Document:

EX-4.1

 Exhibit 4.1 
  

 
  

CABOT OIL & GAS CORPORATION 

$100,000,000 3.24% Series K Senior Notes due September 18, 2021 

$575,000,000 3.67% Series L Senior Notes due September 18, 2024 

$250,000,000 3.77% Series M Senior Notes due September 18, 2026 

 
  

NOTE PURCHASE AGREEMENT 
  

 
 Dated
September 18, 2014 
  
  

 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	 	  	Page	 
			
	1.	 	AUTHORIZATION OF NOTES	  	 	1	  
			
	2.	 	SALE AND PURCHASE OF NOTES	  	 	1	  
			
	3.	 	CLOSING	  	 	2	  
			
	4.	 	CONDITIONS TO CLOSING	  	 	2	  
		 	 4.1.
	  	 Representations and Warranties
	  	 	2	  
		 	 4.2.
	  	 Performance; No Default
	  	 	2	  
		 	 4.3.
	  	 Compliance Certificates
	  	 	2	  
		 	 4.4.
	  	 Opinions of Counsel
	  	 	3	  
		 	 4.5.
	  	 Purchase Permitted By Applicable Law, Etc
	  	 	3	  
		 	 4.6.
	  	 Sale of Other Notes
	  	 	3	  
		 	 4.7.
	  	 Payment of Special Counsel Fees
	  	 	3	  
		 	 4.8.
	  	 Private Placement Number
	  	 	4	  
		 	 4.9.
	  	 Changes in Corporate Structure
	  	 	4	  
		 	 4.10.
	  	 Funding Instructions
	  	 	4	  
		 	 4.11.
	  	 Proceedings and Documents
	  	 	4	  
			
	 5.
	 	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	  	 	4	  
		 	 5.1.
	  	 Organization; Power and Authority
	  	 	4	  
		 	 5.2.
	  	 Authorization, Etc
	  	 	4	  
		 	 5.3.
	  	 Disclosure
	  	 	5	  
		 	 5.4.
	  	 Organization and Ownership of Shares of Subsidiaries; Affiliates
	  	 	5	  
		 	 5.5.
	  	 Financial Statements; Material Liabilities
	  	 	6	  
		 	 5.6.
	  	 Compliance with Laws, Other Instruments, Etc
	  	 	6	  
		 	 5.7.
	  	 Governmental Authorizations, Etc
	  	 	6	  
		 	 5.8.
	  	 Litigation; Observance of Agreements, Statutes and Orders
	  	 	7	  
		 	 5.9.
	  	 Taxes
	  	 	7	  
		 	 5.10.
	  	 Title to Property; Leases
	  	 	7	  
		 	 5.11.
	  	 Licenses, Permits, Etc
	  	 	8	  
		 	 5.12.
	  	 Compliance with ERISA
	  	 	8	  
		 	 5.13.
	  	 Private Offering by the Company
	  	 	9	  
		 	 5.14.
	  	 Use of Proceeds; Margin Regulations
	  	 	9	  
		 	 5.15.
	  	 Existing Indebtedness; Future Liens
	  	 	9	  
		 	 5.16.
	  	 Foreign Assets Control Regulations, Etc
	  	 	10	  
		 	 5.17.
	  	 Status under Certain Statutes
	  	 	11	  
		 	 5.18.
	  	 Environmental Matters
	  	 	11	  
		 	 5.19.
	  	 Ranking of Obligations
	  	 	11	  
			
	 6.
	 	REPRESENTATIONS OF THE PURCHASERS	  	 	11	  
		 	 6.1.
	  	 Purchase for Investment
	  	 	11	  
		 	 6.2.
	  	 Source of Funds
	  	 	12	  
			
	 7.
	 	INFORMATION AS TO COMPANY	  	 	13	  
		 	 7.1.
	  	 Financial and Business Information
	  	 	13	  
		 	 7.2.
	  	 Officer’s Certificate
	  	 	16	  
		 	 7.3.
	  	 Visitation
	  	 	17	  

  
 i 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
			
	 8.
	 	 PAYMENT AND PREPAYMENT OF THE NOTES
	  	 	18	  
		 	 8.1.
	  	 Maturity
	  	 	18	  
		 	 8.2.
	  	 Optional Prepayments with Make-Whole Amount
	  	 	18	  
		 	 8.3.
	  	 Prepayment of Notes Upon Change of Control
	  	 	18	  
		 	 8.4.
	  	 Prepayment in Connection with a Disposition
	  	 	19	  
		 	 8.5.
	  	 Allocation of Partial Prepayments
	  	 	20	  
		 	 8.6.
	  	 Maturity; Surrender, Etc
	  	 	20	  
		 	 8.7.
	  	 Purchase of Notes
	  	 	20	  
		 	 8.8.
	  	 Make-Whole Amount
	  	 	21	  
			
	 9.
	 	 AFFIRMATIVE COVENANTS
	  	 	22	  
		 	 9.1.
	  	 Compliance with Law
	  	 	22	  
		 	 9.2.
	  	 Insurance
	  	 	23	  
		 	 9.3.
	  	 Maintenance of Properties
	  	 	23	  
		 	 9.4.
	  	 Payment of Taxes and Claims
	  	 	23	  
		 	 9.5.
	  	 Corporate Existence, Etc
	  	 	23	  
		 	 9.6.
	  	 Books and Records
	  	 	24	  
		 	 9.7.
	  	 Ranking of Obligations
	  	 	24	  
		 	 9.8.
	  	 Subsidiary Guaranty; Release of Guaranties
	  	 	24	  
			
	 10.
	 	 NEGATIVE COVENANTS
	  	 	25	  
		 	 10.1.
	  	 Transactions with Affiliates
	  	 	25	  
		 	 10.2.
	  	 Merger, Consolidation, Etc
	  	 	26	  
		 	 10.3.
	  	 Line of Business
	  	 	26	  
		 	 10.4.
	  	 Terrorism Sanctions Regulations
	  	 	26	  
		 	 10.5.
	  	 Liens
	  	 	27	  
		 	 10.6.
	  	 Sale of Assets
	  	 	28	  
		 	 10.7.
	  	 Priority Debt
	  	 	29	  
		 	 10.8.
	  	 Asset Coverage Ratio
	  	 	29	  
		 	 10.9.
	  	 Annual Coverage Ratio
	  	 	30	  
			
	 11.
	 	 EVENTS OF DEFAULT
	  	 	30	  
			
	 12.
	 	 REMEDIES ON DEFAULT, ETC
	  	 	32	  
		 	 12.1.
	  	 Acceleration
	  	 	32	  
		 	 12.2.
	  	 Other Remedies
	  	 	33	  
		 	 12.3.
	  	 Rescission
	  	 	33	  
		 	 12.4.
	  	 No Waivers or Election of Remedies, Expenses, Etc
	  	 	34	  
			
	 13.
	 	 REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
	  	 	34	  
		 	 13.1.
	  	 Registration of Notes
	  	 	34	  
		 	 13.2.
	  	 Transfer and Exchange of Notes
	  	 	34	  
		 	 13.3.
	  	 Replacement of Notes
	  	 	35	  

  
 ii 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
			
	14.	 	PAYMENTS ON NOTES	  	 	35	  
		 	 14.1.
	  	 Place of Payment
	  	 	35	  
		 	 14.2.
	  	 Home Office Payment
	  	 	35	  
			
	15.	 	EXPENSES, ETC	  	 	36	  
		 	 15.1.
	  	 Transaction Expenses
	  	 	36	  
		 	 15.2.
	  	 Survival
	  	 	36	  
			
	16.	 	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT	  	 	36	  
			
	17.	 	AMENDMENT AND WAIVER	  	 	37	  
		 	 17.1.
	  	 Requirements
	  	 	37	  
		 	 17.2.
	  	 Solicitation of Holders of Notes
	  	 	37	  
		 	 17.3.
	  	 Binding Effect, etc
	  	 	38	  
		 	 17.4.
	  	 Notes Held by Company, etc
	  	 	38	  
			
	18.	 	NOTICES	  	 	38	  
			
	19.	 	REPRODUCTION OF DOCUMENTS	  	 	39	  
			
	20.	 	CONFIDENTIAL INFORMATION	  	 	39	  
			
	21.	 	SUBSTITUTION OF PURCHASER	  	 	40	  
			
	22.	 	MISCELLANEOUS	  	 	40	  
		 	 22.1.
	  	 Successors and Assigns
	  	 	40	  
		 	 22.2.
	  	 Payments Due on Non-Business Days
	  	 	41	  
		 	 22.3.
	  	 Accounting Terms
	  	 	41	  
		 	 22.4.
	  	 Severability
	  	 	41	  
		 	 22.5.
	  	 Construction, etc
	  	 	42	  
		 	 22.6.
	  	 Counterparts
	  	 	42	  
		 	 22.7.
	  	 Governing Law
	  	 	42	  
		 	 22.8.
	  	 Jurisdiction and Process; Waiver of Jury Trial
	  	 	42	  

  
 iii 

					
	Schedule A	  	—	  	Information Relating to Purchasers
			
	Schedule B	  	—	  	Defined Terms
			
	Schedule 5.3	  	—	  	Disclosure Materials
			
	Schedule 5.4	  	—	  	Subsidiaries of the Company and Ownership of Subsidiary Stock
			
	Schedule 5.5	  	—	  	Financial Statements
			
	Schedule 5.15	  	—	  	Existing Indebtedness
			
	Schedule 10.5	  	—	  	Liens
			
	Exhibit 1(a)	  	—	  	Form of 3.24% Series K Senior Note due September 18, 2021
			
	Exhibit 1(b)	  	—	  	Form of 3.67% Series L Senior Note due September 18, 2024
			
	Exhibit 1(c)	  	—	  	Form of 3.77% Series M Senior Note due September 18, 2026
			
	Exhibit 4.4(a)	  	—	  	Form of Opinion of Managing Counsel for the Company
			
	Exhibit 4.4(b)	  	—	  	Form of Opinion of Special Counsel for the Company
			
	Exhibit 4.4(c)	  	—	  	Form of Opinion of Special Counsel for the Purchasers

 CABOT OIL & GAS CORPORATION 

Three Memorial City Plaza 

840 Gessner Road, Suite 1400 

Houston, Texas 77024 

$100,000,000 3.24% Series K Senior Notes due September 18, 2021 

$575,000,000 3.67% Series L Senior Notes due September 18, 2024 

$250,000,000 3.77% Series M Senior Notes due September 18, 2026 

September 18, 2014 
 To Each of The
Purchasers Listed in 
 Schedule A Hereto: 
 Ladies and
Gentlemen: 
 CABOT OIL & GAS CORPORATION, a Delaware corporation, agrees with each of the purchasers whose names appear at
the end hereof (each, a “Purchaser” and, collectively, the “Purchasers”) as follows: 
  

	1.	AUTHORIZATION OF NOTES. 

 The Company will authorize the issue and sale of
(a) $100,000,000 aggregate principal amount of its 3.24% Series K Senior Notes due September 18, 2021 (the “Series K Notes”), (b) $575,000,000 aggregate principal amount of its 3.67% Series L Senior Notes due
September 18, 2024 (the “Series L Notes”) and (c) $250,000,000 aggregate principal amount of its 3.77% Series M Senior Notes due September 18, 2026 (the “Series M Notes and together with the Series K Notes
and the Series L Notes, collectively, the “Notes”, such term to include any such notes issued in substitution therefor pursuant to Section 13). The Series K Notes, Series L Notes and the Series M Notes shall be substantially in
the forms set out in Exhibit 1(a), Exhibit 1(b) and Exhibit 1(c), respectively. Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are,
unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. 
  

	2.	SALE AND PURCHASE OF NOTES. 

 Subject to the terms and conditions of this Agreement, the
Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount and in the Series specified opposite such Purchaser’s name in
Schedule A at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or
non-performance of any obligation by any other Purchaser hereunder. 

	3.	CLOSING. 

 The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Bingham McCutchen LLP, One State Street, Hartford, CT 06103, at 10:00 a.m., local time, at a closing (the “Closing”) on September 18, 2014 or on such other Business Day thereafter on or prior to September 24,
2014 as may be agreed upon by the Company and the Purchasers. At the Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note of each Series to be purchased by such Purchaser (or
such greater number of Notes of each such Series in denominations of at least $500,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by
such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 636462608 at JPMorgan Chase Bank,
N.A., 2200 Ross Avenue, 6th Floor, Dallas, Texas 75201, ABA number 021000021. If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment. 
  

	4.	CONDITIONS TO CLOSING. 

 Each Purchaser’s obligation to purchase and pay for the
Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions: 

 

	 	4.1.	Representations and Warranties. 

 The representations and warranties of the
Company in this Agreement shall be correct when made and at the time of the Closing. 
  

	 	4.2.	Performance; No Default. 

 The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and immediately after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited
by Sections 10.1, 10.5 or 10.7 had such Sections applied since such date. 
  

	 	4.3.	Compliance Certificates. 

 (a) Officer’s Certificate.
The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled. 

(b) Secretary’s Certificates. The Company shall have delivered to such Purchaser a certificate of its Secretary or
Assistant Secretary, dated the date of the Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes, this Agreement and the Subsidiary Guaranty, as
applicable. 

  
 -2- 

	 	4.4.	Opinions of Counsel. 

 Such Purchaser shall have received opinions in form and
substance satisfactory to such Purchaser, dated the date of the Closing (a) from Deidre L. Shearer, Managing Counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers), (b) from Baker Botts L.L.P., counsel for the Company, covering
the matters set forth in Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers) and (c) from Bingham McCutchen LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(c) and covering such other matters incident to such
transactions as such Purchaser may reasonably request. 
  

	 	4.5.	Purchase Permitted By Applicable Law, Etc. 

 On the date of the Closing such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by
such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted. 

 

	 	4.6.	Sale of Other Notes. 

 Contemporaneously with the Closing the Company shall sell
to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule A. 
  

	 	4.7.	Payment of Special Counsel Fees. 

 Without limiting the provisions of
Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing. 

  
 -3- 

	 	4.8.	Private Placement Number. 

 A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each Series of Notes. 
  

	 	4.9.	Changes in Corporate Structure. 

 The Company shall not have changed its
jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5. 
  

	 	4.10.	Funding Instructions. 

 At least three Business Days prior to the date of the
Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (a) the name and address of the transferee bank,
(b) such transferee bank’s ABA number and (c) the account name and number into which the purchase price for the Notes is to be deposited. 
  

	 	4.11.	Proceedings and Documents. 

 All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all
such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request. 
  

	5.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

 The Company represents and warrants to
each Purchaser that: 
  

	 	5.1.	Organization; Power and Authority. 

 The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof. 

 

	 	5.2.	Authorization, Etc. 

 This Agreement and the Notes have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and 

  
 -4- 

 
delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). 
  

	 	5.3.	Disclosure. 

 The Company, through its agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated has delivered to each Purchaser a copy of a Private Placement Memorandum, dated August, 2014 (the “Memorandum”), relating to the transactions contemplated hereby. The Memorandum fairly describes,
in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. This Agreement, the Memorandum and the documents, certificates or other writings delivered to the Purchasers by or on behalf
of the Company in connection with the transactions contemplated hereby and identified in Schedule 5.3 (excluding estimates, financial projections and pro forma financial statements (the “Projections”)), and the financial
statements listed in Schedule 5.5 (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements delivered to each Purchaser prior to September 18, 2014 being referred to, collectively, as
the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under
which they were made. As to Projections, the Company represents only that such information was prepared in good faith based upon assumptions believed by it to be reasonable at the time. Except as disclosed in the Disclosure Documents, since
December 31, 2013, there has been no change in the financial condition, operations, business, or properties of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. 
  

	 	5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates. 

(a) Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Company’s
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other
Subsidiary, (ii) of the Company’s Affiliates, other than Subsidiaries, and (iii) of the Company’s directors and senior officers. 

(b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as
being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien. 

(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and,
where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure 

  
 -5- 

 
to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact. 

(d) No Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than
this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary. 
  

	 	5.5.	Financial Statements; Material Liabilities. 

 The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such financial statements and the consolidated results of their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). The Company and its
Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents. 
  

	 	5.6.	Compliance with Laws, Other Instruments, Etc. 

 The execution, delivery and
performance by the Company of this Agreement and the Notes will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under,
any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other Material agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary
or any of their respective properties is bound, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary. 

 

	 	5.7.	Governmental Authorizations, Etc. 

 No consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required to be obtained or made by the Company in connection with the execution, delivery or performance by the Company of this Agreement or the Notes. 

  
 -6- 

	 	5.8.	Litigation; Observance of Agreements, Statutes and Orders. 

 (a)
There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 

(b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party
or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws, the USA
Patriot Act or any of the laws and regulations referred to in Section 5.16) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 

 

	 	5.9.	Taxes. 

 The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any
other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods have
been determined in accordance with GAAP. The Federal income tax liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to
and including the fiscal year ended December 31, 2009. 
  

	 	5.10.	Title to Property; Leases. 

 The Company and its Subsidiaries have good and
defensible title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired
by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in compliance with this Agreement as if this Agreement had been in effect), in each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. 

  
 -7- 

	 	5.11.	Licenses, Permits, Etc. 

 The Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of
others, except for those conflicts that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 
  

	 	5.12.	Compliance with ERISA. 

 (a) The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability (other than Title IV premiums satisfied in due course) pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such
penalty or excise tax provisions under the Code or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate
Material. 
 (b) The present value of the aggregate benefit liabilities under each of the Plans that are subject to Title IV
of ERISA (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plans allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms
“current value” and “present value” have the meaning specified in section 3 of ERISA. 

(c) The Company and its ERISA Affiliates have not incurred any unsatisfied withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material. 

(d) The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended
fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material. 

  
 -8- 

 (e) The execution and delivery of this Agreement and the issuance and sale of the
Notes hereunder will not involve any non-exempt transaction that is subject to the prohibitions of section 406(a) of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be
used to pay the purchase price of the Notes to be purchased by such Purchaser. 
  

	 	5.13.	Private Offering by the Company. 

 Neither the Company nor anyone acting on its
behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the Purchasers and other Institutional
Investors (as defined in clause (c) to the definition of such term) totaling not more than 70 (inclusive of the Purchasers), each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its
behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any
applicable jurisdiction. 
  

	 	5.14.	Use of Proceeds; Margin Regulations. 

 The Company will apply the proceeds of the
sale of the Notes to refinance certain existing Indebtedness and for general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 20% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 20% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U. 
  

	 	5.15.	Existing Indebtedness; Future Liens 

 (a) Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of June 30, 2014 (including a description of the obligors and obligees, principal amount outstanding and collateral
therefor, if any, and Guaranty thereof, if any), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries. Neither the
Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with

  
 -9- 

 
respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly scheduled dates of payment. 
 (b) Except as
disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 10.5. 
 (c) Neither the Company nor any Subsidiary is a party to, or
otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15. 

 

	 	5.16.	Foreign Assets Control Regulations, Etc. 

 (a) Neither the Company
nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of Treasury (“OFAC”) (an
“OFAC Listed Person”) or (ii) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person that is subject to
any OFAC Sanctions Program (each OFAC Listed Person and each other Person described in clause (ii), a “Blocked Person”). Neither the Company nor any Controlled Entity is engaged in any activities that could subject such Person or
any Purchaser to sanctions under CISADA or under any applicable law of any state of the United States that imposes sanctions on Persons that do business with Iran or any other country that is subject to an OFAC Sanctions Program. 

(b) No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any
Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, in connection with any investment in, or any transactions or dealings with, any Blocked Person. 

(c) To the Company’s actual knowledge after making due inquiry, neither the Company nor any Controlled Entity (i) is
under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any applicable law (collectively,
“Anti-Money Laundering Laws”), (ii) has been assessed civil penalties under any Anti-Money Laundering Laws or (iii) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The
Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable law), to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all Anti-Money Laundering Laws.

  
 -10- 

 (d) No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for any improper payments to any governmental official or employee, political party, official of a political party, candidate for political office, official of any public international organization or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any improper advantage. The Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable law), to ensure that the Company
and each Controlled Entity is and will continue to be in compliance with all applicable anti-corruption laws and regulations. 
  

	 	5.17.	Status under Certain Statutes. 

 (a) Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended. 
 (b) Neither the Company nor any
Subsidiary is a “public utility,” as that term is defined under the Federal Power Act, as amended, and the regulations publicly promulgated thereunder (collectively, the “FPA”) by the Federal Energy Regulatory Commission
(“FERC”). Following the consummation of the transactions contemplated by this Agreement, solely as a result of the execution and delivery hereof and thereof, no Purchaser or holder of Notes shall be subject to regulation as a
“public utility” or as an “affiliate” thereof under the FPA. 
  

	 	5.18.	Environmental Matters. 

 Except for such matters that individually, or in the
aggregate could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any of its Subsidiaries (a) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law, (b) has become subject to any Environmental Liability, (c) has received any notice of any claim with respect to any Environmental Liability or (d) knows of any basis for any Environmental
Liability. 
  

	 	5.19.	Ranking of Obligations. 

 The Company’s payment obligations under this
Agreement and the Notes will, upon issuance of the Notes, rank at least pari passu, without preference of priority, with all other unsecured and unsubordinated Indebtedness of the Company. 

 

	6.	REPRESENTATIONS OF THE PURCHASERS. 

  

	 	6.1.	Purchase for Investment. 

 Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of
such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to
the provisions of the Securities 

  
 -11- 

 
Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to
register the Notes. 
  

	 	6.2.	Source of Funds. 

 Each Purchaser severally represents that at least one of the
following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder: 

(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of
Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the amount of the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC
Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other
employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account
(exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or 

(b) the Source is a separate account of an insurance company that is maintained solely in connection with such Purchaser’s
fixed contractual obligations of the insurance company under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such
plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or 

(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or 

(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the
“QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such
investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by
the 

  
 -12- 

 
QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the
identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause
(d); or 
 (e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the
“INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are
satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such
INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or 

(f) the Source is a governmental plan; or 

(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or 
 (h) the Source
does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA and section 4975 of the Code. 
 As used in this
Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA. 

 

	7.	INFORMATION AS TO COMPANY. 

  

	 	7.1.	Financial and Business Information. 

 The Company shall deliver to each holder of
Notes that is an Institutional Investor: 
 (a) Quarterly Statements — within 60 days (or such shorter period as
is 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC
regardless of whether the Company is subject to the filing requirements thereof) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate
copies of, 
 (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and 

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, 

  
 -13- 

 setting forth in each case in comparative form the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Form 10-Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a), provided, further, that the Company shall be
deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q available on “EDGAR” and on its home page on the
worldwide web (at the date of this Agreement located at: http//www.cabotog.com) and shall have given each Purchaser prior notice of such availability on EDGAR and on its home page in connection with each delivery (such availability and notice
thereof being referred to as “Electronic Delivery”); 
 (b) Annual Statements — within 90 days
(or such shorter period as is 15 days greater than the period applicable to the filing of the Company’s Annual Report on Form 10-K (the
“Form 10-K”) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each fiscal year of the Company, duplicate copies of, 

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and 

(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries
for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants of recognized
national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such
opinion in the circumstances, 
 provided that the delivery within the time period specified above of the Company’s Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with the SEC shall be deemed to 

  
 -14- 

 
satisfy the requirements of this Section 7.1(b), provided, further, that the Company shall be deemed to have made such delivery of such Form 10-K
if it shall have timely made Electronic Delivery thereof; 
 (c) SEC and Other Reports — promptly upon their
becoming available, one copy of each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder and any registration statements on Form S-8 or its equivalent), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the SEC; provided, that the Company shall be deemed to have made such delivery of the foregoing if it shall have timely made Electronic Delivery thereof; 

(d) Notice of Default or Event of Default — promptly, and in any event within five days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a
claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto; 

(e) ERISA Matters — promptly, and in any event within five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto: 

(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or 
 (ii) the
taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or 

(iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA, the Pension Funding Rules, or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a
Material Adverse Effect; 

  
 -15- 

 (f) Notices from Governmental Authority — promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a
Material Adverse Effect; 
 (g) Engineering Reports — by April 10th of each year, a report in form and
substance reasonably satisfactory to the Required Holders prepared by or under the supervision of a petroleum engineer who may be an employee of the Company, which shall evaluate all net Proved Reserves owned by the Company and its Subsidiaries as
of the preceding December 31st and which shall set forth the information necessary to determine the Present Value of Proved Reserves as of such date, together with a review report thereon in form and substance reasonably satisfactory to the
Required Holders by Miller & Lents, Ltd. or other independent petroleum engineers of nationally recognized standing; and 

(h) Borrowing Base Reports — promptly, and in any event within three (3) Business Days of receipt thereof, a
copy of each New Borrowing Base Notice (as defined in the Bank Credit Agreement) (or similar borrowing base notice under any successor agreement) received by the Company; and 

(i) Requested Information — with reasonable promptness, such other data and information relating to the business,
operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries (including, but without limitation, actual copies of the Company’s Form 10-Q and Form 10-K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of Notes. 

 

	 	7.2.	Officer’s Certificate. 

 Each set of financial statements delivered to a
holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such financial statements, shall be by
separate concurrent delivery of such certificate to each holder of Notes): 
 (a) Covenant Compliance — the
information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.7, 10.8 and 10.9, inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence). In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with
this Agreement pursuant to Section 22.3) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and

  
 -16- 

 (b) Event of Default — a statement that such Senior Financial Officer
has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by
the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition
or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what
action the Company shall have taken or proposes to take with respect thereto. 
 (c) Additional Information — a
list of all obligors, borrowers and guarantors under the Bank Credit Agreement (or a statement that the list of obligors, borrowers and guarantors under the Bank Credit Agreement most recently delivered pursuant to this Section 7.2 remains
unchanged) together with a copy of each guaranty, joinder agreement or such other agreement evidencing its obligations thereunder executed in connection therewith or in connection with this Agreement since the date of the last certificate required
under this Section to be delivered to each holder of Notes. 
  

	 	7.3.	Visitation. 

 The Company shall permit the representatives of each holder of
Notes that is an Institutional Investor: 
 (a) No Default — if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers,
and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants (provided that representatives of the Company shall have the right to be present during any such discussion with the
Company’s independent public accountants), and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as
often as may be reasonably requested in writing; provided that each holder shall not be entitled to more than one visitation during any fiscal year; and 

(b) Default — if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any
of the offices or properties of the Company or any Subsidiary during normal business hours, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all
at such times and as often as may be requested. 

  
 -17- 

	8.	PAYMENT AND PREPAYMENT OF THE NOTES. 

  

	 	8.1.	Maturity. 

 As provided therein, the entire unpaid principal balance of the Notes
shall be due and payable on the stated maturity date thereof. 
  

	 	8.2.	Optional Prepayments with Make-Whole Amount. 

 The Company may, at its option,
upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, (but if in part, in an amount not less than $1,000,000 or such lesser amount as shall then be outstanding), at 100% of the principal amount so
prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and
not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note
held by such holder to be prepaid (determined in accordance with Section 8.5), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior
Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. 

 

	 	8.3.	Prepayment of Notes Upon Change of Control. 

 (a) Notice of
Change of Control or Control Event; Offer to Prepay if Change of Control Has Occurred. The Company will, within 5 Business Days after any Responsible Officer has knowledge of the occurrence of any Change of Control or Control Event (subject to
extension if necessary in order to comply with applicable law), give notice of such Change of Control or Control Event to each holder of Notes. If a Change of Control has occurred, such notice shall contain and constitute an offer to prepay Notes as
described in paragraph (b) of this Section 8.3 and shall be accompanied by the certificate described in paragraph (e) of this Section 8.3. 

(b) Offer to Prepay; Time for Payment. The offer to prepay Notes contemplated by paragraph (a) of this
Section 8.3 shall be an offer to prepay, in accordance with and subject to this Section 8.3, all, but not less than all, of the Notes held by each holder (in the case of this Section 8.3 only, “holder” in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date”). The Proposed Prepayment Date shall not be less than 15 days
and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in the offer, the Proposed Prepayment Date shall be the 45th day after the date of such offer). 

  
 -18- 

 (c) Acceptance; Rejection. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance to be delivered to the Company at least 5 days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant
to this Section 8.3, or to accept an offer as to all of the Notes held by the holder, within such time period shall be deemed to constitute a rejection of such offer by such holder. 

(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.3 shall be at 100% of the
principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment. On the Business Day preceding the date of prepayment, the Company shall deliver to each holder of Notes being prepaid a statement setting forth
the details of the computation of such amount. The prepayment shall be made on the Proposed Prepayment Date. 
 (e)
Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.3 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date, (ii) that such offer is made pursuant to this Section 8.3, (iii) that the entire principal amount of each Note is offered to be prepaid, (iv) the interest that would be due on each Note
offered to be prepaid, accrued to the Proposed Prepayment Date, (v) that the conditions of this Section 8.3 required to be fulfilled prior to the giving of such notice have been fulfilled and (vi) in reasonable detail, the nature and
date of the Change of Control. 
  

	 	8.4.	Prepayment in Connection with a Disposition. 

 (a) Notice and
Offer. In the event any Debt Prepayment Application is to be used to make an offer (a “Transfer Prepayment Offer”) to prepay Notes pursuant to Section 10.6 of this Agreement (a “Debt Prepayment Transfer”),
the Company will give written notice of such Debt Prepayment Transfer to each holder of Notes. Such written notice shall contain, and such written notice shall constitute, an irrevocable offer to prepay, at the election of each holder, a portion of
the Notes held by such holder equal to such holder’s Ratable Portion of the net proceeds in respect of such Debt Prepayment Transfer on a date specified in such notice (the “Transfer Prepayment Date”) that is not less than
thirty (30) days and not more than sixty (60) days after the date of such notice, together with interest on the amount to be so prepaid accrued to the Transfer Prepayment Date. If the Transfer Prepayment Date shall not be specified in such
notice, the Transfer Prepayment Date shall be the thirtieth (30th) day after the date of such notice. 
 (b)
Acceptance and Payment. To accept such Transfer Prepayment Offer, a holder of Notes shall cause a notice of such acceptance to be delivered to the Company at least 5 days prior to the Transfer Prepayment Date, provided, that failure to accept
such offer in writing within such time period shall be deemed to constitute a rejection of the Transfer Prepayment Offer. If so accepted by any holder of a Note, such offered prepayment (equal to not less than such holder’s Ratable Portion of
the net proceeds in respect of such Debt Prepayment Transfer) shall be due and payable on the Transfer Prepayment Date. Such offered prepayment shall be made at one hundred percent 

  
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(100%) of the principal amount of such Notes being so prepaid, together with interest on such principal amount then being prepaid accrued to the Transfer Prepayment Date determined as of the date
of such prepayment. 
 (c) Other Terms. Each offer to prepay the Notes pursuant to this Section 8.4 shall be
accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying (i) the Transfer Prepayment Date, (ii) the net proceeds in respect of the applicable Debt Prepayment Transfer,
(iii) that such offer is being made pursuant to Section 8.4 and Section 10.6 of this Agreement, (iv) the principal amount of each Note offered to be prepaid, (v) the interest that would be due on each Note offered to be
prepaid, accrued to the Transfer Prepayment Date and (vi) in reasonable detail, the nature of the Disposition giving rise to such Debt Prepayment Transfer and certifying that no Default or Event of Default exists or would exist after giving
effect to the prepayment contemplated by such offer. 
 (d) Notice Concerning Status of Holders of Notes. Promptly
after each Transfer Prepayment Date and the making of all prepayments contemplated on such Transfer Prepayment Date under this Section 8.4 (and, in any event, within thirty (30) days thereafter), the Company shall deliver to each holder of
Notes a certificate signed by a Senior Financial Officer of the Company containing a list of the then current holders of Notes (together with their addresses) and setting forth as to each such holder the outstanding principal amount of Notes held by
such holder at such time. 
  

