectual Property that is owned or controlled by Seller and used in or applicable to the Business and all rights to sue and recover damages and other remedies for any past, present or future infringement, dilution, misappropriation or other violation of any such Intellectual Property. “Intellectual Property Assets” shall not include, whether expressly, impliedly, or by estoppel, (i) any Intellectual Property not related to the Business, including, without limitation, the Tutopatch Products and the Tutoplast Process, (ii) any processes or other methods of manufacture, or any other Intellectual Property of any kind or nature whatsoever that is neither required nor used in the conduct of the Business and (iii) any Intellectual Property that is owned by a third party and used in the conduct of the Business pursuant to an Intellectual Property Agreement.

“ Intellectual Property Registrations ” means all Intellectual Property Assets that are subject to any issuance, registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, issued and reissued patents and pending applications for any of the foregoing.

“ Inventory ” has the meaning set forth in Section 2.01(a).

“ IP Assignment Agreement ” has the meaning set forth in Section 3.02(a)(viii).

“ IP Retention Agreement ” has the meaning set forth in Section 3.02(a)(v).

“Knowledge of Buyer” or “Buyer’s Knowledge” means the actual knowledge of the persons listed on Section 1.01(a) of the Disclosure Schedules, after the inquiry of the individual within the Buyer’s organization with substantive responsibility over the matter in question.

“ Knowledge of Seller” or “Seller’s Knowledge ” means the actual knowledge after the persons listed on Section 1.01(b) of the Disclosure Schedules, after inquiry of the individual within the Seller’s organization with substantive responsibility over the matter in question.

“ Law ” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“ Liability ” means liabilities, indebtedness or other obligations of any nature, whether known or unknown, absolute, accrued, contingent, liquidated, unliquidated or otherwise, due or to become due, and whether or not required to be reflected on a balance sheet prepared in accordance with GAAP.

“ Losses ” means losses, damages, Taxes, Liabilities, costs or expenses, including reasonable attorneys’ fees and experts fees and expenses.

“ Material Adverse Effect ” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse (a) to the business, results of operations, financial condition or assets of the Business, taken as a whole, or (b) the ability of Seller to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any changes in applicable Laws or accounting rules (including GAAP), or the enforcement, implementation or interpretation thereof; (vii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Seller and the Business; (viii) any natural or man-made disaster or acts of God; or (ix) any failure by the Business to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded); provided, in each of clauses (i), (ii), (iii), (iv), (vi) and (viii), except to the extent the Business is substantially disproportionately affected thereby in a durationally significant manner relative to participants in the industry and market in which the Business operates.

“ Material Contracts ” has the meaning set forth in Section 4.04(a).

“ Mixed Contract ” means any Assigned Contract that includes products that are not applicable to the Business and that are listed in Section 2.01(b)(ii) of the Disclosure Schedules .

“Mixed Product Registrations” means any Permit or Registration for a Sternal Product issued by a Governmental Authority where (a) the ownership of such Permit or Registration is directly and legally assignable by Seller to Buyer, and (b) such Permit or Registration includes indications for use outside the Field.

“ Permits ” means all permits, licenses, franchises, approvals, authorizations and consents required to be obtained from Governmental Authorities.

“ Permitted Encumbrances ” means (a) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which adequate reserves have been establish in accordance with GAAP; (b) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business and which are not, individually or in the aggregate, material to the Business; (c) liens arising under original purchase price

conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; and (d) other imperfections of title or Encumbrances, if any, which do not materially detract from the value of the property subject thereto or the operation of the Business or the Purchased Assets.

“ Person ” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“ Product Authorization” means any Permit or Registration for a Sternal Product issued by a Governmental Authority where (a) such Permit or Registration is not directly and legally assignable or otherwise transferable by Seller to Buyer, and (b) obtaining an equivalent Permit or Registration requires Buyer to apply for, qualify for, and obtain its own Permit or Registration for the Sternal Product.

“ Purchase Price ” has the meaning set forth in Section 2.06.

“ Purchased Assets ” has the meaning set forth in Section 2.01.

“ Qualified Benefit Plan ” has the meaning set forth in Section 4.14(b).

“ Quality Agreement ” has the meaning set forth in Section 3.02(a)(vii).

“ Registrations ” means authorizations, approvals, clearances, licenses, permits, certificates or exemptions issued by any Governmental Authority (including 510(k) clearances, pre-market notifications, CE Marks, pricing and reimbursement approvals, labeling approvals, and any registrations (as such registrations may be known in its applicable jurisdiction)) held by Seller or an Affiliate of Seller relating to the Business that are required for the research, development, distribution, marketing, storage, transportation, use and sale of the Purchased Assets.

“ Release ” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

“ Representative ” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“ Sales Earn-Out ” has the meaning set forth in Section 2.06(c).

“ Seller ” has the meaning set forth in the preamble.

“ Seller Indemnitees ” has the meaning set forth in Section 7.03.

“ Shared Authorizations ” has the meaning set forth in Section 6.09(b).

“Statutory Representations ” has the meaning set forth in Section 7.01.

“Sternal Products ” means the Seller’s cable and plate-based products that are used in the Field, including associated instrumentation and, for the avoidance of doubt, the Thorecon family of products and [****] products.

“ Straddle Period ” has the meaning set forth in Section 6.05.

“ Tangible Personal Property ” has the meaning set forth in Section 2.01(c).

“ Taxes ” means (i) all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, escheat or unclaimed property (whether or not considered a tax under applicable law) customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto (or with respect to any failure to timely or properly file any Tax Return) and any interest in respect of such additions or penalties and (ii) any liability for items described in clause (i) payable by reason of contract (including any tax sharing, tax indemnification, or tax allocation agreement), assumption, transferee, successor or similar liability (including bulk transfer or similar Laws), operation of law (including pursuant to Treasury Regulations Section 1.1502-6 or any predecessor or successor thereof or any analogous or similar state, local, or foreign Law) or otherwise.

“ Tax Return ” means any return, declaration, report, claim for refund, information return or statement or other document required to be filed with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Third Party Claim ” has the meaning set forth in Section 7.05(a).

“ Thorecon Amount ” has the meaning set forth in Section 2.06(b).

“ Transaction Documents ” means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the Contract Manufacturing Agreement, the Escrow Agreement, the Transition Services Agreement, the IP Retention Agreement, the Quality Agreement, the Engineering Services Agreement, and the other agreements, instruments and documents required to be delivered at the Closing.

“ Transferred Employee ” has the meaning set forth in Section 6.01(a).

“ Transferred Records ” has the meaning set forth in Section 2.01(f).

“ Transition Services Agreement ” has the meaning set forth in Section 3.02(a)(iv).

“ Trauma ” means physical injuries of sudden onset not caused by medical examination or treatment (for example, damage to the sternum or anterior ribs done by a cardiothoracic surgeon to gain access to an organ in the human thorax is not deemed to be Trauma).

“ Tutopatch Products ” means Seller’s proprietary Tutopatch ^® extracellular matrix (ECM) natural collagenous matrix derived from bovine pericardium.

“ Tutoplast Process ” means Seller’s proprietary Tutoplast ^® Tissue Sterilization Process chemical sterilization methodology involving osmotic, oxidative and alkaline (if indicated) treatment to break down cell walls, inactivate pathogens and remove bacteria.

“ Used Intellectual Property” means any Intellectual Property used by Seller in the conduct of the Business under any Intellectual Property Agreement.

“ VAT ” means value added tax.

ARTICLE II

PURCHASE, SALE, AND LICENSE

2.01 Purchase and Sale of Assets . Subject to the terms and conditions set forth herein, at the Closing, Seller shall (and shall cause its wholly owned subsidiary, Pioneer Surgical Technology, Inc. and as may be applicable, its other Affiliates to) sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all Encumbrances other than Permitted Encumbrances, all of Seller’s and, as applicable, its Affiliates’ right, title and interest in, to and under those certain assets, properties and rights of Seller and its Affiliates, as applicable (collectively, the “ Purchased Assets ”), as set forth below:

(a) all (i) consigned inventory and surgical instruments, all finished goods inventory and surgical instruments (with respect to those finished goods that account for eighty percent (80%) of the Business’s revenue, a minimum of three months based on current run rates calculated as the average finished goods inventory on hand for April, May, and June 2017, except for part numbers [****] but which shall be delivered to Buyer as promptly as practicable after the Closing at no additional cost in the quantities set forth in the “To Be Built” column on Schedule 2.01(a)) and including as detailed on Schedule 2.01(a), and (ii) other merchandise used or held for use primarily in the conduct of the Business and maintained, held or stored by or for Seller or its Affiliates, including items as of August 2, 2017 as set forth on Section 2.01(a) of the Disclosure Schedules (“ Inventory ”), and any prepaid deposits for any of the same;

(b) all Contracts set forth on Section 2.01(b)(i) of the Disclosure Schedules (collectively, the “ Assigned Contracts ”) (but if any Assigned Contract cannot be assigned by Seller to Buyer without violating applicable Law, or if any Assigned Contract is a Mixed Contract, then such Contract shall be addressed in accordance with Section 2.09);

(c) all instruments, supplies (other than raw materials and work in process) and other tangible personal property, used primarily in the conduct of the Business, as well as tooling to the extent such tooling is used exclusively for the Business, and all Sternal Product molds having a value or replacement cost of at least $25,000, listed on Section 2.01(c) of the Disclosure Schedules (the “ Tangible Personal Property ”);

(d) all Permits and Registrations (including all relevant drawings, records and test reports) for the Sternal Products which are held by Seller or its Affiliates and required for the conduct of the Business as currently conducted or for the ownership of the Purchased Assets, including those listed on Section 2.01(d) of the Disclosure Schedules, but only to the extent such Permits and Registrations may be transferred under applicable Law (but if any Permit or Registration cannot be transferred under applicable Law, Seller agrees to assign all interests in such Permit or Registration to Buyer (including any beneficial or other interest held through an agent or distributor), cooperate with and reasonably assist Buyer in obtaining such Permit or Registration, and if any Permit or Registration applies to products or indications for use in addition to those applicable to the Business, Seller agrees to cooperate with and use commercially reasonable efforts, at its own expense, to assist Buyer in obtaining separate Permits or Registrations);

(e) all of Seller’s and its Affiliates’ rights under warranties, indemnities and all similar rights against third parties to the extent related to any Purchased Assets, except for such rights related to Seller’s ownership or operation of the Business and the Purchased Assets prior to the Closing Date;

(f) copies of all customer lists, customer purchasing histories, price lists, distribution lists, customer complaint files, design history files, CAD files and drawings, records and data (including filings with the FDA or other Governmental Authority), personnel and human resources files for all the Transferred Employees (to the extent allowed by applicable Law), sales material and records, and clinical and marketing studies, that primarily relate to the Business or the Purchased Assets (collectively, the “ Transferred Records ”); provided (1) that if any Transferred Records cannot be immediately transferred to Seller under applicable Law, Seller shall transfer such Transferred Records as soon as transfer becomes possible under applicable Law; and (2) that prior to delivery Seller may redact any information from such Transferred Records not pertaining to the Purchased Assets or related to the Business, and may retain a copy of any Transferred Records;

(g) all of the Intellectual Property that qualifies as Intellectual Property Assets, more specifically described as follows:

(i) the trademarks, service marks, logos, trade dress and other indicia of source, origin, sponsorship, endorsement or certification, including all registrations and applications to register the foregoing, and the goodwill connected with the use of and symbolized by the foregoing, including those listed on Section 2.01(g)(i) of the Disclosure Schedules;

(ii) the copyrights, including all registrations and applications to register copyrights, and works of authorship, whether or not copyrightable, including those listed on Section 2.01(g)(ii) of the Disclosure Schedules;

(iii) the trade secrets and confidential know-how and other confidential information, including those listed on Section 2.01(g)(iii) of the Disclosure Schedules;

(iv) the patents and patent applications listed on Section 2.01(g)(iv) of the Disclosure Schedules; and

(v) all other intellectual property and industrial property rights and assets and any associated registrations or applications, and all rights, interests and protections that are required for the exercise of any of the foregoing, including those listed on Section 2.01(g)(v) of the Disclosure Schedules.

(h) process validations and sterilization validations, packaging validations and other validations that primarily relate to the Business or the Purchased Assets, as well as all documentation, drawings, bills of materials, flow charts and other materials that memorialize any process, method, know-how or technology used in the manufacture of the Sternal Products (“ Associated Documentation ”) (excluding such Associated Documentation relating to Mixed Product Registrations, which shall be administered in accordance with Section 6.09(b)); and

(i) all goodwill associated with any of the assets described in the foregoing clauses.

The Parties acknowledge that the terms “primarily relates to the Business” and “used primarily in the conduct of the Business” may be difficult to apply regarding a particular asset that has substantial use in the Business and in the Seller’s other businesses. In a situation where the Parties have a good faith dispute regarding whether a particular asset “primarily relates to the Business” or is “used primarily in the conduct of the Business”, the Parties shall negotiate in good faith to reach a mutually acceptable resolution concerning the use of such asset. Notwithstanding the above, any asset clearly identified as a “Purchased Asset” or an “Excluded Asset” shall not be subject to the above procedure.

2.02 Retention of Certain Rights to the Intellectual Property Assets and Grant of Certain Rights to Trademarks .

(a) As provided for in the IP Retention Agreement, Seller has retained certain rights to the Intellectual Property Assets referenced in Section 2.03(n).

(b) Seller hereby grants Buyer a non-exclusive, worldwide, fully-paid, royalty-free, license to reproduce, use, and display Seller’s trademarks, service marks, and logos listed in Section 2.02(b) of the Disclosure Schedules (collectively, the “Licensed Marks” ) solely in connection with operating the Business, including marketing, promoting, and advertising the Sternal Products, for a period of up to three (3) years after the Closing. All uses of the Licensed Marks shall be subject to the trademark usage guidelines provided by Seller. Any benefits (including, without limitation, goodwill) accruing from Buyer’s use of the Licensed Marks will automatically vest in Seller. Upon Seller’s reasonable request, Buyer will furnish to Seller samples of each use of the Licensed Marks by Buyer. Buyer will reasonably cooperate with Seller in facilitating inspection and quality control over Buyer’s use of the Licensed Marks. Buyer’s use of the Licensed Mark will not tarnish, blur, or dilute the quality associated with the Licensed Marks or the associated goodwill.

2.03 Excluded Assets . Other than the Purchased Assets subject to Section 2.01, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of Seller, and all such other assets and properties shall be excluded from the Purchased Assets (the “ Excluded Assets ”). Excluded Assets include, but are not limited to, the following assets and properties of Seller:

(a) all cash and cash equivalents, bank accounts and securities of Seller;

(b) all accounts or notes receivable, including those of the Business;

(d) all Intellectual Property other than (i) the Intellectual Property Assets as set forth in Section 2.01(g) and Seller’s rights under the Used Intellectual Property, except to the extent that such Used Intellectual Property is otherwise considered an Excluded Asset under Section 2.03(c) and 2.03(n), and (ii) any Intellectual Property Registrations that are for any reason omitted from Section 4.07(a) of the Disclosure Schedules;

(e) the corporate seals, organizational documents, minute books, stock books, Tax Returns, books of account or other records having to do with the corporate organization of Seller, and any other books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable Law and is required by applicable Law to retain;

(f) all insurance policies of Seller and all rights to applicable claims and proceeds thereunder;

(g) all Tax assets (including duty and Tax refunds and prepayments) of Seller or any of its Affiliates;

(h) all rights to any action, suit or claim of any nature available to or being pursued by Seller, whether arising by way of counterclaim or otherwise, but in any event only to the extent related to Seller’s ownership or operation of the Business and the Purchased Assets prior to the Closing Date;

(i) all rights under warranties, indemnities and all similar rights against third parties to the extent related to Seller’s ownership or operation of the Business and the Purchased Assets prior to the Closing Date;

(j) all other assets, properties and rights used by Seller exclusively in its businesses other than the Business;

(k) all Benefit Plans and trusts or other assets attributable thereto;

(l) the rights which accrue or will accrue to Seller under the Transaction Documents;

(m) the Mixed Contracts;

(n) the trade name, including corporate or fictitious names, whether registered as a trademark or subject to common law trademark rights, of Seller and any of its Affiliates, including the names RTI Surgical, RTI, RTI Donor Services, Pioneer Surgical Technologies, Pioneer Surgical, Pioneer, Tutogen Medical, or Tutogen;

(o) the assets listed in Section 2.03(o) of the Disclosure Schedules; and

(p) raw materials, work in process, and ordinary and customary shop floor instrumentation, gauges, tools, supplies, equipment, and machinery.

2.04 Assumed Liabilities . Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge when due any and all liabilities and obligations of the Business arising out of or relating to the conduct of the Business or the Purchased Assets after the Closing, other than the Excluded Liabilities (collectively, the “ Assumed Liabilities ”), including, without limitation, the following:

(a) all Liabilities and obligations arising under or relating to the Assigned Contracts but excluding any Liability relating to or arising from any breach on or prior to the Closing, or any event, circumstance or condition first occurring or existing on or prior to the Closing that with notice, lapse of time or both would constitute or result in a breach, by Seller of any of its obligations thereunder; and

(b) all Liabilities and obligations for (i) Taxes relating to the Business, the Purchased Assets or the Assumed Liabilities for any taxable period (or portion thereof) beginning after the Closing Date and (ii) Taxes for which Buyer is liable pursuant to Section 6.04; and

(c) except as may be otherwise provided for in this Agreement or Transaction Documents, all other liabilities and obligations arising out of or relating to Buyer’s ownership of the Purchased Assets or operation of the Business, in either case, after the Closing.

2.05 Excluded Liabilities . Notwithstanding anything to the contrary in this Agreement, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Liabilities or obligations of Seller or any of its Affiliates of any kind or nature whatsoever other than the Assumed Liabilities (collectively, the “ Excluded Liabilities ”), including, without limitation, the following:

(a) any Liabilities or obligations arising out of or relating to Seller’s ownership or operation of the Business and the Purchased Assets prior to the Closing Date, including any Environmental Claim;

(b) any Liabilities or obligations relating to or arising out of the Excluded Assets;

(c) any Liabilities or obligations for (i) Taxes relating to the Business, the Purchased Assets or the Assumed Liabilities for any taxable period (or portion thereof), as prorated, ending on or prior to the Closing Date, (ii) any Taxes imposed on Buyer or its Affiliates as a successor or transferee of Seller or its Affiliates, and (iii) any other Taxes of Seller or any stockholders or Affiliates of Seller (other than Taxes allocated to Buyer under Section 6.04) for any taxable period;

(d) except as specifically provided in Section 6.01, any Liabilities or obligations of Seller relating to or arising out of (i) the employment, or termination of employment, of any Employee or former employee of the Business prior to or upon the Closing, or the employment, or termination of employment, of any Employee that does not become a Transferred Employee upon the Closing, (ii) any current or former service provider of the Business prior to the Closing, or (iii) workers’ compensation claims of any Employee or former employee of the Business which relate to events occurring prior to the Closing Date;

(e) any Liabilities or obligations in respect of or in connection with unused paid time off (whether in the form of paid time off or component vacation, sick and/or personal day programs) and all other unpaid wages (including salary, wages, bonuses and commissions, in each case applicable) to the extent accrued or earned prior to the Closing by any Employee or former employee of the Business; and

(f) any Liabilities or obligations of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others.

2.06 Purchase Price . The aggregate purchase price for the Purchased Assets shall be SIXTY MILLION U.S. DOLLARS ($60,000,000) (the “ Purchase Price ”), plus the assumption of the Assumed Liabilities. The Purchase Price shall be paid as follows:

(a) FIFTY FOUR MILLION U.S. DOLLARS ($54,000,000) minus the Escrow Amount paid at the Closing by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer.

(b) ONE MILLION U.S. DOLLARS ($1,000,000) (the “ Thorecon Amount ” ) by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer within fifteen (15) days of, and only to the extent that, FDA 510(k) clearance for the Thorecon product is obtained on or before March 31, 2018.

(c) FIVE MILLION U.S. DOLLARS ($5,000,000) (the “ Sales Earn-Out ,” and together with the Thorecon Amount, the “ Earn-Out Amount ”) paid on or before the thirtieth day after December 31, 2019, by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer, in the event and only to the extent, that gross, aggregate sales to end-users of greater than TWENTY MILLION ONE HUNDRED THOUSAND U.S. DOLLARS ($20,100,000) are achieved for the twelve months ending December 31, 2019, on product lines acquired under this Agreement.

To the extent any amount of VAT is required to be paid with respect to any payment made by Buyer to Seller under this Section 2.06, fifty percent (50%) of the amount of such VAT payment shall be reimbursed by Buyer to Seller.

2.07 Escrow Account .

(a) At the Closing, Buyer shall deposit the Escrow Amount in the Escrow Account (“ Escrow Account ”) established pursuant to the terms of the Escrow Agreement by and among the Escrow Agent, Buyer and Seller, the form of which is attached hereto as Exhibit F (the “ Escrow Agreement ”).

(b) The Escrow Amount shall be used as security for and shall be available to satisfy indemnification payments, if any, required to be made to Buyer pursuant to Article VII of this Agreement.

(c) On the first anniversary of the Closing Date (“ Escrow Release Date ”), the Buyer and Seller shall give joint written instructions to the Escrow Agent to release, to an account designated by Seller, the balance of the Escrow Amount less the amount of all indemnification claims made by Buyer, in good faith, pursuant to this Agreement and delivered to Escrow Agent and Seller prior to the first anniversary of the Closing Date, which claims remain unresolved, if any.

(d) Subject to Section 2.07(f), if within one hundred eighty (180) days following the Closing Date, Seller has completed its obligations pursuant to Section 6.09(a)(i) of this Agreement [****], then Buyer and Seller shall give joint written instructions to the Escrow Agent to release, to an account designated by Seller, Seven Hundred and Fifty Thousand Dollars ($750,000) from the Escrow Account (the “ [****] Escrow Release Amount ”).

(e) Subject to Section 2.07(f), if within one hundred eighty (180) days following the Closing Date, Seller has completed its obligations pursuant to Section 6.09(a)(ii) of this Agreement [****], then Buyer and Seller shall give joint written instructions to the Escrow Agent to release, to an account designated by Seller, Seven Hundred and Fifty Thousand Dollars ($750,000) from the Escrow Account (the “ [****] Escrow Release Amount ”).

(f) Notwithstanding anything to the contrary in Sections 2.07(d) or 2.07(e), neither the [****] Escrow Release Amount nor the [****] Escrow Release Amount shall be released to Seller if, at the time the Seller would otherwise be entitled to such release pursuant to Sections 2.07(d) or 2.07(e), as applicable, the amount of the indemnification claims made by Buyer, in good faith, pursuant to this Agreement and delivered to the Escrow Agent and to Seller, exceeds One Million Five Hundred Thousand Dollars ($1,500,000).

2.08 Allocation of Purchase Price . Within one-hundred-twenty (120) days after the Closing Date, Seller shall deliver a schedule allocating the Purchase Price (including any Assumed Liabilities and other amounts treated as consideration for the Purchased Assets for Tax purposes) (the “ Allocation Schedule ”) among the Purchased Assets. The Allocation Schedule shall be prepared in accordance with Section 1060 of the Code. The Allocation Schedule shall be deemed final unless Buyer notifies Seller in writing that Buyer objects to one or more items reflected in the Allocation Schedule within 30 days after delivery of the Allocation Schedule to Buyer. In the event of any such objection, Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however , that if Seller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule within 90 days after the delivery of the Allocation Schedule to Buyer, either party may submit for resolution such dispute to CBIZ, Inc. or, if CBIZ, Inc. is unable to serve, another impartial nationally recognized firm of independent certified public accountants mutually appointed by Buyer and Seller. The fees and expenses of such accounting firm shall be borne equally by Seller and Buyer. Seller and Buyer agree to file their respective IRS Forms 8594 and all federal, state and local Tax Returns in accordance with the Allocation Schedule.

2.09 Non-assignable Assets .

(a) Notwithstanding anything to the contrary in this Agreement, and subject to the provisions of this Section 2.09, to the extent that the sale, assignment, transfer, conveyance or delivery, or attempted sale, assignment, transfer, conveyance or delivery, to Buyer of any Purchased Asset would result in a violation of applicable Law, or would require the consent, authorization, approval or waiver of a Person who is not a party to this Agreement or an Affiliate of a party to this Agreement (including any Governmental Authority), and such consent, authorization, approval or waiver was not obtained prior to the Closing, this Agreement shall not constitute a sale, assignment, transfer, conveyance or delivery, or an attempted sale, assignment, transfer, conveyance or delivery, thereof (unless Buyer notifies Seller that any such Purchased Asset should be transferred or assigned notwithstanding the absence of a requisite consent); provided, however, that the Closing is occurring notwithstanding the foregoing without any adjustment to the Purchase Price on account thereof. Following the Closing, Seller and Buyer shall use commercially reasonable efforts, and shall cooperate with each other, to obtain any such required consent, authorization, approval or waiver, or any release, substitution or amendment required to novate all Liabilities and obligations under any and all Assigned Contracts or other Liabilities that constitute Assumed Liabilities or to obtain in writing the unconditional release of all parties to such arrangements, so that, in any case, Buyer shall be solely responsible for such Liabilities and obligations from and after the Closing Date; provided, however, that neither Seller nor Buyer shall be required to pay any consideration therefor. Once such consent, authorization, approval, waiver, release, substitution or amendment is obtained, Seller shall, to the extent not previously sold, assigned, transferred, conveyed or delivered to Buyer, sell, assign, transfer, convey and deliver to Buyer the relevant Purchased Asset to which such consent, authorization, approval, waiver, release, substitution or amendment relates for no additional consideration. Applicable sales, transfer and other similar Taxes in connection with such sale, assignment, transfer, conveyance or license shall be paid one-half by Buyer and one-half by Seller in accordance with Section 6.04.

(b) To the extent that any Purchased Asset and/or Assumed Liability cannot be transferred to Buyer following the Closing pursuant to this Section 2.09, Buyer and Seller shall use commercially reasonable efforts to enter into such arrangements (such as subleasing, sublicensing or subcontracting) to provide to the parties the economic and, to the extent permitted under applicable Law, operational equivalent of the transfer of such Purchased Asset and/or Assumed Liability to Buyer as of the Closing and the performance by Buyer of its obligations with respect thereto. Buyer shall, as agent or subcontractor for Seller, pay, perform and discharge fully the Liabilities and obligations of Seller thereunder from and after the Closing Date. To the extent permitted under applicable Law, Seller shall, at Buyer’s expense, hold in trust for and pay to Buyer promptly upon receipt thereof, such Purchased Asset and all income, proceeds and other monies received by Seller to the extent related to such Purchased Asset in connection with the arrangements under this Section 2.09. Seller shall be permitted to set off against such amounts all direct costs associated with the retention and maintenance of such Purchased Assets. Notwithstanding anything herein to the contrary, the provisions of this Section 2.09 shall not apply to any consent or approval required under any antitrust, competition or trade regulation Law. For purposes of this Section 2.09(b) only, Mixed Contracts will be treated as if they were Purchased Assets such that Buyer realizes the benefit of the bargain with respect to the Mixed Contracts to the extent applicable to the Business.

2.10 Withholding Taxes . Notwithstanding anything in this Agreement to the contrary, Buyer, the Escrow Agent, or their designees, shall be entitled to deduct and withhold from any amounts payable pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or any other provision of applicable Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the recipient in respect of which such deduction and withholding was made. In the event that Buyer, the Escrow Agent or their designees determines that it is required to deduct and withhold from an amount payable to Seller pursuant to this Agreement, it shall promptly notify Seller for the purpose of determining the actions, if any, that can be taken to avoid the withholding requirement.

ARTICLE III

CLOSING

3.01 Closing . The consummation of the transactions contemplated by this Agreement (the “ Closing ”) is taking place concurrently with the execution of this Agreement on this Closing Date. The Closing is taking place via an electronic medium in which separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, will first be delivered by an electronic mail exchange of signature pages, with originals to follow by reputable overnight courier addressed to each party’s counsel.

3.02 Closing Deliverables .

(a) At the Closing, Seller shall deliver to Buyer the following:

(i) a bill of sale in the form of Exhibit A hereto (the “ Bill of Sale ”) and duly executed by Seller and Pioneer Surgical Technology, B.V., transferring the tangible personal property included in the Purchased Assets to Buyer;

(ii) an assignment and assumption agreement in the form of Exhibit B hereto (the “ Assignment and Assumption Agreement ”) and duly executed by Seller and Pioneer Surgical Technology, B..V., effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

(iii) a contract manufacturing agreement in the form of Exhibit C hereto (the “ Contract Manufacturing Agreement ”) and duly executed by Seller, under which Seller will supply certain products and services to Buyer under the terms and in exchange for the consideration set forth in the Contract Manufacturing Agreement;

(iv) a transition services agreement in the form of Exhibit D hereto (the “ Transition Services Agreement ”) and duly executed by Seller, under which Seller will perform certain services for Buyer under the terms and in exchange for the consideration set forth in the Transition Services Agreement;

(v) an intellectual property retention and license agreement in the form of Exhibit E hereto (the “ IP Retention Agreement ”) and duly executed by Seller and Pioneer Surgical Technology, Inc.;

(vi) the Escrow Agreement duly executed by Seller;

(vii) a quality agreement in the form of Exhibit G hereto (the “ Quality Agreement ”) and duly executed by Seller;

(viii) an assignment of Intellectual Property in the form of Exhibit I hereto (the “ IP Assignment Agreement ”) and duly executed by Pioneer Surgical Technology, Inc.;

(ix) a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that attached to such certificate are true and complete copies of all resolutions adopted by the board of directors of Seller authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and the other Transaction Documents;

(x) a consent letter from Seller’s lenders consenting to the transactions contemplated by this Agreement and the release of any liens on the Purchased Assets, in form reasonably acceptable to Buyer, and UCC termination statements, assignments and lien releases and other instruments and documents, executed by each respective secured party in forms reasonably acceptable to Buyer and suitable for recording, terminating and releasing all liens filed of record in any jurisdiction and evidencing any security interest in any of the Purchased Assets;

(xi) evidence of Seller obtaining each of the consents identified in Section 3.02(a)(xi) of the Disclosure Schedules; and

(xii) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

(b) At the Closing, Buyer shall deliver to Seller the following:

(i) the Purchase Price minus (i) $9,000,000, which is equal to the sum of (x) the Escrow Amount plus (y) the Earn-Out Amount;

(ii) the Bill of Sale duly executed by Buyer;

(iii) the Assignment and Assumption Agreement duly executed by Buyer;

(iv) the Contract Manufacturing Agreement duly executed by Buyer;

(v) the Transition Services Agreement duly executed by Buyer;

(vi) the Escrow Agreement duly executed by Buyer;

(vii) the IP Retention Agreement duly executed by Buyer;

(viii) the Quality Agreement duly executed by Buyer;

(ix) the Engineering Services Agreement duly executed by Buyer;

(x) the IP Assignment Agreement duly executed by Buyer; and

(xi) a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached to such certificate are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and the other Transaction Documents.

(c) At the Closing, Buyer shall deliver the Escrow Amount to the account designated by the Escrow Agent, by wire transfer of immediately available funds. The Escrow Amount shall be held and disbursed in accordance with the Escrow Agreement, which shall provide, among other things, that: (i) the Escrow Amount will be available to satisfy any

amounts owed by Seller as an Indemnifying Party to the Buyer pursuant to this Agreement and (ii) after the date which is twelve (12) months from the Closing Date, any amounts remaining in the escrow account and not subject to pending claims pursuant to the Escrow Agreement shall be distributed to Seller.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Schedules, Seller represents and warrants to Buyer that the statements contained in this Article IV are true and correct as of the Closing.

4.01 Organization and Qualification of Seller . Seller is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted. Section 4.01 of the Disclosure Schedules sets forth each jurisdiction in which the ownership of the Purchased Assets or the operation of the Business as currently conducted makes licensing or qualification necessary and Seller is duly licensed or qualified to do business and is in good standing in each such jurisdiction, except where the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.

4.02 Authority of Seller . Seller has all necessary corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

4.03 No Conflicts; Consents . The execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a)

result in a violation or breach of any provision of the certificate of incorporation or by-laws of Seller; (b) result in a violation or breach of any provision of any material Law or Governmental Order applicable to Seller, the Business or the Purchased Assets; or (c) except as set forth in Section 4.03 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any Material Contract. No material consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement or any of the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for such filings as set forth in Section 4.03 of the Disclosure Schedules.

4.04 Material Contracts .

(a) Section 4.04(a) of the Disclosure Schedules lists each of the following Contracts (x) by which any of the Purchased Assets are bound or affected or (y) to which Seller is a party or by which it is bound in connection with the Business or the Purchased Assets (collectively, the “ Material Contracts ”):

(i) all Contracts involving aggregate consideration in excess of $25,000 or requiring performance by any party more than one year from the date hereof, which, in each case, cannot be cancelled without penalty or without more than 180 days’ notice;

(ii) all Contracts that relate to the sale of any of the Purchased Assets, other than in the ordinary course of business consistent with the past customs and practices of the Business, for consideration in excess of $ 25,000 and all Contracts for the grant to any Person of any option, right of first refusal or preferential or similar right to purchase any of the Purchased Assets;

(iii) all Contracts between or among Seller and any of its Affiliates;

(iv) all collective bargaining agreements or Contracts with any labor organization, union or association;

(v) all joint venture, partnership, or similar Contracts;

(vi) all Contracts under which the Seller or any of its Affiliates is, or may become, obligated to incur any severance, retention, change of control or transaction payment which would become payable by reason of or in connection with this Agreement or the transactions contemplated by this Agreement;

(vii) any employment or consulting Contract that provides for annual compensation in excess of $25,000 or any Contract which contains any noncompetition or nonsolicitation obligations; and

(viii) all other Contracts that are material to the Purchased Assets or the operation of the Business and not previously disclosed pursuant to this Section 4.04(a).

(b) Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. Seller is not in material breach of, or material default under, any Material Contract (for the avoidance of doubt, Seller shall not be deemed to be in material breach of or material default under any Assigned Contract requiring a consent to assignment as set forth on Schedule 4.03(c) of the Disclosure Schedules, solely because of a failure to obtain such consent). There are no material disputes pending, or threatened in writing, under any Contract included in the Purchased Assets. To the Knowledge of Seller: (i) no other party to a Material Contract is in material breach or default and (ii) no event has occurred that with notice or lapse of time would constitute a material breach or default, or permit termination, modification, or acceleration, under a Material Contract.

(c) Seller has delivered or made available to Buyer a correct and complete copy of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder).

4.05 Absence of Changes or Events . Except as set forth in the applicable subsection of Section 4.05 of the Disclosure Schedules, since the Balance Sheet Date,

(a) Seller has conducted the Business only in the ordinary course of business consistent with the past customs and practices of the Business;

(b) There has occurred no event, occurrence, or development that has had a Material Adverse Effect;

(c) Seller has not incurred loss of, or damage to, the Purchased Assets in excess of $25,000 individually or $50,000 in the aggregate;

(d) No Encumbrances, except for Permitted Encumbrances, have been imposed or permitted to exist upon any of the Purchased Assets;

(e) Seller has not sold, exchanged, transferred, licensed or otherwise disposed of any of its assets related to the Business, except in the ordinary course of business and except for any assets for an amount of less than $25,000;

(f) Seller has not entered into any agreement, contract, lease or license (or series of related agreements, contracts, leases, and licenses) relating to the Business involving payment by the Business of more than $25,000 after the Closing;

(g) Neither the Company nor any of its subsidiaries has canceled, compromised, waived or released any debts or claims related to the Business involving more than $25,000;

(h) There has not been any labor dispute or disturbance adversely affecting the Business, including the filing of any petition or charge of unfair labor practice with any Governmental Authority, efforts to effect a union representation election, actual or threatened employee strike, work stoppage or slowdown;

(i) there has not been any employment, severance, termination, retention, change of control or similar agreements or arrangements entered into or modified by Seller related to any Transferred Employee that will be a Liability of Buyer, or (ii) except as would not result in an aggregate incremental cost to Seller of $15,000 or more, any bonuses, salary increases, severance or termination pay made or granted by Seller to any Transferred Employee;

(j) Except as required by Law, Seller has not adopted, amended, modified established, terminated or materially increased benefits under any Benefit Plan;

(k) Seller has not adopted any plan of merger, consolidation, reorganization, liquidation or dissolution or filed a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consented to the filing of any bankruptcy petition against it under any similar Law;

(l) Seller has not made any material change in any method of accounting or accounting practice for the Business;

(m) Except as in the ordinary course of business, no party has terminated, cancelled, amended, modified, or accelerated any Material Contract or waived any material rights under any such Material Contract; and

(n) Seller has not made any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing, other than negotiations with Buyer and its Representatives regarding the transactions contemplated by this Agreement.

4.06 Title to Purchased Assets . Seller or its applicable Affiliate(s) has good and valid title to, or a valid license or leasehold interest in, all Purchased Assets, free and clear of Encumbrances except for Permitted Encumbrances. All conveyances of Purchased Assets from Seller’s Affiliate(s) to Buyer hereunder are valid and enforceable and vest in Buyer valid title to the Purchased Assets purported to be conveyed thereby free and clear of all Encumbrances except for Permitted Encumbrances.

4.07 Intellectual Property .

(a) Section 4.07(a) of the Disclosure Schedules lists all Intellectual Property Registrations and all Intellectual Property Agreements. Seller has the right to use, sublicense and otherwise commercialize all Intellectual Property Assets and all of the Used Intellectual Property, as the foregoing are used, sublicensed and commercialized by Seller in the conduct of the Business as currently conducted. After the execution and consummation of this Agreement and the other Transaction Documents, Buyer shall have the right to use, sublicense and otherwise commercialize all of the Used Intellectual Property.

(b) The Intellectual Property Registrations have been duly registered in, filed in and issued by (as applicable) the appropriate Intellectual Property registration offices in the respective applicable jurisdictions (domestic and foreign), and each such registration, filing and issuance remains in full force and effect as of the Closing Date. All maintenance fees, annuities, and the like due or payable on the Intellectual Property Registrations have been timely paid to the relevant Governmental Authorities and authorized registrars, and all Intellectual Property Registrations are otherwise in good standing. Section 4.07(b) of the Disclosure Schedules lists any such maintenance fee, annuities or the like that will become due within ninety days after the Closing Date.

(c) Each Intellectual Property Asset is valid and enforceable and has not been ruled invalid or unenforceable. No Intellectual Property Asset is subject to, and neither the execution nor the consummation of this Agreement or the other Transaction Documents will cause any of the Intellectual Property Assets to become subject to, any order that restricts, impairs or otherwise imposes any obligation with respect to the validity, enforceability, use, enforcement, transfer, licensing or other exploitation of, or that otherwise adversely affects, such Intellectual Property Asset. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Intellectual Property Agreement or result in or permit a termination thereof or would cause or permit the acceleration of or other changes to any right or obligation or the loss of any benefit thereunder. Seller has not received any claim or notice alleging any breach or default of or under any Intellectual Property Agreement. Upon the execution and consummation of this Agreement and the other Transaction Documents, Buyer will succeed to all of the rights and benefits of Seller under the Used Intellectual Property and neither the execution nor the consummation of this Agreement or the other Transaction Documents will constitute an event of default under any Intellectual Property Agreement or result in or permit a termination thereof or cause or permit the acceleration of or other changes to any right or obligation or the loss of any benefit thereunder.

(d) The conduct of the Business as currently conducted does not infringe, misappropriate, dilute or otherwise violate, and to the Knowledge of Seller, conduct of the Business as previously conducted did not infringe, misappropriate, dilute or otherwise violate, the Intellectual Property of any Person; and to the Knowledge of Seller no Person is infringing, misappropriating, diluting or otherwise violating or has infringed, misappropriated, diluted or otherwise violated any Intellectual Property Assets.

(e) Except as set forth in Section 4.07(e) of the Disclosure Schedules, Seller or its Affiliate is the sole and exclusive legal and beneficial, and with respect to the Intellectual Property Registrations, record, owner of all right, title and interest in and to the Intellectual Property Assets, and has the valid right to use all other Intellectual Property used in or necessary for the conduct of the Business as currently conducted (or, to the Knowledge of Seller, as previously conducted), in each case, free and clear of Encumbrances other than Permitted Encumbrances.

(f) The Used Intellectual Property and Intellectual Property Assets together constitute all of the Intellectual Property necessary to operate the Business as presently conducted (or, to the Knowledge of Seller, as previously conducted) by Seller.

(g) There has been no claim made, by or against Seller (and Seller has not been a party to any action including such a claim), and Seller has not received notice of any such claim: (i) asserting the invalidity, misuse or unenforceability, infringement, misappropriation or other violation of any Intellectual Property of any Person or any Intellectual Property Assets (except for routine patent and trademark prosecution not involving any third party other than the relevant governmental registration authority); (ii) challenging Seller’s unencumbered sole ownership of or rights to use, license or otherwise exploit any Intellectual Property Asset; or (iii) otherwise asserting claims or allegations affecting or that would, if established, affect the Intellectual Property Assets or the Seller’s rights in such Intellectual Property Assets. There is no proceeding or action before any court or tribunal related to any Intellectual Property Asset or, to the Knowledge of Seller, Used Intellectual Property.

(h) Notwithstanding anything to the contrary in this Agreement, this Section 4.07 constitutes the sole representation and warranty of the Seller under this Agreement with respect to any actual or alleged infringement, misappropriation or other violation by Seller of any Intellectual Property of any other Person.

4.08 Legal Proceedings; Governmental Orders .

(a) There are no actions, suits, claims, investigations or other legal proceedings pending or, to Seller’s Knowledge, threatened (i) against or by Seller relating to or affecting the Business, the Purchased Assets or the Assumed Liabilities or (ii) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement or which would reasonably be expected to prevent or materially delay the transactions contemplated by this Agreement.

(b) There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Business or the Purchased Assets.

4.09 Compliance with Laws; Permits and Registrations .

(a) Seller is, in all material respects, and for the three years prior to the date of this Agreement has been, in compliance with all Laws applicable to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets.

(b) All material Permits and Registrations required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets have been obtained by Seller and are valid and in full force and effect and Seller is not in breach or violation of, or default under, any such Permit. Section 4.09(b) of the Disclosure Schedules lists each such Permit and Registration held by Seller, and the Governmental Authority or other Person responsible for issuing such Permit or Registration.

(c) None of the representations and warranties in Section 4.09 shall be deemed to relate to environmental matters (which are governed by Section 4.12), employment matters (which are governed by Section 4.13) employee benefits matters (which are governed by Section 4.14), or tax matters (which are governed by Section 4.10).

(d) Neither Seller nor, to the Knowledge of Seller, any of Seller’s Representatives or Affiliates on its behalf, has: (a) directly or indirectly, given, or agreed to give, any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other Person who was, is or may be in a position to help or hinder Seller in connection with the Business (or assist in connection with any actual or proposed transaction) or made, or agreed to make, any illegal contribution, or reimbursed any illegal political gift or contribution made by any other Person, to any candidate for federal, state, local or foreign public office; or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records of the Business for any purpose.

4.10 Taxes .

(a) Except as set forth in Section 4.10 of the Disclosure Schedules, Seller has filed (taking into account any valid extensions) all federal and other material Tax Returns required to be filed by Seller or with respect to the Purchased Assets or the Business, and all such Tax Returns are true, complete and correct in all material respects. Seller has timely paid all Taxes payable by or on behalf of Seller (whether or not shown as owing on any Tax Return) and Taxes imposed on or with respect to the Purchased Assets and the Business. Seller is not currently the beneficiary of any extension of time within which to file any material Tax Return other than extensions of time to file Tax Returns obtained in the ordinary course of business. With respect to any period for which Tax Returns have not yet been filed or for which Taxes are not yet due or owing, Seller has made due and sufficient accruals for such Taxes on the Financial Statements.

(b) No claim has been made by any Governmental Authority in a jurisdiction where Seller does not file a Tax Return that it is or may be subject to Taxation in that jurisdiction.

(c) Seller has complied with all applicable Laws relating to the payment and withholding of Taxes and has duly and timely withheld and paid over (or set aside for payment when due) to the appropriate Governmental Authority all Taxes required to have been withheld and paid over, and has complied with all information reporting, backup withholding requirements and similar requirements of all applicable Laws.

(d) There are no liens for Taxes upon any asset of the Business or any Purchased Asset other than liens for Taxes not yet due and payable. Neither Buyer nor its Affiliates will have any Liability or obligation, and will not incur any Loss, expense or cost, and none of the Purchased Assets will be subject to any Encumbrance, by reason of any Taxes arising out of (i) the Business as conducted by Seller prior to the Closing Date or (ii) any other operations or activities of Seller whether conducted prior to the date hereof or hereafter.

(e) With respect to the Business or Purchased Assets, or as would otherwise impact Buyer after the Closing, no Tax Return of Seller has ever been audited by any Governmental Authority, and no such audit, examination, investigation, or other administrative or court proceedings with respect to Taxes are in progress or, to the Knowledge of Seller, pending. No deficiencies for any Tax have been threatened, claimed, proposed or assessed against Seller or on or with respect to the Business or the Purchased Assets which have not been settled or paid. No waiver or extension of any statute of limitations with respect to Taxes imposed on Seller, the Business, or the Purchased Assets, or Tax Returns for which Seller may be liable is currently in effect or has been requested by any Tax Authority as of the date hereof.

(f) Seller is not a party to or bound by, nor are the Purchased Assets or Business subject to, any tax sharing, indemnification, allocation or similar agreement. Except as may apply to the consolidated tax return of Seller and its Affiliates, Seller has never been a member of an affiliated group filing a consolidated, combined, unitary, or similar Tax Return, and is not obligated by Law, assumption, transferee or successor liability, or by any Contract, whether express or implied, to indemnify any other Person with respect to Taxes.

(g) Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2

(h) Other than with respect to the representations in Section 4.10(d) and Section 4.10(f), nothing in this Section 4.10 shall be construed as providing a representation or warranty with respect to any taxable period or portion thereof beginning after the Closing Date.

4.11 Real Property . None of the real property owned or leased by Seller is used exclusively in the Business, and no real property rights or obligations are included among the Purchased Assets. There are no actions, suits, claims, investigations or other legal proceedings pending or, to Seller’s Knowledge, threatened against or by Seller relating to or affecting the real property owned or leased by Seller that could result in a Material Adverse Effect.

4.12 Environmental Matters.

(a) The operations of Seller with respect to the Business and the Purchased Assets are in compliance in all material respects with all Environmental Laws. Seller has not received from any Person, with respect to the Business or the Purchased Assets, any: (i) Environmental Notice or Environmental Claim; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

(b) Seller has obtained and is in material compliance with all Environmental Permits necessary for the conduct of the Business as currently conducted or the ownership, lease, operation or use of the Purchased Assets.

(c) The representations and warranties set forth in this Section 4.12 are Seller’s sole and exclusive representations and warranties regarding environmental matters.

4.13 Employees .

(a) Section 4.13 of the Disclosure Schedules sets forth a true and complete list as of the date hereof of all Employees to whom Buyer will extend an offer of employment under this Agreement, including any Employee who is not actively at work due to an approved absence, whether paid or unpaid, and with respect to each Employee his or her (i) job title, (ii) current annual salary or hourly rate of pay, (iii) work location, (iv) dates of employment, (v) target bonus opportunities, (vi) employment classification (including whether they are full-time or part-time, exempt or non-exempt, temporary or permanent and unionized or non-unionized) and (vii) employee benefits, including retirement, welfare and severance benefits (including any change of control or transaction payment which would become payable by reason of or in connection with this Agreement or the transactions contemplated by this Agreement). Each such Employee is employed at-will and the employment of each such Employee may be terminated at any time, for any or no reason, with or without notice. Section 4.13 of the Disclosure Schedules separately sets forth a true and complete list as of the date hereof of all natural persons who are independent contractors, contingent workers, and leased or agency worker employees providing services to the Business within the last twelve (12) months where the annual fees paid with respect to such persons exceed $25,000.

(b) Except as disclosed in Section 4.13 of the Disclosure Schedules, to the Knowledge of the Seller, no Employee or group of Employees has any plans to terminate employment with the Seller. Except as disclosed in Section 4.13 of the Disclosure Schedules, Seller is not a party to or bound by any collective bargaining agreement, nor has it experienced any work slowdowns, lockouts, stoppages, picketing, strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. Seller has not committed any unfair labor practice. Seller has no Knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to the Employees and no demand for recognition of such Employees has been made by, or on behalf of, any labor union. To the Knowledge of Seller, no petition has been filed or proceedings instituted by an Employee or group of Employees with any labor relations board seeking recognition of a bargaining representative. Except as disclosed in Section 4.13 of the Disclosure Schedule, Seller has not stated or acknowledged, whether by contract or otherwise, that Seller is the employer or joint employer or co-employer of persons providing services to Seller as independent contractors. Seller is and has been in material compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to the Employees. The representations and warranties set forth in this Section 4.13 are Seller’s sole and exclusive representations and warranties regarding employment matters.

4.14 Employee Benefit Matters.

(a) Section 4.14(a) of the Disclosure Schedules sets forth a current and correct list of each “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA) and any other benefit arrangement or obligation (whether written or unwritten) to provide material benefits, including any retirement, employment, consulting, compensation, deferred compensation, profit-sharing, incentive, bonus, stock option, restricted stock, stock

appreciation right, phantom equity, equity-based, change in control, severance, stay or retention, vacation, paid time off, sick leave, plant closing benefits, welfare and fringe-benefit agreement, plan, policy and program in effect and covering one or more current or former employees of the Business, current or former directors of the Business or the beneficiaries or dependents of any such Persons, and is maintained, sponsored, contributed to, or required to be contributed to by Seller, or under which Seller has any material liability for premiums or benefits (as listed on Section 4.14(a) of the Disclosure Schedules, each, a “ Benefit Plan ”).

(b) Except as set forth in Section 4.14(b) of the Disclosure Schedules, each Benefit Plan and related trust complies with all applicable Laws (including ERISA and the Code) in all material respects. Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “ Qualified Benefit Plan ”) has received a favorable determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and to Seller’s Knowledge, nothing has occurred that could reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability of reliance on such opinion letter from the Internal Revenue Service, as applicable. With respect to any Benefit Plan, to Seller’s Knowledge, no event has occurred or is reasonably expected to occur that has resulted in or would subject Seller to a Tax under Section 4971 of the Code or the Purchased Assets to a lien under Section 430(k) of the Code.

