Document:

Exhibit 10.1

  

AMENDMENT AND RELEASE AGREEMENT

 

This AMENDMENT AND
RELEASE AGREEMENT (the “Agreement”), dated as of November 29, 2013, is by and between Recon Technology Ltd.,
a Cayman Islands exempted company (the “Company”), and each of the Buyers (as defined in the Purchase Agreement
(as defined below)).

 

RECITALS

 

A.On November 25,
2013, the Company and each of the Buyers entered into that certain Securities Purchase Agreement (the “Purchase Agreement”).
Capitalized terms used in this Agreement that are not otherwise defined herein have the meanings set forth in the Purchase Agreement.

 

B.In accordance
with Section 8(e) of the Purchase Agreement, the parties hereto desire to amend the Purchase Agreement and the form of Warrants
as contemplated by this Agreement.

 

AGREEMENT

 

NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each of the parties hereto hereby agree as follows:

 

1.Amendments.

 

(a)The
Schedule of Buyers attached to the Purchase Agreement is hereby deleted in its entirety and replaced with the Schedule of Buyers
attached hereto as Exhibit A.

 

(b)Section
1(b) of the form of Warrant is hereby deleted in its entirety and replaced with the following:

 

“(b)Exercise
Price. For purposes of this Warrant, “Exercise Price” means $5.38, subject to adjustment as provided herein.” 

 

 

    	 

    	 

    

 

2.Company Release.
The Company, on its own behalf and on behalf of its Subsidiaries and its and their respective officers, directors, affiliates,
investors and other related Persons (the Company and all of the foregoing Persons referred to above in this Section ‎2 are
referred to herein as “Company Releasors”), hereby irrevocably, fully and unconditionally releases and forever
discharges (x) each Buyer and (y) each of the present and former directors, officers, shareholders, members, managers, investment
managers, investment advisers, partners, employees, agents, advisors, consultants and representatives of each Buyer, (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls each Buyer, within the meaning of the 1933 Act or the 1934 Act, and each of the present
and former directors, officers, shareholders, members, managers, investment managers, investment advisers, partners, employees,
agents, advisors, consultants and representatives (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding the lack of such title or any other title) of such controlling Persons and each of their direct and
indirect related Persons (each Buyer and all such other Persons referred to above in clause (y) in this Section ‎2 are referred
to herein collectively as the “Buyer Releasees”) from all claims, actions, obligations, causes of action, suits,
losses, omissions, damages, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees and costs of defense and investigation), expenses and liabilities, of every name and nature, whether
known or unknown, absolute or contingent, suspected or unsuspected, matured or unmatured, both at law and in equity, (collectively,
the “Claims”) which any Company Releasor may now own, hold, have or claim to have against any of the Buyer Releasees
for, upon, or by reason of any nature, cause, action or inaction or thing whatsoever which arises from the beginning of the world
to the date and time of this Agreement relating to the Company or any of its Subsidiaries (collectively, the “Company
Claims”). The Company, on behalf of itself and its successors, assigns and other legal representatives and all of the
other Company Releasors, covenants that it will not (and that it will cause all other Persons who may seek to claim as, by, through
or in relation to any of the Company Releasors or the matters released by the Company Releasors in this Agreement not to) sue any
of the Buyer Releasees on the basis of or related to or in connection with any Company Claim herein released and discharged, as
provided in this paragraph. Notwithstanding the foregoing, nothing contained in this paragraph shall release or relieve any obligations
of any Buyer under this Agreement, the Purchase Agreement or under any other Transaction Document to which it is a party.

 

3.Buyer
Release. Each Buyer, on its own behalf and on behalf of such Buyer’s officers and directors (or managers (as
applicable), (and all of the foregoing Persons of such Buyer referred to above in this Section ‎3 are referred to herein
as “Buyer Releasors”), hereby irrevocably, fully and unconditionally releases and forever discharges the
Company and its present and former officers and directors (the Company and its present and former officers and directors are
referred to herein collectively as the “Company Releasees”) from all Claims which such Buyer and its Buyer
Releasors may now own, hold, have or claim to have against any of the Company Releasees for, upon, or by reason of any
nature, cause, action or inaction or thing whatsoever which arises from the beginning of the world to the date and time of
this Agreement that solely arise out of or relate to the Company’s filing of the Form S-8 with the SEC on November 26,
2013, or the Company’s failure to disclose its intention to file such Form S-8 (collectively, the
“Buyer Claims”). Each Buyer on behalf of itself and its successors, assigns and other legal
representatives and each of its Buyer Releasors, covenants that it will not (and that it will cause all other Persons who may
seek to claim as, by, through or in relation to such Buyer or its Buyer Releasors or the matters released by such Buyer in
this Agreement not to) sue any of the Company Releasees on the basis of or related to or in connection with any of such
Buyer’s Buyer Claims herein released and discharged, as provided in this paragraph. Notwithstanding the foregoing,
nothing contained in this paragraph shall release or relieve any obligations of the Company under this Agreement, the
Purchase Agreement or any of the other Transaction Documents.

 

    	2

    	 

    

 

4.Entire Agreement;
Amendment and Waiver. This Agreement supersedes all other prior oral or written agreements between the parties hereto, their
affiliates and Persons acting on their respective behalf solely with respect to the matters contained herein, and this Agreement
contains the entire understanding of the parties solely with respect to the matters covered herein; provided, however, that the
Purchase Agreement and the other Transaction Documents shall continue in full force and effect, as amended by this Agreement. The
parties hereto make no representations or warranties to each other, express (except as contained in this Agreement) or implied,
and any and all prior representations and warranties made by any party hereto or its representatives, whether verbally or in writing,
are deemed to have been merged into this Agreement and the other written agreements contemplated hereby, it being intended that
no such prior representations or warranties shall survive the execution and delivery of this Agreement. The Purchase Agreement,
the other Transaction Documents and this Agreement shall be read and construed as a single agreement, and all references to the
Purchase Agreement and the other Transaction Documents shall hereafter refer to the Purchase Agreement or the other Transaction
Documents (as the case may be), as amended by this Agreement. No provision of this Agreement may be amended other than by an instrument
in writing signed by the parties hereto. No waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party. This Agreement shall be a Transaction Documents for all purposes of all Transaction Documents.

 

5.Governing
Law. The parties hereby agree that pursuant to 735 Illinois Compiled Statutes 105/5-5 they have chosen that all questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State
of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Chicago, Illinois,
for the adjudication of any dispute hereunder or under any of the other Transaction Documents or in connection herewith or with
any transaction contemplated hereby or thereby or discussed herein or therein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall (i) limit,
or be deemed to limit, in any way any right to serve process in any manner permitted by law, (ii) operate, or shall be deemed to
operate, to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to
collect on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer
or (iii) limit, or be deemed to limit, any provision of Section 13 of the Warrants. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY.

 

    	3

    	 

    

 

6.Counterparts.
This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.

 

7.Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

8.Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including, as contemplated below, any assignee or transferee of any of the Securities. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written consent of each of the Buyers (which may be granted
or withheld in each Buyer’s sole discretion), including, without limitation, by way of a Fundamental Transaction (as defined
in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth
in the Warrants). A Buyer may assign some or all of its rights hereunder in connection with any assignment or transfer of any of
its Securities without the consent of the Company, in which event such assignee or transferee (as the case may be) shall be deemed
to be a Buyer hereunder with respect to such assigned rights.

 

9.Descriptive
Headings; Interpretation; No Third Party Beneficiaries. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun
herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer
to this entire Agreement instead of just the provision in which they are found. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against
any party. For clarification purposes, the Recitals are part of this Agreement and are all incorporated into this Agreement by
reference. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns,
and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

    	4

    	 

    

 

10.Disclosure
of this Agreement. The Company shall, on or before 8:30 a.m., New York time, on the date of this Agreement, file a Current
Report on Form 8-K describing all the material terms of this Agreement in the form required by the 1934 Act and attaching this
Agreement.

 

11.Prospectus
Supplement and Blue Sky. Immediately prior to execution of this Agreement, the Company shall have delivered, and as soon as
practicable after execution of this Agreement the Company shall file, a prospectus supplement with respect to the Securities as
required under, and in conformity with, the 1933 Act, including Rule 424(b) thereunder. Without limiting any other obligation of
the Company under any Transaction Document, the Company shall timely make all filings and reports relating to the offer and sale
of the Securities required under all applicable securities laws (including, without limitation, all applicable federal securities
laws and all applicable “Blue Sky” laws and including, without limitation, as a result of entering into this Agreement),
and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like
relating to the offering and sale of the Securities to the Buyers.

 

12.Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under this Agreement or any other Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute
the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or
entity with respect to such obligations or the transactions contemplated by this Agreement and the other Transaction Documents
or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company shall not
assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement or the other Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment under the Transaction Documents and that no other Buyer will be acting as agent of such Buyer
in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under this Agreement or the
other Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with the Company
in the negotiation of the transaction contemplated by this Agreement and the other Transaction Documents with the advice of its
own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase
and sale of the Securities contemplated by the Transaction Documents was solely in the control of the Company, not the action or
decision of any Buyer, and was done solely for the convenience of the Company and not because it was required or requested to do
so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Buyer, solely, and not between the Company and the Buyers collectively and not between and
among the Buyers.

 

[signature pages follow]

 

    	5

    	 

    

 

IN WITNESS WHEREOF,
Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.

 

 

	 	COMPANY:
	 	 
	 	RECON TECHNOLOGY,
        LTD.
	 	 
	 	 
	 	By: 	/s/ Shenping Yin

	 
	 	 	Name:	Shenping Yin	 
	 	 	Title:	Chief Executive Officer	 
	 	 	 	 

  

 

    	 

    	 

    

IN WITNESS WHEREOF,
Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.

 

	 	
        BUYER:

         

	 	
        CRANSHIRE CAPITAL MASTER FUND, LTD.

         

        By:Cranshire Capital Advisors, LLC

        Its:Investment Manager

	 	 	 
	 	 
	 	/s/ Keith Goodman	 
	 	By:Keith Goodman
	 	Its:Authorized Signatory
	 	 

 

 

    	 

    	 

    

IN WITNESS WHEREOF,
Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.  

 

	 	
        BUYER:

         

	 	
        EQUITEC SPECIALISTS, LLC

         

        By:Cranshire Capital Advisors, LLC

        Its:Investment Manager

	 	 	 
	 	 
	 	/s/ Keith Goodman	 
	 	By:Keith Goodman
	 	Its:Authorized Signatory
	 	 

 

 

 

 

 

    	 

    	 

    

Exhibit A

 

SCHEDULE OF BUYERS

 

	(1)	(2)	(3)	(4)	(5)	(6)
	
        Buyer
	
        Address,
Facsimile Number and E-mail Address
	
        Number
        of Common Shares
	
        Number
        of 

        Warrant Shares
	
        Purchase
        Price
	
        Legal
        Representative’s

        Address and Facsimile Number

	
         

         

        Cranshire Capital Master Fund, Ltd.

         
	
         

        c/o Cranshire Capital Advisors, LLC

        3100 Dundee Road, Suite 703

        Northbrook, Illinois 60062

        Attn: Mitchell P. Kopin

        Facsimile: (847) 562-9031

        E-mail: notices@cranshirecapital.com

         
	
         

        136,625
	
         

        40,987
	
         

        $587,487.50
	
        Greenberg Traurig, LLP

        77 W. Wacker Drive, Suite 3100

        Chicago, Illinois 60601

        Attention: Peter H. Lieberman

           Todd A. Mazur

        Facsimile: (312) 456-8435

        E-Mail: liebermanp@gtlaw.com

                      mazurt@gtlaw.com

        

        

	Equitec Specialists, LLC	
         

         

         

        c/o Cranshire Capital Advisors, LLC

        3100 Dundee Road, Suite 703

        Northbrook, Illinois 60062

        Attn: Mitchell P. Kopin

        Facsimile: (847) 562-9031

        E-mail: notices@cranshirecapital.com

         

         

         

         
	
         

         

         

         

        45,542
	
         

         

         

         

        13,663
	
         

         

         

         

        $195,830.60
	
        Greenberg Traurig, LLP

        77 W. Wacker Drive, Suite 3100

        Chicago, Illinois 60601

        Attention: Peter H. Lieberman

           Todd A. Mazur

        Facsimile: (312) 456-8435

        E-Mail: liebermanp@gtlaw.com

        mazurt@gtlaw.com

	Hudson Bay Master Fund, Ltd.	
         

         

         

        c/o Hudson Bay Capital Management LP

        777 Third Avenue, 30th Floor

        New York, New York 10017

        Attn: George Antonopoulos

        Facsimile: (212) 571-1279

        E-mail: investments@hudsonbaycapital.com

         
	
         

         

         

         

        182,167
	
         

         

         

         

        54,650
	
         

         

         

         

        $783,318.10
	
        Elected Not To Provide

         

	Tenor Opportunity Master Fund, Ltd.	
         