	 	8.5.	Allocation of Partial Prepayments. 

 In the case of each partial prepayment of
the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment, without regard to the Series of Notes. 
  

	 	8.6.	Maturity; Surrender, Etc. 

 In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note. 

 

	 	8.7.	Purchase of Notes. 

 The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an
offer to purchase made by the Company or an Affiliate pro rata to the 

  
 -20- 

 
holders of all Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed decision
with respect to such offer, and shall remain open for at least 30 Business Days. If the holders of more than 25% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such
fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.
The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. 

 

	 	8.8.	Make-Whole Amount. 

 “Make-Whole Amount” means, with respect to
any Note of any Series, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note of such Series over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings: 

“Called Principal” means, with respect to any Note of any Series, the principal of such Note that is to be prepaid pursuant
to Section 8.2, or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 

“Discounted Value” means, with respect to the Called Principal of any Note of any Series, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on such Series of Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. 

“Reinvestment Yield” means, with respect to the Called Principal of any Note of any Series, 0.50% over the yield to maturity
implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may
replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond
equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities
(1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the
applicable Note. 

  
 -21- 

 If such yields are not Reported or the yields Reported as of such time are not ascertainable
(including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest
day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S.
Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied
yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so
reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Series of Note. 

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a
360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. 

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note of any Series, all payments of such
Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of the Notes of such Series, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required
to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1. 
 “Settlement Date” means, with
respect to the Called Principal of any Note of any Series, the date on which such Called Principal is to be prepaid pursuant to Section 8.2, or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the
context requires. 
  

	9.	AFFIRMATIVE COVENANTS. 

 The Company covenants that so long as any of the Notes are
outstanding: 
  

	 	9.1.	Compliance with Law. 

 Without limiting Section 10.4, the Company will, and
will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA Patriot Act and the laws and
regulations referred to in Section 5.16, and will obtain and maintain in effect all 

  
 -22- 

 
licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
  

	 	9.2.	Insurance. 

 The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated. 

 

	 	9.3.	Maintenance of Properties. 

 The Company will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
  

	 	9.4.	Payment of Taxes and Claims. 

 The Company will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (a) the amount, applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (b) the nonpayment
of all such taxes, assessments, charges, levies and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect. 
  

	 	9.5.	Corporate Existence, Etc. 

 Subject to Section 10.2, the Company will at all
times preserve and keep in full force and effect its corporate existence; provided that the Company may convert to a form other than a corporate form so long as (x) no Change of Control shall result therefrom and (y) such successor

  
 -23- 

 
(i) shall have executed and delivered, in form and substance reasonably satisfactory to the Required Holders, to each holder of any Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement and the Notes, and (ii) shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms of this Section 9.5. Subject to Section 10.2, the
Company will at all times preserve and keep in full force and effect the legal existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such legal existence, right or franchise could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. 
  

	 	9.6.	Books and Records. 

 The Company will, and will cause each of its Subsidiaries
to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be. 

 

	 	9.7.	Ranking of Obligations. 

 The Company will ensure that its payment obligations
under this Agreement and the Notes will at times rank at least pari passu, without preference or priority, with all other unsecured unsubordinated Indebtedness of the Company. 

 

	 	9.8.	Subsidiary Guaranty; Release of Guaranties. 

 (a) Subsidiary
Guarantors. The Company will cause each Subsidiary that, on or after the date of the Closing, is or becomes a borrower or guarantor of Indebtedness in respect of the Bank Credit Agreement, on the date of Closing or within 10 Business Days of its
thereafter becoming a co-obligor, borrower or a guarantor of Indebtedness in respect of the Bank Credit Agreement to execute and deliver or become a party to a guaranty agreement in form and substance reasonably satisfactory to the Required Holders
(the “Subsidiary Guaranty”), and shall deliver to each holder of Notes: 
 (i) an executed counterpart of
the Subsidiary Guaranty, or, if a Subsidiary Guaranty has been previously executed and delivered, an executed counterpart of a joinder thereto; 

(ii) copies of such directors’ or other authorizing resolutions, charter, bylaws and other constitutive documents of such
Subsidiary as the Required Holders may reasonably request; and 
 (iii) an opinion of independent counsel reasonably
satisfactory to the Required Holders and an opinion of in-house counsel to the Company, in each case consistent with the opinions provided to the Purchasers at the time of Closing covering the authorization, execution, delivery, compliance with law,
no conflict with other documents, no consents and enforceability against such Subsidiary. 

  
 -24- 

 (b) Release of Subsidiary Guarantor. Each Subsidiary Guarantor shall be
immediately and without any further act by any Person released and discharged from its obligations under the Subsidiary Guaranty and otherwise as a Subsidiary Guarantor upon (i) the Disposition of such Subsidiary Guarantor in compliance with
Section 10.6 or the dissolution of such Subsidiary Guarantor and the assumption of its liabilities under its Subsidiary Guaranty by the Company or another Subsidiary Guarantor or (ii) such Subsidiary Guarantor being released and discharged
as a co-obligor, borrower or guarantor under and in respect of the Bank Credit Agreement; provided that in the case of clause (ii) if any fee or other consideration is paid or given to any holder of Indebtedness under the Bank Credit Agreement
in connection with such release, other than the repayment of all or a portion of such Indebtedness under the Bank Credit Agreement, each holder of a Note receives equivalent consideration on a pro rata basis; provided, however, that in the event the
Bank Credit Agreement is amended or replaced or refinanced, and upfront fees or similar fees are paid to the lenders and/or agents or arrangers thereunder in consideration of their commitments to extend credit and/or in consideration of their
agreement to provide services, such fees shall not be subject to the provisions of this subparagraph (b); and provided, further in the case of both clause (i) and (ii): (x) no Default or Event of Default exists or will exist immediately
following such release and discharge; and (y) at the time of such release and discharge, the Company delivers to each holder of Notes a certificate of a Responsible Officer certifying (A) that a Disposition of such Subsidiary Guarantor has
occurred in compliance with Section 10.6 or that such Subsidiary Guarantor has been or is being released and discharged as a co-obligor, borrower or guarantor under and in respect of the Bank Credit Agreement and (B) as to the matters set
forth in clauses (x) and (y). 
 (c) Confirmation of Release. Upon written request of the Company following
release of a Guarantor pursuant to Section 9.8(b), each Holder of a Note agrees to provide written confirmation of such release. 
  

	10.	NEGATIVE COVENANTS. 

 The Company covenants that so long as any of the Notes are
outstanding: 
  

	 	10.1.	Transactions with Affiliates. 

 The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Company or another Subsidiary), except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate. 

  
 -25- 

	 	10.2.	Merger, Consolidation, Etc. 

 The Company will not consolidate with or merge with
any other Person or convey, transfer, sell or lease all or substantially all of its assets in a single transaction or series of transactions to any Person except that the Company may consolidate or merge with any other Person or convey, transfer,
sell or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, provided that: 

(a) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance,
transfer, sale or lease all or substantially all of the assets of the Company as an entirety, as the case may be, is a solvent corporation, limited liability company or limited partnership organized and existing under the laws of the United States
or any state thereof (including the District of Columbia), and, if the Company is not such successor or survivor, such entity (i) shall have executed and delivered, in form and substance reasonably satisfactory to the Required Holders, to each
holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (ii) shall have caused to be delivered to each holder of any Notes an opinion of nationally
recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with
the terms of this Section 10.2(a); and 
 (b) after giving effect to such transaction, no Default or Event of Default
shall exist. 
 No such conveyance, transfer, sale or lease of all or substantially all of the assets of the Company shall have the effect
of releasing the Company or any successor that shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability under this Agreement or the Notes. 

 

	 	10.3.	Line of Business. 

 The Company will not and will not permit any Subsidiary to
engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company
and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum. 
  

	 	10.4.	Terrorism Sanctions Regulations. 

 The Company will not and will not permit any
Controlled Entity to (a) become a Blocked Person, (b) have any investments in, or engage in any dealings or transactions with, any Blocked Person if such investments, dealings or transactions would cause any holder of a Note to be in
violation of any laws or regulations that are applicable to such holder or (c) engage in any activities that could subject such Person or any holder of a Note to sanctions under CISADA or under any applicable law of any state of the United
States that imposes sanctions on Persons that do business with Iran or any other country that is subject to an OFAC Sanctions Program. 

  
 -26- 

	 	10.5.	Liens. 

 The Company will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist, directly or indirectly, any Lien on its properties or assets, including capital stock, whether now owned or hereafter acquired, except: 

(a) Liens on property or assets of the Company or any Subsidiary if, at the time such Liens are created, the Notes are equally
and ratably secured by a Lien on the same property and assets pursuant to an agreement or agreements (including an inter-creditor agreement) reasonably acceptable to the Required Holders; 

(b) Permitted Encumbrances; 

(c) Liens existing on property or assets of the Company or any Subsidiary as of the date of this Agreement that are described
in Schedule 10.5; 
 (d) any Lien existing on any property or asset prior to the acquisition thereof by the Company or any
Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date of this Agreement prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien does not apply to any other property or assets of the Company or any Subsidiary (other than any improvements, accessions and proceeds) and
(iii) such Lien secures only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; 
 (e) Liens on fixed or capital assets acquired, constructed or improved by the
Company or any Subsidiary; provided that (i) such Liens and the Indebtedness secured thereby are incurred prior to or within 270 days after such acquisition or the completion of such construction or improvement, (ii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets, and (iii) such Liens do not apply to any other property or assets of the Company or any Subsidiary (other than any improvements,
accessions and proceeds); 
 (f) Liens securing surety or other bonds required in the normal course of business; 

(g) Liens on cash deposits securing obligations under Swap Agreements; 

(h) any Lien renewing, extending or replacing any Lien permitted by paragraphs (c), (d) or (e) of this
Section 10.5, provided that (x) the principal amount Indebtedness so secured and then outstanding is not increased, (y) the Lien is not extended to other property of the Company or such Subsidiary and (z) the Indebtedness secured
thereby is permitted hereunder; 
 (i) Liens securing Intercompany Indebtedness; 

  
 -27- 

 (j) Liens securing judgments for the payment of money that individually or in the
aggregate do not constitute an Event of Default under Section 11(i); 
 (k) Liens on the Petroleum Properties securing
performance obligations under Advance Payment Contracts, provided that the aggregate outstanding amount of such obligations does not at any time exceed $10,000,000; and 

(l) Liens securing Indebtedness not otherwise permitted by paragraphs (a) through (k) of this Section 10.5,
provided that the outstanding principal amount of Priority Debt does not at any time exceed 10% of Consolidated Total Assets as of the end of the most recently completed fiscal quarter. 

 

	 	10.6.	Sale of Assets. 

 Except as permitted by Section 10.2, the Company will not,
and will not permit any Subsidiary to, sell, lease, transfer or otherwise dispose of, including by way of merger (collectively a “Disposition”), any assets, in one or a series of transactions, to any Person, other than: 

(a) Dispositions of surplus equipment for fair and adequate consideration; 

(b) Dispositions of worthless or obsolete equipment; 

(c) Dispositions of equipment that is replaced by equipment of substantially equal suitability and value; 

(d) Dispositions of inventory (including Hydrocarbons and seismic data) that is sold in the ordinary course of business; 

(e) Dispositions not otherwise permitted by paragraphs (a), (b), (c) or (d) of this Section 10.6 provided that:

 (i) in the good faith opinion of the Company, the Disposition is in exchange for consideration having a fair market value
at least equal to that of the property subject to such Disposition and is in the best interest of the Company or such Subsidiary; 

(ii) after giving effect to such transaction, no Default or Event of Default shall exist; and 

(iii) immediately after giving effect to the Disposition, the aggregate net book value of all assets that were the subject of
any Disposition pursuant to this Section 10.6(e) occurring in the then current fiscal year would not exceed 25% of Consolidated Total Assets as of the last day of the most recently ended fiscal year. 

Notwithstanding the foregoing, the Company may, or may permit a Subsidiary to, make a Disposition and the assets (or portion thereof, as the
case may be) subject to such Disposition 

  
 -28- 

 
shall not be subject to or included in the foregoing limitation and computation contained in paragraph (e)(iii) of the preceding sentence if, within 365 days of such Disposition, an amount equal
to the net proceeds from such Disposition (or portion thereof, as the case may be) is: 
 (A) reinvested in productive assets
to be used in the existing business of the Company or a Subsidiary (including exploration and development capital expenditures); or 

(B) the net proceeds from such Disposition (or portion thereof, as the case may be) are applied to a Debt Prepayment
Application. Solely for the purposes of the foregoing clause (B), whether or not such offers are accepted by the holders, the entire principal amount of the Notes subject to a Debt Prepayment Application shall be deemed to have been prepaid. 

 

	 	10.7.	Priority Debt. 

 The Company will not at any time permit the outstanding
principal amount of Priority Debt to exceed 10% of Consolidated Total Assets as of the end of the most recently completed fiscal quarter, provided, however, that no Lien created pursuant to Section 10.5(l) shall secure Indebtedness owing under
the Bank Credit Agreement unless the Notes are equally and ratably secured by all property subject to such Lien and no Subsidiary shall guaranty or otherwise become obligated in respect of such Indebtedness unless such Subsidiary guaranties, or
becomes similarly obligated in respect of, the Notes pursuant to Section 9.8, in each case pursuant to documentation reasonably satisfactory to the Required Holders. 
  

	 	10.8.	Asset Coverage Ratio. 

 (a) The ratio of (i) Present Value of
Proved Reserves plus Adjusted Cash to (ii) Indebtedness and Other Liabilities shall at no time be less than 1.75:1 (the “Asset Coverage Ratio”); in addition, for so long as any Bank Credit Agreement is in effect and the
Borrowing Base therein is being calculated, at no time shall Indebtedness and Other Liabilities exceed 115% of the Borrowing Base then in effect; provided however, that if at any time the Borrowing Base shall cease to be calculated under any Bank
Credit Agreement, then (x) the ratio of (i) Indebtedness and Other Liabilities as of the end of any fiscal quarter of the Company (commencing with the fiscal quarter ended immediately preceding the date Borrowing Base is no longer being
calculated) to (ii) Consolidated EBITDAX for the period of four fiscal quarters ending on such date shall not be greater than 3.00:1 and (y) the Asset Coverage Ratio shall no longer be calculated hereunder. 

(b) The Present Value of Proved Reserves will be determined and adjusted periodically as follows: 

(i) The calculation of Present Value of Proved Reserves will be determined from the most recent Reserve Report. 

(ii) Upon any sale by the Company or any Subsidiary of any Petroleum Property including but not limited to a sale of a lesser
interest such as a 

  
 -29- 

 
royalty or a net profit interest to the extent the sale of such lesser interest is not considered to create a Lien (other than the sale of hydrocarbons after severance occurring in the ordinary
course of the Company’s or such Subsidiary’s business), the calculation of Present Value of Proved Reserves shall be reduced, effective on the date of consummation of such sale, by an amount equal to the Present Value of Proved Reserves
attributable to Proved Reserves included in such sale. 
 (iii) Immediately upon acquisition or development by the Company or
any Subsidiary of any Petroleum Property owned directly by the Company or any Subsidiary and not reflected in the most recent Reserve Report, the calculation of Present Value of Proved Reserves shall be increased in an amount equal to the Present
Value of Proved Reserves attributable to such Petroleum Property. 
  

	 	10.9.	Annual Coverage Ratio. 

 The Company will not permit as of the last day of any
fiscal quarter the Annual Coverage Ratio to be less than 2.8:1. For this purpose: 
 (a) “Annual Coverage
Ratio” means at any date the ratio of Consolidated Cash Flow to Consolidated Interest Expense for the period of four consecutive fiscal quarters ending on such date. 

(b) “Consolidated Cash Flow” means, for any period, the net cash from operating activities of the Company and
its Consolidated Subsidiaries for such period, as the same is, or would in accordance with GAAP be set forth in a statement of cash flows for such period, plus to the extent deducted in determining such net cash from operating activities, the sum of
(x) Consolidated Interest Expense for such period and (y) income tax expense. 
 (c) “Consolidated Interest
Expense” means, for any period, the interest expense of the Company and its Consolidated Subsidiaries determined for such period in accordance with GAAP. 

(d) “Consolidated Subsidiaries” means at any date any Subsidiary or other entity the accounts of which would
in accordance with GAAP be consolidated with those of the Company in its consolidated financial statements if such statements were prepared as of such date. 
  

	11.	EVENTS OF DEFAULT. 

 An “Event of Default” shall exist if any of the following
conditions or events shall occur and be continuing: 
 (a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or 

  
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 (b) the Company defaults in the payment of any interest on any Note for more than
five Business Days after the same becomes due and payable; or 
 (c) the Company defaults in the performance of or compliance
with any term contained in Section 7.1(d) or Sections 10.1 through 10.9; or 
 (d) the Company defaults in the
performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this
Section 11(d)); or 
 (e) any representation or warranty made in writing by or on behalf of the Company or by any
officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made and if capable of being cured is
not cured within 30 days; or 
 (f) (i) the Company or any Material Subsidiary is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $30,000,000 beyond any period of grace provided with respect thereto,
or (ii) the Company or any Material Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $30,000,000 or of any mortgage,
indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to
be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder
of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Material Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of
payment in an aggregate outstanding principal amount of at least $30,000,000, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; provided, that clause (iii) shall
not apply to Indebtedness that becomes due (without the occurrence of any default or event of default thereunder) as a result of a disposition of assets pursuant to a due on sale or equivalent provision, issuance of equity or incurrence of other
debt, provided that such Indebtedness is purchased or paid when due or within the grace period provided; or 
 (g) the
Company or any Material Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any 

  
 -31- 

 
jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or 

(h) a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or
any of its Material Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Material
Subsidiaries, or any such petition shall be filed against the Company or any of its Material Subsidiaries and such petition shall not be dismissed within 60 days; or 

(i) a final judgment or judgments for the payment of money aggregating in excess of $30,000,000 (except to the extent to which
the insurer has provided coverage not subject to reservation) are rendered against one or more of the Company and its Material Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 60 days after the expiration of such stay; 
 (j) any Subsidiary Guaranty ceases to be in full
force and effect (unless released in accordance with Section 9.8) or is declared to be null and void in whole or in material part by a court or other governmental or regulatory authority having jurisdiction or the validity or enforceability
thereof shall be contested by the Company or any Subsidiary Guarantor or any of them renounces any of the same or denies that it has any or further liability thereunder; or 

(k) if an ERISA Event has resulted in liability of the Company or any Subsidiary under Title IV of ERISA to a Plan, a
Multiemployer Plan or the PBGC in an aggregate amount in excess of $30,000,000 and such amount has not been paid when due. 
  

	12.	REMEDIES ON DEFAULT, ETC. 

  

	 	12.1.	Acceleration. 

 (a) If an Event of Default with respect to the
Company described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause
(i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable. 

(b) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option,
by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. 
 (c) If any
Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to
the Company, declare all the Notes held by it or them to be immediately due and payable. 

  
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 Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the
Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which
are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such
circumstances. 
  

	 	12.2.	Other Remedies. 

 If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by
an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise. 
  

	 	12.3.	Rescission. 

 At any time after any Notes have been declared due and payable
pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes of any Series, at the Default Rate for such Series, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all
Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon. 

  
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	 	12.4.	No Waivers or Election of Remedies, Expenses, Etc. 

 No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by
any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under
Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys’ fees, expenses and disbursements. 
  

	13.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 

  

	 	13.1.	Registration of Notes. 

 The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes. 

 

	 	13.2.	Transfer and Exchange of Notes. 

 Upon surrender of any Note to the Company at
the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof),
within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes of such Series (as requested by the holder thereof) in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of such Note for such Series as set forth in Exhibit
1(a), 1(b), 1(c) or 1(d), as applicable. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if
necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representations set forth in Section 6.2. 

  
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	 	13.3.	Replacement of Notes. 

 Upon receipt by the Company at the address and to the
attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an
Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and 

(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such
Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be
satisfactory), or 
 (b) in the case of mutilation, upon surrender and cancellation thereof, 

within ten Business Days thereafter (or such longer period of time as the applicable holder may agree to), the Company at its own expense shall execute and
deliver, in lieu thereof, a new Note of the same Series, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon. 
  

	14.	PAYMENTS ON NOTES. 

  

	 	14.1.	Place of Payment. 

 Subject to Section 14.2, payments of principal,
Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Company may at any time, by notice to each holder of a
Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction. 

 

	 	14.2.	Home Office Payment. 

 So long as any Purchaser or its nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at 

  
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the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser
will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note
as the Purchasers have made in this Section 14.2. 
  

	15.	EXPENSES, ETC. 

  

	 	15.1.	Transaction Expenses. 

 Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of
a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Notes or any Subsidiary Guaranty (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Notes or any Subsidiary Guaranty or in responding to any
subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Notes or any Subsidiary Guaranty, or by reason of being a holder of any Note, (b) the costs and expenses, including financial
advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Notes and any Subsidiary Guaranty and
(c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed
$3,000. The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or
other holder in connection with its purchase of the Notes). 
  

	 	15.2.	Survival. 

 The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement. 
  

	16.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. 

 All representations and
warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by
any subsequent holder of a Note, regardless of any investigation made at any time by or on 

  
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behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall
be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between each Purchaser and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof. 
  

	17.	AMENDMENT AND WAIVER. 

  

	 	17.1.	Requirements. 

 This Agreement, the Notes and any Subsidiary Guaranty may be
amended, and the observance of any term hereof or thereof may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of
the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20. 
  

	 	17.2.	Solicitation of Holders of Notes. 

 (a) Solicitation. The
Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected
pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes. 

(b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of
any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment. 
 (c) Consent in Contemplation of Transfer. Any consent given
pursuant to this Section 17 or any Subsidiary Guaranty (i) that contains, is contingent upon, or is in 

  
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contemplation of a current or future offer of prepayment or repurchase by the Company, any Subsidiary or any Affiliate of the Company (or any other Person acting in concert with any of them),
unless such offer is made to all such holders on the same terms and conditions, or (ii) by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate of the Company in connection
with such consent shall, in each case, be void and of no force or effect except, in the case of any consent given pursuant to clause (ii) above, solely as to the holder that has so transferred or agreed to transfer its Notes, and any amendments
effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions)
shall be void and of no force or effect except, in the case of any consent given pursuant to clause (ii) above, solely as to the holder that has so transferred or agreed to transfer its Notes. 

 

	 	17.3.	Binding Effect, etc. 

 Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment
or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time
to time be amended, supplemented or otherwise modified. 
  

	 	17.4.	Notes Held by Company, etc. 

 Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action
provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be
deemed not to be outstanding. 
  

	18.	NOTICES. 

 All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid),
or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent: 
 (i) if to any
Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Company in writing, 

  
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 (ii) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Company in writing, or 
 (iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing. 

Notices under this Section 18 will be deemed given only when actually received. 

 

	19.	REPRODUCTION OF DOCUMENTS. 

 This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so
reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is
in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction. 
  

	20.	CONFIDENTIAL INFORMATION. 

 For the purposes of this Section 20, “Confidential
Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its
Notes), 

  
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(ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal, state or provincial regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization,
or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of
Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s
Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request
by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee),
such holder will enter into an agreement with the Company embodying the provisions of this Section 20. 
  

	21.	SUBSTITUTION OF PURCHASER. 

 Each Purchaser shall have the right to substitute any one of
its Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other
than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be
deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement. 

 

	22.	MISCELLANEOUS. 

  

	 	22.1.	Successors and Assigns. 

 All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not. 

  
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	 	22.2.	Payments Due on Non-Business Days. 

 Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.6 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or
interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day;
provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of
interest payable on such next succeeding Business Day. 
  

	 	22.3.	Accounting Terms. 

 All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and
(ii) all financial statements shall be prepared in accordance with GAAP. Notwithstanding the foregoing or any other provision of this Agreement, for purposes of determining compliance with the financial covenants contained in this Agreement,
any election by the Company to measure any portion of a non-derivative financial liability at fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Section 825-10 or any similar accounting standard),
other than to reflect a hedge of such non-derivative financial liability (including both interest rate and foreign currency hedges), shall be disregarded and such determination shall be made as if such election had not been made. 

If at any time any change in GAAP would affect the computation of any financial ratio, term or requirement set forth herein, and either the
Company or the Required Holders shall so request, the Holders and the Company shall negotiate in good faith to amend such ratio, term or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of
the Required Holders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Holders financial statements
and other documents required under this Agreement or as reasonably requested by the Holders hereunder setting forth a reconciliation between calculations of such ratio, term or requirement made before and after giving effect to such change in GAAP.

  

	 	22.4.	Severability. 

 Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. 

  
 -41- 

	 	22.5.	Construction, etc. 

 Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof. 

 

	 	22.6.	Counterparts. 

 This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Delivery of
this Agreement by facsimile transmission or other electronic delivery shall be effective as delivery of a manually executed counterpart hereof. 
  

	 	22.7.	Governing Law. 

 This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit
the application of the laws of a jurisdiction other than such State. 
  

	 	22.8.	Jurisdiction and Process; Waiver of Jury Trial. 

 (a) The Company
irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement, the Notes or
any Subsidiary Guaranty. To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court,
any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. 
 (b) The Company consents to process being served by or on behalf of any holder of Notes in any suit,
action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified
in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in
any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. 

  
 -42- 

 
Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service. 

(c) Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve process in any manner permitted
by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction. 
 (d) The parties hereto hereby waive trial by jury in any action brought on or with respect to this
Agreement, the Notes or any other document executed in connection herewith or therewith. 
 [Remainder of page left intentionally blank.
Next page is signature page.] 

  
 -43- 

 If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of
this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company. 
  

			
	Very truly yours,
	
	CABOT OIL & GAS CORPORATION
		
	By:	 	 /s/ Scott C. Schroeder

	Name:	 	Scott C. Schroeder
	Title:	 	Executive Vice President, Chief Financial Officer and Treasurer

  

	
	 This Agreement is hereby accepted and agreed to as of the date thereof.

 [Signature Page to Note Purchase Agreement] 

 SCHEDULE A 

INFORMATION RELATING TO PURCHASERS 

[Omitted] 

  
 Schedule A-2 

 Schedule B 

DEFINED TERMS 

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term: 

“Adjusted Cash” means, as of any date, the lesser of (a) the amount by which cash and short-term investments of the
Company and its Subsidiaries exceed $5,000,000 and (b) the amount, if any, by which (i) current assets of the Company and its Subsidiaries exceed (ii) current liabilities of such Persons (excluding the aggregate outstanding principal
amount of Indebtedness included in such current liabilities), in each case determined on a consolidated basis as of such date. If such current liabilities exceed such current assets, Adjusted Cash shall be zero. 

“Advance Payment Contract” means (a) any production payment (whether volumetric or dollar denominated) granted or sold
by any Person payable from a specified share of proceeds received from production from specified Petroleum Properties, together with all undertakings and obligations in connection therewith or (b) any contract whereby any Person receives or
becomes entitled to receive (either directly or indirectly) any payment (an “Advance Payment”) as consideration for (i) Hydrocarbons produced or to be produced from Petroleum Properties owned by such Person or its Affiliates in
advance of the delivery of such Hydrocarbons (and regardless of whether such Hydrocarbons are actually produced or actual delivery is required) to or for the account of the purchaser thereof or (ii) a right or option to receive such
Hydrocarbons (or a cash payment in lieu of such Hydrocarbons); provided that inclusion of customary and standard “take or pay” provisions in any gas sales or purchase contract or any other similar contract shall not, in and of itself,
cause such gas sales or purchase contract to constitute an Advance Payment Contract for the purposes of this definition. 

“Affiliate” means each Person who controls, is controlled by or is under common control with the Company. For purposes of
this definition, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or
otherwise. 
 “Anti-Money Laundering Laws” is defined in Section 5.16(c). 

“Bank Credit Agreement” means the Amended and Restated Credit Agreement dated as of September 22, 2010 among the
Company, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America Securities LLC and Bank of Montreal as co-syndication agents, BNP Paribas and Wells Fargo Bank N.A., as co-documentation agents and
the lenders from time to time party thereto, as such agreement has been and as hereafter may be amended, restated, supplemented, modified, refinanced, extended or replaced. 

“Blocked Person” is defined in Section 5.16(a). 

“Borrowing Base” shall have the meaning set forth in the Bank Credit Agreement. 

  
 Schedule B-1 

 “Business Day” means (a) for the purposes of Section 8.8 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Houston, Texas are required or authorized to be closed. 
 “Capital
Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP. 

