Document:

Execution Copy

 

Exhibit 10.4

GENERAL RELEASE AND SEVERANCE AGREEMENT

 

This GENERAL RELEASE AND SEVERANCE AGREEMENT
(the “GENERAL RELEASE AGREEMENT”) is made and entered into between TranS1 Inc., a Delaware corporation having
a principal place of business in North Carolina (the “Company”) and Dwayne Montgomery, a resident of the state of Tennessee,
employed by the Company in North Carolina (the “Employee”). Throughout the remainder of this GENERAL RELEASE AGREEMENT,
the Company and Employee may be collectively referred to as “the parties.”

 

Employee is currently
employed by the Company as Vice President of Commercial Operations. The Company and Employee wish to terminate the employment relationship,
effective May 1, 2013. The Company wishes to provide Employee with severance benefits that are greater than those to which he is
entitled. The parties wish to agree upon mutually acceptable terms for Employee’s separation from employment and avoid all
litigation relating to the employment relationship and its termination.

 

Employee represents that he or she has carefully
read this entire GENERAL RELEASE AGREEMENT, understands its consequences, and voluntarily enters into it.

 

In consideration of the
above and the mutual promises set forth below, Employee and the Company agree as follows:

 

1.          SEPARATION.
Employee’s employment shall terminate effective May 1, 2013 (the “Separation Date”). Between the Notification
Date (as defined in Section 11) and the Separation Date, Employee shall continue to perform his duties and shall continue to receive
his full salary and benefits.

 

2.          Severance
Benefits. In consideration of the release and other promises contained
herein, the adequacy of which Employee hereby acknowledges, the Company shall pay Employee the sum of One Hundred and Seventy Thousand
One Hundred Eighty-Six Dollars and 00/100 ($170,186.00) (less applicable withholdings), which shall be payable in seven (7) equal
installment payments in accordance with the Company’s payroll schedule in existence on the Separation Date beginning on the
first such payroll date following the tenth (10th) day after this GENERAL RELEASE AGREEMENT becomes effective
as set forth in Section 12 below.

 

As of the Separation Date, Employee shall
not be entitled to medical, dental, vision, disability, accidental death and dismemberment insurance benefits, or any other employee
benefits, and shall not be a participant in the Company’s 401(k) Plan (the “401(k) Plan”) or any other plan of
any type. For the avoidance of doubt, Employee will not be eligible to contribute to his or her 401(k) plan from severance pay
nor receive matching funds from the Company’s related policies. Nothing in this GENERAL RELEASE AGREEMENT, however,
shall be deemed to limit Employee’s continuation coverage rights under COBRA or Employee’s vested rights, if any, under
the 401(k) plan or other Company Plan, and the terms of those plans shall govern.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	 	 

    	 

    

 

3.          Adequacy
of Consideration. Employee acknowledges that the benefits available to him or her under this GENERAL RELEASE AGREEMENT
are significant, are of greater value than the benefits to which he or she would be entitled to receive if he or she did not sign
this GENERAL RELEASE AGREEMENT, and constitute adequate consideration for the release of claims under Sections 9 and 10
of this GENERAL RELEASE AGREEMENT.

 

4.          ACKNOWLEDGEMENT
OF PAY. Employee agrees and acknowledges that he or she has been paid all wages due and owing to him or her as
of the Separation Date, except for the compensation and benefits described in Sections 2 and 5 of this GENERAL RELEASE AGREEMENT.
Employee further acknowledges that he or she is not owed any further compensation, except as described in Section 2 of this GENERAL
RELEASE AGREEMENT. Employee acknowledges and agrees that he or she is not entitled to severance benefits under any other agreement,
including without limitation the Employment Severance Agreement, executed on or around November, 2011, or under any Company plan
or policy.

 

5.          PAID
TIME OFF/VACATION PAY. The Company will pay Employee for all accrued but untaken vacation in accordance with Company policy
in his or her last regular paycheck following the Separation Date.