(c) Except as set forth in Section 4.14(c) of the Disclosure Schedules, within the last six (6) years none of the Seller nor any of its ERISA Affiliates sponsors, maintains, or contributes to (or is obligated to contribute to) or otherwise has any Liability or obligation under any “employee pension benefit plan” as defined in Section 3(2) of ERISA that: (i) is subject to the minimum funding standards of Section 302 or Title IV of ERISA or Section 412 of the Code; (ii) is a “multi-employer plan” (as defined in Section 3(37) of ERISA); or (iii) is a “multiple employer plan” within the meaning of Section 413(c) of the Code or a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA). Seller has not: (A) withdrawn from any employee pension benefit plan under circumstances resulting (or expected to result) in liability; or (B) engaged in any transaction which would give rise to a liability under Section 4069 or Section 4212(c) of ERISA.

(d) Except as set forth in Section 4.14(d) of the Disclosure Schedules and other than as required under Section 4980B of the Code or other applicable Law, no Benefit Plan provides benefits to any individual for any reason after such individual ceases to be employed by the Seller (including retiree life insurance, retiree health benefits or other retiree employee welfare benefits).

(e) Except as set forth in Section 4.14(e) of the Disclosure Schedules, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby will (either alone or together with any other event and pursuant to any Benefit Plan or otherwise): (i) entitle any Employee, former employee, or current or former

director, consultant or other service provider of the Business to payment of any money or other property; (ii) increase the amount of any compensation or benefits otherwise payable to any Employee, former employee, or current or former director, consultant or other service provider of the Business; or (iii) result in the forgiveness of indebtedness or the acceleration of payment, funding or the vesting of any benefit or compensation to any Employee, former employee, or current or former director, officer or other service provider of the Business. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in any “ parachute payment” within the meaning of Section 280G(b)(2) of the Code.

(f) Anything herein to the contrary notwithstanding, the representations and warranties set forth in this Section 4.14 are the Seller’s sole and exclusive representations and warranties regarding employee benefit matters.

4.15 Financial Statements . Copies of a partial balance sheet of the Business as of June 30, 2017, and an unaudited income statement summary of the Business for the period ended June 30, 2017 and for the years ended December 31, 2016 and December 31, 2015 (collectively the “ Financial Statements ”) are included in the Disclosure Schedules. Except as set forth in Section 4.15 of the Disclosure Schedules, the Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby. The Financial Statements are based on the books and records of the Business, and fairly present in all material respects the financial condition of the Business as of such dates and the results of the operations of the Business for the periods then ended. The balance sheet assets of the Business as of June 30, 2017 is referred to herein as the “ Balance Sheet Assets ” and the date thereof as the “ Balance Sheet Date ”.

4.16 Inventory . Except as has been reserved against on the Financial Statements and as disclosed in Section 4.16 of the Disclosure Schedules, all the Inventory reflected on the Financial Statements was properly stated therein at the lower of cost or market value in accordance with GAAP, and all the Inventory acquired and maintained by Seller in connection with the Business through the Closing Date has been acquired and maintained in the ordinary course of business consistent with the past customs and practices of the Business. All Inventory on the Closing Date consists of items of a quality usable or saleable in the ordinary course of business, is in conformance with FDA and applicable foreign government authority requirements, and is and will be in quantities sufficient for use or sale in the ordinary course of business.

4.17 Absence of Undisclosed Assumed Liabilities . Except as disclosed in Section 4.17 of the Disclosure Schedules, Seller has no material Liabilities with respect to the Business that will constitute an Assumed Liability.

4.18 Suppliers and Customers

(a) Reserved.

(b) Section 4.18(b) of the Disclosure Schedules sets forth a complete and accurate list of the ten (10) largest customers of the Business (on a consolidated basis, measured by the aggregate amount sold by the Business) and the amounts billed by Seller in connection with the Business, on a consolidated basis, to each such customer during the twelve (12) months ended on May 31, 2017.

(c) Except as set forth in Section 4.18(c) of the Disclosure Schedules Seller is not involved in any material controversy, dispute or disagreement with any of the customers listed in Section 4.18(b) of the Disclosure Schedules in connection with the Business and since May 31, 2017 none of the customers listed in Section 4.18(b) of the Disclosure Schedules has canceled, terminated or notified the Business of a material reduction in purchases from the Business.

4.19 Product Liability; Product Warranty . Except as disclosed in Section 4.19 of the Disclosure Schedules, (a) to the Knowledge of Seller no products manufactured, sold or delivered by Seller with respect to the Business have been out of conformity with any applicable warranties so as to subject it or the Business to material Liability beyond rework or replacement of the product in the ordinary course of business consistent with the past customs and practices of the Business, and Seller does not have any Liability for other material damages in connection therewith other than return, rework or replacement of nonconforming products in the ordinary course of Business consistent with the past customs and practices of the Business; (b) Seller has not received any written or, to the Knowledge of Seller, oral notice of any claims for any extraordinary product returns, product recalls, warranty obligations or service calls relating to any of its products or services in connection with the Business; and (c) Seller has not had, and does not have, any material Liability arising out of any inquiry to individuals or property as a result of the ownership, possession or use of any products manufactured, sold or delivered by Seller in connection with the Business or with respect to any services rendered by it.

4.20 Sufficiency of Assets . The Purchased Assets consist of all of the assets used or useful in the operation of the Business as conducted prior to the Closing except for the assets and services provided by Seller pursuant to the Contract Manufacturing Agreement, Transition Services Agreement, or as provided for in Section 2.09. Except as disclosed in Section 4.20 of the Disclosure Schedule, the Excluded Assets are either substitutable in the ordinary course of business (e.g. turning machines and milling equipment) or otherwise not material to the Business. Anything in this Section 4.20 to the contrary notwithstanding, impact to the Business, if any, related to Buyer not obtaining any rights to the Tutoplast Process or the Tutopatch Products under this Agreement shall not be deemed a breach of this provision.

4.21 Food and Drug Regulatory Compliance.

(a) Seller, with respect to the Business, has made or caused to be made each required filing with the FDA or foreign Governmental Authority having jurisdiction over the manufacture, sale, or distribution of the Sternal Products, and each filing is valid and in full force and effect, except where the failure to have made such a filing has not had, and would not reasonably be expected to have, an adverse effect on the Business in any material respect.

(b) Seller, with respect to the Sternal Products, is, and at all times since January 1, 2014, has been, in compliance in all material respects with (i) the Federal Food, Drug, and Cosmetic Act and (ii) all Laws and Governmental Orders, in each case, administered by the FDA or any foreign Governmental Authority having jurisdiction over Seller applicable to the design, development, testing, manufacture, packaging, handling, distribution or sale of Sternal Products.

(c) Since January 1, 2014, there has not been, nor, to the Knowledge of Seller, is there currently under consideration by Seller or any Governmental Authority, any recall, withdrawal, or suspension of any Sternal Product except as disclosed in Section 4.21(c) of the Disclosure Schedules.

(d) Except for ordinary course inquiries by Governmental Authorities or as disclosed in Section 4.21(d) of the Disclosure Schedules, there are not presently pending, or, to the Knowledge of Seller, threatened in writing, any civil, criminal or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings or demand letters alleging any material violation of any Laws or Governmental Order applicable to the design, development, testing, manufacture, materials, workmanship, packaging, handling, distribution, or sale, including any failure to warn or alleged breach of express or implied warranty or representation, relating to any Sternal Product manufactured, distributed or sold by or on behalf of Seller.

(e) Since January 1, 2014, Seller has not received notice of any serious adverse event related to any Sternal Products.

(f) Seller, with respect to the Sternal Products, is in material compliance with the written procedures, record-keeping and reporting requirements required by the FDA or any other Governmental Authority pertaining to the reporting of adverse events and recalls, including, as the case may be, Medical Device Reporting set forth in 21 C.F.R. Part 803 and Reports of Corrections and Removals set forth in 21 C.F.R. Part 806, and all Sternal Products are and, within the past three (3) years, have been labeled, promoted, and advertised in accordance with their approved labeling, as applicable, or within the scope of an exemption from obtaining such approval.

(g) Seller has made available to Buyer all inspection reports prepared by FDA or a comparable Governmental Authority since January 1, 2014, that are in the possession of Seller and relate to the Sternal Products. Seller has timely responded to all inspection reports, and there are no outstanding issues to resolve.

4.22 Brokers . Except for Stephens, Inc., whose fee is the responsibility of, and will be paid by, Seller, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.

4.23 510(k) Ownership . There are no Encumbrances, Contracts or any other arrangements between Seller and any of its customers or distributors or other Person which impedes, prohibits, or in any way restricts Seller’s ability to convey, transfer or assign the ownership rights to the 510(k) authorization, or any equivalent authorization of any foreign regulatory authority, for its sternal cable products.

4.24 No Other Representations and Warranties . Except as set forth in this Agreement, neither Seller nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation or warranty as to the accuracy or completeness of any information regarding the Business and the Purchased Assets furnished or made available to Buyer and its Representatives (including any information prepared by Stephens, Inc., and any information, documents or material delivered to Buyer or made available to Buyer in the Data Room, management presentations or in any other form in expectation of the transactions contemplated hereby) or as to the revenue, profitability or success of the Business, in each case after the Closing, or any representation or warranty arising from statute or otherwise in law.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in the Disclosure Schedules, Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the Closing.

5.01 Organization and Authority of Buyer . Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware.

5.02 Authority of Buyer . Buyer has all necessary corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

5.03 No Conflicts; Consents . The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) result in a violation or breach of any provision of the certificate of incorporation or by-laws of Buyer; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) except as set forth in Section 5.03 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer is a party, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except as set forth in Section 5.03 of the Disclosure Schedules and such consents, approvals, Permits, Governmental Orders, declarations, filings or notices which, in the aggregate, would not have a Material Adverse Effect.

5.04 Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

5.05 Legal Proceedings . There are no actions, suits, claims, investigations or other legal proceedings pending or, to Buyer’s Knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

ARTICLE VI

COVENANTS

6.01 Employees and Employee Benefits .

(a) Effective as of the Closing Date, Buyer shall or shall cause one of its Affiliates to, offer employment to all Employees included in Section 6.01(a) of the Disclosure Schedules, including any such Employees who are absent due to vacation, family leave, short-term disability or other approved leave of absence (the employees who accept such employment and commence employment, the “ Transferred Employees ”). Effective as of the Closing Date, Seller shall take any necessary action to end its employment relationship with the Transferred Employees. No later than August 18, 2017, the first payroll date following the Closing Date, Seller shall pay to each Transferred Employee an amount equal to the pro-rated amount of any bonuses at target earned by such Transferred Employee from January 1, 2017 through June 30,

2017, as well as any commissions earned by any Transferred Employee prior to the Closing Date but not yet paid as of the Closing Date, in each case in the amounts set forth on Section 6.01(a) of the Disclosure Schedules. For the first year of a Transferred Employee’s employment with Buyer or its Affiliate, and to the extent not inconsistent with Section 6.01(b), Buyer or its Affiliate, as applicable, will use commercially reasonable efforts to provide the Transferred Employees with a level of compensation and benefits comparable to that which is set forth in Section 4.13(a) of the Disclosure Schedules. Seller will use commercially reasonable efforts to encourage Employees to accept the position offered by Buyer or its Affiliate.

(b) With respect to any employee benefit plan maintained by Buyer or an Affiliate of Buyer (collectively, “ Buyer Benefit Plans ”) for the benefit of any Transferred Employee, effective as of the Closing, Buyer shall, or shall cause its Affiliate to, use commercially reasonable efforts to recognize all service of the Transferred Employees with Seller, as if such service were with Buyer, for vesting, eligibility and accrual purposes; provided, however, such service shall not be recognized to the extent that (x) such recognition would result in a duplication of benefits or (y) such service was not recognized under the corresponding Buyer Benefit Plan.

(c) This Section 6.01 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 6.01, express or implied, shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 6.01. Nothing contained herein, express or implied, shall be construed to establish, amend or modify any benefit plan, program, agreement or arrangement. The parties hereto acknowledge and agree that the terms set forth in this Section 6.01 shall not create any right in any Transferred Employee or any other Person to any continued employment with Buyer or any of its Affiliates or compensation or benefits of any nature or kind whatsoever.

6.02 Confidentiality . Buyer acknowledges and agrees that the Confidentiality Agreement remains in full force and effect and, in addition, covenants and agrees to keep confidential, in accordance with the provisions of the Confidentiality Agreement, information provided to Buyer pursuant to this Agreement. Seller hereby agrees that it will not, and will cause its Representatives and Affiliates not to, at any time on or after the Closing, directly or indirectly, without the prior written consent of Buyer (such consent not to be unreasonably withheld, conditioned, or delayed), disclose or use, any Confidential Information involving or relating to the Business or the Purchased Assets (except at the request of Buyer); provided, however, that Seller may, without the prior written consent of Buyer, disclose or use Confidential Information (if such Confidential Information is applicable to other aspects of Seller’s business in addition to the Business), but only to the extent reasonably necessary for the conduct of the Seller’s business; provided, further, that the information subject to the foregoing provisions of this sentence will not include: (a) any information generally available to, or known by, the public (other than as a result of disclosure in violation hereof); or (b) any information that becomes available on a non-confidential basis from a source that is not prohibited from disclosing such information by any legal, contractual or fiduciary obligations; and provided, further, that the provisions of this Section 6.02 will not prohibit any retention of copies of records or disclosure: (i) required by any applicable Law so long as reasonable prior notice of such disclosure is given to Buyer and a reasonable opportunity is afforded Buyer to contest such disclosure; or (ii) made in connection with the enforcement of any right or remedy relating to this Agreement or the transactions contemplated hereby.

6.03 Public Announcements . Unless otherwise required by applicable Law or the rules of a stock exchange on which a party’s (or Affiliate’s) stock is traded, the parties to this Agreement shall not, and shall cause their respective Representatives to not, make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall reasonably cooperate as to the timing and contents of any such announcement; provided that the provisions of this Section 6.03 will not prohibit any disclosure (i) by Buyer to its direct or indirect equityholders to the extent customarily provided to such current or prospective equityholders, or the posting of a news release regarding the transactions contemplated hereby on Buyer’s or its Affiliate’s website; (ii) made in connection with the enforcement of any right or remedy relating to this Agreement or the transactions contemplated hereby; or (iii) that is a reproduction of information disclosed on an approved public announcement.

6.04 Transfer Taxes . All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid one-half by Buyer and one-half by Seller. Buyer shall timely file any Tax Return or other document with respect to such Taxes or fees (and Seller shall cooperate with respect thereto as necessary).

6.05 Straddle Periods . Buyer shall prepare all Tax Returns with respect to the Business and the Purchased Assets for any taxable period that includes but does not end on the Closing Date (a “ Straddle Period ”). Buyer shall provide a draft of any such Tax Return to Seller at least thirty (30) days prior to the due date thereof for Seller’s review, and shall incorporate any reasonable comments provided thereto by Seller. Liability for all real property Taxes, personal property Taxes and other ad valorem Taxes levied with respect to the Business or the Purchased Assets in any Straddle Period shall be apportioned between Seller and Buyer based on the number of days in such Straddle Period prior to and including the Closing Date (for which Seller shall be liable) and the number of days in such Straddle Period after the Closing Date (for which Buyer shall be liable). Each party shall pay to the other any Taxes for which it is liable hereunder that are payable by such other party to an applicable Governmental Authority at least ten (10) days prior to the due date thereof. For the avoidance of doubt, the foregoing portion of this Section 6.05 does not apply to the income Tax Returns of the Seller or the Buyer. Each of the Seller and the Buyer shall be responsible for the preparation of its own income Tax Returns and neither party shall have the right or obligation to review the other party’s income Tax Returns.

6.06 Further Assurances . Each of the parties shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents. Seller shall use commercially reasonable efforts, and Buyer shall cooperate with Seller, to obtain, as promptly as practicable following the Closing, any consents required to assign the Assigned Contracts to Buyer, to the extent such consents have not previously been obtained. In the event any Assigned Contract for an independent sales representative for the Products also includes Tutopatch Products, then Buyer will cooperate with Seller for purposes of Seller entering into new contracts with such independent sales representatives for purposes of continuing the supply of Tutopatch Products.

6.07 Non-competition; Non-solicitation .

(a) Neither Seller nor Seller’s Affiliates, either directly or indirectly, shall: (i) compete, or assist a third party in any activity that competes anywhere in the world with the Business until five (5) years following the Closing; (ii) solicit any customers or vendors of the Business, excluding activities falling outside the Field, until five (5) years following the Closing; or (iii) solicit any of Buyer’s employees for any reason until five (5) years following the Closing.

(b) It is the intention of the parties hereto that the provisions of this Section 6.07 shall be enforced to the fullest extent permissible under all applicable Laws. Unenforceability or the modification to conform with such applicable Laws of any provision of this Section 6.07 shall not render unenforceable or impair the remainder of this Section 6.07. The covenants in Section 6.07(a) with respect to duration, geography and scope shall be deemed to be separate covenants, and should any court of competent jurisdiction conclude or find that Section 6.07(a) or any portion thereof is not enforceable with respect to duration, geography or scope, such conclusion or finding shall in no way render invalid or unenforceable this Section 6.07, and the maximum duration, geography or scope reasonable under the circumstances as determined by such court of competent jurisdiction shall be substituted for the stated duration, geography or scope in order to render the same valid and enforceable to the maximum extent under applicable Laws. Seller acknowledges that the duration, geography and scope of such restrictions are fair and reasonable and are reasonably required to protect the Business and Buyer and its Affiliates.

(c) Notwithstanding the foregoing, this Section 6.07 shall not prohibit Seller from manufacturing any products for a third Person that is not an Affiliate of Seller (in the provision by Seller of contract manufacturing services to such third Person) to treat Trauma generally (including but not limited to Trauma to the sternum or anterior ribs), provided that (i) treatment of Trauma to the sternum or anterior ribs is not a primary purpose or a substantial focus of the marketing of such products, (ii) such products are marketed and sold solely under trademarks or brands controlled by such third Person and not under any trademark or brand owned or controlled by Seller or any Affiliate thereof and (iii) Seller provides no design or product engineering services with respect to any such products in the Field.

6.08 Misallocation of Assets .

(a) If, at any time following the Closing, either party becomes aware that any Purchased Asset which should have been transferred to Buyer pursuant to the terms of this Agreement (including finished goods inventory pursuant to Section 2.01(a)) was not transferred to Buyer as contemplated by this Agreement, then Seller shall promptly transfer or cause its Affiliates to transfer such Purchased Asset to Buyer for no consideration and at Seller’s expense.

(b) If, at any time following the Closing, either party becomes aware that any Excluded Asset which should have been retained by Seller pursuant to the terms of this Agreement was transferred to Buyer, then Buyer shall promptly transfer or cause its Affiliates to transfer such Excluded Asset to Seller for no consideration and at Buyer’s expense.

6.09 Regulatory Compliance .

(a) Regulatory Matters Pending at Closing:

(i) [****]. Seller agrees to provide Buyer and its employees, agents, Representatives, consultants, and contractors reasonable access to any real property, books, and records associated with the manufacture of Sternal Products for the purpose of confirming satisfaction of the requirements of this Section 6.09(a)(i);

(ii) Seller, at its own expense, shall promptly, but in no event later than, (A) December 31, 2017 as pertaining to the [****].

(b) Sternal Product Permit and Registration Transfer.

(i) Upon completing all [****] described in Section 6.09(a), and upon receiving Buyer’s written notice that it has successfully obtained all Product Authorizations required for the sale of those Sternal Products not covered under Mixed Product Registrations, Seller, at its own expense, shall promptly make all required filings with the applicable Governmental Authorities to transfer and assign all Permits and Registrations for the Sternal Products, other than the Mixed Product Registrations and Product Authorizations for which such Permits or Registrations are required so that Buyer will be the owner or holder of such Permit or Registration and to permit Buyer to be the legal manufacturer and distribute the Sternal Products in its own name;

(ii) With respect to Mixed Product Registrations, Seller shall, at its own expense, promptly and diligently pursue issuance of a separate Registration for the applicable Sternal Product in the name of Seller containing only indications for use in the Field. Seller shall transfer such separate Registration to Buyer upon receipt of Buyer’s written notice that it has obtained all Product Authorizations required for the sale of those Sternal Products covered under Mixed Product Registrations. As reasonably requested by Seller, Buyer will cooperate, at its own expense, in executing any necessary paperwork or other activities or requirements the satisfaction of which are in Buyer’s control. Until such time as the aforementioned separate Registration has been received, Seller shall hold and maintain in effect in its name (and free of any Encumbrance or rights in any other Person other than Permitted Encumbrances) the Mixed Product Registrations, and comply with the terms and conditions of

the private label and distribution provisions of the Contract Manufacturing Agreement. In the event new pre-clinical animal studies, clinical studies, or extraordinary testing are required to obtain such new Registrations (the “Clinical Prerequisite” ), the pursuit of such Registration shall be deemed to fall under Section 2.09 and the parties will in good faith negotiate a resolution in accordance therewith. Except in the case of a Clinical Prerequisite, if a separate Registration as contemplated in this Section 6.09(b)(ii) has not been received by June 30, 2018, Buyer shall, in its sole discretion, have the option (the “510(k) Option” ) to require Seller to convey, transfer, and assign to Buyer, the applicable Mixed Product Registration (upon conveyance, a “Shared Authorization” ). If Buyer elects to exercise the 510(k) Option, it shall provide written notice to Seller of its election and Seller shall, upon receipt of such notice and without additional consideration, undertake procedures with respect to the Mixed Product Registration as provided for in Section 6(b)(i) as if it was not a Mixed Product Registration. Upon the transfer of the Shared Authorization(s) to Buyer, the parties acknowledge and agree that (i) Buyer shall have no obligation of any kind or nature whatsoever to produce, manufacture, or distribute any of Seller’s products that are reliant on the Shared Authorizations prior to its transfer to Buyer, and (ii) Buyer shall have no liability or obligations of any kind or nature whatsoever to any of Seller’s customers or third parties by virtue of Seller having any Liabilities or other obligations to such Persons in connection with the transfer of the Shared Authorizations. Upon Buyer being in possession of the new Registration in its name or the Shared Authorization, the applicable Sternal Products manufactured thereunder shall be manufactured under the ordinary terms of the Contract Manufacturing Agreement without reference to the private label aspects thereof. Anything herein to the contrary notwithstanding, in the event of a transfer, conveyance, or assignment resulting in a Shared Authorization, Buyer agrees to cooperate in good faith with Seller to enter into an agreement under which Seller will be permitted to manufacture products under a private label arrangement to supply Seller’s customers under the condition that Seller indemnify and hold Buyer harmless in any and all respects whatsoever related thereto.

(i) Buyer acknowledges that the manufacture, distribution and selling of Sternal Products (or other operation of the Business generally) may require Buyer to apply for, qualify for, and obtain its own new, or otherwise separate, Permits and/or Registrations from Governmental Authorities based upon its own ability to satisfy the applicable requirements. Except to the extent related to the transfer from Seller to Buyer of the Purchased Assets, and as otherwise required in connection with such transfer under this Agreement or the Transaction Documents, any and all such costs associated therewith shall be at Buyer’s expense. In this regard, and with respect to Product Authorizations and the Sternal Products manufactured thereunder, Seller shall hold and maintain in effect in its name the Product Authorizations and manufacture such Sternal Products under the terms and conditions of the private label and distribution provisions of the Contract Manufacturing Agreement, until such time as Buyer obtains the necessary Permits and Registrations to manufacture, distribute and sell the applicable Sternal Products in its own name. Buyer shall use commercially reasonable efforts to obtain such Permits and Registrations in a timely manner.

(d) Seller agrees to provide Buyer and its employees, agents, Representatives, consultants, and contractors reasonable access to any real property, books, and records associated with the manufacture of Sternal Products for the purpose of confirming resolution of [****].

6.10 Accounts Receivable and Payable . Following the Closing, Seller agrees that it will collect all of its accounts receivable in connection with the Business and pay all of its accounts payable with respect to the Business, in each case in the ordinary course of business consistent with the past practices and customs of the Business, and will use its commercially reasonable efforts to not take any action which would, or could reasonably be expected to, cause any disruption to the Business. Additionally, Buyer agrees that to the extent it receives accounts receivable relating to a pre-Closing period, the Buyer shall promptly remit such funds to Seller.

6.11 Thorecon FDA Clearance . Following the Closing, Seller shall use its commercially reasonable efforts to obtain an FDA 510(k) clearance for the Thorecon product. In addition, Seller shall provide Buyer with monthly updates regarding the status and progress of an FDA 510(k) clearance for the Thorecon product, shall copy Buyer on all 510(k) filings and correspondence with the FDA related to the Thorecon product, and shall provide prompt written notice to Buyer of any notice or other communication delivered to Seller from the FDA or any other Governmental Authority related to the Thorecon product.

6.12 Transfer of Sternal Product Files . Upon the applicable Sternal Product registration being conveyed, assigned or otherwise obtained by Buyer, as set forth in Section 6.09(b) or Section 6.09(c), Seller shall provide Buyer with the associated Technical File, Design History File/Design Outputs and the Device Master Record, as defined by current FDA regulations, MDR/ISO standards or other Governmental Authorities, as well as all documentation associated with the design and production processes of the Sternal Products (including, but not limited to, validations, testing data, and qualifications).

6.13 Subordination . Notwithstanding anything to the contrary in this Agreement, Seller acknowledges that Buyer’s obligations to pay the Earn-Out Amount, and Guarantor’s guarantee with respect thereto, are subordinated to Buyer’s obligations under its financing agreements and that Buyer and Guarantor may be restricted from making a payment on the Earn-Out Amount pursuant to their financing agreements. Any payment received by Seller in violation of the foregoing shall be held in trust by Seller for the benefit of the lenders under such financing agreements and shall promptly be paid over to such lenders by wire transfer of immediately available funds. The parties hereto acknowledge and agree that the lenders under such financing agreements are express third party beneficiaries of this Section 6.13, which may not be amended or modified in any manner that would affect their respective rights hereunder without the written consent of the lenders or agents for such lenders under such financings. In the event Buyer and Guarantor are restricted from making any Earn-Out Amount payments to Seller, Vance Street Capital II, L.P. agrees that it shall pay, or cause to be paid, to Seller on the date any Earn-Out Amount is due and payable to Seller.

ARTICLE VII

INDEMNIFICATION

7.01 Survival . Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is one (1) year from the Closing Date; provided that (i) the representations and warranties in (i) Sections 4.01 (Organization and Qualification of Seller), 4.02 (Authority of Seller), 4.06 (Title to Purchased Assets), 4.22 (Brokers), and 4.23 (510(k) Ownership), and 5.01 (Organization and Authority of Buyer), 5.02 (Authority of Buyer) and 5.04 (Brokers), (such sections, collectively, the “ Fundamental Representations ”) shall survive for a period of five (5) years after the Closing Date, (ii) Section 4.07 (Intellectual Property), Section 4.10 (Taxes), and Section 4.12 (Environmental Matters) (such sections, collectively, the “ Statutory Representations ”) shall survive for a period of sixty (60) days following the expiration of the applicable statute of limitations and (iii) Section 4.20 (Sufficiency of Assets) shall survive for a period of two (2) years after the Closing Date. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such claims shall survive until finally resolved. Each of the covenants or other agreements contained in this Agreement shall survive the Closing Date.

7.02 Indemnification by Seller . Subject to the other terms and conditions of this Article VII, Seller shall indemnify Buyer and its Affiliates and their respective Representatives (collectively, the “ Buyer Indemnitees ”) against, and shall hold each of them harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement;

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement;

(d) any breach of the Contract Manufacturing Agreement, the Quality Agreement, or the Transition Services Agreement; or

(e) to the extent attributable to actions or omissions occurring prior to Closing, any non-compliance with the Federal Food, Drug, and Cosmetic Act and any Laws and Governmental Orders administered by the FDA or any foreign Governmental Authority having jurisdiction over Seller applicable to the design, development, testing, manufacture, packaging, handling, distribution or sale of Sternal Products.

7.03 Indemnification by Buyer . Subject to the other terms and conditions of this Article VII, Buyer shall indemnify Seller and its Affiliates and their respective Representatives (collectively, the “ Seller Indemnitees ”) against, and shall hold each of them harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement;

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement; or

7.04 Certain Limitations . The party making a claim under this Article VII is referred to as the “ Indemnified Party ”, and the party against whom such claims are asserted under this Article VII is referred to as the “ Indemnifying Party ”. The indemnification provided for in Section 7.02 and Section 7.03 shall be subject to the following limitations:

(a) Subject to Section 7.04(c), the Indemnifying Party shall not be liable to the Indemnified Party for indemnification under Section 7.02(a) or Section 7.03(a), as the case may be, until the aggregate amount of all Losses in respect of indemnification under Section 7.02(a) or Section 7.03(a) exceeds $200,000 (the “ Deductible ”), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Deductible. With respect to any claim as to which the Indemnified Party may be entitled to indemnification under Section 7.02(a) or Section 7.03(a), as the case may be, the Indemnifying Party shall not be liable for any individual or series of related Losses which do not exceed $10,000 (which Losses shall not be counted toward the Deductible).

(b) Subject to Section 7.04(c), the aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 7.02(a) or Section 7.03(a), as the case may be, shall not exceed ten percent (10%) of the Purchase Price.

(c) Notwithstanding anything in this Agreement to the contrary, the limitations on liability contained in Sections 7.04(a) and 7.04(b) for indemnification pursuant to Section 7.02(a) and Section 7.03(a) shall not apply to breaches of any Fundamental Representations, Statutory Representations and the representations contained in Sections 5.01, 5.02 and 5.04; provided, however, that an Indemnifying Party’s obligation to indemnify the Indemnified Party for such Losses shall be limited to the amount of the Purchase Price, except in the case of intentional misrepresentation or fraud as to which there shall be no limit.

(d) The aggregate amount of all Losses for which Seller shall be liable pursuant to Section 7.02(d) and 7.02(e) shall not exceed the amount of the Purchase Price received by Seller from Buyer, except in the case of intentional misrepresentation or fraud as to which there shall be no limit.

(e) For the avoidance of doubt, Losses for which Seller shall be liable pursuant to Section 7.02(d): [****].

(f) Payments by an Indemnifying Party pursuant to Section 7.02 or Section 7.03 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such claim.

(g) Payments by an Indemnifying Party pursuant to Section 7.02 or Section 7.03 in respect of any Loss shall be reduced by (i) an amount equal to any Tax benefit actually realized as a cash reduction to Taxes (determined on a with and without basis) in the taxable year of the Loss as a result of such Loss by the Indemnified Party and (ii) any recoveries actually received under an insurance policy, less the amount expended to obtain such recoveries.

(h) In no event shall any Indemnifying Party be liable to any Indemnified Party for any speculative, punitive, special or indirect damages, except to the extent recovered pursuant to a third party claim or that would be recoverable for breach of contract under applicable Law.

(i) Each Indemnified Party shall take, and cause its Affiliates to take, all commercially reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise to a Loss, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

(j) For purposes of the calculation of Losses indemnifiable pursuant to Sections 7.02(a) and 7.03(a), the representations and warranties of Seller and Buyer shall not be deemed to be qualified by any references to materiality (or Material Adverse Effect or terms of like import).

7.05 Indemnification Procedures .

(a) Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a “ Third Party Claim ”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt, but in any event within thirty (30) days, written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the

Indemnified Party shall cooperate in good faith in such defense, provided that the Indemnifying Party shall not have the right to assume such defense if (i) the Third Party Claim relates to or involves any criminal or quasi criminal Action or proceeding, (ii) the Indemnified Party reasonably believes an adverse determination with respect to the Third Party Claim would be detrimental to or injure the Indemnified Party’s reputation or future business prospects, or (iii) the Third Party Claim seeks an injunction or other equitable relief against the Indemnified Party (but only to the extent necessary to defend against the injunction or claim for other equitable relief) or (iv) there exists or would, or could reasonably be expected to, exist a conflict of interest between the Indemnified Party and Indemnifying Party that would make it inappropriate in the reasonable judgment of the Indemnified Party for the Indemnifying Party to control the defense. In the event the Indemnifying Party has assumed defense of a Third Party Claim and there exists or would, or could reasonably be expected to, exist a conflict of interest that would make it inappropriate in the reasonable judgment of the Indemnified Party for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall have the right to request the Indemnifying Party to appoint alternative legal counsel, failing which the Indemnified Party may regain control of the defense and proceed under this Section as if the Indemnifying Party had not assumed control of the defense. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 7.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may, subject to Section 7.05(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. In such case, the Indemnified Party will provide the Indemnifying Party with a running total of Loses for which indemnification is sought, with such running total to be updated no less than once per calendar quarter. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section 6.02) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), except as provided in this Section 7.05(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If

the Indemnified Party fails to consent to such firm offer within fifteen (15) Business Days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 7.05(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

(c) Direct Claims. Any claim by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “ Direct Claim ”) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. During such 30-day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Indemnified Party’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30-day period, the Indemnifying Party shall be deemed to have accepted such claim and shall be liable to the Indemnified Party for the amount thereof. If the Indemnifying Party rejects such claim during such 30-day period, the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

7.06 Exclusive Remedies . Subject to Section 8.11, the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from intentional misrepresentation or fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VII. Nothing in this Section 7.06 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 8.11 or to seek any remedy on account of any intentional misrepresentation or fraud by any party hereto.

ARTICLE VIII

MISCELLANEOUS

8.01 Expenses . Except as otherwise expressly provided herein (including Section 6.04 hereof), all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

8.02 Notices . All notices, requests, consents, claims, demands, waivers and, unless otherwise expressly provided for herein, other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by facsimile (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02):


If to Seller:		RTI Surgical, Inc. Attn: Robert P. Jordheim (or his successor) 11621 Research Circle Alachua, FL 32615 Facsimile: 386-462-3821

with a copy to:		RTI Surgical, Inc. Attn: Keith C. Koford (or his successor) 11621 Research Circle Alachua, FL 32615 Facsimile: 386-418-5157

and with a copy to:		Holland & Knight LLP Attn: Robert Grammig 100 North Tampa Street, Suite 4100 Tampa, FL 33602 Facsimile: 813-229-0134

If to Buyer or Guarantor:		Vance Street Capital LLC 11150 Santa Monica Blvd. #750 Los Angeles, CA 90025 Attention: Brian Martin Facsimile: (310) 478-8072

with a copy to:		Paul Hastings LLP 515 S. Flower St., Twenty-Fifth Floor Los Angeles, California 90071 Attention: Robert Miller Facsimile: (213) 996-3254

8.03 Interpretation . For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; and (b) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

8.04 Headings . The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

8.05 Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

8.06 Entire Agreement . This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

8.07 Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed, except that no prior consent is required for assignment to an Affiliate and Buyer may assign its rights hereunder to any Person as security for financing or in connection with a sale of all or substantially all of the assets of the Business. No assignment shall relieve the assigning party of any of its obligations hereunder.

8.08 No Third Party Beneficiaries . This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Notwithstanding anything to the contrary in this Section 8.08, Buyer’s and Guarantor’s lenders under their financing agreements are express third party beneficiaries of Section 6.13 of this Agreement.

8.09 Amendment and Modification; Waiver . This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Notwithstanding anything to the contrary in this Section 8.09, any amendments or waivers to Section 6.13 of this Agreement shall require the prior written consent of Buyer’s and Guarantor’s lenders under their financing agreements.

8.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF DELAWARE IN EACH CASE LOCATED IN THE CITY OF WILMINGTON AND COUNTY OF NEW CASTLE, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.10(c).

8.11 Specific Performance . The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

8.12 Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

8.13 Non-recourse . This Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto (including successors and assigns of such parties) and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any party hereto or of any Affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any claim, action, suit or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby.

8.14 Obligations of Guarantor . Guarantor is jointly and severally liable for all warranties, representations, covenants, performance obligations, and sums presently payable, or which may become payable, under this Agreement, including any Transaction Documents executed in connections with this Agreement, and any subsequent amendments hereto or thereto. Seller shall not be required to attempt against Buyer before proceeding against Guarantor.

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


RTI SURGICAL, INC.

By:
Name:
Title:

Signature Page to Asset Purchase Agreement

A&E ADVANCED CLOSURE SYSTEMS, LLC

By:

Name: Michael Janish

Title: Chief Executive Officer and President

ALTO DEVELOPMENT CORP

By:

Name: Michael Janish

Title: Chief Executive Officer and President

VANCE STREET CAPITAL II, L.P., solely for purposes of Section 6.13

By: Vance Street Management LLC,

its General Partner

By:

Richard Roeder, Managing Member

Signature Page to Asset Purchase Agreement

Exhibit 10.2

Contract Manufacturing Agreement

This Contract Manufacturing Agreement, dated as of August 3, 2017 (the “ CMA ”), is entered into by and between RTI Surgical, Inc., a Delaware corporation (“ Seller ”), and A&E Advanced Closure Systems, LLC, a Delaware limited liability company (“ Buyer ”, and together with Seller, the “ Parties ”, and each, a “ Party ”).

WHEREAS , Seller is in the business of manufacturing and selling sternal cable and sternal plate-based products, including associated instrumentation, for use in the Field;

WHEREAS , Buyer wishes to purchase certain Products (as defined below) in the Field from Seller; and

WHEREAS , Seller desires to manufacture and sell the Products to Buyer.

NOW, THEREFORE , in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions . Capitalized terms have the meanings set out or referred to in this Section 1 or as otherwise defined in this CMA. Capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Asset Purchase Agreement (as defined below).

“ Action ” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or other, whether at law, in equity or otherwise.

“ Assets and Resources ” has the meaning set forth in Section 2.8(a).

“ Asset Purchase Agreement ” means the asset purchase agreement between Buyer and Seller, dated as of August 3, 2017.

“ Basic Purchase Order Terms ” means, collectively, any one or more of the following terms specified by Buyer in a Purchase Order pursuant to Section 3.2: (a) a list of the Products to be purchased, including SKU; (b) the quantity of each of the Products ordered; (c) the delivery date; (d) the unit Price for each of the Products to be purchased; (e) shipping terms Ex Works at Seller’s facilities and (f) the billing address.

“ Buyer ” has the meaning set forth in the preamble to this CMA.

[****]

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“ Claim ” means any Action brought against a Person entitled to indemnification under Section 10.

“ COGS” with respect to any Product means the materials, direct labor and manufacturing overhead costs incurred by Seller in the production of such Product.

“ Confidential Information ” has the meaning set forth in Section 13.1.

“ Contract Year ” shall mean the period commencing on the Effective Date and ending on June 30, 2018, and each twelve (12) month period commencing on July 1 of each subsequent year (e.g., July 1, 2018 & July 1, 2019 etc.). For example, if the Effective Date of this CMA was July 14, 2017, then Contract Year 1 would be July 14, 2017 through June 30, 2018, Contract Year 2 would be July 1, 2018 through June 30, 2019, and so forth.

“ Defective ” means not conforming to the Product Warranty under Section 9.3.

“ Defective Products ” means goods shipped by Seller to Buyer pursuant to this CMA that are Defective.

“ Disclosing Party ” has the meaning set forth in Section 13.1.

“ Effective Date ” means August 3, 2017.

“ Ex Works ” has the meaning set forth in Section 4.2.

“ Excess Orders ” has the meaning set forth in Section 3.2.

“ Excused Violation ” means any violation by Buyer of any Law or breach of this Agreement or other Transaction Agreement that is based upon a condition, occurrence or cause that is essentially a continuation of any condition, occurrence or cause that existed in connection with the Business while Seller still operated the Business; provided that such violation or breach shall cease to be deemed to be an Excused Violation as of such time, if any, as Buyer receives information that should reasonably have put Buyer on notice of such violation or breach such that Buyer’s continued violation or breach thereof results from Buyer’s negligence in its operation of the Business.

“ Field ” means all use in humans of cable or plate-based products involving the sternum or anterior ribs.

“ Force Majeure Event ” has the meaning set forth in Section 17.21.

“ Fundamental Default” means (i) that fewer than [****] of the Products ordered for shipment hereunder over any [****] period are delivered by Seller on time, (ii) Seller breaches Section 2.5, (iii) Seller commits an intentional breach of this Agreement, or (iv) Seller otherwise materially breaches this CMA or the Quality Agreement and (x) fails to cure such breach within [****] after written notice from Buyer or (y) repeats such breach [****].

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“ Indemnified Party ” has the meaning set forth in Section 10.1.

“ Indemnifying Party ” has the meaning set forth in Section 10.1.

“ Initial Term ” has the meaning set forth in Section 6.1.

“ Losses ” has the meaning set forth in Section 10.1.

“ Managed Version ” means (i) Wholly Engineered products; (ii) Thorecon Products; and (iii) [****].

“ Margin ” with respect to any Product means a fraction, the numerator of which is the amount by which the price for which Seller sells such Product to Buyer hereunder exceeds the COGS associated with such Product and the denominator of which is such price, expressed as a percentage. For example, if the COGS associated with a Product are $100 and the Price is $125, then the Margin for such Product is ($125 - $100)/$125 = 20%.

“ New Product ” means any product that is not a Managed Version.

“ Nonconforming Products ” means any Products received by Buyer from Seller pursuant to a Purchase Order that (i) do not conform to such Purchase Order, (ii) do not conform to the specifications, (iii) are not properly packaged, (iv) do not include all required documentation or (v) for any other reason are not suitable for immediate release and sale.

“ Notice ” has the meaning set forth in Section 17.5.

“ Party ” has the meaning set forth in the preamble to this CMA.

“ Payment Failure ” has the meaning set forth in Section 6.3(a).

“ Personnel ” of a Party means any agents, employees, contractors or subcontractors engaged or appointed by such Party.

“ Price ” has the meaning set forth in Section 5.1.

“ Product Warranty ” has the meaning set forth in Section 9.3.

“ Product(s) ” means all products manufactured by Seller for Buyer under this CMA.

“ Purchase Order ” means Buyer’s purchase order issued to Seller hereunder.

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“ Quality Agreement ” means the Contract Manufacturing Quality Agreement and the Private Label Quality Agreement of even date herewith by and among the Parties, which sets forth certain obligations of the Parties with respect to the quality and compliance of the Products.

“ Receiving Party ” has the meaning set forth in Section 13.1.

“ Regular Planning Meeting ” has the meaning set forth in Section 2.8(c).

“ Relationship Manager ” has the meaning set forth in Section 2.8(b).

“ Renewal Term ” has the meaning set forth in Section 6.2.

“ Responsible Party ” means Buyer with respect to the Products constituting CMA Products under the CMA Product Quality Agreement, and Seller with respect to Products constituting Private Label Products under the Private Label Quality Agreement.

“ Safety Stock ” has the meaning set forth in Section 3.4.

“ Seller ” has the meaning set forth in the preamble to this CMA.

“ Service Providers ” has the meaning set forth in Section 16.3.

“ Service Schedule ” has the meaning set forth in Section 16.1(b).

“ Services ” means any services provided by Seller pursuant to Section 16.

“ Taxes ” means any and all present and future sales, income, stamp and other taxes, levies, imposts, duties, deductions, charges, fees or withholdings imposed, levied, withheld or assessed by any Governmental Authority, together with any interest or penalties imposed thereon.

“ Term ” has the meaning set forth in Section 6.2.

“ TSA” means the Transition Services Agreement between the Parties.

“ Warranty Period ” with respect to any Product means the useful life of such Product as set forth on the documentation therefor. The useful life of the Sternal Products (including, without limitation, instrumentation) is three (3) years.

“ Wholly Engineered ” means a Sternal Product that does not require material engineering of the lower level component drawings.

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2.	Purchase and Sale of Products .

2.1

Purchase and Sale . Subject to the terms and conditions of this CMA, during the Term Buyer shall purchase from Seller, and Seller shall manufacture and/or supply and sell to Buyer, the Products (including the Sternal Products and all Managed Versions). Schedule 1 contains: (a) a description of the Sternal Products to be manufactured and sold hereunder; and (b) the purchase price for each of the Sternal Products.

2.2

Exclusivity of Seller . Seller will not market or sell any Sternal Products or Managed Versions, or manufacture Sternal Products or Managed Versions for other Persons or for itself or its Affiliates, where Seller knows, or reasonably should know, that such Sternal Products or Managed Versions will be marketed for use or sale in the Field. Seller shall not be prohibited from manufacturing, marketing, and/or distributing the Sternal Products (including Managed Versions) for use or sale outside the Field. Further, notwithstanding the foregoing, this Section 2.2 shall not prohibit Seller from manufacturing any products for a third Person that is not an Affiliate of Seller (in the provision by Seller of contract manufacturing services to such third Person) to treat Trauma generally (including but not limited to Trauma to the sternum or anterior ribs), provided that (i) treatment of Trauma to the sternum or anterior ribs is not a primary purpose or a substantial focus of the marketing of such products, (ii) such products are marketed and sold solely under trademarks or brands controlled by such third Person and not under any trademark or brand owned or controlled by Seller or any Affiliate thereof and (iii) Seller provides no design or product engineering services with respect to any such products in the Field. Other than the Sternal Products (including Managed Versions), and to the extent not inconsistent with Section 6.07 of the Asset Purchase Agreement, no prohibitions shall exist with respect to any products manufactured, marketed, and/or distributed for use or sale by Seller or its Affiliates, whether directly or indirectly, including its distributors, and/or third-party resellers. For avoidance of doubt, no right is granted for Seller to use, and Seller agrees not to use, any trademark or other designation of source, origin, sponsorship, endorsement of certification of Buyer, including any of the foregoing included in the Purchased Assets.

2.3

Exclusivity of Buyer . Subject to Section 2.4 (“Secondary Source”): (1) Buyer will purchase all Sternal Products, including Managed Versions, from Seller; (2) Seller shall have a right of first negotiation to manufacture for Buyer all New Products that do not otherwise constitute Sternal Products or Managed Versions, provided that the right of first negotiation shall only apply to products manufactured during the Term and shall in no event apply to products commercially released after the third anniversary of the Closing of the Asset Purchase Agreement or that are or shall be products, or new versions or line extensions with respect to any product, manufactured by Buyer separately from

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the Business, and provided, further, that the right of first negotiation shall terminate upon a change of Control of Buyer; and (3) except as may be otherwise agreed to by the Parties, Buyer will not distribute or sell Sternal Products or Managed Versions to any Person whom Buyer knows, or reasonably should know, will market and use such Products outside the Field. If Seller’s rights under the foregoing right of first negotiation arise with respect to any product that Buyer wishes to have manufactured, Buyer shall so notify Seller in writing. If Seller wishes to manufacture such product for Buyer, Seller shall so notify Buyer within thirty (30) days after receiving such notice from Buyer, which notice shall include the terms under which Seller proposes to provide such manufacturing services (the “ ROFN Proposal ”). Buyer and Seller shall then negotiate in good faith with the view of entering into a written agreement pursuant to which Seller will provide such manufacturing services to Buyer. Notwithstanding any other provision hereof, if Seller fails to timely provide a ROFN Proposal, or if Buyer and Seller for any reason fail to enter into such a written agreement within sixty (60) days after Seller provides the ROFN Proposal to Buyer, Seller’s rights under the forgoing right of first negotiation with respect to such product shall terminate, and Buyer shall be free to engage any third Person to provide manufacturing services with respect to such product, any version thereof or other product related thereto under any terms, at any time, at Buyer’s sole discretion. All restrictions upon and obligations of Buyer under this Section 2.3 shall terminate and be of no further force or effect upon the occurrence of a Fundamental Default.

2.4

Secondary Source .

(a)

Buyer will have the right to engage a secondary source manufacturer (including the Buyer manufacturing in its own facility) for Sternal Products or any Managed Version upon providing Notice to Seller of such engagement. Prior to Buyer placing its first purchase order with the secondary source for Sternal Products or Managed Versions for commercial distribution, Buyer will provide Notice to Seller. Upon Seller’s receipt of Buyer’s Notice of placing its first such purchase order with the secondary source, and provided that Seller shall not have theretofore committed any Fundamental Default, the restrictions in Section 2.2 shall be deemed waived by Buyer without the requirement of any further Notice; provided, however, that Buyer shall remain subject to Section 3.5 of this CMA and Seller shall remain subject to Section 6.07 of the Asset Purchase Agreement. For avoidance of doubt, notwithstanding Buyer’s purchases of Sternal Products or Managed Versions from any secondary source, Seller shall remain subject to Section 2.2 in all respects if, prior to such purchases, Seller committed a Fundamental Default.

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(b)

Notwithstanding anything to the contrary in Section 2.3, Buyer will have the right at any time to qualify and otherwise prepare any third Person to manufacture the Sternal Products and Managed Versions for Buyer by engaging such third Person to manufacture Sternal Products or Managed Versions to the extent required in connection with such qualification and preparation, and Seller shall reasonably assist and cooperate with Buyer in any efforts of Buyer to do so, but, for so long as Buyer’s obligations under Section 2.3 remain in effect, not for commercial resale. For avoidance of doubt, Seller shall remain subject to Section 2.2 in all respects notwithstanding Buyer’s exercise of its rights under this Section 2.4(b), including, without limitation, its purchase of Sternal Products and Managed Versions from the secondary source or prospective secondary source in connection with its qualification as, or preparation for becoming, a secondary source. To the extent that Seller’s performance of its obligations under this Section 2.4(b) to assist and cooperate with Buyer’s to qualify and otherwise prepare a second source to manufacture Sternal Products and any then-existing Managed Versions require substantial effort, then Seller shall promptly so notify Buyer, and such obligations shall then be conditioned upon Buyer’s acceptance of a Service Schedule therefor under Section 16. Seller shall promptly prepare and propose such a Service Schedule upon Buyer’s request and shall make all commercially efforts to expeditiously resolve any concerns of Buyer with respect thereto.