“Capital Lease Obligations” means with respect to a specified Person, the obligations of such Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as Capital Leases, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP. 
 “Change of Control” means any of the
following events or circumstances (a) any Person or related Persons constituting a “group” for purposes of Section 13(d) of the Exchange Act shall have acquired “beneficial ownership” of a majority of the Voting Stock
of the Company, or (b) during any period of 24 consecutive months, individuals who were directors of the Company at the beginning of the period and Qualifying Directors, in the aggregate, shall cease to constitute a majority of the Board of
Directors of the Company. 
 Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred: 

(1) if, immediately following the event that would otherwise constitute a Change of Control, the Company (or the acquiring Person if it has
acquired substantially all of the assets of the Company, or the resulting or surviving Person if it has merged or consolidated with the Company and the Company is not the surviving entity) has a rating of BBB- or higher by Standard &
Poor’s Ratings Services, a Division of McGraw Hill Financial, Inc. (or any successor thereto) or Baa3 or higher by Moody’s Investors Service, Inc. (or any successor thereto) or an equivalent rating by another rating agency of recognized
national standing if it has only a single rating or, if it has two or more ratings, at least two of the ratings are BBB- or higher by Standard & Poor’s Ratings Services, a Division of McGraw Hill Financial, Inc. (or any successor
thereto) or Baa3 or higher by Moody’s Investors Service, Inc. (or any successor thereto) or an equivalent rating by another rating agency of recognized national standing (in each case, with no negative outlook) (as used in this paragraph
“rating” of a Person means a rating of long-term unsecured debt of such Person); 
 (2) if
the event that would otherwise constitute a Change of Control occurs in connection with a transaction in which (i) 100% of the Voting Stock of the Company becomes and remains at all times owned by another entity (a “Permitted Holding
Company”), (ii) a majority of the Voting Stock of the Permitted Holding Company is owned by persons who were the holders of a majority of the Voting Stock of the Company prior to such transaction, and (iii) individuals who were
directors of the Company at the beginning of the period described in clause (b) of this definition and Qualifying Directors, in the aggregate, constitute a majority of the Board of Directors of the Permitted Holding Company (provided
that, after such transaction, the Permitted Holding Company shall be substituted for the Company for purposes of this definition of Change of Control); or 

  
 Schedule B-2 

 (3) upon a conversion of the Company into a limited liability company, limited partnership or
other form of entity or an exchange of all of the outstanding equity interests of the Company for equity interests in another form of entity into which the Company has been converted, so long as following such conversion or exchange the persons who
were the holders of the capital stock of, or other equity interests in, the Company immediately prior to such transactions own in the aggregate the majority of the equity interests of such entity into which the Company has been converted sufficient
to elect a majority of its Board of Directors or persons performing a similar function. 
 “CISADA” means the United States
Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. 
 “Closing” is defined in Section 3. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time. 
 “Company” means Cabot Oil & Gas Corporation, a Delaware corporation or any
successor that becomes such in the manner prescribed in Section 10.2. 
 “Confidential Information” is defined in
Section 20. 
 “Consolidated EBITDAX” means, for any period, the sum of (a) Consolidated Net Income of the
Company and its Subsidiaries for such period, plus (b) the following expenses or charges, without duplication and to the extent deducted in calculating such Consolidated Net Income for such period: (i) Consolidated Interest Expense,
(ii) income and franchise taxes, (iii) depreciation, depletion, amortization, exploration and abandonment expenses, and intangible drilling costs, (iv) lease impairment expenses; (v) extraordinary losses (or less extraordinary
gains) attributable to writeups or writedowns of assets, including ceiling test writedown and impairments of long-lived assets and (vi) other noncash charges, minus (c) all noncash income added to Consolidated Net Income; provided that
EBITDAX (and any defined term used herein) for any applicable period shall be calculated on a pro forma basis for any acquisitions or dispositions during such period, as if such acquisition or disposition had occurred on the first day of such period
and, concurrently with such determination, the Company shall furnish to the holders of the Notes audited financial statements or other financing information with respect to such business entity demonstrating to the reasonable satisfaction of the
Required Holders the basis for such computations. 
 “Consolidated Interest Expense” is defined in Section 10.9(c).

 “Consolidated Net Income” means with respect to the Company and its Subsidiaries, for any period, the aggregate of the
net income (or loss) of the Company and its Subsidiaries after allowances for taxes for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise
included therein) the following: (a) the net income of any Person in which the Company or any Subsidiary has an interest (which interest does not cause the net income of such other Person to 

  
 Schedule B-3 

 
be consolidated with the net income of the Company and its Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during
such period by such other Person to the Company or a Subsidiary, as the case may be; (b) the net income (but not loss) during such period of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions or
transfers or loans by such Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Subsidiary or is otherwise restricted or prohibited, in each case
determined in accordance with GAAP; (c) the net income (or loss) of any Person acquired in a pooling-of-interests transaction for any period prior to the date of such transaction; (d) any extraordinary gains or losses during such period
and (e) any gains or losses attributable to writeups or writedowns of assets, including ceiling test writedowns and impairments of long-lived assets. 

“Consolidated Total Assets” means, as of any date, the assets and properties of the Company and its Subsidiaries as of such
date, determined on a consolidated basis in accordance with GAAP; provided, however, that Consolidated Total Assets shall be determined without giving effect to non-cash charges associated with successful efforts impairment test accounting or other
similar tests resulting in non-cash charges. 
 “Control Event” means the execution of any written agreement which, when
fully performed by the parties thereto, would result in a Change in Control. 
 “Controlled Affiliate” means, at any time,
and with respect to any Person, any Affiliate of such Person that at such time is Controlled by such first Person. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 

“Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled
Affiliates. 
 “Crude Oil” means all crude oil and condensate. 

“Debt Prepayment Application” means, with respect to any Disposition under Section 10.6(e) of any assets, the
application by the Company or any Subsidiary, as the case may be, of cash in an amount equal to the net proceeds with respect to such Disposition to pay Senior Indebtedness (other than (a) Senior Indebtedness owing to the Company or any of its
Subsidiaries or any Affiliate and (b) Senior Indebtedness in respect of any revolving credit or similar facilities providing the Company or any Subsidiary with the right to obtain loans or other extensions of credit from time to time, unless in
connection with such payment of Senior Indebtedness the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such prepayment), provided that in the course of making such application
the Company shall offer to prepay each outstanding Note, in accordance with Section 8.4, in a principal amount which equals the Ratable Portion of such Note in respect of such Disposition. 

“Debt Prepayment Transfer” is defined in Section 8.4(a). 

  
 Schedule B-4 

 “Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event of Default. 
 “Default Rate” means, with
respect to any Note, that rate of interest that is equal to the greater of (a) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (b) 2% over the rate of interest publicly announced by
Bank of America, N.A. from time to time at its principal office in New York, New York as its “base” or “prime” rate. 

“Disposition” is defined in Section 10.6 

“Electronic Delivery” is defined in Section 7.1(a). 

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum
products (including natural gas), chemicals or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products (including natural gas), chemicals or industrial, toxic or hazardous substances or wastes or the clean-up
or other remediation thereof, including the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended and the Superfund Amendments and Reauthorization Act of 1986, as amended, and the Hazardous Materials Transportation Law, as amended. 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs or
environmental remediation, fines, penalties or indemnities), of the Company or any of its Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or any Hazardous Materials into the environment or (e) any contract or agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to the foregoing. 
 “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together
with the Company under section 414 of the Code. 
 “ERISA Event” means (a) any “reportable event”, as
defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which 

  
 Schedule B-5 

 
the 30-day notice period is waived); (b) the failure to make any required contribution, including estimated installment payment thereof, under the Pension Funding Rules, whether or not
waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Company or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of withdrawal liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. 

“Event of Default” is defined in Section 11. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute. For purposes of the
definitions of “Change of Control” and “Qualifying Director,” unless otherwise defined in such Sections, the terms enclosed in quotation marks as used therein have the meanings ascribed to such terms under the Exchange Act and
the rules and regulations promulgated by the Securities and Exchange Commission thereunder. 
 “Form
10-K” is defined in Section 7.1(b). 
 “Form
10-Q” is defined in Section 7.1(a). 
 “GAAP” means generally
accepted accounting principles as in effect from time to time in the United States of America. 
 “Governmental Authority”
means 
 (a) the government of 

(i) the United States of America or any State or other political subdivision thereof, or 

(ii) any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or 
 (b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to, any such government. 
 “Governmental Requirement”
means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter
in effect, of any Governmental Authority. 

  
 Schedule B-6 

 “Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person: 

(a) to purchase such indebtedness or obligation or any property constituting security therefor; 

(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation; 

(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or 
 (d)
otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof. 
 In any computation of the indebtedness or other
liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. 

“Hazardous Material” means any substance regulated or as to which liability might arise under any applicable Environmental
Law including: (a) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,”
“solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar meaning or import found in any applicable Environmental
Law; (b) Hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (c) radioactive materials, explosives, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon, infectious or medical wastes. 
 “holder” means, with respect to
any Note the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1. 

“Hydrocarbons” means all Crude Oil and Natural Gas produced from or attributable to the Petroleum Properties of the Company
and its Subsidiaries. 
 “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person
for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are
customarily paid (excluding current accounts payable incurred in the ordinary course of business), (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of property or 

  
 Schedule B-7 

 
services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guaranties by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances and (k) all obligations of such Person with respect to Advance Payment Contracts to which such Person is a party. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms
of such Indebtedness provide that such Person is not liable therefor. 
 “Indebtedness and Other Liabilities” means, at any
date, the sum of, without duplication, (a) Indebtedness (under clauses (a) through and including (h) of such definition) of the Company and its Subsidiaries at such date, plus (b) the amount, if any, by which Negative Adjusted
Working Capital at such date exceeds 6% of the Present Value of Proved Reserves, minus (c) Non-Recourse Debt of the Company and its Subsidiaries at such date. 

“INHAM Exception” is defined in Section 6.2(e). 

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or
more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any
insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note. 

“Intercompany Indebtedness” means Indebtedness of Wholly-Owned Subsidiaries owing to the Company. 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities (other than customary director, officer and employee stock option
plans and “poison pill” plans). 
 “Make-Whole Amount” is defined in Section 8.8. 

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole. 
 “Material Subsidiary” means any Subsidiary of the Company representing
more than 5% of Consolidated Total Assets or 5% of total revenue (for the immediately preceding four fiscal quarters) of the Company and its Subsidiaries. 

  
 Schedule B-8 

 “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes. 
 “Memorandum” is defined in Section 5.3. 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3)
of ERISA). 
 “NAIC” means the National Association of Insurance Commissioners or any successor thereto. 

“Natural Gas” means all natural gas, distillate or sulphur, natural gas liquids and all products recovered in the processing
of natural gas (other than condensate) including, without limitation, natural gasoline, coalbed methane gas, casinghead gas, iso-butane, normal butane, propane and ethane (including such methane allowable in commercial ethane). 

“Negative Adjusted Working Capital” means, at any date, the amount, if any, by which current liabilities other than
Indebtedness (under clauses (a) through and including (h) of such definition) of the Company and its Subsidiaries exceeds current assets of such Persons, determined on a consolidated basis as of such date. 

“Non-Recourse Debt” of any Person means Indebtedness of such Person in respect of which (a) the recourse of the holder
of such Indebtedness, whether direct or indirect and whether contingent or otherwise, is effectively limited to the assets directly securing such Indebtedness; (b) such holder may not collect by levy of execution against assets of such Person
generally (other than the assets directly securing such Indebtedness) if such Person fails to pay such Indebtedness when due and the holder obtains a judgment with respect thereto; and (c) such holder has waived, to the extent such holder may
effectively do so, such holder’s right to elect recourse treatment under 11 U.S.C. (S) 1111(b). 
 “Notes” is
defined in Section 1. 
 “OFAC” is defined in Section 5.16(a). 

“OFAC Listed Person” is defined in Section 5.16(a). 

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A
list of OFAC Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs. 
 “Officer’s
Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate. 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. 

  
 Schedule B-9 

 “Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Plans and set forth in Sections 412 and 430 through 436 of the Code and Part 3, Subtitle I, of Title I of ERISA each as in effect from time to time. 

“Permitted Encumbrances” means: 

(a) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business that are not yet due and
payable; 
 (b) Liens of mechanics, materialmen, warehousemen, carriers, landlords or other like liens (including, without
limitation, liens arising in favor of sellers of hydrocarbons), securing obligations incurred in the ordinary course of business that are not yet due and payable; 

(c) Pledges or deposits in connection with or to secure workmen’s compensation, unemployment insurance, pensions or other
employee benefits; 
 (d) Encumbrances consisting of covenants, zoning restrictions, rights, easements, liens, governmental
environmental permitting and operation restrictions, operating restrictions under leases, the exercise by governmental bodies or third parties of eminent domain or condemnation rights, or any other restrictions on the use of real property, none of
which materially impairs the use of such property by the Company or its Subsidiaries in the operation of its business, and none of which is violated in any material respect by existing or proposed operations; 

(e) Liens of operators and/or co-working interest owners under joint operating agreements or similar contractual arrangements
with respect to the Company’s or its Subsidiaries’ proportionate share of the expense of exploration, development and operation of oil, gas and mineral leasehold or fee interests owned jointly with others, to the extent that same relate to
sums not yet overdue, or if they relate to sums that are overdue, then to the extent that the same are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are set aside on its books in accordance with
GAAP; 
 (f) Liens arising in the ordinary course of business under farm-out agreements, gas sales contracts, operating
agreements, unitization and pooling agreements, and such other documents as are customarily found in connection with comparable drilling and producing operations; 

(g) letters of credit, pledges or deposits, including bonds, required in the ordinary course of business to secure public or
statutory obligations or to secure performance in connection with bids or contracts relating to the exploration or development of Petroleum Properties, to the extent that payment of the underlying obligations is not yet due or is being contested in
good faith by appropriate proceedings by or on behalf of the Company or a Subsidiary and with respect to which appropriate reserves have been established in accordance with GAAP; 

  
 Schedule B-10 

 (h) Liens representing gas imbalances; 

(i) The following, if the validity or amount thereof is being contested in good faith by appropriate and lawful proceedings and
with respect to which adequate reserves are set aside on its books, and so long as they do not, in the aggregate, materially detract from the value of the property of the Company, or materially impair the use thereof in the operation of its
business: 
 (1) Claims or liens for taxes, assessments, or charges due and payable and subject to interest or penalty; 

(2) Claims, liens, and encumbrances upon, and defects of title to, real or personal property, including any attachment of
personal or real property or other legal process prior to adjudication of a dispute on the merits; 
 (3) Claims or liens of
mechanics, materialmen, warehousemen, carriers, or other like liens (including, without limitation, liens arising in form of sellers of hydrocarbons); and 

(4) Adverse judgments on appeal; and 

(i) Inchoate liens in respect of royalty owners; 

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness except as provided in clause
(h) to the extent consisting of any Advance Payment Contracts. 
 “Person” means an individual, partnership,
corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority. 

“Petroleum Property” means any interest of the Company or any Subsidiary in oil and gas reserves and assets consisting
primarily of gas gathering, processing and storage facilities and transmission pipelines. 
 “Plan” means an “employee
benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made
or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability. 

“Present Value of Proved Reserves” means, at any time, the net present value, discounted at 10% per annum, of the future
after-tax net revenues expected to accrue to the Company’s and its Subsidiaries’ collective interests in Proved Reserves expected to be produced from their Petroleum Properties during the remaining expected economic lives of such reserves.
Each calculation of such expected future net revenues shall be made in accordance with the then existing standards of the Society of Petroleum Engineers, provided that in any event (a) appropriate deductions shall be made for severance and ad
valorem taxes, and for operating, gathering, transportation and marketing costs required for the production and sale of such 

  
 Schedule B-11 

 
reserves, (b) appropriate adjustments shall be made for hedging operations, provided that Swap Agreements with non-investment grade counterparties shall not be taken into account to the
extent that such Swap Agreements improve the position of or otherwise benefit the Company or any of its Subsidiaries, (c) the pricing assumptions used in determining net present value for any particular reserves shall be based upon the
following price decks: (i) for natural gas, the quotation for deliveries of natural gas for each such year from the New York Mercantile Exchange for Henry Hub, provided that with respect to quotations for calendar years after the fifth calendar
year, the quotation for the fifth calendar year shall be applied and (ii) for crude oil, the quotation for deliveries of West Texas Intermediate crude oil for each such calendar year from the New York Mercantile Exchange for Cushing, Oklahoma,
provided that with respect to quotations for calendar years after the fifth calendar year, the quotation for the fifth calendar year shall be applied, and (d) the cash-flows derived from the pricing assumptions set forth in clause
(c) above shall be further adjusted to account for the historical basis differentials for each month during the preceding 12-month period calculated by comparing realized crude oil and natural gas prices to Cushing, Oklahoma and Henry Hub NYMEX
prices for each month during such period; provided that in calculating the Present Value of Proved Reserves, Proved Undeveloped Reserves shall not be taken into account to the extent that more than 30% of the Present Value of Proved Reserves is
attributable to Proved Undeveloped Reserves. 
 “Priority Debt” means, as of any date, the sum (without duplication) of
(a) Indebtedness of the Company or any of its Subsidiaries secured by Liens not otherwise permitted by Sections 10.5(a) through (k) and (b) Indebtedness of Subsidiaries other than (i) Indebtedness of a Subsidiary outstanding on
date hereof and set forth in Schedule 5.15, and any extension, renewal, refinancing or refunding, provided that the principal amount of such Indebtedness is not increased; (ii) Indebtedness of a Subsidiary owed to the Company or a Subsidiary
Guarantor; (iii) Indebtedness of a Subsidiary that is not a Subsidiary Guarantor owed to a Subsidiary; (iv) Indebtedness of a Subsidiary outstanding at the time it becomes a Subsidiary and extensions, renewals and refundings thereof,
provided that (x) such Indebtedness shall not have been incurred in contemplation of such Subsidiary becoming a Subsidiary, (y) immediately after such Subsidiary becomes a Subsidiary, no Default or Event of Default shall exist, and
(z) such Indebtedness is not outstanding for more than one year from the date such entity becomes a Subsidiary; and (v) Indebtedness of a Subsidiary Guarantor. 

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate. 
 “Proposed Prepayment Date” is defined in Section 8.3(b). 

“Proved Developed Non-Producing Reserves” has the meaning assigned to that term by the Society of Petroleum Engineers, as it
may be amended from time to time, but generally shall mean the subcategory of “Proved Developed Reserves” (as defined by the Society of Petroleum Engineers) which will become “Proved Developed Producing Reserves” upon minor
capital expenditures being made with respect to existing wells which will cause formerly non-producing completions or intervals to become open and producing to market. 

“Proved Developed Producing Reserves” has the meaning assigned to that term by the Society of Petroleum Engineers, as it may
be amended from time to time, but generally shall 

  
 Schedule B-12 

 
mean the subcategory of “Proved Developed Reserves” (as defined by the Society of Petroleum Engineers) which are recoverable by natural reservoir energies (including pumping) from the
completion intervals currently open and producing to market. Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of
primary recovery will be included as “Proved Developed Producing Reserves” only after testing by a pilot project or after the operation of an installed program has confirmed through production response through existing completions
producing to market that increased recovery will be achieved. Proved Developed Producing Reserves shall not include any Proved Developed Non-Producing Reserves. 

“Proved Reserves” means and includes Proved Developed Producing Reserves, Proved Developed Non-Producing Reserves and Proved
Undeveloped Reserves. 
 “Proved Undeveloped Reserves” has the meaning assigned to that term by the Society of Petroleum
Engineers, as it may be amended from time to time, but generally shall mean those reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for
recompletion. Proved Undeveloped Reserves on undrilled acreage shall be limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved Undeveloped Reserves for other undrilled units can be
claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Under no circumstances should estimates for Proved Undeveloped Reserves be attributable to any acreage for which
an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir. 

“PTE” is defined in Section 6.2(a). 

“Purchaser” is defined in the first paragraph of this Agreement. 

“QPAM Exception” is defined in Section 6.2(d). 

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of
such term as set forth in Rule 144A(a)(1) under the Securities Act. 
 “Qualifying Directors” means any director who
(a) is elected by a majority of the members of the board of directors of the Company who were directors immediately prior to the event that caused the change in directorships and (b) is not a “person” or member of a
“group” of persons, or an “affiliate” or “associate” of any “person” or “group” member, or an “associate” of an “affiliate” of any such “person” or “group”
member, which “person” or “group” of persons, together with all of their respective “affiliates” and “associates” and all “associates” of their respective “affiliates” (other than a
“person” or “group” of persons or an “affiliate” or “associate” of such “person” or “group” of persons or an “associate” of such “affiliate” in each case which is
affiliated with the Company or any Subsidiary) comprise a majority of the board of directors of the Company. 

  
 Schedule B-13 

 “Ratable Portion” means, in respect of any holder of any Note upon any
Disposition under Section 10.6(e), an amount equal to the product of 
 (a) the net proceeds arising from such Disposition being
offered to be applied to the payment of Senior Indebtedness pursuant to Section 10.6(iii)(B), multiplied by 
 (b) a fraction, the
numerator of which is the outstanding principal amount of such holder’s Note, and the denominator of which is the aggregate outstanding principal amount of all Senior Indebtedness at the time of such Disposition determined on a consolidated
basis in accordance with GAAP. 
 “Related Fund” means, with respect to any holder of any Note, any fund or entity that
(i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor. 

“Required Holders” means, at any time, the holders of at least a majority in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any of its Affiliates). 
 “Reserve Report” means the reserve
report delivered to the Purchasers for the fiscal year ended December 31, 2013 and, subsequently, a report delivered by the Company pursuant to Section 7.1(g). 

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement. 
 “SEC” shall mean the Securities and Exchange Commission of the
United States, or any successor thereto. 
 “Securities” or “Security” shall have the meaning specified in
Section 2(1) of the Securities Act. 
 “Securities Act” means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect. 
 “Senior Indebtedness” means the
Notes and any Indebtedness of the Company or its Subsidiaries that by its terms is not in any manner subordinated in right of payment to any other unsecured Indebtedness of the Company or any Subsidiary. 

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the
Company. 
 “Series” means any one or more of the series of Notes issued hereunder. 

“Series K Notes” is defined in Section 1(a). 

“Series L Notes” is defined in Section 1(b). 

“Series M Notes” is defined in Section 1(c). 

“Source” is defined in Section 6.2. 

  
 Schedule B-14 

 “Subsidiary” means, as to any Person, any other Person in which such first
Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such
first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company. 
 “Subsidiary
Guaranty” is defined in Section 9.8 and includes any guaranty executed and delivered after the date of Closing by a Material Subsidiary pursuant to Section 9.8. 

“Subsidiary Guarantor” means any Subsidiary of the Company that hereafter executes and delivers a Subsidiary Guaranty
pursuant to Section 9.8. 
 “SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

 “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the
Company or the Subsidiaries shall be a Swap Agreement. 
 “Transfer Prepayment Date” is defined in Section 8.4(a).

 “Transfer Prepayment Offer” is defined in Section 8.4(a). 

“USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 

“Voting Stock” means, with respect to any Person, any class of shares of stock or other equity interests of such Person
having general voting power under ordinary circumstances to elect the board of directors or other managing entities, as appropriate, of such Person (irrespective of whether or not at the time stock of any other class or classes or other equity
interests of such Person shall have or might have voting power by reason of the happening of any contingency). 
 “Wholly-Owned
Subsidiary” means, at any time, any Subsidiary one hundred percent of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s
other Wholly-Owned Subsidiaries at such time. 

  
 Schedule B-15 

 Schedule 5.3 

Disclosure Materials 
 [Omitted]

  
 Schedule 5.3-1 

 Schedule 5.4 

Organization and Ownership of Shares of Subsidiaries 

[Omitted] 

  
 Schedule 5.4-1 

 Schedule 5.5 

Financial Statements 
 [Omitted]

  
 Schedule 5.5-1 

 Schedule 5.15 

Existing Indebtedness 
 [Omitted]

  
 Schedule 5.15-1 

 Schedule 10.5 

Existing Liens 
 [Omitted] 

  
 Schedule 10.5-1 

 Exhibit 1(a) 

FORM OF SERIES K NOTE 

CABOT OIL & GAS CORPORATION 

3.24% SERIES K SENIOR NOTE DUE SEPTEMBER 18, 2021 

 

			
	No. RK-[        ]	  	[Date]
	$[        ]	  	PPN: 127097 E*0

 For Value Received, the undersigned, CABOT OIL & GAS CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (herein called the “Company”), hereby promises to pay to
[                    ], or registered assigns, the principal sum of
[                    ] DOLLARS (or so much thereof as shall not have been prepaid) on September 18, 2021, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.24% per annum from the date hereof, payable semiannually, on the 18th day of March and September in
each year, commencing with the March next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an
Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.24% or (ii) 2% over the rate of interest publicly announced by Bank of
America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand). 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States
of America at the principal office of JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below. 
 This Note is one of the Series K Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase
Agreement, dated as of September 18, 2014 (as from time to time amended, supplemented or otherwise modified, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement. 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer
accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company may treat the 

  
 Exhibit 1(a)-1 

 
person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the
contrary. 
 This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise. 
 If an Event of Default occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement. 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State. 

 

			
	CABOT OIL & GAS CORPORATION
		
	By	 	  

	Name:	 	
	Title:	 	

  
 Exhibit 1(a)-2 

 Exhibit 1(b) 

FORM OF SERIES L NOTE 

CABOT OIL & GAS CORPORATION 

3.67% SERIES L SENIOR NOTE DUE SEPTEMBER 18, 2024 

 

			
	No. RL-[        ]	  	[Date]
	$[        ]	  	PPN: 127097 E@8

 For Value Received, the undersigned, CABOT OIL & GAS CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (herein called the “Company”), hereby promises to pay to
[                    ], or registered assigns, the principal sum of
[                    ] DOLLARS (or so much thereof as shall not have been prepaid) on September 18, 2024, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.67% per annum from the date hereof, payable semiannually, on the 18th day of March and September in
each year, commencing with the March next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an
Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.67% or (ii) 2% over the rate of interest publicly announced by Bank of
America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand). 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States
of America at the principal office of JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below. 
 This Note is one of the Series L Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase
Agreement, dated as of September 18, 2014 (as from time to time amended, supplemented or otherwise modified, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement. 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer
accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not
be affected by any notice to the contrary. 

  
 Exhibit 1(b)-1 

 This Note is also subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise. 
 If an Event of Default occurs and is continuing, the
principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement. 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State. 

 

			
	CABOT OIL & GAS CORPORATION
		
	By	 	  

	Name:	 	
	Title:	 	

  
 Exhibit 1(b)-2 

 Exhibit 1(c) 

FORM OF SERIES M NOTE 

CABOT OIL & GAS CORPORATION 

3.77% SERIES M SENIOR NOTE DUE SEPTEMBER 18, 2026 

 

			
	No. RM-[        ]	  	[Date]
	$[        ]	  	PPN: 127097 E#6

 For Value Received, the undersigned, CABOT OIL & GAS CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (herein called the “Company”), hereby promises to pay to
[                    ], or registered assigns, the principal sum of
[                    ] DOLLARS (or so much thereof as shall not have been prepaid) on September 18, 2026, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.77% per annum from the date hereof, payable semiannually, on the 18th day of March and September in
each year, commencing with the March next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an
Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.77% or (ii) 2% over the rate of interest publicly announced by Bank of
America, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand). 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States
of America at the principal office of JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to
below. 
 This Note is one of the Series M Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase
Agreement, dated as of September 18, 2014 (as from time to time amended, supplemented or otherwise modified, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement. 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer
accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of,

  
 Exhibit 1(c)-1 

 
the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the contrary. 
 This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise. 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner,
at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement. 
 This Note shall be
construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application
of the laws of a jurisdiction other than such State. 
  

			
	CABOT OIL & GAS CORPORATION
		
	By	 	  

	Name:	 	
	Title:	 	

  
 Exhibit 1(c)-2 

 Exhibit 4.4(a) 

FORM OF OPINION OF MANAGING COUNSEL
FOR THE COMPANY 
 [Omitted] 

  
 Exhibit 4.4(a)-1 

 Exhibit 4.4(b) 

FORM OF OPINION OF SPECIAL COUNSEL
FOR THE COMPANY 
 [Omitted] 

  
 Exhibit 4.4(b)-1 

 Exhibit 4.4(c) 

FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS 
 [Omitted] 

  
 Exhibit 4.4(c)-1Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of September 23, 2014, by and among Baxano Surgical, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.           The
Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”)
under the Securities Act.

 

B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, that aggregate principal amount of subordinated convertible debentures of the Company, in substantially the
form attached hereto as Exhibit A (the “Debentures”), set forth below such Purchaser’s name on
the signature page of this Agreement (which aggregate principal amount for all Purchasers together shall be $1,384,801.10), which
Debentures shall be convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”)(as converted, the “Conversion Shares”) in accordance with the terms of the Debentures.

 

C.           The
Debentures are entitled to interest, amortization payments and certain other amounts, which, at the option of the Company and subject
to certain conditions, may be paid in shares of Common Stock (the “Interest Shares”) or in cash.

 

D.           The
Debentures, the Conversion Shares and the Interest Shares collectively are referred to herein as the “Securities”.

 

E.           The
Company has engaged Summer Street to act as placement agent (the “Placement Agent”) for the offering of the
Debentures on a “best efforts” basis.

 

F.           Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant
to which, among other things, the Company will agree to provide certain registration rights with respect to the Underlying Shares
under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.

 

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 Purchasers hereby agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1         Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

“Action”
means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation
pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their properties
or any executive officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an executive officer,
director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative
agency, regulatory authority, stock market, stock exchange or trading facility.

 

    	 

    	 

    

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls,
is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

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

 

“Board of Directors”
means the board of directors of the Company.

 

“Business Day”
means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Buy-In”
has the meaning set forth in Section 4.1(f).

 

“Cash Payment
Cap” means, with respect to any Person, an amount equal to the product of (i) the aggregate maximum permitted amount
of cash payments by the Company under the Transaction Documents, as set forth in Section 3(c) of the Subordination Agreement, multiplied
by (ii) the quotient of (x) the initial principal amount of the Debentures then held by such Person divided by (y) the aggregate
initial principal amount of all Debentures issued pursuant to this Agreement. In the event that such Person is not the initial
holder of any Debentures then held by such Person, the amount of the Cash Payment Cap with respect to such Person shall be reduced
by the amount of any cash payment of any kind made by the Company to any prior holder of such Debentures under any of the Transaction
Documents.

 

“Closing”
means the closing of the purchase and sale of the Debentures pursuant to this Agreement.

 

“Closing Bid
Price” means, for any security as of any date, (a) the last reported closing bid price per share of Common Stock for
such security on the Principal Trading Market, as reported by Bloomberg Financial Markets, or, (b) if the Principal Trading Market
begins to operate on an extended hours basis and does not designate the closing bid price then the last bid price of such security
prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or (c) if the foregoing do not apply, the last
closing price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg Financial Markets, or (d) if no closing bid price is reported for such security by Bloomberg Financial Markets, the average
of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the
Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
of such security on such date shall be the fair market value as mutually determined by the Company and the holder of such security.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

 

“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto,
and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived,
as the case may be, or such other date as the parties may agree.

 

“Commission”
has the meaning set forth in the Recitals.

 

    	2

    	 

    

 

“Common Stock”
has the meaning set forth in the Recitals, and also includes any other class of securities into which the Common Stock may hereafter
be reclassified or changed.

 

“Common Stock
Equivalents” means any securities of the Company or any Subsidiary which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument
that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or
other securities that entitle the holder to receive, directly or indirectly, Common Stock.

 

“Company”
has the meaning set forth in the Preamble.

 

“Company Board
Recommendation” has the meaning set forth in Section 4.15(b).

 

“Company Counsel”
means Goodwin Procter LLP, with offices located at 53 State Street

Boston, Massachusetts 02109.

 

“Company Deliverables”
has the meaning set forth in Section 2.2(a).

 

“Company’s
Knowledge” means with respect to any statement made to the Company’s Knowledge, that the statement is based upon
the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject
of the statement.

 

“Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.

 

“Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Conversion
Shares” has the meaning set forth in the Recitals.

 

“Deadline Date”
has the meaning set forth in Section 4.1(f).

 

“Debentures”
has the meaning set forth in the Recitals.

 

“Debenture Amount”
means, with respect to each Purchaser, the aggregate principal amount set forth below such Purchaser’s name on the signature
page hereto next to the heading “Aggregate Principal Amount of Debentures to be Acquired.”