 

6.          OTHER
AGREEMENTS. Nothing in this GENERAL RELEASE AGREEMENT shall terminate, revoke or diminish Employee’s obligations
or the Company’s and/or its Affiliates’ rights and remedies under law or any agreements relating to trade secrets,
confidential information, competitive activities or intellectual property, which Employee has executed in the past, including without
limitation the TranS1, Inc. Employee Proprietary Information Agreement, dated February 23, 2010. Employee shall also be bound by
and shall comply with all prior agreements or Company policies regarding confidentiality, nondisclosure, non-competition, non-solicitation,
intellectual property, or related matters, which he or she has signed, acknowledged or has been subject to at any time during his
or her employment with the Company (“Existing Obligations”), along with any other agreement that relate to confidentiality,
proprietary information and intellectual property, and nothing herein shall diminish Employee’s obligations, or the Company’s
rights thereunder.

 

7.          EMPLOYEE
REPRESENTATIONS AND GOVERNMENT DISCLOSURES. Employee represents and acknowledges that he or she has fully disclosed to and
cooperated with the Company in connection with all regulatory matters within his or her area or responsibility with the Company.
Employee acknowledges and agrees that nothing in this GENERAL RELEASE AGREEMENT is intended to restrain and does not restrain
the rights of Employee or the Company to report or provide information relating to any matters within the regulatory responsibilities
of any government agency relating to the work of the Company.

 

8.          COMPANY
PROPERTY. Employee agrees that before receiving any payments or benefits under this GENERAL RELEASE AGREEMENT, he or
she shall have returned all Company property (including but not limited to computer and electronic equipment, cell phones, credit
cards, keys, etc.), Company documents (whether in hard or electronic form), material, data, information and related matters to
the Company.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	2	 

    	 

    

 

9.          RElease.
In consideration of the pay and benefits conferred by this GENERAL RELEASE AGREEMENT, EMPLOYEE (ON BEHALF OF HERSELF/HIMSELF,
HIS/HER FAMILY MEMBERS, HEIRS, ASSIGNS, EXECUTORS AND OTHER REPRESENTATIVES) RELEASES THE COMPANY AND ITS PAST, PRESENT AND FUTURE
PARENTS, SUBSIDIARIES, AFFILIATES, AND ITS AND/OR THEIR PREDECESSORS, SUCCESSORS, ASSIGNS, AND ITS AND/OR THEIR PAST, PRESENT AND
FUTURE OFFICERS, DIRECTORS, EMPLOYEES, OWNERS, INVESTORS, SHAREHOLDERS, ADMINISTRATORS, BUSINESS UNITS, EMPLOYEE BENEFIT PLANS
(TOGETHER WITH ALL PLAN ADMINISTRATORS, TRUSTEES, FIDUCIARIES AND INSURERS) AND AGENTS (“RELEASEES”) FROM ALL
CLAIMS AND WAIVES ALL RIGHTS KNOWN OR UNKNOWN, HE/SHE MAY HAVE OR CLAIM TO HAVE RELATING TO HIS/HER EMPLOYMENT WITH THE
COMPANY, OR HIS/HER SEPARATION THEREFROM, OR RELATING TO ANY OTHER MATTER WHATSOEVER  arising before the execution of this
GENERAL RELEASE AGREEMENT, including but not limited to claims for: (i) discrimination, harassment or retaliation
arising under any federal, state or local laws prohibiting age (including but not limited to claims under the Age Discrimination
in Employment Act of 1967 (ADEA), as amended, and the Older Worker Benefit Protection Act of 1990 (OWBPA)), sex, national origin,
race, religion, disability, veteran status or other protected class discrimination, the Family and Medical Leave Act, as amended
(FMLA), harassment or retaliation for protected activity; (ii) for compensation, commission payments, bonus payments, stock, options
and/or benefits under any plan, program or policy, including but not limited to claims under the Fair Labor Standards Act of 1938
(FLSA), as amended, the Employee Retirement Income Security Act of 1974, as amended, (ERISA), the Family and Medical Leave Act,
as amended (FMLA), and similar federal, state, and local laws; (iii) under federal, state or local law of any nature whatsoever,
including but not limited to constitutional, statutory, tort, express or implied contract, wrongful discharge, or other common
law; and (iv) attorneys’ fees. Provided, however, that this release does not apply to claims for workers’ compensation
benefits or unemployment benefits filed with the applicable state agencies, or to any claim for a breach of this GENERAL RELEASE
AGREEMENT. For the purpose of implementing a full and complete release and discharge, Employee expressly acknowledges that
this GENERAL RELEASE AGREEMENT is intended to include in its effect, without limitation, all claims which he or she does
not know or suspect to exist in his or her favor at the time of execution hereof, and that this GENERAL RELEASE AGREEMENT
contemplated the extinguishment of any such claim or claims.