         

         

        1180 Ave. of Americas, Ste. 1940

        New York, New York 10036

        Attn: Waqas Khatri

        Facsimile: (212) 918-5301

        E-mail: wkhatri@tenorcapital.com

         
	
         

         

         

         

        182,166
	
         

         

         

         

        54,650
	
         

         

         

         

        $783,313.80
	
        Elected Not To ProvideExhibit 10.1

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT
(the “Agreement”), dated as of December 3, 2013, by and between BAXANO SURGICAL, INC., a Delaware corporation,
(the “Company”), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the “Investor”).

 

WHEREAS:

 

Subject to the terms and conditions set
forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to buy from the Company, up to Seven
Million Dollars ($7,000,000) of the Company's common stock, $0.0001 par value per share (the “Common Stock”).
The shares of Common Stock to be purchased hereunder are referred to herein as the “Purchase Shares.”

 

NOW THEREFORE, in consideration of the
mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

1.          CERTAIN
DEFINITIONS. 

 

For purposes of this
Agreement, the following terms shall have the following meanings:

 

(a)          “Accelerated
Purchase Share Amount” means, with respect to any Accelerated Purchase made pursuant to Section 2(b) hereof, the number
of Purchase Shares directed by the Company to be purchased by the Investor on an Accelerated Purchase Notice, which number of Purchase
Shares shall not exceed the lesser of (i) 200% of the number of Purchase Shares directed by the Company to be purchased by the
Investor pursuant to the corresponding Regular Purchase Notice for the corresponding Regular Purchase referred to in Section 2(b)
hereof (subject to the Purchase Share limitations contained in Section 2(a) hereof) and (ii) the Accelerated Purchase Share Percentage
multiplied by the trading volume of the Common Stock on the Principal Market during normal trading hours on the Accelerated Purchase
Date.

 

(b)          “Accelerated
Purchase Date” means, with respect to any Accelerated Purchase made pursuant to Section 2(b) hereof, the Business Day
immediately following the applicable Purchase Date with respect to the corresponding Regular Purchase referred to in Section 2(b)
hereof.

 

(c)          “Accelerated
Purchase Notice” means, with respect to any Accelerated Purchase made pursuant to Section 2(b) hereof, an irrevocable
written notice from the Company to the Investor directing the Investor to buy a specified Accelerated Purchase Share Amount on
the applicable Accelerated Purchase Date pursuant to Section 2(b) hereof at the applicable Accelerated Purchase Price.

 

(d)          “Accelerated
Purchase Share Percentage” means, with respect to any Accelerated Purchase made pursuant to Section 2(b) hereof, 0.30.

 

(e)          “Accelerated
Purchase Price” means, with respect to any particular Accelerated Purchase made pursuant to Section 2(b) hereof, the
lower of (i) ninety-five percent (95%) of the VWAP during (A) the entire trading day on the Accelerated Purchase Date, if the volume
of shares of Common Stock traded on the Principal Market on the Accelerated Purchase Date has not exceeded the Accelerated Purchase
Share Volume Maximum, or (B) the portion of the trading day of the Accelerated Purchase Date (calculated starting at the beginning
of normal trading hours) until such time at which the volume of shares of Common Stock traded on the Principal Market has exceeded
the Accelerated Purchase Share Volume Maximum or (ii) the Closing Sale Price on the Accelerated Purchase Date (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

 

    	 

    	 

    

 

(f)          “Accelerated
Purchase Share Volume Maximum” means the number of shares of Common Stock traded on the Principal Market during normal
trading hours on the Accelerated Purchase Date equal to (i) the amount of shares of Common Stock properly directed by the Company
to be purchased on the Accelerated Purchase Notice, divided by (ii) the Accelerated Purchase Share Percentage (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).

 

(g)  “Available Amount”
means, initially, Seven Million Dollars ($7,000,000) in the aggregate, which amount shall be reduced by the Purchase Amount each
time the Investor purchases shares of Common Stock pursuant to Section 2 hereof.

 

(h)          “Average
Price” means a price per Purchase Share (rounded to the nearest tenth of a cent) equal to the quotient obtained by dividing
(i) the aggregate gross purchase price paid by the Investor for all Purchase Shares purchased pursuant to this Agreement, by (ii)
the aggregate number of Purchase Shares issued pursuant to this Agreement.

 

(i)          “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

(j)          “Base
Price” means a price per Purchase Share equal to the sum of (i) the Signing Market Price and (ii) $0.0288 (subject to
adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction
that occurs on or after the date of this Agreement).

 

(k)          “Base
Prospectus” means the Company’s final base prospectus, dated August 1, 2011, a preliminary form of which is included
in the Registration Statement, including the documents incorporated by reference therein.

 

(l)          “Business
Day” means any day on which the Principal Market is open for trading, including any day on which the Principal Market
is open for trading for a period of time less than the customary time.

 

(m)          “Closing
Sale Price” means, for any security as of any date, the last closing sale price for such security on the Principal Market
as reported by the Principal Market.

 

(n)          “Confidential
Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment),
which is designated as "Confidential," "Proprietary" or some similar designation. Information communicated
orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to
a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly
known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly
known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction
of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party
as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the
receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently
developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed
by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement
prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.

 

    	-2-

    	 

    

 

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

 

(p)  
       “DTC” means The Depository Trust Company, or any successor performing substantially the same function for
the Company.

 

(q)          “DWAC
Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and
without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified
Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar
program hereafter adopted by DTC performing substantially the same function.

 

(r)
         “Exchange Act” means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

 

(s)          “Hercules
Loan Documents” means (i)
the Loan and Security Agreement dated as of December 3, 2013, between the Company and Hercules Technology Growth Capital, Inc.,
and (ii) the other Loan Documents referred to therein, including without limitation the Warrant issued thereunder. 

 

(t)          “Initial
Prospectus Supplement” means the prospectus supplement to the Base Prospectus complying with Rule 424(b) under the Securities
Act that is filed with the SEC and delivered by the Company to the Investor upon the execution and delivery of this Agreement in
accordance with Section 5(a), including the documents incorporated by reference therein.

 

(u)          “Material
Adverse Effect” means any material adverse effect on (i) the enforceability of any Transaction Document, (ii) the
results of operations, assets, business or financial condition of the Company, other than any material adverse effect that resulted
exclusively from (A) any change in the United States or foreign economies or securities or financial markets in general that
does not have a disproportionate effect on the Company, (B) any change that generally affects the industry in which the Company
operates that does not have a disproportionate effect on the Company, (C) any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities,
acts of war, sabotage or terrorism or military actions existing as of the date hereof, (D) any action taken by the Investor,
its affiliates or its or their successors and assigns with respect to the transactions contemplated by this Agreement, (E) the
effect of any change in applicable laws or accounting rules that does not have a disproportionate effect on the Company, or (F) any
change resulting from compliance with terms of this Agreement or the consummation of the transactions contemplated by this Agreement,
or (iii) the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document to be performed as of the date of determination.

 

(v)          “Maturity
Date” means the first day of the month immediately following the thirty-six (36) month anniversary of the Commencement
Date.

 

    	-3-

    	 

    

 

(w)          “Merger
Transactions” means the acquisition by the Company of Baxano, Inc. and the concurrent private placement transaction with
certain investors on May 31, 2013, as described in the SEC Documents.

 

(x)          “Person”
means an individual or entity including but not limited to any limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or agency thereof.

 

(y)          “Principal
Market” means The NASDAQ Global Market; provided, however, that in the event the Company’s Common Stock is ever
listed or traded on The NASDAQ Capital Market, The NASDAQ Global Select Market, the New York Stock Exchange, the NYSE MKT, the
NYSE Arca or the OTC Bulletin Board (it being understood that as used herein “OTC Bulletin Board” shall also mean any
successor or comparable market quotation system or exchange to the OTC Bulletin Board such as the OTCQB operated by the OTC Markets
Group, Inc.), then the “Principal Market” shall mean such other market or exchange on which the Company’s Common
Stock is then listed or traded.

 

(z)          “Prospectus”
means the Base Prospectus, as supplemented by any Prospectus Supplement (including the Initial Prospectus Supplement), including
the documents incorporated by reference therein.

 

(aa)         “Prospectus
Supplement” means any prospectus supplement to the Base Prospectus (including the Initial Prospectus Supplement) filed
with the SEC pursuant to Rule 424(b) under the Securities Act in connection with the transactions contemplated by this Agreement,
including the documents incorporated by reference therein.

 

(bb)         “Purchase
Amount” means, with respect to any Regular Purchase or any Accelerated Purchase made hereunder, the portion of the Available
Amount to be purchased by the Investor pursuant to Section 2 hereof.

 

(cc)         “Purchase
Date” means, with respect to any Regular Purchase made pursuant to Section 2(a) hereof, the Business Day on which the
Investor receives by 9:30 a.m., Eastern time, of such Business Day a valid Regular Purchase Notice that the Investor is to buy
Purchase Shares pursuant to Section 2(a) hereof.

 

(dd)         “Purchase
Price” means, with respect to any Regular Purchase made pursuant to Section 2(a) hereof, the lower of: (i) the
lowest Sale Price on the applicable Purchase Date and (ii) the arithmetic average of the three (3) lowest Closing Sale Prices for
the Common Stock during the twelve (12) consecutive Business Days ending on the Business Day immediately preceding such Purchase
Date (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction that occurs on or after the date of this Agreement).

 

(ee)         “Registration
Statement” means the effective registration statement on Form S-3 (Commission File No. 333-174255) filed by the
Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including the Securities,
and certain other securities, as such Registration Statement has been or may be amended and supplemented from time to time, including
all documents filed as part thereof or incorporated by reference therein, and including all information deemed to be a part thereof
at the time of effectiveness pursuant to Rule 430B of the Securities Act, including any comparable successor registration statement
filed by the Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including
the Securities.

 

    	-4-

    	 

    

 

(ff)         “Regular
Purchase Notice” means, with respect to any Regular Purchase pursuant to Section 2(a) hereof, an irrevocable written
notice from the Company to the Investor directing the Investor to buy such applicable amount of Purchase Shares at the applicable
Purchase Price as specified by the Company therein on the Purchase Date.

 

(gg)         “Sale
Price” means any trade price for the shares of Common Stock on the Principal Market as reported by the Principal Market.

 

(hh)         “SEC”
means the U.S. Securities and Exchange Commission.

 

(ii)       
  “Securities” means, collectively, the Purchase Shares and the Commitment Shares.

 

(jj)       
  “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

(kk)
      “Signing Market Price” means $1.04, representing the consolidated
closing bid price of the Common Stock on The NASDAQ Global Market on December 2, 2013, the date immediately prior to the date
of this Agreement.

 

(ll)        
 “Staff Interpretations” means the interpretations of the SEC’s staff set forth in response to
question 139.21 of the Compliance and Disclosure Interpretations of Securities Act Sections of the Division of Corporation
Finance of the SEC dated May 16, 2013.

 

(mm)       “Subsidiary”
means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting
stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated
under the Securities Act.

 

(nn)         “Transaction
Documents” means, collectively, this Agreement and the schedules and exhibits hereto, and each of the other agreements,
documents, certificates and instruments entered into or furnished by the parties hereto in connection with the transactions contemplated
hereby and thereby.

 

(oo)         “Transfer Agent”
means American Stock Transfer & Trust Company, LLC, or such other Person who is then serving as the transfer agent for the
Company in respect of the Common Stock.

 

(pp)         “VWAP”
means in respect of an applicable Accelerated Purchase Date, the volume weighted average price of the Common Stock on the Principal
Market, as reported on the Principal Market.

 

2. PURCHASE OF COMMON STOCK. 

 

Subject to the terms
and conditions set forth in this Agreement, the Company has the right to sell to the Investor, and the Investor has the obligation
to purchase from the Company, Purchase Shares as follows:

 

    	-5-

    	 

    

 

(a)          Commencement
of Regular Sales of Common Stock. Upon the satisfaction of the conditions set forth in Sections 7 and 8 hereof (the “Commencement”
and the date of satisfaction of such conditions the “Commencement Date”) and thereafter, the Company shall have
the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Regular Purchase Notice from time
to time, to purchase up to One Hundred Thousand (100,000) Purchase Shares (each such purchase a “Regular Purchase”),
at the Purchase Price on the Purchase Date; provided, however, that (i) the Regular Purchase may be increased to up to One Hundred
Twenty-Five Thousand (125,000) Purchase Shares, provided that the Closing Sale Price of the Common Stock is not below $1.50 on
the Purchase Date and (ii) the Regular Purchase may be increased to up to One Hundred Fifty Thousand (150,000) Purchase Shares,
provided that the Closing Sale Price of the Common Stock is not below $2.00 on the Purchase Date (all of which share amounts shall
be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction);
and provided, further, that the Investor’s committed obligation under any single Regular Purchase shall not exceed One Million
Dollars ($1,000,000). If the Company delivers any Regular Purchase Notice for a Purchase Amount in excess of the limitations contained
in the immediately preceding sentence, such Regular Purchase Notice shall be void ab initio to the extent of the amount
by which the number of Purchase Shares set forth in such Regular Purchase Notice exceeds the number of Purchase Shares which the
Company is permitted to include in such Purchase Notice in accordance herewith, and the Investor shall have no obligation to purchase
such excess Purchase Shares in respect of such Regular Purchase Notice; provided that the Investor shall remain obligated to purchase
the number of Purchase Shares which the Company is permitted to include in such Regular Purchase Notice. The Company may deliver
multiple Regular Purchase Notices to the Investor so long as at least one (1) Business Day has passed since the most recent Regular
Purchase was completed.