 

“Disclosure
Materials” has the meaning set forth in Section 3.1(h).

 

“Disclosure Schedules”
has the meaning set forth in Section 3.1.

 

“DTC”
has the meaning set forth in Section 4.1(c).

 

    	3

    	 

    

 

“Effective Date”
means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all
of the Underlying Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the
Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions
or (c) following the one year anniversary of the Closing Date provided that a holder of Shares or Underlying Shares is not an Affiliate
of the Company, all of the Shares and Underlying Shares may be sold pursuant to an exemption from registration under Section 4(1)
of the Securities Act without volume or manner-of-sale restrictions and Company counsel has delivered to such holders a standing
written unqualified opinion that resales may then be made by such holders of the Underlying Shares pursuant to such exemption which
opinion shall be in form and substance reasonably acceptable to such holders.

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Environmental
Laws” has the meaning set forth in Section 3.1(dd).

 

“Escrow Account”
has the meaning set forth in Section 2.1(c).

 

“Escrow Agent”
has the meaning set forth in Section 2.1(c).

 

“Escrow Amount”
has the meaning set forth in Section 2.1(c).

 

“Evaluation
Date” has the meaning set forth in Section 3.1(t).

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Existing Debentures”
means the subordinated convertible debentures due April 22, 2017, issued by the Company to the Purchasers on April 22, 2014 pursuant
to the March 11, 2014 Purchase Agreement.

 

“Existing Warrants”
means the Common Stock purchase warrants issued to the Purchasers pursuant to the March 11, 2014 Purchase Agreement.

 

“FDA”
has the meaning set forth in Section 3.1(ll).

 

“GAAP”
means U.S. generally accepted accounting principles, as applied by the Company.

 

“Governmental
Licenses” has the meaning set forth in Section 3.1(ll).

 

“Indebtedness”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) “capital leases” in accordance
with generally accepted accounting principles (other than trade payables entered into in the ordinary course of business), (iii)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments, and (v) all guaranties, endorsements and Contingent Obligations
in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business.

 

“Indemnified
Person” has the meaning set forth in Section 4.9.

 

“Intellectual
Property Rights” has the meaning set forth in Section 3.1(p).

 

    	4

    	 

    

 

“Interest Shares”
has the meaning set forth in the Recitals.

 

“Irrevocable
Transfer Agent Instructions” means, with respect to the Company, the Irrevocable Transfer Agent Instructions, in substantially
the form of Exhibit F, executed by the Company and delivered to and acknowledged in writing by the Transfer Agent.

 

“Legend Removal
Date” has the meaning set forth in Section 4.1(c).

 

“Lien”
means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of
any kind.

 

“Lock-Up Agreement”
has the meaning set forth in Section 2.2(a)(ix).

 

“Material Adverse
Effect” means a material adverse effect on the results of operations, assets, prospects, business or financial condition
of the Company and the Subsidiaries, taken as a whole, except that any of the following, either alone or in combination, shall
not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions
in the U.S. economy or which are generally applicable to the industry in which the Company operates, provided that such effects
are not borne disproportionately by the Company, (ii) effects resulting from or relating to the announcement or disclosure
of the sale of the Securities or other transactions contemplated by this Agreement, (iii) effects caused by any event, occurrence
or condition resulting from or relating to the taking of any action in accordance with this Agreement, (iv) effects 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, (v) effects
resulting from decreases in the Company’s stock price as a result of the transactions contemplated by the Transaction Documents
or the Debentures issued thereunder, or as a result of sales of the Securities or securities issuable upon conversion or exercise,
as applicable, of the Existing Debentures or the Existing Warrants into the open market.

 

“Material Contract”
means any contract of the Company that has been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10)
of Regulation S-K.

 

“Material Permits”
has the meaning set forth in Section 3.1(n).

 

“New York Courts”
means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

“OFAC”
has the meaning set forth in Section 3.1(kk).

 

“Outside Date”
means the seventh (7th) day after the date hereof.

 

“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

 

“Placement Agent”
has the meaning set forth in the Recitals.

 

“Principal Trading
Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of
the date of this Agreement and the Closing Date, shall be the NASDAQ Global Market.

 

    	5

    	 

    

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition).

 

“Proposals”
has the meaning set forth in Section 4.15(a).

 

“Proxy Statement”
has the meaning set forth in Section 4.15(a).

 

“Purchase Price”
means the aggregate purchase price for the Debentures to be purchased by each Purchaser and shall be the amount set forth below
such Purchaser’s name on the signature page of this Agreement on the line titled “Aggregate Purchase Price”.

 

“Purchaser”
or “Purchasers” has the meaning set forth in the Preamble.

 

“Purchaser Deliverables”
has the meaning set forth in Section 2.2(b).

 

“Purchaser Party”
has the meaning set forth in Section 4.9.

 

“Registration
Rights Agreement” has the meaning set forth in the Recitals.

 

“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

 

“Regulation
D” has the meaning set forth in the Recitals.

 

“Required Approvals”
has the meaning set forth in Section 3.1(e).

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Reports”
has the meaning set forth in Section 3.1(h).

 

“Secretary’s
Certificate” has the meaning set forth in Section 2.2(a)(vii).

 

“Securities”
has the meaning set forth in the Recitals.

 

“Securities
Act” has the meaning set forth in the Recitals.

 

“Shares Authorization
Approval” has the meaning set forth in Section 4.15(a).

 

“Short Sales”
include, without limitation, (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and (ii) sales and other transactions through non-U.S. broker dealers
or foreign regulated brokers (but shall not be deemed to include the location and/or reservation of borrowable shares of Common
Stock).

 

    	6

    	 

    

 

“Subordination
Agreements” means, collectively, (i) that certain Subordination Agreement, dated as of September 24, 2014, among the
Purchasers, the Company, and Hercules Technology Growth Capital, Inc., as the same may, from time to time, be amended, modified,
supplemented, restated or replaced and (ii) that certain Subordination Agreement, dated as of September 24, 2014, among the Purchasers,
the Company, and DAFNA Lifescience L.P., as the same may, from time to time, be amended, modified, supplemented, restated or replaced
..

 

“Subscription
Amount” means, with respect to each Purchaser, the aggregate amount to be paid for the Debentures purchased hereunder
as indicated on such Purchaser’s signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription
Amount)” in United States dollars and in immediately available funds.

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, include any subsidiary
of the Company formed or acquired after the date hereof.

 

“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchasers, in the
form of Exhibit C attached hereto.

 

“Trading Affiliates”
has the meaning set forth in Section 3.2(h).

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink
sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided,
that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall
mean a Business Day.

 

“Trading Market”
means whichever of the New York Stock Exchange, the NYSE Amex Equities (formerly the American Stock Exchange), the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.

 

“Transaction
Documents” means this Agreement, the schedules and exhibits attached hereto, the Debentures, the Registration Rights
Agreement, the Subsidiary Guarantee, the Irrevocable Transfer Agent Instructions and any other documents or agreements explicitly
contemplated hereunder.

 

“Transfer Agent”
means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 10150
Mallard Creek Road, Suite 307, Charlotte, North Carolina 28262, and a facsimile number of (718) 765-8743, or any successor transfer
agent for the Company.

 

“Underlying
Shares” means the Conversion Shares and the Interest Shares.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

    	7

    	 

    

 

ARTICLE II.

PURCHASE AND SALE

 

2.1         Closing.

 

(a)          Amount.
Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company, a Debenture in aggregate principal amount set forth
below such Purchaser’s name on the signature page hereto.

 

(b)          Closing.
The Closing of the purchase and sale of the Debentures shall take place at the offices of EGS or at such other locations or remotely
by facsimile transmission or other electronic means as the parties may mutually agree.

 

(c)          Form
of Payment. Except as may otherwise be agreed to among the Company and one or more of the Purchasers, on the Closing Date,
each Purchaser shall wire its Subscription Amount, in United States dollars and in immediately available funds, to an account established
by the Company . The Company and the Placement Agent shall provide to each Purchaser no later than one Business Day prior to the
Closing Date the wire transfer information for the Company’s account. On the Closing Date, (a) the Company shall deliver,
in immediately available funds, to Sabby Capital Management., LLC (“Sabby”), $35,000 for its legal fees and
due diligence expenses and (b) the Company shall deliver to each Purchaser, one or more Debentures in aggregate principal amount
equal to the Debenture Amount. In the event that the Company fails to issue to any Purchaser such Purchaser’s Debentures
(which issuance, for the avoidance of doubt, must be an original), for any reason on the Closing Date, and provided that all other
conditions set forth in this Agreement for the issuance of such securities to such Purchaser shall have been satisfied or waived,
as the case may be, the Company shall pay to such Purchaser, in cash, as liquidated damages and not as a penalty, for each $1,000
of Debentures that the Company shall have failed to issue to such Purchaser, $10 per Trading Day for each Trading Day after the
Closing Date until such Debentures are delivered.

 

2.2         Closing
Deliveries.   (a) On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser
the following (the “Company Deliverables”):

 

(i)          this
Agreement, duly executed by the Company;

 

(ii)         one
or more original Debentures, executed by the Company and registered in the name of such Purchaser as set forth on the Securities
Questionnaire included as Exhibit D hereto, in aggregate principal amount equal to the Debenture Amount;

 

(iii)        [Intentionally
Omitted];

 

(iv)        the
Subsidiary Guarantee, duly executed by the parties thereto;

 

(v)         the
Subordination Agreements, duly executed by the parties thereto (other than the Purchasers);

 

    	8

    	 

    

 

(vi)        the
Registration Rights Agreement;

 

(vii)       duly
executed Irrevocable Transfer Agent Instructions acknowledged in writing by the Transfer Agent;

 

(viii)      a
certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving
the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying
the current versions of the certificate of incorporation, as amended, and by-laws of the Company and (c) certifying as to the signatures
and authority of persons signing the Transaction Documents and related documents on behalf of the Company, in the form attached
hereto as Exhibit G;

 

(ix)         the
Compliance Certificate referred to in Section 5.1(i);

 

(x)          a
certificate evidencing the formation and good standing of the Company issued by the Secretary of State of the State of Delaware,
as of a date within three (3) Business Days of the Closing Date;

 

(xi)         a
certified copy of the certificate of incorporation, as certified by the Secretary of State of the State of Delaware, as of a date
within five (5) Business Days of the Closing Date (along with bringdown good standings, if applicable);

 

(xii)        a
certified copy of the certificate of incorporation, as certified by the Secretary of State of the State of Delaware, as of a date
within three (3) Business Days of the Closing Date; and

 

(b)          On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following, with respect to such
Purchaser (the “Purchaser Deliverables”):

 

(i)          this
Agreement, duly executed by such Purchaser;

 

(ii)         its
Subscription Amount, in United States dollars and in immediately available funds, by wire transfer to the account of the Company,
which shall not be less than $1,500,000, in the aggregate amount such Purchaser and its Affiliates;

 

(iii)        the
Registration Rights Agreement, duly executed by such Purchaser;

 

(iv)        a
fully completed and duly executed Selling Stockholder Questionnaire in the form attached as Annex B to the Registration Rights
Agreement;

 

(v)         the
Subordination Agreements duly executed by such Purchaser; and

 

(vi)        a
fully completed and duly executed Accredited Investor Questionnaire, satisfactory to the Company, and Securities Questionnaire
in the forms attached hereto as Exhibits D-1 and D-2, respectively.

 

    	9

    	 

    

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1         Representations
and Warranties of the Company. Except as set forth in the schedules delivered herewith (the “Disclosure Schedules”),
which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules or other representations relating to the subject
matter of such disclosures, the Company hereby represents and warrants as of the date hereof and the Closing Date (except for the
representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers
and to the Placement Agent:

 

(a)          Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a) hereto. Except as disclosed
in Schedule 3.1(a) hereto, the Company owns, directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock or comparable
equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities.

 

(b)          Organization
and Qualification. The Company and each of its Subsidiaries 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 (as applicable), with the
requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate
or articles of incorporation or bylaws or other organizational or charter documents. The Company and each of its Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign corporation or other entity 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, would not have or reasonably be expected to result in a Material Adverse
Effect, and no Proceeding has been instituted, is pending, or, to the Company’s Knowledge, has been threatened in writing
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)          Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Debentures
and the reservation for issuance and the subsequent issuance of the Conversion Shares upon conversion of the Debentures, the Interest
Shares (if interest under the Debentures is paid in Interest Shares)) have been duly authorized by all necessary corporate action
on the part of the Company, and no further corporate action is required by the Company, its Board of Directors or its stockholders
in connection therewith other than in connection with the Required Approvals. Each of the Transaction Documents to which it is
a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the
terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.

 

    	10

    	 

    

 

(d)          No
Conflicts. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the
consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of
the Debentures and the reservation for issuance and issuance of the Conversion Shares and the Interest Shares) do not and will
not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or otherwise result in a violation of the organizational documents of the Company, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws
and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by the Purchasers
herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading
Markets), or by which any property or asset of the Company or a Subsidiary is bound or affected, except in the case of clauses
(ii) and (iii) such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

 

(e)          Filings,
Consents and Approvals. Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents
(including the issuance of the Securities), other than (i) the filing with the Commission of one or more Registration Statements
in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities
laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act,
(iv) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the
Securities and the listing of the Conversion Shares and Interest Shares for trading or quotation, as the case may be, thereon in
the time and manner required thereby, (v) the filings required in accordance with Section 4.5 of this Agreement and (vi)
those that have been made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).

 

(f)          Issuance
of the Securities. The Debentures have been duly authorized and, when issued and paid for in accordance with the terms of the
Transaction Documents, will be duly and validly issued, free and clear of all Liens, other than restrictions on transfer provided
for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights
of stockholders. The Conversion Shares issuable upon conversion of the Debentures have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents and the Debentures will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or
imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of stockholders. Assuming the accuracy
of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all
applicable federal and state securities laws. As of the Closing Date, the Company shall have reserved from its duly authorized
capital stock the number of shares of Common Stock then issuable upon conversion of the Debentures (without taking into account
any limitations on the conversion of the Debentures set forth in the Debentures). The Company shall, so long as any of the Debentures,
Existing Debentures and Existing Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized
and unissued capital stock, solely for the purpose of effecting the conversion of the Debentures and the Existing Debentures or
the exercise of the Existing Warrants, the number of shares of Common Stock then issuable upon conversion of the Debentures and
the Existing Debentures or the exercise of the Existing Warrants (without taking into account any limitations on the conversion
of the Debentures or the Existing Debentures set forth in the Debentures or the Existing Debentures, as applicable, and without
taking into account any limitations on the exercise of the Existing Warrants set forth in the Existing Warrants). The Company shall
reserve from its duly authorized capital stock the number of shares of Common Stock issuable upon payment of interest in Interest
Shares under the Debentures. When issued, such Interest Shares shall have been duly authorized and will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of stockholders.

 

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(g)          Capitalization.
The number of shares and type of all authorized, issued and outstanding capital stock,
options and other securities of the Company (whether or not presently convertible into or
exercisable or exchangeable for shares of capital stock of the Company) is set
forth in Schedule 3.1(g) hereto. The Company has not issued any capital
stock since the date of its most recently filed SEC Report.  Except as set forth on Schedule 3.1(g), no Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents that have not been effectively waived as of the Closing Date. Except as set forth on
Schedule 3.1(g) or a result of the purchase and sale of the Debentures, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of
Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Debentures will not
obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not
result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of
such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in compliance with all applicable federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.

 

(h)          SEC
Reports; Disclosure Materials. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 12 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
Reports”, and the SEC Reports, together with the Disclosure Schedules, being collectively referred to as the “Disclosure
Materials”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension, except where the failure to file on a timely basis would not have or reasonably
be expected to result in a Material Adverse Effect (including, for this purpose only, any failure to qualify to register the Underlying
Shares for resale on Form S-3 or that would prevent any Purchaser from using Rule 144 to resell any Securities). As of their
respective filing dates, or to the extent corrected by a subsequent amendment, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder,
and none of the SEC Reports, 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 light of the circumstances under which they
were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act.

 

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(i)          Financial
Statements.

 

(i)          The
financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected
by a subsequent amendment). Such financial statements have been prepared in accordance with GAAP applied on a consistent basis
during the periods involved, 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 taken as a whole 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.

 

(ii)         The
financial statements of Baxano, Inc., a Delaware corporation, and the related notes thereto filed as Exhibit 99.2 and Exhibit 99.3
to Amendment No. 1 to the Current Report on Form 8-K filed with the Commission on June 26, 2013 comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the
time of filing (or to the extent corrected by a subsequent amendment). Such financial statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved, 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 Baxano, Inc. 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.

 

(iii)        The
pro forma financial statements of the Company and the related notes thereto filed as Exhibit 99.4 to Amendment No. 1 to the Current
Report on Form 8-K filed with the Commission on June 26, 2013 comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected
by a subsequent amendment) and have been properly presented on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred
to therein.

 

(iv)        Except
as included therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated
by reference in the SEC Reports under the Securities Act or the Exchange Act.

 

(j)          Material
Changes. Since the date of the latest financial statements included within the SEC Reports, except as specifically disclosed
in a subsequent SEC Report filed prior to the date hereof or as contemplated by the Transaction Documents or as set forth on Schedule
3.1(j), (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in
filings made with the Commission, (iii) the Company has not altered materially its method of accounting or the manner in which
it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
(other than in connection with repurchases of unvested stock issued to employees of the Company), and (v) the Company has not issued
any equity securities to any officer, director or Affiliate, except Common Stock issued pursuant to existing Company stock option
or stock purchase plans or executive and director compensation arrangements disclosed in the SEC Reports. Except for the issuance
of the Debentures contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective businesses, properties, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly
disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

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(k)          Litigation.
There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor
any Subsidiary nor, to the Company’s Knowledge, any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There
has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or executive officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under
the Exchange Act or the Securities Act.

 

(l)          Employment
Matters. No material labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees
of the Company which would have or reasonably be expected to result in a Material Adverse Effect. None of the Company’s or
any Subsidiary’s employees is a member of a union that relates to such employee’s relationship with the Company, and
neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Subsidiary
believes that its relationship with its employees is good. No executive officer of the Company (as defined in Rule 501(f) of the
Securities Act) has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer's employment with the Company or any such Subsidiary. To the Company’s Knowledge, no
executive officer, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer
does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters, except in each case,
matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. The Company
and each of its Subsidiaries is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in
compliance would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(m)          Compliance.
Except as disclosed on Schedule 3.1(m), neither the Company nor any of its Subsidiaries (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by
the Company or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received written notice of a claim
that it is in default under or that it is in violation of, any Material Contract (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court, arbitrator or governmental body having jurisdiction over the Company
or its properties or assets, or (iii) is in violation of, or in receipt of written notice that it is in violation of, any statute,
rule or regulation of any governmental authority applicable to the Company, except in each case as would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

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(n)          Regulatory
Permits. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its respective businesses as currently conducted and
as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and
would not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither
the Company nor any of its Subsidiaries has received any notice of Proceedings relating to the revocation or modification of any
such Material Permits.

 

(o)          Title
to Assets. Neither the Company nor any of its Subsidiaries owns any real property. The Company and its Subsidiaries have good
and marketable title to all tangible personal property owned by them that is material to the business of the Company and its Subsidiaries,
taken as a whole, in each case free and clear of all Liens except as set forth on Schedule 3.1(o) or such as do not materially
affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company
and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases 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 and its Subsidiaries.

 

(p)          Patents
and Trademarks. To the Company’s Knowledge, the Company and the Subsidiaries own, possess, license or have other rights
to use, all patents, patent applications, trade and service marks, trade and service mark applications and registrations, trade
names, trade secrets, inventions, copyrights, licenses, technology, know-how and other intellectual property rights and similar
rights described in the SEC Reports as necessary or material for use in connection with their respective businesses and which the
failure to so have would have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. There is
no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by any Person that the Company’s
business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights
of another. To the Company’s Knowledge, there is no existing infringement by another Person of any of the Intellectual Property
Rights that would have or would reasonably be expected to have a Material Adverse Effect. To the Company’s Knowledge, all
patent applications and patents within the Intellectual Property Rights have been prosecuted with a duty of candor, and there is
no material fact known by the Company that would preclude the issuance of patents with respect to said patent applications or that
would render any issued patents invalid or unenforceable. There is no pending or, to the Company’s Knowledge, threatened
action, suit, proceeding or claim by another Person challenging the Company’s rights in or to any material Intellectual Property
Rights, or challenging inventorship, validity or scope of any such Intellectual Property Rights. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property
Rights, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. None of the technology employed by the Company or its Subsidiaries has been obtained or is being used by the Company or
the respective Subsidiary, as applicable, in violation of any contractual obligation binding on the Company or the respective Subsidiary,
as applicable, or, to the Company’s Knowledge, any of its executive officers, directors or employees or otherwise in violation
of the rights of any Person.

 

(q)          Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company
and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company
nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge,
will it or any Subsidiary be unable to renew their respective 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 without a significant increase in
cost.

 

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(r)          Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the executive officers or directors of the Company
and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company
or any Subsidiary (other than for services as employees, executive officers and directors), that would be required to be disclosed
pursuant to Item 404 of Regulation S-K.

 

(s)          Internal
Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any differences.

 

(t)          Sarbanes-Oxley;
Disclosure Controls. The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley
Act of 2002 which are applicable to it as of the Closing Date. The Company has established disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for the Company and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying executive officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the Exchange Act the conclusions of the certifying executive officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the
Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(u)          Certain
Fees. Except as described on Schedule 3.1(u), no person or entity will have, as a result of the transactions contemplated
by this Agreement, any valid right, interest or claim against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than the
Placement Agent with respect to the offer and sale of the Debentures (which placement agent fees are being paid by the Company).
The Purchasers 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 paragraph (u) that may be due in connection with the transactions contemplated by the Transaction
Documents.

 

(v)         Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of
this Agreement and the accuracy of the information disclosed in the Accredited Investor Questionnaires provided by the Purchasers,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
under the Transaction Documents. The issuance and sale of the Securities hereunder does not contravene the rules and regulations
of the Principal Trading Market.

 

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(w)          Investment
Company The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Debentures will not
be, or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as
amended.

 

(x)          Registration
Rights. Other than each of the Purchasers or as set forth in Schedule 3.1(x) hereto, no Person has any right to cause
the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which
are currently registered on an effective registration statement on file with the Commission.

 

(y)          Listing
and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor
has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth
in Schedule 3.1(y) hereto, the Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance in all material respects with all listing and maintenance requirements of the Principal Trading Market on
the date hereof. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another
established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such electronic transfer.

 

(z)          Application
of Takeover Protections; Rights Agreements. The Company and the Board of Directors have taken 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 Company's charter documents or the laws of its state of
incorporation that is or would reasonably be expected to become applicable to any of the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation,
the Company's issuance of the Securities and the Purchasers' ownership of the Securities.

 

(aa)        Disclosure.
The Company confirms that it has not provided, and to the Company’s Knowledge, none of its executive officers or directors
nor any other Person acting on its or their behalf has provided, and it has not authorized the Placement Agents to provide, any
Purchaser or its respective agents or counsel with any information that it believes constitutes material, non-public information
except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may
constitute such information, all of which will be disclosed by the Company in the Form 8-K as contemplated by Section 4.5
hereof. The Company understands and confirms that the Purchasers will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosure furnished by or on behalf of the Company to the Purchasers 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 Company acknowledges and
agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereto.

 

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(bb)       No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, none of the Company, its Subsidiaries nor, to the Company’s Knowledge, any Person acting on its behalf has, directly
or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances
that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection
with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant
to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation
or stockholder approval provisions, including, without limitation, under the rules and regulations of the Principal Trading Market.

 

(cc)        Solvency.
Schedule 3.1(cc) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments.

 

(dd)       Tax
Matters. The Company and each of its Subsidiaries (i) has accurately and timely prepared and filed (or requested valid extensions
thereof) all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) 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, with respect to
which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return
would not have or reasonably be expected to result in a Material Adverse Effect. There are no unpaid taxes in any material amount
claimed to be due by the Company or any of its Subsidiaries by the taxing authority of any jurisdiction.

 

(ee)        Environmental
Matters. To the Company’s Knowledge, neither the Company nor any of its Subsidiaries (i) is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property
contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; which violation, contamination,
liability or claim has had or would have, individually or in the aggregate, a Material Adverse Effect; and there is no pending
investigation or, to the Company’s Knowledge, investigation threatened in writing that might lead to such a claim.

 

(ff)         No
General Solicitation. Neither the Company nor, to the Company’s Knowledge, any person acting on behalf of the Company
has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the
Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501
under the Securities Act.

 

(gg)       Foreign
Corrupt Practices. Neither the Company, nor to the Company’s Knowledge, 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.

 

(hh)       Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary)
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Reports and is not
so disclosed and would have or reasonably be expected to result in a Material Adverse Effect.

 

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(ii)          Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that no Purchaser is 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 thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents
and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(jj)          Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(h) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that, subject to Sections 3.2(h) and 4.13 hereof, (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging
activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

 

(kk)        Regulation
M Compliance.  The Company has not, and to the Company’s Knowledge no one 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 of the Company or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation
paid to the Placement Agent in connection with the placement of the Debentures.

 

(ll)          PFIC.
Neither the Company nor any Subsidiary is or intends to become a “passive foreign investment company” within the meaning
of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(mm)      OFAC.
Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, executive officer, agent, employee,
Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to
any Subsidiary, joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar
or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S.
sanctions administered by OFAC.

 

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(nn)       Government
Licenses. The Company possesses such permits, certificates, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business of the Company as described in the SEC Reports, including without limitation, all such approvals,
certificates, authorizations and permits required by the United States Food and Drug Administration (the “FDA”)
and/or other federal, state, local or foreign agencies or bodies engaged in the regulation of clinical trials, medical devices,
or biohazardous substances or materials, except where the failure so to possess would not, individually or in the aggregate, have
or reasonably be expected to have a Material Adverse Effect; the Company is in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, have or reasonably
be expected to have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would
not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect; and the Company has not
received any written notice of proceedings relating to the revocation or modification of any such Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have or reasonably be expected
to have a Material Adverse Effect. Where required by applicable laws and regulations of the FDA or any foreign regulatory authority,
the Company has submitted to the FDA or any foreign regulatory authority any application, or amendment or supplement thereto, for
a clinical trial it has conducted or sponsored or is conducting or sponsoring, except where such failure would not, individually
or in the aggregate, have or reasonably be expected to have a Material Adverse Effect; all such submissions were in material compliance
with applicable laws and rules and regulations when submitted and no material deficiencies have been asserted by the FDA or such
foreign regulatory authority with respect to any such submissions, except any deficiencies which would not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

(oo)       Shell
Company. The Company is not, and was not in the past, an “ineligible issuer” (as defined in Rule 405 promulgated
under the Securities Act).

 

(pp)       No
Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(qq)       Use
of Form S-3. The Company meets the registration and transaction requirements for use of Form S-3 for the registration of the
resale of the Underlying Shares by the Purchasers, subject to the Commission’s guidance and interpretations regarding secondary
offerings being considered primary offerings.

 

(rr)         No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer
of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person"
and, together, "Issuer Covered Persons") is subject to any of the "Bad Actor" disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (a "Disqualification Event"), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

 

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(ss)        Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale
of any Regulation D Securities.

 

(tt)         Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing
Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of
time, become a Disqualification Event relating to any Issuer Covered Person.

 

(uu)       Ranking
of Debentures. Except as set forth on Schedule 3.1(uu), no Indebtedness, as of the Closing, will be senior to, or pari
passu with, the Debentures in right of payment.

 

3.2         Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as
of the date hereof and as of the Closing Date to the Company and the Placement Agents as follows:

 

(a)          Organization;
Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement by such Purchaser and performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability
company or other applicable like action, on the part of such Purchaser. Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the
valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(b)          No
Conflicts. The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement
and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of
the organizational documents of such Purchaser, (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 such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the
case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations
hereunder.

 

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(c)          Investment
Intent. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and (i) is acquiring the Debentures, (ii) upon conversion of the
Debentures, will acquire the Conversion Shares issuable upon conversion thereof and (iii) will acquire the Interest Shares (to
the extent interest under the Debentures is paid in Interest Shares) as principal for its own account and not with a view to, or
for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities
laws, provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Securities
for any minimum period of time and reserves the right, subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state
securities laws. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does
not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution
of any of the Securities (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is
not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to
be so registered as a broker-dealer.

 

(d)          Purchaser
Status. At the time such Purchaser was offered the Debentures, it was, and at the date hereof it is, an “accredited investor”
as defined in Rule 501(a) under the Securities Act.

 

(e)          General
Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general advertisement.

 

(f)          Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(g)          Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been
afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such
Purchaser's right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company's representations
and warranties contained in the Transaction Documents. Such Purchaser has sought such accounting, legal and tax advice as it has
considered necessary to make an informed decision with respect to its acquisition of the Securities.

 

(h)          Certain
Trading Activities. Other than with respect to the transactions contemplated herein, since the time that such Purchaser was
first contacted by the Company, the Placement Agent or any other Person regarding the transactions contemplated hereby, neither
the Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Purchaser’s investments or trading or information concerning such Purchaser’s investments,
including in respect of the Securities, and (z) is subject to such Purchaser’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting
on behalf of or pursuant to any understanding with such Purchaser or Trading Affiliate, effected or agreed to effect any purchases
or sales of the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading Affiliate that is, individually or collectively, a multi-managed
investment bank or vehicle whereby separate portfolio managers manage separate portions of such Purchaser's or Trading Affiliate’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser's or Trading Affiliate’s assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated
by this Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect
short sales or similar transactions in the future.

 

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(i)          Brokers
and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest
or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Purchaser.

 

(j)          Independent
Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant
to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal,
tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the Securities. Such Purchaser understands that the Placement
Agent has acted solely as the agent of the Company in this placement of the Debentures and such Purchaser has not relied on the
business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder,
and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with the transactions
contemplated by the Transaction Documents.

 

(k)          Reliance
on Exemptions. Such Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.

 

(l)           No
Governmental Review. Such Purchaser understands that no United States 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 the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(m)         Regulation
M. Such Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common
Stock and other activities with respect to the Common Stock by the Purchasers.

 

(n)         Residency.
Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Securities
was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

 

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(o)         Accuracy
of Accredited Investor Questionnaire.  The Accredited Investor Questionnaire delivered by the Purchaser in connection
with this Agreement is complete and accurate in all respects as of the date of this Agreement and will be correct as of the Closing
Date and the effective date of the Registration Statement; provided, that the Purchaser shall be entitled to update such information
by providing written notice thereof to the Company.

 

The Company and each
of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction
Documents.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Transfer
Restrictions.

 

(a)          Compliance
with Laws. Notwithstanding any other provision of this Article IV, each Purchaser covenants that the Securities may
be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities
Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) pursuant to Rule 144 or (iv) in connection
with a bona fide pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of
such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights of a Purchaser under this
Agreement and the Registration Rights Agreement with respect to such transferred Securities.