 

CALIFORNIA EMPLOYEES. Employee expressly
waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California, and does
so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 states as follows: “A
general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time
of executing the release, which, if known by him/her must have materially affected his or her settlement with the debtor.”
Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge,
Employee expressly acknowledges that this GENERAL RELEASE AGREEMENT is intended to include in its effect,
without limitation, all claims which Employee does not know or suspect to exist in his/her favor at the time of execution
hereof, and that this GENERAL RELEASE AGREEMENT contemplates the extinguishment of any such claim or claims.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	3	 

    	 

    

 

10.         Covenant
Not To Sue. In consideration of the pay and benefits offered to Employee under this GENERAL RELEASE AGREEMENT,
Employee will not sue Releasees on any of the released claims, on any matters relating to his or her employment, or relating to
any other matter, arising before the execution of this GENERAL RELEASE AGREEMENT, including but not limited to claims under
the ADEA, or join as a party with others who may sue Releasees on any such claims; provided, however, this paragraph will not bar
a challenge under the OWBPA to the enforceability of the waiver and release of ADEA claims set forth in this GENERAL RELEASE
AGREEMENT or bar claims for workers’ compensation or unemployment benefits above, or where otherwise prohibited by law.
To the maximum extent permitted by law, Employee agrees that Employee will not seek and waives any right to accept any relief or
award from any charge or action against Releasees before any federal, state, or local administrative agency or federal, state or
local court whether filed by Employee or on Employee’s behalf with respect to any claim or right covered by paragraph 10.
Employee does not abide by this paragraph, then (i) he or she will return all monies received under this GENERAL RELEASE AGREEMENT
and indemnify Releasees for all expenses incurred in defending the action, and (ii) Releasees will be relieved of their obligations
hereunder.

 

11.         RIGHT
TO REVIEW. The Company delivered, via hand delivery, the original GENERAL RELEASE AGREEMENT, containing the release
language set forth in Sections 9 and 10 to Employee on April 2, 2013 (the “Initial Notification Date”) and desired
that he or she have adequate time and opportunity to review and understand the consequences of entering into it. Accordingly, the
Company advised Employee as follows:

 

		·	to consult with his or her attorney prior to executing it; and

		·	that he or she has twenty one (21) days from the Initial Notification Date to review and consider whether he or she wishes
to execute this GENERAL RELEASE AGREEMENT.

 

Since receiving this GENERAL RELEASE AGREEMENT, Employee
asked that the reference in the opening paragraph to his state of residency be changed to Tennessee from North Carolina, and the
Company has made this modification. The revised GENERAL RELEASE AGREEMENT was delivered to Employee, via email, on April
8, 2013 (the “Supplemental Notification Date”). Employee acknowledges and agrees that such modification is not material,
and does not restart the running of the 21-day review period. Accordingly, Employee acknowledges and agrees that he has been given
at least 21-days to review this GENERAL RELEASE AGREEMENT from the Initial Notification Date. Since the Separation
Date is more than 21-days after the Initial Notification Date, Employee has until five (5) calendar days after the Separation Date
to execute and return this GENERAL RELEASE AGREEMENT. Employee may not execute or return the GENERAL RELEASE
AGREEMENT before the Separation Date. If Employee does not return an executed copy of this GENERAL RELEASE AGREEMENT
to the Company by no later than the fifth (5th) calendar day after the Separation Date, it and the obligations
of the Company herein shall become null and void. The executed GENERAL RELEASE AGREEMENT should be returned to: Tod
McDonald, Sr. HR Director, TranS1, Inc., 301 Government Center Drive, Wilmington, North Carolina 28403.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	4	 

    	 

    

 

12.         REVOCATION.
Employee may revoke the GENERAL RELEASE AGREEMENT during the seven (7) day period immediately following his or her execution
of it. This GENERAL RELEASE AGREEMENT will not become effective or enforceable until the revocation period has expired.
To revoke this GENERAL RELEASE AGREEMENT, a written notice of revocation must be delivered to: Tod McDonald, Sr. HR Director,
TranS1, Inc., 301 Government Center Drive, Wilmington, North Carolina 28403.