2.5

Effect of Change of Control or Sale of Assets . In the event of a change of control of Seller or its business, including a merger, sale of stock or sale by Seller of substantially all of its assets, or in the event of any other assignment or transfer of Seller’s business or assets relating to or used in its performance of this CMA, Seller shall cause the Person that acquires such assets or business or acquires control of Seller or its business to assume and agree to perform all of Seller’s obligations under this CMA and the Quality Agreement. Anything in this CMA to the contrary notwithstanding, in the event Seller is subject to a change in control whereby the Person gaining control of Seller is in the business of manufacturing, marketing, and/or distributing for use or sale medical products and instruments in the Field, nothing herein shall be deemed to prohibit such Person from continuing to conduct and expand its business (excluding the business purchased from Seller) in the Field.

2.6

Seller Consent to Specification Change for New Products . Seller shall not be obligated to manufacture any New Product until the specification for such New Product is accepted by Seller, in its sole discretion.

2.7

Managed Versions . If pursuant to Section 16 or otherwise, Seller develops, either solely or jointly with Buyer, any Managed Version, Seller shall, to the extent Buyer submits and Seller accepts Purchase Orders therefor pursuant to Section 3, manufacture such Managed Version for Buyer pursuant to and in accordance with this CMA.

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(a)

If Buyer develops, or engages any third Person to develop, any Managed Version and desires to have Seller manufacture such Managed Version hereunder, Buyer shall so notify Seller in writing, which notice includes proposed specifications for such Managed Version. Within thirty (30) days after receiving such notice, Seller shall respond thereto in writing, which response shall either (i) accept such specifications or (ii) suggest changes to such specifications, explaining in detail the reasons for such changes (which reasons may include, without limitation, that manufacturing to such specification would not be reasonably practicable or that changing such specification would reduce manufacturing or other costs). If Seller suggests changes to such specifications, the Parties shall promptly confer in good faith with the view of mutually agreeing to the specifications for such Managed Version. If Buyer and Seller fail to reach an agreement within ten (10) Business Days regarding such specifications, then the decisions of Buyer with respect thereto shall control, provided that Seller shall in no event be obligated to manufacture to such specifications if it is not reasonably practicable to do so (and Seller promptly so notifies Buyer), and provided, further, that the price of such Managed Version hereunder shall be based on Seller’s COGS associated with manufacturing to such specifications as contemplated in Section 5.1(c). Once the specifications for such Managed Version are accepted by Seller or established as otherwise contemplated in this Section 2.7(a), Seller shall, to the extent Buyer submits and Seller accepts Purchase Orders pursuant to Section 3, manufacture such Managed Version for Buyer pursuant to and in accordance with this CMA. The thirty (30) day period provided above for Seller to respond to Buyer’s notice and the ten (10) Business Day period for the Parties to attempt to reach agreement regarding new specifications may upon notice from Buyer, be accelerated upon exigent circumstances, including, without limitation, circumstances that could cause an interruption of or material harm to the Business as a result of the act of the FDA or any other Governmental Authority, market forces or otherwise. Notwithstanding the foregoing, Seller shall have no obligation under this Section 2.7(a) to manufacture any Managed Version, or to review specifications for any Managed Version that is to be manufactured, using additive manufacturing.

(b)

Promptly upon Seller’s completion of the development or design or a Managed Version or after Buyer’s Notice to Seller that it desires Seller to manufacture any Managed Version as contemplated in Section 2.7(a), Seller shall provide Buyer a report stating the price thereof hereunder as determined pursuant to Section 5.1(c), which report shall include all information reasonably required or requested by Buyer to confirm that such price is set correctly. If Buyer so requests, Seller shall be reasonably available under Section 16 to work with Buyer to modify the proposed specifications for any Managed Version in light of Buyer’s concerns regarding such price.

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(c)

To the extent that Seller’s performance of its obligations under Sections 2.8(b) or 2.8(c) to review or revise specifications for or determine the price of any Managed Version require substantial effort, then Seller shall promptly so notify Buyer, and such obligations shall then be conditioned upon Buyer’s acceptance of a Service Schedule therefor under Section 16. Seller shall promptly prepare and propose such a Service Schedule upon Buyer’s request and shall make all commercially reasonable efforts to expeditiously resolve any concerns of Buyer with respect thereto.

(d)

If any Managed Version constitutes a replacement for a Product then being manufactured by Seller hereunder, such that Buyer ceases to sell the prior version of such Product (a “ Discontinued Product ”), then all outstanding Purchase Orders for such Discontinued Product having a delivery date following the release of such Managed Version shall be deemed to be for such Managed Version (with the price thereunder changed as provided herein), and all forecasts with respect to such Discontinued Product for delivery after release of such Managed Version shall be deemed to be forecasts for such Managed Version. To the extent that Seller has any finished goods inventory of such Discontinued Product after release of such Managed Version, or has work-in-process, subassemblies or raw materials inventory for such Discontinued Product, in either case that were manufactured or intended for use in connection with then-pending Purchase Orders or the binding portion of the then most recent forecast that required or forecasted delivery within ninety (90) days of such release date, or that were required to comply with Seller’s obligations under Section 3.4, and to the extent that Seller is not reasonably able to utilize such inventory in connection with such Managed Version or otherwise, Buyer shall purchase such inventory form Seller at Seller’s COGS thereof. Seller shall promptly provide buyer such documentation, records, backup and support for such COGS as Buyer shall reasonably request. Nothing herein limits or conditions any of Seller’s obligations hereunder, including, without limitation, its obligations with respect to product warranties, recalls or indemnification.

2.8

Resource Allocation; Relationship Manager; Resource Planning Committee .

(a)

Buyer acknowledges that, in addition to manufacturing Products for Buyer hereunder, Seller is engaged in the business of designing and manufacturing medical devices for sale by Seller under Seller’s brands and of manufacturing medical devices as a contract manufacturer for other customers, and that those businesses of Seller rely on many of the assets and resources (including equipment, labor, raw materials, components,

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subcontractors, capital and other manufacturing inputs) that Seller also uses to perform its obligations under this CMA (the “ Assets and Resources ”). Similarly, Seller acknowledges that, subject to Section 2.5(a), it is Buyer’s sole source for Products and Services, that, even if Buyer were not restricted hereunder from using alternative suppliers, there are currently no alternative suppliers that could supply Buyer with Products or Services under acceptable terms, and, consequently, that Buyer’s ability to successfully operate and maintain the value of the Business it purchases from Seller under the Asset Purchase Agreement depends upon, and in entering into the Asset Purchase Agreement, Buyer has relied upon, Seller’s good faith performance of its obligations under this CMA. Accordingly, Seller shall allocate the Assets and Resources, in terms of both quantity and quality, among its businesses described above in this Section 2.10(a) fairly and in good faith. In the case of a Force Majeure event, Seller will give equal priority to the needs of Buyer in allocating Seller’s Assets and Resources.

(b)

Each party shall appoint a primary “Relationship Manager” and an alternate for when the primary Relationship Manager is not reasonably available. The Relationship Mangers shall manage the relationship of the parties under this CMA and in connection with the performance hereof.

(c)

On a regular basis mutually agreed to by the Parties throughout the Term (but not less often than quarterly), the Relationship Managers, and such other representatives of the Parties as the Relationship Managers shall reasonably decide to include, shall meet in person or via teleconference (“ Regular Planning Meetings ”). At the Regular Planning Meetings, the Parties shall discuss the allocation of Assets and Resources in light of Buyer’s forecasts and plans and the needs of Seller’s businesses other than its business of performing under this CMA. Subject to their mutual obligations of confidentiality, each Party shall, to facilitate the constructive dialog and collaborative planning that the Regular Planning Meetings are intended to foster, share with the other Party such information regarding the Assets and Resources and regarding its business needs, forecasts and plans as the other Party shall reasonably request. The Parties shall use all commercially reasonable efforts to reach consensus regarding the allocation of Assets and Resources in accordance with the requirements of this Section 2.8 and to amicably resolve any disputes regarding compliance by Seller with its obligations under Section 2.8(a). All Regular Planning Meetings shall be held at such times and locations as are mutually determined by the Relationship Managers.

(d)

Seller’s obligations under this Section 2.8 are in addition to, and in no way condition, qualify or limit, Seller’s other obligations under this CMA. Accordingly, Seller’s compliance with this Section 2.8 will in no way excuse any breach by Seller of any other provision of this CMA.

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2.9

Terms of CMA Prevail Over Buyer’s Purchase Order . The Parties intend for the terms and conditions contained in this CMA and the Basic Purchase Order Terms contained in the applicable Purchase Order to exclusively govern and control each of the Parties’ respective rights and obligations regarding the subject matter of this CMA, and this CMA is expressly limited to such terms and conditions. Any conflicting or additional terms presented in any Purchase Order is waived and of no effect.

2.10

Packaging .

(a)

Materials . Packaging materials will utilize Seller’s designs suited to its production capabilities, using Seller’s standard methods of packaging and shipping, and Seller shall maintain records of packaging specifications; provided that nothing herein shall limit Buyer’s right to change packaging specifications as the Responsible Party. All graphics will be designed by Buyer and shall be within Seller’s current production capabilities, not add to Seller’s costs, and be compliant with applicable Laws. In addition to any graphic designs transferred to Buyer among the Purchased Assets, as between Buyer and Seller all graphics (other than Seller’s retained trademarks, if used) shall be Buyer’s Intellectual Property. All costs for graphic designs and costs for implementing graphic design changes shall be borne by Buyer; provided that nothing herein limits any of Seller’s obligations under the Asset Purchase Agreement with respect to labeling changes and otherwise or requires Buyer to incur any costs in connection therewith.

(b)

Inserts . The Responsible Party shall develop package inserts, shall maintain records of package insert specifications, and shall have control over content. In the event a party becomes aware of a regulatory or legal insufficiency of a package insert that requires urgent modification to maintain compliance, it shall provide prompt notice to the other party and Seller will make such required change and work with Buyer to determine the process for effecting such changes with respect to Products in inventory or that have been distributed. Costs and expenses relating to such changes, including any Recalls or other actions required or advisable in the opinion of the Responsible Party with respect to the affected Products, shall be borne by the at-fault party, unless expressly provided for otherwise under the APA or Section 9.7 of this CMA.

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(c)

Labels . Seller shall utilize package labels developed by the Responsible Party that are within Seller’s current production capabilities, do not add to Seller’s Costs, and are compliant with applicable laws. In the event a party becomes aware of a regulatory or legal insufficiency of a package label that requires urgent modification to maintain compliance, it shall provide prompt notice to the other party and Seller will make such required change and work with Buyer to determine the process for effecting such changes with respect to Products in inventory or that have been distributed. Costs and expenses relating to such changes, including any Recalls or other actions required or advisable in the opinion of the Responsible Party with respect to the affected Products, shall be borne by the at-fault party, unless expressly provided for otherwise under the APA or Section 9.7 of this CMA.

2.11

No Conflict Minerals . RTI shall comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act by sourcing conflict-free minerals for use in the manufacturing of metal implants and other products, and upon request, shall provide documentation of compliance to A&E and regulatory agencies.

3.	Ordering Procedure .

3.1

Forecasts . Buyer has provided to Seller a rolling forecast (and corresponding Purchase Orders) for the period beginning the first Contract Year which is attached hereto as Exhibit A. Thereafter, by the last Business Day of each month, Buyer will submit a rolling forecast, listed by SKU, of Buyer’s actual or anticipated designated delivery dates of Products over the 12-month period commencing on the following month. (For illustrative purposes only, September will be the first month of a rolling forecast submitted on the last Business Day of August.) The first four months of each rolling forecast shall be binding on Buyer. Months 5 through 12 of the rolling forecast shall not be binding upon Buyer, but are for planning purposes only. All non-binding months of the rolling forecasts shall be based on Buyer’s good faith estimates. Unless otherwise agreed to by Seller, the anticipated quantities for each Product (both by SKU and cumulatively) specified for month five in a rolling forecast shall neither increase nor decrease by more than [****] upon its conversion to the binding fourth month in the subsequent month’s rolling forecast. Buyer will use commercially reasonable efforts to provide smooth month-to-month ordering patterns in its rolling forecast (excluding the effect of stocking orders).

3.2

Purchase Orders . Buyer shall submit to Seller Purchase Orders for Products correlating to the binding forecast no later than [****] before the designated delivery date. All accepted Purchase Orders for Products shall be firm and binding on Buyer and Seller. Seller shall accept all Purchase Order submitted by Buyer for Sternal Products, Managed Versions (except as provided in Section 2.7(a)) and any New Products (to the extent that the Parties have mutually agreed that Seller will manufacture such New Products hereunder); provided, however, that Seller will not be required to accept Purchase Orders (i) for Managed Versions that are not designed or developed by Seller until the specifications

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therefor have been established as contemplated in Section 2.7(a), (ii) that designate a delivery date(s) less than [****] from the date of the Purchase Order, or for a quantity of Product on the specified delivery date(s) that, when aggregated with other outstanding Purchase Orders, exceeds the sum of (x) [****] of the forecasted orders for delivery of such Product on such date(s) plus (y) the then available Safety Stock of such Products (collectively, the “Excess Orders”), or (ii) that are not in conformity with the applicable requirements of this CMA. Seller will use commercially reasonable efforts to accept all Excess Orders (provided that such Excess Orders otherwise comply with this CMA). To the extent that Seller cannot accept an Excess Order notwithstanding such commercially reasonable efforts, Seller will confer with Buyer and make commercially reasonable efforts to accept delivery dates with respect to such Excess Orders that are as close as is commercially practicable to Buyer’s requested delivery date. If accepting an Excess Order would require Seller to incur overtime expenses, Seller’s acceptance of such Excess Order may include a statement that such acceptance is contingent on Buyer’s agreement to pay such overtime expenses (but only to the extent that such overtime expenses are solely attributable to Seller’s efforts to timely deliver such Excess Order), which acceptance shall further state Seller’s good faith best estimate of the amount of such overtime expenses. If Buyer does not agree to pay such overtime expenses, such acceptance shall be void, and such Purchase Order shall not be binding on Buyer and Seller. Seller may invoice Buyer for such overtime expenses incurred by Seller. If Buyer does not respond to any contingent acceptance of an Excess Order within three (3) Business Days after Buyer’s receipt of such contingent acceptance, Buyer shall be deemed to have declined to pay overtime with respect to such Excess Order. For clarity, overtime expenses shall relate solely to employees of Seller who are not exempt from the requirement to pay overtime under applicable law and means, with respect to any such employee, the product obtained by multiplying (i) the amount by which the hourly compensation that Seller is required by law to pay to such employee for work performed during overtime periods (as defined under applicable law) exceeds such employee’s standard hourly compensation, by (ii) the number of hours worked by such employee during applicable overtime periods. Seller shall provide such documentation, records, backup and support as Buyer shall reasonably request to confirm that any overtime expenses charge hereunder conform to the requirements of this Section 3.2.

3.3

Initial Instrument Set Order . Without limiting any of Seller’s other obligations regarding Purchase Orders and shipping, within thirty (30) days after the closing of the Asset Purchase Agreement, Buyer will submit, and Seller will accept, a purchase order for [****] set forth in Exhibit B for manufacture by January 31, 2018. Rolling shipments may be made by Seller.

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3.4

Safety Stock . Beginning one hundred twenty (120) days after the Effective Date, Seller will at all times during the Term maintain in inventory a quantity of finished goods sufficient to meet [****] of Sternal Product demand, based on the binding portion of the forecast with respect to those Sternal Products that account for [****] of Seller’s revenue under this Agreement (the “ Safety Stock ”). Upon Seller’s full performance of its obligations under Section 6.9 of the Asset Purchase Agreement, including the release of Products with such changes to labeling and any other modifications as may be required in connection with such performance, the Safety Stock required hereunder shall thereafter be [****] of Sternal Product demand, based on the binding portion of the forecast with respect to those Sternal Products that account for [****] of Seller’s revenue under this Agreement. Seller shall not be deemed in default of this provision if the Safety Stock falls below the minimum threshold due to orders made by Buyer in excess of the binding forecasts, provided that Seller shall replenish the Safety Stock to the levels required hereunder as soon as is reasonably practicable.

3.5

Minimum Annual Performance .

(a)

Buyer must meet or exceed its Minimum Annual Performance (“ MAP ”) level for each Contract Year as measured by the aggregate fees for Products ordered by Buyer for delivery during such Contract Year. The MAP for the first Contract Year shall be [****]. Thereafter, the MAP for each Contract Year (including the Contract Year(s) contained in any Renewal Term) shall equal [****] of the amount that Buyer would pay hereunder over such Contract Year if it ordered all of the Products set forth on the most recent forecast that shall have been submitted hereunder as of the first day of such Contract Year and timely received such Products during such Contract Year. In the event of a Force Majeure Event, the MAP with respect to the particular Contract Year affected by such Force Majeure Event shall be deemed reduced by the amount that Buyer would have paid hereunder for the Products subject to the Force Majeure Event had they been timely shipped to Buyer. This Section 3.5 shall terminate and be of no further force or effect upon the occurrence of a Fundamental Default.

(b)

Within thirty (30) calendar days following the end of a Contract Year, Seller shall notify Buyer in the event Buyer failed to satisfy its MAP for the prior Contract Year and shall specify the amount of the deficiency (a “ Deficiency Notice ”). Buyer shall have thirty (30) calendar days from receipt of the Deficiency Notice from Seller to cure the deficiency by submitting a Purchase Order to Seller for Products in a quantity sufficient to require payment that is equal to or greater than the amount of such deficiency, which Purchase Order shall include payment in advance in the amount of such deficiency (with any balance owing under such Purchase Order paid as provided herein). Such payment in advance shall not count toward Buyer’s MAP requirement for the then-current Contract Year. In the event Buyer fails to satisfy its MAP for the final Contract Year of this CMA, this Section 3.5(b) shall survive for such minimum amount of time as required for the parties to satisfy their respective cure provisions hereunder. This Section 3.5(b) sets forth Buyer’s sole liability and Seller’s sole and exclusive remedy for any breach of this Section 3.5.

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4.	Shipment, Delivery, Acceptance and Inspection .

4.1

Shipment . Seller may make partial shipments of Products to Buyer within the designated delivery window, provided that doing so does not increase shipping costs incurred by Buyer. Buyer will be entitled to designate the common courier for shipment. In the absence of specific instructions, Seller may select a national courier (e.g., Fedex, UPS, DHL) of its choice.

4.2

Delivery . Seller shall deliver the Products Ex Works at Seller’s facilities as defined in Incoterms 2010. Seller will ship all Products purchased under an accepted binding Purchase Order on time. An on time shipment shall be deemed to be a shipment made up to seven days before, and up to three days after, the shipment date specified on such Purchase Order. For this purpose, Nonconforming or Defective Products will not be deemed to be shipped until repaired or replaced Product is shipped. Such Nonconforming or Defective Products shall be replaced, including shipping, at no charge to Buyer.

4.3

Inspection of Shipments Received . Buyer shall inspect Products received under this CMA within five (5) Business Days after Buyer receives such Products at its facility, including without limitation, all materials and documentation required to release or commercially sell or distribute such Products, and shall either accept or, only if any such Products are Nonconforming Products, reject such Products. Buyer will be deemed to have accepted Products unless it provides Seller with written Notice of any Nonconforming Products within seven (7) Business Days following receipt of the Products and all such materials and documentation at its facility, stating with specificity all defects and nonconformities, and furnishing such other written evidence or other documentation as may be reasonably required by Seller (including the subject Products, or a representative sample thereof, which Buyer contends are Nonconforming Products). Seller acknowledges that inspection of Products shall be limited to inspection of the closed containers in which such Products are shipped to Buyer, without opening any such containers, and of any related documentation and materials provided therewith. Accordingly, acceptance by Buyer of any Products shall in no way waive or limit any of Seller’s rights under or relating to any Product Warranty or other rights. If Buyer timely notifies Seller of any Nonconforming Products, Seller shall inspect such Product(s) for nonconformities and, provided a nonconformity exists, Seller shall elect to either:

(a)

replace such Nonconforming Products with conforming Products; or

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(b)

refund to Buyer such amount paid by Buyer to Seller for such Nonconforming Products returned by Buyer to Seller.

Buyer shall ship all Nonconforming Products to Seller’s facility or to such other location as Seller may instruct Buyer. Seller shall reimburse Buyer for its shipment costs to Seller for verified Nonconforming Products, and if Seller exercises its option to replace Nonconforming Products, Seller shall ship to Buyer, at Seller’s expense and risk of loss, the replacement Products.

EXCEPT AS OTHERWISE PROVIDED FOR IN THIS CMA, AND WITHOUT IN ANY WAY LIMITING OR EXCLUDING ANY OF BUYER’S REMEDIES FOR FAILURE TO COMPLY WITH ANY BINDING PURCHASE ORDER, FOR ANY BREACH OF SECTION 3 OR UNDER SECTION 9.5, SECTION 9.7 OR SECTION 10, THE REMEDIES SET FORTH IN THIS SECTION 4.3 ARE BUYER’S EXCLUSIVE REMEDY FOR THE DELIVERY OF NONCONFORMING PRODUCTS, SUBJECT TO BUYER’S RIGHTS UNDER SECTION 9.5 WITH RESPECT TO ANY SUCH PRODUCTS FOR WHICH BUYER HAS ACCEPTED DELIVERY UNDER THIS SECTION 4.3.

4.4

Limited Right of Return . Except as provided under Section 4.3 and Section 9.5 or as may be required in connection with any recall or other act of any Governmental Authority, Buyer has no right to return Products shipped to Buyer pursuant to this CMA.

5.	Price and Payment .

5.1

Pr oduct Price .

(a)

With respect to all Sternal Products currently offered for sale by Seller, as well as those Sternal Products labeled “Thorecon” in Schedule 1, Buyer shall purchase such products from Seller at the prices calculated [****] and set forth on Schedule 1 attached hereto, with such prices being fixed for the Term, except as otherwise provided for in this CMA (“ Prices ”).

(b)

Seller represents and warrants that the Price of each Sternal Product currently offered for sale by Seller and of each of Seller’s Thoracon Products has been set to provide Seller [****] with respect to such Product, assuming that the COGS with respect to each such Sternal Product currently offered by Seller is equal to [****].

(c)

The price at which Seller shall sell any Managed Versions to Buyer hereunder shall be set so as to [****]. Seller represents and warrants that, to the best of its knowledge as of the date that it reports [****] to Buyer pursuant to Section 2.7(c), all information in such report and in any associated documentation, backup, records or support shall be complete and correct. Once accepted by Buyer, Managed Version prices hereunder

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[****]; provided that if such Managed Version is released at any time during the last twelve (12) months of the Initial Term or any Renewal Term, and if this CMA is then renewed for a Renewal Term after such release, then [****].

(d)

The Parties shall in good faith negotiate fair and competitive pricing for New Products and if the Parties reach agreement, amend this CMA to add the prices and other terms and conditions for the New Product.

5.2

Shipping Charges, Insurance and Taxes . All Prices are exclusive of, and Buyer is solely responsible for, and shall pay, and shall hold Seller harmless from, all Taxes, with respect to, or measured by, the sale, shipment, use or Price of the Products or any Services (including interest and penalties thereon); provided, however, that Buyer shall not be responsible for any Taxes imposed on, or with respect to, Seller’s income, revenues, gross receipts, use, Personnel or real or personal property or other assets.

5.3

Services Prices .

(a)

As full and complete consideration for provision of the Services, Buyer shall pay Seller to provide the Services in accordance with the following fee schedule:


Skills required		Hourly Rate
Skilled Technical Staff		[****]
Engineer I, II & Process Engineer; Specialist / Sr. Specialist RA / QA		[****]
Engineer III and Project Manager; Mgr / Sr. Mgr RA / QA		[****]
Director of Engineering / RA / QA		[****]

(b)

All charges must in any event be reasonable and appropriately documented.

(c)

Each of the Parties acknowledges that, over the course of the Term, the titles and job descriptions of Seller’s engineering and other technical personnel, as well as Seller’s costs associated with such personnel, may change. If, as a result of any such changes, it would be reasonable and appropriate for the job titles or hourly rates set forth above in this Section 5.3 to change, the Parties shall discuss and make reasonable efforts to agree upon appropriate changes thereto at the Regular Planning Meetings.

(d)

Buyer will reimburse Seller for out-of-pocket costs incurred by Seller in providing services (such as the cost of materials included in deliverables provided to Buyer) to the extent that such out-of-pocket costs are described in reasonable detail in the applicable Service Schedule.

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(e)

Seller shall promptly provide buyer such documentation, records, backup and support for any charges related to the Services as Buyer shall reasonably request.

5.4

Payment Terms . Seller shall issue invoices to Buyer for all Products ordered by Buyer at or after the time that such Products are shipped and for all Services provided in any month at or after the end of such month (or as otherwise specified in the applicable Service Schedule), setting forth in reasonable detail the amounts payable by Buyer under this CMA. Buyer shall pay to Seller all undisputed invoiced amounts with thirty (30) days of the date of such invoice (and shall pay amounts disputed pursuant to Section 5.5 within thirty (30) days after such dispute is resolved). Buyer shall make all payments in US dollars by check or wire transfer, in accordance with the following wire instructions:


ABA Routing Number:		[****]
Account Number:		[****]
Banking Institution:		[****]
Bank Address:		[****]
Company Contact:		[****]

5.5

Invoice Disputes . Buyer shall notify Seller in writing of any dispute with any invoice (along with substantiating documentation and a reasonably detailed description of the dispute) within fifteen (15) Business Days from the date of such invoice, provided that if Buyer inadvertently fails to review in a timely fashion any invoice received hereunder, then Buyer may dispute such invoice at any time within five (5) Business Days after receiving Notice from Seller that such payment is past due. Buyer will be deemed to have accepted all invoices for which Seller does not receive timely notification of dispute, and shall pay all undisputed amounts due under such invoices within the period set forth in Section 5.4. The Parties shall seek to resolve any such disputes expeditiously and in good faith.

5.6

Late Payments . Buyer shall pay interest on all late payments (whether during the Term or after the expiration or earlier termination of the Term), calculated daily and compounded monthly, at the lesser of the rate of [****] per annum or the highest rate permissible under applicable Law. Buyer shall also reimburse Seller for all reasonable costs incurred by Seller in collecting any late payments, and Seller shall reimburse Buyer for all reasonable costs incurred by Buyer to defend any collection claim by Seller that is found to lack merit, including in each case attorneys’ fees and court costs. In addition to all other remedies available under this CMA or at Law (which Seller does not waive by the exercise of any rights under this CMA), if Buyer fails to pay any undisputed amounts when due under this CMA, Seller may (a) suspend the delivery of any Products, (b) reject Buyer’s Purchase Orders.

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5.7

No Set-off Right . Buyer shall not, and acknowledges that it will have no right to, offset any amounts owed to Seller under this CMA against any other amounts owed (or to become due and owing) to it by Seller or Seller’s Affiliates, whether relating to Seller’s or its Affiliates’ breach or non-performance of this CMA, any Purchase Order or any other agreement.

6.	Term; Termination .

6.1

Initial Term . The term of this CMA commences on the Effective Date and continues for a period of five (5) years, unless it is earlier terminated pursuant to the terms of this CMA (the “ Initial Term ”).

6.2

Renewal Term . Upon expiration of the Initial Term, the term of this CMA will automatically renew for one additional two (2) year term unless either Party provides written Notice of non-renewal at least one (1) year prior to the end of the Initial Term (the “ Renewal Term ” and together with the Initial Term, the “ Term ”), unless the Renewal Term is earlier terminated pursuant to the terms of this CMA.

6.3

Seller’s Right to Terminate . Seller may terminate this CMA, by providing written Notice to Buyer:

(a)

if Buyer fails to pay any undisputed amount when due under this CMA if such failure to pay is not cured by Buyer within thirty (30) days after Buyer’s receipt of written Notice of such failure to pay (“ Payment Failure ”);

(b)

if Buyer is in material breach of any representation, warranty or covenant of Buyer under this CMA (other than committing a Payment Failure), and either the breach cannot be cured or, if the breach can be cured, it is not cured by Buyer within thirty (30) days after Buyer’s receipt of written Notice of such breach;

(c)

if Buyer (i) becomes insolvent, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, or (iii) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business; or

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(d)

in the event of a Force Majeure Event affecting Buyer’s performance under this CMA for more than one hundred twenty (120) consecutive days.

Any termination under this Section 6.3 will be effective on Buyer’s receipt of Seller’s written Notice of termination or such later date (if any) set forth in such Notice.

6.4

Buyer’s Right to Terminate . Buyer may terminate this CMA, by providing written Notice to Seller:

(a)

if Seller commits a Fundamental Default;

(b)

if Seller (i) becomes insolvent, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, or (iii) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business; or

(c)

in the event of a Force Majeure Event affecting Seller’s performance under this CMA for more than one hundred twenty (120) consecutive days.

6.5

Effect of Expiration or Termination .

(a)

Upon the expiration or earlier termination of this CMA, to the extent that Seller has any finished goods inventory of Product, or has work-in-process, subassemblies or raw materials inventory for Product, in each case that were manufactured or intended for use in connection with then-pending Purchase Orders or the binding portion of the then most recent forecast that required or forecasted delivery within ninety (90) days of such termination, or were required to comply with Seller’s obligations under Section 3.4, and to the extent that Seller is not reasonably able to utilize such inventory, Buyer shall purchase such inventory form Seller at Seller’s COGS thereof. Seller shall promptly provide buyer such documentation, records, backup and support for such COGS as Buyer shall reasonably request.

(b)

Expiration or termination of the Term will not affect Buyer’s obligation to pay for any Products shipped to Buyer hereunder nor any rights or obligations of the Parties that:

(i)

come into effect upon or after termination or expiration of this CMA; or

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(ii)

otherwise survive the expiration or earlier termination of this CMA pursuant to Section 17.4 and were incurred by the Parties prior to such expiration or earlier termination.

(c)

Except as provided in Section 6.5(d), any Notice of termination under this CMA automatically operates as a cancellation of any deliveries of Products to Buyer that are scheduled to be made, or of Services that are to be provided, subsequent to the effective date of termination, whether or not any orders for such Products or the applicable Service Schedules had been accepted by Seller.

(d)

Notwithstanding any other provision hereof, if this Agreement terminates pursuant to Section 6.3(b) or 6.4 before Buyer has fully qualified a second source that is fully ready and able to assume full responsibility for manufacturing the Products as required by Buyer, and provided that Buyer does not commit or timely cures any Payment Default, the Parties’ respective obligations under this CMA shall survive any such termination hereof until such time as Buyer has fully qualified a second source of supply that is ready to commence fulfilling Buyer’s requirements for Products, such time to qualify a second source not to exceed the period commencing upon termination of this CMA and ending on the earlier of (i) the first (1st) anniversary of such termination and (ii) the fifth (5th) anniversary of the Effective Date, if this CMA is terminated during its Initial Term, or the seventh (7th) anniversary of the Effective Date, if this CMA is terminated during the Renewal Term, provided that in either case such period may be extended if Seller fails in any material respect to fully perform its obligations under Section 2.4(b) or 16 hereof or any of its obligations under the Asset Purchase Agreement, Transition Services Agreement, or any other Transaction Documents that relate to or affect Buyer’s practical ability to assume full responsibility for manufacturing the Products.

7.	Certain Obligations of Buyer .

7.1

Certain Prohibited Acts . Notwithstanding anything to the contrary in this CMA, neither Buyer nor any Buyer Personnel shall make any representations, warranties, guarantees, indemnities, similar claims or other commitments actually, apparently or ostensibly on behalf of Seller.

7.2

Credit Risk on Resale of the Products to Customers . Without limiting Seller’s obligations or Buyer’s rights under the Asset Purchase Agreement or any other Transaction Document, Seller shall not be responsible under this CMA for any credit risks with respect to, and for collecting payment for, all products (including Products) sold to Buyer’s customers, whether or not Buyer has made full payment to Seller for such products. The inability of Buyer to collect the purchase price for any product shall not be a condition to Buyer’s obligation to pay Seller for any Products.

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Compliance with Laws . Both Parties shall at all times comply with all Laws applicable to this CMA and each Party’s respective performance of its obligations hereunder. Without limiting the generality of the foregoing, each Party shall (a) at its own expense, maintain all certifications, credentials, licenses and permits necessary to conduct its business relating to the manufacture, purchase, use or resale of the Products and (b) not engage in any activity or transaction involving the Products, by way of resale, lease, shipment, use or otherwise, that violates any Law. Notwithstanding the foregoing, Buyer shall not be deemed to breach this Section 8 by reason of any Excused Violation.

9.	Representations and Warranties .

9.1

Buyer’s Representations and Warranties . Buyer represents and warrants to Seller that:

(a)

it is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware;

(b)

it has the full right, power and authority to enter into this CMA and to perform its obligations hereunder;

(c)

the execution of this CMA by its Representative whose signature is set forth at the end of this CMA, and the delivery of this CMA by Buyer, have been duly authorized by all necessary action on the part of Buyer;

(d)

the execution, delivery and performance of this CMA by Buyer will not violate, conflict with, require consent under or result in any breach or default under (i) any of Buyer’s organizational documents or (ii) any applicable Law;

(e)

this CMA has been executed and delivered by Buyer and (assuming due authorization, execution and delivery by Seller) constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms;

(f)

it is in material compliance with all applicable Laws relating to this CMA, the Products and the operation of its business, except for any Excused Violations; and

(g)

it is not insolvent.

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9.2

Seller’s Representations and Warranties . Seller represents and warrants to Buyer that:

(a)

it is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware;

(b)

it has the full right, power and authority to enter into this CMA and to perform its obligations hereunder;

(c)

the execution of this CMA by its Representative whose signature is set forth at the end of this CMA, and the delivery of this CMA by Seller, have been duly authorized by all necessary action on the part of Seller; and

(d)

the execution, delivery and performance of this CMA by Seller will not violate, conflict with, require consent under or result in any breach or default under (i) any of Seller’s organizational documents, or (ii) any applicable Law;

(e)

this CMA has been executed and delivered by Seller and (assuming due authorization, execution and delivery by Buyer) constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms;

(f)

it is in material compliance with all applicable Laws relating to this CMA, the Products and the operation of its business; and

(g)

to the Knowledge of the Seller, there exist no conditions, occurrences or causes that would be reasonably expected to lead to any Excused Violations; and

(h)

it is not insolvent.

9.3

Product Warranty . Subject to the provisions of Sections 9.4 through 9.6, Seller warrants to Buyer (the “ Product Warranty ”) that:

(a)

During the applicable Warranty Period, each Product will materially conform to the applicable specifications, will be free from defects in materials and workmanship, will be manufactured in compliance with all applicable Laws and will comply in all respects with all requirements of the Quality Agreement.

(b)

Buyer will receive good and valid title to all Products, free and clear of all encumbrances and liens of any kind.

9.4

Product Warranty Limitations . The Product Warranty does not apply to any Product that:

(a)

has been subjected to use contrary to any instructions issued by Seller, including, without limitation, any of the following to the extent specifically defined in such instructions: abuse, misuse, neglect, negligence, accident, improper testing, improper installation, improper storage, improper handling, abnormal physical stress or abnormal environmental conditions;

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(b)

has not been used, stored and maintained in accordance with the documentation therefor; or

(c)

has been reconstructed, repaired or altered by Persons other than Seller or its authorized Representative.

Buyer shall notify Seller of any changes to the documentation for any Product relating to the use, storage or maintenance thereof and shall make commercially reasonable efforts to address any concerns expressed by Seller that such changes would impair the reliability or durability of such Products.

9.5

Buyer’s Exclusive Remedy for Defective Products . Buyer’s remedy under this Section 9.5 is conditioned upon Buyer’s compliance with its obligations under Section 9.5(a) and Section 9.5(b) below. During the Warranty Period, with respect to any allegedly Defective Products:

(a)

Buyer shall notify Seller, in writing, of any claim of a violation of the Product Warranty within thirty (30) days from the date Buyer discovers such violation, stating with specificity all defects to Buyer’s knowledge, and making commercially reasonable efforts to furnish such other written evidence or other documentation as may be reasonably requested by Seller;

(b)

To the extent reasonably feasible, Buyer shall ship such allegedly Defective Products to Seller’s facility located at Marquette, Michigan for inspection and testing by Seller;

(c)

Seller’s shall inspect and test such Products and, except for any defect that has been caused by any of the factors described in Section 9.4 above, subject to Section 9.5(a) and Section 9.5(b), Seller shall elect to either (i) replace such Defective Products with conforming Products; or (ii) refund to Buyer such amount paid by Buyer to Seller for such Defective Product; and

(d)

Seller shall reimburse Buyer for its shipment costs to Seller for verified Defective Products, and if Seller exercises its option to replace Defective Products, Seller shall ship to Buyer, at Seller’s expense and risk of loss, the replacement Products.

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Buyer has no right to return any Product except as set forth in this Section 9.5 or Section 4.3 or as may be required in connection with any recall or other act of any Governmental Authority. In no event shall Buyer reconstruct, repair, alter or replace any Product, in whole or in part, either itself or by or through any third party.

EXCEPT AS OTHERWISE PROVIDED FOR IN THIS CMA, AND WITHOUT IN ANY WAY LIMITING OR EXCLUDING ANY OF BUYER’S REMEDIES FOR FAILURE TO COMPLY WITH ANY BINDING PURCHASE ORDER, FOR ANY BREACH OF SECTION 3 OR SECTION 16.2 OR UNDER SECTION 4.3, SECTION 9.7 OR SECTION 10, THE REMEDIES SET FORTH IN THIS SECTION 9.5 ARE BUYER’S EXCLUSIVE REMEDY FOR THE DELIVERY OF DEFECTIVE PRODUCTS.

9.6 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES; NON-RELIANCE . EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 9.2 AND THE PRODUCT WARRANTY SET FORTH IN SECTION 9.3, AND EXCEPT FOR ANY WARRANTIES PROVIDED IN SECTION 16, (A) NEITHER SELLER NOR ANY PERSON ON SELLER’S BEHALF HAS MADE OR MAKES ANY EXPRESS, IMPLIED, STATUTORY, OR OTHER REPRESENTATION OR WARRANTY UNDER THIS CMA, EITHER ORAL OR WRITTEN, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OR PERFORMANCE OF GOODS OR PRODUCTS TO STANDARDS SPECIFIC TO THE COUNTRY OF IMPORT, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED, AND (B) BUYER ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY SELLER, OR ANY OTHER PERSON ON SELLER’S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN SECTIONS 9.2 AND 9.3 OF THIS CMA, IN THE ASSET PURCHASE AGREEMENT, OR IN ANY OTHER TRANSACTION DOCUMENT.

9.7

Recalls; Market Withdrawals; Field Corrections . The Parties shall conduct recalls, market withdrawals, field corrections, or their foreign equivalents (collectively, “ Recalls ”) in accordance with Laws applicable to the Products and jurisdictions where such Recall is applicable. The responsibilities of the Parties in effecting Recalls shall be in accordance with the requirements of applicable Laws with respect to the respective activities and roles filled by the Parties under this CMA, and as otherwise may be required under the Parties’ Quality Agreement. The at-fault Party whose actions or omissions gave rise to the Recall shall reimburse the Party not at fault for its reasonable out-of-pocket costs incurred in connection with conducting the Recall. The Parties will in good faith cooperate with each other in the conduct of a Recall. For the avoidance of doubt, Seller shall be deemed to be at-fault for any Recall attributable to an Excused Violation, and, subject to the foregoing, if any Recall is attributable to a breach of this Agreement, the Quality Agreement or any other Transaction Agreement by, either Party, such Party shall be deemed to be the at-fault Party with respect to such Recall.

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10.	Indemnification .

10.1

Mutual Indemnification . Subject to the terms and conditions of this CMA, including those set forth in Section 10.2 and Section 10.3, each Party (as “ Indemnifying Party ”) shall indemnify, defend and hold harmless the other Party and its Representatives/officers, directors, employees, agents, Affiliates, successors and permitted assigns (collectively, “ Indemnified Party ”) against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys’ fees, fees and the costs of enforcing any right to indemnification under this CMA and the cost of pursuing any insurance providers (collectively, “ Losses ”), arising out or resulting from any third-party Claim alleging:

(a)

a material breach or non-fulfillment of any representation, warranty or covenant under this CMA or the Quality Agreement by Indemnifying Party or Indemnifying Party’s Personnel;

(b)

any negligent or more culpable act or omission of Indemnifying Party or its Personnel (including any recklessness or willful misconduct) in connection with the performance of this CMA or the Quality Agreement;

(c)

any bodily injury, death of any Person or damage to real or tangible personal property caused by the willful or negligent acts or omissions of Indemnifying Party or its Personnel;

(d)

any failure by Indemnifying Party or its Personnel to materially comply with any applicable Laws (provided that, for the purposes of this Section 10(d), Seller shall be responsible for any Excused Violation); or

(e)

any claim made by any employee, agent or representative of Seller or any other Service Provider against an Indemnified Party relating in any way to such employee’s, agent’s or representative’s involvement in the Services (it being understood that, for any claims under this Section 10.1(e), Seller shall be the Indemnifying Party and the Indemnified Party shall be Buyer or any of its Representatives/officers, directors, employees, agents, Affiliates, successors or permitted assigns).

10.2

Exceptions and Limitations on Indemnification . Notwithstanding anything to the contrary in this CMA, an Indemnifying Party is not obligated to indemnify or defend (if applicable) an Indemnified Party against any Claim if such Claim or corresponding Losses arise out of or result from, in whole or in part, the Indemnified Party’s or its Personnel’s:

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(a)

negligence or more culpable act or omission (including recklessness or willful misconduct); or

(b)

bad faith failure to comply with any of its obligations set forth in this CMA.

10.3

Indemnification Procedure . To receive the foregoing indemnities, the Party seeking indemnification (“Indemnitee”) must: (i) provide Notice to be received by the indemnifying Party (“Indemnitor”) within ten (10) Business Days of Indemnitee’s first notice of the Claim, provided however, that any failure or delay in providing written notice shall not affect the Indemnitor’s indemnification obligations, except to the extent the Indemnitor is prejudiced by such failure or delay; (ii) tender to Indemnitor full control and authority over the defense of the Claim; (iii) cooperate as reasonably requested by Indemnitor (at Indemnitor’s expense) in Indemnitor’s defense of the Claim; and (iv) not enter into any settlement or compromise of such Claim defended by Indemnitor without the express written authorization of Indemnitor. Indemnitor shall not settle or compromise a Claim without Indemnitee’s prior written consent (which consent shall not be unreasonably withheld or delayed), unless: (i) the sole relief provided in such settlement or compromise constitutes monetary damages borne in full by Indemnitor; and (ii) such settlement or compromise does not include any finding or admission of a violation by Indemnitee of any Laws or third party’s rights; or require any changes in the Indemnitor’s or Indemnitee’s business practices that would impair performance of either Party’s obligations under this CMA.

11.	Limitation of Liability .

11.1

NO LIABILITY FOR CONSEQUENTIAL OR INDIRECT DAMAGES . EXCEPT AS PROVIDED IN SECTION 11.3, IN NO EVENT SHALL EITHER PARTY OR THEIR REPRESENTATIVES BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS CMA, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT THE OTHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE.

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11.2

MAXIMUM LIABILITY FOR DAMAGES . EXCEPT AS PROVIDED IN SECTION 11.3, IN NO EVENT SHALL EACH PARTY’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS CMA, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE TOTAL OF THE AMOUNTS PAID AND AMOUNTS ACCRUED BUT NOT YET PAID TO SELLER PURSUANT TO THIS CMA IN THE ONE YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

11.3

Exceptions . Notwithstanding any other provision hereof, this Section 11 shall not apply to, and shall neither exclude any damages or other remedies nor limit any liability of Seller arising out of or in connection with, Seller’s or its Affiliates’ (i) intentional misconduct or recklessness giving rise to a breach of this CMA or the termination hereof, (ii) breach of Section 13 or (iii) obligations under Section 10.

12.

Intellectual Property . Except as provided in Section 16, neither Party shall obtain from the other Party, whether expressly, impliedly, or by estoppel, any rights to the Intellectual Property of the other Party by operation of this CMA, except that the Parties will grant, and do hereby grant, a limited license to its Intellectual Property solely to the extent reasonably necessary for each Party to satisfy its respective performance obligations or exercise its rights under this CMA. Nothing in this CMA shall be deemed to otherwise affect the transfer and/or license of Intellectual Property rights conferred in the Asset Purchase Agreement, Intellectual Property License Agreement, or any other Transaction Documents.

13.	Confidentiality .

13.1

Scope of Confidential Information . From time to time during the Term, either Party (as the “ Disclosing Party ”) may disclose or make available to the other Party (as the “ Receiving Party ”) information about its business affairs, goods and services, forecasts, confidential information and materials comprising or relating to Intellectual Property, trade secrets, third-party confidential information and other sensitive or proprietary information. Such information, as well as the terms of this CMA, whether orally or in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential,” is collectively referred to as “ Confidential Information ” hereunder. Buyer shall be deemed to be the Disclosing Party and Seller shall be deemed to be the Receiving Party with respect to all Confidential Information included, or the rights to which are included, in the Purchased Assets. Notwithstanding the foregoing, Confidential Information does not include information that, at the time of disclosure and as established by documentary evidence:

(a)

is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Section 13 by the Receiving Party or any of its Representatives;

(b)

is or becomes available to the Receiving Party on a non-confidential basis from a third-party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information;

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(c)

was known by or in the possession of the Receiving Party or its Representatives prior to being disclosed by or on behalf of the Disclosing Party;

(d)

was or is independently developed by the Receiving Party without reference to or use of, in whole or in part, any of the Disclosing Party’s Confidential Information; or

(e)

is required to be disclosed pursuant to applicable Law or rules or regulations of any stock exchange.

13.2

Protection of Confidential Information . The Receiving Party shall, for so long as it retains any Confidential Information that qualifies as a trade secret under applicable law, and for five (5) years from disclosure of any Confidential Information that does not qualify as a trade secret:

(a)

protect and safeguard the confidentiality of the Disclosing Party’s Confidential Information with at least the same degree of care as the Receiving Party would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care;

(b)

not use the Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this CMA; and

(c)

not disclose any such Confidential Information to any Person, except to the Receiving Party’s Representatives who need to know the Confidential Information to assist the Receiving Party, or act on its behalf, to exercise its rights or perform its obligations under this CMA.

The Receiving Party shall be responsible for any breach of this Section 13 caused by any of its Representatives. At any time during or after the Term, at the Disclosing Party’s written request, the Receiving Party and its Representatives shall promptly return all Confidential Information and copies thereof that it has received under this CMA.

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14.

Tooling . Any injection molds, equipment or other items used by Seller in the manufacture of Products that are sold to Buyer under the Asset Purchase Agreement or later purchased by Buyer for Seller’s use shall be loaned by Buyer to Seller solely for use in manufacturing Products for Buyer. Seller shall maintain such items and assume responsibility for any loss thereof or damage thereto, except for normal wear and tear and will segregate and appropriately mark such items and keep them free of liens and encumbrances. In the event any molds included among the Purchased Assets are held on Seller’s behalf by a supplier of Seller, Seller shall notify such supplier of the transfer of ownership and direct them accordingly. If Buyer so requests, Seller shall promptly return all such molds, equipment or other items upon notice from Buyer at Buyer’s expense; provided, however, that upon Seller’s return of such molds or other items to Buyer, Seller’s obligation to supply Products created with such molds or other items shall terminate. All tooling not expressly sold to Buyer under the Asset Purchase Agreement or later purchased by Buyer for Seller’s use that is used to manufacture the Products is owned by Seller. Buyer has no right, title, or interest in or to any such tooling.

15.

Insurance . During the Term and for a period of five (5) years thereafter each Party shall, at its own expense, maintain and carry in full force and effect, subject to appropriate levels of self-insurance, commercial general liability insurance (including product liability coverage) in a sum no less than $10,000,000 with financially sound and reputable insurers, and upon the other Party’s request, shall provide the other Party with a certificate of insurance evidencing the insurance coverage specified in this Section.

16.	Engineering Services .

16.1

Provision of Services .

(a)

Seller agrees to provide, or to cause its Affiliates to provide

(i)

Instrument Evaluation and Reworking: at Buyer’s request Seller shall: (1) accept instruments for potential rework and refurbishment; (2) evaluate such instruments for potential rework and refurbishment; (3) provide quotation of pricing for rework and refurbishment of such instruments; and (4) perform quoted rework and refurbishment on such instruments (“ Instrument Evaluation and Reworking ”). Without limiting the forgoing, Instrument Evaluation and Reworking will, if requested by Buyer, include: (v) Seller service personnel promptly training Buyer personnel to provide Instrument Evaluation and Reworking services; (w) Seller working with Product customers to transition Instrument Evaluation and Reworking service relationships to Buyer personnel; (x) Seller continuing to provide Instrument Evaluation and Reworking service to customers in the same manner as prior to the transition; (y) Seller providing any other services reasonably requested by Buyer to ensure that the transition to Buyer is

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seamless from the customers’ perspective; and (z) Seller providing any other services reasonably requested by Buyer to ensure the same level of Instrument Evaluation and Reworking service is provided to customers at all times after transition to Buyer.

(ii)

Engineering Services: any and all services pertaining to product design or manufacturing, research, development, or engineering, in each case to the extent relating to any Sternal Product or any Managed Version. Without limiting the forgoing, Engineering Services will, if requested by Buyer, include: (1) Seller transferring any and all Sternal Product and Managed Version related manufacturing know-how, trade secrets, and information to Buyer; (2) Seller maintaining the Sternal Products and Managed Versions; and (3) Seller undertaking (x) the design, research (but not including preclinical animal studies or clinical research), development, and engineering of Managed Versions and (y) related manufacturing engineering.

(iii)

Quality and Regulatory Services: any and all services pertaining to interfacing with any Governmental Authority or that relate to any requirements imposed thereby, relating to any Sternal Product or Managed Version; obtaining, maintaining, or transferring any registrations, licenses, or approvals with respect to any such Sternal Product or Managed Version; or repairing or correcting any such Sternal Product or any Managed Version. Without limiting the forgoing, Quality and Regulatory Services will, if requested by Buyer, include: (1) Seller managing or assisting with the transfer of any FDA or other licenses, registrations, or approvals for the Products from Seller to Buyer; (2) Seller identifying any problems or potential problems relating to the Products; (3) Seller repairing or correcting any problems of potential problems relating to the Products; and (4) Seller carrying out sustaining quality work for the Products.