 

(b)          Legends.
Certificates evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c):

 

[NEITHER THESE SECURITIES NOR THE
SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

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The Company acknowledges
and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Securities
in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan.
Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee,
secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection
with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge. No notice shall be required
of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure
of such legended Securities. Each Purchaser acknowledges that the Company shall not be responsible for any pledges relating to,
or the grant of any security interest in, any of the Securities or for any agreement, understanding or arrangement between any
Purchaser and its pledgee or secured party. At the appropriate Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of
the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders
thereunder. Each Purchaser acknowledges and agrees that, except as otherwise provided in Section 4.1(c), any Securities
subject to a pledge or security interest as contemplated by this Section 4.1(b) shall continue to bear the legend set forth
in this Section 4.1(b) and be subject to the restrictions on transfer set forth in Section 4.1(a).

 

(c)          Removal
of Legends. The legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate
without such legend or any other legend to the holder of the applicable Securities upon which it is stamped or issue to such holder
by electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (i) such
Securities are registered for resale under the Securities Act (provided that, if the Purchaser is selling pursuant to the effective
registration statement registering the Securities for resale, the Purchaser agrees to only sell such Securities during such time
that such registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement),
(ii) such Securities are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii)
such Securities are eligible for sale under Rule 144. Following the Effective Date, the Company shall cause Company Counsel to
issue to the Transfer Agent the legal opinion referred to in the Irrevocable Transfer Agent Instructions. Any fees (with respect
to the Transfer Agent, Company Counsel or otherwise) associated with the issuance of such opinion or the removal of such legend
shall be borne by the Company. Following the Effective Date, or at such earlier time as a legend is no longer required for certain
Securities, the Company will no later than three (3) Trading Days (such third (3rd) Trading Day, the “Legend
Removal Date”) following the delivery by a Purchaser to the Company (with notice to the Company) of (i) a legended certificate
representing the Underlying Shares or (ii) a Conversion Notice in the manner stated in the Debentures to effect the conversion
of such Debenture in accordance with its terms, and, in each case, an opinion of counsel to the extent required by Section 4.1(a),
deliver or cause to be delivered to the transferee of such Purchaser or such Purchaser, as applicable, a certificate representing
such Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c). Certificates
for Underlying Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Purchasers by crediting
the account of the Purchaser’s prime broker with DTC as directed by such Purchaser. In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to this Section 4.1(c), $10 per
Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading
Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required
by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.

 

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(d)          Irrevocable
Transfer Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent, and any subsequent transfer agent, in substantially the form of Exhibit F attached hereto
(the “Irrevocable Transfer Agent Instructions”). The Company represents and warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section 4.1(d) (or instructions that are consistent
therewith) will be given by the Company to the Transfer Agent in connection with this Agreement, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the
other Transaction Documents and applicable law. The Company acknowledges that a breach by it of its obligations under this Section
4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 4.1(d) will be inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Section 4.1(d), that a Purchaser shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity
of showing economic loss and without any bond or other security being required.

 

(e)          Acknowledgement.
Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise
transfer the Securities or any interest therein without complying with the requirements of the Securities Act and applicable law.
While the Registration Statement remains effective, each Purchaser hereunder may sell the Underlying Shares in accordance with
the plan of distribution contained in the Registration Statement and if it does so it will comply therewith and with the related
prospectus delivery requirements unless an exemption therefrom is available. Each Purchaser, severally and not jointly with the
other Purchasers, agrees that if it is notified by the Company in writing at any time that the Registration Statement registering
the resale of the Underlying Shares is not effective or that the prospectus included in such Registration Statement no longer complies
with the requirements of Section 10 of the Securities Act, the Purchaser will refrain from selling such Underlying Shares until
such time as the Purchaser is notified by the Company that such Registration Statement is effective or such prospectus is compliant
with Section 10 of the Securities Act, unless such Purchaser is able to, and does, sell such Underlying Shares pursuant to an available
exemption from the registration requirements of Section 5 of the Securities Act. Both the Company and the Transfer Agent, and their
respective directors, executive officers, employees and agents, may rely on this Section 4.1(e).

 

(f)          Buy-In.
If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended certificates within three (3) Trading
Days of receipt of all documents necessary for the removal of the legend set forth above (the “Deadline Date”),
then, in addition to all other remedies available to such Purchaser, if on or after the Trading Day immediately following such
three (3) Trading Day period, such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the holder of shares of Common Stock that such Purchaser anticipated receiving from the Company without
any restrictive legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after such Purchaser’s
request promptly honor its obligation to deliver to such Purchaser a certificate or certificates representing such shares of Common
Stock and pay cash to the Purchaser in an amount equal to the excess (if any) of the Purchaser’s total purchase price for
such shares over the product of (a) such number of shares of Common Stock, times (b) the Closing Bid Price on the Deadline Date.

 

4.2         Reservation
of Common Stock. The Company shall take all action necessary to at all times during the period the Debentures are outstanding
have authorized, and reserved for the purpose of issuance from and after the Closing Date, the number of shares of Common Stock
then issuable upon conversion of the Debentures issued at the Closing (without taking into account any limitations on conversion
of the Debentures set forth in the Debentures).

 

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4.3         Furnishing
of Information. In order to enable the Purchasers to sell the Securities under Rule 144, until the date that the Securities
cease to be Registrable Securities (as defined in the Registration Rights Agreement) (and for no less than twelve (12) months from
the Closing), the Company shall use its commercially reasonable efforts to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. During such period, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare
and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Securities under Rule 144.

 

4.4         Integration.
The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers, or that will be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of the Principal Trading Market such that it would require stockholder approval prior
to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.5         Securities
Laws Disclosure; Publicity. By 9:00 A.M., New York City time, on the Trading Day immediately following the date hereof, the
Company shall file a Current Report on Form 8-K with the Commission describing the terms of the Transaction Documents (and including
as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement,
the form of Debenture and the Registration Rights Agreement)). Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Purchaser or an Affiliate of any Purchaser, or include the name of any Purchaser or an Affiliate of any Purchaser
in any press release or filing with the Commission (other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with
(A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents
(including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law, request of the
Staff of the Commission or Principal Trading Market regulations, in which case the Company shall provide the Purchasers with prior
written notice of such disclosure permitted under this subclause (ii). From and after the issuance of the Form 8-K set forth in
this Section 4.5, no Purchaser shall be in possession of any material, non-public information received from the Company, any Subsidiary
or any of their respective executive officers, directors, employees or agents,that is not disclosed in the Form 8-K set forth in
this Section 4.5. In addition, effective upon the issuance of the Form 8-K set forth in this Section 4.5, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, affiliates or agents, on the one hand, and any of the Purchasers
or any of their affiliates, on the other hand, shall terminate. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this Agreement are required to be publicly disclosed by the
Company as described in this Section 4.5, such Purchaser will maintain the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this transaction).

 

4.6         Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “acquiring person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, in either case solely by virtue
of receiving Securities under the Transaction Documents or under any other written agreement between the Company and the Purchasers;
provided, however, that no such Purchaser owns any equity in the Company prior to its purchase of the Securities hereunder.

 

    	27

    	 

    

 

4.7         Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
including this Agreement, or as expressly required by any applicable securities law, the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information regarding
the Company that the Company believes constitutes material non-public information without the express written consent of such Purchaser,
unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.

 

4.8         Use
of Proceeds. The Company shall use the net proceeds from the sale of the Debentures hereunder primarily for working capital
and general corporate purposes, and shall not use such proceeds for: (a) the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices, (b) the
redemption of any Common Stock or Common Stock Equivalents or (c) the settlement of any outstanding litigation.

 

4.9         Indemnification
of Purchasers. Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party 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 Purchaser Party. Any
Purchaser Party 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 Purchaser Party 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 counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.9 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.

 

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4.10       Principal
Trading Market Listing. In the time and manner required by the Principal Trading Market, the Company shall prepare and file
with such Principal Trading Market an additional shares listing application covering all of the Underlying Shares and shall use
its commercially reasonable efforts to take all steps necessary to cause all of the Underlying Shares to be approved for listing
on the Principal Trading Market as promptly as possible thereafter.

 

4.11       Form D;
Blue Sky. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D
and to provide a copy thereof, promptly upon the written request of any Purchaser. The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify
the Securities for sale to the Purchasers under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification) and shall provide evidence of such actions promptly upon the written
request of any Purchaser.

 

4.12       [Intentionally
Omitted]

 

4.13       Short
Sales and Confidentiality After The Date Hereof. Such Purchaser shall not, and shall cause its Trading Affiliates not
to, engage, directly or indirectly, in any transactions in the Company’s securities (including, without limitation, any Short
Sales involving the Company’s securities) during the period from the date hereof until the earlier of such time as (i) the
transactions contemplated by this Agreement are first publicly announced as described in Section 4.5 or (ii) this Agreement
is terminated in full pursuant to Section 6.18. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section
4.5, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included
in the Transaction Documents and Disclosure Schedules. Notwithstanding the foregoing, no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced as described in Section 4.5. Notwithstanding the foregoing,
in the event that a Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser's assets, the representation set forth above shall apply only with respect to
the portion of assets managed by the portfolio manager that have knowledge about the financing transaction contemplated by this
Agreement. Moreover, notwithstanding the foregoing, in the event that a Purchaser has sold Securities pursuant to Rule 144 prior
to the Effective Date of the initial Registration Statement and the Company has failed to deliver certificates without legends
prior to the settlement date for such sale (assuming that such certificates meet the requirements set forth in Section 4.1(c)
for the removal of legends), the provisions of this Section 4.13 shall not prohibit the Purchaser from entering into Net
Short Sales for the purpose of delivering shares of Common Stock in settlement of such sale.

 

4.14       Subsequent
Equity Sales.

 

(a)          From
the date hereof until 90th day after the Effective Date, neither the Company nor any Subsidiary shall issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents;
provided, however, the Company may enter into the $25 Million Offering (as defined in Section 4.21), provided, that,
such agreement is entered into within 4 Trading Days from the date of this Agreement and the material terms of such offering are
including the in Current Report on Form 8-K to be filed pursuant to Section 4.5 herein.

 

    	29

    	 

    

 

(b)          From
the date hereof until such time as no Purchaser holds any of Debentures, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

(c)          Notwithstanding
the foregoing, in no event shall this Section 4.14 prohibit the Company from issuing shares of Common Stock or Common
Stock Equivalents (i) upon the exercise of any options or warrants outstanding on the date hereof, (ii) upon the conversion
of the Debentures or in payment of interest pursuant to the Debentures, (iii) to employees or directors pursuant to any stock option
or equity incentive or employee stock purchase plan, (iv) upon a firm commitment underwritten public offering of Common Stock (each
such issuance, an “Exempt Issuance”), except that no Variable Rate Transaction shall be an Exempt Issuance.

 

4.15       [Intentionally
Omitted]

 

4.16       Cash
Payment Cap; Subordination. Notwithstanding anything contained herein or in any other of the Transaction Documents to the contrary,
while the Senior Indebtedness (as defined in the Debentures) is outstanding, (i) the Company shall not make, or be required to
make, any cash payment of any kind to any Person under any of the Transaction Documents to the extent that such cash payment, when
aggregated with all other cash payments to such Person under the Transaction Documents, would exceed such Person’s Cash Payment
Cap and (ii) to the extent that any provision of the Subordination Agreements conflicts with any provision of any of the Transaction
Documents, such provision of the Subordination Agreements shall control. To the extent that any cash payment otherwise required
to be paid by the Company to any Person pursuant to any of the Transaction Documents is not payable as a result of the application
of the foregoing sentence, such payment shall be accrued and held in abeyance for such Person until such time as the Senior Indebtedness
is no longer outstanding.

 

4.17       Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
is also offered to all of the parties to this Agreement. Further, the Company shall not make any payment of principal or interest
on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any
applicable time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities
or otherwise.

 

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4.18       Conversion
Procedures. The form of Notice of Conversion included in the Debentures set forth the totality of the procedures required
of the Purchasers in order to convert the Debentures. Without limiting the preceding sentences, no ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form
be required in order to convert the Debentures. No additional legal opinion, other information or instructions shall be required
of the Purchasers to convert their Debentures. The Company shall honor conversions of the Debentures and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.19       Adjustment
to Existing Conversion and Exercise Prices. The Company hereby agrees and acknowledges that upon the Closing, (i) the Conversion
Price (as defined in the Existing Debentures) of $382,055.25 of the Existing Debentures held by the Purchasers is hereby reduced
to equal $0.05 and (ii) the Exercise Price (as defined in the Existing Warrants) of Existing Warrants to exercise up to 2,303,978
Warrant Shares held by the Purchasers is hereby reduced to equal $0.05. Such reductions shall be allocated ratably according to
each Purchasers participation hereunder. The adjustments to are immediate upon Closing and require no further action by the Purchaser.
Furthermore, the Company hereby agrees and acknowledges that such adjustments shall occur only to Existing Debentures and Existing
Warrants held by a Purchaser hereunder and no such adjustments shall be made to any other Existing Debentures and Existing Warrants.

 

4.20       Participation
in Future Financing.

 

(a)          From
the date hereof until the date that the Debentures are no longer outstanding, upon any issuance by the Company or any of its Subsidiaries
of Common Shares or Common Share Equivalents for cash consideration, Indebtedness or a combination of units thereof (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal
to 50% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.

 

(b)          Approximately
(5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice
of its intention to effect a Subsequent Financing (a “Subsequent Financing Notice”). The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to
be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall
include a term sheet or similar document relating thereto as an attachment.

 

(c)          Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the third (3rd) Trading Day after all of the Purchasers have received the Subsequent Financing Notice
that the Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and
representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth
in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such third (3rd) Trading Day,
such Purchaser shall be deemed to have notified the Company that it does not elect to participate.

 

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(d)          If
by 5:30 p.m. (New York City time) on the third (3rd) Trading Day after all of the Purchasers have received the Subsequent Financing
Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees
to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining
portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

 

(e)          If
by 5:30 p.m. (New York City time) on the third (3rd) Trading Day after all of the Purchasers have received the Subsequent Financing
Notice, the Company receives responses to the Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate
amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below)
of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased
on the Closing Date by a Purchaser participating under this Section 4.20 and (y) the sum of the aggregate Subscription Amounts
of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.20.

 

(f)          The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.20, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 30 Trading Days after the date
of the initial Subsequent Financing Notice.

 

(g)          The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to
any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination
of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of
such Purchaser.

 

(h)          Notwithstanding
anything to the contrary in this Section 4.20 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the sixth (6th) Business Day following delivery of the Subsequent
Financing Notice. If by such sixth (6th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent
Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such
transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries.

 

(i)          Notwithstanding
the foregoing, this Section 4.20 shall not apply in respect of issuances pursuant to clauses (i) through (iii) of the definition
of Exempt Issuance.

 

4.21       Obligation
to Participate in $25 Million Offering. Each Purchaser, severally and not jointly, hereby covenants and agrees with the Company
that it will participate in any offering by the Company of senior secured convertible debentures entered into within 4 Trading
Days from the date of this Agreement (the “$25 Million Offering”) for a subscription, when combined with the subscriptions
of each Purchaser’s Affiliates, of not less than $8 million, provided that the terms and conditions of the $25 Million Offering
are acceptable to a majority in interest of the Purchasers, including but not limited to include gross proceeds to the Company
of at least $25 million (including the proceeds of this transaction) and the Company shall have obtained a financial viability
exception under NASDAQ Listing Rule 5635(f) to the NASDAQ shareholder approval requirements for such $25 Million Offering. In the
event that the $25 Million Offering is not entered into within 4 Trading Days from the date of this Agreement, the $25 Million
Offering shall be deemed to have been abandoned and the Purchasers will not be in possession of any material, non-public information
upon the filing of the Current Report on Form 8-K to be filed pursuant to Section 4.5.

 

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4.22       Exercise
of Existing Warrants. The Purchasers hereby acknowledge and agree, that upon the Closing, to exercise their Existing Warrants,
at an effective exercise price of $0.05 per share, for an aggregate exercise price of $115,198.90, provided that the registration
statement registering the resale of the Warrant Shares is then effective (and effective for the foreseeable future) and available
for use by the Purchaser.

 

4.23       Lock-Up
Agreements. On or before the 7th Trading Day following the Closing Date, the Company shall deliver to the Purchasers
a Lock-Up Agreement, substantially in the form of Exhibit I hereto (the “Lock-Up Agreement”) executed
by each person listed on Exhibit J hereto, and each such Lock-Up Agreement shall be in full force and effect on the Closing
Date.

 

ARTICLE V.

CONDITIONS PRECEDENT TO
CLOSING

 

5.1         Conditions
Precedent to the Obligations of the Purchasers to Purchase Securities. The obligation of each Purchaser to acquire Debentures
at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of
the following conditions, any of which may be waived by such Purchaser (as to itself only):

 

(a)          Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as to materiality, in which case such representations
and warranties shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on
and as of such date, except for such representations and warranties that speak as of a specific date.

 

(b)          Performance.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.

 

(c)          No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(d)          Consents.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Debentures (including all Required Approvals), all of which shall be and remain
so long as necessary in full force and effect.

 

(e)          Adverse
Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that has had or would
reasonably be expected to have a Material Adverse Effect.

 

(f)          Listing.
The NASDAQ Global Market shall have received the application for the listing of additional shares for the Conversion Shares and
Interest Shares.

 

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(g)          No
Suspensions of Trading in Common Stock. The Common Stock shall not have been suspended, as of the Closing Date, by the Commission
or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the Commission or the Principal
Trading Market have been threatened, as of the Closing Date, either (A) in writing by the Commission or the Principal Trading Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.

 

(h)          Company
Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).

 

(i)           Compliance
Certificate. The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit H.

 

(j)           Termination.
This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

5.2         Conditions
Precedent to the Obligations of the Company to sell Securities. The Company's obligation to sell and issue the Debentures at
the Closing to each Purchaser is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following conditions, any of which may be waived by the Company:

 

(a)          Representations
and Warranties. The representations and warranties made by the Purchasers in Section 3.2 hereof shall be true and correct
in all material respects (except for those representations and warranties which are qualified as to materiality, in which case
such representations and warranties shall be true and correct in all respects) as of the date when made, and as of the Closing
Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.

 

(b)          Performance.
Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.

 

(c)          No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(d)          Consents.
The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary
for consummation of the purchase and sale of the Securities, all of which shall be and remain so long as necessary in full force
and effect.

 

(e)          Purchasers
Deliverables. Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).

 

(f)           Listing.
The NASDAQ Global Market shall have received the application for the listing of additional shares for the Conversion Shares and
Interest Shares.

 

(g)          Termination.
This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.18 herein.

 

    	34

    	 

    

 

(h)          Waiver.
The Company shall have obtained a consent or a waiver, as necessary, from DAFNA Lifescience L.P. and/or entities affiliated therewith
necessary to consummate the transactions contemplated by the Transaction Agreements.

 

ARTICLE VI.

MISCELLANEOUS

 

6.1         Fees
and Expenses. At the Closing, the Company has agreed to reimburse Sabby the non-accountable sum of $50,000 for its legal fees
and expenses, $15,000 of which has been paid prior to the Closing. Except as otherwise expressly set forth in the Transaction Documents
and in the Company’s engagement letter with Summer Street, the Company and the Purchasers shall each pay the fees and expenses
of their respective advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party in
connection with the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities to
the Purchasers. Each Purchaser, severally and not jointly with any other Purchaser, shall be responsible for all other tax liability
that may arise as a result of holding or transferring the Securities by it.

 

6.2         Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver
to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties
under the Transaction Documents.

 

6.3         Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via e-mail or facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section 6.3 prior to 5:00 P.M., New York City time, on a Trading Day, (b) the next Trading Day
after the date of transmission, if such notice or communication is delivered via e-mail or facsimile at the facsimile number specified
in this Section 6.3 on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day
delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as follows:

 

		If to the Company:	Baxano Surgical, Inc.

110 Horizon
Drive

Suite 230

Raleigh, North
Carolina 27615

Telephone No.:
(919) 800-0020

Facsimile No.:
(919) 803-3775

Attention: Ken
Reali

E-mail: ken.reali@baxsurg.com

 

		With a copy to:	Goodwin Procter LLP

53 State Street

Boston, Massachusetts
02109

Telephone No.:
(617) 570-1000

Facsimile No.:
(617) 523-1231

Attention: Edward
A. King

E-mail: eking@goodwinprocter.com

 

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		If to a Purchaser:	To the address, facsimile number or
e-mail address set forth under such Purchaser’s name on the signature page hereof;

 

or such other address as
may be designated in writing hereafter, in the same manner, by such Person.

 

6.4         Amendments;
Waivers; No Additional Consideration. No provision of this Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of at least 67% in interest of the
Securities still held by Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought;
provided, that any amendment, waiver modification or supplement of this Agreement that adversely modifies the Subscription Amount
of any Purchaser, the Purchase Price or Section 2.1(a) of this Agreement or causes any such Purchaser to assume any additional
liability or material obligation, may be effected only pursuant to a written instrument signed by the Company and such Purchaser.
No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of
any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Securities.

 

6.5         Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. 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. This Agreement shall be construed as
if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6         Successors
and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors
and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior
written consent of at least a majority in interest of the Securities still held by Purchasers. Any Purchaser may assign its rights
hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction
Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities,
by the terms and conditions of this Agreement that apply to the “Purchasers”.

 

6.7         No
Third-Party Beneficiaries. 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, except (i)
the Placement Agent is an intended third party beneficiary of Article III hereof and (ii) each Purchaser Party is an intended
third party beneficiary of Section 4.9.

 

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6.8         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject
to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for 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 HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9         Survival.
Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Securities.

 

6.10       Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together 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, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
or by e-mail delivery of a “.pdf” format data file, such signature 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 facsimile signature page
were an original thereof.

 

6.11       Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

6.12       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

6.13       Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and, as applicable,
the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit
of that fact and an agreement to indemnify and hold harmless the Company and, as applicable, the Transfer Agent for any losses
in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent.
The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested
due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent
to any issuance of a replacement.

 

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6.14       Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the
foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

6.15       Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

6.16       Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing,
each reference in any Transaction Document to a number of shares or a price per share shall be deemed to be amended to appropriately
account for such event.

 

6.17       Independent
Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Securities
pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of
any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results
of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may have been made or given
by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees
shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials,
statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no other Purchaser has acted as agent
for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser
in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Purchaser
shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel
have chosen to communicate with the Company through EGS. EGS does not represent all of the Purchasers and only represents Sabby.
The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any Purchaser.

 

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6.18       Termination.
This Agreement may be terminated and the sale and purchase of the Debentures abandoned at any time prior to the Closing by either
the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated
on or prior to 5:00 P.M., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement
under this Section 6.18 shall not be available to any Person whose failure to comply with its obligations under this Agreement
has been the cause of or resulted in the failure of the Closing to occur on or before such time. Nothing in this Section 6.18
shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement
or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section
6.18, the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance with this Section
6.18, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from
such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents
as a result therefrom. The Company and any Purchaser(s) may extend the term of this Agreement in accordance with the amendment
provisions of Section 6.4 hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	39

    	 

    

 

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

 

	 	BAXANO SURGICAL, INC.
	 	 
	 	By:	/s/Ken Reali
	 	 	Name:  Ken Reali
	 	 	Title:  President and Chief Executive Officer

 

[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK]

 

    	 

    	 

    

 

	 	NAME OF PURCHASER:  	 

 

	 	By:	 
	 	Name:
	 	Title:

 

	 	Aggregate Purchase Price	 	$
	 	 	 	 
	 	Aggregate Subscription Amount	 	$
	 	Aggregate Principal Amount of Debentures to be Acquired	 	 
	 	Tax ID.	 	 

 

	 	Address for Notice: 
	 	 
	 	 
	 	 
	 	 

 

	 	Telephone No.:	 
	 	 	 
	 	Facsimile No.:	 
	 	 	 
	 	E-mail Address:  	 
	 	 	 
	 	Attention:	 	 

 

Delivery Instructions:

(if different than above)

 

	c/o	 	 	 
	 	 	 	 
	Street:  	 	 	 
	 	 	 
	City/State/Zip:	 	 
	 	 	 
	Attention:	 	 
	 	 	 
	Telephone No.:  	 	 

  

    	 

    	 

    

 

Exhibit A

 

Form of Subordinated Convertible Debenture

 

    	 

    	 

    

 

 

FORM OF SUBORDINATED CONVERTIBLE DEBENTURE

 

NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON CONVERSION OF, OR PAYMENT OF INTEREST ON, THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 

 

THE SECURITIES REPRESENTED BY THIS DEBENTURE
ARE SUBJECT TO THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF September __, 2014, AMONG THE HOLDERS OF THE DEBENTURES, THE COMPANY
AND HERCULES TECHNOLOGY GROWTH CAPITAL, INC., A MARYLAND CORPORATION (AS THE SAME MAY, FROM TIME TO TIME, BE AMENDED, MODIFIED,
SUPPLEMENTED, RESTATED OR REPLACED, THE “HERCULES SUBORDINATION AGREEMENT”) AND THAT CERTAIN SUBORDINATION AGREEMENT,
DATED AS OF SEPTEMBER [__], 2014, AMONG THE HOLDERS OF THE DEBENTURES, THE COMPANY AND THE OTHER PARTIES THERETO (AS THE SAME MAY,
FROM TIME TO TIME, BE AMENDED, MODIFIED, SUPPLEMENTED, RESTATED OR REPLACED, THE “MARCH 2014 SUBORDINATION AGREEMENT”
AND, TOGETHER WITH THE HERCULES SUBORDINATION AGREEMENT, THE “SUBORDINATION AGREEMENTS”). 

 

Baxano
Surgical, INC.

SUBORDINATED CONVERTIBLE DEBENTURE

 

Issuance Date: September __, 2014

 

Original Principal Amount: U.S. $[ ]

 

 

FOR VALUE RECEIVED,
Baxano Surgical, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of [PURCHASER]
or its registered assigns (“Holder”) the amount set out above as the Original Principal Amount (as reduced pursuant
to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon
a Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest
(“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set
out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon a
Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). This
Subordinated Convertible Debenture (including all Subordinated Convertible Debentures issued in exchange, transfer or replacement
hereof, this “Debenture”) is one of an issue of Subordinated Convertible Debentures issued pursuant to the Purchase
Agreement (as defined below) on the Closing Date (as defined below) (collectively, the “Debentures”, and such
other Subordinated Convertible Debentures, the “Other Debentures”, and the holders of the Debentures,
including the Holder, the “Holders”)). Certain capitalized terms used herein are defined in Section 31.

 

1.          PAYMENTS
OF PRINCIPAL. On each Maturity Date, the Company shall pay to the Holder an amount in cash representing 1/16th of
the initial outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c))
on such Principal and Interest. Other than as specifically permitted by this Debenture, the Company may not prepay any portion
of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.

 

    	1

    	 

    

 

2.        
  INTEREST; INTEREST RATE.

 

(a)          Interest
on this Debenture shall commence accruing on the Issuance Date, shall accrue daily at the Interest Rate on the outstanding Principal
amount from time to time, shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, shall
compound each calendar month (if not timely paid) and shall be payable in arrears quarterly on the first (1st) Business
Day of each calendar quarter (each, an “Interest Date”) with the first Interest Date being January 1, 2015.
Interest shall be payable on each Interest Date, to the record holder of this Debenture on the applicable Interest Date, in shares
of Common Stock (“Interest Shares”) so long as there then exists no Equity Conditions Failure; provided
however, that the Company may, at its option following notice to the Holder, pay Interest on any Interest Date in cash (“Cash
Interest”) or in a combination of Cash Interest and Interest Shares (and provided that such combination is applied according
to each Holders Pro Rata Amount). The Company shall deliver a written notice (each, an “Interest Election Notice”)
to each holder of the Debentures on or prior to twentieth (20th) Trading Day prior to the applicable Interest Date (the
“Interest Notice Due Date”, and such date such notice is delivered to all of the holders, the “Interest
Notice Date”) which notice (i) either (A) confirms that Interest to be paid on such Interest Date shall be paid entirely
in Interest Shares or (B) elects to pay Interest as Cash Interest or a combination of Cash Interest and Interest Shares and specifies
the amount of Interest that shall be paid as Cash Interest and the amount of Interest, if any, that shall be paid in Interest Shares
and (ii) certifies that there has been no Equity Conditions Failure. If an Equity Conditions Failure has occurred as of the Interest
Notice Date, then unless the Company has elected to pay such Interest as Cash Interest, the Interest Notice shall indicate that
unless the Holder waives the Equity Conditions Failure, the Interest shall be paid as Cash Interest. Notwithstanding anything herein
to the contrary, if no Equity Conditions Failure has occurred as of the Interest Notice Date but an Equity Conditions Failure occurs
at any time prior to the Interest Date, (x) the Company shall provide the Holder a subsequent notice to that effect and (y) unless
the Holder waives the Equity Conditions Failure, the Interest shall be paid in cash. Interest to be paid on an Interest Date in
Interest Shares shall be paid in a number of fully paid and nonassessable shares (rounded down to the nearest whole share, with
the Company to pay the fair market value (based on the Closing Sale Price) in Cash Interest) of any fractional shares in cash,
in accordance with Section 3(a)) of Common Stock equal to the quotient of (1) the amount of Interest payable on such Interest Date
less any Cash Interest paid and (2) the Interest Conversion Price in effect on the applicable Interest Date.

 

(b)          When
any Interest Shares are to be paid on an Interest Date, the Company shall (i) (A) provided that the Company's transfer agent (the
“Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of Interest Shares to which the Holder shall be entitled to the Holder's
or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system no later than the close of the second
(2nd) Trading Day following the Interest Date, or (B) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver by the close of the second (2nd) Trading Day following the applicable
Interest Date, to the address set forth in the register maintained by the Company for such purpose pursuant to the Purchase Agreement
or to such address as specified by the Holder in writing to the Company on or before the applicable Interest Date, a certificate,
registered in the name of the Holder or its designee, for the number of Interest Shares to which the Holder shall be entitled and
(ii) with respect to each Interest Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount
of any Cash Interest; provided that such Cash Interest may be paid by check in the event that such Cash Interest is comprised solely
of cash payments in lieu of fractional shares.

 

    	2

    	 

    

 

(c)          Prior
to the payment of Interest on an Interest Date, Interest on this Debenture shall accrue at the Interest Rate and be payable by
way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any
redemption in accordance with Section 12. From and after the occurrence and during the continuance of an Event of Default, the
Interest Rate shall be increased to fifteen percent (15.0%) per annum. In the event that such Event of Default is subsequently
cured, the automatic increase to the Interest Rate referred to in the preceding sentence shall cease to be effective as of the
date of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event
of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and
including the date of such cure of such Event of Default.

 

3.     
     CONVERSION OF DEBENTURES. This Debenture shall be convertible into validly
issued, fully paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in
this Section 3.