 

13.         AGENCY
CHARGES/INVESTIGATIONS. Nothing in this GENERAL RELEASE AGREEMENT shall prohibit Employee from filing a charge or participating
in an investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission or other governmental agency with
jurisdiction concerning the terms, conditions and privileges of his or her employment; provided, however, that by signing this
GENERAL RELEASE AGREEMENT, Employee waives his or her right to, and shall not seek or accept, any monetary or other relief
of any nature whatsoever in connection with any such charges, investigations or proceedings.

 

14.         CONFIDENTIALITY
AND GOOD WILL. The terms and provisions of the GENERAL RELEASE AGREEMENT are confidential and will not be disclosed
to third parties, except as required by law. Notwithstanding the above, Employee may reveal the terms and provisions of the GENERAL
RELEASE AGREEMENT to a lawyer he or she consults for legal advice, members of his or her immediate family, or a financial advisor,
provided that such persons agree to maintain the confidentiality of the Agreement. Employee will not denigrate, disparage, defame
or cast aspersions on the Company or upon the Company’s owners, stockholders, affiliates, officers, directors, employees
or agents.

 

15.         References.
Employee agrees that he or she will direct all written inquiries from prospective employers to the Company’s Human Resources
department. Employee acknowledges and agrees that, consistent with its usual practices, the Company will provide only information
about Employee’s positions, dates of employment and salary.

 

16.         Disclaimer
of Liability. Nothing in this GENERAL RELEASE AGREEMENT is to be construed
as either an admission of liability or admission of wrongdoing on the part of either party, each of which denies any liabilities
or wrongdoing on its part.

 

17.         Governing
Law. This GENERAL RELEASE AGREEMENT shall be governed by the laws of North
Carolina, without regard to its conflict of laws provisions and the applicable provisions of federal law. 

 

18.         Entire
Agreement. Except as expressly provided herein, this GENERAL RELEASE AGREEMENT:
(i) supersedes and cancels all other understandings and agreements, oral or written, with respect to Employee’s employment
with the Company; (ii) supersedes all other understandings and agreements, oral or written, between the parties with respect to
the subject matter of this GENERAL RELEASE AGREEMENT; and (iii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that: (i) no representations, inducements, promises or agreements, oral
or written, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this GENERAL RELEASE
AGREEMENT; and (ii) no agreement, statement or promise not contained in this GENERAL RELEASE AGREEMENT shall be valid.
No change or modification of this GENERAL RELEASE AGREEMENT shall be valid or binding upon the parties unless such change
or modification is in writing and is signed by the parties.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	5	 

    	 

    

 

19.         Severability.
If any portion, provision, or part of this GENERAL RELEASE AGREEMENT is held, determined, or adjudicated by any court of
competent jurisdiction to be invalid, unenforceable, void, or voidable for any reason whatsoever, each such portion, provision,
or part shall be severed from the remaining portions, provisions, or parts of this GENERAL RELEASE AGREEMENT, and such determination
or adjudication shall not affect the validity or enforceability of such remaining portions, provisions, or parts. 

 

20.         Counterparts.
This GENERAL RELEASE AGREEMENT may be executed in any number of counterparts, each of which shall be deemed an original,
and all of which taken together shall constitute one and the same instrument. Any party hereto may execute this GENERAL RELEASE
AGREEMENT by signing any such counterpart.

 

21.         Waiver
of Breach. A waiver of any breach of this GENERAL RELEASE AGREEMENT shall
not constitute a waiver of any other provision of this GENERAL RELEASE AGREEMENT or any subsequent breach of this GENERAL
RELEASE AGREEMENT. 

 

22.         SECTION
409A OF THE INTERNAL REVENUE CODE.

 

22.1         Notwithstanding
anything to the contrary in this Agreement, if   the Employee is a “specified employee” within the meaning of
Section 409A as of the Separation Date (other than due to death), then the severance payable to the Employee together with
any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together,
the “Deferred Compensation Separation Benefits”), that are payable within the first six (6) months following the
Employee’s termination of employment will become payable on the first payroll date that occurs on or after the date six (6) months
and one (1) day following the date of the Employee’s termination of employment. All subsequent Deferred Compensation
Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if the Employee dies following the Separation Date but prior to the six (6) month anniversary
of the Employee’s termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum
as soon as administratively practicable after the date of the Employee’s death and all other Deferred Compensation Separation
Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit
payable under this Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.