 

(b)         Accelerated Purchases.
Subject to the terms and conditions of this Agreement, in addition to purchases of Purchase Shares as described in Section 2(a)
above, the Company shall also have the right, but not the obligation, to direct the Investor by the Company’s delivery to
the Investor of an Accelerated Purchase Notice from time to time, and the Investor thereupon shall have the obligation, to buy
Purchase Shares at the Accelerated Purchase Price on the Accelerated Purchase Date in an amount equal to the Accelerated Purchase
Share Amount (each such purchase, an “Accelerated Purchase”). The Company may deliver an Accelerated Purchase
Notice to the Investor only on a Purchase Date on which the Closing Sale Price is not below $1.50 (to be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). If the Company delivers
any Accelerated Purchase Notice for an Accelerated Purchase Share Amount in excess of the limitations contained in the definition
of Accelerated Purchase Share Amount, such Accelerated Purchase Notice shall be void ab initio to the extent of the amount
by which the number of Purchase Shares set forth in such Accelerated Purchase Notice exceeds the Accelerated Purchase Share Amount
which the Company is permitted to include in such Accelerated Purchase Notice in accordance herewith (which shall be confirmed
in an Accelerated Purchase Confirmation (defined below)), and the Investor shall have no obligation to purchase such excess Purchase
Shares in respect of such Accelerated Purchase Notice; provided that the Investor shall remain obligated to purchase the Accelerated
Purchase Share Amount which the Company is permitted to include in such Accelerated Purchase Notice. Upon completion of each Accelerated
Purchase Date, the Accelerated Purchase Share Amount and the applicable Accelerated Purchase Price shall be set forth on a confirmation
of the Accelerated Purchase to be provided to the Company by the Investor (an “Accelerated Purchase Confirmation”).

 

    	-6-

    	 

    

 

(c)          
Payment for Purchase Shares. For each Regular Purchase, the Investor shall pay to the Company an amount equal to the Purchase
Amount with respect to such Regular Purchase as full payment for such Purchase Shares via wire transfer of immediately available
funds on the same Business Day that the Investor receives such Purchase Shares, if such Purchase Shares are received by the Investor
before 1:00 p.m., Eastern time, or, if such Purchase Shares are received by the Investor after 1:00 p.m., Eastern time, the next
Business Day. For each Accelerated Purchase, the Investor shall pay to the Company an amount equal to the Purchase Amount with
respect to such Accelerated Purchase as full payment for such Purchase Shares via wire transfer of immediately available funds
on the third Business Day following the date that the Investor receives such Purchase Shares. If the Company or the Transfer Agent
shall fail for any reason or for no reason to electronically transfer any Purchase Shares as DWAC Shares in respect of a Regular
Purchase or Accelerated Purchase (as applicable) within three (3) Business Days following the receipt by the Company of the Purchase
Price or Accelerated Purchase Price, respectively, therefor in compliance with this Section 2(c), and if on or after such Business
Day the Investor purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Investor of such Purchase Shares that the Investor anticipated receiving from the Company in respect of such Regular
Purchase or Accelerated Purchase (as applicable), then the Company shall, within three (3) Business Days after the Investor’s
request, either (i) pay cash to the Investor in an amount equal to the Investor’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Cover Price”), at which point the Company’s
obligation to deliver such Purchase Shares as DWAC Shares shall terminate, or (ii) promptly honor its obligation to deliver to
the Investor such Purchase Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the
Cover Price over the total Purchase Price for such Regular Purchase plus the total Accelerated Purchase Price for such Accelerated
Purchase (as applicable). The Company shall not issue any fraction of a share of Common Stock upon any Regular Purchase or Accelerated
Purchase. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction
of a share of Common Stock up or down to the nearest whole share. All payments made under this Agreement shall be made in lawful
money of the United States of America or wire transfer of immediately available funds to such account as the Company may from time
to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount expressed to be due
by the terms of this Agreement is due on any day that is not a Business Day, the same shall instead be due on the next succeeding
day that is a Business Day.

 

(d)
            Purchase Price Floor. The Company and the Investor
shall not effect any Regular Purchase under this Agreement on any Purchase Date that the Closing Sale Price is less than the
Floor Price. "Floor Price" means $1.00, which shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other similar transaction and, effective upon the
consummation of any such reorganization, recapitalization, non-cash dividend, stock split or other similar transaction, the
Floor Price shall mean the lower of (i) the adjusted price and (ii) $1.00.

 

(e)               Compliance
with Registration Statement Eligibility Requirements and Rules of Principal Market.

 

(i)          Maximum
Share Cap. The Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall
not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after giving effect thereto,
the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement would exceed the lesser of: (A)
subject to Section 2(e)(ii) below, the maximum number of shares of Common Stock that the Company may issue pursuant to this Agreement
and the transactions contemplated hereby (taking into account all shares of Common Stock issued or issuable pursuant to any transaction
or series of transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of
The NASDAQ Stock Market) without (1) breaching the Company’s obligations under the applicable rules of The NASDAQ Stock Market
or (2) obtaining stockholder approval under the applicable rules of The NASDAQ Stock Market (the “Exchange Cap”),
unless and until the Company elects to solicit stockholder approval of the issuance of Common Stock as contemplated by this Agreement
and the stockholders of the Company have in fact approved such issuance in accordance with the applicable rules and regulations
of The NASDAQ Stock Market, and the Certificate of Incorporation and Bylaws of the Company; and (B) for so long as the Company
is subject to the limitations set forth in General Instruction I.B.6. of Form S-3 and the Staff Interpretations, the maximum number
of shares of Common Stock that the Company may issue pursuant to this Agreement and the transactions contemplated hereby without
exceeding the limitations set forth in General Instruction I.B.6. of Form S-3 and the Staff Interpretations (the “Registration
Statement Eligibility Cap”). For all purposes of this Agreement, the term “Maximum Share Cap” shall
mean the lesser of (i) the Exchange Cap, to the extent applicable to the transactions contemplated by this Agreement, and
(ii) the Registration Statement Eligibility Cap, to the extent applicable to the transactions contemplated by this Agreement. For
the avoidance of doubt, the Company may, but shall be under no obligation to, request its stockholders to approve the issuance
of Common Stock as contemplated by this Agreement; provided, that if stockholder approval is not obtained in accordance with this
Section 2(e)(i), the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby
at all times during the term of this Agreement (except as set forth in Section 2(e)(ii) below).

 

    	-7-

    	 

    

 

(ii)         At-Market
Transaction. Notwithstanding Section 2(e)(i) above, the Exchange Cap shall not be applicable for any purposes of this Agreement
and the transactions contemplated hereby, solely to the extent that (and only for so long as) the Average Price shall equal or
exceed the Base Price (it being hereby acknowledged and agreed that the Exchange Cap shall be applicable for all purposes of this
Agreement and the transactions contemplated hereby at all other times during the term of this Agreement, unless the stockholder
approval referred to in Section 2(e)(i) is obtained).

 

(iii)        General.
The Company shall not issue any shares of Common Stock pursuant to this Agreement if such issuance would reasonably be expected
to result in (A) a violation of the Securities Act (including, without limitation, non-compliance with General Instruction I.B.6.
of Form S-3 and the Staff Interpretations) or (B) a breach of the rules and regulations of The NASDAQ Stock Market. The provisions
of this Section 2(e) shall be implemented in a manner otherwise than in strict conformity with the terms hereof only if
necessary to ensure compliance with the Securities Act (including, without limitation, General Instruction I.B.6. of Form S-3 and
the Staff Interpretations) and the rules and regulations of The NASDAQ Stock Market.

 

(f)          Beneficial
Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue
or sell, and the Investor shall not purchase or acquire, any shares of Common Stock under this Agreement which, when
aggregated with all other shares of Common Stock then beneficially owned by the Investor and its affiliates (as calculated pursuant
to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor
and its affiliates of more than 9.99% of the then issued and outstanding shares of Common Stock (the “Beneficial
Ownership Limitation”). Upon the written or oral request of the Investor, the Company shall promptly (but not later than
one (1) Business Day) confirm orally or in writing to the Investor the number of shares of Common Stock then outstanding. The Investor
and the Company shall each cooperate in good faith in the determinations required hereby and the application hereof. The Investor’s
written certification to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof
hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error.

 

3.          INVESTOR'S
REPRESENTATIONS AND WARRANTIES.

 

The Investor represents
and warrants to the Company that as of the date hereof and as of the Commencement Date:

 

(a)          Accredited
Investor Status. The Investor is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation
D promulgated under the Securities Act.

 

    	-8-

    	 

    

 

(b)          Information.
The Investor understands that its investment in the Securities involves a high degree of risk. The Investor (i) is able to bear
the economic risk of an investment in the Securities including a total loss thereof, (ii) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities
and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial
condition and business of the Company and others matters related to an investment in the Securities. Neither such inquiries nor
any other due diligence investigations conducted by the Investor or its representatives shall modify, amend or affect the Investor's
right to rely on the Company's representations and warranties contained in Section 4 below. The Investor has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities.

 

(c)          No
Governmental Review. The Investor understands that no U.S. federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(d)          Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a
valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

(e)          Residency.
The Investor is a resident of the State of Illinois.

 

(f)          No
Short Selling. The Investor represents and warrants to the Company that at no time prior to the date of this Agreement has
any of the Investor, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly,
any (i) "short sale" (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock, and will not engage in short
sales during the term of this Agreement.

 

4.          REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to the Investor that as of the date hereof and as of the Commencement Date:

 

(a)          Organization
and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate power and authority to own
and use its properties and assets and to carry on its business as currently conducted.  The Company is not in violation
or default of any of the provisions of its certificate of incorporation or bylaws.  The Company is duly qualified to
conduct business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
The Company has no Subsidiaries.

 

    	-9-

    	 

    

 

(b)          Authorization;
Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement and each of the other Transaction Documents, and to issue the Securities in accordance with the terms hereof
and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation, the issuance of the Commitment Shares (as defined below in Section
5(e)) and the reservation for issuance and the issuance of the Purchase Shares issuable under this Agreement, have been duly authorized
by the Company's Board of Directors and no further consent or authorization is required by the Company, its Board of Directors
or its stockholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly
executed and delivered by the Company and (iv) this Agreement constitutes, and each other Transaction Document upon its execution
on behalf of the Company, shall constitute, the valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies. The Board of Directors of the Company has approved the resolutions (the “Signing Resolutions”)
substantially in the form as set forth as Exhibit C attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Signing Resolutions are valid, in full force and effect and have not been modified or supplemented in any respect.
The Company has delivered to the Investor a true and correct copy of a unanimous written consent adopting the Signing Resolutions
executed by all of the members of the Board of Directors of the Company. Except as set forth in this Agreement, no other approvals
or consents of the Company’s Board of Directors, any authorized committee thereof, and/or stockholders is necessary under
applicable laws and the Company’s Certificate of Incorporation and/or Bylaws to authorize the execution and delivery of this
Agreement or any of the transactions contemplated hereby, including, but not limited to, the issuance of the Commitment Shares
and the issuance of the Purchase Shares.

 

(c)          Capitalization.
As of the date hereof, the authorized capital stock of the Company is set forth in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2012. Except as disclosed in the Base Prospectus and the SEC Documents (as defined below) and as
provided for in the Hercules Loan Documents, (i) no shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities,
(iii) other than pursuant to the Company’s equity compensation plans, there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or
may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock
of the Company, (iv) there are no agreements or arrangements under which the Company is obligated to register the sale of any of
its securities under the Securities Act, (v) there are no outstanding securities or instruments of the Company which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
is or may become bound to redeem a security of the Company, (vi) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities as described in this Agreement and (vii) the Company
does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement.
The Company has furnished to the Investor true and correct copies of the Company's Certificate of Incorporation, as amended and
as in effect on the date hereof (the "Certificate of Incorporation"), and the Company's Bylaws, as amended and
as in effect on the date hereof (the "Bylaws"), and summaries of the terms of all securities convertible into
or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders thereof in respect
thereto.