(b)

Buyer shall notify Seller in any form or manner of Buyer’s choosing of any Services that Buyer wishes to procure under this Section 16. For all Services requested by Buyer that are estimated by Seller to take [****], but in any event not to exceed a cumulative total of [****] (as calculated in accordance with the rates set forth herein) (such Services, the “De Minimis Services”), Seller shall notify Buyer of such estimated cost and, upon receiving approval from Buyer (which approval may be oral or in writing), Seller shall promptly undertake the De Minimis Services in accordance with and subject to the terms and conditions of this Section 16. All Services that are not De Minimis Services shall be specified on a service schedule (each such schedule, a “Service Schedule”). Each

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Service shall become subject to the terms and conditions of this CMA and execution of a Service Schedule related thereto. In addition, if any services, functions, responsibilities or other components of work for any Service are not specifically requested by Buyer or described in the applicable Service Schedule but are inherent to or a necessary part of the Services described therein, or are reasonably required for proper performance or provision of such Services, they shall be deemed to be “Services” for all purposes under this CMA.

(c)

The Parties acknowledge that some of the Services available hereunder may overlap with services available or to be provided or performed under the Asset Purchase Agreement and/or the TSA. In the event of any such overlap, to the extent that any Services are, at the relevant time, available under the Asset Purchase Agreement or the Asset Purchase Agreement requires performance thereof, such Services shall be deemed to be provided thereunder; to the extent that any Services are, at the relevant time, not available or required to be performed under the Asset Purchase Agreement but are available or required to be performed under the TSA, they shall be deemed to be provided thereunder; and Services that, at the relevant time, are neither available nor required to be performed under the Asset Purchase Agreement or the TSA shall be deemed to be provided hereunder.

16.2

Standard of Service . Seller represents, warrants, and agrees that the Services shall be provided in good faith, in accordance with Law and in a professional and workmanlike manner, and that the quality of the functions, activities and efforts that constitute the Services, including, without limitation, the experience and qualifications of the Seller or other Service Provider personnel providing the Services, shall be not less than the quality of such functions, activities and efforts before the date of the Asset Purchase Agreement. Seller further represents, warrants, and agrees that the Services will be performed in accordance with any performance standards set forth in the applicable Service Schedule. Buyer will cooperate reasonably and make commercially reasonable efforts to provide any necessary information to enable Seller to perform the Services.

16.3

Delegation to Affiliates ; Third-Party Service Providers. Seller shall have the right to delegate obligations hereunder to its Affiliates and/or hire other third-party subcontractors (collectively with Seller, the “ Service Providers ”) to provide all or part of any Service hereunder, in a manner consistent with Seller’s ordinary business practices. Seller shall in all cases retain responsibility for the provision to Buyer of Services to be performed by any Service Provider (including, without limitation, any of Seller’s Affiliates).

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16.4

Access to Premises .

(a)

In order to enable the provision of the Services by Seller, Buyer agrees that it shall provide, at no cost to Seller, the Service Providers with reasonable access to the facilities and information of the Business to the extent necessary for Seller to fulfill its obligations under this Section 16, subject to such conditions (such as execution of confidentiality agreements) as Buyer shall reasonably impose.

(b)

Seller agrees that the Service Providers, when on the property of Buyer or when given access to any equipment, computer, software, network or files owned or controlled by Buyer, shall conform to the applicable policies and procedures of Seller concerning health, safety and security as well as any such policies and procedures of Buyer which are made known to Seller.

16.5

Responsibility for Wages and Fees . For such time as any employees of Seller or any of its Affiliates are providing the Services to Buyer under this Section 16, (a) such employees will be deemed employees of Seller or such Affiliate, as applicable, and shall not be deemed to be employees of Buyer for any purpose, and (b) Seller or such Affiliate, as applicable, shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker’s compensation, and the withholding and payment of applicable taxes relating to such employment.

16.6

Intellectual Property .

(a)

As used herein, “ Work Product ” shall include, without limitation, any and all technology of any kind, including, without limitation, designs, inventions, works of authorship, mask works, know-how, trade secrets, discoveries, ideas, data, information, processes, drawings, designs, computer programs and software, work-in-progress, and technical information, including, but not limited to, material specifications, processing instructions, equipment specifications, product specifications, electronic files, research notebooks, invention disclosures, research and development reports and the like related thereto, and all amendments, modifications, derivatives, and improvements of or to any of the foregoing, that are created, developed or conceived by or on behalf of any Service Providers (alone or with others), or delivered to Buyer by any Service Providers, in connection with the Services, including, without limitation, all Managed Versions. As used herein, “ Intellectual Property Rights ” means all intellectual property and proprietary rights of any kind or nature anywhere in the world, including, without limitation: (i) patent rights; (ii) rights of authorship, including copyrights, moral rights, and rights of attribution; (iii) rights in trade secrets, know how, and confidential information; and (iv) all other rights of any kind or nature in any Work Product.

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(b)

Seller, on behalf of itself and all Service Providers, hereby irrevocably and unconditionally assigns and agrees to assign to Buyer, without additional consideration, all right, title and interest in and to all Work Product, whether currently existing or created or developed later, including, without limitation, all Intellectual Property Rights related thereto, whether existing now or in the future, effective immediately upon the inception, conception, creation or development thereof. Seller shall (and shall cause all Service Providers to) (i) disclose promptly to Buyer all Work Product, and (ii) execute such written instruments and do such other acts as may be necessary in the opinion of Buyer to obtain a patent, register a copyright or otherwise evidence or enforce Buyer’s rights in and to such Work Product (and Seller hereby irrevocably appoints Buyer and any of its officers as its attorney in fact to undertake such acts in its name). If any Work Product, or any Intellectual Property Rights therein, including moral rights, cannot (as a matter of law) be assigned to Buyer then (1) Seller, on behalf of itself and all Service Providers, unconditionally and irrevocably waives the enforcement of such rights and all claims and causes of action of any kind against Buyer with respect to such Work Product, and (2) to the extent Seller cannot (as a matter of law) make such waiver, Seller, on behalf of itself and all Service Providers, unconditionally grants to Buyer an exclusive, perpetual, irrevocable, worldwide, fully assignable, fully-paid and royalty-free license, with the right to sublicense through multiple levels of sublicensees, under any and all such rights to exercise any and all present or future rights in the Work Product without any restriction.

(c)

Seller represents, warrants, and agrees that (i) the Work Product shall be the original work of Seller or the Service Providers, and any individuals involved in the development of Work Product have executed (or prior to any such involvement, shall execute) a written agreement with Seller or a Service Provider in which such individuals (1) assign to Seller or such Service Provider (as applicable) all right, title and interest in and to the Work Product, and (2) agree to be bound by confidentiality and non-disclosure obligations no less restrictive than those set forth in this CMA; (ii) all Service Providers have executed (or prior to any such involvement, shall execute) a written agreement with Seller in which the Service Providers (1) assign to Seller all right, title and interest in and to the Work Product, and (2) agree to be bound by confidentiality and non-disclosure obligations no less restrictive than those set forth in this CMA; (iii) Seller has the right to grant the rights and assignments granted herein, without the need for any consents, assignments, releases, immunities or other rights not yet obtained; (iv) the Services and Work Product do not and shall not infringe, misappropriate or violate any Intellectual Property Rights of any third party; and (v) neither the Work Product nor any element thereof shall be subject to any license, lien, security interest, option, right, or other encumbrance of any kind.

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17.	Miscellaneous .

17.1

Further Assurances . Upon a Party’s reasonable request, the other Party shall, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this CMA.

17.2

Relationship of the Parties . The relationship between Seller and Buyer is solely that of vendor and vendee, and they are independent contracting parties. Nothing in this CMA creates any agency, joint venture, partnership or other form of joint enterprise, employment or fiduciary relationship between the Parties. Neither Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any third party.

17.3

Entire Agreement . This CMA, the Quality Agreement and the Asset Purchase Agreement, including any related exhibits and schedules, together constitute the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

17.4

Survival; Statute of Limitations . Subject to the limitations and other provisions of this CMA: (a) the representations and warranties of the Parties contained herein, as well as any payment obligation that accrued during the Term, will survive the expiration or earlier termination of this CMA for a period of 12 months after such expiration or termination; and (b) Sections 1, 2.9, 4 (but only to the extent of orders still pending delivery), 6.5, 8, 9.3, 9.4, 9.5, 9.6, 9.7, 10, 11, 12, 13, 14, 15 and 17 of this CMA, as well as any other provision that, in order to give proper effect to its intent, should survive such expiration or termination, will survive the expiration or earlier termination of this CMA for the period specified therein, or if nothing is specified for a period of 12 months after such expiration or termination. All other provisions of this CMA will not survive the expiration or earlier termination of this CMA. Notwithstanding any right under any applicable statute of limitations to bring a claim, no Action for breach of this CMA may be brought by either Party after the earlier of (i) expiration of the applicable limitations period under applicable law with respect to such breach or (ii) the date that is two (2) years after such Party knew or should have known of such breach.

17.5

Notices . All notices, requests, consents, claims, demands, waivers and other communications under this CMA (each, a “ Notice ”) must be in writing and addressed to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this section). All Notices shall be delivered by personal delivery or by nationally-recognized courier (e.g. FedEx, UPS) with all fees pre-paid. Notwithstanding the

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foregoing, solely for the purposes of Sections 3.1 and 3.2, notice by facsimile or e-mail (with confirmation of transmission) will satisfy the requirements of this Section 17.5. Except as otherwise provided in this CMA, a Notice is effective only (a) on receipt by the receiving Party, and (b) if the Party giving the Notice has complied with the requirements of this Section.

To Buyer :

Vance Street Capital LLC

11150 Santa Monica Blvd. #750

Los Angeles, CA 90025

Attention: Brian Martin


To Seller :		With a copy to :
RTI Surgical, Inc.		RTI Surgical, Inc.
Attn: Chief Financial Officer		Attn: Legal Department
11621 Research Circle		11621 Research Circle
Alachua, FL 32615		Alachua, FL 32615

17.6

Interpretation . For purposes of this CMA: (a) the words “include,” “includes” and “including” are deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this CMA as a whole; (d) words denoting the singular have a comparable meaning when used in the plural, and vice-versa; and (e) words denoting any gender include all genders. Unless the context otherwise requires, references in this CMA: (x) to sections, exhibits, schedules, attachments and appendices mean the sections of, and exhibits, schedules, attachments and appendices attached to, this CMA; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The Parties drafted this CMA without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The exhibits, schedules, attachments and appendices referred to herein are an integral part of this CMA to the same extent as if they were set forth verbatim herein.

17.7

Headings . The headings in this CMA are for reference only and do not affect the interpretation of this CMA.

17.8

Severability . If any term or provision of this CMA is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this CMA or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such

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determination that any term or provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this CMA to effect the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

17.9

Amendment and Modification . No amendment to this CMA is effective unless it is in writing and signed by an authorized Representative of each Party.

17.10

Waiver .

(a)

No waiver under this CMA is effective unless it is in writing and signed by an authorized representative of the Party waiving its right.

(b)

Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated, and does not operate as a waiver on any future occasion.

(c)

None of the following constitutes a waiver or estoppel of any right, remedy, power, privilege or condition arising from this CMA:

(i)

any failure or delay in exercising any right, remedy, power or privilege or in enforcing any condition under this CMA; or

(ii)

any act, omission or course of dealing between the Parties.

17.11

Cumulative Remedies . Except as otherwise provided for in the CMA, all rights and remedies provided in this CMA are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties or otherwise.

17.12

Equitable Remedies . Each Party acknowledges and agrees that (a) a breach or threatened breach by such Party of any of its obligations under Section 13 would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and (b) in the event of a breach or a threatened breach by such Party of any such obligations, the other Party shall, in addition to any and all other rights and remedies that may be available to such Party at law, at equity or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction, without any requirement to post a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford an adequate remedy. Each Party agrees that such Party will not oppose or otherwise challenge the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section 17.12.

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17.13

Assignment . Either Party may assign in its sole discretion this CMA inclusive of its exhibits and the Quality Agreement, provided that any assignment by Seller or any direct or indirect assignee thereof must be to a Person that assumes all of Seller’s obligations hereunder and under the Quality Agreement and obtains from Seller all of the Assets and Resources.

17.14

Successors and Assigns . This CMA is binding on and inures to the benefit of the Parties and their respective permitted successors and permitted assigns.

17.15

No Third-Party Beneficiaries . This CMA benefits solely the parties to this CMA and their respective permitted successors and permitted assigns and nothing in this CMA, express or implied, confers on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this CMA.

17.16

Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

(a)

This CMA shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

(b)

ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS CMA OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF DELAWARE, IN EACH CASE LOCATED IN THE CITY OF WILMINGTON AND COUNTY OF NEW CASTLE, AND EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS CMA IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES

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AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS CMA OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS CMA CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS CMA BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 17.16(c) .

17.17

Counterparts . This CMA may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this CMA delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this CMA.

17.18

Force Majeure . Seller shall not be deemed to breach this CMA to the extent that Seller is prevented from or delayed in performing its obligations hereunder due to any causes that are, and that would notwithstanding the exercise of reasonable diligence be expected to be, beyond Seller’s reasonable control (such causes, “ Force Majeure Events ”), but only to the extent that (i) the effects of such Force Majeure Events upon the functions, activities and efforts of Seller to perform its obligations hereunder is not greater or more than its effects on such ( or similar or related functions, activities or efforts of Seller or its vendors performed in connection with Seller’s own business and (ii) Seller uses its commercially reasonable efforts to mitigate the effects of the Force Majeure Events, including without limitation, by working around any constraints on Seller’s ability of perform its obligations hereunder that arise as a result of such Force Majeure Event (“ Work-Around Efforts ”). Upon any Force Majeure Event, Seller shall give notice of such event as soon as reasonably practicable to Buyer stating the extent and duration of the impact that such event will have on its performance of its obligations hereunder and the cause thereof, and Seller shall resume the performance of its obligations as soon as reasonably practicable. Seller shall not be liable for the nonperformance or delay in performance of its obligations under this CMA when such failure is true to a Force Majeure Event, provided that Seller implements any feasible Work-Around Efforts.

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[SIGNATURE PAGE(S) FOLLOWS]

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IN WITNESS WHEREOF, the Parties hereto by their duly-authorized representatives have executed this Contract Manufacturing Agreement as of August __, 2017.


RTI SURGICAL, INC .

By:
Name:		Camille I. Farhat
Title:		President & Chief Executive Officer

Signature Page to Contract Manufacturing Agreement

IN WITNESS WHEREOF, the Parties hereto by their duly-authorized representatives have executed this Contract Manufacturing Agreement as of August __, 2017.


A&E ADVANCED CLOSURE SYSTEMS, LLC

By:
Name:		Michael Janish
Title:		Chief Executive Officer and President

Signature Page to Contract Manufacturing Agreement

SCHEDULE 1

PRICING

[****]

Thorecon Products shall be priced at [****] in accordance with Section 5.1(a).

* The products having Material Numbers [****] are subject to a contract between Seller and the supplier of the additional products, including a territorial restriction imposed by Seller’s supplier. Buyer may therefore distribute and sell any such products that it purchases from Seller only within the territory to which Seller is restricted, i.e. all states, jurisdictions, commonwealths and territories comprising the United States of America, including without limitation, Guam and Puerto Rico, and the European Union. Notwithstanding any other provision of this CMA, including, without limitation, Section 2.3, Buyer may purchase such products directly from the manufacturer or from any third party, instead of or in addition to its purchase of such products from Seller. The territorial restrictions specified herein shall not apply to any such products that Buyer purchases from any source other than Seller.

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EXHIBIT A

ROLLING FORECAST

[****]

Page 44 of 45

EXHIBIT B

TRITIUM TOOLSET CONFIGURATION

[****]

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Exhibit 10.3

THIRD AMENDED AND RESTATED LOAN AGREEMENT

RTI SURGICAL, INC.,

as Borrower

and

TD BANK, N.A.,

as Administrative Agent,

and

TD BANK, N.A.

and

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,

as Lenders

and

TD SECURITIES “USA” LLC, as Bookrunner and Joint Lead Arranger, and

FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as Joint Lead Arranger

Dated as of August 3, 2017

THIRD AMENDED AND RESTATED LOAN AGREEMENT

This Third Amended and Restated Loan Agreement (this “ Agreement ”) is dated August 3, 2017 (the “ Amendment Date ”), by and among: (i) RTI Surgical, Inc., a Delaware corporation formerly known as RTI Biologics, Inc. (“ Borrower ”); (ii) TD Bank, N.A., a national banking association, as administrative agent for the Lenders (in such capacity, including any successor thereto, the “ Administrative Agent ”); and (iii) each of the Lenders from time to time a party hereto.

Borrower desires to modify its financing arrangements with Lenders and Lenders are willing to modify Borrower’s existing loans and extensions of credit under the terms and provisions set forth in this Agreement.

This Agreement amends and restates in its entirety that certain Second Amended and Restated Credit Agreement, dated July 16, 2013, by and among Borrower, the Administrative Agent and the Lenders, as amended by: (i) that certain First Amendment to Second Amended and Restated Loan Agreement, dated December 30, 2013; (ii) that certain Second Amendment to Second Amended and Restated Loan Agreement, dated October 15, 2014; (iii) that certain Third Amendment to Second Amended and Restated Loan Agreement, dated June 29, 2015, (iv) that certain Fourth Amendment to Second Amended and Restated Loan Agreement, dated June 29, 2016, (v) that certain Fifth Amendment to Second Amended and Restated Loan Agreement, dated November 7, 2016, and (vi) that certain Sixth Amendment to Second Amended and Restated Loan Agreement, dated February 28, 2017 (the “ Prior Loan Agreement ”).

Upon the execution and delivery of this Agreement and effective upon the Amendment Date, First Tennessee Bank National Association shall become a Joint Lead Arranger with respect to the financing arrangements contemplated by this Agreement. By their execution and delivery of this Agreement, Lenders hereby provide their consent to Borrower’s sale of its CTS Business (as defined herein) for a cash purchase price of not less than $54,000,000.

The parties desire to define the terms and conditions of their relationship in writing.

Now, therefore, the parties hereto, intending to be legally bound, hereby agree that the Prior Loan Agreement is hereby amended and restated in its entirety as follows:

SECTION 1

DEFINITIONS AND INTERPRETATIONS

1.1 Terms Defined . As used in this Agreement, the following terms have the following respective meanings:

(a) “ Account ” means all of the “accounts” (as that term is defined in the UCC) of Borrower, whether now existing or hereafter arising.

(b) “ Account Debtor ” means any Person obligated on any Account owing to Borrower.

(d) “ Adjusted LIBOR Rate ” means a per annum interest rate determined pursuant to the following formula:


Adjusted LIBOR Rate =		London Interbank Offered Rate
		1 – LIBOR Reserve Percentage

(e) “ AdvaMed Code ” is defined in Section 4.14(i) .

(f) “ Advance(s) ” means any monies advanced or credit extended to Borrower by Lender under the Revolving Credit.

(g) “ Advance Date ” is defined in Section 2.3(b)(ii) .

(h) “ Advance Request ” is defined in Section 2.3(b)(ii) .

(i) “ Affiliate ” means with respect to any Person, (i) any Person which, directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person, or (ii) any Person who is a director or officer (A) of such Person, (B) of any Subsidiary of such Person, or (C) of any person described in clause (i) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote five percent (5%) or more of the Capital Stock having ordinary voting power for the election of directors (or comparable equivalent) of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Control may be by ownership, contract, or otherwise.

(j) “ Alternate Rate ” is defined in Section 2.12 .

(k) “ Anti-Terrorism Laws ” means any statute, treaty, law (including common law), ordinance, regulation, rule, order, opinion, release, injunction, writ, decree or award of any Governmental Authority relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.

(l) “ Applicable Basis Points ” is defined in Section 2.9(b) .

(m) “ Asset Sale ” means the sale, transfer, lease, license or other disposition by Borrower, or by any Subsidiary of Borrower, to any Person other than Borrower or any such Subsidiary, of any Property (excluding any such disposition permitted by Section 6.2 ) now owned, or hereafter acquired, of any nature whatsoever in any transaction or series of related transactions other than the sale of Inventory in the ordinary course of business. An “ Asset Sale ” includes, but is not limited to, a merger, consolidation, division, conversion, dissolution or liquidation.

(n) “ Assignment of Claims Act ” means the Federal Assignment of Claims Act, 31 U.S.C. § 3727 et seq., as amended from time to time.

(o) “ Authorized Officer ” means any officer (or comparable equivalent) of Borrower authorized by specific resolution of Borrower to request Advances or execute Covenant Compliance Certificates as set forth in the authorization certificate delivered to Lender substantially in the form of Exhibit B .

(p) “ Bank Affiliate ” means with respect to any Lender, any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with Lender. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (i) to vote twenty-five percent (25%) or more of any class of Capital Stock having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (ii) to direct or cause the direction of the management and policies of such Person whether by ownership of Capital Stock, contract or otherwise.

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(q) “ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy”, as now or hereinafter in effect, or any successor statute.

(r) “ Blocked Person ” is defined in Section 4.25(b) .

(s) “ Borrowing Certificate ” means the certificate delivered to Administrative Agent by Borrower substantially in the form of Exhibit F .

(t) “ Business Day ” means any day other than a Saturday, Sunday or federal holiday (or a day on which commercial banks in New York City are required or permitted to close) on which Administrative Agent is open and conducting its customary banking transactions.

(u) “ Capitalized Lease Obligations ” means any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, consistently applied.

(v) “ Capital Expenditures ” means, for any period, the aggregate of all expenditures (including that portion of Capitalized Lease Obligations attributable to that period) made in respect of the purchase, construction or other acquisition of fixed or capital assets, determined in accordance with GAAP.

(w) “ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all other ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing, but excluding from all of the foregoing any debt securities convertible into or exchangeable for Capital Stock (and/or cash based on the value of Capital Stock).

(x) “ Cash Collateral Pledge Agreement ” means that Cash Collateral Pledge Agreement to be executed by Borrower granting a first perfected security interest in the CTS Tax Escrow Account in favor of Administrative Agent and Lenders.

(y) “ Change of Control ” means the earliest to occur of (i) a “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act, but excluding any employee benefit plan of such person and its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Securities Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding voting stock of Borrower, and (ii) during any period of twelve (12) consecutive months, the board of directors of Borrower shall cease to consist of a majority of the Continuing Directors.

(z) “ Closing ” is defined in Section 3.6 .

(aa) “ Code ” means the Internal Revenue Code of 1986, as amended, as the same may be in effect, from time to time.

(bb) “ Collateral ” means all of the Property and interests in Property described in Section 2.15 and all other Property, and interests in Property that now or hereafter secure payment of the Obligations and satisfaction by Borrower of all covenants and undertakings contained in this Agreement and the other Loan Documents.

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(cc) “ Consolidated Amortization Expense ” means, for any period, the aggregate consolidated amount of amortization expenses of Borrower, as determined in accordance with GAAP.

(dd) “ Consolidated Depreciation Expense ” means for any period, the aggregate, consolidated amount of depreciation expenses of Borrower, as determined in accordance with GAAP.

(ee) “ Consolidated EBITDA ” means, for any period, Borrower’s Consolidated Net Income (or deficit) plus (i) Consolidated Interest Expense, plus (ii) Consolidated Depreciation Expense, plus (iii) Consolidated Amortization Expense, plus (iv) Consolidated Tax Expense, plus (v) Extraordinary Expenses minus (vi) Extraordinary Income, all as determined in accordance with GAAP. For purposes of the financial covenant calculations contemplated by Section 5.12 , Borrower’s quarterly Consolidated EBITDA, inclusive of authorized one time charges and excluding EBITDA generated by Borrower’s CTS Business shall be as set forth on Appendix 1 attached hereto.

(ff) “ Consolidated Interest Expense ” means, for any period (without duplication), the aggregate, consolidated amount of interest expense required to be paid or accrued during such period on all Indebtedness of Borrower outstanding during all or any part of such period, as determined in accordance with GAAP.

(gg) “ Consolidated Net Income ” means, for any period, consolidated net income after taxes of Borrower as such would appear on Borrower’s consolidated statement of income, prepared in accordance with GAAP.

(hh) “ Consolidated Tax Expense ” means, for any period, the aggregate consolidated amount of income tax expenses of Borrower, as determined in accordance with GAAP.

(ii) “ Continuing Directors ” shall mean the directors of Borrower on the Amendment Date, and each other director, if, in each case, such other directors’ nomination for election to the board of directors of Borrower is recommended by a majority of the then Continuing Directors.

(jj) “ Contract ” means any written or oral legally binding contract, agreement, instrument, commitment or undertaking of any nature (including leases, licenses, mortgages, notes, guarantees, sublicenses, subcontracts, letters of intent and purchase orders) as of the Amendment Date or as may hereafter be in effect.

(kk) “ Covenant Compliance Certificate ” is defined in Section 5.15 .

(ll) “ CTS Business ” means Borrower’s Cardiothoracic Segments (CTS) business.

(mm) “ CTS Tax Escrow Account ” means the deposit account at First Tennessee Bank into which Borrower shall deposit not less than $12,000,000 of cash proceeds received upon the closing of the sale of Borrower’s CTS Business.

(nn) “ Default ” means any event, act, condition or occurrence which with notice, or lapse of time or both, would constitute an Event of Default hereunder.

(oo) “ Defaulting Lender ” means any Lender that: (i) has failed, within two (2) Business Days of the date required to be funded or paid, to (A) fund any portion of its Loan or (B) pay over to

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Borrower any other amount required to be paid by it under this Agreement, unless, in the case of clause (A) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied; (ii) has notified Borrower in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; or (iii) has become the subject of a bankruptcy, insolvency or similar event.

(pp) “ Director Indemnification Agreement ” means that certain Indemnification Agreement, dated July 16, 2013, by and between Borrower and its directors.

(qq) “ Disqualified Stock ” means any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable for any reason, (ii) is convertible or exchangeable for Indebtedness or Capital Stock that meets the requirements of clauses (i) and (ii), or (iii) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the Term Loan Maturity Date.

(rr) “ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the grant of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith or entering into an agreement to do any of the foregoing.

(ss) “ Distribution ” means:

(i) Cash dividends or other cash distributions on any now or hereafter outstanding Capital Stock of Borrower;

(ii) The redemption, repurchase, defeasance or acquisition of such Capital Stock or of warrants, rights or other options to purchase such Capital Stock; and

(iii) Any loans or advances (other than salaries), to any shareholder(s), partner(s) or member(s) of Borrower or any Subsidiary of Borrower.

(tt) “ Dividend Payment ” is defined in Section 2.2(c)(i) .

(uu) “ Dividend Payment Date ” is defined in Section 2.2(c)(i) .

(vv) “ Dollar ,” “ Dollars ,” “ U.S. Dollars ” and the symbol “ $ ” mean the lawful money of the United States of America.

(ww) “ Domestic Subsidiary ” shall mean any Subsidiary that is organized under the laws of the United States of America, any state thereof or the District of Columbia.

(xx) “ Domestic Subsidiary Patent Security Agreement ” means that certain security agreement dated July 16, 2013 executed by each Domestic Subsidiary (other than RTI Donor Services) granting a security interest in the Patent Collateral of such Domestic Subsidiary (as defined in such Domestic Subsidiary Patent Security Agreement) in favor of Administrative Agent and Lenders.

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(yy) “ Domestic Subsidiary Security Agreement ” means that certain security agreement dated July 16, 2013 executed by each Domestic Subsidiary (other than RTI Donor Services) in favor of Administrative Agent and Lenders.

(zz) “ Domestic Subsidiary Trademark Security Agreement ” means that certain security agreement dated July 16, 2013 executed by each Domestic Subsidiary (other than RTI Donor Services) granting a security interest in the Trademarks of such Domestic Subsidiary (as defined in such Domestic Subsidiary Trademark Security Agreement) in favor of Administrative Agent and Lenders.

(aaa) “ Environmental Laws ” means any and all applicable foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct concerning pollution, protection of the environment, or the impact of Hazardous Substances on human health or the environment, as now or may at any time hereafter be in effect from time to time.

(bbb) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as the same may be in effect, from time to time.

(ccc) “ Escrow Agreement ” means that certain Escrow Agreement to be executed by Borrower and First Tennessee Bank setting forth the terms and conditions of Borrower’s cash deposit of not less than $12,000,000 for payment of taxes payable by reason of the sale of Borrower’s CTS Business.

(ddd) “ Event of Default ” is defined in Section 7.1 .

(eee) “ Executive Order No. 13224 ” means Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced and as may be in effect from time to time.

(fff) “ Expenses ” is defined in Section 9.6 .

(ggg) “ Extraordinary Income ” shall consist of one-time non-recurring income items, including, but not limited to, gains on sale and acquisition related recapture of contingent or escrowed purchase money payments.

(hhh) “ Extraordinary Expenses ” means any one-time expenses such as: (i) non-cash intangible asset impairment charges; (ii) non-cash stock based compensation; (iii) currently authorized one time charges of (A) $3,300,000 in proxy, severance and restructure charges in the Quarter ending June 30, 2016, (B) $3,550,000 in review, severance and executive retirement charges in the Quarter ending September 30, 2016, (C) $15,624,000 in inventory, abandonment and executive retirement charges in the Quarter ending December 31, 2016, and (D) $4,000,000 in severance charges in the Quarter ending March 31, 2017; (iv) severance charges not exceeding $3,500,000 to be taken in the Quarter ending June 30, 2017 related to restructuring charges in Europe and certain other executive positions; and (v) severance charges and other related charges as approved by Lenders not exceeding $4,000,000 in the aggregate to be taken in Quarters ending September 30, 2017 and/or December 31, 2017. The restructuring and severance expenses referred to in clauses (iv) and (v) are subject to good faith review and approval by the Required Lenders for determination of eligibility under the defined categories.

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(iii) “ FDA ” is defined in Section 4.14(a) .

(jjj) “ FDCA ” is defined in Section 4.14(a) .

(kkk) “ Fixed Charge Coverage Ratio ” means, for any period, on a consolidated basis, the ratio (i) Consolidated EBITDA minus cash taxes (excluding taxes arising from the sale of the CTS Business), minus Distributions, minus increases in due from and/or investments in Affiliates, minus Unfunded Capital Expenditures divided by (ii) required annual principal and interest payments, all as determined in accordance with GAAP.

(lll) “ GAAP ” means generally accepted accounting principles as in effect on the Amendment Date applied in a manner consistent with the most recent audited financial statements of Borrower furnished to Lenders and described in Section 4.7 .

(mmm) “ Governmental Authority ” means any foreign, federal, state or local government or political subdivision, or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury, or arbitration.

(nnn) “ Guarantor ” means each of the Domestic Subsidiaries of Borrower (other than RTI Donor Services) and any other Person who may hereafter guaranty, as surety, all of the Obligations.

(ooo) “ Guaranty Agreement ” means that certain guaranty agreement dated July 16, 2013 by each Guarantor in favor of Lenders.

(ppp) “ Hazardous Substances ” means any substances defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic substance or similar term, under and regulated pursuant to any Environmental Law.

(qqq) “ Hedging Agreements ” means any Interest Hedging Instrument or any other interest rate protection agreement, foreign currency exchange agreement, commodity purchase or option agreement, or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. § 101 et. seq.).

(rrr) “ Indebtedness ” of any Person, means, at any date, without duplication, (i) all indebtedness of such Person for borrowed money (including with respect to Borrower, the Obligations) or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (ii) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, including, without limitation, any debt securities convertible into or exchangeable for Capital Stock, (iii) all Capitalized Lease Obligations of such Person, (iv) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder, (v) all obligations of other Persons which such Person has guaranteed, (vi) Disqualified Stock, (vii) all Obligations of such Person under Hedging Agreements, and (viii) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof.

(sss) “ Intellectual Property ” means all intellectual property, regardless of form, including: (i) patents and patent applications, published and unpublished works of authorship, including audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, mask works, and sound recordings; (ii) inventions and discoveries, including articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and new uses for any of the preceding items; (iii) words, names, symbols, devices, designs, and

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other designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product, or service or to indicate a form of certification, including logos, product designs, and product features (“ Trademarks ”); and (iv) trade secrets, confidential information, and information that is not generally known or readily ascertainable through proper means, whether tangible or intangible, including algorithms, ideas, designs, formulas, know-how, methods, processes, programs, prototypes, systems, and techniques.

(ttt) “ Interest Hedging Instrument ” means any documentation evidencing any interest rate swap, interest “cap” or “collar” or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. § 101 et. seq.) between Borrower and Lender (or any Affiliate of Lender).

(uuu) “ Inventory ” means all of the “inventory” (as that term is defined in the UCC) of Borrower, whether now existing or hereafter acquired or created.

(vvv) “ Investor Rights Agreement ” means that certain Investor Rights Agreement, dated July 16, 2013, by and between Borrower and WSHP Biologics Holdings.

(www) “ IRS ” means the Internal Revenue Service.

(xxx) “ Lenders ” shall mean (i) the Persons listed on Exhibit A (other than any such Person that has ceased to be a party hereto) and (ii) any Person that has become a party hereto pursuant to an assignment. The amount of each Lender’s commitment with respect to the Revolving Credit (each, a “ Commitment ”) and each Lender’s applicable percentage of the Term Loans (each, an “ Applicable Percentage ”) is set forth on such Exhibit A .

(yyy) “ Leverage Ratio ” means, at any time, on a consolidated basis, the ratio of Borrower’s (i) Total Funded Indebtedness, to (ii) Consolidated EBITDA.

(zzz) “ LIBOR Interest Period ” means, initially, the first (1st) LIBOR Interest Period hereunder commenced on July 16, 2013 and ended on and included July 31, 2013 (date immediately preceding the first reset date). Thereafter, each “ LIBOR Interest Period ” shall commence on and include the 1 ^st calendar day of every calendar month immediately following the previous LIBOR Interest Period (the “ Reset Date ”); provided , however , (i) if any LIBOR Interest Period would end on a day for which there is no numerically corresponding day in the calendar month, such LIBOR Interest Period shall end on the last day of the relevant calendar month and (ii) no LIBOR Interest Period shall extend beyond the Term Loan Maturity Date.

(aaaa) “ LIBOR Reserve Percentage ” means, for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D, as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of LIBOR Rate loans is determined), whether or not Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. LIBOR Rate loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to Lender. The Adjusted LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage.

(bbbb) “ LIBOR Spread ” is defined in Section 2.4(c) .

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(cccc) “ LIBOR Spread Applicable Basis Points ” is defined in Section 2.4(c) .

(dddd) “ Lien ” means any interest of any kind or nature in property securing an obligation owed to, or a claim of any kind or nature in property by, a Person other than the owner of the Property, whether such interest is based on the common law, statute, regulation or contract, and including, but not limited to, a security interest or lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt, a lease, consignment or bailment for security purposes, a trust, or an assignment. For the purposes of this Agreement, Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.

(eeee) “ Loans ” means, collectively, the unpaid balance of cash Advances under the Revolving Credit and the Term Loan.

(ffff) “ Loan Documents ” means, collectively, this Agreement, the Note(s), the Security Documents, and all agreements, instruments and documents executed and/or delivered in connection therewith, all as may be supplemented, restated, superseded, amended or replaced from time to time.

(gggg) “ London Banking Days ” means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England.

(hhhh) “ London Interbank Offered Rate ” means the rate of interest (rounded upwards, at Administrative Agent’s option, to the next 100th of one percent) equal to the British Bankers’ Association LIBOR (“ BBA LIBOR ”) for the equivalent LIBOR Interest Period as published by Bloomberg (or such other commercially available source providing quotations of BBA LIBOR as designated by Lender from time to time) at approximately 11:00 A.M. (London time) two (2) London Banking Days prior to the Reset Date; provided however, if more than one BBA LIBOR is specified, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term London Interbank Offered Rate shall mean, with respect to any LIBOR Interest Period, the rate of interest per annum determined by administrative Agent to be the average rate per annum at which deposits in dollars are offered for such Interest Period by major banks in London, England at approximately 11:00 A.M. (London time) two (2) London Banking Days prior to the Reset Date.

(iiii) “ Material Adverse Effect ” means a material adverse effect with respect to (i) the business, assets, properties, financial condition, contingent liabilities, or results of operations of Borrower and its Subsidiaries, (ii) Borrower’s ability to pay the Obligations in accordance with the terms hereof, or (iii) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of Lenders hereunder or thereunder.

(jjjj) “ Material Contract ” means, with respect to Borrower or any Subsidiary of Borrower: (i) any distributor, original equipment manufacturer, reseller, value added reseller, sales, agency or manufacturer’s representative Contract pursuant to which any Person has a right to market, resell or distribute any products involving in the case of any such Contract more than Ten Million and 00/100 Dollars ($10,000,000.00) per annum; (ii) other than Standard Outbound IP Agreements, all licenses, sublicenses and other Contracts involving consideration in excess of Ten Million and 00/100 Dollars ($10,000,000.00) pursuant to which any Person is granted any rights to Intellectual Property or pursuant to which Borrower and/or any Subsidiary has agreed to any restriction on the right of Borrower and/or any Subsidiary to use or enforce any rights in or with respect to any Intellectual Property or pursuant to which Borrower and/or any Subsidiary agrees to encumber, transfer or sell rights in or with respect to any Intellectual Property; (iii) other than Standard Inbound IP Agreements, all licenses,

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sublicenses and other Contracts involving consideration in excess of Ten Million and 00/100 Dollars ($10,000,000.00) pursuant to which Borrower and/or any Subsidiary acquired or is granted any rights to intellectual property owned by a third party or pursuant to which Borrower and/or any Subsidiary is granted the right to market, resell or distribute any products, technology or services of any Person; (iv) any other Contract involving payment of more than Ten Million and 00/100 Dollars ($10,0000.00) per annum; and (v) any amendment, supplement, and modification (whether oral or written) in respect of any of the foregoing.

(kkkk) “ Maximum Acquisition and Investment Amount ” means with respect to any Permitted Acquisitions and Permitted Capital Stock Investments, taken together, (i) Twenty Million and 00/100 Dollars ($20,000,000.00) in any twelve (12)-month period or (ii) Ten Million and 00/100 Dollars ($10,000,000.00) with respect to any individual transaction.

(llll) “ Maximum Revolving Credit Amount ” means the sum of Forty-Two Million Five Hundred Thousand and 00/100 Dollars ($42,500,000.00).

(mmmm) “ Non-Encumbrance Agreement ” means that certain agreement not to encumber real property dated July 16, 2013 by Borrower and each Domestic Subsidiary in favor of Administrative Agent and Lenders.

(nnnn) “ Note(s) ” mean, collectively, the Revolving Credit Notes and Term Loan Notes.

(oooo) “ Obligations ” mean all existing and future debts, liabilities and obligations of every kind or nature at any time owing by Borrower to Lenders or any other subsidiary of Lenders or any Bank Affiliate, whether under this Agreement, or any other existing or future instrument, document or agreement, between Borrower or Lenders or any other subsidiary of Lenders or any Bank Affiliate, whether joint or several, related or unrelated, primary or secondary, matured or contingent, due or to become due (including debts, liabilities and obligations obtained by assignment), and whether principal, interest, fees, indemnification obligations hereunder or Expenses (specifically including interest accruing after the commencement of any bankruptcy, insolvency or similar proceeding with respect to Borrower, whether or not a claim for such post-commencement interest is allowed), including, without limitation, debts, liabilities and obligations in respect of the Revolving Credit and Term Loan and any extensions, modifications, substitutions, increases and renewals thereof; any amount payable by Borrower or any Subsidiary of Borrower pursuant to an Interest Hedging Instrument; the payment of all amounts advanced by Lenders or any other subsidiary of Lenders or any Bank Affiliate to preserve, protect and enforce rights hereunder and in the Collateral; and all Expenses incurred by Lenders or any other subsidiary of Lenders or any Bank Affiliate. Without limiting the generality of the foregoing, Obligations shall include any other debts, liabilities or obligations owing to Lenders or any other subsidiary of Lenders or any Bank Affiliate in connection with any lockbox, cash management, or other services (including electronic funds transfers or automated clearing house transactions) provided by Lenders or any other subsidiary of Lenders or any Bank Affiliate to Borrower, as well as any other loan, advances or extension of credit, under any existing or future loan agreement, promissory note, or other instrument, document or agreement between Borrower and any Lender or any other subsidiary of such Lender or any Bank Affiliate.

(pppp) “ Patent Rights ” is defined in Section 4.13(b) .

(qqqq) “ Patent Security Agreement ” means that certain security agreement dated July 16, 2013 executed by Borrower granting a security interest in the Patent Collateral (as defined in the Patent Security Agreement) in favor of Administrative Agent and Lenders.

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(rrrr) “ PBGC ” means the Pension Benefit Guaranty Corporation.

(ssss) “ Pension Plan ” is defined in Section 4.11(a) .

(tttt) “ Perfection Certificate ” means each Perfection Certificate provided by Borrower and each Domestic Subsidiary to Administrative Agent on or prior to the Amendment Date in form and substance satisfactory to Administrative Agent.

(uuuu) “ Permitted Acquisition ” is defined in Section 6.1(b)(vi) .

(vvvv) “ Permitted Capital Stock Investment ” means any acquisition of the Capital Stock of any Person that does not become a direct or indirect Subsidiary of Borrower as a result of such acquisition.

(wwww) “ Permitted Indebtedness ” means: (i) Indebtedness to Lenders in connection with the Revolving Credit, Term Loan or otherwise pursuant to the Loan Documents; (ii) trade payables incurred in the ordinary course of Borrower’s business; (iii) Indebtedness outstanding on the date hereof and listed in Exhibit C ; (iv) additional purchase money Indebtedness (including Capitalized Lease Obligations) hereafter incurred by Borrower to finance the purchase of fixed assets; provided that, (A) the aggregate amount of any such Indebtedness at any time outstanding shall not exceed Two Million and 00/100 Dollars ($2,000,000.00), (B) such Indebtedness shall not exceed the purchase price of the assets funded, (C) such Indebtedness shall be incurred within ninety (90) days of the acquisition of the assets funded, and (D) no such Indebtedness may be refinanced for a principal amount in excess of the principal amount outstanding at the time of such refinancing; (v) any Subordinated Indebtedness; (vi) additional Indebtedness the aggregate amount of which outstanding at any time shall not exceed Two Million and 00/100 Dollars ($2,000,000.00); (vii) Indebtedness of Borrower to any Subsidiary and of any Subsidiary to Borrower or any other Subsidiary; and (viii) Indebtedness which represents a replacement, refinancing, refunding or renewal of any Indebtedness described in sub-clauses (iii) through (v) above; provided, however, that the amount of any Indebtedness referenced in clause (viii) shall not be increased at the time of such refinancing, renewal or extension except by fees and expenses reasonably incurred in connection with such refinancing; and, provided, further, that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, renewal or extension shall be no less favorable in any material respect to Borrower and its Subsidiaries or to Lenders than the terms of the Indebtedness being refinanced, renewed or extended.

(xxxx) “ Permitted Investments ” means: (i) obligations issued or guaranteed by the United States of America or any agency thereof; (ii) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating) by a nationally recognized investment rating agency; (iii) certificates of time deposit and bankers’ acceptances having maturities of not more than one hundred eighty (180) days and repurchase agreements backed by United States government securities of a commercial bank if (A) such bank has a combined capital and surplus of at least Five Hundred Million and 00/100 Dollars ($500,000,000.00), or (B) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency, and (iv) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof.

(yyyy) “ Permitted Liens ” means: (i) Liens securing taxes, assessments, business improvement charges, water charges, sewer rents or governmental charges or levies not delinquent for a period of thirty (30) days or which are being contested in good faith and by appropriate proceedings for which adequate reserves (if required by GAAP) with respect thereto have been established; (ii) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation,

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unemployment insurance, social security and other like laws; (iii) Liens on fixed assets security purchase money Indebtedness permitted under Section 6.7 ; provided , that such Lien attached to such assets concurrently, or within ninety (90) days of the acquisition of such assets, and only to the assets so acquired; (iv) Liens existing on the Amendment Date and shown on Exhibit D ; (v) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP; (vi) deposits to secure the performance of bids and contracts, statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (vii) Liens to secure obligations to landlords, lessors or renters under leases or rental agreements; (viii) with respect to any real property, (A) applicable zoning Requirements of Law, building codes and other land use Requirements of Law, (B) Liens and other matters of record in existence on the date hereof listed on Exhibit D , (C) non-monetary Liens and other matters that would be shown by an accurate title insurance policy or an accurate survey, and (D) rights of any landlords and sublandlords; (ix) Liens not otherwise permitted so long as the aggregate outstanding principal amount of the Obligations secured thereby does not exceed (as to Borrower and all Subsidiaries in the aggregate) Five Hundred Thousand and 00/100 Dollars ($500,000.00) at any one time; (x) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (xi) any Lien arising out of the refinancing, replacement, renewal or refunding of any secured Permitted Indebtedness; and (xii) Liens in favor of Administrative Agent or Lenders securing the Obligations.

(zzzz) “ Person ” means an individual, partnership, corporation, trust, limited liability company, limited liability partnership, unincorporated association or organization, joint venture or any other entity.

(aaaaa) “ Preferred Stock ” means that certain preferred stock of Borrower designated as Series A Preferred Stock, $0.001 par value per share, having the rights, preferences, privileges and designations set forth in the Preferred Stock Certificate of Designation, issued to WSHP Biologics Holdings pursuant to the Preferred Stock Investment Agreement.

(bbbbb) “ Preferred Stock Certificate of Designation ” means that certain Series A Preferred Stock Certificate of Designation of Borrower as in effect on July 13, 2016.

(ccccc) “ Preferred Stock Investment Agreement ” means that certain Investment Agreement, dated June 12, 2013, by and between Borrower and WSHP Biologics Holdings.

(ddddd) “ Property ” means any interest of Borrower or any Subsidiary in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

(eeeee) “ Quarter ” means each of the following calendar quarters: (i) January 1 through March 31; (ii) April 1 through June 30; (iii) July 1 through September 30; and (iv) October 1 through December 31.

(fffff) “ Quarter End ” means the day on which each Quarter ends ( i.e. , (i) March 31; (ii) June 30; (iii) September 30; and (iv) December 31); provided , however , to the extent such day is not a Business Day, payments shall be due on the first following day that is a Business Day. Such extension of time will not be included in the calculation of interest due.

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(ggggg) “ Reaffirmation Agreements ” means those agreements described in Section 2.16 hereof.

(hhhhh) “ Regulated Products ” is defined in Section 4.14(a) .

(iiiii) “ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System comprising Part 204 of Title 12, Code of Federal Regulations, as in effect from time to time, and any successor thereto.

(jjjjj) “ Required Lenders ” shall mean, at any time: (i) if there are two (2) or fewer unaffiliated Lenders, all of the Lenders; and (ii) if there are three (3) or more unaffiliated Lenders, then Lenders having Loans representing more than sixty-seven percent (67%) of the sum of all Loans outstanding at such time.

(kkkkk) “ Requirement of Law ” means, collectively, all international, foreign, federal, state and local laws, statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

(lllll) “ Reset Date ” is defined in the definition of LIBOR Interest Period.

(mmmmm) “ Restricted Cash ” means restricted cash as defined by GAAP and in any event not subject to any Lien (other than in favor of Lenders) and not designated for a specific purpose or held in a trust account or reserve account.

(nnnnn) “ Revolving Credit ” is defined in Section 2.1(a) .

(ooooo) “ Revolving Credit Closing Fee ” is defined in Section 2.6(a) .

(ppppp) “ Revolving Credit Maturity Date ” means September 15, 2019, or such later date as Lender may, in its sole and absolute discretion, designate in writing to Borrower.

(qqqqq) “ Revolving Credit Note(s) ” is defined in Section 2.1(b) .

(rrrrr) “ RTI Donor Services ” means RTI Donor Services, Inc., a Delaware non-profit corporation.

(sssss) “ Scheduled Intellectual Property ” is defined in Section 4.13(b) .

(ttttt) “ Securities Pledge Agreement ” means that certain securities pledge agreement dated July 16, 2013 by Borrower (and each applicable Subsidiary of Borrower) in favor of Administrative Agent and Lenders.

(uuuuu) “ Security Agreement ” means that certain security agreement dated July 16, 2013 executed by Borrower in favor of Administrative Agent and Lenders.

(vvvvv) “ Security Documents ” means, collectively, the Guaranty Agreement, the Security Agreement, the Patent Security Agreement, the Trademark Security Agreement, the Domestic Subsidiary Security Agreement, the Domestic Subsidiary Patent Security Agreement, the Domestic

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Subsidiary Trademark Security Agreement, the Non-Encumbrance Agreements, the U.S. Patent Non-Encumbrance Agreement, the Securities Pledge Agreement, the Cash Collateral Pledge Agreement, the Reaffirmation Agreements, the Perfection Certificates, and all agreements, instruments and documents executed and/or delivered in connection therewith, all as may be supplemented, restated, superseded, amended or replaced from time to time.

(wwwww) “ Social Security Act ” is defined in Section 4.14(f).

(xxxxx) “ Spread Adjustment Date ” means the first Business Day of the Quarter after Borrower’s quarterly financial statements first reflect that Borrower’s one-time Extraordinary Expenses comprise less than twenty-five percent (25%) of Borrower’s Consolidated EBITDA for any rolling four fiscal-quarter period occurring during the period this Agreement is in effect.

(yyyyy) “ Standard Inbound IP Agreements ” means (i) non-disclosure agreements granting to Borrower a limited right to use a third party’s confidential information entered into by Borrower in the ordinary course of its business, consistent with past practice, (ii) “shrink wrap” and similar generally available commercial end-user licenses to software that is not redistributed with the products, (iii) employment agreements and consulting agreements pursuant to which Borrower obtains rights to use Intellectual Property created in the scope of such employment or provision of services for Borrower, (iv) agreements granting Borrower a right to use the third party Trademarks in connection with Company’s marketing or advertising of Borrower, or Borrower’s products or such third party’s products; and (v) other agreements pursuant to which Borrower has been granted a license to use Intellectual Property in the ordinary course of business consistent with past practices.