 

22.2         Any
amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4)
of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	6	 

    	 

    

 

22.3         Any
amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant
to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute
Deferred Compensation Separation Benefits for purposes of clause (i) above. For purposes of this Agreement, “Section
409A Limit” shall mean the lesser of two (2) times: (i) the Employee’s annualized compensation based upon
the annual rate of pay paid to the Employee during the Company’s taxable year preceding the Company’s taxable year
of the Employee’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Code for the year in which the Employee’s employment is terminated.

 

22.4         The
foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and
benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein
will be interpreted to so comply. The Company and the Employee agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to the Employee under Section 409A. The parties intend that the provisions
of this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
and the regulations thereunder (collectively, “Section 409A”) and all provisions of this Agreement shall be
construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. If any provision of
this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any
additional tax or interest under Section 409A, the Company shall, upon the specific request of Executive, use its reasonable
business efforts to in good faith reform such provision to comply with Code Section 409A; provided, that to the maximum
extent practicable, the original intent and economic benefit to Executive and the Company of the applicable provision shall be
maintained, and the Company shall have no obligation to make any changes that could create any additional economic cost or loss
of benefit to the Company. The Company shall timely use its reasonable business efforts to amend any plans and programs in which
Executive participates to bring it in compliance with Section 409A. Notwithstanding the foregoing, the Company shall have no liability
with regard to any failure to comply with Section 409A so long as it has acted in good faith with regard to compliance therewith.

 

[Signatures on the following page]

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	7	 

    	 

    

 

IN WITNESS WHEREOF, the parties have entered
into this GENERAL RELEASE AGREEMENT as of the day and year written below.

 

	 	TRANS1 INC.
	 	 
	 	By:  	/s/ Ken Reali
	 	 	 
	 	Date:  	5/1/2013
	 	 
	 	DWAYNE MONTGOMERY
	 	 	 
	 	/s/Dwayne Montgomery
	 	 	 
	 	Date:  	5/1/2013

 

    	# Exhibit 10.4 - Montgomery Severance Agreement	8Exhibit 10.5

 

FIRST AMENDMENT TO
LEASE

 

This First Amendment to Lease (this “Amendment”)
is made as of the __ day of June, 2013, by and between SUN LIFE ASSURANCE COMPANY OF CANADA, a Canadian corporation (“Landlord”),
and BAXANO SURGICAL, INC., a Delaware corporation (“Tenant”) (NASDAQ symbol BAXS).

 

Landlord and Tenant, as successor in in
interest to TranS1, Inc., are parties to that certain Office Lease dated October _, 2012 (the “Lease”), pursuant
to which Landlord leases to Tenant approximately 4,358 rentable square feet known as Suite 230 (the “Original Premises”)
in the building owned by Landlord known as Horizon IV, with a street address of 110 Horizon Drive, Raleigh, North Carolina. Landlord
and Tenant now wish to amend the Lease.

 

NOW THEREFORE, in consideration of the mutual
covenants contained herein, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the Lease is hereby amended and the parties hereto do hereby agree as follows:

 

1.             Recitals; Definitions. The
foregoing recitals are true, correct and complete and are hereby incorporated in this Amendment by this reference. Capitalized
terms used herein and not otherwise defined herein shall have the meanings given them in the Lease.

 

2.             Expansion Premises. Effective
as of the Expansion Commencement Date (as defined below), Landlord leases to Tenant and Tenant leases from Landlord the additional
areas known as Suite 210, consisting of 6,745 rentable square feet, and Suite 130, consisting of 1,759 square feet, which space
is shown on Exhibit A attached hereto and incorporated herein by this reference (collectively, the “Expansion Premises”).
As of the Expansion Commencement Date and except as expressly set forth herein, all references to the “Premises” in
the Lease shall be deemed to refer to the Original Premises and the Expansion Premises and shall consist of an aggregate of 12,862
rentable square feet.

 

3.             Expansion Commencement Date.
The “Expansion Commencement Date” shall mean the earlier of (i) October 1, 2013 or (ii) the first business day
after Landlord delivers the Expansion Premises with the Tenant Improvements (as defined below) substantially completed (net of
any Tenant delays).

 

4.             Extension Term. The term of
the Lease for the Premises (Original Premises and Expansion Premises) is hereby extended (the “Extension Term”)
until the date which is seventy four (74) months after the Expansion Commencement Date.