 

    	-10-

    	 

    

 

(d)          Issuance
of Securities. Upon issuance and payment therefor in accordance with the terms and conditions of this Agreement, the Purchase
Shares shall be validly issued, fully paid and nonassessable and free from all taxes, liens, charges, restrictions, rights of first
refusal and preemptive rights with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder
of Common Stock. The Initial Commitment Shares (as defined below in Section 5(e)) have been duly authorized and, upon issuance
in accordance with the terms of this Agreement, shall be validly issued, fully paid and nonassessable and free from all taxes,
liens, charges, restrictions, rights of first refusal and preemptive rights with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock. 7,000,000 shares of Common Stock have been duly authorized and
reserved for issuance upon purchase under this Agreement as Purchase Shares. 60,870 shares of Common Stock (subject to equitable
adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) have been duly
authorized and reserved for issuance as Additional Commitment Shares (as defined below in Section 5(e)) in accordance with this
Agreement. Upon issuance in accordance with the terms of this Agreement, the Additional Commitment Shares shall be validly issued,
fully paid and nonassessable and free from all taxes, liens, charges, restrictions, rights of first refusal and preemptive rights
with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

 

(e)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance
of the Purchase Shares and the Commitment Shares) will not (i) result in a violation of the Certificate of Incorporation, any Certificate
of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the Bylaws or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the
Company is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the Principal Market applicable to the Company) or by which any
property or asset of the Company is bound or affected, except in the case of conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations under clause (ii), which would not reasonably be expected to result in a Material Adverse Effect.
The Company is not in violation of any term of or in default under its Certificate of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws. The Company is not in violation of
any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
or order or any statute, rule or regulation applicable to the Company, except for possible conflicts, defaults, terminations or
amendments that would not reasonably be expected to have a Material Adverse Effect. The business of the Company is not being conducted,
and shall not be conducted, in violation of any law, ordinance, regulation of any governmental entity, except for possible violations,
the sanctions for which either individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.
Except as specifically contemplated by this Agreement and as required under the Securities Act or applicable state securities laws
and the rules and regulations of the Principal Market and under the Corporate Financing Rule 5110 of the Financial Industry Regulatory
Authority (FINRA), the Company is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents in accordance with the terms hereof or thereof. Except
as set forth elsewhere in this Agreement, all consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence shall be obtained or effected on or prior to the Commencement Date. Except
as required in connection with the Merger Transactions, since one year prior to the date hereof, the Company has not received nor
delivered any notices or correspondence from or to the Principal Market. The Principal Market has not commenced any delisting proceedings
against the Company.

 

    	-11-

    	 

    

 

(f)          SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twelve months preceding the date hereof (or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension.  As of their
respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable. None of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect
at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. Except as publicly available through the
SEC’s Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) or in connection with a confidential treatment request
submitted to the SEC, the Company has received no notices or correspondence from the SEC for the one year preceding the date hereof.
The SEC has not commenced any enforcement proceedings against the Company.

 

(g)          Absence
of Certain Changes. Except as disclosed in the SEC Documents, since December 31, 2012, there has been no material adverse change
in the business, properties, operations, financial condition or results of operations of the Company. The Company has not taken
any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company
have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings.
The Company is financially solvent and is generally able to pay its debts as they become due.

 

(h)          Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company,
the Common Stock or any of the Company's officers or directors in their capacities as such, which would reasonably be expected
to have a Material Adverse Effect.

 

(i)          Acknowledgment
Regarding Investor's Status. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm's
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further
acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Investor
or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Investor's purchase of the Securities. The Company further represents to the Investor that
the Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company
and its representatives and advisors.

 

    	-12-

    	 

    

 

(j)          No
Integrated Offering. Neither the Company nor any Person acting on its behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company in a manner that would require stockholder approval pursuant to the rules
of the Principal Market on which any of the securities of the Company are listed or designated. The issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the Principal Market.

 

(k)          Intellectual
Property Rights. The Company owns or possesses adequate rights or licenses to use all material trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct its business as now conducted. None of the Company's material trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses,
approvals, government authorizations, trade secrets or other intellectual property rights have expired or terminated, or, by the
terms and conditions thereof, could expire or terminate within two years from the date of this Agreement. The Company does not
have any knowledge of any infringement by the Company of any material trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others,
or of any such development of similar or identical trade secrets or technical information by others, and there is no claim, action
or proceeding being made or brought against, or to the Company's knowledge, being threatened against, the Company regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade
secret or other infringement, which would reasonably be expected to have a Material Adverse Effect.

 

(l)          Environmental
Laws. The Company (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license
or approval, except where, in each of the three foregoing clauses, the failure to so comply would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

(m)          Title.
The Company has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal
property owned by it that is material to the business of the Company, in each case free and clear of all liens, encumbrances and
defects (“Liens”) and, except for Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company are held by it under valid, subsisting and enforceable leases with which the Company is in compliance
with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings
by the Company.

 

    	-13-

    	 

    

 

(n)          Insurance.
The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses in which the Company is engaged. The Company has
not been refused any insurance coverage sought or applied for and does not have any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially and adversely affect the condition, financial
or otherwise, or the earnings, business or operations of the Company.

 

(o)          Regulatory
Permits. The Company possesses all material certificates, authorizations and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct its business, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit.

 

(p)          Tax
Status. The Company has made or filed all federal and state income and all other material tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the extent that the Company has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.

 

(q)          Transactions
With Affiliates.  Except as set forth in the SEC Documents,
none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.

 

(r)          Application
of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the
laws of the state of its incorporation which is or could become applicable to the Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the Securities and the Investor's ownership of the
Securities.

 

(s)           Disclosure.  Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents that will be timely
publicly disclosed by the Company, the Company confirms that neither it nor any other Person acting on its behalf has provided
the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Registration Statement or any Prospectus Supplements thereto.   The
Company understands and confirms that the Investor will rely on the foregoing representation in effecting purchases and sales of
securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Investor regarding
the Company, its business and the transactions contemplated hereby, including the disclosure schedules to this Agreement, is true
and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases
disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges
and agrees that the Investor neither makes nor has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.

 

    	-14-

    	 

    

 

(t)          Foreign
Corrupt Practices.  Neither the Company, nor to the knowledge
of the Company, any agent or other Person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any Person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.

 

(u)          Registration
Statement. The Company has prepared and filed with the SEC in accordance with the provisions of the Securities Act the Registration
Statement. The Registration Statement was declared effective by order of the SEC on August 1, 2011. The Registration Statement
is effective pursuant to the Securities Act and available for the issuance of the Securities thereunder, and the Company has not
received any written notice that the SEC has issued or intends to issue a stop order or other similar order with respect to the
Registration Statement or the Prospectus or that the SEC otherwise has (i) suspended or withdrawn the effectiveness of the
Registration Statement or (ii) issued any order preventing or suspending the use of the Prospectus or any Prospectus Supplement,
in either case, either temporarily or permanently or intends or has threatened in writing to do so. The “Plan of Distribution”
section of the Prospectus permits the issuance of the Securities hereunder. At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2)
of the Securities Act, the Registration Statement and any amendments thereto complied and will comply in all material respects
with the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Base
Prospectus and any Prospectus Supplement thereto, at the time such Base Prospectus or such Prospectus Supplement thereto was issued
and on the Commencement Date, complied and will comply in all material respects with the requirements of the Securities Act and
did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading; provided that this representation
and warranty does not apply to statements in or omissions from any Prospectus Supplement made in reliance upon and in conformity
with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use
therein. The Company meets all of the requirements for the use of a registration statement on Form S-3 pursuant to the Securities
Act for the offering and sale of the Securities contemplated by this Agreement in reliance on General Instruction I.B.6. of Form
S-3 and the Staff Interpretations, and the SEC has not notified the Company of any objection to the use of the form of the Registration
Statement pursuant to Rule 401(g)(1) of the Securities Act. The Company hereby confirms that, for so long as the Company is
subject to General Instruction I.B.6. of Form S-3 and the Staff Interpretations, the Company shall not issue any shares of Common
Stock pursuant to this Agreement if such issuance would reasonably be expected to result in non-compliance with General Instruction
I.B.6. of Form S-3 and the Staff Interpretations. The Registration Statement, as of its effective date, meets the requirements
set forth in Rule 415(a)(1)(x) pursuant to the Securities Act. At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities
Act) relating to any of the Securities, the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the Securities
Act). The Company has not distributed any offering material in connection with the offering and sale of any of the Securities,
and, until the Investor does not hold any of the Securities, shall not distribute any offering material in connection with the
offering and sale of any of the Securities, to or by the Investor, in each case, other than the Registration Statement or any amendment
thereto, the Prospectus or any Prospectus Supplement required pursuant to applicable law or the Transaction Documents. The Company
has not made, and agrees that unless it obtains the prior written consent of the Investor it will not make, an offer relating to
the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act. The
Company shall comply with the requirements of Rules 164 and 433 under the Securities Act applicable to any such free writing prospectus
consented to by the Investor, including in respect of timely filing with the SEC, legending and record keeping.

 

    	-15-

    	 

    

 

(v)          DTC
Eligibility. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer
(FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.

 

(w)          
Sarbanes-Oxley. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended,
which are applicable to it as of the date hereof.

  

(x)          Certain
Fees. Except as disclosed on Schedule 4(x), no brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents. Except as disclosed on Schedule 4(x), the Investor
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this Section 4(x) that may be due in connection with the transactions contemplated by the Transaction
Documents.

  

(y)          Investment
Company. The Company is not, and immediately after receipt of payment for the Securities will not be, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

  

(z)          Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock pursuant to the Exchange Act nor has the Company received any notification that the SEC is currently contemplating
terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof, received any notice from
any Person to the effect that the Company is not in compliance with the listing or maintenance requirements of the Principal Market.
The Company is in compliance with all such listing and maintenance requirements.

  

(aa)         Accountants.
The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are an
independent registered public accounting firm as required by the Securities Act.

  

    	-16-

    	 

    

  

(bb)         No
Market Manipulation. The Company has not, and to its knowledge no Person acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any Securities.

  

(cc)         Shell
Company Status. The Company is not currently, and within the past three years has not been, an issuer identified in Rule 144(i)(1)
under the Securities Act.

  

5.            COVENANTS.

 

(a)          Filing
of Current Report and Initial Prospectus Supplement. The Company agrees that it shall, within the time required under the Exchange
Act, file with the SEC a report on Form 8-K relating to the transactions contemplated by, and describing the material terms and
conditions of, the Transaction Documents (the “Current Report”). The Company further agrees that it shall, within
the time required under Rule 424(b) under the Securities Act, file with the SEC the Initial Prospectus Supplement pursuant to Rule
424(b) under the Securities Act specifically relating to the transactions contemplated by, and describing the material terms and
conditions of, the Transaction Documents, containing information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430B under the Securities Act, and disclosing all information relating to the transactions contemplated
hereby required to be disclosed in the Registration Statement and the Prospectus as of the date of the Initial Prospectus Supplement,
including, without limitation, information required to be disclosed in the section captioned “Plan of Distribution”
in the Prospectus. The Investor acknowledges that it will be identified in the Initial Prospectus Supplement as an underwriter
within the meaning of Section 2(a)(11) of the Securities Act. The Company shall permit the Investor to review and comment upon
the final pre-filing draft version of the Current Report and the final pre-filing draft version the Initial Prospectus Supplement
at least 24 hours prior to their filing with the SEC, the Company shall give due consideration to all such comments, and the Company
shall not file the Current Report or the Initial Prospectus Supplement with the SEC in a form to which the Investor reasonably
objects. The Investor shall use its reasonable best efforts to comment upon the final pre-filing draft version of the Current Report
and the final pre-filing draft version of the Initial Prospectus Supplement within 24 hours from the date the Investor receives
it from the Company. The Investor shall furnish to the Company such information regarding itself, the Securities held by it and
the intended method of distribution thereof, including any arrangement between the Investor and any other Person relating to the
sale or distribution of the Securities, as shall be reasonably requested by the Company in connection with the preparation and
filing of the Current Report and the Initial Prospectus Supplement, and shall otherwise cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the Current Report and the Initial Prospectus Supplement
with the SEC.

 

(b)          Blue
Sky. The Company shall take all such action, if any, as is reasonably necessary in order to obtain an exemption for or to register
or qualify (i) the issuance of the Commitment Shares and the sale of the Purchase Shares to the Investor under this Agreement and
(ii) any subsequent resale of all Commitment Shares and all Purchase Shares by the Investor, in each case, under applicable securities
or “Blue Sky” laws of the states of the United States in such states as is reasonably requested by the Investor from
time to time, and shall provide evidence of any such action so taken to the Investor.