(zzzzz) “ Standard Outbound IP Agreements ” means (i) non-disclosure agreements granting to a third party a limited right to use Borrower’s confidential information entered into by Borrower in the ordinary course of its business, consistent with past practice, (ii) non-exclusive licenses to Borrower’s products (which, to the extent such products are software, are licenses to object code) granted by Borrower or other agreements pursuant to which Borrower has granted a license to Intellectual Property in the ordinary course of its business consistent with past practice, and (iii) agreements granting a third party a right to use Borrower’s Trademarks in connection with such third party’s marketing or advertising of Borrower or Borrower’s products.

(aaaaaa) “ Subordinated Debt ” means Indebtedness of Borrower subject to payment terms and subordination provisions set forth in a Subordination Agreement .

(bbbbbb) “ Subordination Agreement ” means an agreement between Borrower, the Administrative Agent and the holders of any Indebtedness, containing the terms of subordination and related provisions and otherwise reasonably acceptable to the Required Lenders.

(cccccc) “ Subsidiary ” with respect to any Person at any time, means: (i) any corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person or owned by a corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person; (ii) any trust of which a majority of the beneficial interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person; (iii) any corporation, partnership, joint venture, limited liability company or other entity of which ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at such time owned directly or indirectly, beneficially or of record, by, or which is otherwise controlled directly, indirectly or through one or more intermediaries by, such Person or one or more Subsidiaries of such Person.

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(dddddd) “ Term Loan ” is defined in Section 2.2(a) .

(eeeeee) “ Term Loan Maturity Date ” means September 15, 2019.

(ffffff) “ Term Loan Note(s) ” is defined in Section 2.2(b) .

(gggggg) “ Term Loan Closing Fee ” is defined in Section 2.6(b) .

(hhhhhh) “ Third Party Intellectual Property Rights ” is defined in Section 4.13(b) .

(iiiiii) “ Total Funded Indebtedness ” means, as of any date of determination with respect to Borrower and its Subsidiaries on a consolidated basis, without duplication, the sum of: (a) all obligations for borrowed money (including the Obligations but excluding Subordinated Debt) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) the maximum amount available to be drawn under Letters of Credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds (excluding any bid or performance bonds so long as such obligations are contingent) and similar instruments; (c) all non-contingent obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (d) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned by Borrower or any Subsidiary (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by Borrower or such Subsidiary or is limited in recourse; (e) all obligations to purchase, redeem, retire, defease or otherwise make any payment prior to the Revolving Credit Maturity Date or the Term Loan Maturity Date in respect of any of Borrower’s equity interests or any warrant, right or option to acquire such equity interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (f) any earn out obligations to the extent that the same are no longer contingent in nature; (g) all guarantees with respect to Indebtedness of the types specified in clauses (a) through (f) above of another Person; and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or limited liability partnership) in which Borrower or any Subsidiary is a general partner or joint venturer, but only to the extent that there is direct recourse to Borrower or such Subsidiary for the payment of such Indebtedness. For the purposes of determining Total Funded Indebtedness for covenant calculation only (i) the outstanding Indebtedness associated solely with the Revolving Credit Note (but no other Indebtedness) shall be reduced by the amount of Unrestricted Cash maintained by Borrower, on a consolidated basis, in excess of Ten Million and 00/100 Dollars ($10,000,000.00) (the “Covenant Net Debt Adjustment”), provided in no event shall the Covenant Net Debt Adjustment be an amount greater than the outstanding balance under the Revolving Credit Note and (ii) for the Quarter ending June 30, 2017 only, Total Funded Indebtedness for the purpose of the Leverage Ratio calculation required under Section 5.12(b) shall (A) be calculated using the outstanding principal balance of the Term Loan after the Borrower’s $22,000,000 reduction in principal contemplated herein and (B) the Covenant Net Debt Adjustment for the Quarter ending June 30, 2017 shall include Unrestricted Cash of Borrower arising from the sale of the CTS Business (but such Unrestricted Cash shall not, for these purposes, include (1) RTI’s closing costs relating to the CTS Business sale, (2) the $22,000,000 principal reduction contemplated herein, or (3) the $12,000,000 deposited by Borrower into the CTS Tax Escrow Account).

(jjjjjj) “ Trademark Security Agreement ” means that certain security agreement dated July 16, 2013 executed by Borrower granting a security interest in the Trademarks of Borrower in favor of Administrative Agent and Lenders.

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(kkkkkk) “ UCC ” means the Uniform Commercial Code as adopted in the State of Florida, as in effect from time to time.

(llllll) “ Unfunded Capital Expenditures ” means Capital Expenditures that are not financed through interest bearing Indebtedness.

(mmmmmm) “ Unrestricted Cash ” means all cash less any Restricted Cash.

(nnnnnn) “ U.S. Patent Non-Encumbrance Agreement ” means that certain agreement not to encumber any United States patent dated July 16, 2013 by each Subsidiary of Borrower that is not a Domestic Subsidiary but holds a United State patent, in favor of Administrative Agent and Lenders.

(oooooo) “ Waterstreet Agreements ” means (i) the Preferred Stock Investment Agreement, (ii) the Preferred Stock Certificate of Designation, (iii) the Director Indemnification Agreement and (iv) the Investor Rights Agreement.

(pppppp) “ WSHP Biologics Holdings ” means WSHP Biologics Holdings, LLC, a Delaware limited liability company.

1.2 Other Capitalized Terms . Any other capitalized terms used without further definition herein shall have the respective meaning set forth in the UCC.

1.3 Accounting Principles . Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with GAAP as in effect on the Amendment Date, to the extent applicable, except as otherwise expressly provided in this Agreement. If there are any changes in GAAP after the Amendment Date that would affect the computation of the financial covenants in Section 5.12 , such changes shall only be followed, with respect to such financial covenants, from and after the date this Agreement shall have been amended to take into account any such changes.

1.4 Construction . No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting shall apply to any Loan Documents.

SECTION 2

THE LOANS

2.1 Revolving Credit - Description .

(a) Subject to the terms and conditions of this Agreement, each Lender hereby severally establishes for the benefit of Borrower a revolving credit facility (collectively, the “ Revolving Credit ”) which shall include cash Advances extended by each Lender to or for the benefit of Borrower from time to time hereunder. The aggregate principal amount of unpaid cash Advances by each Lender shall not at any time exceed each Lender’s Applicable Percentage of the Maximum Revolving Credit Amount as set forth on Exhibit A. Subject to such limitation, the outstanding balance of Advances under the Revolving Credit may fluctuate from time to time, to be reduced by repayments made by Borrower, to be increased by future Advances which may be made by Lenders, to or for the benefit of Borrower, and, subject to the provisions of Section 7 , shall be due and payable on the Revolving Credit Maturity Date.

(b) On or about July 16, 2013, Borrower executed and delivered one or more promissory notes to Lenders (which promissory notes were thereafter amended and restated in 2015 and 2016) for the

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Maximum Revolving Credit Amount. Such promissory notes (the “ Revolving Credit Note(s) ”) have been renewed as of the date hereof. The Revolving Credit Notes shall evidence Borrower’s unconditional obligation to repay Lenders for all Advances made under the Revolving Credit, with interest as herein provided. Each Advance under the Revolving Credit shall be deemed evidenced by the Revolving Credit Notes, which is deemed incorporated herein by reference and made part hereof. The Revolving Credit Notes shall be in form and substance satisfactory to Administrative Agent and Lenders.

(d) Subject to the terms of this Section 3.1 , Lenders agree to issue letters of credit on behalf of Borrower or its Subsidiaries from time-to-time (the “ Letters of Credit ”); provided , however , that the maximum aggregate stated amount of all Letters of Credit outstanding at any time shall not exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00). For purposes of determining availability of Advances, the Revolving Credit Limit shall be reduced by the face amount of all outstanding Letters of Credit. Borrower shall pay to Lenders a reasonable letter of credit fee. All Letters of Credit shall be in form and substance reasonably satisfactory to Administrative Agent and Lenders.

(e) The term of the Revolving Credit shall expire on the Revolving Credit Maturity Date. On such date, unless having been sooner accelerated by Lenders pursuant to the terms hereof, and without impairing any rights under this Agreement or any other Loan Document, all outstanding Advances, all accrued but unpaid interest, and all other sums owing under the Revolving Credit shall be due and payable in full, and as of and after such date Borrower shall not request and Lenders shall not make any further Advances under the Revolving Credit.

2.2 Term Loan - Description .

(a) On or about July 16, 2013, Lenders advanced to Borrower the sum of Sixty Million And 00/100 Dollars ($60,000,000.00), the outstanding principal balance of which as of the Amendment Date is Twenty-Five Million Three Hundred Seventy-Five Thousand and 00/100 Dollars ($25,375,000.00) (the “ Term Loan ”).

(b) On or about July 16, 2013, Borrower executed and delivered one or more promissory notes to Lenders in the original principal amount of the Term Loan. Such promissory notes (the “ Term Loan Note(s) ”) have been renewed as of the date hereof. The Term Loan Notes evidence Borrower’s unconditional obligation to repay to Lender the Term Loan with interest as provided in this Agreement.

(i) Interest will be payable quarterly in arrears, together with quarterly payments of the principal balance of the Term Loan, commencing October 1, 2017, each in the amount of $1,125,000.

(ii) A final payment of any and all unpaid principal and any and all accrued unpaid interest outstanding under the Term Loan shall be due and payable on the Term Loan Maturity Date.

(d) Fifty percent (50%) of any funds remaining in the CTS Tax Escrow Account after Borrower’s payment in full of all federal and state income taxes arising from Borrower’s sale of its CTS Business shall be paid to Administrative Agent and applied to the then unpaid installments of the principal balance of the Term Loan in inverse order of their maturity. The other fifty percent (50%) of funds remaining in the CTS Tax Escrow Account at such time shall be released to Borrower.

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2.3 Advances and Payments .

(a) Except to the extent otherwise set forth in this Agreement (or in the case of an Interest Hedging Instrument under the applicable agreements), all payments of principal and of interest on the Revolving Credit, Term Loan and all Expenses, fees, indemnification obligations and all other charges and any other Obligations of Borrower, shall be made to Administrative Agent for the benefit of the Lenders at its banking office at 9715 N. Gate Parkway, Jacksonville, Florida 32246, or such other office as Administrative Agent may designate in writing, in United States dollars, in immediately available funds. Borrower hereby authorizes Administrative Agent, following notice to Borrower (provided no notice is required for regularly scheduled payments), to charge checking account number 7600277916 maintained at Administrative Agent and further agrees that Administrative Agent shall have the unconditional right and discretion (and Borrower hereby authorizes Lender) to charge such account, following notice to Borrower (provided no notice is required for regularly scheduled payments), in any event for all of Borrower’s Obligations as they become due from time to time under this Agreement including, without limitation, interest, principal, fees, indemnification obligations and reimbursement of Expenses. Alternatively, Administrative Agent may in its discretion, after notice Borrower, (and Borrower hereby authorizes Administrative Agent to) make a cash Advance under the Revolving Credit in a sum sufficient to pay all interest accrued and payable on the Obligations and to pay all costs, fees and Expenses owing hereunder. Borrower acknowledges that Borrower’s failure to maintain sufficient funds in any checking, operating or deposit account for payment of any of the Obligations, or Administrative Agent’s failure to charge any such account shall not relieve Borrower of any payment obligation under this Agreement or any other Loan Document. Any payments received prior to 2:00 p.m. Eastern time on any Business Day shall be deemed received on such Business Day. Any payments (including any payment in full of the Obligations), received after 2:00 p.m. Eastern time on any Business Day shall be deemed received on the immediately following Business Day.

(b) Cash Advances which may be made by Lenders from time to time under the Revolving Credit shall be made available by crediting such proceeds to Borrower’s operating account with Administrative Agent.

(i) All cash Advances requested by Borrower under the Revolving Credit must be in the minimum amount of One Hundred and 00/100 Dollars ($100.00) and integral multiples of One Hundred and 00/100 Dollars ($100.00) in excess thereof.

(ii) All cash Advances requested by Borrower under the Revolving Credit are to be in writing pursuant to a written request (an “ Advance Request ”). Requests for Advances under the Revolving Credit must be requested three (3) Business Days in advance and must specify the requested date of such Advance (the “ Advance Date ”) and the amount of such Advance. Upon Lender’s written request, with each Advance Request, Borrower shall submit a Borrowing Certificate.

(iii) Upon receiving a request for an Advance in accordance with subparagraph (ii) above, and subject to the conditions set forth in this Agreement, each Lender shall make its pro rata share of the requested Advance available to Borrower as soon as is reasonably practicable on the Advance Date.

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2.4 Interest .

(a) The unpaid principal balance of cash Advances under the Revolving Credit shall bear interest, subject to the terms hereof, at a per annum rate equal to: (i) the Adjusted LIBOR Rate plus (ii) the LIBOR Spread.

(b) The unpaid principal balance of the Term Loan shall bear interest, subject to the terms hereof, at a per annum rate equal to: (i) the Adjusted LIBOR Rate plus (ii) the LIBOR Spread.

(a) The “ LIBOR Spread ” shall be (i) three hundred fifty (350) basis points per annum for the period commencing on the Amendment Date and continuing through, but not including, the Spread Adjustment Date, and (ii) for the period commencing on the Spread Adjustment Date, the LIBOR Spread shall be three hundred (300) basis points.

2.5 Additional Interest Provisions .

(a) Interest on the Loans shall be calculated on the basis of a year of three hundred sixty (360) days but charged for the actual number of days elapsed.

(b) After the occurrence and during the continuance of an Event of Default hereunder, at the election of the Administrative Agent, the per annum effective rate of interest on all outstanding principal under the Loans, shall accrue at the rate otherwise applicable to the Loans plus three hundred (300) basis points. All such increases may, at the election of the Administrative Agent, be applied retroactively to the date of the occurrence of the Event of Default. Borrower agrees that the default rate payable to Lenders is a reasonable estimate of damages suffered by Lenders and is not a penalty.

(c) All contractual rates of interest chargeable on outstanding principal under the Loans shall continue to accrue and be paid even after Default, an Event of Default, maturity, acceleration, judgment, bankruptcy, insolvency proceedings of any kind or the happening of any event or occurrence similar or dissimilar.

(d) In no contingency or event whatsoever shall the aggregate of all amounts deemed interest hereunder and charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such court determines Lender has charged or received interest hereunder in excess of the highest applicable rate, Lender shall apply, in its sole discretion, and set off such excess interest received by Lender against other Obligations due or to become due and such rate shall automatically be reduced to the maximum rate permitted by such law.

2.6 Fees and Charges .

(a) At Closing, Lenders shall have fully earned and Borrower shall unconditionally pay to Lender, a non-refundable fee with respect to the Revolving Credit (the “ Revolving Credit Closing Fee ”) of One Hundred Six Thousand Two Hundred Fifty and 00/100 Dollars ($106,250.00).

(b) At Closing, Lenders shall have fully earned and Borrower shall unconditionally pay to Lender a non-refundable fee with respect to the Term Loan (the “ Term Loan Closing Fee ”) of Sixty-Three Thousand Four Hundred Thirty-Eight and 00/100 Dollars ($63,438.00).

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2.7 Prepayments .

(a) Borrower may prepay the Revolving Credit and Term Loan in whole or in part at any time or from time to time, without penalty or premium except as provided in Section 2.11 . Any prepayment shall be accompanied by all accrued and unpaid interest. Any partial prepayment of the Term Loan shall be applied to the Term Loan in the inverse order of maturity.

(b) Borrower shall be required to prepay the Term Loan, in whole or in part, immediately upon the receipt of any proceeds from: (i) the issuance of non-purchase money debt (other than Permitted Indebtedness); (ii) any transaction or series of transactions involving the sale of any asset or assets outside the ordinary course of business in any calendar year in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00); (iii) any issuance of Capital Stock of Borrower or any of its Subsidiaries except (A) any issuance of Capital Stock in connection with a Permitted Acquisition that is permitted under Section 6.1(b) or otherwise approved by the Required Lenders, (B) any Capital Stock issued in connection with the conversion of Preferred Stock, and (C) any issues of Capital Stock to employees of Borrower or its Subsidiaries under a stock plan approved by the board of directors of Borrower.

2.8 Use of Proceeds .

(a) The extensions of credit under and proceeds of the Term Loan were by Borrower to fund the acquisition of Pioneer Surgical Technologies, Inc.

(b) The extensions of credit under and proceeds of the Revolving Credit shall be used only for: (i) working capital and general corporate purposes and (ii) disposition costs associated with the sale of Borrower’s CTS Business.

2.9 Unused Revolving Credit Fee . Borrower shall pay to Lenders a quarterly fee in arrears based upon the unused portion of the Revolving Credit.

(a) For purposes of this Agreement, “ Unused Revolving Credit ” means an amount equal to: (i) the Maximum Revolving Credit Amount ( i.e. , Forty-Two Million Five Hundred Thousand and 00/100 Dollars ($42,500,000.00); minus (ii) the average daily outstanding principal balance of the Revolving Credit for the immediately preceding Quarter.

(b) The “ Unused Revolving Credit Fee ” shall be an amount equal to the Unused Revolving Credit for such immediately preceding Quarter multiplied by the Applicable Basis Points. For purposes of this Agreement, the “ Applicable Basis Points ” are determined based on Borrower’s financial performance under the Leverage Ratio as follows:


Leverage Ratio		Applicable Basis Points per annum
Less than 1x		15 basis points

Equal to or greater than 1x but less than 1.5x		20 basis points

Equal to or greater than 1.5x but less than 2x		25 basis points

Equal to or greater than 2x		30 basis points

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(c) Changes in the Applicable Basis Points resulting from changes in the Leverage Ratio shall become effective on the first Business Day after the Borrower’s quarterly financial statements reflect a change in the Leverage Ratio and shall remain in effect until the next change to be effected pursuant to this Section 2.9(c) .

2.10 Capital Adequacy . If the adoption of or any change in any Requirement of Law imposes, modifies, or deems applicable any capital adequacy, capital maintenance or similar requirement which affects the manner in which any Lender allocates capital resources to its commitments (including any commitments hereunder), and as a result thereof, in the reasonable opinion of such Lender, the rate of return on such Lender’s capital with regard to the Loans is reduced to a level below that which such Lender could have achieved but for such circumstances, by an amount determined by such Lender to be material, then in such case and upon notice from such Lender to Borrower, from time to time, Borrower shall pay such Lender such additional amount or amounts as shall compensate such Lender for such reduction in such Lender’s rate of return. Such notice shall contain the statement of such Lender with regard to any such amount or amounts which shall, in the absence of manifest error, be binding upon Borrower. In determining such amount, such Lender may use any reasonable method of averaging and attribution that it deems applicable. Any rules, regulations, policies, guidelines, directives or similar requirements adopted, promulgated or implemented in connection with (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (b) the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or any United States Governmental Authority, in each case pursuant to Basel III, shall in all events be deemed to have been imposed, introduced and adopted after the date of this Agreement. A certificate as to any additional amounts payable pursuant to this Section 2.10 submitted by any Lender to Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error.

2.11 Funding Indemnity . Borrower shall indemnify Administrative Agent and each Lender, and hold Administrative Agent and each Lender harmless from any loss, damages, liability, or expense which Administrative Agent or such Lender may sustain or incur as a consequence of the making of a prepayment of Loans on a day which is not the last day of a LIBOR Interest Period with respect thereto. With respect to such Loans, such indemnification shall equal the excess, if any, of (a) the amount of interest which would have accrued on the amount so prepaid for the period from the date of such prepayment at the applicable rate of interest for such Loans provided for herein over (b) the amount of interest (as reasonably determined by Administrative Agent) which would have accrued to Lenders on such amount by placing such amount on deposit for a comparable period with leading banks in the London interbank Eurodollar market. This covenant shall survive the termination of this Agreement, and the payment of the Obligations. Borrower shall be liable for any breakage costs associated with any Interest Hedging Instrument or any Hedging Agreement as a result of any prepayment.

2.12 Inability to Determine Interest Rate . Notwithstanding any other provision of this Agreement, if Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that (a) by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining the Adjusted LIBOR Rate for a LIBOR Interest Period, or (b) the Adjusted LIBOR Rate does not adequately and fairly reflect the cost to Lenders of funding Advances under the Revolving Credit that Borrower has requested during a LIBOR Interest Period, Lender shall forthwith give telephone notice of such determination, confirmed in writing, to Borrower at least two (2) Business Days prior to the first day of such LIBOR Interest Period, whereupon the outstanding principal amount shall bear interest at an equivalent rate then designated by the Administrative Agent (with the approval of the Required Lenders), for general commercial loan reference purposes (the “ Alternate Rate ”).

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2.13 Illegalit y . Notwithstanding any other provision of this Agreement, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof to Administrative Agent or Lenders by the relevant Governmental Authority shall make it unlawful for Lenders to make or maintain Advances under the Revolving Credit as contemplated by this Agreement, or to obtain in the interbank Eurodollar market, the funds with which to make such Loans, (a) Administrative Agent shall promptly notify Borrower thereof, (b) the commitment of Lenders hereunder to make Advances or continue Advances as such shall forthwith be suspended until Administrative Agent shall give notice that the condition or situation which gave rise to the suspension no longer exists, and (c) each Lender’s Loans then outstanding, if any, shall be converted on the last day of the LIBOR Interest Period for such Loans so as to bear interest at the Alternate Rate. Borrower agrees promptly to pay Administrative Agent and Lenders, upon its demand, any additional amounts necessary to compensate Administrative Agent and Lenders for actual and direct costs (but not including anticipated profits) reasonably incurred by Administrative Agent and Lenders in connection with any repayment in accordance with this Section 2.13 , including but not limited to, any interest or fees payable by Lenders to lenders of funds obtained by it in order to make or maintain its loans hereunder. A certificate as to any additional amounts payable pursuant to this Section 2.13 submitted by Administrative Agent to Borrower shall be conclusive evidence (absent manifest error) of such amounts owing. Administrative Agent agrees to use reasonable efforts to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section 2.13 ; provided , however , that such efforts shall not cause the imposition on Administrative Agent or any Lender of any additional costs or legal or regulatory burdens deemed by Administrative Agent or such Lender in its reasonable discretion to be material.

2.14 Requirements of Law .

(a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by Administrative Agent or any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall impose, modify, or hold applicable, any reserve, special deposit, compulsory loan, or similar requirement against assets held by, deposits or other liabilities in, or for the account of, advances, loans, or other extension of credit (including participations therein) by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the LIBOR Rate hereunder; or

(ii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to materially increase the cost to such Lender of making or maintaining Advances under the Revolving Credit, or to reduce any amount receivable hereunder, or under any Note, then, in any such case, Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such additional costs or reduced amount receivable which such Lender reasonably deems to be material as determined by such Lender, with respect to its Advances. A certificate as to any additional amounts payable pursuant to this Section 2.14 submitted by such Lender to Borrower shall be presumptive evidence of such amounts owing in the absence of manifest error. Each Lender agrees to use reasonable efforts to avoid, or to minimize, any amounts which might otherwise be payable pursuant to this Section 2.14 ; provided , however , that such efforts shall not cause the imposition on such Lender of any additional costs or legal regulatory burdens deemed by such Lender in good faith to be material.

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(b) A certificate as to any additional amounts payable pursuant to this Section 2.14 submitted by any Lender to Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. In determining such amount, such Lender shall use a reasonable averaging and attribution method. Notwithstanding anything to the contrary in this Section 2.14 , Borrower shall not be required to compensate a Lender pursuant to this Section 2.14 for any amounts incurred more than six (6) months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six (6)-month period shall be extended to include the period of such retroactive effect.

2.15 Security for Obligations . To secure the payment and performance of the Obligations, Borrower has executed, and has caused to be executed, the Security Documents, as follows:

(a) Pursuant to the Security Agreement, Borrower granted to Administrative Agent, for the benefit of Lenders, a first priority security interest in and to all of the Property (including, without limitation, Intellectual Property pursuant to the Patent Security Agreement and the Trademark Security Agreement) of Borrower (excluding any interest in owned or leased real property of Borrower). The Patent Security Agreement and the Trademark Security Agreement have each been amended this date pursuant to that certain First Amendment to Patent Security Agreement and that certain First Amendment to Trademark Security Agreement, respectively.

(b) Pursuant to the Domestic Subsidiary Security Agreement, each Domestic Subsidiary (other than RTI Donor Services) granted to Administrative Agent, for the benefit of Lenders, a first priority security interest in and to all of the Property (including, without limitation, Intellectual Property pursuant to the Domestic Subsidiary Patent Security Agreement and the Domestic Subsidiary Trademark Security Agreement, as each has been amended to the date hereof) of such Domestic Subsidiary (excluding any interest in owned or leased real property of such Domestic Subsidiary). The Domestic Subsidiary Patent Security Agreement and the Domestic Subsidiary Trademark Security Agreement have each been amended this date pursuant to that certain First Amendment to Domestic Subsidiary Patent Security Agreement and that certain First Amendment to Domestic Subsidiary Trademark Security Agreement, respectively.

(c) Pursuant to the U.S. Patent Non-Encumbrance Agreement, each Subsidiary that (i) is not a Domestic Subsidiary and (ii) owns any United States patent agreed not to allow any Lien to be created on such United States Patent.

(d) Pursuant to the Non-Encumbrance Agreement: (i) Borrower agreed not to allow any Lien to be created (other than a Permitted Lien) on any interest of Borrower in owned or leased real property of Borrower; and (ii) each Domestic Subsidiary (other than RTI Donor Services) agreed not to allow any Lien to be created (other than a Permitted Lien) on any interest of such Domestic Subsidiary in owned or leased real property of such Domestic Subsidiary.

(e) Pursuant to the Securities Pledge Agreement, Borrower and each Subsidiary of Borrower owning any Capital Stock in a Subsidiary that is not a Domestic Subsidiary pledged to Administrative Agent, for the benefit of Lenders, a first priority security interest in and to sixty-five percent (65%) of the Capital Stock of any Subsidiary of Borrower that is not a Domestic Subsidiary.

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2.16 Representations, Warranties and Agreements – Security Documents . Borrower hereby represents, warrants and agrees as follows, with respect to the Security Documents:

(a) The Security Agreement, the Patent Security Agreement (as amended this date), the Trademark Security Agreement (as amended this date), the Securities Pledge Agreement and the Non-Encumbrance Agreement, each signed by Borrower: (i) are each in full force and effect; (ii) that the terms and provisions thereof shall extend to and secure all obligations of Borrower as identified and described in this Agreement and the Loan Documents described herein; and (iii) that, as of the date hereof, there are no claims, defenses, counterclaims or offsets in favor of Borrower against Lenders, Administrative Agent, or any of them .

(b) Borrower shall cause each of the Domestic Subsidiaries of Borrower to execute and deliver to Administrative Agent, on behalf of Lenders, an agreement ratifying and acknowledging the Domestic Subsidiary Security Agreement, the Domestic Subsidiary Patent Security Agreement (as amended to the date hereof) and the Domestic Subsidiary Trademark Security Agreement (as amended to the date hereof): (i) are in full force and effect, (ii) that the terms and provisions thereof shall extend to and secure all obligations of Borrower as identified and described in this Agreement; and (iii) that as of the date hereof, there are no claims, defenses, counterclaims or offsets in favor of the such parties against Lenders, Administrative Agent, or any of them.

(c) Borrower shall cause Tutogen Medical, Inc., a Florida corporation, and Pioneer Surgical Technology, Inc., a Michigan corporation, to execute and deliver to Administrative Agent, on behalf of Lenders, an agreement ratifying and acknowledging the Securities Pledge Agreement executed by them and by Borrower: (i) is in full force and effect, (ii) that the terms and provisions thereof shall extend to and secure all obligations of Borrower as identified and described in this Agreement; and (iii) that, as of the date hereof, there are no claims, defenses, counterclaims or offsets in favor of the such parties against Lenders, Administrative Agent, or any of them.

(d) Borrower shall cause Tutogen Medical, GmbH, to execute and deliver to Administrative Agent, on behalf of Lenders, an agreement ratifying and acknowledging the U.S. Patent Non-Encumbrance Agreement executed by such party: (i) is in full force and effect, (ii) that the terms and provisions thereof shall extend to and secure all obligations of Borrower as identified and described in this Agreement; and (iii) that, as of the date hereof, there are no claims, defenses, counterclaims or offsets in favor of the such parties against Lenders, Administrative Agent, or any of them.

2.17 Replacement of Lenders . Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 2.10 or 2.14 , (b) is a Defaulting Lender, or (c) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of each Lender or each Lender affected thereby (provided that at least Required Lenders’ consent to such proposed amendment, supplement, modification, consent or waiver has been obtained), with a replacement financial institution; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (iv) Borrower shall be liable to such replaced Lender under Section 9.4 if any Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (v) the replacement financial institution shall be satisfactory to the Required Lenders in their absolute discretion, (vi) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 9.11 , (vii) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.10 or 2.14 , as the case may be, and (viii) any such replacement shall not be deemed to be a waiver of any rights that Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

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2.18 Defaulting Lenders . Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, without limiting any other rights Borrower may have against such Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the Unused Revolving Credit of such Defaulting Lender pursuant to Section 2.9(b) ; and

(b) the Advances and Revolving Credit commitment of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification); provided that (i) such Defaulting Lender’s Revolving Credit commitment may not be increased or extended without its consent, (ii) the principal amount of, or interest or fees payable on, Loans may not be reduced or excused or the scheduled date of payment may not be postponed as to such Defaulting Lender without such Defaulting Lender’s consent, and (iii) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other Lenders or affected Lenders, as the case may be, shall require the consent of such Defaulting Lender.

2.19 Sharing of Payments by Lenders . All fees payable to Lenders hereunder, including, without limitation, the fees referred to in Section 2.6 and Section 2.9 , shall be paid to Lenders in proportion to their respective Commitments and Applicable Percentages as set forth on Exhibit A attached. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest and (ii) the provisions of this Section 2.19 shall not be construed to apply to (x) any payment made by Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to Borrowers or any Subsidiary of Borrower (as to which the provisions of this Section 2.19 shall apply). Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrower in the amount of such participation.

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SECTION 3

CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

Closing under this Agreement is subject to the following conditions precedent (all instruments, documents and agreements to be in form and substance satisfactory to Administrative Agent and Lenders):

3.1 Resolutions, Opinions, and Other Documents . Borrower shall have delivered, or caused to be delivered to Administrative Agent the following:

(a) this Agreement and each of the other Loan Documents, all properly executed;

(b) all other documents to be executed and/or delivered by Borrower or any other Person pursuant to this Agreement;

(c) certified copies of (i) resolutions of Borrower’s and each applicable Subsidiary’s board of directors or managing members (as applicable) authorizing the execution, delivery and performance of this Agreement, and each of the other Loan Documents required to be delivered by any Section hereof and (ii) Borrower’s and each applicable Subsidiary’s articles or certificate of incorporation and by-laws or certificate of formation and operating agreement, as applicable;

(d) an incumbency certificate for Borrower identifying all Authorized Officers, with specimen signatures;

(e) a written opinion of Borrower’s independent counsel addressed to Administrative Agent for the benefit of Lenders;

(f) certification by the president of Borrower that there has not occurred any Material Adverse Effect;

(g) payment by Borrower of all fees including, without limitation, the Revolving Credit Closing Fee, the Term Loan Closing Fee and Expenses associated with the Loans;

(h) completed Lien searches;

(i) insurance certificates and policies as required under Section 5.2 ;

(j) certification by the president of Borrower that the sale of Borrower’s CTS Business for a minimum sales price of $54,000,000 has closed on terms previously represented to Lenders;

(k) Borrower shall have (i) prepaid the Term Loan by not less than $22,000,000 using a portion of the sales proceeds received from the sale of Borrower’s CTS business, and (ii) deposited not less than $12,000,000 into the CTS Tax Escrow Account;

(l) Borrower shall have provided Lenders a calculation of tax liability relating to the sale of Borrower’s CTS Business prepared by Borrower’s accountants and, in the event that Borrower’s tax liability arising from such sale is less than $12,000,000, then Borrower shall have further prepaid the Term Loan by not less than fifty percent (50%) of the difference between $12,000,000 and Borrower’s actual tax liability as calculated by Borrower’s accountants; and

(m) Borrower shall have provided Lenders an updated financial forecast (that gives effect to the transactions contemplated by this Agreement) by Quarter for 2017.

3.2 Absence of Certain Events . At the Amendment Date, no Default or Event of Default hereunder shall have occurred and be continuing.

3.3 Warranties and Representations at Closing . The warranties and representations contained in Section 4 shall be true and correct in all material respects on the Amendment Date with the same effect

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as though made on and as of that date except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects).

3.4 Compliance with this Agreement . Borrower shall have performed and complied with all agreements, covenants and conditions contained herein including, without limitation, the provisions of Sections 5 and 6 , which are required to be performed or complied with by Borrower before or at the Amendment Date.

3.5 Officers ’ Certificate . Administrative Agent shall have received a certificate dated the Amendment Date and signed by the chief financial officer of Borrower certifying that all of the conditions specified in this Section 3 have been fulfilled.

3.6 Closing . Subject to the conditions of this Section 3 , the amendment and restatement of the Prior Loan Agreement shall become effective on the Amendment Date contemporaneously with the execution hereof (the “ Closing ”) subject, however, to the prior or simultaneous closing of Borrower’s sale of its CTS Business for a cash purchase price of not less than $54,000,000 on terms previously represented to Lenders.

3.7 Waiver of Rights . By completing the Closing hereunder, or by making Advances hereunder, Administrative Agent and Lenders do not thereby waive a breach of any warranty or representation made by Borrower hereunder or under any agreement, document, or instrument delivered to Administrative Agent on behalf of Lenders or otherwise referred to herein, and any claims and rights of Lender resulting from any breach or misrepresentation by Borrower are specifically reserved by Administrative Agent and Lenders.

3.8 Conditions for Advances . The making of Advances under the Revolving Credit in any form following the Amendment Date is subject to the following conditions precedent (all instruments, documents and agreements to be in form and substance satisfactory to Administrative Agent) following the Amendment Date:

(a) This Agreement and each of the other Loan Documents shall be effective;

(b) No event or condition shall have occurred or become known to Borrower, or would result from the making of any requested Advance, which could reasonably be expected to have a Material Adverse Effect;

(d) Each Advance is within and complies with the terms and conditions of this Agreement including, without limitation, the notice provisions contained in Section 2.3 ;

(e) No Lien (other than a Permitted Lien) has been imposed on Borrower or any of its Subsidiaries; and

(f) Each representation and warranty set forth in Section 4 and any other Loan Document in effect at such time (as amended or modified from time to time) is then true and correct in all material respects as if made on and as of such date except to the extent such representations and warranties are made only as of a specific earlier date.

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SECTION 4

REPRESENTATIONS AND WARRANTIES

To induce Administrative Agent and each Lender to complete the Closing, Borrower warrants and represents to Administrative Agent and each Lender that:

4.1 Organization and Validity .

(a) Borrower (i) is a corporation, duly organized and validly existing under the laws of the State of Delaware, (ii) has the appropriate power and authority to operate its business and to own its Property and (iii) is duly qualified, is validly existing and in good standing and has lawful power and authority to engage in the business it conducts in each state where the nature and extent of its business requires qualification, except where the failure to so qualify does not and could not reasonably be expected to have a Material Adverse Effect.

(b) The making and performance of this Agreement and the other Loan Documents will not violate any Requirement of Law, or the charter, minutes or bylaw provisions of Borrower, or violate or result in a default (immediately or with the passage of time) under any material contract, agreement or instrument to which Borrower is a party, or by which Borrower is bound. Borrower is not in violation of any term of any material agreement or instrument to which it is a party or by which it may be bound which violation has or could reasonably be expected to have a Material Adverse Effect, or of its charter, minutes or bylaw provisions, or of Borrower’s operating agreement or partnership agreement, as applicable.

(c) Borrower has all requisite power and authority to enter into and perform this Agreement and to incur the obligations herein provided for, and has taken all proper and necessary action to authorize the execution, delivery and performance of this Agreement, and the other Loan Documents as applicable.

(d) This Agreement, the Notes to be issued hereunder, and all of the other Loan Documents, when delivered, will be valid and binding upon Borrower, and enforceable in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

4.2 Places of Business . As of the Amendment Date, the only places of business of Borrower and each of its Subsidiaries, and the places where each of Borrower and its Subsidiaries keeps and intends to keep its Property, are at the addresses shown on Schedule 4.2 . Schedule 4.2 also lists each jurisdiction in which Borrower and each Subsidiary is duly qualified to transact business as of the Amendment Date. With respect to each of the place of business listed on Schedule 4.2 , Borrower or such Subsidiary is duly qualified, is validly existing and in good standing and has lawful power and authority to engage in the business it conducts in the state in which such place of business is located, except where the failure to so qualify could not reasonable be expected to have a Material Adverse Effect.

4.3 Pending Litigation . Except as set forth on Schedule 4.3 :

(a) There are no judgments or judicial or administrative orders or proceedings pending, or to the knowledge of Borrower, threatened, against Borrower or any of its Subsidiaries in any court or before any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

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(b) To the knowledge of Borrower, there are no investigations (administrative, civil or criminal) pending or threatened against Borrower or any of its Subsidiaries in any court or before any Governmental Authority that could reasonably be expected to have a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is in default with respect to any order of any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

(c) To the knowledge of Borrower, no shareholder or executive officer of Borrower or any of its Subsidiaries has been indicted in connection with or convicted of engaging in any criminal conduct, or is currently subject to any lawsuit or proceeding or under investigation in connection with any anti-racketeering or other conduct or activity which may result in the forfeiture of any property to any Governmental Authority.

4.4 Title to Properties . Except as set forth on Schedule 4.4 , Borrower and each of its Subsidiaries has good and marketable title in fee simple (or its equivalent under applicable law) to all the Property it owns, free from Liens and free from the claims of any other Person, except for Permitted Liens.

4.5 Governmental Consent . Except as set forth on Schedule 4.5 , neither the nature of Borrower or any of its Subsidiaries or of Borrower’s or any of its Subsidiaries’ business or Property, nor any relationship between Borrower or any of its Subsidiaries and any other Person, nor any circumstance affecting Borrower or any of its Subsidiaries in connection with the issuance or delivery of this Agreement, the Notes or any other Loan Documents is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority on the part of Borrower, except where a consent, approval, authorization, filing, registration or qualification has been obtained or where the failure to do so could not have reasonably expected to have a Material Adverse Effect.

4.6 Taxes . All material tax returns required to be filed by Borrower and its Subsidiaries in any jurisdiction have been filed or extended, and all taxes, assessments, fees and other governmental charges upon Borrower or any of its Subsidiaries, or upon any of its Property, income or franchises, which are shown to be due and payable on such returns have been paid, except for those taxes being contested in good faith with due diligence by appropriate proceedings for which appropriate reserves have been maintained under GAAP and as to which no Lien has been entered. Except as set forth on Schedule 4.6 , as of the Amendment Date, Borrower is not aware of any proposed additional tax assessment or tax to be assessed against or applicable to Borrower or any of its Subsidiaries.

4.7 Financial Statements . The annual audited consolidated (if applicable) balance sheet of Borrower as of December 31, 2016, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date accompanied by reports thereon from Borrower’s independent certified public accountants (complete copies of which have been delivered to Administrative Agent), and the interim consolidated (if applicable) balance sheet of Borrower as of March 31, 2017, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date have been prepared in accordance with GAAP and present fairly the financial position of Borrower as of such dates and the results of its operations for such periods. The fiscal year for Borrower ends on December 31. Borrower’s federal tax identification number and state organizational identification number for UCC purposes are as shown on the Perfection Certificate for Borrower and each Guarantor.

4.8 Full Disclosure . The financial statements referred to in Section 4.7 do not, nor does any other written statement of Borrower to Lender in connection with the negotiation of the Loans, contain, to the knowledge of Borrower, any untrue statement of a material fact. Such statements do not omit a material fact, the omission of which would make the statements contained therein misleading.

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4.9 Subsidiaries . As of the Amendment Date, Borrower has no Subsidiaries other than those specifically disclosed in Schedule 4.9 . All of the outstanding Capital Stock of each of Borrower’s Subsidiaries has been validly issued, is fully paid and nonassessable and is owned by Borrower or the applicable Subsidiary and in the amounts, each as specified on Schedule 4.9 , and free and clear of all Liens except those created under the Security Documents.

4.10 Government Regulations .

(a) The use of the proceeds of and Borrower’s issuance of the Notes will not directly or indirectly violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations U, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Borrower does not own or intend to carry or purchase any “margin stock” within the meaning of said Regulation U.

(b) Except as set forth on Schedule 4.10(b) , Borrower is current with all reports and documents required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions.

4.11 Employee Benefits . Except as set forth on Schedule 4.11 :

(a) As of the date hereof, no employee benefit pension plan as defined in Section 3(2) of ERISA which is covered by Section 412 of the Internal Revenue Code or Section 302 or Title IV of ERISA and which is maintained by Borrower or any Subsidiary of Borrower or under which Borrower or any Subsidiary of Borrower could have any liability under ERISA (a “ Pension Plan ”) (i) has failed to meet the minimum funding standards established in Section 302 of ERISA, (ii) has failed to comply in a material respect with all applicable requirements of ERISA and of the Internal Revenue Code, including all applicable rulings and regulations thereunder except where a failure to so comply is not reasonably expected to result in a material liability to Borrower, (iii) has engaged in or been involved in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code which would be reasonably expected to subject Borrower to any material liability, or (iv) has been terminated if such termination would subject Borrower to any material liability.

(b) Neither Borrower nor any Subsidiary of Borrower has assumed, or received notice of a claim asserted against Borrower or any Subsidiary of Borrower for, withdrawal liability (as defined in Section 4207 of ERISA) with respect to any “multi-employer pension plan” within the meaning of Section 3(37) of ERISA), either as a participating employer or as a member of any Controlled Group (as defined in ERISA).

(c) Borrower and each Subsidiary of Borrower has timely made all contributions when due with respect to any multi-employer pension plan in which it participates and no event has occurred triggering a claim against Borrower or any Subsidiary of Borrower for withdrawal liability pursuant to Title IV of ERISA with respect to any multi-employer pension plan in which Borrower participates.

(d) All Pension Plans and multi-employer pension plans in which Borrower or any Domestic Subsidiary of Borrower participates are shown on Schedule 4.11 .

4.12 Business Interruptions . Except as set forth on Schedule 4.12 :

(a) Within five (5) years prior to the date hereof, none of the business, Property or operations of Borrower or any Subsidiary of Borrower have been materially and adversely affected in any way by any casualty, strike, lockout, combination of workers, order of the United States of America, or any state or local government, or any political subdivision or agency thereof, directed against Borrower or any Subsidiary of Borrower.

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(b) Except as could not reasonably be expected to have a Material Adverse Effect, there are no pending or, to Borrower’s knowledge, threatened labor disputes, strikes, lockouts or similar occurrences or grievances affecting Borrower or any Subsidiary of Borrower. No labor contract of Borrower or any Subsidiary of Borrower is scheduled to expire prior to the Revolving Credit Maturity Date.

4.13 Intellectual Property . Except as set forth on Schedule 4.13 :

(a) Borrower and/or each Subsidiary owns, or is licensed or otherwise possesses legal rights under all Intellectual Property, and all patents, patent applications, trademarks, trade names, service marks, trade dress, copyrights, domain names, mask works, schematics, technology, know-how, trade secrets, confidential information, customer lists, technical information, technical data, process technology, plans, drawings and blue prints, inventions, algorithms, devices, systems, processes, computer software programs and applications to the extent the same are used in and are material to the respective businesses of Borrower and/or any Subsidiary.

(b) Schedule 4.13 lists, as of the Amendment Date, all: (i) patents, patent applications (“ Patent Rights ”), registered and common law trademarks and service marks, and registered copyrights owned by Borrower and/or each Subsidiary (“ Scheduled Intellectual Property ”), including where applicable the jurisdictions, both domestic and foreign, in which each such item of Intellectual Property has been issued or registered or in which any application for such issuance and registration has been filed; (ii) written licenses, sublicenses and other agreements as to which Borrower or any Subsidiary is a party and pursuant to which any Person is authorized to use any Intellectual Property owned by Borrower other than Standard Outbound IP Licenses; (iii) written licenses, sublicenses and other agreements to which Borrower or any Subsidiary is a party and pursuant to which Borrower or any Subsidiary is authorized to use any third party’s Intellectual Property (other than, with respect to such software, off-the-shelf commercial or shrink-wrap software or open source software) (“ Third Party Intellectual Property Rights ”) that are incorporated or used in any product or service of Borrower and/or each Subsidiary or which are material to their respective operations other than Standard Inbound IP Licenses; and (iv) all agreements to which Borrower or any Subsidiary is a party that provide for an optional or contingent license, sublicense or other agreement as described in clauses (ii) or (iii) above in this Section 4.13(b) .

(c) To Borrower’s knowledge, all Scheduled Intellectual Property material to its operations is valid, enforceable, has been duly maintained, is in full force and effect, and has not been cancelled, expired or abandoned.

(d) None of the Patent Rights were developed under a funding agreement with the Government of the United States of America or with any state governments, pursuant to which the government of the United States of America or any state governments has rights relative thereto.

(e) Neither Borrower nor any Subsidiary has received any notice from, or demand or claim by, any third party that any of the Intellectual Property material to its operations, including any Patent Rights are not solely owned by Borrower or any Subsidiary of Borrower or that the Patent Rights are subject to a license.

(f) No allowable or allowed subject matter of the Patent Rights listed in Schedule 4.13 owned or held by Borrower or any Subsidiary, in whole or in part, is subject to any competing or interfering claims by any third party (but excluding any patent claims issued to any third parties by the

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United States Patent and Trademark Office), or claims of ownership by any third party. To the knowledge of Borrower, no allowable or allowed subject matter of the Patent Rights listed in Schedule 4.13 subject to any exclusive license held by Borrower or any Subsidiary, in whole or in part, is subject to any competing or interfering claims by any third party (but excluding any patent claims issued to any third parties by the United States Patent and Trademark Office), or claims of ownership by any third party. No allowable or allowed subject matter of such Patent Rights has been the subject of any interference, re-examination or opposition proceedings or any other post-grant proceedings and, to Borrower’s knowledge, there is no reasonable basis for any such interference, reexamination or opposition proceedings or any other post-grant proceedings.

(g) Borrower has taken all action necessary to maintain the enforceability and registration of all Scheduled Intellectual Property material to the operation of Borrower and/or each Subsidiary.

(h) All annuities, maintenance fees or other fees necessary to maintain the pendency or right to assert the Patent Rights and Trademarks due on or before the date hereof have been paid according to proper entity status in the relevant jurisdiction.

(i) The registrations to Patent Rights and Trademarks material to its operations are in good standing and none of the Patent Rights or Trademarks have lapsed, been disclaimed or otherwise voluntarily limited in scope, or been dedicated to the public.

(j) Neither Borrower nor any Subsidiary has received any invitation to license or written charge, complaint, claim, demand or notice that Borrower or any Subsidiary has infringed, misappropriated, or acted in conflict with any of the Intellectual Property material to its operations owned by any third party. To Borrower’s knowledge, neither Borrower nor any Subsidiary has infringed, misappropriated, or acted in conflict with any of the Intellectual Property material to its operations owned by any third party.

(k) To Borrower’s knowledge, there is no unauthorized use, disclosure, infringement or misappropriation of any Intellectual Property rights, in any such case, material to its operations, of Borrower and/or any Subsidiary, or any Third Party Intellectual Property Rights material to its operations to the extent exclusively licensed to Borrower and/or any Subsidiary, by any third party, including any employee or former employee of Borrower and/or any Subsidiary.

(l) Neither Borrower nor any Subsidiary has, in the three (3) years preceding the date of this Agreement, sent to or contemplated sending to any third party any written charge, complaint, claim, demand or notice asserting that such Person has infringed, misappropriated, or acted in conflict with any of the Intellectual Property owned by Borrower and/or any Subsidiary and material to its operations, nor (to Borrower’s knowledge) is any such infringement, misappropriation, or conflict occurring or threatened nor is Borrower aware of any.

(m) Neither Borrower nor any Subsidiary is, nor will be, as a result of the execution and delivery of this Agreement by Borrower, or the performance of its obligations hereunder, in material breach of any license, sublicense or other agreement.

(n) Borrower has entered into written confidentiality agreements with all employees and third parties to whom Borrower and/or any Subsidiary has disclosed material Borrower-owned confidential Intellectual Property, except where a failure to do so would not have a Material Adverse Effect.

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(o) Borrower has not obtained any opinions from its inside or outside legal counsel that any of the material products infringe one or more claims of any third party Intellectual Property.

4.14 Regulatory Compliance . Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or as set forth in Schedule 4.14 :

(a) As to Borrower and each of its Subsidiaries, Affiliates and agents, and as to each product subject to the Federal Food, Drug and Cosmetic Act of 1938, and the Public Health Service Act Section 361, as amended, and the regulations of the Food and Drug Administration (the “ FDA ”) promulgated thereunder (the “ FDCA ”) or similar Requirements of Law (each such product, a “ Medical Device ,” a “ Biologic ,” a “ Drug ,” or “ Human Tissue Intended for Transplantation ,” as the case may be, and collectively “ Regulated Products ”)) that is or has been developed, manufactured, tested, distributed or marketed by Borrower and its Subsidiaries, Affiliates and agents are in material compliance with, and each such Regulated Product is being developed, manufactured, tested, distributed and/or marketed in material compliance with, all applicable requirements under the FDCA and other applicable Requirements of Law, including 21 C.F.R. Parts 1270 and 1271 (regulation of Human Cellular and Tissue Products, or HCTP’s), 21 C.F.R. Part 820 (regulation of Medical Devices), the United States National Organ Transplant Act, 42 U.S.C. §274e, the licensing requirements and other applicable Requirements of Law of the several states of the United States, European Union Directives, Medical Device Directive 93/42/EC, EU Directive 2004/23/EC (standards of quality and safety for the donation, procurement, testing, processing, preservation, storage and distribution of human tissues and cells), applicable Requirements of Law of the various member nations of the European Union, American Association of Tissue Banking (AATB) standards, and those Requirements of Law relating to the tissue donor recovery process. Neither Borrower nor any Subsidiary has received any written communication from the FDA or any other Governmental Authority (i) contesting the premarket clearance or approval of, the uses of or the labeling and promotion of any products of Borrower or any of its Subsidiaries or (ii) otherwise alleging any violation applicable to any Regulated Product by Borrower or any of its Subsidiaries, Affiliates or agents of any Requirements of Law.