 

5.             Rent.

 

(a)          Base Rent: Expansion Premises.
The Base Rent payable during the Extension Term for the Expansion Premises only shall be as follows:

 

    	 

    	 

    

 

	Months	 	 	Monthly Rent	 	 	Annual Rent	 	 	Rent PRSF	 
	 	1- 2	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	 	3-12	 	 	$	14,279.63	 	 	$	171,355.60	 	 	$	20.15	 
	 	13-24	 	 	$	14,708.02	 	 	$	176,496.27	 	 	$	20.75	 
	 	25-36	 	 	$	15,149.26	 	 	$	181,791.16	 	 	$	21.38	 
	 	37-48	 	 	$	15,603.74	 	 	$	187,244.89	 	 	$	22.02	 
	 	49-60	 	 	$	16,071.85	 	 	$	192,862.24	 	 	$	22.68	 
	 	61-72	 	 	$	16,554.01	 	 	$	198,648.10	 	 	$	23.36	 
	 	73-74	 	 	$	17,050.63	 	 	$	204,607.55	 	 	$	24.06	 

 

(b)          Base Rent: Existing Premises. The Base Rent
for the Existing Premises shall be as currently set forth in the Lease through June 10, 2018, and thereafter shall increase by
three percent (3%) per annum.

 

(c)          Operating Expenses. Effective as of the Expansion
Commencement Date, Tenant’s Percentage shall be adjusted to 27.52%.

 

6.             Condition.

 

(a)          Prior to delivering the Premises to
Tenant, Landlord shall install the tenant improvements to the Premises as depicted on the space plan and specifications (if any)
(collectively, the “Plan”) prepared by _______________________ dated ______________, 2013 (the “Tenant
Improvements”). Landlord shall cause the Tenant Improvements to be installed in accordance with the Plan and all applicable
permits, approvals, codes, ordinances and regulations, in a good and workmanlike manner, using Building-standard materials unless
otherwise specified in the Plan, free of all liens, by a licensed contractor. Once installed, the Tenant Improvements shall be
a part of the Premises and the sole property of Landlord. Landlord shall obtain bids from three (3) reputable general contractors
and select the lowest bid. In selecting the general contractor, Landlord agrees to cooperate with any project manager retained
by Tenant, at Tenant’s expense, and to work with Tenant to adjust the scope of work to Tenant’s construction budget.

 

(b)          Landlord shall provide Tenant a tenant
allowance of up to Fifteen Dollars ($15.00) per rentable square foot (the “Tenant Allowance”) for design, permitting,
construction and supervision of the Tenant Improvements to the Premises. Any costs of the Tenant Improvements in excess of the
Tenant Allowance shall be paid by Tenant to Landlord, as additional rent, within thirty (30) days after substantial completion
of the Tenant Improvements (as “substantial completion” is defined in Exhibit C to the Lease). Any
amount not used by Landlord for the Tenant Improvements shall be retained by Landlord. The costs of the Tenant Improvements
shall include the actual costs of construction (including the overhead and profit of Landlord’s contractor), all construction
management fees of Landlord’s property manager, the costs of all permits and approvals, and all design costs and other charges
by Landlord’s architects and engineers. The parties acknowledge that the construction management fees of Landlord’s
property manager equal three percent (3%) of the total project costs. The early access provisions of Section 4.4 of the Lease shall
apply to the Expansion Premises.

 

    	2

    	 

    

 

(c)          Landlord shall notify Tenant in writing
of the substantial completion of the Tenant Improvements. Within three (3) days after receipt of such notice, Tenant shall inspect
the Expansion Premises and provide Landlord with a punch list of uncompleted items; delivery of the punch list shall not, however,
delay the Expansion Commencement Date (which may occur prior to completion of the Tenant Improvements). Tenant shall be deemed
to have approved all work not listed in the punch list (other than latent defects). The punch list items shall be completed by
Landlord within thirty (30) days, subject to availability of labor and materials.

 

(d)          Tenant shall purchase (not using
the Tenant Allowance) and thereafter maintain, repair and replace the supplemental HVAC unit for Tenant’s server room, which
shall be installed by Landlord’s general contractor during installation of the Tenant Improvements.

 

7.             Use. The Expansion Premises
shall be used by Tenant only for offices, storage and sterilization of instruments, which shall be delivered and sent in a decontaminated
(no blood) form using sealed boxes.