 

    	-17-

    	 

    

 

(c)          Listing/DTC.
The Company shall promptly secure the listing of all of the Purchase Shares and Commitment Shares to be issued to the Investor
hereunder on the Principal Market (subject to official notice of issuance) and upon each other national securities exchange or
automated quotation system, if any, upon which the Common Stock is then listed, and shall maintain, so long as any shares of Common
Stock shall be so listed, such listing of all such Securities from time to time issuable hereunder. The Company shall maintain
the listing of the Common Stock on the Principal Market and shall comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules and regulations of the Principal Market. The Company shall not take any action
that would reasonably be expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company
shall promptly, and in no event later than the following Business Day, provide to the Investor copies of any notices it receives
from any Person regarding the continued eligibility of the Common Stock for listing on the Principal Market. The Company shall
pay all fees and expenses in connection with satisfying its obligations under this Section 5(c). The Company shall take all action
necessary to ensure that its Common Stock can be transferred electronically as DWAC Shares.

 

(d)          Prohibition
of Short Sales and Hedging Transactions. The Investor agrees that beginning on the date of this Agreement and ending on the
90th calendar day following the date of termination of this Agreement as provided in Section 11, the Investor and its
agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i)
“short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii)
hedging transaction, which establishes a net short position with respect to the Common Stock.

 

(e)          Issuance
of Commitment Shares. In consideration for the Investor’s execution and delivery of this Agreement, the Company shall
cause the Transfer Agent to issue, on the date of this Agreement, 182,609 shares of Common Stock (the “Initial Commitment
Shares”) directly to the Investor electronically as DWAC Shares and shall deliver to the Transfer Agent the Irrevocable
Transfer Agent Instructions with respect to the issuance of the Commitment Shares. For the avoidance of doubt, all of the Initial
Commitment Shares shall be fully earned as of the date of this Agreement, whether or not the Commencement shall occur or any Purchase
Shares are purchased by the Investor under this Agreement and irrespective of any termination of this Agreement. In connection
with each Regular Purchase and each Accelerated Purchase of Purchase Shares hereunder, the Company shall issue to the Investor
a number of shares of Common Stock (the “Additional Commitment Shares” and, collectively with the Initial Commitment
Shares, the “Commitment Shares”) equal to the product of (x) 60,870 and (y) the Purchase Amount Fraction. The
“Purchase Amount Fraction” shall mean a fraction, the numerator of which is the Purchase Amount purchased by
the Investor with respect to such Regular Purchase and Accelerated Purchase (as applicable) of Purchase Shares and the denominator
of which is Seven Million Dollars ($7,000,000). The Additional Commitment Shares shall be issued to the Investor on the same Business
Day as Purchase Shares are issued to the Investor in connection with the applicable Regular Purchase and Accelerated Purchase (as
applicable) in accordance with Section 2(c). The Additional Commitment Shares shall be equitably adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction. For the avoidance of doubt, the Additional Commitment
Shares shall be fully earned as of the date of their issuance pursuant to this Agreement, whether or not any additional Purchase
Shares are purchased thereafter by the Investor under this Agreement and irrespective of any termination of this Agreement.

 

    	-18-

    	 

    

 

(f)          Due
Diligence; Non-Public Information. The Investor shall have the right, from time to time as the Investor may reasonably deem
appropriate, to perform reasonable due diligence on the Company during normal business hours. The Company and its officers and
employees shall provide information and reasonably cooperate with the Investor in connection with any reasonable request by the
Investor related to the Investor's due diligence of the Company. Each party hereto agrees not to disclose any Confidential Information
of the other party to any third party and shall not use the Confidential Information for any purpose other than in connection with,
or in furtherance of, the transactions contemplated hereby. Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party. The Company confirms that neither it nor any other Person acting on its
behalf shall provide the Investor or its agents or counsel with any information that constitutes or might constitute material,
non-public information, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by
Regulation FD. In the event of a breach of the foregoing covenant by the Company or any Person acting on its behalf (as determined
in the reasonable good faith judgment of the Investor), in addition to any other remedy provided herein or in the other Transaction
Documents, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement
or otherwise, of such material, non-public information without the prior approval by the Company; provided the Investor shall have
first provided notice to the Company that it believes it has received information that constitutes material, non-public information,
the Company shall have at least 24 hours to publicly disclose such material, non-public information prior to any such disclosure
by the Investor, and the Company shall have failed to publicly disclose such material, non-public information within such time
period. The Investor shall not have any liability to the Company or any of its directors, officers, employees, stockholders or
agents, for any such disclosure. The Company understands and confirms that the Investor shall be relying on the foregoing covenants
in effecting transactions in securities of the Company.

 

(g)        Purchase Records. The
Investor and the Company shall each maintain records showing the remaining Available Amount at any given time and the dates and
Purchase Amounts for each Regular Purchase and Accelerated Purchase or shall use such other method, reasonably satisfactory to
the Investor and the Company.

 

(h)          Taxes.
 The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of Common Stock to the Investor made under this Agreement.

 

(i)          
Effective Registration Statement; Current Prospectus; Securities Law Compliance. The Company shall use its reasonable best
efforts to keep the Registration Statement effective pursuant to Rule 415 promulgated under the Securities Act, and to keep the
Registration Statement and the Prospectus current and available for issuances and sales of all of the Securities by the Company
to the Investor, and for the resale by the Investor, at all times until the earlier of (i) the date on which the Investor shall
have sold all the Securities and no Available Amount remains under this Agreement and (ii) 90 days following the Maturity Date
(the "Registration Period"). Without limiting the generality of the foregoing, during the Registration Period,
the Company shall (a) take all action necessary to cause the Common Stock to continue to be registered as a class of securities
under Sections 12(b) or 12(g) of the Exchange Act, shall comply with its reporting and filing obligations under the Exchange Act,
and shall not take any action or file any document (whether or not permitted by the Exchange Act) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations under the Exchange Act, and (b) prepare and file with
the SEC, at the Company’s expense, such amendments (including, without limitation, post-effective
amendments) to the Registration Statement and such Prospectus Supplements pursuant to Rule 424(b) under the Securities Act, in
each case, as may be necessary to keep the Registration Statement effective pursuant to Rule 415 promulgated under the Securities
Act, and to keep the Registration Statement and the Prospectus current and available for issuances and sales of all of the Securities
by the Company to the Investor, and for the resale of all of the Securities by the Investor, at all times during the Registration
Period (it being hereby acknowledged and agreed that the Company shall prepare and file with the SEC, at the Company’s expense,
immediately prior to the third anniversary of the initial effective date of the Registration Statement (the “Renewal Date”),
a new Registration Statement relating to the Securities, in a form satisfactory to the Investor and its counsel, and the Company
shall use its reasonable best efforts to cause such Registration Statement to be declared effective within 180 days after the Renewal
Date). The Investor shall furnish to the Company such information regarding itself, the Securities held by it and the intended
method of distribution thereof as shall be reasonably requested by the Company in connection with the preparation and filing of
any such amendment to the Registration Statement (or new Registration Statement) or any such Prospectus Supplement, and shall otherwise
cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any such amendment
to the Registration Statement (or new Registration Statement) or any such Prospectus Supplement. The Company shall comply with
all applicable federal, state and foreign securities laws in connection with the offer, issuance and sale of the Securities contemplated
by the Transaction Documents. Without limiting the generality of the foregoing, neither the Company nor any of its officers or
directors will take, directly or indirectly, any action designed or intended to stabilize or manipulate the price of any security
of the Company, or which would reasonably be expected to cause or result in, stabilization or manipulation of the price of any
security of the Company.

 

    	-19-

    	 

    

 

(j)          Stop
Orders. The Company shall advise the Investor promptly (but in no event later than 24 hours) and shall confirm such advice
in writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement to the Registration
Statement, the Prospectus, any Prospectus Supplement or for any additional information; (ii) of the Company’s receipt of
notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting or
suspending the use of the Prospectus or any Prospectus Supplement, or of the Company’s receipt of any notification of the
suspension of qualification of the Securities for offering or sale in any jurisdiction or the initiation or contemplated initiation
of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any event, which makes any statement
of a material fact made in the Registration Statement, the Prospectus or any Prospectus Supplement untrue or which requires the
making of any additions to or changes to the statements then made in the Registration Statement, the Prospectus or any Prospectus
Supplement in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make
the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus or any
Prospectus Supplement to comply with the Securities Act or any other law. The Company shall not be required to disclose to the
Investor the substance or specific reasons of any of the events set forth in clauses (i) through (iii) of the immediately preceding
sentence, but rather, shall only be required to disclose that the event has occurred. The Company shall not deliver to the Investor
any Regular Purchase Notice or Accelerated Purchase Notice, and the Investor shall not be obligated to purchase any shares of Common
Stock under this Agreement, during the continuation or pendency of any of the foregoing events. If at any time the SEC shall issue
any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending the use of the Prospectus
or any Prospectus Supplement, the Company shall use its reasonable best efforts to obtain the withdrawal of such order at the earliest
possible time. The Company shall furnish to the Investor, without charge, a copy of any correspondence from the SEC or the staff
of the SEC to the Company or its representatives relating to the Registration Statement or the Prospectus, as the case may be.

 

(k)          Amendments
to Registration Statement; Prospectus Supplements. Except as provided in this Agreement and other than periodic and current
reports required to be filed pursuant to the Exchange Act, the Company shall not file with the SEC any amendment to the Registration
Statement or any supplement to the Base Prospectus that refers to the Investor, the Transaction Documents or the transactions contemplated
thereby (including, without limitation, any Prospectus Supplement filed in connection with the transactions contemplated by the
Transaction Documents), in each case with respect to which (a) the Investor shall not previously have been advised and afforded
the opportunity to review and comment thereon at least two (2) Business Days prior to filing with the SEC, as the case may be,
(b) the Company shall not have given due consideration to any comments thereon received from the Investor or its counsel, or (c)
the Investor shall reasonably object, unless the Company reasonably has determined that it is necessary to amend the Registration
Statement or make any supplement to the Prospectus to comply with the Securities Act or any other applicable law or regulation,
in which case the Company shall promptly (but in no event later than 24 hours) so inform the Investor, the Investor shall be provided
with a reasonable opportunity to review and comment upon any disclosure referring to the Investor, the Transaction Documents or
the transactions contemplated thereby, as applicable, and the Company shall expeditiously furnish to the Investor a copy thereof.
In addition, for so long as, in the reasonable opinion of counsel for the Investor, the Prospectus is required to be delivered
in connection with any acquisition or sale of Securities by the Investor, the Company shall not file any Prospectus Supplement
with respect to the Securities without furnishing to the Investor as many copies of such Prospectus Supplement, together with the
Prospectus, as the Investor may reasonably request.

 

    	-20-

    	 

    

 

(l)          Prospectus
Delivery. The Company consents to the use of the Prospectus (and of each Prospectus Supplement thereto) in accordance with
the provisions of the Securities Act and with the securities or “blue sky” laws of the jurisdictions in which the Securities
may be sold by the Investor, in connection with the offering and sale of the Securities and for such period of time thereafter
as the Prospectus is required by the Securities Act to be delivered in connection with sales of the Securities. The Company will
make available to the Investor upon request, and thereafter from time to time will furnish to the Investor, as many copies of the
Prospectus (and each Prospectus Supplement thereto) as the Investor may reasonably request for the purposes contemplated by the
Securities Act within the time during which the Prospectus is required by the Securities Act to be delivered in connection with
sales of the Securities. If during such period of time any event shall occur that in the reasonable judgment of the Company and
its counsel, or in the reasonable judgment of the Investor and its counsel, is required to be set forth in the Registration Statement,
the Prospectus or any Prospectus Supplement or should be set forth therein in order to make the statements made therein (in the
case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading,
or if in the reasonable judgment of the Company and its counsel, or in the reasonable judgment of the Investor and its counsel,
it is otherwise necessary to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply
with the Securities Act or any other applicable law or regulation, the Company shall forthwith prepare and, subject to Section
5(k) above, file with the SEC an appropriate amendment to the Registration Statement or an appropriate Prospectus Supplement and
in each case shall expeditiously furnish to the Investor, at the Company’s expense, such amendment to the Registration Statement
or such Prospectus Supplement, as applicable, as may be necessary to reflect any such change or to effect such compliance. The
Company shall have no obligation to separately advise the Investor of, or deliver copies to the Investor of, the SEC Documents,
all of which the Investor shall be deemed to have notice of.