(b) All material reports, documents, claims and notices required to be filed, maintained, or furnished to any Governmental Authority by Borrower or any of its Subsidiaries have been so filed, maintained or furnished.

(c) No Regulated Product of Borrower or any of its Subsidiaries has been recalled, withdrawn, suspended or discontinued by Borrower or any of its Subsidiaries in the United States or outside the United States (whether voluntarily or otherwise). No proceedings in the United States or outside of the United States of which Borrower has knowledge (whether completed or pending) seeking the recall, withdrawal, suspension or seizure of any Regulated Product of Borrower or any of its Subsidiaries are pending against Borrower or any of its Subsidiaries nor have any such proceedings been pending at any prior time.

(d) As to each Regulated Product of Borrower or any of its Subsidiaries for which a premarket notification submission under Section 510(k) of the FDCA, premarket approval application, biological license application, new drug application, investigational new drug application or similar state or foreign regulatory application has been cleared or approved, Borrower and its Subsidiaries, Affiliates and agents are in compliance with 21 U.S.C. §§ 355, 360 and 360e, and 42 U.S.C. § 262 and 21 C.F.R. Parts 312, 314, 600, and 601, 807, 812, 814 et seq., as applicable, and similar Requirement of Law and all terms and conditions of such applications, except for any such failure or failures to be in compliance which individually or in the aggregate are not or would not be material. As to each such Regulated Product of Borrower or any of its Subsidiaries, Borrower and the officers, employees or agents of Borrower have included in the application for such Regulated Product of Borrower or any of its

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Subsidiaries, where required, the certification described in 21 U.S.C. § 335a(k)(1) or any similar Requirement of Law and the list described in 21 U.S.C. § 335a(k)(2) or any similar Requirement of Law, and each such certification and list was true, complete and correct in all material respects when made. In addition, the Borrower and its Subsidiaries, Affiliates and agents are in substantial compliance with all applicable registration and listing requirements set forth in 21 U.S.C. § 360, 42 U.S.C. § 262 and 21 C.F.R. Part 207, 601 and 807 and all similar Requirements of Law.

(e) No article of any Regulated Product manufactured and/or distributed by Borrower or any of its Subsidiaries is (i) adulterated within the meaning of 21 U.S.C. § 351 (or similar Requirement of Law), (ii) misbranded within the meaning of 21 U.S.C. § 352 (or similar Requirement of Law) or (iii) a product that is in violation of 21 U.S.C. §§ 355, 360, 360e and 42 U.S.C. § 262 (or similar Requirement of Law).

(f) Neither Borrower nor any of its Subsidiaries or Affiliates nor, to the knowledge of Borrower, any officer, employee or agent of Borrower or any of its Subsidiaries or Affiliates has made an untrue statement of a material fact or fraudulent statement to the FDA or any other Governmental Authority that primarily regulates Medical Devices, Biologics or Drugs, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority that primarily regulates Medical Devices, Biologics or Drugs, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA or any other Governmental Authority to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy. Neither Borrower nor any of its Subsidiaries or Affiliates or, to the knowledge of Borrower, any officer, employee or agent of Borrower or any of its Subsidiaries or Affiliates has been convicted of any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar Requirement of Law or authorized by 21 U.S.C. § 335a(b) or any similar Requirement of Law. Neither Borrower nor any of its Subsidiaries or Affiliates nor, to the knowledge of Borrower, any officer, employee or agent of Borrower or any of its Subsidiaries or Affiliates has been convicted of any crime or engaged in any conduct for which such person or entity could be excluded from participating in the federal health care programs under Section 1128 of the Social Security Act of 1935, as amended (the “ Social Security Act ”), or any similar Requirement of Law.

(g) Neither Borrower nor any of its Subsidiaries has received within the last four (4) years any written notice that the FDA or any other Governmental Authority has (i) commenced, or threatened to initiate, any action to withdraw its approval or request the recall of any Regulated Product of Borrower or any of its Subsidiaries, (ii) commenced, or threatened to initiate, any action to enjoin production of any Regulated Product of Borrower or any of its Subsidiaries, (iii) commenced, or threatened to initiate, any action to enjoin the production of any Regulated Product of Borrower or any of its Subsidiaries produced at any facility where any Regulated Product is manufactured, tested or packaged, (iv) filed a warning letter concerning deviations from the regulations concerning any Regulated Product or the manufacture or distribution thereof or (v) issued an FDA Form 483, except as listed on Schedule 4.14 .

(h) Borrower and its Subsidiaries are in full compliance with all Medical Device, Drug, Biologic and Human Tissue Intended for Transplantation reporting requirements promulgated by any Governmental Authority, including FDA, for all Regulated Products manufactured or distributed by Borrower or any of its Subsidiaries, except for failures to be in compliance with the foregoing that individually or in the aggregate are not or would not be material.

(i) Borrower and its Subsidiaries are in full compliance with the Federal Anti-Kickback Statute, 42 U.S.C.A. §§ 1320a-7b(b), the Stark Law (42 U.S.C. §§ 1395nn) and the AdvaMed Code of

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Ethics on Interactions with Health Care Professionals (the “ AdvaMed Code ”), and all of Borrower’s and its Subsidiaries’ contracts, agreements and arrangements with Health Care Professionals (as defined in the AdvaMed Code) are in full compliance with the AdvaMed Code.

4.15 Other Associations . Borrower is not engaged and has no interest in any joint venture or partnership with any other Person except as set forth in Schedule 4.15 or as otherwise permitted by Section 6.7 .

4.16 Environmental Matters . Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or as set forth in Schedule 4.16 :

(a) To the best of Borrower’s knowledge after due inquiry, no Property presently owned, leased or operated by Borrower or any Subsidiary of Borrower contains, or has previously contained within the last ten (10) years, any Hazardous Substances in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could give rise to liability under, any Environmental Law.

(b) To the best of Borrower’s knowledge after due inquiry, Borrower and each Subsidiary of Borrower is in compliance, and, for the duration of all applicable statutes of limitations periods, has been in compliance with all applicable Environmental Laws, and there is no contamination at, under or about any properties presently owned, leased, or operated by Borrower or any Subsidiary of Borrower or violation of any Environmental Law with respect to such properties which could reasonably be expected to interfere with any of their continued operations or reasonably be expected to impair the fair saleable value thereof.

(c) Neither Borrower nor any Subsidiary of Borrower has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance assessment with Environmental Laws and Borrower has no knowledge that any such notice is being overtly threatened.

(d) Hazardous Substances have not been transported or disposed of by Borrower or a Subsidiary of Borrower in a manner or to a location which are reasonably likely to give rise to liability of Borrower or any Subsidiary of Borrower under any Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending, or to the knowledge of Borrower, threatened under any Environmental Law to which Borrower or any Subsidiary of Borrower is, or to Borrower’s knowledge will be, named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding.

4.17 Regulation O . No director or executive officer of Borrower is a director, executive officer or principal shareholder of Lender. For the purposes hereof the terms “director” “executive officer” and “principal shareholder” (when used with reference to Lender), have the respective meanings assigned thereto in Regulation O issued by the Board of Governors of the Federal Reserve System.

4.18 Material Contracts . Set forth on Schedule 4.18 is a complete and accurate list of all Material Contracts as of the Amendment Date, showing as of the date hereof, the name thereof, the parties, the subject matter and the term. Each Material Contract has been duly authorized, executed and delivered by the Borrower or applicable Subsidiary (and to Borrower’s knowledge, by the other parties thereto), is in full force and effect and is binding upon and enforceable against the Borrower and its Subsidiaries that are parties thereto (and to Borrower’s knowledge, against the other parties thereto) in accordance with its terms, except to the extent any such Material Contract expires or otherwise terminates in accordance with its terms (other than a termination as a result of breach or default).

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4.19 Solvency . After giving effect to the transactions contemplated under this Agreement (including, without limitation, the acquisition of Pioneer Surgical Technologies), Borrower and its Subsidiaries, taken as a whole, are solvent, are able to pay its debts as they become due, and have capital sufficient to carry on its business and all businesses in which it is about to engage, and now owns Property having a value both at fair valuation and at present fair saleble value greater than the amount required to pay Borrower’s debts. Borrower will not be rendered insolvent by the execution and delivery of this Agreement or any of the other Loan Documents executed in connection with this Agreement or by the transactions contemplated hereunder or thereunder.

4.20 Perfection and Priority . This Agreement and the other Loan Documents are effective to create in favor of Administrative Agent legal, valid and enforceable Liens in all right, title and interest of Borrower and the Subsidiaries in the Collateral, and when financing statements have been filed in the offices of the respective jurisdiction of organization under Borrower’s and each Subsidiary’s name, Borrower and each Guarantor will have granted to Administrative Agent and Administrative Agent will have for the benefit of Lenders perfected first priority Liens in the Collateral, superior in right to any and all other Liens, existing or future.

4.21 Commercial Tort Claims . Except as set forth on Schedule 4.21 , as of the Amendment Date, neither Borrower nor any Subsidiary of Borrower is a party to any Commercial Tort Claims.

4.22 Letter of Credit Rights . As of the Amendment Date, neither Borrower nor any Subsidiary of Borrower has any Letter of Credit Rights.

4.23 Export Control Laws . Borrower and each Subsidiary has conducted its export transactions in material compliance with applicable provisions of United States export control laws and regulations. Without limiting the foregoing: (a) Borrower and each Subsidiary has obtained all export licenses and other approvals required for its exports of products, software and technologies from the United States; (b) Borrower and each Subsidiary is in material compliance with the terms of all applicable export licenses or other approvals; (c) there are no pending or, to the knowledge of Borrower, claims threatened in writing against Borrower or any Subsidiary with respect to such export licenses or other approvals; and (d) there are no material actions, conditions or circumstances pertaining to the Borrower’s or any Subsidiary’s export transactions that would reasonably be expected to give rise to any future claims.

4.24 Foreign Corrupt Practices Act . None of Borrower or any Subsidiary or any predecessor, or, to the knowledge of Borrower, any employee, representative or other Person associated with or acting on behalf of Borrower or any Subsidiary or any predecessor has, directly or indirectly, (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds, (c) established or maintained a secret or unrecorded fund, participated in or co-operated with an international boycott as defined in Section 999 of the Code, (d) violated any provision of (i) the Foreign Corrupt Practices Act of 1977, as amended, and the rules, regulations and guidance promulgated thereunder, (ii) the U.K. Bribery Act of 2010, as amended, and the rules, regulations and guidance promulgated thereunder or (iii) any other similar applicable Requirement of Law relating to corruption or bribery, or (e) made any bribe, rebate, payoff, influence, payment, kickback or other similar unlawful payment of any nature.

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4.25 Anti-Terrorism Laws .

(a) Neither Borrower nor any Affiliate of Borrower is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(b) Neither Borrower nor any Affiliate of Borrower, or to Borrower’s knowledge, any of its respective agents acting or benefiting in any capacity in connection with the Loans or other transactions hereunder, is any of the following (each, a “ Blocked Person ”):

(i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

(iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;

(v) a Person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or

(vi) a Person who is affiliated with a Person listed above.

SECTION 5

BORROWER’S AFFIRMATIVE COVENANTS

Borrower covenants that until all of the Obligations due under the Loan Documents are paid and satisfied in full and the Revolving Credit has been terminated, that:

5.1 Payment of Taxes and Claims . Borrower and each of its Subsidiaries shall pay, before they become delinquent, all material taxes, assessments and governmental charges, or levies imposed upon it, or upon Borrower’s and each of its Subsidiaries’ Property, and all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons entitled to the benefit of statutory or common law Liens which, in any case, if unpaid, would result in the imposition of a Lien upon its Property; provided , however , that Borrower or any Subsidiary of Borrower shall not be required to pay any such tax, assessment, charge, levy, claim or demand if the amount, applicability or validity thereof, shall at the time be contested in good faith and by appropriate proceedings by Borrower or such Subsidiary, and if Borrower or such Subsidiary shall have set aside on its books adequate reserves in respect thereof, if so required in accordance with GAAP and which deferment of payment is permissible so long as no Lien other than a Permitted Lien has been entered and the same could not reasonably be expected to have a Material Adverse Effect.

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5.2 Maintenance of Properties and Insurance .

(a) Property . Borrower and each of its Subsidiaries shall maintain its Property in good condition (normal wear and tear and casualty and condemnation excepted) make all reasonably necessary renewals, replacements, additions, betterments and improvements thereto consistent with industry and past practice and will pay and discharge when due the cost of repairs and maintenance to its Property, and will pay all rentals when due for all real estate leased by Borrower and each of its Subsidiaries, to the extent material to its operations.

(b) Property Insurance, Public and Products Liability Insurance . Borrower and each of its Subsidiaries shall maintain insurance (i) on all insurable tangible Property against fire, flood, casualty and such other hazards (including, without limitation, extended coverage, workmen’s compensation, boiler and machinery, with inflation coverage by endorsement) and (ii) against public liability, product liability and business interruption, in each case in such amounts, with such deductibles and with such insurers as are customarily used by companies operating in the same industry as Borrower from insurers acceptable to Administrative Agent and with an AM Best rating of no lower than A-. At or prior to Closing, Borrower shall furnish Administrative Agent with duplicate original policies of insurance or such other evidence of insurance as Administrative Agent may require, and any certificates of insurance shall be issued on Accord Form-27. In the event Borrower or any of its Subsidiaries fails to procure or cause to be procured any such insurance or to timely pay or cause to be paid the premium(s) on any such insurance, Administrative Agent may do so for Borrower, but Borrower shall continue to be liable for the same. The policies of all such casualty insurance shall contain standard lender’s loss payable clauses (and, with respect to liability and interruption insurance, additional insured clauses) issued in favor of Administrative Agent on behalf of and for the benefit of Lenders under which all losses thereunder shall be paid to Administrative Agent, on behalf of and for the benefit of Lenders, as Lenders’ interest may appear. Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without thirty (30) days prior written notice to Administrative Agent and shall insure Administrative Agent notwithstanding the act or neglect of Borrower. Insurance proceeds paid to the Administrative Agent shall be made available to permit the restoration of damage with such proceeds to all Property; provided , however , that following the occurrence and continuance of an Event of Default, Borrower hereby appoints Administrative Agent as Borrower’s and each of its Subsidiaries’ attorney-in-fact, exercisable at Administrative Agent’s option to endorse any check which may be payable to Borrower or any Subsidiary in order to collect the proceeds of such insurance on behalf of and for the benefit of Lenders, and, pursuant to the provisions of this Section 5.2(b) such proceeds may be applied by Administrative Agent, in its discretion (but with the approval of the Required Lenders), to any Obligations or to repair, reconstruct or replace the loss of or damage to Property as Administrative Agent, in its discretion (but with the approval of the Required Lenders), may from time to time determine. Borrower further covenants that all insurance premiums owing under its current policies have been paid. Borrower shall notify Administrative Agent immediately upon Borrower’s or any of its Subsidiaries’ receipt of a notice of termination, cancellation, or non-renewal from its insurance company of any such policy.

5.3 Financial Records . Borrower and each of its Subsidiaries shall keep current and accurate books of records and accounts in which full and correct entries will be made of all of its material business transactions, and will reflect in its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP. Borrower shall not change its fiscal year end date without the prior written consent of the Required Lenders.

5.4 Corporate Existence and Rights . Borrower shall do (or cause to be done) all things necessary to preserve and keep in full force and effect its and each of its Subsidiaries existence, good standing, rights and franchises, except to the extent a failure to do so could not reasonably be expected to

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have a Material Adverse Effect. Borrower shall (and Borrower shall cause each of its Subsidiaries to) obtain and maintain any and all licenses, permits, franchises or other governmental authorizations necessary to the ownership of its property or the conduct of its businesses.

5.5 Compliance with Laws . Borrower and each of its Subsidiaries shall: (a) be in compliance in all material respects with any and all Requirements of Law to which it is subject, whether foreign, federal, state or local, including, without limitation, Environmental Laws and Requirements of Law applicable to Regulated Products; and (b) timely satisfy all assessments, fines, costs and penalties imposed (after exhaustion of all appeals, provided a stay has been put in effect during such appeal) by any Governmental Authority against Borrower or any of its Subsidiaries or any Property of Borrower or any of its Subsidiaries, except where (i) Borrower or such Subsidiary is contesting any Requirement of Law in good faith by appropriate proceedings diligently conducted or (ii) the failure to comply could not reasonably be expected to have a Material Adverse Effect.

5.6 Business Conducted . Borrower shall continue in the business presently operated by it using its best efforts to maintain its customers and goodwill. Neither Borrower nor any of its Subsidiaries shall engage, directly or indirectly, in any material respect in any line of business substantially different from the businesses conducted by Borrower immediately prior to the Amendment Date.

5.7 Litigation . Borrower shall give prompt notice to Administrative Agent of any litigation claiming in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00) from Borrower or any of its Subsidiaries, or which could reasonably be expected to have a Material Adverse Effect.

5.8 Issue Taxes . Borrower and each of its Subsidiaries shall pay all taxes (other than taxes based upon or measured by any Lender’s income or revenues or any personal property tax), if any, in connection with the issuance of the Notes and the recording of any lien documents. The obligations of Borrower hereunder shall survive the payment of Borrower’s Obligations hereunder and the termination of this Agreement.

5.9 Bank Accounts . Borrower and each of its Subsidiaries shall maintain its primary depository and disbursement account(s) with Administrative Agent.

5.10 Employee Benefit Plans . Borrower and each of its Subsidiaries shall (a) fund all of its Pension Plan(s) in a manner that will satisfy the minimum funding standards of Section 302 of ERISA, (b) furnish Administrative Agent, promptly upon Administrative Agent’s request, with copies of all reports or other statements filed with the United States Department of Labor, the PBGC or the IRS with respect to all Pension Plan(s), or which Borrower, or any member of a Controlled Group, may receive from the United States Department of Labor, the IRS or the PBGC, with respect to all such Pension Plan(s), and (c) promptly advise Administrative Agent of the occurrence of any reportable event (as defined in Section 4043 of ERISA, with respect to any Pension Plan, other than a reportable event for which the thirty (30) day notice requirement has been waived by the PBGC) or a non-exempt prohibited transaction (under Section 406 of ERISA or Section 4975 of the Code) with respect to any such Pension Plan(s) and for which Borrower or any of its Subsidiaries could reasonably be expected to incur a material liability, and the action which Borrower proposes to take with respect thereto. Borrower and each of its Subsidiaries will make all contributions when due with respect to any multi-employer pension plan in which it participates and will promptly advise Administrative Agent upon (x) its receipt of notice of the assertion against Borrower or any of its Subsidiaries of a claim for withdrawal liability, (y) the occurrence of any event which, to the best of Borrower’s knowledge, would trigger the assertion of a claim for withdrawal liability against Borrower or any of its Subsidiaries, and (z) upon the occurrence of any event which, to the best of Borrower’s knowledge, would be reasonably expected to trigger an indirect withdrawal liability (through a controlled group of which) Borrower or any of its Subsidiaries is a member under Title IV of ERISA, whether liquidated or contingent.

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5.11 New Subsidiaries . Each newly-created or newly-acquired Domestic Subsidiary of Borrower shall, within fifteen (15) days of such creation or acquisition, become a party to the applicable Loan Documents by executing and delivering to the Administrative Agent a counterpart of a joinder agreement and providing such other documentation as the Administrative Agent shall deem reasonably appropriate for such purpose, including, without limitation, amendments to the Security Documents or any other applicable Loan Document, and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of, inter alia, the joinder agreement), all in form, content and scope reasonably satisfactory to the Administrative Agent. In such event, the Administrative Agent is hereby authorized by the parties hereto to amend Schedule 4.9 to include each such new Subsidiary.

5.12 Financial Covenants . Borrower shall maintain and comply with the following financial covenants:

(a) Minimum Fixed Charge Coverage Ratio . Borrower, on a consolidated basis, shall maintain a Fixed Charge Coverage Ratio of not less than 1.25 to 1.0, measured quarterly as of each Quarter End, on a trailing four (4) Quarter basis. Notwithstanding any other provision hereof, historical EBITDA generated by Borrower’s CTS Business shall not be considered part of consolidated EBITDA beginning with the June 30, 2017 Quarter-End and thereafter.

(b) Leverage Ratio . Borrower, on a consolidated basis, shall maintain a Leverage Ratio of not greater than 3.00 to 1.0, measured as of each Quarter End, on a trailing four (4) Quarter basis. Notwithstanding any other provision hereof, historical EBITDA generated by Borrower’s CTS Business shall not be considered part of consolidated EBITDA beginning with the June 30, 2017 Quarter-End and thereafter.

5.13 Minimum Unrestricted Cash . Borrower, on a consolidated basis, shall maintain at all times Unrestricted Cash in an amount of at least Ten Million and 00/100 Dollars ($10,000,000.00).

5.14 Financial and Business Information . Borrower shall deliver or cause to be delivered to Lender the following:

(a) Financial Statements and Collateral Reports . Such data, reports, statements and information, financial or otherwise, as Lender may reasonably request, including, without limitation:

(i) within forty (40) days after the end of each Quarter, the consolidated and consolidating (if applicable) income and cash flow statements of Borrower and its Subsidiaries for such Quarter and for the expired portion of the fiscal year ending with the end of such month, setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year, and the consolidated and consolidating (if applicable) balance sheet of Borrower and its Subsidiaries as at the end of such Quarter, setting forth in comparative form the corresponding figures as at the end of the corresponding periods of the previous fiscal year, all in reasonable detail and certified by Borrower’s chief executive officer or president to have been prepared from the books and records of Borrower;

(ii) within seventy-five (75) days after the end of each fiscal year of Borrower, the consolidated and consolidating (if applicable) income and cash flow statements of Borrower and its Subsidiaries for such year, and the consolidated and consolidating (if applicable)

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balance sheet of Borrower and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding figures as at the end of and for the previous fiscal year, all in reasonable detail, including all supporting schedules, and audited by an independent public accounting firm acceptable to Administrative Agent, and unqualifiedly certified to have been prepared in accordance with GAAP, and such independent public accountants shall also unqualifiedly certify that in making the examinations necessary to their certification mentioned above they have reviewed the terms of this Agreement and the accounts and conditions of Borrower during the accounting period covered by the certificate and that such review did not disclose the existence of any condition or event which constitutes an Event of Default under Sections 5.12 and 5.13 , together with copies of any management letters provided by such accountants to management of Borrower;

(iii) within fifteen (15) days of the end of each Quarter, Borrower’s accounts receivable aging report, accounts payable aging report, inventory reports and such other reports as Administrative Agent reasonably deems necessary, certified by Borrower’s chief financial officer as true and correct, all in form and substance reasonably satisfactory to Administrative Agent; and

(iv) within fifteen (15) days of filing with the applicable Government Authority, Borrower shall furnish, or shall cause to be furnished, to Administrative Agent copies of the annual federal and state income tax returns of Borrower for the immediately preceding year;

(b) Notice of Event of Default . Promptly upon becoming aware of the existence of any condition or event which constitutes a Default (if the same is continuing) or an Event of Default under this Agreement, a written notice specifying the nature and period of existence thereof and what action Borrower is taking (and proposes to take) with respect thereto;

(c) Notice of Claimed Default . Promptly upon receipt by Borrower, written notice of default given to Borrower by any creditor for Indebtedness for borrowed money with an aggregate amount in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00), otherwise holding long term Indebtedness of Borrower; and

(d) Securities and Other Reports . If Borrower shall be required to file reports with the Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, promptly upon its becoming available, one copy of each financial statement, report, notice or proxy statement sent by Borrower to stockholders generally, and a copy of each regular or periodic report, and any registration statement, or prospectus in respect thereof, filed by Borrower with any securities exchange or with federal or state securities and exchange commissions or any successor agency.

(e) FDA Actions . Borrower agrees to provide to Administrative Agent copies of all FDA warning letters and FDA Form 483 notices promptly after Borrower’s receipt. Thereafter, within five (5) days of filing with the FDA, Borrower shall furnish Administrative Agent copies of all responses filed by Borrower with the FDA in response to such warning letters and Form 483 notices. In addition, Borrower shall provide to Administrative Agent a written status report at least once each Quarter of Borrower’s plan to remediate the matters raised by the FDA in any warning letter or Form 483 notice and Borrower’s progress toward accomplishing such remediation.

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5.15 Officers ’ Certificates . Along with the set of financial statements delivered to Administrative Agent at the end of each fiscal quarter pursuant to Section 5.14(a)(i) and the annual financial statements delivered pursuant to Section 5.14(a)(ii) , Borrower shall deliver to Administrative Agent a certificate (“ Covenant Compliance Certificate ”) (in the form of Exhibit E ) from the chief financial officer, chief executive officer or president of Borrower (and as to certificates accompanying the annual financial statements of Borrower, also certified by Borrower’s independent certified public accountant) setting forth:

(a) Event of Default . That the signer has reviewed the relevant terms of this Agreement, and has made (or caused to be made under his/her supervision) a review of the transactions and conditions of Borrower from the beginning of the accounting period covered by the financial statements being delivered therewith to the date of the certificate, and that such review has not disclosed the existence during such period of any condition or event which constitutes a Default or an Event of Default or, if any such condition or event exists, specifying the nature and period of existence thereof and what action Borrower has taken or proposes to take with respect thereto.

(b) Covenant Compliance . The information (including detailed calculations) required in order to establish that Borrower is in compliance with the requirements of Section 5.14 as of the end of the period covered by the financial statements delivered.

5.16 Audits and Inspection; Appraisals . Borrower shall permit any of Administrative Agent’s officers or other representatives to visit and inspect on one (1) occasion during any twelve (12)-month period (unless an Event of Default has occurred and is continuing in which case such limitation shall not be applicable) upon reasonable notice during business hours any of the locations of Borrower and each of its Subsidiaries (provided that, while an Event of Default exists, Administrative Agent may make such visits and inspections at any time without prior notice) to examine and audit all of Borrower’s Property, books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent certified public accountants all at Borrower’s expense at the standard rates charged by Administrative Agent for such activities (including with respect to any field examinations), plus Administrative Agent’s reasonable out-of-pocket expenses (all of which amounts shall be Expenses). Administrative Agent may, in its discretion (but with the approval of the Required Lenders), require Inventory appraisals if an Event of Default exists, at Borrower’s sole cost and expense. Appraisals shall be done by an appraiser reasonably acceptable to Administrative Agent and shall be in form and substance satisfactory to Administrative Agent.

5.17 Tax Returns, Financial Statements and Other Reports . Borrower further agrees that, if requested by Administrative Agent, it shall promptly furnish Administrative Agent with copies of all reports filed with any federal, state or local Governmental Authority.

5.18 Information to Participant . Administrative Agent may divulge to any participant, assignee or co-lender or prospective participant, assignee or co-lender it may obtain in the Revolving Credit or Term Loan or any portion thereof, all information, and furnish to such Person copies of any reports, financial statements, certificates, and documents obtained under any provision of this Agreement, or related agreements and documents, subject to Section 9.23 .

5.19 Material Adverse Developments . Borrower agrees that promptly upon becoming aware of any development or other information outside the ordinary course of business and excluding matters of a general economic, financial or political nature which would reasonably be expected to have a Material Adverse Effect it shall give to Administrative Agent notice specifying the nature of such development or information and such anticipated effect.

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5.20 Places of Business . Borrower shall give thirty (30) days prior written notice to Administrative Agent of any changes in the location of any of Borrower’s or any of its Subsidiaries’ respective places of business, of the places where records concerning its Accounts or where its Inventory are kept, or the establishment of any new, or the discontinuance of any existing place of business; provided that Borrower may not establish its principal place of business outside of the United States.

5.21 Commercial Tort Claims . Borrower will immediately notify Administrative Agent in writing in the event that Borrower or any its Subsidiaries becomes a party to or obtains any rights with respect to any Commercial Tort Claim with a value in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00). Such notification shall include information sufficient to describe such Commercial Tort Claim, including, but not limited to, the parties to the claim, the court in which the claim was commenced, the docket number assigned to such claim, if any, and a detailed explanation of the events that gave rise to the claim. Borrower shall execute and deliver to Administrative Agent all documents and/or agreements necessary to grant Administrative Agent a security interest in such Commercial Tort Claim to secure the Obligations. Borrower authorizes Administrative Agent to file (without Borrower’s signature) initial financing statements or amendments, as Administrative Agent deems necessary to perfect its security interest in the Commercial Tort Claim.

5.22 Letter of Credit Rights . Borrower shall provide Administrative Agent with written notice of any letters of credit with a value in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00) for which Borrower or any of its Subsidiaries is the beneficiary. Borrower shall execute and deliver (and use commercially reasonable efforts to cause to be executed or delivered) to Administrative Agent all documents and agreements as Administrative Agent may request in order to obtain and perfect its security interest in such Letter of Credit Rights.

5.23 Cross-Default . THE LOANS CONTEMPLATED BY THIS AGREEMENT SHALL BE CROSS-DEFAULTED WITH ALL OTHER EXISTING AND FUTURE NOTES AND OTHER LOAN DOCUMENTS FROM BORROWER TO ANY LENDER (COLLECTIVELY, THE “ ADDITIONAL LOAN DOCUMENTS ”), WHEREBY (a) AN EVENT OF DEFAULT UNDER ANY OF THE ADDITIONAL LOAN DOCUMENTS SHALL BE DEEMED AN EVENT OF DEFAULT UNDER THIS AGREEMENT AND ALL LOAN DOCUMENTS, AND (b) AN EVENT OF DEFAULT UNDER THIS AGREEMENT OR ANY LOAN DOCUMENTS SHALL BE DEEMED AN EVENT OF DEFAULT UNDER ALL ADDITIONAL LOAN DOCUMENTS.

SECTION 6

BORROWER’S NEGATIVE COVENANTS

Borrower covenants that until all of the Obligations due under the Loan Documents are paid and satisfied in full and the Revolving Credit has been terminated, that:

6.1 Mergers, Consolidation, and Acquisitions .

(a) Neither Borrower nor any Subsidiary shall merge, dissolve, liquidate, consolidate with or into another Person or make an Asset Sale of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, or acquire all or substantially all of the assets or more than fifty percent (50%) of the Capital Stock of any other Person (or other interest that would require consolidation of the acquired Person with the Borrower under GAAP).

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(b) At all times prior to the Spread Adjustment Date, neither Borrower nor any Subsidiary shall acquire all or substantially all of the assets or more than fifty percent (50%) of the Capital Stock of any other Person (or other interest that would require consolidation of the acquired Person with the Borrower under GAAP), without the prior written consent of the Required Lenders. Notwithstanding Section 6.1(a) , Borrower or a Subsidiary may, after the Spread Adjustment Date, acquire all or substantially all the assets of a Person or line of business of such Person, or not less than fifty-one percent (51%) of the Capital Stock of a Person (referred to herein as the “ Acquired Entity ”); provided that, with respect to any such transaction:

(i) at the time of such acquisition, no Default or Event of Default has occurred and is continuing, and such acquisition will not otherwise create a Default or an Event of Default hereunder;

(ii) in any merger or consolidation, the surviving Person shall be either Borrower or a Subsidiary;

(iii) the business to be acquired is predominantly in the same line of business as Borrower, or in businesses reasonably related or incidental thereto;

(iv) the board of directors and (if required by applicable law) the shareholders, or the equivalent of each thereof, of the business to be acquired have approved such acquisition as evidenced by written resolutions or consents evidencing such approval;

(v) (A) in the case of an asset acquisition, all of the assets acquired shall be acquired by Borrower or by a Domestic Subsidiary, and such Domestic Subsidiary shall, within fifteen (15) days thereafter (or such longer period approved by the Administrative Agent), become a Guarantor hereunder in accordance with Section 5.11 , if it is not already a Guarantor, and shall pledge (or cause to be pledged) all of its assets to the Administrative Agent for the benefit of Lenders or (B) in the case of an acquisition of one hundred percent (100%) of the Capital Stock of the acquired company, such acquired company shall, within fifteen (15) days thereafter (or such longer period approved by the Administrative Agent), become a Guarantor in accordance with Section 5.11 and shall grant a first priority security interest (or cause to be granted a first priority security interest) in all of its assets to the Administrative Agent for the benefit of the Lenders, or such acquired company shall be merged with and into Borrower or a Guarantor (which shall be the surviving entity) and (C) in all such cases, such Person shall otherwise comply with the provisions of Section 5.11 and the other provisions of this Agreement; and

(vi) the cash consideration to be paid by Borrower or the applicable Domestic Subsidiary in connection with any acquisition or series of related acquisitions (including in such cash consideration any deferred cash payments, contingent or otherwise, and the aggregate amount of all liabilities (including Indebtedness) assumed or, in the case of an acquisition of the Capital Stock of the acquisition target, including all liabilities (including Indebtedness) of such acquisition target shall not exceed the Maximum Acquisition and Investment Amount (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.1(b) being referred to as a “ Permitted Acquisition ”).

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6.2 Dispositions . Neither Borrower nor any of its Subsidiaries shall make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete, abandoned, or worn out or no longer useful property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of Inventory in the ordinary course of business;

(d) compromise and settlement of accounts receivable of disputed accounts and accounts of insolvent customers to the extent such compromise and settlement is made in the ordinary course of business in amounts;

(e) Dispositions of accounts receivable for purposes of collection in the ordinary course of business;

(f) the termination of any lease, sublease, license or sublicense of real estate to which Borrower or any Subsidiary is party to the extent such real estate is no longer required by such Person in the ordinary course of its business, or the termination of any such lease, sublease, license or sublicense at the end of its applicable term;

(g) Dispositions pursuant to Standard Outbound IP Agreements; or

(h) other Dispositions of property with an aggregate value not to exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00) during any calendar year.

6.3 Liens and Encumbrances . Neither Borrower nor any of its Subsidiaries shall: (a) execute a negative pledge agreement with any Person covering any of its Property, or (b) cause or permit or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), its Property (including, without limitation, the Collateral), whether now owned or hereafter acquired, to be subject to a Lien or be subject to any claim except for Permitted Liens.

6.4 Transactions With Affiliates .

(a) Borrower shall not enter into any transaction with any Affiliate, including, without limitation, the purchase, sale, or exchange of Property, or the loaning or giving of funds to any Affiliate unless: (i) such Affiliate is engaged in a business substantially related to the business conducted by Borrower and the transaction is in the ordinary course of and pursuant to the reasonable requirements of Borrower’s business and upon terms substantially the same and no less favorable to Borrower as it would obtain in a comparable arm’s length transactions with any Person not an Affiliate, and so long as such transaction is not prohibited hereunder; (ii) such Affiliate is a Subsidiary (other than RTI Donor Services); (iii) such transaction is the issuance of the Preferred Stock to WSHP Biologics Holdings pursuant to the Preferred Stock Investment Agreement and the other transactions contemplated by the Waterstreet Agreements; or (iv) such transaction is intended for incidental administrative purposes.

(b) Borrower shall not create or acquire any Subsidiary except (i) as otherwise provided in this Agreement or (ii) in compliance with Section 5.11 .

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6.5 Indebtedness/Guarantees . Excepting the endorsement in the ordinary course of business of negotiable instruments for deposit or collection, neither Borrower nor any of its Subsidiaries shall become or be liable, directly or indirectly, primary or secondary, matured or contingent, in any manner, whether as borrower, primary obligor, guarantor, surety, accommodation maker, or otherwise, for the existing or future Indebtedness of any kind of any Person, other than Permitted Indebtedness.

6.6 Distributions, Bonuses and Other Indebtedness .

(a) Except for Distributions by any Subsidiary of Borrower to Borrower or a Domestic Subsidiary of Borrower and except as set forth in clauses (b) and (c) below, Borrower shall not: (i) declare or pay or make any forms of Distribution to holders of Borrower’s Capital Stock (other than the borrower’s Preferred Stock); (ii) make any voluntary cash payment of any Distribution on Borrower’s Preferred Stock; (iii) declare or pay any bonus compensation to its officers if an Event of Default exists or would result from the payment thereof; (iv) hereafter incur or become liable for any Indebtedness other than Permitted Indebtedness; or (v) make any payments on Subordinated Debt.

(b) Notwithstanding the provisions of Section 6.6(a) above, Borrower shall have the right to make Distributions or payments: (i) to holders of Borrower’s Capital Stock upon the prior written consent of the Required Lenders; (ii) subject to Section 6.6(c) on the Preferred Stock in accordance with the Preferred Stock Certificate of Designation, so long as in the case of any voluntary cash Distributions under the Certificate of Designations (A) no Event of Default has occurred and is continuing and (B) no Event of Default will result from such Distribution and (iii) on Subordinated Debt, if any, but only to the extent permitted by the applicable Subordination Agreement.

(c) Notwithstanding the provisions in Section 6.6(a) above, Borrower may make voluntary cash Distributions on the Preferred Stock under the Certificate of Designations if (i) the Spread Adjustment Date shall have occurred and (ii) the Borrower’s Leverage Ratio at a Quarter End immediately preceding the making of such Distribution measured both (A) on historical results as of such Quarter End and (B) on a pro forma basis (after giving effect to the contemplated Distributions) as of such Quarter End is 2.50 to 1.00 or less.

6.7 Loans and Investments . Neither Borrower nor any of its Subsidiaries shall make or have outstanding loans, advances, extensions of credit or capital contributions to, or investments in, any Person other than: (a) Permitted Investments; (b) Standard Inbound IP Agreements; (c) loans to Borrower or to Subsidiaries of Borrower; (d) Investments otherwise permitted under Section 6.1(b) ; (e) loans to employees of Borrower and its Subsidiaries existing on the Closing in an aggregate amount of less than One Million and 00/100 Dollars ($1,000,000.00); and (f) Permitted Capital Stock Investment so long as the cash consideration to be paid by Borrower or the applicable Subsidiary in connection with such Permitted Capital Stock Investment does not exceed the Maximum Acquisition and Investment Amount; provided , Borrower shall grant to Administrative Agent a first priority security interest in the Capital Stock acquired as part of such Permitted Capital Stock Investment.

6.8 Use of Name of Lenders . Neither Borrower nor any of its Subsidiaries shall use Administrative Agent’s or any Lender’s name in connection with any of its business operations. Nothing herein contained is intended to permit or authorize Borrower to make any contract on behalf of Administrative Agent or any Lender.

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6.9 Miscellaneous Covenants .

(a) Neither Borrower nor any of its Subsidiaries shall become a party to any contract or agreement which at the time of becoming a party to such contract or agreement would (i) invalidate any of the Loan Documents or (ii) cause an Event of Default under Sections 5.12 or 5.13 (as measured as of the time of becoming a party to such contract or agreement).

(b) Neither Borrower nor any of its Subsidiaries shall carry or purchase any “margin stock” within the meaning of Regulations U, T or X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

6.10 Jurisdiction of Organization . Borrower shall not change its jurisdiction of organization.

6.11 Preferred Stock . Borrower shall not amend its Certificate of Incorporation, including, without limitation, the Preferred Stock Certificate of Designation, as in effect on July 16, 2013 in a manner materially adverse to any Lender.

SECTION 7

DEFAULT

7.1 Events of Default . Each of the following events shall constitute an event of default (each, an “ Event of Default ”):

(a) Payments . If Borrower fails to make any payment of principal or interest under the Obligations within three (3) Business Days of the date such payment is due and payable; or

(b) Other Charges . If Borrower fails to pay any other charges, fees, Expenses or other monetary obligations owing to Lenders arising out of or incurred in connection with this Agreement within three (3) Business Days of the date such payment is due and payable; or

(c) Loan Document Defaults . If Borrower or any other Person (other than any Lender) party to a Loan Document fails to perform, comply with or observe any covenant or undertaking contained in any Loan Document and (other than with respect to the covenants contained in Sections 5.11 and 5.12 and Section 6 (excluding Section 6.9(a) ) for which no cure period shall exist), such failure continues for fifteen (15) days (or in the case of Section 6.9(a) , thirty (30) days) after a responsible officer of Borrower has actual knowledge thereof; or

(d) Uninsured Loss . If there shall occur any uninsured damage to or loss, theft, or destruction in excess of Two Million and 00/100 Dollars ($2,000,000.00) in the aggregate with respect to any portion of any Property of Borrower; or

(e) Warranties or Representations and Financial Statements . If any warranty, representation or other statement by or on behalf of Borrower contained in or pursuant to this Agreement, the other Loan Documents or in any document statement, report, financial statement, certificate, agreement or instrument furnished in compliance with, relating to, or in reference to this Agreement, is false, erroneous, or misleading in any material respect when made; or

(f) Agreements with Others . (i) If Borrower shall default beyond any grace period in the payment of principal or interest of any Indebtedness of Borrower with a principal amount in excess of Five Hundred Thousand and 00/100 Dollars ($500,000.00); or (ii) if Borrower otherwise defaults under the terms of any such Indebtedness if the effect of any such default is to enable the holder of such Indebtedness to accelerate the payment of Borrower’s obligations, which are the subject thereof, prior to the maturity date or prior to the regularly scheduled date of payment; or

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(g) Other Agreements with Lender . If Borrower breaches or violates the terms of, or if a default (and expiration of any applicable cure period), or an Event of Default, occurs under, any Interest Hedging Instrument or any other existing or future agreement (related or unrelated) (including, without limitation, the other Loan Documents) between Borrower and Lender; or

(h) Judgments . If any final judgment for the payment of money in excess of One Million and 00/100 Dollars ($1,000,000.00) in the aggregate (i) which is not paid or fully covered by insurance or (ii) for which Borrower has not established a cash or cash equivalent reserve in the full amount of such judgment, shall be rendered by a court of record against Borrower and such judgment shall continue unsatisfied and in effect for a period of thirty (30) consecutive days without being vacated, discharged, satisfied or bonded pending appeal; or

(i) Assignment for Benefit of Creditors . If Borrower makes or proposes in writing, an assignment for the benefit of creditors generally, offers a composition or extension to creditors, or makes or sends notice of an intended bulk sale of any business or assets now or hereafter owned or conducted by Borrower; or

(j) Bankruptcy, Dissolution . Upon the commencement of any action for the dissolution or liquidation of Borrower, or the commencement of any proceeding to avoid any transaction entered into by Borrower, or the commencement of any case or proceeding for reorganization or liquidation of Borrower’s debts under the Bankruptcy Code or any other state or federal law, now or hereafter enacted for the relief of debtors, whether instituted by or against Borrower; provided however, that Borrower shall have thirty (30) days to obtain the dismissal or discharge of involuntary proceedings filed against it, it being understood that during such thirty (30) day period, Lender shall not be obligated to make Advances hereunder and Lender may seek adequate protection in any bankruptcy proceeding; or

(k) Receiver . Upon the appointment of a receiver, liquidator, custodian, trustee or similar official or fiduciary for any Borrower or for Borrower’s Property; or

(l) Termination of Business . If Borrower ceases any material portion of its business operations as presently conducted; or

(m) Pension Benefits . If Borrower fails to comply with ERISA so that proceedings are commenced to appoint a trustee under ERISA to administer Borrower’s employee plans or the PBGC institutes proceedings to appoint a trustee to administer such plan(s), or a Lien is entered against the Borrower to secure any funding deficiency or claim or a “reportable event” as defined under ERISA occurs (for which notice has not been waived by the PBGC) and any such event or occurrence that results in a Material Adverse Effect; or

(n) Investigations . Borrower has engaged in any type of activity which results in the forfeiture of any material property of Borrower to any governmental entity, federal, state or local; or

(o) Change of Control . If there shall occur a Change of Control; or

(p) Liens . If any Lien in favor of Lender on a material part of the Collateral shall cease to be valid, enforceable and perfected and prior to all other Liens other than Permitted Liens or if Borrower or any Governmental Authority shall assert any of the foregoing.

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7.2 Rights and Remedies on Default .

(a) In addition to all other rights, options and remedies granted or available to Administrative Agent on behalf of Lenders under this Agreement or the Loan Documents (each of which is also then exercisable by Administrative Agent at the direction of the Required Lenders), or otherwise available at law or in equity, upon or at any time after the occurrence and during the continuance of a Default or an Event of Default, each Lender may, in its discretion, withhold or cease making Advances under the Revolving Credit.

(b) In addition to all other rights, options and remedies granted or available to Administrative Agent on behalf of Lenders under this Agreement or the Loan Documents (each of which is also then exercisable by Administrative Agent on behalf of Lenders at the direction of the Required Lenders), or otherwise available at law or in equity, upon or at any time after the occurrence and during the continuance of an Event of Default Administrative Agent on behalf of Lenders, upon the request and at the direction of the Required Lenders, shall terminate the Revolving Credit and declare the Obligations (other than any Obligations arising under an Interest Hedging Instrument) immediately due and payable, all without demand, notice, presentment or protest or further action of any kind (it also being understood that the occurrence of any of the events or conditions set forth in Sections 7.1(i) , (j) or (k) shall automatically cause an acceleration of the Obligations (other than any Obligations arising under an Interest Hedging Instrument).

(c) In addition to all other rights, options and remedies granted or available to Lenders under this Agreement or the Loan Documents (each of which is also then exercisable by Administrative Agent on behalf of Lenders), or otherwise available at law or in equity, upon or at any time after the acceleration of the Obligations following the occurrence of an Event of Default, upon Administrative Agent’s request, with the approval of the Required Lenders, Borrower shall establish a lockbox with Administrative Agent through which Borrower and its Subsidiaries shall instruct all Account Debtors to make payment on Accounts. Borrower shall execute such agreements as Administrative Agent may require, to establish the lockbox.

(d) In addition to all other rights, options and remedies granted or available to Lenders under this Agreement or the Loan Documents (each of which is also then exercisable, at the direction of the Required Lenders, by Administrative Agent on behalf of Lenders), or otherwise available at law or in equity, upon or at any time after the acceleration of the Obligations following the occurrence and continuation of an Event of Default (other than the rights with respect to clause (iv) below which Administrative Agent may, and upon the request of the Required Lenders shall, exercise at any time after an Event of Default and regardless of whether there is an acceleration), Administrative Agent may, and upon the request of the Required Lenders shall, exercise all rights under the UCC and any other applicable law or in equity, and under all Loan Documents permitted to be exercised after the occurrence of an Event of Default, including the following rights and remedies (which list is given by way of example and is not intended to be an exhaustive list of all such rights and remedies):

(i) The right to take possession of, send notices regarding and collect directly the Collateral, with or without judicial process (including without limitation the right to notify the United States postal authorities to redirect mail addressed to Borrower to an address designated by Administrative Agent); or

(ii) By its own means or with judicial assistance, enter Borrower’s premises and take possession of the Collateral, or render it unusable, or dispose of the Collateral on such premises in compliance with subsection (e) below, without any liability for rent, storage, utilities or other sums, and Borrower shall not resist or interfere with such action; or

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(iii) Require Borrower at Borrower’s expense to assemble all or any part of the Collateral (other than real estate or fixtures) and make it available to Administrative Agent at any place designated by Administrative Agent; or

(iv) The right to reduce or modify the Maximum Revolving Credit Limit or to modify the terms and conditions upon which Lender may be willing to consider making Advances under the Revolving Credit or to take additional reserves against the Revolving Credit; or

(v) The right to enjoin any violation of Section 7.1 , it being agreed that each Lender’s remedies at law are inadequate.

(e) Borrower hereby agrees that a notice received by it at least seven (7) days before the time of any intended public sale or of the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. If permitted by applicable law, any perishable inventory or Collateral which threatens to speedily decline in value or which is sold on a recognized market may be sold immediately by Administrative Agent on behalf of Lender without prior notice to Borrower. Borrower covenants and agrees not to interfere with or impose any obstacle to Administrative Agent’s exercise of its rights and remedies with respect to the Collateral, after the occurrence of an Event of Default hereunder. Administrative Agent shall have no obligation to clean up or prepare the Collateral for sale. If Administrative Agent sells any of the Collateral upon credit, Borrower will only be credited with payments actually made by the purchaser thereof, that are received by Administrative Agent on behalf of Lenders. Administrative Agent may, in connection with any sale of the Collateral specifically disclaim any warranties of title or the like.

(f) In addition to all other rights, options and remedies granted or available to Administrative Agent on behalf of Lenders under this Agreement or the Loan Documents (each of which is also then exercisable by Administrative Agent), or otherwise available at law or in equity, upon or at any time after the occurrence and during the continuance of an Event of Default, Borrower shall not make any Distribution on the Preferred Stock (or any other Capital Stock of Borrower) without the prior written consent of the Required Lenders.

7.3 Nature of Remedies . All rights and remedies granted Administrative Agent on behalf of Lenders under this Agreement and under the Loan Documents, or otherwise available at law or in equity, shall be deemed concurrent and cumulative, and not alternative remedies, and Administrative Agent may proceed, and upon the request of the Required Lenders shall proceed, with any number of remedies at the same time until all Obligations are satisfied in full. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and Lender, upon or at any time after the occurrence of an Event of Default, may proceed against Borrower, at any time, under any agreement, with any available remedy and in any order.

7.4 Set-Off . In addition to all other rights, options and remedies granted or available to Administrative Agent on behalf of Lenders under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), upon or at any time after the occurrence and during the continuance of an Event of Default, Administrative Agent on behalf of Lenders (and any participant) shall have and be deemed to have, without notice to Borrower, the immediate right of set-off against any bank account of Borrower with any Lender, or of Borrower with any other subsidiary of Lenders or Bank Affiliate or any participant and may apply the funds or amount thus set-off against any of Borrower’s Obligations hereunder. If any bank account of Borrower with any Lender, any other subsidiary of such Lender or any Bank Affiliate or any participant is attached or otherwise liened or levied upon by any third party, such Lender (and such participant) shall have and be deemed to have, without notice to Borrower, the immediate right of set-off and may apply the funds or amount thus set-off against any of Borrower’s Obligations hereunder.

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SECTION 8

ADMINISTRATIVE AGENT

8.1 Appointment . Lenders hereby irrevocably designate and appoint Administrative Agent as administrative agent to act as specified herein and in the other Loan Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Loan Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of its respective duties hereunder by or through its officers, directors, agents, employees or affiliates.