 

8.             Security Deposit. Upon full
execution hereof, as a condition to the effectiveness of this Amendment (in addition to the existing Security Deposit under the
Lease), Tenant shall deliver to Landlord an irrevocable letter of credit issued by a major banking institution reasonably acceptable
to Landlord (the "Bank") in the amount of $150,000 having an expiration date three (3) months after the expiration
of the Lease term (or a self-renewal provision which extends the final expiration date to three (3) months after the expiration
of the Lease term), and otherwise in form and content acceptable to landlord in its discretion. The letter of credit shall provide
that Landlord may draw from time to time upon such letter to the extent that Landlord certifies to the Bank as to any one or more
of the following: (a) that Landlord is owed Base Rent or additional rent, or both, or other amounts which Tenant is obligated to
pay under the Lease which remain unpaid beyond applicable grace periods, (b) that the letter of credit has not been renewed or
replaced as required below, or (c) that a default beyond applicable grace periods has occurred under the Lease. Such letter of
credit shall be replaced or renewed, and such replacement or renewal letter of credit shall be delivered to Landlord, not later
than thirty (30) days prior to expiration thereof. If Landlord draws upon the letter of credit to satisfy any obligation of Tenant
hereunder, Tenant shall immediately upon request by Landlord deliver a replacement letter of credit to Landlord or otherwise restore
the Security Deposit to its original amount. In the event the letter of credit is drawn upon by Landlord because such letter of
credit is about to expire and has not been replaced or renewed by Tenant in accordance with the provisions of this Section, the
proceeds of such letter of credit and all interest accrued thereon shall be held in escrow by Landlord or its agent as security
for Tenant's obligations hereunder until such time as Tenant shall have delivered Landlord a replacement letter of credit. Upon
thirty (30) days prior notice from Landlord, Tenant shall cooperate with Landlord in transferring the letter of credit to a grantee
or transferee and, if necessary, shall deliver a replacement letter of credit if such letter of credit is not otherwise transferable.

 

9.             Brokers. Landlord and Tenant acknowledge that
Avison Young is acting as broker for Landlord and shall be paid a commission pursuant to a separate agreement with Landlord, and
Jones Lang LaSalle is acting as broker for Tenant and shall be paid a commission pursuant to a separate agreement. Tenant hereby
indemnifies and holds harmless Landlord from any claim from any third party claiming to be Tenant’s agent and therein demanding
a fee for the transaction contemplated by this Amendment, and Landlord hereby indemnifies and holds harmless Tenant from any claim
from any third party claiming to be Landlord’s agent and therein demanding a fee for the transaction contemplated by this
Amendment.

 

    	3

    	 

    

 

10.          Entire Agreement. This Amendment
and the Lease represent the entire agreement between the parties hereto. Landlord and Tenant agree that there are no collateral
or oral agreements or understandings between them with respect to the Premises. This Amendment supersedes all prior negotiations,
agreements, letters or other statements with respect to the Premises.

 

11.          No Further Modifications.
Except as expressly amended and modified hereby, the Lease shall otherwise remain in full force and effect, the parties hereto
hereby ratifying and confirming the same. To the extent of any inconsistency between the Lease and this Amendment, the terms of
this Amendment shall control. Landlord and Tenant hereby confirm that there are no defaults under the Lease.

 

12.          OFAC. Neither
Tenant nor, to Tenant's actual knowledge without inquiry (i) its direct parent or any of its subsidiaries, (ii) any of their
respective partners, or members, shareholders or other equity owners, or (iii)any of their respective employees, officers,
directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from
doing business under regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury
(including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action.

 

13.          Counterpart Execution. This
Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which when attached together
shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the duly authorized
representatives of the parties herein have hereunto set their hands and seals, the day and year first above written.

 

	TENANT:	 	 	LANDLORD:
	 	 	 	 
	Baxano Surgical, Inc.	 	Sun Life Assurance Company of Canada
	 	 	 	 	 
	By:	 	 	By: 	 
	 	 	 	 	 
	Name:	 	 	Name: 	 
	 	 	 	 	 
	Title: 	 	 	Title: 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	 
	 	 	 	Name:	 
	 	 	 	 	 
	 	 	 	Title:	 

 

    	4

    	 

    

 

EXHIBIT A

 

DRAWING OF EXPANSION PREMISES

 

    	5

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