 

(a)          Conversion
Right. Subject to the provisions of Section 3(d), the Holder shall be entitled to convert any portion of the outstanding and
unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable shares of Common Stock in accordance
with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock
upon any conversion. 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 down to the nearest whole share and the Company shall pay the Holder in cash the fair
market value (based on the Closing Sale Price) for any such fractional shares. The Company shall pay any and all transfer, stamp,
issuance and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any
Conversion Amount.

 

(b)          Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

 

(i)          “Conversion
Amount” means the portion of the Principal to be converted, redeemed or otherwise with respect to which this determination
is being made, plus all accrued and unpaid Interest with respect to such portion of the Principal amount and accrued and unpaid
Late Charges with respect to such portion of such Principal and such Interest.

 

(ii)         “Conversion
Price” means, as of any Conversion Date or other date of determination, $0______1, subject to adjustment
as provided herein.

 

 

1   Closing
Bid Price immediately prior to execution.

  

    	3

    	 

    

 

(c)          Mechanics
of Conversion.

 

(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York
time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company. No ink-original Conversion Notice shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any form of Conversion Notice be required. If required by Section 3(c)(iii), within three
(3) Trading Days following a conversion of this Debenture as aforesaid, the Holder shall surrender this Debenture to a nationally
recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Debenture
in the case of its loss, theft or destruction as contemplated by Section 19(b)). On or before the first (1st) Trading
Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile an acknowledgment of confirmation,
in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to the Holder and the Transfer Agent. On
or before the second (2nd) Trading Day following the date of receipt of a Conversion Notice, the Company shall (1) provided
that the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program and further provided that the Registration
Statement is then effective or such shares are freely transferable without restriction under Rule 144 under the Securities Act
by a Holder who is not an affiliate of the Company, credit such aggregate number of shares of Common Stock to which the Holder
shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system or (2) if the conditions set forth in clause (1) are not satisfied, issue and deliver (via reputable overnight courier)
to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee (provided
that, if the Registration Statement is not effective and the Holder directs the Company to deliver a certificate for such shares
in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on the Conversion Date an
opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such shares in such other name may
be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities
or blue sky laws), for the number of shares of Common Stock to which the Holder shall be entitled. If this Debenture is physically
surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Debenture is greater than the Principal
portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of this Debenture and at its own expense, issue and deliver to the Holder (or its designee) a new
Debenture (in accordance with Section 19(d)) representing the outstanding Principal not converted. The Person or Persons entitled
to receive the shares of Common Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Conversion Date.

 

(ii)         Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three
(3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise) (the “Share
Delivery Deadline”), a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit the Holder’s or its designee’s balance
account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion
of any Conversion Amount (as the case may be) on or prior to the Share Delivery Deadline (a “Conversion Failure”),
and if on or after such Share Delivery Deadline the Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such conversion that the Holder
anticipated receiving from the Company, then, in addition to all other remedies available to the Holder, the Company shall, within
three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder
in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf,
of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) and
pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Common Stock multiplied by (B) the closing bid price of a share of Common Stock on Conversion Date. Furthermore,
if the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to this Section by the
Share Delivery Deadline, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each one
thousand dollars ($1,000) of principal amount being converted, ten dollars ($10) per Trading Day (increasing to twenty dollars
($20) per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading
Day after such Share Delivery Deadline until such certificates are delivered or Holder rescinds such conversion. Nothing herein
shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 4 hereof
for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the
right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.

 

    	4

    	 

    

 

(iii)        Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the Holders of each Debenture and the principal amount of the Debentures held by such Holders (the “Registered
Debentures”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The
Company and the Holders of the Debentures shall treat each Person whose name is recorded in the Register as the owner of a Debenture
for all purposes, including, without limitation, the right to receive payments of Principal and Interest hereunder, notwithstanding
notice to the contrary. A Registered Debenture may be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register. Upon its receipt of a request to assign or sell all or part of any Registered Debenture by a Holder, the
Company shall record the information contained therein in the Register and issue one or more new Registered Debentures in the same
aggregate principal amount as the principal amount of the surrendered Registered Debenture to the designated assignee or transferee
pursuant to Section 19. Notwithstanding anything to the contrary set forth in this Section 3, upon conversion of any portion of
this Debenture in accordance with the terms hereof, the Holder shall not be required to physically surrender this Debenture to
the Company unless (A) the full Conversion Amount represented by this Debenture is being converted (in which event this Debenture
shall be delivered to the Company as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of
this Debenture. The Company shall update the Register to reflect the Principal, Interest and Late Charges converted and/or paid
(as the case may be) and the dates of such conversions and/or payments (as the case may be) or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon conversion.

 

(iv)        Failure
to Deliver Certificates. If, in the case of any Conversion Notice, such certificate or certificates are not delivered to or
as directed by the applicable Holder by the Share Delivery Deadline, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

(d)          Limitations
on Conversions.

 

(i)          Beneficial
Ownership. Notwithstanding anything to the contrary contained in this Debenture, this Debenture shall not be convertible by
the Holder hereof, and the Company shall not effect any conversion of this Debenture or otherwise issue any shares of Common Stock
pursuant hereto, to the extent (but only to the extent) that after giving effect to such conversion or other share issuance hereunder
the Holder (together with its affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”)
of the Common Stock. To the extent the above limitation applies, the determination of whether this Debenture shall be convertible
(vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) shall,
subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be). No prior inability to convert this Debenture, or to issue shares of Common Stock, pursuant
to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent
determination of convertibility. For purposes of this paragraph, beneficial ownership and all determinations and calculations (including,
without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d)
of the 1934 Act (as defined in the Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of
this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage
limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Debenture. The holders of Common
Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of
holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Debenture or securities issued pursuant to the Purchase Agreement. For the avoidance of doubt,
solely with respect to the calculations in this Section 3(d)(i), shares of Common Stock that may not be issued to the Holder pursuant
to Sections 3(d)(ii)or 10(b) hereof shall be disregarded for purposes of determining the number of shares of Common Stock issuable
upon a conversion or other issuance hereunder until such time, if any, as such applicable restrictions or prohibitions no longer
apply.

 

    	5

    	 

    

 

4.     
     RIGHTS UPON EVENT OF DEFAULT.

 

(a)          Event
of Default. Each of the following events shall constitute an “Event of Default”:   

 

(i)          the
failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on
or prior to the date that is thirty (30) days after the closing of the $25 Million Offering (as defined in the Purchase Agreement),
or if such offering is abandoned, the date that is thirty days from the filing of the Company’s report on Form 8-K relating
to the transactions contemplated by the Purchase Agreement.;

 

(ii)         while
the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of
a stop order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable
Securities (as defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance
with the terms of the Registration Rights Agreement, and (I) such lapse or unavailability continues for a period of twenty (20)
consecutive days or for more than an aggregate of thirty (30) days in any 365-day period (excluding days during an Allowable Grace
Period (as defined in the Registration Rights Agreement)) and (II) any such holder does not then have the right to sell all of
such holder’s Registrable Securities without restriction pursuant to Rule 144 (including, without limitation, volume limitations);

 

(iii)        the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a
period of twenty (20) consecutive days or for more than an aggregate of thirty (30) days in any 365-day period;

 

(iv)        the
Company’s failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five (5)
Trading Days after the applicable Conversion Date or exercise date (as the case may be) (it being understood that a Conversion
Failure or Delivery Failure shall not be deemed to have occurred for purposes of this Section 4(a)(iv) to the extent the Company
has complied with the terms and conditions of Sections 3(d) or 10(b) of this Debenture, and paid such applicable cash consideration
to the Holder in lieu of such applicable delivery of shares of Common Stock);

 

(v)         at
any time following the tenth (10th) consecutive day after March 1, 2015, the Holder’s Authorized Share Allocation
is less than the number of shares of Common Stock that the Holder would then be entitled to receive upon a conversion of the full
Conversion Amount of this Debenture (without regard to any limitations on conversion set forth in Section 3(d) or otherwise);

 

    	6

    	 

    

 

(vi)        the
Company’s or any Subsidiary’s (as defined in the Purchase Agreement) failure to pay to the Holder any amount of Principal,
Interest, Late Charges or other amounts when and as due under this Debenture (including, without limitation, the Company’s
or any Subsidiary’s failure to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined
in the Purchase Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions
contemplated hereby and thereby, except, in the case of a failure to pay Interest, Late Charges or such other amounts when and
as due, in which case only if such failure remains uncured for a period of at least five (5) days;

 

(vii)       the
Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities acquired by the Holder under the Purchase Agreement (including this Debenture)
as and when required by such Securities or the Purchase Agreement, unless otherwise then prohibited by applicable federal securities
laws, and any such failure remains uncured for at least five (5) days;

 

(viii)      [Reserved];

 

(ix)         bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or
against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within forty-five (45) days of their initiation;

 

(x)          the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or
any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the
consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence
of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts
generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance of any such action
or the taking of any action by any secured creditor of the Company or any Subsidiary to commence a Uniform Commercial Code (“UCC”)
foreclosure sale or any other similar action under federal, state or foreign law;

 

(xi)         the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or
insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of forty-five (45) consecutive days;

 

    	7

    	 

    

 

(xii)        a
final judgment or judgments for the payment of money aggregating in excess of $1,000,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment
which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 amount
set forth above so long as liability has been accepted by the insurance carrier or the Company provides the Holder a written statement
from such indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment
is covered by an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such indemnity
within thirty (30) days of the issuance of such judgment;

 

(xiii)       either
(i) the Company and/or any Subsidiary, individually or in the aggregate, fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $500,000 due to any third party (other than, with respect to
unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper
proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or
is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $500,000, which breach
or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) the occurrence
of a default or event of default under any agreement binding the Company or any Subsidiary, which default or event of default would
or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties,
condition (including financial condition) or prospects of the Company and its Subsidiaries, in the aggregate;

 

(xiv)      other
than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches in any material respect
any representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach
of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive
Trading Days;

 

(xv)       a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied, that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred;

 

(xvi)      any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Debenture;

 

(xvii)     any
material adverse change in the results of operations, assets, prospects, business or financial condition of the Company and the
Subsidiaries, taken as a whole (a “Material Adverse Change”), except that any of the following, either alone
or in combination, shall not be deemed a Material Adverse Change: (i) effects caused by changes or circumstances affecting
general market conditions in the U.S. economy or which are generally applicable to the industry in which the Company operates,
provided that such effects are not borne disproportionately by the Company, (ii) effects resulting from or relating to the
announcement or disclosure of the sale of this Debenture or other transaction contemplated by the Transaction Documents, (iii) effects
caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Debenture,
(iv) effects 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, (v) effects resulting from decreases in the Company’s stock price as a result of the transactions contemplated
by the Transaction Documents or the Debentures issued thereunder, or as a result of sales of the Securities (as defined in the
Purchase Agreement) or securities issuable upon conversion or exercise, as applicable, of the Existing Debentures or the Existing
Warrants (as each such term is defined in the Purchase Agreement) into the open market;

 

(xviii)    a
proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them,
seeking to establish the invalidity or unenforceability of any Transaction Document;

 

    	8

    	 

    

 

(xix)       the
electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill” due to an act or failure to act by the Company; or

 

(xx)        any
Event of Default (as defined in the Other Debentures) occurs with respect to any Other Debentures.

 

(b)          Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Debenture or any
Other Debenture, the Company shall within one (1) Business Day deliver written notice thereof via facsimile and overnight courier
(with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time during the period
commencing on the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event
of Default and, solely to the extent the Company has delivered an Event of Default Notice with respect to each such Event of Default
then outstanding, and ending on the later of (x) the date all such Events of Default have been cured and (y) the fifth (5th)
calendar day following the date of the last Event of Default Notice delivered to the Holder, the Holder may require the Company
to redeem all or any portion of this Debenture by delivering written notice thereof (the “Event of Default Redemption
Notice”) to the Company, which Event of Default Redemption Notice shall indicate the portion of this Debenture the Holder
is electing to redeem. Each portion of this Debenture subject to redemption by the Company pursuant to this Section 4(b) shall
be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied
by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect at
such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium
multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the fifth
(5th) Trading Day prior to the date of the Event of Default Redemption Notice and ending on the Trading Day immediately
prior to the date the Company makes the entire payment required to be made under this Section 4(b) (the “Event of Default
Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section
12. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be
prepayments of this Debenture by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything
to the contrary in this Section 4, but subject to Section 3(d), until the Event of Default Redemption Price (together with any
Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with any
Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Debenture.
In the event of the Company’s redemption of any portion of this Debenture under this Section 4(b), the Holder’s damages
would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under
this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss
of its investment opportunity and not as a penalty.

 

    	9

    	 

    

 

5.      
    RIGHTS UPON FUNDAMENTAL TRANSACTION.

 

(a)          Assumption.
If, at any time while this Debenture is outstanding (i) the Company effects any merger or consolidation of the Company with or
into another Person, in which the Company is not the survivor or the stockholders of the Company immediately prior to such merger
or consolidation do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity, (ii) the Company
effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each
case, in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares of Common Stock covered by Section 7(a) below) (in any
such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon conversion
of this Debenture, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the
number of shares of Common Stock then issuable upon conversion in full of this Debenture without regard to any limitations on exercise
contained herein (the “Alternate Consideration”), and the Holder shall no longer have the right to receive any
shares of Common Stock upon conversion of this Debenture. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. The Company shall not effect
any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company,
surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or Person shall
assume the obligation to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the
Holder may be entitled to receive, and the other obligations under this Debenture. The provisions of this paragraph (c) shall similarly
apply to subsequent transactions of an analogous type to any Fundamental Transaction. The Company shall cause any Successor Entity
to assume in writing all of the obligations of the Company under this Debenture and the other Transaction Documents (as defined
in the Purchase Agreement) in accordance with the provisions of this Section 5(a) pursuant to written agreements in form
and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental
Transaction and shall, at the option of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Debenture that is
convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the
conversion of this Debenture) prior to such Fundamental Transaction, and with a conversion price that applies the conversion price
hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion
price being for the purpose of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental
Transaction), and that is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Debenture and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Debenture and the other Transaction Documents with the same effect as if such Successor Entity had been
named as the Company herein.

 

(b)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of this Debenture (i) in addition to the
shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled
with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such
Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Debenture) or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders
of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have
been entitled to receive had this Debenture initially been issued with conversion rights for the form of such consideration (as
opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions
of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations
on the conversion or redemption of this Debenture.

 

    	10

    	 

    

 

6.          RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS. In addition to any adjustments pursuant to Section 7 below, if
at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then
the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Debenture (without taking into account any limitations or restrictions on the convertibility of this Debenture) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right
to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Maximum Percentage).

 

7.      
    RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

 

(a)          Stock
Dividends and Splits. If the Company, at any time while this Debenture is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution pro rata to the holders of any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, (iii) combines its outstanding shares
of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of Common Stock any shares of capital
stock of the Company, then in each such case the Conversion Price shall be adjusted to a price determined by multiplying the Conversion
Price in effect immediately prior to the effective date of such event by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding on such effective date immediately before giving effect to such event and the denominator
of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such event. Any adjustment
made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii), (iii) or (iv) of this
paragraph shall become effective immediately after the effective date of such subdivision, combination or reclassification.

 

(b)          Pro
Rata Distributions. If the Company, at any time while this Debenture is outstanding, distributes to all holders of Common Stock
for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by
the preceding paragraph) or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset, including
cash (in each case, “Distributed Property”), then, upon any conversion of this Debenture that occurs after the
record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive,
in addition to the Conversion Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such
Holder would have been entitled to receive in respect of such number of Conversion Shares had the Holder been the record holder
of such Conversion Shares immediately prior to such record date.

 

8.          EXCHANGE
RIGHT. In the event that the Company shall issue or sell any shares of Common Stock, Convertible Securities, Options or any
combination thereof while this Debenture remains outstanding, the Holder shall have the right to exchange this Debenture for such
Common Stock, Convertible Securities, Options or such combination thereof issued or sold by the Company. By way of example, if
the Company undertakes an offering of convertible securities along with warrants, the Holder shall have the right to surrender
this Debenture to the Company in the exchange for the purchase of the units of convertible securities and warrants (on a $1 for
$1 basis).

 

9.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Purchase Agreement), Bylaws (as defined in the Purchase Agreement) or through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Debenture, and will at all times in good faith carry out all of the provisions
of this Debenture and take all action as may be required to protect the rights of the Holder of this Debenture. Without limiting
the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon
conversion of this Debenture above the Conversion Price then in effect, (ii) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the
conversion of this Debenture, and (iii) shall, so long as any of the Debentures are outstanding, take all action necessary to reserve
and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion
of the Debentures, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion
of the Debentures then outstanding (without regard to any limitations on conversion).

 

    	11

    	 

    

 

10.         RESERVATION
OF AUTHORIZED SHARES.

 

(a)          Reservation.
The Company shall reserve a number of shares of Common Stock for each of the Debentures equal to 100% of the entire Conversion
Rate with respect to the entire Conversion Amount of each such Debenture as of the Issuance Date. So long as any of the Debentures
are outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common
Stock, solely for the purpose of effecting the conversion of the Debentures, 100% of the number of shares of Common Stock as shall
from time to time be necessary to effect the conversion of all of the Debentures then outstanding, provided that at no time shall
the number of shares of Common Stock so reserved be less than the number of shares required to be reserved by the previous sentence
(without regard to any limitations on conversions) (the “Required Reserve Amount”). The initial number of shares
of Common Stock reserved for conversions of the Debentures and each increase in the number of shares so reserved shall be allocated
pro rata among the holders of the Debentures based on the original principal amount of the Debentures held by each holder on the
Closing Date or increase in the number of reserved shares (as the case may be) (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder’s Debentures, each transferee shall be allocated
a pro rata portion of such holder’s Authorization Share Allocation. Any shares of Common Stock reserved and allocated to
any Person which ceases to hold any Debentures shall be allocated to the remaining holders of Debentures, pro rata based on the
principal amount of the Debentures then held by such holders.

 

(b)          Insufficient
Authorized Shares. If, notwithstanding Section 10(a), and not in limitation thereof, at any time while any of the Debentures
remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Debentures at least a number of shares of Common Stock equal to the
Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action
necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for the Debentures then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days
after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of
an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase
in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such
proposal. In the event that the Company is prohibited from issuing shares of Common Stock upon any conversion due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such
unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such
Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion
Amount convertible into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of
Authorization Failure Shares and (y) the Closing Sale Price on the Trading Day immediately preceding the date the Holder delivers
the applicable Conversion Notice with respect to such Authorization Failure Shares to the Company and (ii) to the extent the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in
connection therewith.

 

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11.    
     REDEMPTIONS.

 

(a)          Event
of Default. If the Company receives an Event of Default Redemption Notice, the Company shall deliver the applicable Event of
Default Redemption Price to the Holder in cash within five (5) Business Days after the Company’s receipt of the Holder’s
Event of Default Redemption Notice. In the event of a redemption of less than all of the Conversion Amount of this Note, if requested
by Holder, the Company shall promptly cause to be issued and delivered to the Holder a new Debenture (in accordance with Section
18(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption
Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder
all or any portion of this Debenture representing the Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice, (x)
the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately
return this Debenture, or issue a new Debenture (in accordance with Section 18(d)), to the Holder, and in each case the principal
amount of this Debenture or such new Debenture (as the case may be) shall be increased by an amount equal to any accrued and unpaid
Late Charges with respect thereto and (z) the Conversion Price of this Debenture or such new Debentures (as the case may be) shall
be automatically adjusted with respect to each conversion effected thereafter by the Holder to the applicable Event of Default
Conversion Price. The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its rights following such
notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued prior to the date
of such notice with respect to the Conversion Amount subject to such notice.

 

(b)          Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Debentures for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b),
Section 5(b) or Section 8 (each, an “Other Redemption Notice”), the Company shall immediately, but no later
than one (1) Business Day of its receipt thereof, forward to the Holder by facsimile a copy of such notice. If the Company receives
a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including
the date which is three (3) Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice
and ending on and including the date which is three (3) Business Days after the Company’s receipt of the Holder’s applicable
Redemption Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice
and such Other Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata
amount from each holder of the Debentures (including the Holder) based on the principal amount of the Debentures submitted for
redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven (7) Business
Day period.

 

(c)          Optional
Redemption at Election of Company. Subject to the provisions of this Section 11(c), at any time after the 36-month anniversary
of the Issuance Date if the Closing Bid Price on at least 15 out of 20 consecutive Trading Days exceeds 200% of the then Conversion
Price (the last such date, the “Trigger Date”), so long as there then exists no Equity Conditions Failure, the
Company may, on one occasion only within one Trading Day of a Trigger Date, deliver a notice to the Holder (an “Optional
Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”)
of its irrevocable election to redeem some or all of this Debenture for cash by wire transfer of immediately available funds in
an amount equal to all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal
and Interest on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional
Redemption Date”, such 20 Trading Day period, the “Optional Redemption Period” and such redemption,
the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.
The Company may only effect an Optional Redemption if each of the Equity Conditions shall have been met (unless waived in writing
by the Holder) on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional
Redemption Date and through and including the date payment of the Optional Redemption Amount is
actually made in full. If there is an Equity Conditions Failure at any time during the Optional Redemption Period, then
the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within 3 Trading Days after the first day
on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company
is obligated to notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended to the third
Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab
initio. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery
of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The
Company’s determination to pay an Optional Redemption in cash shall be applied according to each Holder’s Holder Pro
Rata Amount.

 

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(d)          Holder
Redemption Upon Issuance of Securities.  In the event that the Company shall, directly
or indirectly, offer, sale, grant any option to purchase, or other disposition of (or announcement of any offer, sale, grant or
any option to purchase or other disposition of) any of its or its Subsidiaries' equity or equity equivalent securities, including
without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents (“Subsequent
Offering”) while this Debenture remains outstanding, the Company shall offer to the Holder the right to cause the Company
to use up to 20% of the gross proceeds of such Subsequent Offering (“Subsequent Offering Redemption Amount”)
to be used to redeem (“Subsequent Offering Redemption”) this Debenture (if other Debenture holders exercise
their right to redeem hereunder, the Holder shall be entitled to their Holder Pro Rata Amount (but based on participating Holders)
of the Subsequent Offering Redemption Amount) in an amount equal to all outstanding Principal, accrued and unpaid Interest and
accrued and unpaid Late Charges on such Principal and Interest (“Base Redemption Amount”); provided,
however, if a Subsequent Offering occurs (x) prior to the 9 month anniversary of the Issuance Date or (y) at the time of
such Subsequent Offering there is an Equity Conditions Failure, then the redemption price hereunder shall be equal to the greater
of (1) the Base Redemption Amount and (2) an amount equal to the number of Conversion Shares underlying the portion of this Debenture
(and interest and Late Charges, if any) subject to a Subsequent Offering Redemption Amount times the public offering price of the
Common Stock issued or issuable upon conversion (as to Convertible Securities)(if no public offering price can be determined, the
closing bid price immediately prior to the announcement of the Subsequent Offering). The Company shall provide the Holder with
written notice of a Subsequent Offering Redemption on the earlier of the 3rd Trading Day prior to the closing of the
Subsequent Offering, which notice shall include the closing date and Subsequent Offering Amount, and the date that such Subsequent
Offering is publicly disclosed and the Holder shall make its election on or before the Trading Day immediately prior to such Closing
Date. Payment of the Subsequent Offering Redemption Amount shall be made directly out of the closing proceeds of the Subsequent
Offering in cash by wire transfer of immediately available funds. The Company covenants and agrees that it will honor all Notices
of Conversion tendered from the time of delivery of the notice of Subsequent Offering Redemption through the date all amounts owing
thereon are due and paid in full.

 

12.         VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Debenture, except as required by law (including, without
limitation, the Delaware General Corporation Law) and as expressly provided in this Debenture.

 

13.         COVENANTS.
Until this Debenture has been converted, redeemed or otherwise satisfied in accordance with their terms:

 

(a)          Rank.
All payments due under this Debenture (a) shall rank pari passu with all Other Debentures and (b) shall be senior to all
other Indebtedness of the Company and its Subsidiaries other than Permitted Senior Indebtedness.

 

(b)          Incurrence
of Indebtedness. Other than Permitted Indebtedness, the Company shall not, and the Company shall cause each of its Subsidiaries
to not, directly or indirectly, enter into, incur or guarantee, assume or suffer to exist any Indebtedness for borrowed money of
any kind, including, but not limited to, a guarantee.

 

(c)          Existence
of Liens. Other than Permitted Liens, the Company shall not, directly or indirectly, enter into, allow or suffer to exist any
mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and
contract rights) owned by the Company or hereafter acquired or any interest therein or any income or profits therefrom (collectively,
“Liens”).

 

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(d)          Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, repurchase or declare or pay any cash dividend or cash distribution on any of its capital stock, other than
(i) repurchases of stock from former employees, directors, or consultants of the Company under the terms of applicable repurchase
agreements at the original issuance price of such securities in an aggregate amount not to exceed $250,000 in any fiscal year,
provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases, (ii) in connection
with a reverse stock split, (iii) pursuant to employee, director or consultant repurchase plans or other similar agreements or
plans, (iv) dividends paid or distributions made by a Subsidiary to the Company, and (v) payments by the Company in cash, in lieu
of the issuance of fractional shares, upon the exercise of warrants or upon the conversion or exchange of equity interests of the
Company; provided, however, in the case of clauses (i) and (iii) above the repurchase or redemption price does not exceed the original
consideration paid for such stock or equity interest.

 

(e)          Restriction
on Transfer of Assets. The Company shall not, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off,
close, convey or otherwise dispose of any material portion of the assets or rights of the Company owned or hereafter acquired whether
in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances
and other dispositions of such assets or rights by the Company that, in the aggregate, do not have a fair market value in excess
of $500,000 in any twelve (12) month period, (ii) sales of inventory in the ordinary course of business, (iii) licenses of intellectual
property rights of the Company for fair value in an arm’s length transaction in the ordinary course of its business, (iv)
sales of non-inventory equipment not needed for the Company’s business to one or more third parties for fair value in an
arm’s length transaction, (v) sales of non-inventory equipment to one or more third parties for fair value in an arm’s
length transaction, the proceeds of which are used to purchase replacement or other assets useful in the Company’s business
within twelve months of such sale, and (vi) without duplication, Permitted Transfers under (and as defined in) the Loan and Security
Agreement referred to in the definition of “Permitted Senior Indebtedness.”

 

(f)          Maturity
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of the Subsidiaries to mature or accelerate prior to the final Maturity Date.

 

(g)          Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
engage in any material line of business substantially different from those lines of business conducted by the Company and each
of its Subsidiaries on the Issuance Date or any business substantially related or incidental thereto.

 

(h)          Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries (other than TranS1 GmbH) to
maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of such Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, would not have or reasonably be expected to result in a material adverse effect on the
business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or
prospects of the Company and such Subsidiaries, taken as a whole.

 

(i)          Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries (other than TranS1 GmbH) to
maintain and preserve, all of its material properties which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, and comply, and cause each of such Subsidiaries to comply, at all
times with the material provisions of all leases to which it is a party as lessee or under which it occupies property, so as to
prevent any loss or forfeiture thereof or thereunder.

 

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(j)          Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries (other than TranS1 GmbH) to, take all action
reasonably necessary or advisable to maintain all of the Intellectual Property Rights (as defined in the Purchase Agreement) of
the Company and/or any of such Subsidiaries that are necessary or material to the conduct of its business in full force and effect.

 

(k)          Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries (other than TranS1 GmbH) to maintain, insurance
with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability,
hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned
by it) and business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with
respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly
situated.

 

(l)          Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party
to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange
of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) in the ordinary course
of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of
its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm's length transaction with a Person that is not an Affiliate thereof or (ii) if pre-approved by the Audit Committee of the Company’s
Board of Directors in accordance with its Charter.

 

(m)         Restricted
Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority in
aggregate principal amount of the Debentures then outstanding, (i) issue any Debentures (other than as contemplated by the Purchase
Agreement and the Debentures) or (ii) issue any other securities that would cause a breach or default under the Debentures.

 

14.         [Intentionally
Omitted]

 

15.         [Intentionally
Omitted]

 

16.         AMENDING
THE TERMS OF THIS DEBENTURE. The Debentures may be amended or supplemented with the consent of the Holders of at least sixty-seven
percent (67%) in principal amount of the Debentures then outstanding (excluding any Debentures held by the Company or any of its
Subsidiaries); provided, however, that without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Debentures held by a non-consenting Holder): (a) reduce the principal amount of Debentures whose Holders must
consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Debenture or alter
the provisions, or waive any payment, with respect to the redemption of the Debentures; (c) reduce the rate of or change the time
for payment of interest on any Debenture; (d) change the Conversion Price, Share Delivery Deadlines or other material term relating
to payments or deliveries made in connection with the exercise of the rights herein; or (e) make any change in the preceding amendment
and waiver provisions. No consideration shall be offered or paid to the Holder to adversely amend or consent to an adverse waiver
or modification of any provision of this Debenture unless the same consideration is also offered to all of the holders of the Other
Debentures.

 

17.         TRANSFER.
This Debenture and any shares of Common Stock issued upon conversion of this Debenture may be offered, sold, assigned or transferred
by the Holder without the consent of the Company, subject only to the provisions of Section 4.1 of the Purchase Agreement.

 

18.         REISSUANCE
OF THIS DEBENTURE.

 

(a)          Transfer.
Subject to the provisions of Section 4.1 of the Purchase Agreement, if this Debenture is to be transferred, the Holder shall surrender
this Debenture to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Debenture
(in accordance with Section 19(d)), registered as the Holder may request, representing the outstanding Principal being transferred
by the Holder and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with Section
19(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of
this Debenture, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion or redemption
of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated
on the face of this Debenture.

 

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(b)          Lost,
Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Debenture,
the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section 19(d)) representing the outstanding
Principal.

 

(c)          Debenture
Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section 19(d) and in principal amounts of at least
$1,000) representing in the aggregate the outstanding Principal of this Debenture, and each such new Debenture will represent such
portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

(d)          Issuance
of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such
new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 19(a) or Section 19(c),
the Principal designated by the Holder which, when added to the principal represented by the other new Debentures issued in connection
with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance
of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the
Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued
and unpaid Interest and Late Charges on the Principal and Interest of this Debenture, from the Issuance Date.

 

19.         REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Debenture shall be cumulative
and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture. The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder 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 Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Debenture (including, without limitation, compliance with Section 7).

 

20.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Debenture is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Debenture or to enforce the provisions of this Debenture or (b) there occurs any bankruptcy, reorganization, receivership of the
Company or other proceedings affecting Company creditors’ rights and involving a claim under this Debenture, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees, financial advisors and disbursements. The
Company expressly acknowledges and agrees that no amounts due under this Debenture shall be affected, or limited, by the fact that
the purchase price paid for this Debenture was less than the original Principal amount hereof.

 

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21.         CONSTRUCTION;
HEADINGS. This Debenture shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Debenture are for convenience of reference and shall not form part of, or
affect the interpretation of, this Debenture. Terms used in this Debenture but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to
in writing by the Holder.