 

(m)          Integration.
From and after the date of this Agreement, the Company will not, and will use its reasonable best efforts to ensure that no Person
acting on its behalf will, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security,
under circumstances that would cause this offering of the Securities to be integrated with other offerings by the Company in a
manner that would require stockholder approval pursuant to the rules of the Principal Market on which any of the securities of
the Company are listed or designated, unless stockholder approval is obtained before the closing of such subsequent transaction
in accordance with the rules of such Principal Market.

 

(n)          Use
of Proceeds. The Company will use the net proceeds from the offering as described in the Prospectus.

  

    	-21-

    	 

    

  

(o)          Other
Transactions. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement
or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right
of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the
Company to deliver the Purchase Shares and the Commitment Shares to the Investor in accordance with the terms of the Transaction
Documents.

 

(p)          Required
Filings Relating to Purchases. To the extent required under the Securities Act or under interpretations by the SEC thereof,
as promptly as practicable after the close of each of the Company’s fiscal quarters (or on such other dates as required under
the Securities Act or under interpretations by the SEC thereof), the Company shall prepare a Prospectus Supplement, which will
set forth the number of Purchase Shares sold to the Investor during such quarterly period (or other relevant period), the purchase
price for such Purchase Shares and the net proceeds received by the Company from such sales, and shall file such Prospectus Supplement
with the SEC pursuant to Rule 424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rule 430B
under the Securities Act). If any such quarterly Prospectus Supplement is not required to be filed under the Securities Act or
under interpretations by the SEC thereof, the Company shall disclose the information referenced in the immediately preceding sentence
in its annual report on Form 10-K or its quarterly report on Form 10-Q (as applicable) in respect of the quarterly period that
ended immediately before the filing of such report in which sales of Purchase Shares were made to the Investor under this Agreement,
and file such report with the SEC within the applicable time period required by the Exchange Act. The Company shall not file any
Prospectus Supplement pursuant to this Section 5(p), and shall not file any report containing disclosure relating to such sales
of Purchase Shares, unless a copy of such Prospectus Supplement or disclosure has been submitted to the Investor a reasonable period
of time before the filing and the Investor has not reasonably objected thereto (it being acknowledged and agreed that the Company
shall not submit any portion of any Form 10-K or Form 10-Q other than the specific disclosure relating to any sales of Purchase
Shares). The Company shall also furnish copies of all such Prospectus Supplements to each exchange or market in the United States
on which sales of the Purchase Shares may be made as may be required by the rules or regulations of such exchange or market, if
applicable.

 

6.          TRANSFER
AGENT INSTRUCTIONS.

 

On the Commencement
Date, the Company shall issue to the Transfer Agent (and any subsequent transfer agent) irrevocable instructions, in the form substantially
similar to those used by the Investor in substantially similar transactions, to issue the Purchase Shares and the Commitment Shares
in accordance with the terms of this Agreement (the “Irrevocable Transfer Agent Instructions”). All Securities
to be issued to or for the benefit of the Investor pursuant to this Agreement shall be issued as DWAC Shares. The Company warrants
to the Investor that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 6 will be
given by the Company to the Transfer Agent with respect to the Securities, and the Securities shall otherwise be freely transferable
on the books and records of the Company.

 

		7.	CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE 

SALES
OF SHARES OF COMMON STOCK.

 

The right of the Company
hereunder to commence sales of the Purchase Shares on the Commencement Date is subject to the satisfaction or, where legally permissible,
the waiver of each of the following conditions:

 

    	-22-

    	 

    

 

(a)          The
Investor shall have executed each of the Transaction Documents and delivered the same to the Company;

 

(b)          No
stop order with respect to the Registration Statement shall be pending or threatened by the SEC; and

 

(c)          The
representations and warranties of the Investor shall be true and correct in all material respects as of the date hereof and as
of the Commencement Date as though made at that time.

 

		8.	CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE
SHARES OF COMMON STOCK.

 

The obligation of the
Investor to buy Purchase Shares under this Agreement is subject to the satisfaction or, where legally permissible, the waiver of
each of the following conditions on or prior to the Commencement Date and, once such conditions have been initially satisfied,
there shall not be any ongoing obligation to satisfy such conditions after the Commencement has occurred:

 

(a)          The
Company shall have executed each of the Transaction Documents and delivered the same to the Investor;

 

(b)          The
Common Stock shall be listed or quoted on the Principal Market, trading in the Common Stock shall not have been within the last
365 days suspended by the SEC or the Principal Market, and all Securities to be issued by the Company to the Investor pursuant
to this Agreement shall have been approved for listing or quotation on the Principal Market in accordance with the applicable rules
and regulations of the Principal Market, subject only to official notice of issuance;

 

(c)          The
Investor shall have received the opinions of the Company's legal counsel dated as of the Commencement Date substantially in the
form of Exhibit A attached hereto;

 

(d)          The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to materiality in Section 4 above, in which case, such representations
and warranties shall be true and correct without further qualification) as of the date hereof and as of the Commencement Date as
though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct
as of such date) and the Company shall have performed, satisfied and complied with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date. The
Investor shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Commencement
Date, to the foregoing effect in the form attached hereto as Exhibit B;

 

(e)          The
Board of Directors of the Company shall have adopted resolutions in the form attached hereto as Exhibit C which shall
be in full force and effect without any amendment or supplement thereto as of the Commencement Date;

 

(f)          As
of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, (A) solely for
the purpose of effecting purchases of Purchase Shares hereunder, 7,000,000 shares of Common Stock and (B) as Additional Commitment
Shares in accordance with Section 5(e) hereof, 60,870 shares of Common Stock;

 

    	-23-

    	 

    

 

(g)          The
Irrevocable Transfer Agent Instructions shall have been delivered to and acknowledged in writing by the Company and the Company's
Transfer Agent (or any successor transfer agent), and the Initial Commitment Shares required to be issued on the date of this Agreement
in accordance with Section 5(e) hereof shall have been issued directly to the Investor electronically as DWAC Shares;

 

(h)          The
Company shall have delivered to the Investor a certificate evidencing the incorporation and good standing of the Company in the
State of Delaware issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business Days of the Commencement
Date;

 

(i)          The
Company shall have delivered to the Investor a certified copy of the Certificate of Incorporation as certified by the Secretary
of State of the State of Delaware within ten (10) Business Days of the Commencement Date;

 

(j)          The
Company shall have delivered to the Investor a secretary's certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit D;

 

(k)          The
Registration Statement shall continue to be effective and no stop order with respect to the Registration Statement shall be pending
or threatened by the SEC. The Company shall have a maximum dollar amount certain of Common Stock registered under the Registration
Statement which is sufficient to issue to the Investor not less than (i) the full Available Amount worth of Purchase Shares plus
(ii) all of the Commitment Shares. The Current Report and the Initial Prospectus Supplement each shall have been filed with the
SEC, as required pursuant to Section 5(a), and copies of the Prospectus shall have been delivered to the Investor in accordance
with Section 5(m) hereof. The Prospectus shall be current and available for issuances and sales of all of the Securities by the
Company to the Investor, and for the resale of all of the Securities by the Investor. Any other Prospectus Supplements required
to have been filed by the Company with the SEC under the Securities Act at or prior to the Commencement Date shall have been filed
with the SEC within the applicable time periods prescribed for such filings under the Securities Act. All reports, schedules, registrations,
forms, statements, information and other documents required to have been filed by the Company with the SEC at or prior to the Commencement
Date pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC within the applicable time periods
prescribed for such filings under the Exchange Act;

 

(l)          No
Event of Default (as defined below) has occurred, or any event which, after notice and/or lapse of time, would become an Event
of Default has occurred;

 

(m)        All
federal, state and local governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction
Documents and necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and orders
of, and all filings and registrations with, all federal, state and local courts or governmental agencies and all federal, state
and local regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction Documents
and the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been obtained or
made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state securities
or “Blue Sky” laws or applicable rules and regulations of the Principal Market, or otherwise required by the SEC, the
Principal Market or any state securities regulators;

 

    	-24-

    	 

    

 

(n)          No
statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed
by any federal, state, local or foreign court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents; and

 

(o)          No
action, suit or proceeding before any federal, state, local or foreign arbitrator or any court or governmental authority of competent
jurisdiction shall have been commenced or threatened, and no inquiry or investigation by any federal, state, local or foreign governmental
authority of competent jurisdiction shall have been commenced or threatened, against the Company, or any of the officers, directors
or affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents,
or seeking material damages in connection with such transactions.

 

		9.	INDEMNIFICATION.

 

In consideration of
the Investor's execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in addition to all
of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless
the Investor and all of its affiliates, stockholders, officers, directors, employees and direct or indirect investors and any of
the foregoing Person's agents or other representatives (including, without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of,
or arising out of, or relating to: (a) any misrepresentation or breach of any representation or warranty made by the Company in
the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (c) any cause of action, suit or claim brought or made against such Indemnitee and arising
out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, (d) any violation of the Securities Act, the Exchange Act, state securities
or “Blue Sky” laws, or the rules and regulations of the Principal Market in connection with the transactions contemplated
by the Transaction Documents by the Company or any of its Subsidiaries, affiliates, officers, directors or employees, (e) any untrue
statement or alleged untrue statement of a material fact contained, or incorporated by reference, in the Registration Statement
or any amendment thereto or any omission or alleged omission to state therein, or in any document incorporated by reference therein,
a material fact required to be stated therein or necessary to make the statements therein not misleading, or (f) any untrue statement
or alleged untrue statement of a material fact contained, or incorporated by reference, in the Prospectus, or any omission or alleged
omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided,
however, that (I) the indemnity contained in clause (c) of this Section 9 shall not apply to any Indemnified Liabilities which
directly and primarily result from the fraud, gross negligence or willful misconduct of an Indemnitee, (II) the indemnity contained
in clauses (d), (e) and (f) of this Section 9 shall not apply to any Indemnified Liabilities to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by or on behalf of the Investor expressly for use in any
Prospectus Supplement (it being hereby acknowledged and agreed that the written information set forth on Exhibit E
attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in the
Initial Prospectus Supplement), if the Prospectus was timely made available by the Company to the Investor pursuant to Section
5(l), (III) the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not inure to the benefit of the Investor
to the extent such Indemnified Liabilities are based on a failure of the Investor to deliver or to cause to be delivered the Prospectus
made available by the Company, if such Prospectus was timely made available by the Company pursuant to Section 5(l), and if delivery
of the Prospectus would have cured the defect giving rise to such Indemnified Liabilities, and (IV) the indemnity in this Section
9 shall not apply to amounts paid in settlement of any claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld, conditioned or delayed. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law. Payment under this indemnification shall be made
within thirty (30) days from the date Investor makes written request for it. A certificate containing reasonable detail as to the
amount of such indemnification submitted to the Company by Investor shall be conclusive evidence, absent manifest error, of the
amount due from the Company to Investor. If any action shall be brought against any Indemnitee in respect of which indemnity may
be sought pursuant to this Agreement, such Indemnitee shall promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee, except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and the position of such Indemnitee, in which case
the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.

 

    	-25-

    	 

    

 

		10.	EVENTS OF DEFAULT.

 

An “Event
of Default” shall be deemed to have occurred at any time as any of the following events occurs:

 

(a)          the
effectiveness of the Registration Statement registering the Securities lapses for any reason (including, without limitation, the
issuance of a stop order or similar order) or the Registration Statement or the Prospectus is unavailable for the sale by the Company
to the Investor (or the resale by the Investor) of any or all of the Securities to be issued to the Investor under the Transaction
Documents (including, without limitation, as a result of any failure of the Company to satisfy all of the requirements for the
use of a registration statement on Form S-3 pursuant to the Securities Act for the offering and sale of the Securities contemplated
by this Agreement), and such lapse or unavailability continues for a period of ten (10) consecutive Business Days or for more than
an aggregate of thirty (30) Business Days in any 365-day period;

 

(b)          the
suspension of the Common Stock from trading or the failure of the Common Stock to be listed on the Principal Market for a period
of one (1) Business Day, provided that the Company may not direct the Investor to purchase any shares of Common Stock during any
such suspension;

 

(c)          the
delisting of the Common Stock from The NASDAQ Global Market, provided, however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange, The NASDAQ Capital Market, The NASDAQ Global Select Market, the NYSE MKT, the NYSE Arca,
the OTC Bulletin Board or OTC Markets (or nationally recognized successor to any of the foregoing);

 

    	-26-

    	 

    

 

(d)          the
failure for any reason by the Transfer Agent to issue Purchase Shares or Additional Commitment Shares to the Investor within three
(3) Business Days after the applicable Purchase Date or Accelerated Purchase Date (as applicable) on which the Investor is entitled
to receive such Securities;

 

(e)          the
Company breaches any representation, warranty, covenant or other term or condition under any Transaction Document if such breach
could have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably curable, only if such
breach continues for a period of at least five (5) Business Days;

 

(f)          if
any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law;

 

(g)          if
the Company, pursuant to or within the meaning of any Bankruptcy Law, (i) commences a voluntary case, (ii) consents to the entry
of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (iv) makes a general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;

 

(h)          a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in
an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders
the liquidation of the Company or any Subsidiary;

 

(i)          if
at any time the Company is not eligible to transfer its Common Stock electronically as DWAC Shares; or

 

(j)          if
at any time after the Commencement Date, the Maximum Share Cap is reached (to the extent the Maximum Share Cap is applicable pursuant
to Section 2(e) hereof).