8.2 Nature of Duties .

(a) The Administrative Agent, the Joint Lead Arrangers, and the Book Runners shall not have any duties or responsibilities except those expressly set forth in this Agreement and in the other Loan Documents. Neither the Administrative Agent nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Loan Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Loan Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein.

(b) Notwithstanding any other provision of this Agreement or any provision of any other Loan Document, each Joint Lead Arranger is named as such for recognition purposes only, and in its capacity as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Loan Documents or the transactions contemplated hereby and thereby; it being understood and agreed that each Arranger shall be entitled to all indemnification and reimbursement rights in favor of the Administrative Agent as, and to the extent, provided for under Section 8.6 . Without limitation of the foregoing, each Joint Lead Arranger shall not, solely by reason of this Agreement or any other Loan Documents, have any fiduciary relationship in respect of any Lender or any other Person.

8.3 Lack of Reliance on the Administrative Agent . Independently and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of Borrower and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of Borrower and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or

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other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Loan Document or the financial condition of Borrower or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Loan Document, or the financial condition of Borrower or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default.

8.4 Certain Rights of the Administrative Agent . If the Administrative Agent requests instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Loan Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders and the Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder or under any other Loan Document in accordance with the instructions of the Required Lenders.

8.5 Reliance . The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Loan Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.

8.6 Indemnification . To the extent the Administrative Agent (or any affiliate thereof) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the Administrative Agent (and any affiliate thereof) in proportion to their respective “percentage” as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any affiliate thereof) in performing its duties hereunder or under any other Loan Document or in any way relating to or arising out of this Agreement or any other Loan Document; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

8.7 Administrative Agent in Its Individual Capacity . With respect to its obligation to make Loans under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lender,” “Required Lenders” or any similar terms shall, unless the context clearly indicates otherwise, include the Administrative Agent in its respective individual capacities. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to Borrower or any Affiliate of Borrower (or any Person engaged in a similar business with Borrower or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from Borrower or any Affiliate of Borrower for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

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8.8 Holders . Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

8.9 Resignation by the Administrative Agent .

(a) Administrative Agent may resign from the performance of all its respective functions and duties hereunder and/or under the other Loan Documents at any time by giving fifteen (15) Business Days’ prior written notice to the Lenders and, unless a Default or an Event of Default then exists, Borrower. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor administrative agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to Borrower, which acceptance shall not be unreasonably withheld or delayed (provided that Borrower’s approval shall not be required if an Event of Default then exists).

(c) If a successor administrative agent shall not have been so appointed within such fifteen (15)-Business Day period, Administrative Agent, with the consent of Borrower (which consent shall not be unreasonably withheld or delayed, provided that Borrower’s consent shall not be required if an Event of Default then exists), shall then appoint a successor administrative agent who shall serve as administrative agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor administrative agent as provided above.

(d) If no successor administrative agent has been appointed pursuant to clause (b) or (c) above by the twentieth (20 ^th ) Business Day after the date such notice of resignation was given by Administrative Agent, Administrative Agent’s resignation shall nonetheless become effective and the Required Lenders shall thereafter perform all the duties of Administrative Agent hereunder and/or under any other Loan Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.

(e) Upon a resignation of Administrative Agent pursuant to this Section 8.9 , the administrative agent shall remain indemnified to the extent provided in this Agreement and the other Loan Documents and the provisions of this Section 8 (and the analogous provisions of the other Loan Documents) shall continue in effect for the benefit of the Administrative Agent for all of its actions and inactions while serving as the Administrative Agent.

8.10 Collateral Matters .

(a) Each Lender authorizes and directs the Administrative Agent to enter into the Security Documents for the benefit of the Lenders. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Administrative Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of

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Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders hereby authorize the Administrative Agent, at its option and in its discretion, to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon termination of this Agreement and payment and satisfaction of all of the Obligations (other than inchoate indemnification obligations) at any time arising under or in respect of this Agreement or the Loan Documents or the transactions contemplated hereby or thereby, (ii) constituting property being sold or otherwise disposed of (to Persons other than Borrower and its Subsidiaries) upon the sale or other disposition thereof in compliance with this Agreement, (iii) if approved, authorized or ratified in writing by the Required Lenders or as otherwise may be expressly provided in the relevant documentation granting such Lien.

(c) Administrative Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by Borrower or any of its Subsidiaries or is cared for, protected or insured or that the Liens granted to the Administrative Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Administrative Agent in this Section 8.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Administrative Agent may act in any manner it may deem appropriate, in its sole discretion, given the Administrative Agent’s own interest in the Collateral as one of the Lenders and that the Administrative Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(d) To the extent required by any applicable laws, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. Each Lender shall indemnify and hold harmless the Administrative Agent against, and shall make payable in respect thereof within ten (10) days after demand therefor, any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent by the IRS or any other Governmental Authority as a result of the failure of the Administrative Agent to properly withhold Tax from amounts paid to or for the account of such Lender for any reason (including, without limitation, because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding Tax ineffective). A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due Administrative Agent under this Section 8.10(d) . The agreements in this Section 8.10(d) shall survive the resignation and/or replacement of Administrative Agent, any assignment of rights by, or the replacement of, a Lender, and the repayment, satisfaction or discharge of all other obligations.

8.11 Delivery of Information . Administrative Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by Administrative Agent from Borrower or any of its Subsidiaries, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Loan Document except (i) as specifically provided in this Agreement or any other Loan Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of Administrative Agent at the time of receipt of such request and then only in accordance with such specific request.

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SECTION 9

MISCELLANEOUS

9.1 Governing Law . THIS AGREEMENT, AND ALL MATERS ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF FLORIDA. THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.

9.2 Integrated Agreement . The Notes, the other Loan Documents, all related agreements, and this Agreement shall be construed as integrated and complementary of each other, and as augmenting and not restricting Lenders’ rights and remedies. If, after applying the foregoing, an inconsistency still exists, the provisions of this Agreement shall constitute an amendment thereto and shall control.

9.3 Waiver . No omission or delay by Lender in exercising any right or power under this Agreement or any related agreements and documents will impair such right or power or be construed to be a waiver of any Default, or Event of Default or an acquiescence therein, and any single or partial exercise of any such right or power will not preclude other or further exercise thereof or the exercise of any other right, and as to Borrower no waiver will be valid unless in writing and signed by Administrative Agent and Lenders and then only to the extent specified.

9.4 Indemnity .

(a) Borrower releases and shall indemnify, defend and hold harmless Administrative Agent and each Lender and each of its respective officers, employees and agents, of and from any claims, demands, liabilities, obligations, judgments, injuries, losses, damages and costs and expenses (including, without limitation, reasonable legal fees) resulting from (i) acts or conduct of Borrower under, pursuant or related to this Agreement and the other Loan Documents, (ii) Borrower’s breach or violation of any representation, warranty, covenant or undertaking contained in this Agreement or the other Loan Documents, (iii) Borrower’s failure to comply with any Requirement of Law, and (iv) any claim by any other creditor of Borrower against Administrative Agent or any Lender arising out of any transaction whether hereunder or in any way related to the Loan Documents and all costs, expenses, fines, penalties or other damages resulting therefrom, except to the extent resulting from acts or conduct of Administrative Agent or any Lender constituting willful misconduct or gross negligence.

(b) Promptly after receipt by an indemnified party under Section 9.4(a) of notice of the commencement of any action by a third party, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof. The omission so to notify the indemnifying party shall relieve the indemnifying party from any liability which it may have to any indemnified party under such subsection only if the indemnifying party is unable to defend such actions as a result of such failure to so notify. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the

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consent of the indemnified party, be counsel to the indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under Section 9.4(a) for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.

9.5 Time . Whenever Borrower shall be required to make any payment, or perform any act, on a day which is not a Business Day, such payment may be made, or such act may be performed, on the next succeeding Business Day. Time is of the essence in Borrower’s performance under all provisions of this Agreement and all related agreements and documents.

9.6 Expenses of Lender . At Closing and from time to time thereafter, Borrower will pay, upon demand of Administrative Agent, all reasonable costs, fees and expenses of Administrative Agent and each Lender in connection with (a) the analysis, negotiation, preparation, execution, administration, delivery and termination of this Agreement, and other Loan Documents and the documents and instruments referred to herein and therein, and any amendment, amendment and restatement, supplement, waiver or consent relating hereto or thereto, whether or not any such amendment, amendment and restatement, supplement, waiver or consent is executed or becomes effective, search costs, the reasonable fees, expenses and disbursements of counsel for Administrative Agent, any fees or expenses incurred by Administrative Agent or any Lender under Section 5.11 for which Borrower is obligated thereunder, and reasonable charges of any expert consultant to Administrative Agent, (b) the enforcement of Administrative Agent’s and each Lender’s rights hereunder, or the collection of any payments owing from Borrower under this Agreement or the other Loan Documents or the protection, preservation or defense of the rights of Administrative Agent and each Lender hereunder and under the other Loan Documents, and (c) any refinancing or restructuring of the credit arrangements provided under this Agreement and other Loan Documents in the nature of a “work-out” or of any insolvency or bankruptcy proceedings, or otherwise (including the reasonable fees and disbursements of counsel for Administrative Agent and, with respect to clauses (b) and (c), reasonable allocated costs of internal counsel) (collectively, the “ Expenses ”).

9.7 Brokerage . This transaction was brought about and entered into by Administrative Agent, Lenders and Borrower acting as principals and without any brokers, agents or finders being the effective procuring cause hereof. Borrower represents that it has not committed Administrative Agent or any Lender to the payment of any brokerage fee, commission or charge in connection with this transaction. If any such claim is made on Administrative Agent or any Lender by any broker, finder or agent or other person, Borrower hereby indemnifies, defends and saves such party harmless against such claim and further will defend, with counsel satisfactory to Administrative Agent, any action or actions to recover on such claim, at Borrower’s own cost and expense, including such party’s reasonable counsel fees. Borrower further agrees that until any such claim or demand is adjudicated in such party’s favor, the amount demanded shall be deemed an Obligation of Borrower under this Agreement.

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9.8 Notices .

(a) Any notices or consents required or permitted by this Agreement shall be in writing and shall be deemed given if delivered in person to the person listed below or if sent by telecopy or by nationally recognized overnight courier, as follows, unless such address is changed by written notice hereunder:


If to Administrative Agent to:		TD Bank, N.A.
		2307 W. Kennedy Blvd.
		Tampa, Florida 33609
		Attention: Mike Nursey
		Telecopy No. 813-258-5623

With copies to:		Rogers Towers, P.A.
		1301 Riverplace Blvd., Suite 1500
		Jacksonville, Florida 32207
		Attention: J. Kirby Chritton
		Telecopy No. 904-396-0663

If to Lenders to:		To the addresses set forth on Exhibit A

If to Borrower to:		RTI Surgical, Inc.
		11631 Research Circle
		Alachua, Florida 32015
		Attention: Chief Financial Officer
		Telecopy No. 386-418-0342

With copies to:		RTI Surgical, Inc.
		11631 Research Circle
		Alachua, Florida 32015
		Attention: General Counsel
		Telecopy No. 386-418-0342

(b) Any notice sent by Administrative Agent, any Lender, or Borrower by any of the above methods shall be deemed to be given when so received.

(c) Administrative Agent and Lenders shall be fully entitled to rely upon any telecopy transmission or other writing purported to be sent by any Authorized Officer (whether requesting an Advance or otherwise) as being genuine and authorized.

9.9 Headings . The headings of any paragraph or Section of this Agreement are for convenience only and shall not be used to interpret any provision of this Agreement.

9.10 Survival . All warranties, representations, and covenants made by Borrower herein, or in any agreement referred to herein or on any certificate, document or other instrument delivered by it or on its behalf under this Agreement, shall be considered to have been relied upon by Administrative Agent and Lenders, and shall survive the delivery to Lenders of the Notes, regardless of any investigation made by Administrative Agent or any Lender or on its behalf. All statements in any such certificate or other instrument prepared and/or delivered for the benefit of Administrative Agent and Lenders shall constitute warranties and representations by Borrower hereunder. Except as otherwise expressly provided in this Agreement, all covenants made by Borrower hereunder or under any other agreement or instrument shall be deemed continuing until all Obligations due under the Loan Documents are satisfied in full. All indemnification obligations under this Agreement shall survive the termination of this Agreement and payment of the Obligations due under the Loan Documents for a period of two (2) years.

9.11 Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. Borrower may not transfer, assign or delegate any of its duties or obligations hereunder. Borrower acknowledges and agrees that any Lender may at any

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time, and from time to time, (a) sell participating interests in the Loans, and Lender’s rights hereunder to other financial institutions, and (b) sell, transfer, or assign the Loans and Lender’s rights hereunder, to any one or more additional banks or financial institutions, subject (as to Lender’s rights under this clause (b)) to Borrower’s written consent, which consent shall not be unreasonably withheld; provided that, no consent under this clause (b) shall be required if an Event of Default exists at the time of such sale, transfer or assignment.

9.12 Duplicate Originals . Two (2) or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument.

9.13 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by Borrower or any Subsidiary therefrom, shall be effective unless in writing signed by the Required Lenders and Borrower or the applicable Subsidiary, as the case may be, and acknowledged by the Administrative Agent and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a) extend, increase or decrease the Commitment of any Lender or reinstate any Commitment terminated pursuant to Section 7.2(b) without the written consent of such Lender;

(b) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(c) reduce the principal of, or the rate of interest specified herein on, any Loan or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of Borrower to pay interest or any fees due hereunder at the Default Rate;

(d) change Section 2.19 in a manner that would alter the pro rata sharing of payments required thereby or the order of the application of payments thereunder, in each case, without the written consent of each Lender;

(e) change any provision of this Section 9.13 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender; or

(f) (i) release all or substantially all of the Collateral in any transaction or series of related transactions, (ii) release all or substantially all of the Guarantors, (iii) subordinate the Obligations hereunder to any other Indebtedness, (iii) except as provided by operation of applicable law, subordinate the Liens on all or substantially all of the Collateral granted in favor of the Administrative Agent for itself and the other Lenders under the Security Documents to any other Lien, in each case, without the written consent of each Lender; or

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(g) unless also signed by Administrative Agent, no amendment, waiver or consent shall affect the rights or duties of Administrative Agent under this Agreement or any other Loan Document;

provided , further , that notwithstanding anything to the contrary herein, (i) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein and (ii) the Required Lenders shall determine whether or not to allow Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of Lenders.

Notwithstanding any provision herein to the contrary, this Agreement may be amended with the written consent of the Required Lenders, Administrative Agent and Borrower (i) to add one or more additional revolving credit or term loan facilities to this Agreement and to permit the extensions of credit and all related obligations and liabilities arising in connection therewith from time to time outstanding to share ratably (or on a basis subordinated to the existing facilities hereunder) in the benefits of this Agreement and the other Loan Documents with the obligations and liabilities from time to time outstanding in respect of the existing facilities hereunder, and (ii) in connection with the foregoing, to permit, as deemed appropriate by Administrative Agent and approved by the Required Lenders, Lenders providing such additional credit facilities to participate in any required vote or action required to be approved by the Required Lenders or by any other number, percentage or class of Lenders hereunder.

Notwithstanding any provision herein to the contrary Administrative Agent and Borrower may amend, modify or supplement this Agreement or any other Loan Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect or inconsistency or to effect administrative changes, and such amendment shall become effective without any further consent of any other party to such Loan Document so long as (i) such amendment, modification or supplement does not adversely affect the rights of any Lender in any material respect and (ii) Lenders shall have received at least five Business Days’ prior written notice thereof and Administrative Agent shall not have received, within five Business Days of the date of such notice to Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.

9.14 Signatories . Each individual signatory hereto represents and warrants that he is duly authorized to execute this Agreement on behalf of his principal and that he executes the Agreement in such capacity and not as a party.

9.15 Third Parties . No rights are intended to be created hereunder, or under any related agreements or documents for the benefit of any third party donee, creditor or incidental beneficiary of Borrower. Nothing contained in this Agreement shall be construed as a delegation to Lender of Borrower’s duty of performance, including, without limitation, Borrower’s duties under any account or contract with any other Person.

9.16 Discharge of Taxes, Borrower ’ s Obligations . Lender, in its sole discretion, shall have the right at any time, and from time to time, with at least ten (10) days prior notice to Borrower if Borrower fail to do so, to: (a) pay for the performance of any of Borrower’s obligations hereunder, and (b) discharge taxes or Liens, at any time levied or placed on Borrower’s Property in violation of this Agreement unless Borrower is in good faith with due diligence by appropriate proceedings contesting such taxes or Liens and maintaining proper reserves therefor in accordance with GAAP. Expenses and advances shall be added to the Revolving Credit, and bear interest at the rate applicable to the Revolving Credit, until reimbursed to Lender. Such payments and advances made by Lender shall not be construed as a waiver by Lender of a Default or Event of Default under this Agreement.

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9.17 Consent to Jurisdiction . Borrower, Administrative Agent and each Lender each hereby irrevocably consent to the non-exclusive jurisdiction of the Courts of the State of Florida or the United States District Court for the Middle District of Florida, Jacksonville Division in any and all actions and proceedings whether arising hereunder or under any other agreement or undertaking. Borrower waives any objection which Borrower may have based upon lack of personal jurisdiction, improper venue or forum non conveniens. Borrower irrevocably agrees to service of process by certified mail, return receipt requested to the address of the appropriate party set forth herein.

9.18 Additional Documentation . Borrower shall execute and/or re-execute, and cause any Guarantor or other Person party to any Loan Document, to execute and/or re-execute and to deliver to Administrative Agent or Administrative Agent’s counsel, as may be deemed appropriate, any document or instrument signed in connection with this Agreement which was incorrectly signed, as well as any document or instrument which should have been signed at or prior to the Closing, but which was not so signed and delivered. Borrower agrees to comply with any written request by Lender within ten (10) days after receipt by Borrower of such request.

9.19 Advertisement . Administrative Agent and each Lender, in its sole discretion, shall have the right to announce and publicize the financing established hereunder, as it deems appropriate, by means and media selected by Administrative Agent or such Lender. Such publication shall include all pertinent information relating to such financing, including without limitation, the term, purpose, pricing, loan amount, name of Borrower. The form and content of the published information shall be in the sole discretion of Administrative Agent or such Lender and shall be considered the sole and exclusive property of Administrative Agent or such Lender. All expenses related to publicizing the financing shall be the sole responsibility of Administrative Agent or such Lender.

9.20 Waiver of Jury Trial . BORROWER AND ADMINISTRATIVE AGENT AND EACH LENDER EACH HEREBY WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

9.21 Consequential Damages . Neither Administrative Agent, any Lender nor any agent or attorney of Administrative Agent or any Lender shall be liable for any consequential damages arising from any breach of contract, tort or other wrong relating to the establishment, administration or collection of the Obligations.

9.22 Release of Collateral . Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (a) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with the provisions of this Agreement, or (b) under the circumstances described in the immediately following sentence. At such time as the Loans and the Obligations due under the Loan Documents shall have been paid in full, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.

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9.23 Confidentiality .

(a) The Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by or on behalf of Borrower, the Administrative Agent or any Lender pursuant to or in connection with this Agreement that is designated by the provider thereof as confidential; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (i) to the Administrative Agent, any other Lender or any Affiliate thereof, (ii) subject to an agreement to comply with the provisions of this Section 9.23 , to any actual or prospective transferee or any direct or indirect counterparty to any Hedging Agreement (or any professional advisor to such counterparty), (iii) to its employees, directors, agents, attorneys, accountants, representatives, consultants, auditors and other professional advisors or those of any of its affiliates, (iv) upon the request or demand of any Governmental Authority, (v) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (vi) if required to do so in connection with any litigation or similar proceeding, (vii) that has been publicly disclosed, (viii) in connection with the exercise of any remedy hereunder or under any other Loan Document, or (ix) if agreed by Borrower or any Subsidiary of Borrower in its sole discretion, to any other Person.

(b) Each Lender acknowledges that information furnished to it pursuant to this Agreement or the other Loan Documents may include material non-public information concerning the Borrower and its Subsidiaries and Affiliates and their related parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with those procedures and applicable law, including federal and state securities laws.

(c) All information, including requests for waivers and amendments, furnished by Borrower or the Administrative Agent pursuant to, or in the course of administering, this Agreement or the other Loan Documents will be syndicate-level information, which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities. Accordingly, each Lender represents to Borrower and the Administrative Agent that it has identified in its administrative questionnaire a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law, including federal and state securities laws.

9.24 Patriot Act Notice . Lenders are subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56) (signed into law October 26, 2001)) (the “Act”) and hereby notify Borrower and Guarantors that pursuant to the requirements of the Act, Lenders are required to obtain, verify and record information that identifies Borrower and Guarantors, which information includes the names and addresses of Borrower and Guarantors and other information that will allow Lenders to identify Borrower and Guarantors in accordance with the Act.

[SIGNATURES TO FOLLOW ON SEPARATE PAGE]

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WITNESS the due execution of this Agreement as a document under seal as of the date first written above.


RTI SURGICAL, INC., as Borrower

By:		/s/ Robert P. Jordheim
Name:		Robert P. Jordheim
Title:		EVP and Chief Financial Officer

(Signature Page to Third Amended and Restated Loan Agreement)


TD BANK, N.A., as Administrative Agent

By:		/s/ Mike Nursey
Name:		Mike Nursey
Title:		Central Florida Market President

TD BANK, N.A., as Lender

By:		/s/ Mike Nursey
Name:		Mike Nursey
Title:		Central Florida Market President

FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, as Lender

By:		/s/ Kristi Lewallen
Name:		Kristi Lewallen
Title:		Director, Specialty Healthcare

(Signature Page to Third Amended and Restated Loan Agreement)

EXHIBIT A

LENDERS


Lender	Notice Address	Commitments and Applicable Percentages
		Term Loan					Revolving Credit
		Amount		Percentage			Amount		Percentage
TD Bank, N.A.	9715 N. Gate Parkway Jacksonville, Florida 32246 Attention: Mike Nursey Telecopy No. with copies to : Rogers Towers, P.A. 1301 Riverplace Blvd. Suite 1500 Jacksonville, Florida 32207 Attention: J. Kirby Chritton Telecopy No. 904-396-0663	$	12,687,500		50	%	$	21,250,000		50	%

First Tennessee Bank National Association	211 Franklin Road Suite 300 Brentwood, Tennessee 37027 Attention: Kristi Lewallen Telecopy No: (866) 342-2099	$	12,687,500		50	%	$	21,250,000		50	%

EXHIBIT B

AUTHORIZATION CERTIFICATE

(Borrower Letterhead)

Date:

TD Bank, N.A., as Administrative Agent

9715 N. Gate Parkway

Jacksonville, Florida 32246

Attention:

Dear :

The following individuals are authorized to request loan advances against RTI Surgical, Inc., a Delaware corporation formerly known as RTI Biologics, Inc. (“Borrower”) line of credit and transfer funds from any of Borrower’s accounts per written instructions received via fax:


	Authorized Person	Title	Signature
1.
2.
3.


Acknowledged and approved:

By:
Name:
Title:

EXHIBIT C

PERMITTED INDEBTEDNESS


	Current Draw		Availability
Domestic Lines of Credit TD Bank	$	35,000,000	$	7,500,000

AFCO Insurance Premium Finance	$	1,603,055.20

Long Term Debt TD Bank/Regions Bank	$	47,375,000

EXHIBIT D

PERMITTED LIENS

As to the Real Property in Alachua, Florida

Declaration of Covenants, Conditions, Restrictions and Easements, recorded in Book 1588, page 2207, Joinder in Book 1588, page 2205, together with First Amendment in Book 1762, page 1883 and Second Amendment in Book 2161, page 1701, together with Designation and Assumption by Successor Developer recorded in Book 2283, page 613 and Book 2283, page 632.

Restrictions, dedications, conditions, reservations, easements and other matters shown on the plat of Progress Center, as recorded in Plat Book M, Page(s) 82.

Restrictions, dedications, conditions, reservations, easements and other matters shown on the plat of Replat Of Progress Center, as recorded in Plat Book P, Page(s) 48.

Agreement between Apalachee Development Company, a Florida corporation, and the State of Florida Department of Community Affairs recorded in Book 1605, Page 1374, as amended in Book 1617, page 613.

Notice of Development Order Approving The Development of Regional Impact known as Progress Center recorded in Book 1692, Page 1378, as Amended in Book 1863, page 331 and Second Amendment in Book 2232, page 2867.

Notice of Preliminary Development Agreement recorded in Book 2198, Page 2845.

Covenants, Conditions and Restrictions as set forth in Special Warranty Deed recorded in Book 2264, page 2522.

Cross Ingress-Egress Easement Agreement recorded in Book 2283, Page 642.

Grant of Easement for Ingress, Egress and Public Utilities recorded in Book 3873, Page 1565.

10.

Non-Exclusive Public Utility Easement recorded in Book 4157, Page 2088.

As to the Real Property in Marquette, Michigan

Terms and Conditions contained in Easement for Storm Sewer in Judgment Amending Plat of River Park Complex as disclosed by instrument recorded in Document Number 2004R-11781.

Deed Restrictions to River Park Complex recorded in Liber 123, Page 907.

EXHIBIT E

COVENANT COMPLIANCE CERTIFICATE

(Borrower Letterhead)

TD Bank, N.A., as Administrative Agent Date:

9715 N. Gate Parkway

Jacksonville, Florida 32246

Attention:

The undersigned, the President of RTI Surgical, Inc., a Delaware corporation formerly known as RTI Biologics, Inc. (“ Borrower ”), gives this certificate to TD Bank, N.A., as administrative agent (in such capacity, the “ Administrative Agent ”), in accordance with the requirements of Section of that certain Third Amended and Restated Loan Agreement, dated August , 2017 (as amended, modified, supplemented or restated and in effect from time to time, the “Loan Agreement”), by and among Borrower, lenders and the Administrative Agent. Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement.

1. Based upon my review of the consolidated balance sheets and statements of income of Borrower for the fiscal period ending , 20 , copies of which are attached hereto, I hereby certify that:

(a) The Fixed Charge Coverage Ratio of Borrower is ;

(b) The Leverage Ratio of Borrower is ; and

Attached as Schedule A are the details underlying such financial covenant calculations.

2. No default exists on the date hereof, other than: [if none, so state; and

3. No Event of Default exists on the date hereof, other than: [if none, so state].


Very truly yours,

By:
Name:
Title:

APPENDIX 1

CONSOLIDATED EBITDA

For purposes of the financial covenant calculations contemplated by Section 5.12, Borrower’s quarterly Consolidated EBITDA, inclusive of authorized one time charges and excluding EBITDA generated by Borrower’s CTS Business shall be as follows for the periods indicated:


For the Quarter ending September 30, 2016		$5,721,000

For the Quarter ending December 31, 2016		$5,084,000

For the Quarter ending March 32, 2017		$5,856,000

For the Quarter ending June 30, 2017		Consolidated EBITDA for the Quarter ending June 30, 2017, inclusive of authorized one time charges less EBITDA generated by Borrower’s CTS Business in such Quarter.

Exhibit 10.4

RTI SURGICAL, INC.

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “ Agreement ”) dated as of September 18, 2017, between RTI Surgical, Inc., a Delaware corporation (the “ Company ”), and Jonathon M. Singer (the “ Employee ”).

W I T N E S S E T H

WHEREAS, the Company desires to employ the Employee as the Chief Administrative and Chief Financial Officer of the Company; and

WHEREAS, the Company and the Employee desire to enter into this Agreement as to the terms of the Employee’s employment with the Company.

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

1. POSITION AND DUTIES.

(a) During the Employment Term (as defined in Section 2 hereof), the Employee shall serve as the Chief Administrative and Chief Financial Officer of the Company. In this capacity, the Employee shall have the duties, authorities and responsibilities as are required by the Employee’s position, and such other duties, authorities and responsibilities as may reasonably be assigned to the Employee that are not inconsistent with the Employee’s position as Chief Administrative and Chief Financial Officer of the Company. The Employee’s principal place of employment with the Company shall be in the Chicago, Illinois metropolitan area or (b) such other place as mutually agreed upon by the Employee and the Chief Executive Officer (the “CEO”), provided that the Employee understands and agrees that the Employee may be required to travel from time to time for business purposes. The Employee shall report directly to the Company’s CEO.

(b) During the Employment Term, the Employee shall devote all of the Employee’s business time, energy, business judgment, knowledge and skill and the Employee’s best efforts to the performance of the Employee’s duties with the Company; provided that the Employee shall be entitled to serve on for-profit, civic, charitable, educational, religious, public interest, or public service boards, and to manage the Employee’s personal and family investments, in each case, to the extent such activities do not materially interfere with the performance of the Employee’s duties and responsibilities hereunder, and provided further that the Employee shall not serve on more than one for-profit board without the consent of the Board of Directors of the Company (the “ Board ”).

(c) As of 11:59 p.m. (Eastern Time) on the date of this Agreement, Employee resigns as a director of the Company. Employee’s execution of this Agreement shall serve as written notice of Employee’s resignation as a director of the Company.

2. EMPLOYMENT TERM. Beginning on October 2, 2017 (the “ Effective Date ”, the Company agrees to employ the Employee pursuant to the terms of this Agreement, and the Employee agrees to be so employed, for a term of three years (the “ Initial Term ”) commencing as of the Effective Date. On each anniversary of the Effective Date following the Initial Term, the term of this Agreement shall be automatically extended for successive one-year periods, provided , however , that either party hereto may elect not to extend this Agreement by giving written notice to the other party at least sixty (60) days prior to any such anniversary date. Notwithstanding the foregoing, the Employee’s employment hereunder may be earlier terminated in accordance with Section 6 hereof, subject to Section 7 hereof. The period of time between the Effective Date and the termination of the Employee’s employment hereunder shall be referred to herein as the “ Employment Term .”

3. BASE SALARY. The Company agrees to pay the Employee a base salary at an annual rate of not less than $450,000, payable in accordance with the regular payroll practices of the Company, but not less frequently than monthly. The Employee’s Base Salary shall be subject to annual review by the Board (or a committee thereof), and may be increased, but not decreased below its then current level, from time to time by the Board or the CEO. The base salary as determined herein and adjusted from time to time shall constitute “ Base Salary ” for purposes of this Agreement.

4. SHORT TERM AND LONG TERM INCENTIVE. During the Employment Term, the Employee shall be eligible to receive:

(a) a payment in the amount of $168,750 on the date the Company makes its 2017 annual discretionary incentive payments to it employees, but no later than March 15, 2018 (the “ 2017 Payment ”);

(b) an annual discretionary incentive payment under the Company’s annual bonus plan as may be in effect from time to time (the “ Annual Bonus ”) based on a target bonus opportunity of at least 65% of the Employee’s Base Salary (the “ Target Bonus ”), upon the attainment of one or more pre-established performance goals to be established by the Company’s Compensation Committee (the “ Committee ”) or the CEO in its (or his) sole discretion, including a prorated (October 2, 2017-December 31, 2017) Annual Bonus for the 2017 performance period; and

(c) long term incentive compensation under the Company’s long term incentive plan (the “ LTI ”) based upon a target LTI opportunity of at least 110% of the Employee’s Base Salary (the “ Target LTI ”), upon the attainment of pre-established goals to be established by the Board, the Committee or the CEO in its (or his) sole discretion.

(d) The Employee acknowledges that the 2017 Payment is in consideration for his expected contributions over the first three years of his employment. If Employee resigns his employment without Good Reason (as defined below) or is terminated for Cause (as defined below) before October 2, 2020, then the Employee shall repay or forfeit (as the case may be) the 2017 Payment within 30 days of such resignation.

5. EMPLOYEE BENEFITS.

(a) EQUITY GRANTS. In addition to the LTI awards to be granted pursuant to Section 4(c), on the Effective Date, the Company and the Employee are entering into: (i) the Restricted Stock Award Agreement attached as Exhibit A ; and (ii) the Stock Option Agreement attached as Exhibit B to this Agreement (collectively, the “ Initial Equity Grants ”).

The Employee acknowledges that the Initial Equity Grants are in consideration for his being hired by the Company and his expected contributions over the first three years of his employment. If his Employee resigns his employment without Good Reason (as defined below) or is terminated for Cause (as defined below) before October 2, 2020, then the Employee shall forfeit the unvested Initial Equity Grants as of the date of such resignation or termination for Cause.

(b) INDUCEMENT PAYMENT. On or before September 30, 2018, the Company shall pay the Employee $1,000,000 as an inducement to Employee’s entry into this Agreement (“ Inducement Payment ”); provided that the Employee shall repay the after-tax portion of the Inducement Payment if, prior to October 2, 2020, the Employee terminates his employment without Good Reason (as defined below) or is terminated by the Company for Cause (as defined below).

(c) BENEFIT PLANS. During the Employment Term, the Employee shall be entitled to participate in any employee benefit plan that the Company has adopted or may adopt, maintain or contribute to for the benefit of its employees and other senior executives generally, subject to satisfying the applicable eligibility requirements, except to the extent such plans are duplicative of the benefits otherwise provided to hereunder. The Employee’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding the foregoing, the Company may modify or terminate any employee benefit plan at any time.

(d) BUSINESS EXPENSES. Upon presentation of reasonable substantiation and documentation as the Company may specify from time to time, the Employee shall be reimbursed in accordance with the Company’s expense reimbursement policy, for all reasonable out-of-pocket business expenses incurred and paid by the Employee during the Employment Term and in connection with the performance of the Employee’s duties hereunder.

6. TERMINATION. The Employee’s employment and the Employment Term shall terminate on the first of the following to occur:

(a) DISABILITY. Upon ten (10) days’ prior written notice by the Company to the Employee of termination due to Disability. For purposes of this Agreement, “ Disability ” shall be defined as the inability of the Employee to have performed the Employee’s material duties hereunder due to a physical or mental injury, infirmity or incapacity for one hundred eighty (180) days (including weekends and holidays) in any 365-day period as determined by the Board in its reasonable discretion. The Employee shall cooperate in all respects with the Company if a

question arises as to whether the Employee has become disabled (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists selected by the Company and authorizing such medical doctors and other health care specialists to discuss the Employee’s condition with the Company).

(b) DEATH. Automatically upon the date of death of the Employee.

(c) CAUSE. Immediately upon written notice by the Company to the Employee of a termination for Cause. “ Cause ” shall mean the occurrence of one of the following events, unless, to the extent correctable, such events are fully corrected in all material respects by the Employee within fifteen (15) days following written notification by the Company to the Employee of the occurrence of one of the events:

(i) the Employee’s willful misconduct or gross negligence in the performance of the Employee’s material duties to the Company;

(ii) the Employee’s failure to perform the Employee’s material duties to the Company or to follow the lawful directives of the Board (other than as a result of death or Disability);

(iii) indictment for, conviction of, or pleading of guilty or nolo contendere to, any felony or any crime involving moral turpitude;

(iv) the Employee’s violation of any laws, rules or regulations of any governmental or regulatory body, which violation is materially injurious to the Company’s financial condition or reputation;

(v) the Employee’s failure to cooperate in any audit or investigation of the business or financial practices of the Company or any of its subsidiaries;

(vi) the Employee’s performance of any act of theft, embezzlement, fraud, material malfeasance, material dishonesty or misappropriation of the Company’s property;

(vii) breach of a material provision of this Agreement or a material provision of any other agreement with the Company, or a material violation of the Company’s code of conduct or a material violation of any material other written policy;

(viii) the Employee’s possession or use of illegal drugs;

(ix) the Employee’s legal use of alcohol or controlled substances in a manner that materially impairs the Employee’s ability to effectively perform his job; or

(x) the Employee’s commission of any act that is materially injurious to the Company’s financial condition of reputation.

The Company shall provide the Employee with a written notice detailing the specific circumstances alleged to constitute Cause within thirty (30) days after the Company becomes aware of such circumstances, and may actually terminate employment within ten (10) days following the expiration of the Employee’s fifteen (15)-day cure period described above.

(d) WITHOUT CAUSE. Immediately upon written notice by the Company to the Employee of an involuntary termination without Cause (other than for death or Disability).

(e) GOOD REASON. Upon written notice by the Employee to the Company of a termination for Good Reason. “ Good Reason ” shall mean the occurrence of any of the following events, without the express written consent of the Employee, unless such events are fully corrected in all material respects by the Company within thirty (30) days following written notification by the Employee to the Company of the occurrence of one of the reasons set forth below:

(i) material diminution in the Employee’s Base Salary or Target Bonus;

(ii) material diminution in the Employee’s duties, authorities or responsibilities (other than temporarily while physically or mentally incapacitated or as required by applicable law) provided, however, “Good Reason” shall not include the separation of the supervision of the Company’s legal function from the Employee’s authority and responsibilities; or

(iii) relocation of the Employee’s primary work location from (A) the Chicago, Illinois metropolitan area or (B) such other place as mutually agreed upon by the Employee and the CEO or the Board;

(iv) or a material breach of this Agreement by the Company after notice.

The Employee shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within thirty (30) days after the Employee becomes aware of such circumstances, and may actually terminate employment within thirty (30) days following the expiration of the Company’s thirty (30)-day cure period described above. Otherwise, any claim of such circumstances as “Good Reason” shall be deemed irrevocably waived by the Employee.

(f) WITHOUT GOOD REASON. Upon thirty (30) days’ prior written notice by the Employee to the Company of the Employee’s voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date).

(g) EXPIRATION OF EMPLOYMENT TERM; NON-EXTENSION OF AGREEMENT. Upon the expiration of the Employment Term due to a non-extension of the Agreement by the Company or the Employee pursuant to the provisions of Section 2 hereof.

7. CONSEQUENCES OF TERMINATION.

(a) DEATH. In the event that the Employee’s employment and the Employment Term ends on account of the Employee’s death, the Employee or the Employee’s estate, as the case may be, shall be entitled to the following (with the amounts due under Sections 7(a)(i)

through 7(a)(iv) hereof to be paid within sixty (60) days following termination of employment, or such earlier date as may be required by applicable law):

(i) any unpaid Base Salary through the date of termination;

(ii) any Annual Bonus earned but unpaid with respect to the fiscal year ending on or preceding the date of termination (for the avoidance of doubt, no Annual Bonus will be paid for any fiscal year during which the date of termination occurs);

(iii) reimbursement for any unreimbursed business expenses incurred through the date of termination;

(iv) any accrued but unused vacation time in accordance with Company policy; and

(v) all other payments, benefits or fringe benefits to which the Employee shall be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Agreement (collectively, Sections 7(a)(i) through 7(a)(v) hereof shall be hereafter referred to as the “ Accrued Benefits ”).

(b) DISABILITY. In the event that the Employee’s employment and/or Employment Term ends on account of the Employee’s Disability, the Company shall pay or provide the Employee with the Accrued Benefits.

(c) TERMINATION FOR CAUSE OR AS A RESULT OF NON-EXTENSION OF THIS AGREEMENT BY THE EMPLOYEE. If the Employee’s employment is terminated: (x) by the Company for Cause or (y) as a result of the non-extension of the Employment Term by the Employee as provided in Section 2 hereof, the Company shall pay to the Employee the Accrued Benefits other than, in the case of a termination for Cause, the benefit described in Section 7(a)(ii) hereof.

(d) TERMINATION WITHOUT CAUSE OR TERMINATION BY THE EMPLOYEE FOR GOOD REASON OR OTHERWISE. If the Employee’s employment is terminated: (x) by the Company other than for Cause, (y) by the Employee for Good Reason or (z) the non-extension of the Employment Term by the Company as provided in Section 2 hereof, the Company shall pay or provide the Employee with the following, subject to the provisions of Section 23 hereof:

(i) the Accrued Benefits;

(ii) subject to the Employee’s continued compliance with the obligations in Sections 8 , 9 and 10 hereof, an amount equal to the Employee’s monthly Base Salary rate (but not as an employee), paid monthly for a period of 12 months (or, if such termination occurs after a Change in Control, 18 months) following such termination (the “ Severance Period ”); provided that to the extent that the payment of any amount constitutes “nonqualified deferred compensation” for purposes of Code Section 409A (as defined in Section 23 hereof), any such payment scheduled to occur during the first six (6) months following the termination of employment shall not be paid until the first regularly scheduled pay period following the sixth

month following such termination and shall include payment of any amount that was otherwise scheduled to be paid prior thereto; and the Company shall reimburse the Employee for reasonable outplacement services (which shall not exceed $30,000 in the aggregate) incurred during the one-year period following the date of termination. Furthermore, if such termination occurs following a Change in Control (in addition to any accelerated vesting contained in the Initial Equity Grants or the LTI Award) the Employee shall also be entitled to:

(1) a prorated Target Bonus for the year of termination, based on the number of full months completed from the beginning of the fiscal year of termination through the date of termination, payable thirty (30) days following the termination of employment; and

(2) provided the Employee elects continued welfare coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), the Company shall pay, during the period the Employee actually continues such coverage, but in any event not to exceed 18 months, the same percentage of the monthly premium costs for COBRA continuation coverage as it pays of the monthly premium costs for medical coverage for senior executives generally; provided that the Company may pay this amount by paying the Employee a monthly amount equal on an after-tax basis to such amount (the “ Monthly Payments ”); and

Payments and benefits provided in this Section 7(d) shall be in lieu of any termination or severance payments or benefits for which the Employee may be eligible under any of the plans, policies or programs of the Company or under the Worker Adjustment Retraining Notification Act of 1988 or any similar state statute or regulation.

For purposes of this Agreement, “ Change in Control ” shall mean the occurrence of any of the following:

(iii)

The acquisition by any Person, within the meaning of Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than thirty-five percent (35%) of either (A) the value of then outstanding equity securities of the Company (the “ Outstanding Company Stock ”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “ Outstanding Company Voting Securities ”) (the foregoing Beneficial Ownership hereinafter being referred to as a “ Controlling Interest ”); provided, however, that for purposes of this clause (i), the following acquisitions shall not constitute or result in a Change in Control: (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary, or any business, corporation, partnership, limited liability company or other entity designated by the Board, in which the Company or a subsidiary holds a substantial ownership interest, directly or indirectly; or (z) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or

(iv)

During any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(v)

Consummation of (A) a reorganization, merger, statutory share exchange or consolidation or similar transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if equity securities of the Company are issued or issuable in connection with the transaction (each of the events referred to in this clause (A) being hereinafter referred to as a “Business Reorganization”), or (B) a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Subsidiaries (each an “Asset Sale”), in each case, unless, following such Business Reorganization or Asset Sale, (1) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Reorganization or Asset Sale beneficially own, directly or indirectly, more than fifty percent (50%) of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Reorganization or Asset Sale (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Entity”) in substantially the same proportions as their ownership, immediately prior to such Business Reorganization or Asset Sale, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be (excluding any outstanding equity or voting securities of the Continuing Entity that such Beneficial Owners hold immediately following the consummation of the Business Reorganization or Asset Sale as a result of their ownership, prior to such consummation, of equity or voting securities of any company or other entity involved in or forming part of such Business

Reorganization or Asset Sale other than the Company), (2) no Person (excluding any employee benefit plan (or related trust) of the Company or any Continuing Entity or any entity controlled by the Continuing Corporation or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of the value of the then outstanding equity securities of the Continuing Entity or the combined voting power of the then outstanding voting securities of the Continuing Entity except to the extent that such ownership existed prior to the Business Reorganization or Asset Sale and (3) at least a majority of the members of the Board of Directors or other governing body of the Continuing Entity were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Reorganization or Asset Sale.

(e) CODE SECTION 280G.

(i) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any payment, distribution, or other action by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of the Agreement or otherwise (each a “ Payment ”)), would result in an “excess parachute payment” within the meaning of Section 280G(b)(i) of the Code, then the Payments shall be reduced to the “ Reduced Amount; ” provided, however, that no such reduction shall be made unless the net after-tax benefit received by the Employee after such reduction would exceed the net after-tax benefit received by the Employee if no such reduction was made The “ Reduced Amount ” shall be an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be an excess parachute payment under Section 280G(b)(i) of the Code. For purposes of this Section 7(e), present value shall be determined in accordance with Section 280G(d)(4) of the Code. If applicable, Payments shall be reduced in the following order: (A) any cash severance based on a multiple of Base Salary or Annual Bonus; (B) any other cash amounts payable to the Employee; (C) benefits valued as parachute payments; and (D) acceleration of vesting of any equity awards. If and to the extent necessary to avoid a violation of Section 409A, no amounts payable under any “nonqualified deferred compensation plan” subject to Section 409A shall be reduced until after all other Payments have been reduced.

(ii) All determinations required to be made under this Section 7(e), including the amount of any Reduced Amount and the Payments that are to be reduced pursuant to Section 7(e)(i) and shall be made by the Company’s accountants serving immediately prior to the date of the applicable Change in Control (the “ Accounting Firm ”), which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the receipt of notice from the Employee that there has been a Payment, or such earlier time as is requested by the Company. The Accounting Firm’s decision as to which Payments are to be reduced shall be made in consultation with the Employee and shall be subject to the Employee’s consent, which shall not be unreasonably withheld.

(f) OTHER OBLIGATIONS. Upon any termination of the Employee’s employment with the Company, the Employee shall promptly resign from any position as an officer, director or fiduciary of any Company-related entity.

(g) EXCLUSIVE REMEDY. The amounts payable to the Employee following termination of employment and the Employment Term hereunder pursuant to Sections 6 and 7 hereof shall be in full and complete satisfaction of the Employee’s rights under this Agreement and any other claims that the Employee may have in respect of the Employee’s employment with the Company or any of its affiliates, and the Employee acknowledges that such amounts are fair and reasonable, and are the Employee’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of the Employee’s employment hereunder or any breach of this Agreement.

8. RELEASE. Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement beyond the Accrued Benefits shall only be payable if the Employee delivers to the Company and does not revoke a general release of claims in favor of the Company in substantially the form attached on Exhibit C hereto. Such release shall be executed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following termination.

9. RESTRICTIVE COVENANTS.

(a) CONFIDENTIALITY . During the course of the Employee’s employment with the Company, the Employee will have access to Confidential Information. For purposes of this Agreement, “ Confidential Information ” means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company or any of its affiliates, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, partners and/or competitors. The Employee agrees that the Employee shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Employee’s assigned duties and for the benefit of the Company, either during the period of the Employee’s employment or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company’s and its subsidiaries’ and affiliates’ part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by the Employee during the Employee’s employment by the Company (or any predecessor). The foregoing shall not apply to information that: (i) was known to the public prior to its disclosure to the Employee; (ii) becomes generally known to the public subsequent to disclosure to the Employee through no wrongful act of the Employee or any representative of the Employee; or (iii) the Employee is required to disclose by applicable law, regulation or legal process (provided that the Employee provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

(b) NONCOMPETITION. The Employee acknowledges that: (i) the Employee performs services of a unique nature for the Company that are irreplaceable, and that the Employee’s performance of such services to a competing business will result in irreparable harm to the Company; (ii) the Employee has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company or any of its affiliates; (iii) in the course of the Employee’s employment by a competitor, the Employee would inevitably use or disclose such Confidential Information; (iv) the Company and its affiliates have substantial relationships with their customers and the Employee has had and will continue to have access to these customers; (v) the Employee has received and will receive specialized training from the Company and its affiliates; and (vi) the Employee has generated and will continue to generate goodwill for the Company and its affiliates in the course of the Employee’s employment. Accordingly, during the Employee’s employment hereunder and for a period of 12 months thereafter, the Employee agrees that the Employee will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in competition with the Company or any of its subsidiaries or affiliates in any

material business in which the Company or any of its subsidiaries or affiliates is engaged on the date of termination or in which they have planned (that has been approved by the Board of Directors), on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Company conducts business. Notwithstanding the foregoing, nothing herein shall prohibit the Employee from being a passive owner of not more than one percent (1%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company or any of its subsidiaries or affiliates, so long as the Employee has no active participation in the business of such corporation. In addition, the provisions of this Section 9(b) shall not be violated by the Employee commencing employment with a subsidiary, division or unit of any entity that engages in a business in competition with the Company or any of its subsidiaries or affiliates so long as the Employee and such subsidiary, division or unit with which he is employed does not engage in a business in competition with the Company or any of its subsidiaries or affiliates.

(c) NONSOLICITATION; NONINTERFERENCE. (i) During the Employee’s employment with the Company and for a period of 12 months thereafter, the Employee agrees that the Employee shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any customer of the Company or any of its subsidiaries or affiliates to purchase goods or services then sold by the Company or any of its subsidiaries or affiliates from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer.

(ii) During the Employee’s employment with the Company and for a period of 12 months thereafter, the Employee agrees that the Employee shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity: (A) solicit, aid or induce any employee, representative or agent of the Company or any of its subsidiaries or affiliates to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or knowingly hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company or any of its subsidiaries or affiliates and any of their respective vendors, joint venturers or licensors. An employee, representative or agent shall be deemed covered by this Section 9(c)(ii) while so employed or retained and for a period of six (6) months thereafter.

(d) INVENTIONS. (i) The Employee acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, works of authorship and other work product, whether patentable or unpatentable: (A) that are reduced to practice, created, invented, designed, developed, contributed to, or improved with the use of any Company resources and/or within the scope of the Employee’s work with the Company or that relate to the business, operations or actual or demonstrably anticipated research or development of the Company, and that are made or conceived by the Employee, solely or jointly with others, during the Employment Term, or (B) suggested by any work that the Employee performs in connection with the Company, either

while performing the Employee’s duties with the Company or on the Employee’s own time, shall belong exclusively to the Company (or its designee), whether or not patent or other applications for intellectual property protection are filed thereon (the “ Inventions ”). The Employee will keep full and complete written records (the “ Records ”), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and the Employee will surrender them upon the termination of the Employment Term, or upon the Company’s request. The Employee irrevocably conveys, transfers and assigns to the Company the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to the Employment Term, together with the right to file, in the Employee’s name or in the name of the Company (or its designee), applications for patents and equivalent rights (the “ Applications ”). The Employee will, at any time during and subsequent to the Employment Term, make such applications, sign such papers, take all rightful oaths, and perform all other acts as may be requested from time to time by the Company to perfect, record, enforce, protect, patent or register the Company’s rights in the Inventions, all without additional compensation to the Employee from the Company. The Employee will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys all reasonable assistance (including the giving of testimony) to obtain the Inventions for the Company’s benefit, all without additional compensation to the Employee from the Company, but entirely at the Company’s expense.