 

22.         FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder 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. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.

 

23.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Conversion Price, the Interest Conversion Price, the Closing
Sale Price or fair market value (as the case may be) or the arithmetic calculation of the Conversion Rate or the applicable Redemption
Price (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic
calculations (as the case may be) to the other party via facsimile (i) within two (2) Business Days after receipt of the applicable
notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute,
at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable
to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation
(as the case may be) being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2)
Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, the Interest Conversion Price, the
Closing Sale Price or fair market value (as the case may be) to an independent, reputable investment bank selected by the Company
and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or any Redemption Price (as the case
may be) to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the
accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company and the
Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error.

 

24.         NOTICES;
CURRENCY; PAYMENTS.

 

(a)          Notices.
Whenever notice is required to be given under this Debenture, unless otherwise provided herein, such notice shall be given in accordance
with Section 6.3 of the Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken
pursuant to this Debenture, including in reasonable detail a description of such action and the reason therefore. Without limiting
the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the
Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen
(15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution
upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect
to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to
the public prior to or in conjunction with such notice being provided to the Holder.

 

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(b)          Currency.
All dollar amounts referred to in this Debenture are in United States Dollars (“U.S. Dollars”), and all amounts
owing under this Debenture shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Debenture, the U.S. Dollar exchange
rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an
amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period
of time).

 

(c)          Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Debenture, unless otherwise expressly
set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the
account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company
in writing (which address, in the case of each of the initial purchasers of Debentures, shall initially be as set forth on the
applicable signature pages to the Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire
transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s
wire transfer instructions. Whenever any amount expressed to be due by the terms of this Debenture is due on any day which is not
a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of Principal or other
amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred and payable
by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%) per annum from the date such
amount was due until the same is paid in full (“Late Charge”).

 

25.         CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Debenture have been paid in full,
this Debenture shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

26.         WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all
other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Debenture and
the Purchase Agreement.

 

27.         GOVERNING
LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS DEBENTURE SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), 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. EACH OF THE COMPANY AND THE HOLDER 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 VIA REGISTERED
OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER
THE PURCHASE 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 OF
THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 

    	19

    	 

    

 

28.         JUDGEMENT
CURRENCY.

 

(a)          If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to
convert into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment
Currency”) an amount due in U.S. dollars under this Debenture, the conversion shall be made at the Exchange Rate prevailing
on the Trading Day immediately preceding:

 

(i)          the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(ii)         the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 28(a)(ii) being hereinafter referred to as the “Judgment Conversion
Date”).

 

(b)          If
in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(c)          Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Debenture.

 

29.         MAXIMUM
PAYMENTS. Without limiting Section 6.11 of the Purchase Agreement, nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess
of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

 

30.         CERTAIN
DEFINITIONS. For purposes of this Debenture, the following terms shall have the following meanings:

 

(a)          “Bloomberg”
means Bloomberg, L.P.

 

(b)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(c)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by
the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 24. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

    	20

    	 

    

 

(f)          “Closing
Date” shall have the meaning set forth in the Purchase Agreement, which date is the date the Company initially issued
Debentures pursuant to the terms of the Purchase Agreement.

 

(g)          “Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(h)          “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.

 

(i)          “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(j)          “Current
Subsidiary” means any Person in which the Company on the Issuance Date, directly or indirectly, (i) owns any of the outstanding
capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business,
operations or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries.”

 

(k)          “Dollar
Failure” means, with respect to a particular date of determination, that the aggregate dollar trading volume (as reported
on Bloomberg) of the Common Stock on the Eligible Market on which the Common Stock is listed or designated for quotation as of
such date of determination over the ten (10) consecutive Trading Day period ending on the Trading Day immediately preceding such
date of determination is less than $10,000 per Trading Day.

 

(l)          “Eligible
Market” means The New York Stock Exchange, the NYSE MKT LLC, the Nasdaq Global Select Market, the Nasdaq Capital Market
or the Principal Market.

 

    	21

    	 

    

 

(m)          “Equity
Conditions” means: (i) on each day during the period beginning on the later of one month prior to the applicable date
of determination and the Effectiveness Deadline, and ending on and including the applicable date of determination either (x) one
or more Registration Statements filed pursuant to the Registration Rights Agreement shall be effective and the prospectus contained
therein shall be available for the resale by the Holder of all of the Registrable Securities (which, solely for clarification purposes,
includes all shares of Common Stock issuable upon conversion of this Debenture or otherwise pursuant to the terms of this Debenture)
in accordance with the terms of the Registration Rights Agreement and there shall not have been during such period any Grace Periods
(as defined in the Registration Rights Agreement) or (y) all Registrable Securities shall be eligible for sale pursuant to Rule
144 without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation
on conversion of the Debentures, other issuance of securities with respect to the Debentures) and no Current Information Failure
(as defined in the Registration Rights Agreement) exists or is continuing; (ii) on each day during the period beginning one month
prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity
Conditions Measuring Period”), the Common Stock (including all Registrable Securities) is listed or designated for quotation
(as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions
of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the
Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting
occurring) or pending either (A) in writing by such Eligible Market or (B) by falling below the minimum listing maintenance requirements
of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) on each day
during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion
of this Debenture on a timely basis as set forth in Section 3 hereof and all other shares of capital stock required to be delivered
by the Company on a timely basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued
in connection with the event requiring determination may be issued in full without violating Section 3(d) hereof; (v) any shares
of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the rules
or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi)
on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental
Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge
of any fact that would reasonably be expected to cause (1) any Registration Statement required to be filed pursuant to the Registration
Rights Agreement to not be effective or the prospectus contained therein to not be available for the resale of all of the Registrable
Securities in accordance with the terms of the Registration Rights Agreement or (2) any Registrable Securities to not be eligible
for sale pursuant to Rule 144 without the need for registration under any applicable federal or state securities laws (in each
case, disregarding any limitation on conversion of the Debentures, other issuance of securities with respect to the Debentures)
and no Current Information Failure exists or is continuing; (viii) the Holder shall not be in possession of any material, non-public
information provided to it by the Company, any of its affiliates or any of their respective employees, officers, representatives,
agents or the like; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance
with each, and shall not have materially breached any provision, covenant, representation or warranty of any Transaction Document;
(x) no Volume Failure, Dollar Failure or Price Failure exists; and (xi) on each day during the Equity Conditions Measuring Period,
there shall not have occurred an Event of Default or an event that with the passage of time or giving of notice would constitute
an Event of Default.

 

(n)          “Equity
Conditions Failure” means that on any day during the period commencing ten (10) Trading Days prior to the applicable
Interest Notice Date or Option Redemption Date (as the case may be) through the later of the applicable Interest Date or Optional
Redemption Date (as the case may be) and the date on which the applicable shares of Common Stock are actually delivered to the
Holder, the Equity Conditions have not been satisfied (or waived in writing by the Holder).

 

(o)          “Fundamental
Transaction” has the meaning set forth in Section 5(a).

 

(p)          “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

(q)          “Holder
Pro Rata Amount” means a fraction (i) the numerator of which is the initial Principal amount of this Debenture on the
Closing Date and (ii) the denominator of which is the aggregate principal amount of all Debentures issued to the initial purchasers
of Debentures (or their successors and assigns) pursuant to the Purchase Agreement on the Closing Date.

 

(r)          “Indebtedness”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) “capital leases” in accordance
with generally accepted accounting principles (other than trade payables entered into in the ordinary course of business), (iii)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments, and (v) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (i) through (iv) above.

 

(s)          “Interest
Conversion Price” means, with respect to any Interest Date that price which shall be the lower of (i) the applicable
Conversion Price and (ii) the price computed as 90% of the quotient of (I) the sum of the VWAP of the Common Stock for each of
the Trading Days during the ten (10) consecutive Trading Day period ending and including the Trading Day immediately prior to such
Interest Date, divided by (II) ten (10) (such period, the “Interest Measuring Period”). All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that
proportionately decreases or increases the Common Stock during such Interest Measuring Period.

 

    	22

    	 

    

 

(t)          “Interest
Rate” means the greater of (1) 10% plus LIBOR and (2) 11.0%, as may be adjusted from time to time in accordance with
Section 2.

 

(u)          “LIBOR”
means the London Interbank Offered Rate.

 

(v)         “Maturity
Date” shall be comprised of sixteen (16) Trading Days which shall be the first Trading Day of each calendar quarter commencing
on March 31, 2015; provided, however, the Maturity Date may be extended at the option of the Holder in the event
that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred and be continuing
that with the passage of time and the failure to cure would result in an Event of Default.

 

(w)          “New
Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription Date, directly
or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, “New Subsidiaries.”

 

(x)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(y)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(z)          “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Debenture and the Other Debentures, (ii) Permitted Senior Indebtedness,
(iii) Indebtedness consisting of trade payables incurred in the ordinary course of business, (v) Permitted Subordinated Indebtedness,
and (vi) without duplication, other Permitted Indebtedness under (and as defined in) the Loan and Security Agreement referred to
in the definition of “Permitted Senior Indebtedness.”

 

(aa)         “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen's liens, mechanics' liens and other similar liens, arising in the ordinary course of business with
respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price
of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B)
existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment, in either case, with respect to indebtedness in an aggregate amount
not to exceed $50,000, (v) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured
by Liens of the type described in clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited
to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced
does not increase, (vi) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods, (vii) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 4(a), (viii) any Lien securing Permitted Senior Indebtedness, (ix) any Lien
securing Permitted Subordinated Indebtedness, and (x) without duplication, any other Permitted Lien under (and as defined in) the
Loan and Security Agreement referred to in the definition of “Permitted Senior Indebtedness.”

 

    	23

    	 

    

 

(bb)         “Permitted
Senior Indebtedness” means the principal of (and premium, if any), interest on, and all fees and other amounts (including,
without limitation, any reasonable out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket legal fees and
disbursements), collateral protection expenses and other reimbursement or indemnity obligations relating thereto) payable by Company
and/or its Subsidiaries under or in connection with the Loan and Security Agreement dated as of December 3, 2013, between the Company
and Hercules Technology Growth Capital, Inc., and with the Securities Purchase Agreement, dated as of March 11, 2014, among the
Company and the other parties thereto, in each case as amended, modified, supplemented, restated, replaced, or refinanced from
time to time; provided, that the principal amount of such Permitted Senior Indebtedness does not exceed $15,000,000 and the terms
of such Permitted Senior Indebtedness are not modified except as permitted pursuant to the Hercules Subordination Agreement.

 

(cc)         “Permitted
Subordinated Indebtedness” means Indebtedness incurred by the Company that is made expressly subordinate in right of
payment to the Indebtedness evidenced by this Debenture, and the other Debentures as reflected in a written agreement acceptable
to the Required Holders, and which Indebtedness does not provide at any time for (1) the payment, prepayment, repayment, repurchase
or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after final Maturity
Date or later and (2) total interest and fees at a rate in excess of twelve percent (12.0%) per annum.

 

(dd)         “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(ee)         “Price
Failure” means, with respect to a particular date of determination, that the quotient of (I) the sum of the VWAP of the
Common Stock for each Trading Day in the thirty (30) consecutive Trading Day period ending and including the Trading Day immediately
preceding such date of determination, divided by (II) thirty (30) is less than $0.02 (as adjusted for stock splits, stock dividends,
stock combinations or other similar transactions).

 

(ff)      
   “Principal Market” means the trading market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the NASDAQ Global
Market.

 

(gg)         “Redemption
Notices” means, collectively, the Event of Default Redemption Notices and the Change of Control Redemption Notices, and
each of the foregoing, individually, a “Redemption Notice.”

 

(hh)         “Redemption
Premium” means in the case of the Events of Default described in Section 4(a), 110%.

 

(ii)   
      “Redemption Prices” means, collectively, Event of Default Redemption
Prices, and each of the foregoing, individually, a “Redemption Price.”

 

(jj)         “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company
and the initial Holders of the Debentures relating to, among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Debentures or otherwise pursuant to the terms of the Debentures, as may be amended from time to time.

 

(kk)         “SEC”
means the United States Securities and Exchange Commission or the successor thereto.

 

    	24

    	 

    

 

(ll)        
 “Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription
Date, by and among the Company and the initial Holders of the Debentures pursuant to which the Company issued the Debentures,
as may be amended from time to time.

 

(mm)        “Subscription
Date” means September __ 2014.

 

(nn)         “Subsidiaries”
means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing,
individually, a “Subsidiary.”

 

(oo)         “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(pp)         “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.

 

(qq)         “Volume
Failure” means, with respect to a particular date of determination, the average daily volume (as reported on Bloomberg)
of the Common Stock on the Eligible Market on which the Common Stock is listed or designated for quotation as of such date of determination
on any Trading Day during the thirty (30) consecutive Trading Day period ending on the Trading Day immediately preceding such date
of determination is less than $100,000 Trading Day, as to Section 2(a) and Section 11(c).

 

(rr)         “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 24. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

31.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the
Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose
such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that
a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate
to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company
or its Subsidiaries. Nothing contained in this Section 31 shall limit any obligations of the Company, or any rights of the Holder,
under Section 4.5 of the Purchase Agreement.

 

    	25

    	 

    

 

32.         SUBORDINATION.
Notwithstanding anything herein to the contrary, to the extent that any provision of the Subordination Agreements conflicts with
any provision of this Debenture, including, but not limited to, any provision of this Debenture otherwise requiring the Company
to pay any amount in cash to the Holder while the Permitted Senior Indebtedness is outstanding, such provision of the Subordination
Agreements shall control.

 

[signature page follows]

 

    	26

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this Debenture to be duly executed as of the Issuance Date set out above.

 

	 	BAXANO SURGICAL, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	27

    	 

    

 

EXHIBIT I

 

BAXANO SURGICAL, INC.

CONVERSION NOTICE

 

[To be executed by the Holder to exercise
the right to convert the Debenture into shares of Common Stock]

 

To: Baxano Surgical, Inc.

 

(1)         The
undersigned is the Holder of a Debenture in aggregate principal amount of $              
(the “Debenture”) issued by Baxano Surgical, Inc., a Delaware corporation (the “Company”).
Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Debenture.

 

(2)         In
accordance with and pursuant to the Debenture, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Debenture) of the Debenture indicated below into shares of common stock, par value $0.0001 per share, of the Company, as of the
date specified below.

 

	Date of Conversion	 
	 	 
	Aggregate Principal to be converted	 
	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of Aggregate Principal and such Aggregate Interest to be converted	 
	 	 
	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED	 

 

Please confirm the following information:

 

	Conversion Price	 
	 	 
	Number of shares of Common Stock to be issued	 

 

Please issue the Common Stock into which
the Debenture is being converted in the following name and to the following addressee:

 

Issued to: _________________________________

 

Facsimile Number: __________________________

 

Account Number: ___________________________

(if electronic book entry transfer)

 

Transfer Code Number: ______________________

 

    	 

    	 

    

 

The undersigned hereby executes and delivery
this Conversion Notice as of the date set forth below:

  

	Holder: 	 
	By: 	 
	Its: 	 

(Signature must conform in all
respects to name of Holder as specified on the face of the Warrant)

 

Dated:

 

ACKNOWLEDGEMENT

 

The Company hereby acknowledges this Conversion
Notice and hereby directs American Stock Transfer & Trust Company, LLC to issue the above indicated number of shares of Common
Stock in accordance with the Irrevocable Transfer Agent Instructions dated [  ̃ ],
2014, from the Company and acknowledged and agreed to by American Stock Transfer & Trust Company, LLC.

 

	 	BAXANO SURGICAL, INC.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title: 	 

 

    	 

    	 

    

  

Exhibit B

 

Form of Registration Rights Agreement

 

    	 

    	 

    

 

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of September 24, 2014, by and among Baxano Surgical,
Inc., a Delaware corporation (the “Company”), and the several purchasers signatory hereto (each a “Purchaser”
and collectively, the “Purchasers”).

 

This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the “Purchase
Agreement”).

 

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 each of the Purchasers agree as follows:

 

1.     
     Definitions. Capitalized terms used and not otherwise defined herein that are defined in
the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:

 

“Advice”
has the meaning set forth in Section 6(d).

 

“Affiliate”
means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common
control with, such person.

 

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

 

“Business Day”
means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

 

“Closing Date”
has the meaning set forth in the Purchase Agreement.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any securities into which such common stock may hereinafter
be reclassified.

 

“Company”
has the meaning set forth in the Preamble.

 

“Conversion
Shares” means the shares of Common Stock issued or issuable upon conversion of the Debentures.

 

“Debentures”
means the subordinated convertible debentures issued by the Company pursuant to the Purchase Agreement.

 

“Effective Date”
means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

 

    	 

    	 

    

 

“Effectiveness
Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the sixtieth (60th)
calendar day following the Closing Date (or, in the event the Commission reviews and has written comments to the Initial Registration
Statement or the New Registration Statement, the ninetieth (90th) calendar day following the Closing Date); provided,
however, that if the Company is notified by the Commission that the Initial Registration Statement or the New Registration
Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration
Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes
the dates otherwise required above; provided, further, that if the Effectiveness Deadline falls on a Saturday, Sunday or
other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on
which the Commission is open for business.

 

“Effectiveness
Period” has the meaning set forth in Section 2(b).

 

“Event”
has the meaning set forth in Section 2(c).

 

“Event Date”
has the meaning set forth in Section 2(c).

 

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

 

“Filing Deadline”
means, with respect to the Initial Registration Statement required hereunder, the 30th calendar day following the date
hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(a) or Section 3(c),
the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related
to the Registrable Securities, provided, however, that if the Filing Deadline falls on a Saturday, Sunday or other day that
the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is
open for business.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party” has the meaning set forth in Section 5(c).

 

“Indemnifying
Party” has the meaning set forth in Section 5(c).

 

“Initial Registration
Statement” means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

 

“Interest Shares”
means those shares of Common Stock issuable to a Holder as payment for interest pursuant to a Debenture.

 

“Liquidated
Damages” has the meaning set forth in Section 2(c).

 

“Losses”
has the meaning set forth in Section 5(a).

 

“New Registration
Statement” has the meaning set forth in Section 2(a).

 

    	2

    	 

    

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Principal Market”
means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the Closing Date,
shall be the NASDAQ Global Market.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition).

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

 

“Purchase Agreement”
has the meaning set forth in the Recitals.

 

“Purchaser”
or “Purchasers” has the meaning set forth in the Preamble.

 

“Registrable
Securities” means all of (i) the Conversion Shares, (ii) the Interest Shares, and (iii) any securities issued or issuable
upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing, provided,
that with respect to a particular Holder, such Holder’s Conversion Shares and Interest Shares shall cease to be Registrable
Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities
Act (in which case, only such security sold by the Holder shall cease to be a Registrable Security); or (B) becoming eligible for
resale by the Holder under Rule 144 without the requirement for the Company to be in compliance with the current public information
required thereunder and without volume or manner-of-sale restrictions, pursuant to a written opinion letter to such effect, addressed,
delivered and acceptable to the Transfer Agent.

 

“Registration
Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial
Registration Statement, the New Registration Statement and any Remainder Registration Statements), including (in each case) the
amendments and supplements to such Registration Statements, including pre- and post-effective amendments thereto, all exhibits
and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

 

“Remainder Registration
Statements” has the meaning set forth in Section 2(a).

 

    	3

    	 

    

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC Guidance”
means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff, provided
that any such oral guidance, comments, requirements, or requests are reduced to writing by the Commission, and (ii) the Securities
Act.

 

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

 

“Selling Stockholder
Questionnaire” means a questionnaire in the form attached as Annex B hereto.

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock
is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on
any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that
in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean
a Business Day.

 

“Trading Market”
means whichever of the New York Stock Exchange, the NYSE Amex Equities (formerly the American Stock Exchange), the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or
quoted for trading on the date in question.

 

“Transfer Agent”
has the meaning set forth in the Purchase Agreement.

 

    	4

    	 

    

 

2.    
      Registration.

 

(a)          On
or prior to the initial Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering
the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable
Securities, by such other means of distribution of Registrable Securities as the Holders may reasonably specify (the “Initial
Registration Statement”). The Initial Registration Statement shall be on Form S-3 (except if the Company is then ineligible
to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on such other form available
to register for resale the Registrable Securities as a secondary offering) subject to the provisions of Section 2(e) and
shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration
Statement) a “Plan of Distribution” section substantially in the form attached hereto as Annex A (which may
be modified to respond to comments, if any, provided by the Commission). Notwithstanding the registration obligations set forth
in this Section 2, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result
of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company
agrees to promptly (i) inform each of the holders thereof and use its commercially reasonable efforts to file amendments to the
Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a
new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable
Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable
Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement,
the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration
of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Interpretive Response 612.09
of the Commission’s Securities Act Rules Compliance and Disclosure Interpretations. Notwithstanding any other provision of
this Agreement and subject to the payment of liquidated damages in Section 2(c), if any SEC Guidance sets forth a limitation
of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering
(and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater
number of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number
of Registrable Securities to be registered on such Registration Statement will first be reduced by Registrable Securities not acquired
pursuant to the Purchase Agreement (whether pursuant to registration rights or otherwise), second by Registrable Securities represented
by Interest Shares (applied, in the case that some Interest Shares may be registered, to the Holders on a pro rata basis based
on the total number of unregistered Interest Shares held by such Holders), and third by Registrable Securities represented by Conversion
Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Conversion Shares held by such Holders, subject to a determination by the Commission that certain Holders
must be reduced first based on the number of Conversion Shares held by such Holders). In the event the Company amends the Initial
Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company
will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other
form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”).

 

    	5

    	 

    

 

(b)          The
Company shall use its best efforts to cause each Registration Statement to be declared effective by the Commission as soon as practicable
and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness
Deadline (including filing with the Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated
under the Securities Act), and shall use its commercially reasonable efforts to keep each Registration Statement continuously effective
under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration Statement
have been publicly sold by the Holders or (ii) such time that all of the Registrable Securities may be sold without volume or manner-of-sale
restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed
and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”). The Company shall
telephonically request effectiveness of a Registration Statement as of 5:00 P.M. New York City time on a Trading Day. The Company
shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness
of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission,
which date of confirmation shall initially be the date requested for effectiveness of such Registration Statement. The Company
shall, by 9:30 A.M. New York City time on the first Trading Day after the Effective Date, file a final Prospectus with the Commission,
as required by Rule 424(b).

 

(c)          If:
(i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) a Registration
Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness
Deadline of the Initial Registration Statement or (iii) after its Effective Date, (A) such Registration Statement ceases for any
reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement)
to remain continuously effective as to all Registrable Securities included in such Registration Statement or (B) the Holders are
not permitted to utilize the Prospectus therein to resell such Registrable Securities for any reason (other than due to a change
in the “Plan of Distribution” or the inaccuracy of any information regarding the Holders), in each case, for more than
an aggregate of twenty (20) consecutive calendar days or twenty-five (25) calendar days (which need not be consecutive days) during
any twelve (12) month period, (iv) if none of the Initial Registration Statement, the New Registration Statement or a Remainder
Registration Statement is effective and the Company fails to satisfy the current public information requirement pursuant to Rule
144(c)(1) as a result of which the Holders who are not affiliates are unable to sell Registrable Securities without restriction
under Rule 144 (or any successor thereto) or (v) prior to the effective date of a Registration Statement, the Company fails to
file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration
Statement within ten (10) Trading Days after the receipt of comments by or notice from the Commission that such amendment is required
in order for such Registration Statement to be declared effective or (vi) the Company fails to file with the Commission a request
for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities
Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, (any such
failure or breach in clauses (i) through (vi) above being referred to as an “Event,” and, for purposes of clauses
(i), (ii) or (iv), the date on which such Event occurs, and for purposes of clause (iii), the date on which such twenty (20) or
twenty-five (25) calendar day period is exceeded, and for purposes of clause (v) the date on which such ten (10) Trading Day period
is exceeded, and for purposes of clause (vi), the date on which such five Trading Day period is exceeded, being referred to as
an “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law,
on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured
by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated
damages (“Liquidated Damages”) and not as a penalty, equal to the product of 1.0% of the aggregate Subscription
Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any Liquidated Damages pursuant to this
Section 2(c) in full within five (5) Business Days after the date payable, the Company will pay interest thereon at a rate
of one and one-half percent (1.5%) per month (or such lesser maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are
paid in full. Unless otherwise specified in this Section 2(c), the Liquidated Damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event
Date. Notwithstanding the foregoing, nothing shall preclude any Holder from pursuing or obtaining any available remedies at law,
specific performance or other equitable relief with respect to this Section 2(c) in accordance with applicable law.

 

    	6

    	 

    

 

(d)          Each
Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than five (5) Trading Days following
the date of this Agreement. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for
further information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts to
take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective
or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable
Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges
and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this
Section 2(d) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion
of such information in the Registration Statement.

 

(e)          In
the event that Form S-3 is not  available for the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Holders and
(ii) undertake to register the Registrable Securities on Form S-3 promptly after such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement
on Form S-3 covering the Registrable Securities has been declared effective by the Commission.

 

3.    
      Registration Procedures

 

In connection with the
Company's registration obligations hereunder, the Company shall:

 

    	7

    	 

    

 

(a)          Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and any similar or successor reports), (i) furnish to the Holder copies of
such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which documents will be subject
to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on the aforementioned
documents within such five (5) Trading Day or one (1) Trading Day period, as the case may be, then the Holder shall be deemed to
have consented to and approved the use of such documents) and (ii) use commercially reasonable efforts to cause its officers and
directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable
opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The
Company shall not file any Registration Statement or Prospectus or any amendment or supplement thereto in a form to which a Holder
reasonably objects in good faith, provided that, the Company is notified of such objection in writing within the five (5) Trading
Day or one (1) Trading Day period described above, as applicable.

 

(b)          (i)
Prepare and file with the Commission such amendments (including post-effective amendments) and supplements, to each Registration
Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness Period; (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended,
to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably practicable to any comments received from the Commission
with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders
true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains
to the Holders as “Selling Stockholders” but not any comments that would result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of
such Registrable Securities cease to be Registrable Securities or shall have been disposed of (subject to the terms of this Agreement)
in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so
amended or in such Prospectus as so supplemented. In the case of amendments and supplements to a Registration Statement which are
required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing
a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated
such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the
Commission on the same day on which the Exchange Act report which created the requirement for the Company to amend or supplement
such Registration Statement was filed.

 

    	8

    	 

    

 

(c)          Notify
the Holders (which notice shall, pursuant to clauses (iii) through (v) hereof, be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made) as promptly as reasonably practicable (and, in the case of (i)(A)
below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing
no later than one (1) Trading Day following the day: (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment
to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing on any Registration Statement (in which case the
Company shall provide to each of the Holders true and complete copies of all comments that pertain to the Holders as a “Selling
Stockholder” or to the “Plan of Distribution” and all written responses thereto, but not information that the
Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or
any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other federal or
state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information
that pertains to the Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of the issuance
by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration
Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may
be, it 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 (in the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading.

 

(d)          Use
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as soon as practicable.

 

(e)          If
requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each
amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.

 

(f)          Prior
to any resale of Registrable Securities by a Holder, use its best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as
any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions
of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax
in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

 

    	9

    	 

    

 

(g)          If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Holders may request.

 

(h)          Following
the occurrence of any event contemplated by Section 3(c), as promptly as reasonably practicable (taking into account the
Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure
of such event), prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they
were made), not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (v) of Section 3(c)
above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall
suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus
may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(h) to suspend
the availability of a Registration Statement and Prospectus, subject to the payment of partial Liquidated Damages otherwise required
pursuant to Section 2(c), for a period not to exceed twenty-five (25) calendar days (which need not be consecutive days)
in any 12-month period.

 

(i)          The
Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of shares of Common
Stock beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“FINRA”)
affiliations, (iii) any natural persons who have the power to vote or dispose of the common stock and (iv) any other information
as may be required by the Commission, FINRA or any state securities commission. During any periods that the Company is unable to
meet its obligations hereunder with respect to the registration of Registrable Securities because any Holder fails to furnish such
information within three (3) Trading Days of the Company’s request, any Liquidated Damages that are accruing at such time
as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as
to such Holder only, until such information is delivered to the Company.

 

(j)          The
Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting
a filing with FINRA pursuant to FINRA Rule 5110 as requested by any such Holder and the Company shall pay the filing fee required
for the first such filing within five (5) Business Days of the request therefor.

 

    	10

    	 

    

 

(k)          Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to the parenthetical in the first sentence
of Section 3(c).

 

(l)          Comply
with all applicable rules and regulations of the Commission.

 

4.       
   Registration Expenses. All fees and expenses incident to the Company’s performance of or
compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions for any
Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for trading, (B) with respect to compliance with
applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the
Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the
Holders) and (C) if not previously paid by the Company in connection with Section 3(j) hereof, with respect to any
filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities
with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in
connection with such sale), (ii) printing expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of
a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the
expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder. In no event shall the Company be responsible for any underwriting, broker
or similar fees or commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal
fees or other costs of the Holders.

 

    	11

    	 

    

 

5.       
   Indemnification.

 

(a)          Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, partners, members, managers, stockholders, Affiliates, brokers and employees of each of
them (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such
title or any other title), each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, agents, brokers and employees
of each such controlling Person (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding
a lack of such title or any other title), to the fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable
attorneys' fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i)
any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not
misleading, or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities
law or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to
the extent that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed
and approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose),
(B) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(v), related to the use by
a Holder of an outdated or defective Prospectus after the Company has notified such Holder that the Prospectus is outdated or defective
in accordance with Section 3(c) and prior to the receipt by such Holder of the Advice contemplated and defined in Section
6(d) below, but if and only to the extent that following the receipt of the Advice the misstatement or omission giving rise
to such Loss would have been corrected or (C) any such Losses arise solely out of the Purchaser’s (or any other indemnified
Person’s) failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required,
pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such Prospectus or supplement. The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive the transfer of the Registrable Securities
by the Holders.

 

    	12

    	 

    

 

(b)          Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, arising out of or based solely upon any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading (i) to the extent that such untrue statements or omissions are based upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed
and approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence
of an event of the type specified in Section 3(c)(iii)-(v), to the extent related to the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder that the Prospectus is outdated or defective in accordance
with Section 3(c) and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no event
shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable
fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without its prior written consent, which consent shall not
be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding
and such settlement does not include any non-monetary limitation on the actions of any Indemnified Party or any of its affiliates
or any admission of fault or liability on behalf of any such Indemnified Party.

 

    	13

    	 

    

 

Subject to the terms
of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 5)
shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees
and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement
of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 5,
except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

 

(d)          Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable
attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5 was available
to such party in accordance with its terms.

 

The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 5(d), (A) no Holder shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale
of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission
and (B) no contribution will be made under circumstances where the maker of such contribution would not have been required to
indemnify the Indemnified Party under the fault standards set forth in this Section 5. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

 

    	14

    	 

    

 

The indemnity and contribution
agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

6.      
    Miscellaneous.

 

(a)          Remedies.
Subject to the limitations set forth elsewhere in this Agreement, in the event of a breach by the Company or by a Holder of any
of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law
would be adequate.