 

In addition to any other rights and remedies
under applicable law and this Agreement, so long as an Event of Default has occurred and is continuing, or if any event which,
after notice and/or lapse of time, would become an Event of Default, has occurred and is continuing, or so long as the Closing
Sale Price is below the Floor Price, the Company shall not deliver to the Investor any Regular Purchase Notice or Accelerated Purchase
Notice, and the Investor shall not purchase any shares of Common Stock under this Agreement.

 

		11.	TERMINATION

 

This Agreement may
be terminated only as follows:

 

(a)          If
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding
against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes
a general assignment for the benefit of its creditors (any of which would be an Event of Default as described in Sections 10(f),
10(g) and 10(h) hereof), this Agreement shall automatically terminate without any liability or payment to the Company (except as
set forth below) without further action or notice by any Person.

 

    	-27-

    	 

    

 

(b)          In
the event that the Commencement shall not have occurred on or before December 6, 2013, due to the failure to satisfy the conditions
set forth in Sections 7 and 8 above with respect to the Commencement, either the Company or the Investor shall have the option
to terminate this Agreement at the close of business on such date or thereafter without liability of any party to any other party
(except as set forth below); provided, however, that the right to terminate this Agreement under this Section 11(b) shall not be
available to any party if such party is then in breach of any covenant or agreement contained in this Agreement or any representation
or warranty of such party contained in this Agreement fails to be true and correct such that the conditions set forth in Section
7(c) or Section 8(d), as applicable, could not then be satisfied.

 

(c)          
At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no
reason by delivering notice (a “Company Termination Notice”) to the Investor electing to terminate this Agreement
without any liability whatsoever of any party to any other party under this Agreement (except as set forth below). The Company
Termination Notice shall not be effective until one (1) Business Day after it has been received by the Investor.

 

(d)          This
Agreement shall automatically terminate on the date that the Company sells and the Investor purchases the full Available Amount
as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to
any other party under this Agreement (except as set forth below).

 

(e)          If
for any reason or for no reason the full Available Amount has not been purchased in accordance with Section 2 of this Agreement
by the Maturity Date, this Agreement shall automatically terminate on the Maturity Date, without any action or notice on the part
of any party and without any liability whatsoever of any party to any other party under this Agreement (except as set forth below).

 

Except as set forth in Sections 11(a) (in
respect of an Event of Default under Sections 10(f), 10(g) and 10(h)), 11(d) and 11(e), any termination of this Agreement pursuant
to this Section 11 shall be effected by written notice from the Company to the Investor, or the Investor to the Company, as the
case may be, setting forth the basis for the termination hereof. The representations and warranties and covenants of the Company
and the Investor contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set forth in Section 9 hereof and
the agreements and covenants set forth in Sections 10, 11 and 12, shall survive the Commencement and any termination of
this Agreement. No termination of this Agreement shall (i) affect the Company's or the Investor's rights or obligations under this
Agreement with respect to pending Regular Purchases and Accelerated Purchases and the Company and the Investor shall complete their
respective obligations with respect to any pending Regular Purchases and Accelerated Purchases under this Agreement or (ii) be
deemed to release the Company or the Investor from any liability for intentional misrepresentation or willful breach of any of
the Transaction Documents.

 

		12.	MISCELLANEOUS.

 

(a)          Governing
Law; Jurisdiction; Jury Trial. The corporate laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, County of New York, for
the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	-28-

    	 

    

 

(b)          Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature or signature delivered by e-mail in a “.pdf” format data file shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

(c)          Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(d)          Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.

 

(e)          Entire
Agreement; Amendment. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company,
their affiliates and Persons acting on their behalf with respect to the subject matter hereof, and this Agreement, the other Transaction
Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on,
in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in the Transaction
Documents. No provision of this Agreement may be amended other than by a written instrument signed by both parties hereto.

 

(f)          Notices.
Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile
or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed
to the party to receive the same. The addresses for such communications shall be:

 

    	-29-

    	 

    

 

If to the Company:

Baxano Surgical, Inc.

110 Horizon Drive, Suite 230

Raleigh, NC 27615

Telephone: (919) 800-0020

Facsimile:   (919) 803-3775

E-mail:       ken.reali@baxsurg.com

Attention:   Ken Reali

 

With a copy to (which shall not
constitute notice or service of process):

Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, L.L.P.

150 Fayetteville Street, Suite
2300

Raleigh, NC 27601

Telephone:(919) 821-6714

Facsimile:  (919) 821-6800

E-mail:      mrosenfeld@smithlaw.com/awallace@smithlaw.com

Attention:  Margaret N. Rosenfeld,
Esq./Amy S. Wallace, Esq.

 

If to the Investor:

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

Telephone:312-822-9300

Facsimile:   312-822-9301

E-mail:       jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

Attention:  Josh Scheinfeld/Jonathan
Cope

 

With a copy to (which
shall not constitute notice or service of process):

Greenberg
Traurig, LLP

The MetLife
Building

200 Park
Avenue

New York,
NY 10166

Telephone:(212)
801-9200

Facsimile:
  (212) 801-6400

E-mail:        mariscoa@gtlaw.com

Attention:  Anthony
J. Marsico, Esq.

 

If to the Transfer Agent:

American
Stock Transfer & Trust Company, LLC

10150 Mallard
Creek Road, Suite 307

Charlotte,
NC 28262

Telephone: (718) 921-8522

Facsimile:   (718) 765-8743

Attention:   Joan K. Greenfield

 

or at such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other
party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent or other communication, (B) mechanically or electronically generated by the sender's facsimile machine
or email account containing the time, date, and recipient facsimile number or email address, as applicable, and an image of the
first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

    	-30-

    	 

    

 

(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Investor, including by merger or consolidation. The Investor may not assign its rights or obligations under this Agreement.

 

(h)          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(i)          Publicity.
The Company shall afford the Investor and its counsel with the opportunity to review and comment upon, shall consult with the Investor
and its counsel on the form and substance of, and shall give due consideration to all such comments from the Investor or its counsel
on, any press release, SEC filing or any other public disclosure by or on behalf of the Company relating to the Investor, its purchases
hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby, not less than 24 hours prior to
the issuance, filing or public disclosure thereof. The Investor must be provided with a final version of any such press release,
SEC filing or other public disclosure at least 24 hours prior to any release, filing or use by the Company thereof. The Company
agrees and acknowledges that its failure to fully comply with this provision constitutes a Material Adverse Effect.

 

(j)          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(k)          No
Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Investor that, except as disclosed
in Schedule 4(x), it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. The Investor represents and warrants to the Company that it has not engaged any financial advisor, placement
agent, broker or finder in connection with the transactions contemplated hereby. The Company shall be responsible for the payment
of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold the Investor harmless against, any liability, loss or expense
(including, without limitation, attorneys' fees and out of pocket expenses) arising in connection with any such claim.

 

(l)          No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

(m)          Remedies,
Other Obligations, Breaches and Injunctive Relief. The Investor’s remedies provided in this Agreement, including, without
limitation, the Investor’s remedies provided in Section 9, shall be cumulative and in addition to all other remedies available
to the Investor under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief),
no remedy of the Investor contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy
and nothing herein shall limit the Investor's right to pursue actual damages for any failure by the Company to comply with the
terms of this Agreement. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Investor and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, the Investor shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

 

    	-31-

    	 

    

 

(n)          Enforcement
Costs. If: (i) this Agreement is placed by the Investor in the hands of an attorney for enforcement or is enforced by the Investor
through any legal proceeding; (ii) an attorney is retained to represent the Investor in any bankruptcy, reorganization, receivership
or other proceedings affecting creditors' rights and involving a claim under this Agreement; or (iii) an attorney is retained to
represent the Investor in any other proceedings whatsoever in connection with this Agreement, then the Company shall pay to the
Investor, as incurred by the Investor, all reasonable costs and expenses including attorneys' fees incurred in connection therewith,
in addition to all other amounts due hereunder. If this Agreement is placed by the Company in the hands of an attorney for enforcement
or is enforced by the Company through any legal proceeding, then the Investor shall pay to the Company, as incurred by the Company,
all reasonable costs and expenses including attorneys' fees incurred in connection therewith, in addition to all other amounts
due hereunder.

 

(o)          Waivers.
No provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of
such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege.

  

* * * * *

 

    	-32-

    	 

    

 

IN WITNESS WHEREOF,
the Investor and the Company have caused this Agreement to be duly executed as of the date first written above.

 

	 	THE COMPANY:
	 	 
	 	BAXANO SURGICAL, INC.
	 	 
	 	By:	/s/ Ken Reali
	 	Name: Ken Reali
	 	Title: President and Chief Executive Officer
	 	 
	 	INVESTOR:
	 	 
	 	LINCOLN PARK CAPITAL FUND, LLC
	 	BY: LINCOLN PARK CAPITAL, LLC
	 	BY: ALEX NOAH INVESTORS, INC.
	 	 
	 	By:	/s/ Jonathan Cope
	 	Name: Jonathan Cope
	 	Title: President

 

    	-33-

    	 

    

 

SCHEDULES

 

	Schedule 4(x) 	Agent Fees

 

EXHIBITS

 

	Exhibit A	Form of Company Counsel Opinion
	Exhibit B	Form of Officer’s Certificate
	Exhibit C	Form of Resolutions of Board of Directors of the Company
	Exhibit D	Form of Secretary’s Certificate
	Exhibit E	Information About Investor Furnished to the Company

 

    	 

    	 

    

 

DISCLOSURE SCHEDULES

 

Schedule 4(x) – Agent Fees

 

Bayridge Securities, LLC (“Bayridge”)
will receive a cash placement fee of $10,000, and the Company has agreed to reimburse Bayridge’s legal counsel for up to
$5,000 of reasonable attorney’s fees and expenses incurred by Bayridge in connection with the transactions contemplated by
the Agreement.

 

    	 

    	 

    

 

EXHIBIT A

 

FORM OF COMPANY COUNSEL OPINION

 

Capitalized terms used
herein but not defined herein, have the meaning set forth in the Purchase Agreement. Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:

 

1.          The
Company is a corporation validly existing as a corporation in good standing under the laws of the State of Delaware. The Company
is duly qualified to do business as a foreign corporation in the State of North Carolina.

 

2.          The
Company has the corporate power to execute and deliver, and perform its obligations under, the Purchase Agreement. To the best
of our knowledge, the Company has the corporate power to conduct its business as it is described in the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2013 and to own and use the properties owned and used by it.

 

3.          The
execution, delivery and performance by the Company of the Purchase Agreement have been authorized by all necessary corporate action
on the part of the Company. The Purchase Agreement has been duly executed and delivered by the Company and constitutes the valid
and binding obligation of the Company, enforceable against the Company in accordance with its terms except as such enforceability
may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting, creditor’s rights and remedies.

 

4.          The
execution, delivery and performance by the Company of the Purchase Agreement (i) are not in violation of the Certificate of Incorporation
or Bylaws, (ii) do not violate the General Corporation Law of the State of Delaware (the “DGCL”), the North
Carolina Business Corporation Act (the “NCBCA”), or any federal law of the United States, (iii) do not breach
or result in a default under any agreement, contract or other arrangement identified, pursuant to Item 601(b)(10) of Regulation
S-K, as a material agreement of the Company in the Exhibit Index of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2012, as amended, and in subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by
the Company with the SEC prior to the date hereof (“Material Agreements”), and (iv) to our knowledge, do not
violate any order, writ, injunction or decree applicable to the Company.

 

5.          The
issuance of the Purchase Shares and the Commitment Shares pursuant to the terms and conditions of the Purchase Agreement has been
authorized by all necessary corporate action on the part of the Company. The Initial Commitment Shares, upon delivery in accordance
with the Purchase Agreement against payment of the consideration set forth therein and upon their book entry by the Transfer Agent,
will be validly issued, fully paid and non-assessable. The Purchase Shares, when delivered and paid for in accordance with the
Purchase Agreement and upon their book entry by the Transfer Agent, will be validly issued, fully paid and non-assessable. The
Additional Commitment Shares, upon delivery in accordance with the Purchase Agreement against payment of the consideration set
forth therein and upon their book entry by the Transfer Agent, will be validly issued, fully paid and non-assessable. Neither the
issuance, sale or delivery of the Initial Commitment Shares, the Purchase Shares or the Additional Commitment Shares is subject
to any preemptive rights under the Certificate of Incorporation, the Bylaws, the DGCL, the NCBCA or the Material Agreements.