(ii) In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company and the Employee agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to the Employee. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Company, the Employee hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of the Employee’s right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Employee hereby waives any so-called “moral rights” with respect to the Inventions. To the extent that the Employee has any rights in the results and proceeds of the Employee’s service to the Company that cannot be assigned in the manner described herein, the Employee agrees to unconditionally waive the enforcement of such rights. The Employee hereby waives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to the Employee’s benefit by virtue of the Employee being an employee of or other service provider to the Company.

(iii) The parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

(iv) 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

(e) RETURN OF COMPANY PROPERTY. On the date of the Employee’s termination of employment with the Company for any reason (or at any time prior thereto at the Company’s request), the Employee shall return all property belonging to the Company or its affiliates (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company). The Employee may retain the Employee’s rolodex and similar address books provided that such items only include contact information.

(f) REASONABLENESS OF COVENANTS. In signing this Agreement, the Employee gives the Company assurance that the Employee has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed under this Section 9 hereof. The Employee agrees that these restraints are necessary for the reasonable and proper protection of the Company and its affiliates and their Confidential Information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent the Employee from obtaining other suitable employment during the period in which the Employee is bound by the restraints. The Employee acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and its affiliates and that the Employee has sufficient assets and skills to provide a livelihood while such covenants remain in force. The Employee further covenants that the Employee will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 9 , and that the Employee will reimburse the Company and its affiliates for all costs (including reasonable attorneys’ fees) incurred in connection with any action to enforce any of the provisions of this Section 9 if either the Company and/or its affiliates prevails on any material issue involved in such dispute or if the Employee challenges the reasonableness or enforceability of any of the provisions of this Section 9 . It is also agreed that each of the Company’s affiliates will have the right to enforce all of the Employee’s obligations to that affiliate under this Agreement, including without limitation pursuant to this Section 9 .

(g) REFORMATION. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 9 is excessive in duration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state.

(h) TOLLING. In the event of any violation of the provisions of this Section 9 , the Employee acknowledges and agrees that the post-termination restrictions contained in this Section 9 shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

(i) SURVIVAL OF PROVISIONS. The obligations contained in Sections 9 and 10 hereof shall survive the termination or expiration of the Employment Term and the Employee’s employment with the Company and shall be fully enforceable thereafter.

10. COOPERATION. Upon the receipt of reasonable notice from the Company (including outside counsel), the Employee agrees that while employed by the Company and thereafter, the Employee will respond and provide information with regard to matters in which the Employee has knowledge as a result of the Employee’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will provide reasonable assistance to the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Employee’s employment with the Company (collectively, the “ Claims ”). The Employee agrees to promptly inform the Company if the Employee becomes aware of any lawsuits involving Claims that may be filed or threatened against the Company or its affiliates. The Employee also agrees to promptly inform the Company (to the extent that the Employee is legally permitted to do so) if the Employee is asked to assist in any investigation of the Company or its affiliates (or their actions) or another party attempts to obtain information or documents from the Employee (other than in connection with any litigation or other proceeding in which the Employee is a party-in-opposition) with respect to matters the Employee believes in good faith to relate to any investigation of the Company or its affiliates, in each case, regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. During the pendency of any litigation or other proceeding involving Claims, the Employee shall not communicate with anyone (other than the Employee’s attorneys and tax and/or financial advisors and except to the extent that the Employee determines in good faith is necessary in connection with the performance of the Employee’s duties hereunder) with respect to the facts or subject matter of any pending or potential litigation or regulatory or administrative proceeding involving the Company or any of its affiliates without giving prior written notice to the Company or the Company’s counsel. Upon presentation of appropriate documentation, the Company shall pay or reimburse the Employee for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by the Employee in complying with this Section 10 .

11. WHISTLEBLOWER PROTECTION. Notwithstanding anything to the contrary contained herein, no provision of this Agreement shall be interpreted so as to impede

the Employee (or any other individual) from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures under the whistleblower provisions of federal law or regulation. The Employee does not need the prior authorization of the Company to make any such reports or disclosures and the Employee shall not be not required to notify the Company that such reports or disclosures have been made.

12. EQUITABLE RELIEF AND OTHER REMEDIES. The Employee acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 9 or Section 10 hereof may be inadequate and, in recognition of this fact, the Employee agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond or other security, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages. In the event of a violation by the Employee of Section 9 or Section 10 hereof, any severance being paid to the Employee pursuant to this Agreement or otherwise shall immediately cease, and any severance previously paid to the Employee shall be immediately repaid to the Company.

13. NO ASSIGNMENTS. This Agreement is personal to each of the parties hereto. Except as provided in this Section 13 hereof, no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto. The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “ Company ” shall mean the Company and any successor to its business and/or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.

14. NOTICE . For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given: (a) on the date of delivery, if delivered by hand, or (b) on the first business day following the date of deposit, if delivered by guaranteed overnight delivery service, addressed as follows:

If to the Employee:

At the address (or to the facsimile number) shown in the books and records of the Company.

If to the Company:

RTI Surgical, Inc.

11621 Research Circle

Alachua, Florida 32615

Attention: Chief Executive Officer

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

15. SECTION HEADINGS; INCONSISTENCY . The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. In the event of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the Company, the terms of this Agreement shall govern and control.

16. SEVERABILITY . The provisions of this Agreement shall be deemed severable. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by applicable law.

17. COUNTERPARTS . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

18. INDEMNIFICATION. The Company hereby agrees to indemnify the Employee and hold the Employee harmless to the maximum extent permitted by law against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’s fees), losses, and damages resulting from the Employee’s good faith performance of the Employee’s duties and obligations with the Company. This obligation shall survive the termination of the Employee’s employment with the Company.

19. LIABILITY INSURANCE. The Company shall cover the Employee under directors’ and officers’ liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and directors.

20. GOVERNING LAW; JURY WAIVER . This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by

and construed in accordance with the laws of the State of Florida (without regard to its choice of law provisions). Each of the parties agrees that any dispute between the parties shall be resolved only in the federal courts of the United States of America or the courts of the State of Illinois in each case located in the city of Gainesville and the county of Alachua, and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties hereto irrevocably and unconditionally waives all right to trial by jury in any proceeding (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the Employee’s employment by the Company or any affiliate of the Company, or the Employee’s or the Company’s performance under, or the enforcement of, this Agreement. The parties acknowledge and agree that in connection with any dispute arising hereunder, unless otherwise provided in this Agreement, each party shall pay all of its own costs and expenses, including, without limitation, its own legal fees and expenses.

21. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer or director as may be designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement together with all exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes any and all prior agreements or understandings between the Employee and the Company with respect to the subject matter hereof. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

22. REPRESENTATIONS. The Employee represents and warrants to the Company that: (a) the Employee has the legal right to enter into this Agreement and to perform all of the obligations on the Employee’s part to be performed hereunder in accordance with its terms, and (b) the Employee is not a party to any agreement or understanding, written or oral, and is not subject to any restriction, which, in either case, could prevent the Employee from entering into this Agreement or performing all of the Employee’s duties and obligations hereunder.

23. TAX MATTERS.

(a) WITHHOLDING . The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

(b) SECTION 409A COMPLIANCE.

(i) The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “ Code Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible,

maintain the original intent and economic benefit to the Employee and the Company of the applicable provision without violating the provisions of Code Section 409A. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Employee by Code Section 409A or damages for failing to comply with Code Section 409A.

(ii) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of: (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, and (B) the date of the Employee’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 23(b)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum , and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(iii) To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A: (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee; (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(iv) For purposes of Code Section 409A, the Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

(v) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

24. REIMBURSEMENT OF LEGAL EXPENSES . Within 60 days of the date of this Agreement, the Company will pay to the Employee up to $25,000 to cover his legal expenses in connection with the review and negotiation of this Agreement, so long as he provides sufficiently detailed backup for such expenses.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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


COMPANY

By:		/s/ Paul Montague
Name:		Paul Montague
Title:		Vice President of Human Resources

EMPLOYEE

/s/ Jonathon M. Singer
Jonathon M. Singer

EXHIBIT A

RTI SURGICAL, INC.

RESTRICTED STOCK AGREEMENT

FOR

JONATHON M. SINGER

1. Award of Restricted Stock . RTI SURGICAL, INC., a Delaware corporation (the “ Company ”) hereby grants, as of September 18, 2017 (the “ Date of Grant ”), to Jonathon M. Singer (the “ Recipient ”), a number of restricted shares of the Company’s common stock (rounded to the nearest whole number) equal to (x) $500,000 divided by (y) the closing price per share of the Company’s common stock on the Nasdaq Stock Market on the Date of Grant, as set forth on Schedule 1 attached to this Agreement (collectively the “ Restricted Stock ”). The Restricted Stock shall be subject to the terms, provisions and restrictions set forth in this Agreement and the RTI Surgical, Inc. 2015 Incentive Compensation Plan, as may be amended from time to time (the “ Plan ”), which is incorporated herein for all purposes. As a condition to entering into this Agreement, and as a condition to the issuance of any Shares (or any other securities of the Company), the Recipient agrees to be bound by all of the terms and conditions herein and in the Plan. Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributable thereto in the Plan.

2. Vesting of Restricted Stock.

(a) General Vesting. The shares of Restricted Stock shall become vested in the following amounts, at the following times and upon the following conditions, provided that, except as otherwise provided in the Employment Agreement between the Company and the Recipient, dated September 15, 2017, as thereafter amended from time to time (the “ Employment Agreement ”), the Continuous Service of the Recipient continues through and on the applicable Vesting Date:


Number of Shares of Restricted Stock		Vesting Date
0		Prior to the first anniversary of the Grant Date.

1/3 of the Restricted Stock		First anniversary of the Grant Date.

1/3 of the Restricted Stock		Second anniversary of the Grant Date.

1/3 of the Restricted Stock		Third anniversary of the Grant Date.

Except as otherwise provided in Sections 2(b), 2(c) and 4 hereof or the terms of the Employment Agreement, there shall be no proportionate or partial vesting of shares of Restricted Stock in or during the months, days or periods prior to each Vesting Date, and all vesting of shares of Restricted Stock shall occur only on the applicable Vesting Date.

(b) Acceleration of Vesting Upon Change in Control. In the event that a Change in Control of the Company occurs during the Recipient’s Continuous Service, the shares of Restricted Stock subject to this Agreement shall become immediately vested as of the date of the Change in Control. Notwithstanding the foregoing, if in the event of a Change in Control the successor company assumes or substitutes another award for this Restricted Stock award, then the vesting of the Restricted Stock shall not be accelerated as described in this paragraph (b). For purposes of this paragraph, the Restricted Stock shall be considered assumed or substituted for if following the Change in Control the award confers the right to receive, for each Share subject to the Restricted Stock award immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable to the Restricted Stock immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the vesting of the Restricted Stock shall be solely common stock of the successor company or its parent or subsidiary substantially equal in the fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

(c) Acceleration of Vesting at Company Discretion. Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Recipient and of the Company, to accelerate the vesting of any shares of Restricted Stock under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.

(d) Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated:

(i) “ Committee ” means the Compensation Committee of the Board of Directors of the Company.

(ii) “ Non-Vested Shares ” means any portion of the Restricted Stock subject to this Agreement that has not become vested pursuant to this Section 2.

(iii) “ Vested Shares ” means any portion of the Restricted Stock subject to this Agreement that is and has become vested pursuant to this Section 2.

3. Delivery of Restricted Stock .

(a) Issuance of Stock Certificates and Legends. One or more stock certificates evidencing the Restricted Stock shall be issued in the name of the Recipient but shall be held and retained by the Records Administrator of the Company until the date (the “ Applicable Date ”) on which the shares (or a portion thereof) subject to this Restricted Stock award become Vested Shares pursuant to Section 2 hereof, subject to the provisions of Section 4 hereof. All such stock certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.

(b) Stock Powers. The Recipient shall deposit with the Company stock powers or other instruments of transfer or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each certificate representing shares of Restricted Stock until such shares become Vested Shares, on a form attached hereto as Exhibit B . If the Recipient shall fail to provide the Company with any such stock power or other instrument of transfer or assignment, the Recipient hereby irrevocably appoints the Secretary of the Company as his attorney-in-fact, with full power of appointment and substitution, to execute and deliver any such power or other instrument which may be necessary to effectuate the transfer of the Restricted Stock (or assignment of distributions thereon) on the books and records of the Company. In addition, the Company may require the spouse of the Recipient, if any, to execute and deliver to the Company the Consent of Spouse in the form attached hereto as Exhibit C .

(c) Delivery of Stock Certificates. On or after each Applicable Date, upon written request to the Company by the Recipient, the Company shall promptly cause a new certificate or certificates to be issued for and with respect to all shares that become Vested Shares on that Applicable Date, which certificate(s) shall be delivered to the Recipient as soon as administratively practicable after the date of receipt by the Company of the Recipient’s written request. The new certificate or certificates shall continue to bear those legends and endorsements that the Company shall deem necessary or appropriate (including those relating to restrictions on transferability and/or obligations and restrictions under the Securities Laws).

Vested Shares, and that do not become Vested Shares pursuant to Section 2 hereof as a result of such termination, shall be forfeited immediately upon such termination of Continuous Service and revert back to the Company without any payment to the Recipient. If the Recipient breaches any of the Restrictive Covenants as defined in Section 5 hereof, all Non-Vested Shares (and upon written demand by the Company, in its sole and absolute discretion, any Vested Shares) shall be forfeited immediately upon such breach and revert or be transferred by the Recipient back to the Company without any payment to the Recipient.

The Committee shall have the power and authority to enforce on behalf of the Company any rights of the Company under this Agreement in the event of the Recipient’s forfeiture of Non-Vested Shares pursuant to this Section 4.

5. Rights with Respect to Restricted Stock.

(a) General. Except as otherwise provided in this Agreement, the Recipient shall have, with respect to all of the shares of Restricted Stock, whether Vested Shares or Non-Vested Shares, all of the rights of a holder of shares of common stock of the Company, including without limitation (i) the right to vote such Restricted Stock, (ii) the right to receive dividends, if any, as may be declared on the Restricted Stock from time to time, and (iii) the rights available to all holders of shares of common stock of the Company upon any merger, consolidation, reorganization, liquidation or dissolution, stock split-up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to the Recipient as a dividend with respect to shares of Restricted Stock shall have the same status and bear the same legend as the shares of Restricted Stock and shall be held by the Company, if the shares of Restricted Stock that such dividend is attributed to is being so held, unless otherwise determined by the Committee. In addition, notwithstanding any provision to the contrary herein, any cash dividends declared with respect to shares of Restricted Stock subject to this Agreement shall be held in escrow by the Committee until such time as the shares of Restricted Stock that such cash dividends are attributed to shall become Vested Shares, and in the event that such shares of Restricted Stock are subsequently forfeited, the cash dividends attributable to such portion shall be forfeited as well.

(b) Adjustments to Shares. If at any time while this Agreement is in effect (or Shares granted hereunder shall be or remain unvested while Recipient’s Continuous Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of shares of Restricted Stock then subject to this Agreement. If any such adjustment shall result in a fractional Share, such fraction shall be disregarded.

of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Restricted Stock and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Restricted Stock includes, has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

6. Transferability . Unless otherwise determined by the Committee, the shares of Restricted Stock are not transferable unless and until they become Vested Shares in accordance with this Agreement, otherwise than by will or under the applicable laws of descent and distribution. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Recipient. Except as otherwise permitted pursuant to the first sentence of this Section, any attempt to effect a Transfer of any shares of Restricted Stock prior to the date on which the shares become Vested Shares shall be void ab initio . For purposes of this Agreement, “ Transfer ” shall mean any sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation, or other disposition, whether similar or dissimilar to those previously enumerated, whether voluntary or involuntary, and including, but not limited to, any disposition by operation of law, by court order, by judicial process, or by foreclosure, levy or attachment.

7. Tax Matters; Section 83(b) Election.

(a) Section 83(b) Election. If the Recipient properly elects, within thirty (30) days of the Date of Grant, to include in gross income for federal income tax purposes an amount equal to the fair market value (as of the Date of Grant) of the Restricted Stock pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “ Code ”), a form of which is attached hereto as Exhibit A , the Recipient shall make arrangements satisfactory to the Company to pay to the Company any federal, state or local income taxes required to be withheld with respect to the Restricted Stock. If the Recipient shall fail to make such tax payments as are required, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to the Recipient under this Agreement) otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock.

(b) No Section 83(b) Election. If the Recipient does not properly make the election described in paragraph 7(a) above, the Recipient shall, no later than the date or dates as of which the restrictions referred to in this Agreement hereof shall lapse, pay to the Company, or make arrangements satisfactory to the Committee for payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock (including without limitation the vesting thereof), and the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be distributed to the Recipient under this Agreement) otherwise due to Recipient any federal, state, or local taxes of any kind required by law to be withheld with respect to the Restricted Stock.

(c) Recipient’s Responsibilities for Tax Consequences . Tax consequences on the Recipient (including without limitation federal, state, local and foreign income tax consequences) with respect to the Restricted Stock (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Recipient. The Recipient shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters, the making of a Section 83(b) election, and the Recipient’s filing, withholding and payment (or tax liability) obligations.

8. Clawback.

(a) The Company may: (x) cause the cancellation of the Restricted Stock; (y) require reimbursement with respect to the Restricted Stock; and (z) effect any other right of recoupment of equity or other compensation provided under this Agreement or otherwise in accordance with any Company policies generally applicable to the Company’s officers and/or directors that currently exist or that may from time to time be adopted or modified in the future by the Company to the extent required to comply with applicable law (each, a “ Clawback Policy ”), provided that the following conditions are satisfied: (1) there is an accounting restatement of the Company’s financial statements or results; and (2) the restatement results from a noncompliance by the Company with any requirements under or related to the federal securities laws that is material, injurious to the Company or was the result of actions with bad intent. In such an event, the claw back will be in an amount of up to the total economic gain from any stock-based grants within the five-year period preceding the restatement. By accepting the Restricted Stock, the Recipient agrees to be bound to any existing or future Clawback Policy adopted by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company, as required to comply with applicable laws or stock exchange requirements, and is further agreeing that all of the Recipient’s equity awards may be unilaterally amended by the Company, without the Recipient’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy to the extent required to comply with applicable laws or stock exchange requirements.

(b) If the Recipient, without the consent of the Company, while employed by or providing services to the Company or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise violates the Company’s Corporate Governance Guidelines, Code of Conduct and Ethics, Code of Ethics for the Chief Executive Officer and Senior Financial Officer or any other corporate governance materials specified by the SEC or exchange on which common stock of the Company is listed, then, if such violation is material and injurious to the Company, or was the result of actions with bad intent: (i) any outstanding, vested or unvested, earned or unearned portion of the Restricted Stock may, at the Committee’s discretion, be canceled and (ii) the Committee, in its discretion, may require the Recipient or other person to whom any payment has been made or shares or other property have been transferred in connection with the Restricted Stock to forfeit and pay over to the Company, on demand, all or any portion of the gain (whether or not taxable) realized upon the sale of any Restricted Stock.

9. Amendment, Modification & Assignment; Non-Transferability . This Agreement may only be modified or amended in a writing signed by the parties hereto. No promises, assurances,

commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, with respect to the subject matter hereof, have been made by either party which are not set forth expressly in this Agreement. Unless otherwise consented to in writing by the Company, in its sole discretion, this Agreement (and Recipient’s rights hereunder) may not be assigned, and the obligations of Recipient hereunder may not be delegated, in whole or in part. The rights and obligations created hereunder shall be binding on the Recipient and his heirs and legal representatives and on the successors and assigns of the Company.

10. Complete Agreement . This Agreement (together with those agreements and documents expressly referred to herein, for the purposes referred to herein) embody the complete and entire agreement and understanding between the parties with respect to the subject matter hereof, and supersede any and all prior promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, which may relate to the subject matter hereof in any way.

11. Miscellaneous.

(a) No Right to (Continued) Employment or Service. This Agreement and the grant of Restricted Stock hereunder shall not confer, or be construed to confer, upon the Recipient any right to employment or service, or continued employment or service, with the Company or any Related Entity.

(b) No Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall preclude the Company or any Related Entity from adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any such plans, agreements and arrangements may be either generally applicable or applicable only in specific cases or to specific persons.

(c) Severability. If any term or provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or under any applicable law, rule or regulation, then such provision shall be construed or deemed amended to conform to applicable law (or if such provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement and the grant of Restricted Stock hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the award hereunder shall remain in full force and effect).

(d) No Trust or Fund Created. Neither this Agreement nor the grant of Restricted Stock hereunder shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Related Entity and the Recipient or any other person. To the extent that the Recipient or any other person acquires a right to receive payments from the Company or any Related Entity pursuant to this Agreement, such right shall be no greater than the right of any unsecured general creditor of the Company.

(e) Law Governing. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware (without reference to the conflict of laws rules or principles thereof).

(f) Interpretation . The Recipient accepts the Restricted Stock subject to all of the terms, provisions and restrictions of this Agreement and the Plan. The undersigned Recipient hereby accepts as binding, conclusive and final all decisions or interpretations of the Board or the Committee upon any questions arising under this Agreement or the Plan.

(g) Headings. Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

(h) Notices. Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 11621 Research Circle Alachua, Florida 32615, or if the Company should move its principal office, to such principal office, and, in the case of the Recipient, to the Recipient’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

(i) Non-Waiver of Breach. The waiver by any party hereto of the other party’s prompt and complete performance, or breach or violation, of any term or provision of this Agreement shall be effected solely in a writing signed by such party, and shall not operate nor be construed as a waiver of any subsequent breach or violation, and the waiver by any party hereto to exercise any right or remedy which he or it may possess shall not operate nor be construed as the waiver of such right or remedy by such party, or as a bar to the exercise of such right or remedy by such party, upon the occurrence of any subsequent breach or violation.

(j) Counterparts. This Agreement may be executed in two or more separate counterparts, each of which shall be an original, and all of which together shall constitute one and the same agreement.

[ Signature page follows ]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 18 day of September, 2017.


COMPANY:

RTI SURGICAL, INC.

By:	/s/ Paul Montague
	Name:	Paul Montague
	Title:	Vice President of Human Resources


Agreed and Accepted:

RECIPIENT:

By:		/s/ Jonathon M. Singer
		Jonathon M. Singer

EXHIBIT A

ELECTION UNDER SECTION 83(b)

OF THE U.S. INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with his or her receipt of the property described below:

1.	The name, address, taxpayer identification number and taxable year of the undersigned are as follows:


		Name:
		Spouse:
		Taxpayer I.D. No.:
		Address:

		Tax Year:

2. The property with respect to which the election is made is described as follows: ( ) shares of the common stock (“Common Shares”) of RTI Surgical, Inc. (the “Company”).

3. The date on which the property was transferred is , 20 .

4. The property is subject to the following restrictions:

The Common Shares are required to be returned to the Company in the event that the undersigned ceases to perform services for the Company through certain dates specified in the Restricted Stock Agreement between me and the Company dated as of , 20 . This right lapses with regard to a portion of the Common Shares based on my Continuous Service as an Employee, Consultant or Director over time.

5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $ .

6. The amount (if any) paid for such property is: [ZERO] .

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property. The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.


Dated: , 20
				Signature of Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated: , 20
				Spouse of Taxpayer

EXHIBIT B

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, , hereby sell, assign and transfer unto ( ) shares of common stock of RTI Surgical, Inc. standing in my name of the books of said corporation represented by Certificate No. herewith and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted Stock Agreement between RTI Surgical, Inc. and the undersigned dated , .

Dated: ,


Signature:

Print Name: Jonathon M. Singer

INSTRUCTIONS:

Please DO NOT fill in any blanks other than the signature lines .

The purpose of this assignment is to enable the Company to receive the return of the shares of common stock as set forth in the Restricted Stock Agreement, without requiring additional signatures on the part of the Recipient.

EXHIBIT C

CONSENT OF SPOUSE

I, , spouse of Jonathon M. Singer, have read and approve the foregoing Restricted Stock Agreement (the “ Agreement ”). In consideration of the Company’s grant to my spouse of the shares of common stock of RTI Surgical, Inc. as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of common stock issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state or country of our residence as of the date of the signing of the foregoing Agreement.

Dated: , 2017



Signature of Spouse

Print Name:

SCHEDULE 1

RESTRICTED STOCK


Closing Price Per Share	Shares of Restricted Stock
$[ ]		[	]

Initials:

RTI SURGICAL INC.:

RECIPIENT:

EXHIBIT B

RTI SURGICAL, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

FOR

JONATHON M. SINGER

1. Grant of Option. RTI SURGICAL, INC., a Delaware corporation (the “ Company ”) hereby grants, as of September 18, 2017 (“ Date of Grant ”), to Jonathon M. Singer (the “ Optionee ”) an option (the “ Option ”) to purchase up to 306,900 shares of the Company’s common stock (the “ Shares ”), at an exercise price per share equal to the closing price of the Company’s common stock on the Nasdaq Stock Market on the Date of Grant, as set forth on Schedule 1 attached to this Agreement (the “ Exercise Price ”). The Option shall be subject to the terms and conditions set forth herein. The Option is being granted pursuant to the RTI Surgical, Inc. 2015 Incentive Compensation Plan, as may be amended from time to time (the “ Plan ”), which is incorporated herein for all purposes. The Option is a Non-Qualified Stock Option and not an Incentive Stock Option. The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations.

2. Definitions . Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributed thereto in the Plan.

3. Exercise Schedule . Except as otherwise provided in Sections 6 or 9 of this Agreement, in the Plan or in the Employment Agreement between the Company and the Optionee, dated September 15, 2017, as thereafter amended from time to time (the “ Employment Agreement ”), the Option is exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become exercisable with respect to a number of Shares as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. The following table indicates each date (the “ Vesting Date ”) upon which the Optionee shall be entitled to exercise the Option with respect to the number of Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee continues through and on the applicable Vesting Date:


Number of Shares		Vesting Date
0		Any date prior to the first anniversary of the Grant Date.

102,300		The first day following any 60 Day Period (as defined below) during the Exercise Period on which the Average Stock Price per share is equal to or greater than $7.00 (to be adjusted for any stock splits during the Exercise Period).



102,300		The first day following any 60 Day Period during the Exercise Period on which the Average Stock Price per share is equal to or greater than $8.00 (to be adjusted for any stock splits during the Exercise Period).

102,300		The first day following any 60 Day Period during the Exercise Period on which the Average Stock Price per share is equal to or greater than $9.00 (to be adjusted for any stock splits during the Exercise Period).

By way of example, if the Company’s stock price per share is at $5.00 throughout all of calendar year 2018, but then increases to $9.50 on January 2, 2019 and is at or above that same price for 60 days and such 60 ^th day is March 3, 2019, all 225,000 shares of common stock subject to the Option shall vest on March 4, 2019.

For purposes of this Section 3: (I) “60 Day Period” means any period of 60 consecutive calendar days on which the Company’s common stock trades on the Nasdaq Stock Market and (II) “Average Stock Price” is calculated by averaging the closing price of the Company’s common stock for each trading day that occurs during the 60 Day Period (for calendar days during the 60 Day Period that are not trading days, the closing price on such days shall be deemed to be the closing price on the most recent previous trading day) (e.g., the closing price on a Saturday will be deemed to equal the closing price on Friday, the day before).

Except as otherwise specifically provided herein or in the Employment Agreement, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Upon the termination of the Optionee’s Continuous Service, any unvested portion of the Option shall terminate and be null and void.

4. Method of Exercise . The vested portion of this Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory to the Compensation Committee of the Board of Directors of the Company (the “ Committee ”) in its sole discretion have been made for Optionee’s payment to the Company of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding requirements. No Shares shall be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements of any stock exchange upon which the Shares then may be traded.

5. Method of Payment . Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; or (c) to the extent permitted by the Committee, with Shares owned by the Optionee, or the withholding of Shares that otherwise would be delivered to the Optionee as a result of the exercise of the Option; or (d) such other consideration or in such other manner as may be determined by the Committee in its absolute discretion.

6. Termination of Option .

(a) General . Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:

(i) three months after the date on which the Optionee’s Continuous Service is terminated other than by reason of (A) by the Company or a Related Entity for Cause (as defined in the Employment Agreement ), (B) a Disability of the Optionee as determined by a medical doctor satisfactory to the Committee, (C) the death of the Optionee, (D) Optionee’s Retirement (as defined below) or (E) by the Optionee without Good Reason before October 2, 2020 (as defined in the Employment Agreement);

(ii) immediately upon the termination of the Optionee’s Continuous Service (A) by the Company or a Related Entity for Cause or (B) by the Optionee without Good Reason before October 2, 2020;

(iii) twelve months after the date on which the Optionee’s Continuous Service is terminated by the Optionee on account of his or her Retirement (as defined below);

(iv) twelve months after the date on which the Optionee’s Continuous Service is terminated by reason of a Disability as determined by a medical doctor satisfactory to the Committee;

(v) twelve months after the date of termination of the Optionee’s Continuous Service by reason of the death of the Optionee;

(vi) the tenth (10 ^th ) anniversary of the date as of which the Option is granted.

For purposes of this Agreement, “Retirement” shall mean the date on which the Optionee voluntarily terminates his or her Continuous Service with the Company and its Related Entities on or after both (A) attaining age sixty (60) and (B) completing at least five (5) years of Continuous Service with the Company and its Related Entities.

that constitutes a Change in Control, the Option (or portion thereof) that remains unexercised on such date. The Committee shall give written notice of any proposed transaction referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).

7. Transferability . Unless otherwise determined by the Committee, the Option granted hereby is not transferable otherwise than by will or under the applicable laws of descent and distribution, and during the lifetime of the Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s guardian or legal representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately become null and void. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

8. No Rights of Stockholders . Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any Shares purchasable or issuable upon the exercise of the Option, in whole or in part, prior to the date on which the Shares are issued.

9. Acceleration of Exercisability of Option .

(a) Acceleration Upon Certain Terminations or Cancellations of Option . This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, (i) the Option is terminated pursuant to Section 6(b)(i) hereof, or (ii) the Company exercises its discretion to provide a cancellation notice with respect to the Option pursuant to Section 6(b)(ii) hereof.

(b) Acceleration Upon Change in Control. This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, and during the Optionee’s Continuous Service, there is a “Change in Control”, as defined in Section 9(b) of the Plan.

property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company, or its parent or subsidiary, provide that the consideration to be received upon the exercise or vesting of the Option will be solely common stock of the successor company or its parent or subsidiary substantially equal in Fair Market Value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

10. Clawback.

(a) The Company may: (x) cause the cancellation of the Option, (y) require reimbursement with respect to the Option, and (z) effect any other right of recoupment of equity or other compensation provided under this Agreement or otherwise in accordance with any Company policies generally applicable to the Company’s officers and/or directors that currently exist or that may from time to time be adopted or modified in the future by the Company to the extent required to comply with applicable law (each, a “ Clawback Policy ”), provided that the following conditions are satisfied: (1) there is an accounting restatement of the Company’s financial statements or results; and (2) the restatement results from a noncompliance by the Company with any requirements under or related to the federal securities laws that is material, injurious to the Company or was the result of actions with bad intent. In such an event, the claw back will be in an amount of up to the total economic gain from any stock-based grants within the five-year period preceding the restatement. By accepting the Option, the Optionee agrees to be bound to any existing or future Clawback Policy adopted by the Company, or any amendments that may from time to time be made to the Clawback Policy in the future by the Company, as required to comply with applicable laws or stock exchange requirements , and is further agreeing that all of the Optionee’s equity awards may be unilaterally amended by the Company, without the Optionee’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy to the extent required to comply with applicable laws or stock exchange requirements.

(b) If the Optionee, without the consent of the Company, while employed by or providing services to the Company or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise violates the Company’s Corporate Governance Guidelines, Code of Conduct and Ethics, Code of Ethics for the Chief Executive Officer and Senior Financial Officer or any other corporate governance materials specified by the SEC or exchange on which common stock of the Company is listed, then, if such violation is material and injurious to the Company, or was the result of actions with bad intent, (i) any outstanding, vested or unvested, earned or unearned portion of the Option may, at the Committee’s discretion, be canceled and (ii) the Committee, in its discretion, may require the Optionee or other person to whom any payment has been made or shares or other property have been transferred in connection with the Option to forfeit and pay over to the Company, on demand, all or any portion of the gain (whether or not taxable) realized upon the exercise of the Option.

11. No Right to Continued Employment . Neither the Option nor this Agreement shall confer upon the Optionee any right to continued employment or service with the Company.

12. Law Governing . This Agreement shall be governed in accordance with and governed by the internal laws of the State of Delaware.

13. Interpretation / Provisions of Plan Control . This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the Committee as may be in effect from time to time. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Optionee accepts the Option subject to all of the terms and provisions of the Plan and this Agreement. The undersigned Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement, unless shown to have been made in an arbitrary and capricious manner.

14. Notices . Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 11621 Research Circle, Alachua, Florida 32615, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

[ Signature page follows ]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 18 day of September, 2017.


COMPANY:
RTI SURGICAL, INC.

By:	/s/ Paul Montague
	Name:	Paul Montague
	Title:	Vice President of Human Resources

The Optionee acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Option Agreement in their entirety, is familiar with and understands their terms and provisions, and hereby accepts this Option subject to all of the terms and provisions of the Plan and the Option Agreement. The Optionee further represents that he or she has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement.


Dated: September 18, 2017	OPTIONEE:

	By:	/s/ Jonathon M. Singer
		Jonathon M. Singer

SCHEDULE 1

EXERCISE PRICE

Closing Price Per Share

[ ]

Initials:

RTI SURGICAL INC.:

RECIPIENT:

EXHIBIT C

GENERAL RELEASE

I, Jonathan M. Singer, in consideration of and subject to the performance by RTI Surgical, Inc. (together with its subsidiaries, the “ Company ”), of its obligations under the Employment Agreement dated as of [ ], 2017 (the “ Agreement ”), which are further described on Schedule A attached hereto, do hereby release and forever discharge as of the date hereof the Company and its respective affiliates and all present, former and future managers, directors, officers, employees, successors and assigns of the Company and its affiliates and direct or indirect owners (collectively, the “ Released Parties ”) to the extent provided below (this “ General Release ”). The Released Parties are intended to be third-party beneficiaries of this General Release, and this General Release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder. Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement.

My employment or service with the Company and its affiliates terminated as of , , and I hereby resign from any position as an officer, member of the board of managers or directors (as applicable) or fiduciary of the Company or its affiliates (or reaffirm any such resignation that may have already occurred). I understand that any payments or benefits paid or granted to me under Section 7 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive certain of the payments and benefits specified in Section 7 of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter. I understand and agree that such payments and benefits are subject to Sections 9 and 10 of the Agreement, which (as noted below) expressly survive my termination of employment and the execution of this General Release. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates.

Except as provided in paragraphs 4 and 5 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date that this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the

Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “ Claims ”).

I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above.

I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967).

I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided , however , that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Additionally, I am not waiving: (i) any right to the Accrued Benefits or any severance benefits to which I am entitled under the Agreement; (ii) any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the Company’s organizational documents or otherwise; or (iii) my rights as an equity or security holder in the Company or its affiliates.

In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law. I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release.

I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.

I agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees.

I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone.

Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or any governmental entity.

I hereby acknowledge that Sections 7 through 14, 18 through 21 and 23 of the Agreement shall survive my execution of this General Release.

I represent that I am not aware of any claim by me other than the claims that are released by this General Release. I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it.

Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof.

Whenever possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

I HAVE READ IT CAREFULLY;

I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.


SIGNED:						DATED:

Schedule A

Benefits

The Company shall provide me with the following, subject to the terms and conditions set forth in the Agreement and the General Release (including, without limitation, my continued compliance with Sections 8, 9, and 10 of the Agreement):

1. The Accrued Benefits (as defined in the Agreement), payable within sixty (60) days following the Date of Termination.

2. An amount equal to the Employee’s monthly Base Salary rate (but not as an employee), paid monthly for a period of 12 months following such termination; provided that to the extent that the payment of any amount constitutes “nonqualified deferred compensation” for purposes of Code Section 409A (as defined in Section 23 of the Agreement), any such payment scheduled to occur during the first sixty (60) days following the termination of employment shall not be paid until the first regularly scheduled pay period following the sixtieth (60 ^th ) day following such termination and shall include payment of any amount that was otherwise scheduled to be paid prior thereto.

Exhibit 10.5

RTI SURGICAL, INC.

RESTRICTED STOCK AGREEMENT

FOR

JONATHON M. SINGER

2. Vesting of Restricted Stock.

(a) General Vesting . The shares of Restricted Stock shall become vested in the following amounts, at the following times and upon the following conditions, provided that, except as otherwise provided in the Employment Agreement between the Company and the Recipient, dated September 15, 2017, as thereafter amended from time to time (the “ Employment Agreement ”), the Continuous Service of the Recipient continues through and on the applicable Vesting Date:


Number of Shares of Restricted Stock		Vesting Date
0		Prior to the first anniversary of the Grant Date.

1/3 of the Restricted Stock		First anniversary of the Grant Date.

1/3 of the Restricted Stock		Second anniversary of the Grant Date.

1/3 of the Restricted Stock		Third anniversary of the Grant Date.

(b) Acceleration of Vesting Upon Change in Control . In the event that a Change in Control of the Company occurs during the Recipient’s Continuous Service, the shares of Restricted Stock subject to this Agreement shall become immediately vested as of the date of the Change in Control. Notwithstanding the foregoing, if in the event of a Change in Control the successor company assumes or substitutes another award for this Restricted Stock award, then the vesting of the Restricted Stock shall

not be accelerated as described in this paragraph (b). For purposes of this paragraph, the Restricted Stock shall be considered assumed or substituted for if following the Change in Control the award confers the right to receive, for each Share subject to the Restricted Stock award immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable to the Restricted Stock immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the vesting of the Restricted Stock shall be solely common stock of the successor company or its parent or subsidiary substantially equal in the fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

(c) Acceleration of Vesting at Company Discretion . Notwithstanding any other term or provision of this Agreement, the Board or the Committee shall be authorized, in its sole discretion, based upon its review and evaluation of the performance of the Recipient and of the Company, to accelerate the vesting of any shares of Restricted Stock under this Agreement, at such times and upon such terms and conditions as the Board or the Committee shall deem advisable.

(d) Definitions . For purposes of this Agreement, the following terms shall have the meanings indicated:

(i) “ Committee ” means the Compensation Committee of the Board of Directors of the Company.

(ii) “ Non-Vested Shares ” means any portion of the Restricted Stock subject to this Agreement that has not become vested pursuant to this Section 2.

(iii) “ Vested Shares ” means any portion of the Restricted Stock subject to this Agreement that is and has become vested pursuant to this Section 2.

3. Delivery of Restricted Stock.

(a) Issuance of Stock Certificates and Legends . One or more stock certificates evidencing the Restricted Stock shall be issued in the name of the Recipient but shall be held and retained by the Records Administrator of the Company until the date (the “ Applicable Date ”) on which the shares (or a portion thereof) subject to this Restricted Stock award become Vested Shares pursuant to Section 2 hereof, subject to the provisions of Section 4 hereof. All such stock certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:

4. Forfeiture of Non-Vested Shares. Except as provided in the Employment Agreement, if the Recipient’s Continuous Service with the Company and the Related Entities is terminated for any reason, including, without limitation, by Recipient without Good Reason before October 2, 2020 (as defined in the Employment Agreement), any Shares of Restricted Stock that are not Vested Shares, and that do not become Vested Shares pursuant to Section 2 hereof as a result of such termination, shall be forfeited immediately upon such termination of Continuous Service and revert back to the Company without any payment to the Recipient. If the Recipient breaches any of the Restrictive Covenants as defined in Section 5 hereof, all Non-Vested Shares (and upon written demand by the Company, in its sole and absolute discretion, any Vested Shares) shall be forfeited immediately upon such breach and revert or be transferred by the Recipient back to the Company without any payment to the Recipient.

5. Rights with Respect to Restricted Stock.

Restricted Stock that such dividend is attributed to is being so held, unless otherwise determined by the Committee. In addition, notwithstanding any provision to the contrary herein, any cash dividends declared with respect to shares of Restricted Stock subject to this Agreement shall be held in escrow by the Committee until such time as the shares of Restricted Stock that such cash dividends are attributed to shall become Vested Shares, and in the event that such shares of Restricted Stock are subsequently forfeited, the cash dividends attributable to such portion shall be forfeited as well.

(c) No Restrictions on Certain Transactions. Notwithstanding any term or provision of this Agreement to the contrary, the existence of this Agreement, or of any outstanding Restricted Stock awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Restricted Stock and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Restricted Stock includes, has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; or (vi) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

6. Transferability. Unless otherwise determined by the Committee, the shares of Restricted Stock are not transferable unless and until they become Vested Shares in accordance with this Agreement, otherwise than by will or under the applicable laws of descent and distribution. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Recipient. Except as otherwise permitted pursuant to the first sentence of this Section, any attempt to effect a Transfer of any shares of Restricted Stock prior to the date on which the shares become Vested Shares shall be void ab initio . For purposes of this Agreement, “ Transfer ” shall mean any sale, transfer, encumbrance, gift, donation, assignment, pledge, hypothecation, or other disposition, whether similar or dissimilar to those previously enumerated, whether voluntary or involuntary, and including, but not limited to, any disposition by operation of law, by court order, by judicial process, or by foreclosure, levy or attachment.

7. Tax Matters; Section 83(b) Election.

(c) Recipient’s Responsibilities for Tax Consequences. Tax consequences on the Recipient (including without limitation federal, state, local and foreign income tax consequences) with respect to the Restricted Stock (including without limitation the grant, vesting and/or forfeiture thereof) are the sole responsibility of the Recipient. The Recipient shall consult with his or her own personal accountant(s) and/or tax advisor(s) regarding these matters, the making of a Section 83(b) election, and the Recipient’s filing, withholding and payment (or tax liability) obligations.

8. Clawback.

made or shares or other property have been transferred in connection with the Restricted Stock to forfeit and pay over to the Company, on demand, all or any portion of the gain (whether or not taxable) realized upon the sale of any Restricted Stock.

9. Amendment, Modification & Assignment; Non-Transferability. This Agreement may only be modified or amended in a writing signed by the parties hereto. No promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, with respect to the subject matter hereof, have been made by either party which are not set forth expressly in this Agreement. Unless otherwise consented to in writing by the Company, in its sole discretion, this Agreement (and Recipient’s rights hereunder) may not be assigned, and the obligations of Recipient hereunder may not be delegated, in whole or in part. The rights and obligations created hereunder shall be binding on the Recipient and his heirs and legal representatives and on the successors and assigns of the Company.

10. Complete Agreement. This Agreement (together with those agreements and documents expressly referred to herein, for the purposes referred to herein) embody the complete and entire agreement and understanding between the parties with respect to the subject matter hereof, and supersede any and all prior promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, which may relate to the subject matter hereof in any way.

11. Miscellaneous.

(g) Headings . Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

(h) Notices . Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 11621 Research Circle Alachua, Florida 32615, or if the Company should move its principal office, to such principal office, and, in the case of the Recipient, to the Recipient’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

(i) Non-Waiver of Breach . The waiver by any party hereto of the other party’s prompt and complete performance, or breach or violation, of any term or provision of this Agreement shall be effected solely in a writing signed by such party, and shall not operate nor be construed as a waiver of any subsequent breach or violation, and the waiver by any party hereto to exercise any right or remedy which he or it may possess shall not operate nor be construed as the waiver of such right or remedy by such party, or as a bar to the exercise of such right or remedy by such party, upon the occurrence of any subsequent breach or violation.

(j) Counterparts . This Agreement may be executed in two or more separate counterparts, each of which shall be an original, and all of which together shall constitute one and the same agreement.

[ Signature page follows ]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 18 day of September, 2017.


COMPANY:

RTI SURGICAL, INC.

By:	/s/ Paul Montague
	Name:	Paul Montague
	Title:	Vice President of Human Resources


Agreed and Accepted:

RECIPIENT:

By:		/s/ Jonathon M. Singer
		Jonathon M. Singer

EXHIBIT A

ELECTION UNDER SECTION 83(b)

OF THE U.S. INTERNAL REVENUE CODE OF 1986

1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:


Name:
Spouse:
Taxpayer I.D. No.:
Address:

Tax Year:

2. The property with respect to which the election is made is described as follows: ( ) shares of the common stock (“Common Shares”) of RTI Surgical, Inc. (the “Company”).

3. The date on which the property was transferred is , 20 .

4. The property is subject to the following restrictions:

5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $ .

6. The amount (if any) paid for such property is: [ZERO] .


Dated: , 20
				Signature of Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated: , 20
				Spouse of Taxpayer

EXHIBIT B

ASSIGNMENT SEPARATE FROM CERTIFICATE

This Stock Assignment may be used only in accordance with the Restricted Stock Agreement between RTI Surgical, Inc. and the undersigned dated , .

Dated: ,


Signature:



Print Name:		Jonathon M. Singer

INSTRUCTIONS:

Please DO NOT fill in any blanks other than the signature lines .

EXHIBIT C

CONSENT OF SPOUSE

Dated: , 2017



Signature of Spouse

Print Name:

SCHEDULE 1

RESTRICTED STOCK


Closing Price Per Share		Shares of Restricted Stock
$[ ]		[ ]

Initials:

RTI SURGICAL INC.:

RECIPIENT:

Exhibit 10.6

RTI SURGICAL, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

FOR

JONATHON M. SINGER

2. Definitions . Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributed thereto in the Plan.


Number of Shares		Vesting Date
0		Any date prior to the first anniversary of the Grant Date.

102,300		The first day following any 60 Day Period (as defined below) during the Exercise Period on which the Average Stock Price per share is equal to or greater than $7.00 (to be adjusted for any stock splits during the Exercise Period).

102,300		The first day following any 60 Day Period during the Exercise Period on which the Average Stock Price per share is equal to or greater than $8.00 (to be adjusted for any stock splits during the Exercise Period).

102,300		The first day following any 60 Day Period during the Exercise Period on which the Average Stock Price per share is equal to or greater than $9.00 (to be adjusted for any stock splits during the Exercise Period).

6. Termination of Option .

(a) General . Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:

(ii) immediately upon the termination of the Optionee’s Continuous Service (A) by the Company or a Related Entity for Cause or (B) by the Optionee without Good Reason before October 2, 2020;

(iii) twelve months after the date on which the Optionee’s Continuous Service is terminated by the Optionee on account of his or her Retirement (as defined below);

(iv) twelve months after the date on which the Optionee’s Continuous Service is terminated by reason of a Disability as determined by a medical doctor satisfactory to the Committee;

(v) twelve months after the date of termination of the Optionee’s Continuous Service by reason of the death of the Optionee;

(vi) the tenth (10 ^th ) anniversary of the date as of which the Option is granted.

(b) Cancellation . To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (A) the liquidation or dissolution of the Company, or (B) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does not survive or the Shares are exchanged for or converted into securities issued by another entity, or an affiliate of such successor or acquiring entity, unless the successor or acquiring entity, or an affiliate thereof, assumes the Option or substitutes an equivalent option or right pursuant to Section 10(c) of the Plan, and (ii) the Committee in its sole discretion may by written notice (“ cancellation notice ”) cancel, effective upon the consummation of any transaction that constitutes a Change in Control, the Option (or portion thereof) that remains unexercised on such date. The Committee shall give written notice of any proposed transaction referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).

9. Acceleration of Exercisability of Option .

(c) Exception to Acceleration Upon Change in Control. Notwithstanding the foregoing, if in the event of a Change in Control the successor company assumes or substitutes for the Option, the vesting of the Option shall not be accelerated as described in Section 9(b). For the purposes of this paragraph, the Option shall be considered assumed or substituted for if following the Change in Control the Option or substituted option confers the right to purchase, for each Share subject to the Option immediately prior to the Change in Control, on substantially the same vesting and other terms and conditions as were applicable to the Option immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company, or its parent or subsidiary, provide that the consideration to be received upon the exercise or vesting of the Option will be solely common stock of the successor company or its parent or subsidiary substantially equal in Fair Market Value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding.

10. Clawback.

with applicable laws or stock exchange requirements , and is further agreeing that all of the Optionee’s equity awards may be unilaterally amended by the Company, without the Optionee’s consent, to the extent that the Company in its discretion determines to be necessary or appropriate to comply with any Clawback Policy to the extent required to comply with applicable laws or stock exchange requirements.

11. No Right to Continued Employment . Neither the Option nor this Agreement shall confer upon the Optionee any right to continued employment or service with the Company.

12. Law Governing . This Agreement shall be governed in accordance with and governed by the internal laws of the State of Delaware.

13. Interpretation / Provisions of Plan Contro l . This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the Committee as may be in effect from time to time. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Optionee accepts the Option subject to all of the terms and provisions of the Plan and this Agreement. The undersigned Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement, unless shown to have been made in an arbitrary and capricious manner.

[ Signature page follows ]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 18 day of September, 2017.


COMPANY:

RTI SURGICAL, INC.

By:	/s/ Paul Montague
	Name:	Paul Montague
	Title:	Vice President of Human Resources

SCHEDULE 1

EXERCISE PRICE

Closing Price Per Share

[ ]

Initials:

RTI SURGICAL INC.:

RECIPIENT:

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

EXCHANGE ACT RULES 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Camille Farhat, certify that:

(1)	I have reviewed this quarterly report on Form 10-Q of RTI Surgical, Inc.;

(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.



/s/ Camille Farhat				Dated: November 3, 2017
Camille Farhat
President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

EXCHANGE ACT RULES 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathon M. Singer, certify that:

(1)	I have reviewed this quarterly report on Form 10-Q of RTI Surgical, Inc.;

(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)

(a)

(b)

(c)

(d)

(5)	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.



/s/ Jonathon M. Singer				Dated: November 3, 2017
Jonathon M. Singer
Chief Financial and Administrative Officer

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RTI Surgical, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Camille Farhat, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Camille Farhat				Dated: November 3, 2017
Camille Farhat
President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of this Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of RTI Surgical, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathon M. Singer, Chief Financial and Administrative Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Jonathon M. Singer				Dated: November 3, 2017
Jonathon M. Singer
Chief Financial and Administrative Officer

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