  

    	 

    	 

    

 

6.          Other
than that which has been obtained and completed prior to the date hereof, no authorization, approval, consent, filing or other
order of any court or governmental body or regulatory agency of the United States, the State of Delaware (pursuant to the DGCL)
or the State of North Carolina, or of the Principal Market, is required to be obtained by the Company to perform its obligations
under the Purchase Agreement or to issue and sell the Commitment Shares and the Purchase Shares as contemplated by the Purchase
Agreement.

 

7.          Any required filing
of the Initial Prospectus Supplement pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the
time period required by such Rule.

 

8.          The statements in
the Base Prospectus under the captions “Description of Capital Stock We May Offer”, “Description of Debt Securities
We May Offer”, “Description of Warrants We May Offer”, and the statements in the Registration Statement under
Part II, Item 15, as supplemented by the Initial Prospectus Supplement, and only insofar as such statements contain descriptions
of laws, rules or regulations, or the terms of agreements or the Company’s Certificate of Incorporation or the Bylaws, are
correct in all material respects.

 

9.          The Company is not,
and after giving effect to the issuance of the Commitment Shares and the Purchase Shares and the application of the proceeds thereof
as described in the Base Prospectus and the Initial Prospectus Supplement, will not be, an “investment company,” as
that term is defined in the Investment Company Act of 1940, as amended.

 

10.         Except as provided
for in the Hercules Loan Documents or as described in the Registration Statement, the Base Prospectus and the Initial Prospectus
Supplement, none of the Material Agreements grants to any person the right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company
to include such securities in the securities registered pursuant to the Registration Statement or any other registration statement
filed by the Company under the Securities Act.

  

[THE FOLLOWING WILL BE MADE IN A SEPARATE
NEGATIVE ASSURANCES LETTER]

  

The purpose of our
engagement was not to establish or to confirm factual matters or financial or quantitative information set forth in the Registration
Statement, the Base Prospectus and the Initial Prospectus Supplement, and we have not undertaken any obligation to verify independently
any of such matters. Moreover, many of the determinations involved in the preparation of the Registration Statement, the Base Prospectus
and the Initial Prospectus Supplement are of a non-legal nature. As counsel to the Company, we reviewed (but did not participate
in the preparation of) the Registration Statement and the Base Prospectus, participated in the preparation of the Initial Prospectus
Supplement and certain of the documents incorporated by reference in the Registration Statement, and participated in discussions
with your representatives and those of the Company, during which the contents of the Registration Statement, the Base Prospectus
and the Initial Prospectus Supplement were discussed. We have also reviewed certain certificates of officers of the Company and
public officials.

  

On the basis of and
subject to the foregoing, nothing came to our attention that caused us to believe that:

  

		(a)	the Registration Statement, as of its most recent effective
date, insofar as it relates to the offering of the Securities, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the statements therein not misleading,

  

    	 

    	 

    

  

		(b)	the Base Prospectus, as of its date, insofar as it relates
to the offering of the Securities, contained an untrue statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading, or

  

		(c)	the Initial Prospectus Supplement, as of its date and
as of the date and time of delivery of this letter, contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading;

  

provided,
however, that we do not assume any responsibility for the accuracy, completeness or fairness of the statements contained
or incorporated by reference in or omitted from the Registration Statement, the Base Prospectus or the Initial Prospectus Supplement,
and we do not express any view or belief with respect to the financial statements and notes thereto and
the supporting schedules and other financial, statistical or accounting data derived therefrom, or included or incorporated by
reference therein or excluded therefrom, or reports on the effectiveness of internal control over financial reporting contained
therein.

  

Based solely on the
Notice of Effectiveness issued by the SEC on August 1, 2011, we inform you that the Registration Statement became effective under
the Securities Act on August 1, 2011. Based solely on our review of the “Stop Orders” page on the SEC’s website
on December __, 2013, we inform you that no stop order suspending the effectiveness of the Registration Statement has been issued
under the Securities Act.

  

We are not representing
the Company in any pending litigation in which it is a named defendant that challenges the validity or enforceability of, or seeks
to enjoin the performance of, the Purchase Agreement.

  

Further, we confirm
to you that the Registration Statement, as of its most recent effective date, and the Initial Prospectus Supplement, as of its
date, appeared to us on their face to respond in all material respects to the requirements of Form S-3, except that the foregoing
statement does not address any requirement relating to financial statements and notes thereto or the supporting schedules and other
financial, statistical and accounting data or information contained in or omitted from the Registration Statement or the Initial
Prospectus Supplement.

  

    	 

    	 

    

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s
Certificate (“Certificate”) is being delivered pursuant to Section 8(d) of that certain Purchase Agreement dated
as of December __, 2013, (“Purchase Agreement”), by and between BAXANO SURGICAL, INC., a Delaware corporation
(the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”). Terms used herein
and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ___________,
______________ of the Company, hereby certifies as follows:

 

1.          I
am the _____________ of the Company and make the statements contained in this Certificate;

 

2.          The
representations and warranties of the Company are true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section 4 of the Purchase Agreement, in which case, such
representations and warranties are true and correct without further qualification) as of the date when made and as of the Commencement
Date as though made at that time (except for representations and warranties that speak as of a specific date, in which case such
representations and warranties are true and correct as of such date);

 

3.          The
Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.

 

4.        The
Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or
insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due.

 

IN WITNESS WHEREOF,
I have hereunder signed my name on this ___ day of ___________.

 

	 	 
	 	Name:
	 	Title:

 

The undersigned as
Secretary of BAXANO SURGICAL, INC., a Delaware corporation, hereby certifies that ___________ is the duly elected, appointed,
qualified and acting ________ of _________ and that the signature appearing above is his genuine signature.

 

	 	 
	 	Secretary 

 

    	 

    	 

    

 

EXHIBIT C

 

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

 

UNANIMOUS WRITTEN CONSENT OF

BAXANO SURGICAL, INC.

 

In accordance with
the corporate laws of the state of Delaware, the undersigned, being all of the directors of BAXANO SURGICAL, INC., a Delaware
corporation (the “Corporation”) do hereby consent to and adopt the following resolutions as the action of the Board
of Directors for and on behalf of the Corporation and hereby direct that this Consent be filed with the minutes of the proceedings
of the Board of Directors:

 

Lincoln Park Capital
Fund Equity Line Financing

 

WHEREAS, there has
been presented to the Board of Directors of the Corporation a draft of the public equity line purchase agreement (the “Purchase
Agreement”) by and between the Corporation and Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for
the purchase by Lincoln Park of up to Seven Million Dollars ($7,000,000) of the Corporation’s common stock, $0.0001 par value
per share (the “Common Stock”) through a public offering (the “Public Equity Line”); and

 

WHEREAS, after careful
consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best interests of the Corporation to engage in the transactions
contemplated by the Purchase Agreement, including, but not limited to, (i) the issuance of 182,609 shares of Common Stock to Lincoln
Park as an initial commitment fee for the Public Equity Line (the “Initial Public Commitment Shares”), (ii) the issuance
of up to 60,870 shares of Common Stock to Lincoln Park as an additional commitment fee for the Public Equity Line (the “Additional
Public Commitment Shares”), and (iii) the sale of shares of Common Stock to Lincoln Park up to the available amount under
the Purchase Agreement (the "Purchase Shares").

 

NOW, THEREFORE, BE
IT RESOLVED, that the transactions described in the Purchase Agreement are hereby approved and Ken Reali and Tim Shannon (the “Authorized
Officers”) are severally authorized to execute and deliver the Purchase Agreement, and any other agreements or documents
contemplated thereby, with such amendments, changes, additions and deletions as the Authorized Officers may deem to be appropriate
and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer
thereon; and

 

FURTHER RESOLVED, that
the Corporation be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of up to Seven Million
Dollars ($7,000,000) of the Corporation’s Common Stock; and

 

FURTHER RESOLVED, that
the Corporation is hereby authorized to issue to Lincoln Park up to 182,609 shares of Common Stock as Initial Public Commitment
Shares for the Public Equity Line and that upon issuance of the Initial Commitment Shares pursuant to the Purchase Agreement the
Initial Commitment Shares shall be duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching
to the ownership thereof; and

  

    	 

    	 

    

  

FURTHER RESOLVED, that
the Corporation is hereby authorized to issue to Lincoln Park up to 60,870 shares of Common Stock as Additional Public Commitment
Shares for the Public Equity Line and that upon issuance of the Additional Public Commitment Shares pursuant to the Purchase Agreement
the Additional Public Commitment Shares shall be duly authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and

 

FURTHER RESOLVED, that
the Corporation is hereby authorized to issue shares of Common Stock upon the purchase of Purchase Shares up to the available amount
under the Purchase Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of and payment therefor
the Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will be duly authorized, validly issued, fully paid
and nonassessable with no personal liability attaching to the ownership thereof; and

 

FURTHER
RESOLVED, that the Corporation shall initially reserve 182,609 shares of Common Stock for issuance as Initial Public Commitment
Shares under the Public Purchase Agreement; and

 

FURTHER
RESOLVED, that the Corporation shall initially reserve 60,870 shares of Common Stock for issuance as Additional Public Commitment
Shares under the Public Purchase Agreement; and 

 

FURTHER
RESOLVED, that the Corporation shall initially reserve 7,000,000 shares of Common Stock for issuance as Purchase Shares under the
Public Purchase Agreement.

 

FURTHER RESOLVED, that,
without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Corporation and to take all such steps as deemed necessary or appropriate, with the advice and assistance of counsel,
to cause the Corporation to consummate the agreements referred to herein and to perform its obligations under such agreements;
and

 

FURTHER RESOLVED, that
the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered
all such further agreements, amendments, documents, certificates, reports, schedules, applications, notices, letters and undertakings
and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect
the purpose and intent of any and all of the foregoing resolutions, and that all actions heretofore taken by any officer or director
of the Corporation in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.

 

IN WITNESS WHEREOF, the Board of Directors
has executed and delivered this Consent effective as of __________, 2013.

 

	 	 
	 	 
	 	 
	 	 
	 	 

 

being all of the directors of BAXANO SURGICAL, INC

 

    	 

    	 

    

 

EXHIBIT D

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s
Certificate (“Certificate”) is being delivered pursuant to Section 8(j) of that certain Purchase Agreement dated as
of December ___, 2013 (“Purchase Agreement”), by and between BAXANO SURGICAL, INC., a Delaware corporation (the
“Company”) and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”), pursuant to which the Company may
sell to the Investor up to Seven Million Dollars ($7,000,000) of the Company's Common Stock, $0.0001 par value per share (the "Common
Stock"). Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ____________, Secretary
of the Company, hereby certifies as follows:

 

1.          I
am the Secretary of the Company and make the statements contained in this Secretary’s Certificate.

 

2.          Attached
hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s bylaws (“Bylaws”)
and Certificate of Incorporation (“Charter”), in each case, as amended through the date hereof, and no action has been
taken by the Company, its directors, officers or stockholders, in contemplation of the filing of any further amendment relating
to or affecting the Bylaws or Charter.

 

3.          Attached
hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the
Company on _____________. Such resolutions have not been amended, modified or rescinded and remain in full force and effect and
such resolutions are the only resolutions adopted by the Company’s Board of Directors, or any committee thereof, or the stockholders
of the Company relating to or affecting (i) the entering into and performance of the Purchase Agreement, or the issuance, offering
and sale of the Purchase Shares and the Commitment Shares and (ii) and the performance of the Company of its obligation under the
Transaction Documents as contemplated therein.

 

4.          As
of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth on Exhibit D hereto.

 

IN WITNESS WHEREOF,
I have hereunder signed my name on this ___ day of ____________.

 

	 	 
	 	Secretary

 

 

The undersigned as ___________ of BAXANO
SURGICAL, INC., a Delaware corporation, hereby certifies that ____________ is the duly elected, appointed, qualified and acting
Secretary of _________, and that the signature appearing above is his genuine signature.

 

	 	 

 

    	 

    	 

    

 

EXHIBIT E

 

Information About The Investor Furnished
To The Company By The Investor

Expressly For Use In Connection With
The Initial Prospectus Supplement

 

Information With Respect to Lincoln
Park Capital

 

Immediately prior to
the date of the Purchase Agreement, Lincoln Park Capital Fund, LLC, beneficially owned no shares of our common stock. Josh Scheinfeld
and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, the manager of Lincoln Park Capital Fund, LLC, are deemed
to be beneficial owners of all of the shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld
have shared voting and investment power over the shares being offered under the prospectus supplement filed with the SEC in connection
with the transactions contemplated under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an
affiliate of a licensed broker dealer.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00224-of-00352.parquet"}]]