 

(b)          No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement
other than the Registrable Securities and the Company shall not prior to the initial Effective Date of the Initial Registration
Statement enter into any agreement providing any such right to any of its security holders. The Company shall not file with the
Commission any other registration statement until the earlier of the date that is ninety (90) days after the date all Registrable
Securities are registered pursuant to a Registration Statement that is declared effective by the Commission or (ii) the date that
all Registrable Securities are eligible for resale by non-affiliates without volume or manner of sale restrictions under Rule 144
and without the requirement for the company to be in compliance with the current public information requirements under Rule 144.
For the avoidance of doubt, the Company shall not be prohibited from filing amendments to registration statements in connection
with the evergreen requirements filed prior to the date of this Agreement.

 

(c)          Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration
Statement.

 

    	15

    	 

    

 

(d)          Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c)(iii)-(v), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.
The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the
Registrable Securities hereunder shall be subject to the provisions of Section 2(c).

 

(e)          No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities that would
have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

 

(f)          Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
or waived unless the same shall be in writing and signed by the Company and Holders holding no less than 67% of the then outstanding
Registrable Securities, provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which
such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified,
or supplemented except in accordance with the provisions of the immediately preceding sentence.

 

(g)          Notices.
Except as otherwise provided in this Agreement, any notices or other communications or deliveries required or permitted to be provided
hereunder shall be delivered as set forth in the Purchase Agreement.

 

(h)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except
by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations
hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may
assign its respective rights with respect to any or all of its Conversion Shares and/or Interest Shares hereunder in the manner
and to the Persons as permitted under the Purchase Agreement; provided in each case that (i) the Holder agrees in writing
with the transferee or assignee to assign such rights and related obligations under this Agreement, and for the transferee or assignee
to assume such obligations, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment,
(ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to which such registration rights are being transferred
or assigned, (iii) at or before the time the Company receives the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein and
(iv) the transferee is an “accredited investor,” as that term is defined in Rule 501 of Regulation D.

 

    	16

    	 

    

 

(i)          Execution
and Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature 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 facsimile or “.pdf” signature were the original thereof.

 

(j)          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.

 

(k)          Cumulative
Remedies. Except as provided herein, the remedies provided herein are cumulative and not exclusive of any other remedies provided
by law.

 

(l)          Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable
efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(m)         Headings.
The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

    	17

    	 

    

 

(n)          Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement are several and
not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Securities pursuant to the
Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities
or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined
as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided
with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and not because it
was required or requested to do so by any Purchaser.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	18

    	 

    

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	BAXANO SURGICAL, INC.
	 	 	 
	 	By:	 
	 	 	Name:  	Ken Reali
	 	 	Title:	President and Chief Executive Officer

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	[NAME OF INVESTING ENTITY]
	 	 	 
	 	 	 
	 	 	 
	 	AUTHORIZED SIGNATORY
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	ADDRESS FOR NOTICE
	 	 	 
	 	c/o:	 
	 	 	 
	 	Street:	 

	 	 	 
	 	City/State/Zip: 	 

		 	 
	 	Attention: 	 
	 	 	 
	 	Tel:	 
	 	 	 
	 	Fax:	 
	 	 	 
	 	Email:	 

 

    	 

    	 

    

  

Annex A

 

Plan of Distribution

 

Each Selling Stockholder
(the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the any stock exchange, market or trading facility
on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder
may use any one or more of the following methods when selling securities:

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	settlement of short sales;

 

		·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities
at a stipulated price per security;

 

		·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

		·	a combination of any such methods of sale; or

 

		·	any other method permitted pursuant to applicable law.

 

The Selling Stockholders
may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.

 

Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.

 

    	 

    	 

    

 

In connection with
the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).

 

The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.

 

The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

 

Because Selling Stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.
The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale securities by the Selling Stockholders.

 

We agreed to keep this
prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

 

    	2

    	 

    

 

Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

    	3

    	 

    

 

Annex B

 

BAXANO
SURGICAL, Inc.

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial
owner of common stock (the “Registrable Securities”) of Baxano Surgical, Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial
owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.

 

    	 

    	 

    

 

The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

		1.	Name.

 

		(a)	Full Legal Name of Selling Stockholder

 

	 
	 

 

		(b)	Full Legal Name of Registered Holder (if not the same
as (a) above) through which Registrable Securities are held:

 

	 
	 

 

		(c)	Full Legal Name of Natural Control Person (which means
a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this
Questionnaire):

 

	 
	 

 

		2.	Address for Notices to Selling Stockholder:

 

	 
	 
	 

	Telephone: 	 

	Fax: 	 

	Contact Person:  	 

 

		3.	Broker-Dealer Status:

 

		(a)	Are you a broker-dealer?

 

Yes    ̈
             No    ̈

 

		(b)	If “yes” to Section 3(a), did you receive
your Registrable Securities as compensation for investment banking services to the Company?

 

Yes    ̈
             No    ̈

 

		Note:	If “no” to Section 3(b), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

    	 

    	 

    

  

		(c)	Are you an affiliate of a broker-dealer?

 

Yes    ̈
             No    ̈

 

		(d)	If you are an affiliate of a broker-dealer, do you certify
that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable
Securities?

 

Yes    ̈
             No    ̈

 

		Note:	If “no” to Section 3(d), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

		4.	Beneficial Ownership of Securities of the Company
Owned by the Selling Stockholder.

 

Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.

 

		(a)	Type and Amount of other securities beneficially owned by the Selling Stockholder:

 

	 
	 
	 

 

    	 

    	 

    

 

		5.	Relationships with the Company:

 

Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

	 
	 
	 

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion
of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus and any amendments or supplements thereto.

 

IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.

 

	Date:	 	 	Beneficial Owner:  	 
	 	 	 	 	 	 
	 	 	 	By:	 	 
	 	 	 	 	Name:	 
	 	 	 	 	Title:	 

 

PLEASE FAX A COPY (OR EMAIL A .PDF COPY)
OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

    	 

    	 

    

 

Exhibit C

 

Form of Subsidiary Guarantee

 

    	 

    	 

    

 

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY GUARANTEE,
dated as of September 24, 2014 (this “Guarantee”), made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Purchasers”) to that certain Securities Purchase Agreement,
dated as of the date hereof, between Baxano Surgical, Inc., a Delaware corporation (the “Company”) and the Purchasers.

 

WITNESSETH:

 

WHEREAS, pursuant to
that certain Securities Purchase Agreement, dated as of the date hereof, by and between the Company and the Purchasers (the “Purchase
Agreement”), the Company has agreed to sell and issue to the Purchasers, and the Purchasers have agreed to purchase from
the Company the Debentures, subject to the terms and conditions set forth therein; and

 

WHEREAS, each Guarantor
will directly benefit from the extension of credit to the Company represented by the issuance of the Debentures; and

 

NOW, THEREFORE, in
consideration of the premises and to induce the Purchasers to enter into the Purchase Agreement and to carry out the transactions
contemplated thereby, each Guarantor hereby agrees with the Purchasers as follows:

 

1.   
       Definitions. Unless otherwise defined herein, terms defined in the Purchase
Agreement and used herein shall have the meanings given to them in the Purchase Agreement. The words “hereof,”
“herein,” “hereto” and “hereunder” and words of similar import when used in this
Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms. The following terms shall have the following
meanings:

 

“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise modified from time to time.

 

    	1

    	 

    

 

“Obligations”
means, in addition to all other costs and expenses of collection incurred by Purchasers in enforcing any of such Obligations and/or
this Guarantee, all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or several) due or
to become due, or that are now or may be hereafter contracted or acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under this Guarantee, the Debentures and any other instruments, agreements
or other documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from any of the Purchasers as a preference, fraudulent transfer or otherwise as such obligations may be
amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing, the
term “Obligations” shall include, without limitation: (i) principal of, and interest on the Debentures and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Company or any Guarantor
from time to time under or in connection with this Guarantee, the Debentures and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company or any Guarantor.

 

2.    
      Guarantee.

 

(a)          Guarantee.

 

(i)          The
Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Purchasers and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.

 

(ii)         Anything
herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)        Each
Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Purchasers hereunder.

 

(iv)        The
guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been satisfied by indefeasible payment in full.

 

    	2

    	 

    

 

(v)         No
payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Purchasers
from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off
or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment
(other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor
in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are indefeasibly paid in full.

 

(vi)        Notwithstanding
anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific performance of
which by the Guarantors is not reasonably possible (e.g. the issuance of the Company's Common Stock), the Guarantors shall only
be liable for making the Purchasers whole on a monetary basis for the Company's failure to perform such Obligations in accordance
with the Transaction Documents.

 

(b)          Right
of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right
of contribution shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect
limit the obligations and liabilities of any Guarantor to the Purchasers and each Guarantor shall remain liable to the Purchasers
for the full amount guaranteed by such Guarantor hereunder.

 

(c)          No
Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Purchasers, no Guarantor shall be entitled to be subrogated to any of the rights of the Purchasers against the Company or
any other Guarantor or any collateral security or guarantee or right of offset held by the Purchasers for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to the Purchasers by the Company on account of the
Obligations are indefeasibly paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for
the Purchasers, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Purchasers in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Purchasers, if required),
to be applied against the Obligations, whether matured or unmatured, in such order as the Purchasers may determine.

 

    	3

    	 

    

 

(d)          Amendments,
Etc. With Respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Purchasers may be rescinded by the Purchasers and any of the Obligations continued, and the Obligations,
or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Purchasers may deem advisable from time to time, and any collateral security, guarantee or right of offset
at any time held by the Purchasers for the payment of the Obligations may be sold, exchanged, waived, surrendered or released.
The Purchasers shall have no obligation to protect, secure, perfect or insure any Lien at any time held by them as security for
the Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

(e)          Guarantee
Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Purchasers upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and
all dealings between the Company and any of the Guarantors, on the one hand, and the Purchasers, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance
without regard to (a) the validity or enforceability of the Purchase Agreement or any other Transaction Document, any of the Obligations
or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time
held by the Purchasers, (b) any defense, set-off or counterclaim (other than a defense of payment or performance or fraud by Purchasers)
which may at any time be available to or be asserted by the Company or any other Person against the Purchasers, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company for the Obligations, or of such Guarantor under the guarantee
contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Purchasers may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as they may have against the Company, any other Guarantor or any other Person or
against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by
the Purchasers to make any such demand, to pursue such other rights or remedies or to collect any payments from the Company, any
other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right
of offset, or any release of the Company, any other Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the Purchasers against any Guarantor. For the purposes
hereof, “demand” shall include the commencement and continuance of any legal proceedings.

 

    	4

    	 

    

 

(f)          Reinstatement.
The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Purchasers
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor, or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Company or any Guarantor
or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)          Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to the Purchasers without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in the Signature Pages to the Purchase Agreement.

 

3.       
   Representations and Warranties. Each Guarantor hereby makes the following representations and
warranties to Purchasers as of the date hereof:

 

(a)          Organization
and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and in good standing under the laws
of the applicable jurisdiction set forth on Schedule 1, 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 Guarantor has no subsidiaries other than those identified as
such on the Disclosure Schedules to the Purchase Agreement. The Guarantor is duly qualified to do 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, individually
or in the aggregate, (x) adversely affect the legality, validity or enforceability of any of this Guaranty in any material respect,
(y) have a material adverse effect on the results of operations, assets, prospects, or financial condition of the Guarantor or
(z) adversely impair in any material respect the Guarantor's ability to perform fully on a timely basis its obligations under this
Guaranty (a “Material Adverse Effect”).

 

    	5

    	 

    

 

(b)          Authorization;
Enforcement. The Guarantor has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery of this Guaranty
by the Guarantor and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

(c)          No
Conflicts. The execution, delivery and performance of this Guaranty by the Guarantor and the consummation by the Guarantor
of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its Certificate of Incorporation
or By-laws or (ii) conflict with, 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 Guarantor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Guarantor is subject (including Federal and State securities
laws and regulations), or by which any material property or asset of the Guarantor is bound or affected, except in the case of
each of clauses (ii) and (iii), such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as could not, individually or in the aggregate, have or result in a Material Adverse Effect. The business of the Guarantor is not
being conducted in violation of any law, ordinance or regulation of any governmental authority, except for violations which, individually
or in the aggregate, do not have a Material Adverse Effect.

 

    	6

    	 

    

 

(d)          Consents
and Approvals. The Guarantor is not required to obtain any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local, foreign or other governmental authority or other person in connection
with the execution, delivery and performance by the Guarantor of this Guaranty.

 

(e)          Purchase
Agreement. The representations and warranties of the Company set forth in the Purchase Agreement as they relate to such Guarantor,
each of which is hereby incorporated herein by reference, are true and correct as of each time such representations are deemed
to be made pursuant to such Purchase Agreement, and the Purchasers shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation and warranty to the Company's knowledge shall, for the
purposes of this Section 3, be deemed to be a reference to such Guarantor's knowledge.

 

(f)          Foreign
Law. Each Guarantor has consulted with appropriate foreign legal counsel with respect to any of the above representations for
which non-U.S. law is applicable. Such foreign counsel have advised each applicable Guarantor that such counsel knows of no reason
why any of the above representations would not be true and accurate. Such foreign counsel were provided with copies of this Subsidiary
Guarantee and the Transaction Documents prior to rendering their advice.

 

4.        
  Covenants.

 

(a)          Each
Guarantor covenants and agrees with the Purchasers that, from and after the date of this Guarantee until the Obligations shall
have been indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from taking, as the case may be, each commercially
reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as defined in the
Debentures) is caused by the failure to take such action or to refrain from taking such action by such Guarantor.

 

(b)          So
long as any of the Obligations are outstanding, unless Purchasers holding at least 67% of the aggregate principal amount of the
then outstanding Debentures shall otherwise consent in writing, each Guarantor will not directly or indirectly on or after the
date of this Guarantee:

 

i.            enter
into, create, incur, assume or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to,
a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any
income or profits therefrom;

 

ii.         enter
into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets now
owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

    	7

    	 

    

 

iii.         amend
its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of any Purchaser;

 

iv.         repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its securities or debt
obligations;

 

v.           pay
cash dividends on any equity securities of the Company;

 

vi.         enter
into any transaction with any Affiliate of the Guarantor which would be required to be disclosed in any public filing of the Company
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the
disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

 

vii.         enter
into any agreement with respect to any of the foregoing.

 

5.     
     Miscellaneous.

 

(a)          Amendments
in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except
in writing by the Purchasers.

 

(b)          Notices.
All notices, requests and demands to or upon the Purchasers or any Guarantor hereunder shall be effected in the manner provided
for in the Purchase Agreement, provided that any such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 5(b).

 

(c)          No
Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall not by any act (except by a written instrument pursuant
to Section 5(a)), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Purchasers, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Purchasers of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Purchasers would otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

    	8

    	 

    

 

(d)          Enforcement
Expenses; Indemnification.

 

(i)          Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee and the other Transaction
Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to
the Purchasers.

 

(ii)         Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection
with any of the transactions contemplated by this Guarantee.

 

(iii)        Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Guarantee to the extent the Company would be required to do so pursuant to
the Purchase Agreement.

 

(iv)        The
agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Purchase Agreement
and the other Transaction Documents.

 

(e)          Successor
and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit
of the Purchasers and their respective successors and assigns; provided that no Guarantor may assign, transfer or delegate any
of its rights or obligations under this Guarantee without the prior written consent of the Purchasers.

 

    	9

    	 

    

 

(f)          Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchasers at any time and from time to time while an Event of Default under any
of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any other Guarantor, any
such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits, credits, indebtedness
or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Purchasers to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the
Purchasers may elect, against and on account of the obligations and liabilities of such Guarantor to the Purchasers hereunder and
claims of every nature and description of the Purchasers against such Guarantor, in any currency, whether arising hereunder, under
the Purchase Agreement, any other Transaction Document or otherwise, as the Purchasers may elect, whether or not the Purchasers
have made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Purchasers
shall notify such Guarantor promptly of any such set-off and the application made by the Purchasers of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Purchasers
under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which
the Purchasers may have.

 

(g)          Counterparts.
This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(h)          Severability.
Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(i)      
    Section Headings. The Section headings used in this Guarantee are for convenience of reference
only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

(j)        
  Integration. This Guarantee and the other Transaction Documents represent the agreement of the Guarantors
and the Purchasers with respect to the subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Purchasers relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Transaction Documents.

 

    	10

    	 

    

 

(k)          Governing
Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each of the Company and the Guarantors agree that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Guarantee (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York, Borough of Manhattan. Each of the Company and the Guarantors hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Guarantee 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 hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Guarantee or the transactions contemplated hereby.

 

(l)          Acknowledgements.
Each Guarantor hereby acknowledges that:

 

(i)          it
has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents to
which it is a party;

 

(ii)         the
Purchasers have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or
any of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Purchasers, on the
other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(iii)        no
joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Guarantors and the Purchasers.

 

(m)          Additional
Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to become
a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex 1 hereto.

 

(n)          Release
of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with the indefeasible repayment in
full of all amounts owed under the Purchase Agreement, the Debentures and the other Transaction Documents.

 

    	11

    	 

    

 

(o)          Seniority.
The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined in the Purchase
Agreement) of such Guarantor.

 

(p)          WAIVER
OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

*********************

 

(Signature
Pages Follow)

 

    	12

    	 

    

 

IN WITNESS WHEREOF,
each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

 

	 	[SUBSIDIARY
	 	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:

 

    	13

    	 

    

SCHEDULE 1

 

GUARANTORS

 

The following are the names, notice addresses
and jurisdiction of organization of each Guarantor.

 

	 	 	 	COMPANY
	 	JURISDICTION OF	 	OWNED BY
	 	INCORPORATION	 	PERCENTAGE
	 	 	 	 

 

    	14

    	 

    

 

Annex 1 to

SUBSIDIARY GUARANTEE

 

ASSUMPTION AGREEMENT, dated as of ____
__, ______ made by ______________________________, a ______________ corporation (the “Additional Guarantor”),
in favor of the Purchasers pursuant to the Purchase Agreement referred to below. All capitalized terms not defined herein shall
have the meaning ascribed to them in such Purchase Agreement.

 

WITNESSETH:

 

WHEREAS, Baxano Surgical,
Inc., a Delaware corporation (the “Company”) and the Purchasers have entered into a Securities Purchase Agreement,
dated as of September ___, 2014 (as amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”);

 

WHEREAS, in connection
with the Purchase Agreement, the Subsidiaries of the Company (other than the Additional Guarantor) have entered into the Subsidiary
Guarantee, dated as of September ___, 2014 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”)
in favor of the Purchasers;

 

WHEREAS, the Purchase
Agreement requires the Additional Guarantor to become a party to the Guarantee; and

 

WHEREAS, the Additional
Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.          Guarantee.
By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(m) of the Guarantee,
hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein
as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities
of a Guarantor thereunder. The information set forth in Annex 1 hereto is hereby added to the information set forth in Schedule
1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained
in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect
to this Assumption Agreement) as if made on and as of such date.

 

2.          Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.

 

    	15

    	 

    

 

IN WITNESS WHEREOF,
the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

	 	[ADDITIONALGUARANTOR]
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

    	16

    	 

    

 

Exhibit D

 

Securities Questionnaire

 

    	 

    	 

    

 

 

EXHIBIT D-1

 

Accredited
Investor Questionnaire

 

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

		To:	Baxano Surgical, Inc.

 

This Investor Questionnaire
(“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of the
shares of the subordinated convertible debentures, shares of common stock, par value $0.0001 per share (the “common stock”),
that may be issued upon conversion of such debentures, shares of common stock that may be issued as payment of interest under
the debentures, certain warrants and shares of common stock that may be issued upon exercise of such warrants (collectively, the
“Securities”), of Baxano Surgical, Inc., a Delaware corporation (the “Corporation”). The
Securities are being offered and sold by the Corporation without registration under the Securities Act of 1933, as amended (the
“Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(2)
of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Corporation
must determine that a potential investor meets certain suitability requirements before offering or selling Securities to such
investor. The purpose of this Questionnaire is to assure the Corporation that each investor will meet the applicable suitability
requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the
private offering exemptions from registration is based in part on the information herein supplied.

 

This Questionnaire does not constitute
an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by
signing this Questionnaire, you will be authorizing the Corporation to provide a completed copy of this Questionnaire to such parties
as the Corporation deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation
of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers
of the Securities. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire.
Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

 

PART A.           BACKGROUND
INFORMATION

 

Name of Beneficial Owner of the Securities:_____________________________________________

 

Business Address:________________________________________________________________

(Number and
Street)

______________________________________________________________________________

(City)                                      (State)                                                                         (Zip
Code)

 

Telephone Number: (___)__________________________________________________________

 

If a corporation, partnership, limited
liability company, trust or other entity:

Type of entity:___________________________________________________________________

State of formation:______________________
Approximate Date of formation: ____________________

 

Were you formed
for the purpose of investing in the securities being offered?

 

Yes  ̈
              No  ̈

 

    	 

    	 

    

 

If an individual:

 

Residence Address:_______________________________________________________________

(Number and
Street)

______________________________________________________________________________

(City)                                      (State)                                                                         (Zip
Code)

 

Telephone Number: (___) __________________________________________________________

 

Age: __________ Citizenship: ____________
Where registered to vote: _______________

 

Set forth in the space provided below the
state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which
you resided in each state:

 

Are you a director
or executive officer of the Corporation?

 

Yes  ̈
             No  ̈

 

Social Security or Taxpayer Identification
No.  ___________________________________________________         

 

PART B.           ACCREDITED
INVESTOR QUESTIONNAIRE

 

In order for the Corporation
to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you as a Purchaser of Securities of the
Company.

 

	 	__(1)	A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

 

	 	__(2)	A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

 

	 	__(3)	An insurance company as defined in Section 2(13) of the Securities Act;

 

	 	__(4)	An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

 

	 	__(5)	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

 

	 	__(6)	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

    	 

    	 

    

 

	 	__(7)	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

	 	__(8)	A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

 

	 	__(9)	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

 

	 	__(10)	A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Corporation;

  

	 	___(11)	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000;

 

	 	___(12)	A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;
	 	 	 
	 	___(13)	An executive officer or director of the Corporation;

  

	 	___(14)	An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

 

A.           FOR
EXECUTION BY AN INDIVIDUAL: 

 

	 	 	By	 
	Date	 	 	 
	 	 	Print Name:	 

 

    	 

    	 

    

 

B.           FOR
EXECUTION BY AN ENTITY:

 

	 	Entity Name:	 

 

	 	 	By	 
	Date	 	 	 
	 	 	Print Name:	 
	 	 	Title:	 

 

C.           ADDITIONAL
SIGNATURES (if required by partnership, corporation or trust document):

 

	 	Entity Name:	 

 

	 	 	By	 
	Date	 	 	 
	 	 	Print Name:	 
	 	 	Title:	 

 

	 	Entity Name:	 

 

	 	 	By	 
	Date	 	 	 
	 	 	Print Name:	 
	 	 	Title:	 

 

    	 

    	 

    

 

Exhibit
D-2

 

Securities
Questionnaire

 

Pursuant to Section 2.2(b) of the
Agreement, please provide us with the following information:

 

	1.	The exact name that the Securities are to be registered in (this is the name that will appear on the stock certificate(s)).  You may use a nominee name if appropriate:	 
	 	 	 
	2.	The relationship between the Purchaser of the Securities and the Registered Holder listed in response to Item 1 above:	 
	 	 	 
	3.	The mailing address, telephone number and e-mail address of the Registered Holder listed in response to Item 1 above:	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	4.	The Tax Identification Number (or, if an individual, the Social Security Number) of the Registered Holder listed in response to Item 1 above:	 

 

    	 

    	 

    

 

Exhibit F

 

Irrevocable Transfer Agent Instructions

 

    	 

    	 

    

 

 

Form
of Irrevocable Transfer Agent Instructions

 

As of [  ̃ ],
2014

 

American Stock Transfer & Trust Company, LLC

10150 Mallard Creek Road

Suite 307

Charlotte, North Carolina 28262

Attn: Joan K. Greenfield

 

Ladies and Gentlemen:

 

Reference is made to
that certain Securities Purchase Agreement, dated as of [  ̃ ], 2014
(the “Agreement”), by and among Baxano Surgical, Inc., a Delaware corporation (the “Company”),
and the purchasers named on the signature pages thereto (collectively, and including permitted transferees, the “Holders”),
pursuant to which the Company is issuing to the Holders subordinated convertible debentures (the “Debentures”),
which are convertible into shares of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
(such shares, the “Conversion Shares”) and on which the Company may pay interest in shares of Common Stock (the
“Interest Shares”).

 

This letter shall serve
as our irrevocable authorization and direction to you (provided that you are the transfer agent of the Company at such time and
the conditions set forth in this letter are satisfied), subject to any stop transfer instructions that we may issue to you from
time to time, if any:

 

(i)          to
issue certificates or book entries representing shares of Common Stock upon transfer or resale of the Conversion Shares or Interest
Shares; and

 

(ii)         to
issue Conversion Shares upon the conversion of the Debentures to a Holder from time to time upon delivery to you by the Company
of a properly completed and duly executed Conversion Notice, in the form attached hereto as Annex I, which has been
acknowledged by the Company as indicated by the signature of a duly authorized officer of the Company thereon together with indication
of receipt of the exercise price therefor and direction to you to issue the number of Conversion Shares indicated on the Conversion
Notice; and

 

You acknowledge and
agree that so long as you have received (a) written confirmation from the Company’s legal counsel that either (1) a
registration statement covering resales of the Conversion Shares and the Interest Shares has been declared effective by the Securities
and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities
Act”), or (2) the Conversion Shares and the Interest Shares have been sold in conformity with Rule 144 under
the Securities Act (“Rule 144”) or are eligible for sale under Rule 144, without the requirement for the
Company to be in compliance with the current public information required under Rule 144 as to such securities and without volume
or manner-of-sale restrictions and (b) if applicable, a copy of such registration statement, then, unless otherwise required
by law, within three (3) Trading Days of your receipt of a notice of transfer, Conversion Shares, Interest Shares or Conversion
Notice (such Conversion Notice to be delivered by the Company together with its acknowledgment), you shall issue the certificates
representing the Conversion Shares and/or the Interest Shares, as the case may be, registered in the names of such Holders or transferees,
as the case may be, and such certificates shall not bear any legend restricting transfer of the Conversion Shares or the Interest
Shares thereby and should not be subject to any stop-transfer restriction; provided, however, that if such Conversion Shares
and Interest Shares are not registered for resale under the Securities Act or able to be sold under Rule 144 without the requirement
for the Company to be in compliance with the current public information required under Rule 144 as to such securities and without
volume or manner-of-sale restrictions, then the certificates for such Conversion Shares and/or Interest Shares shall bear the following
legend:

 

    	 

    	 

    

  

THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

A form of written confirmation
from the Company’s outside legal counsel that a registration statement covering resales of the Conversion Shares and Interest
Shares has been declared effective by the Commission under the Securities Act is attached hereto as Annex II.

 

Please be advised that
the Holders are relying upon this letter as an inducement to enter into the Agreement and, accordingly, each Holder is a third
party beneficiary to these instructions.

 

Please execute this
letter in the space indicated to acknowledge your agreement to act in accordance with these instructions.

 

	 	Very truly yours,
	 	 
	 	BAXANO SURGICAL, INC.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title: 	 

 

Acknowledged and Agreed:

 

AMERICAN STOCK TRANSFER
& TRUST COMPANY, LLC

 

	By:	 
	Name:	 
	Title: 	 

 

Date: _________________, 2014

 

    	 

    	 

    

 

Annex I

FORM OF CONVERSION NOTICE

 

[To be executed by the Holder to exercise
the right to convert the Debenture into shares of Common Stock]

 

To: Baxano Surgical, Inc.

 

(1)         The
undersigned is the Holder of a Debenture in aggregate principal amount of $              
(the “Debenture”) issued by Baxano Surgical, Inc., a Delaware corporation (the “Company”).
Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Debenture.

 

(2)         In
accordance with and pursuant to the Debenture, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Debenture) of the Debenture indicated below into shares of common stock, par value $0.0001 per share, of the Company, as of the
date specified below.

 

	Date of Conversion	 
	 	 
	Aggregate Principal to be converted	 
	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of Aggregate Principal and such Aggregate Interest to be converted	 
	 	 
	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED	 

 

Please confirm the following information:

 

	Conversion Price	 
	 	 
	Number of shares of Common Stock to be issued	 

 

Please issue the Common Stock into which
the Debenture is being converted in the following name and to the following addressee:

 

Issued to: _________________________________

 

Facsimile Number: __________________________

 

Account Number: ___________________________

(if electronic book entry transfer)

 

Transfer Code Number: ______________________

 

    	 

    	 

    

 

The undersigned hereby executes and delivery
this Conversion Notice as of the date set forth below:

 

	Holder: 	 
	By: 	 
	Its: 	 

(Signature must conform in all
respects to name of Holder as specified on the face of the Warrant)

 

Dated: 

 

ACKNOWLEDGEMENT

 

The Company hereby
acknowledges this Conversion Notice and hereby directs American Stock Transfer & Trust Company, LLC to issue the above indicated
number of shares of Common Stock in accordance with the Irrevocable Transfer Agent Instructions dated [  ̃ ],
2014, from the Company and acknowledged and agreed to by American Stock Transfer & Trust Company, LLC.

 

	 	BAXANO SURGICAL, INC.
	 	 	 
	 	By: 	 
	 	Name:	 
	 	Title: 	 

 

    	 

    	 

    

  

Annex II

 

FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION
STATEMENT

	 	 	 
	
        American Stock Transfer & Trust Company, LLC

        10150 Mallard Creek Road

        Suite 307

        Charlotte, North Carolina 28262

        Attn: Joan K. Greenfield 

	 	 	 
	 	 	Re: Baxano Surgical, Inc.

 

Ladies and Gentlemen:

 

We are counsel to Baxano
Surgical, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with
that certain Securities Purchase Agreement, dated as of [  ̃ ], 2014,
entered into by and among the Company and the purchasers named therein (collectively, the “Purchasers”) pursuant
to which the Company issued to the Purchasers subordinated convertible debentures (the “Debentures”), which
are convertible into shares of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
(such shares, the “Conversion Shares”) and pursuant to which the Company may pay interest in shares of Common
Stock (the “Interest Shares”). Pursuant to that certain Registration Rights Agreement of even date, the Company
agreed to register the resale of the Conversion Shares and Interest Shares (collectively, the “Registrable Securities”),
under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on                     ,
2014, the Company filed a Registration Statement on Form S-3 (File No. 333-                    )
(the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”)
relating to the Registrable Securities which names each of the Purchasers as a selling stockholder thereunder.

 

In connection with
the foregoing, we advise you that a member of the Commission’s staff has advised us by telephone that the Commission has
entered an order declaring the Registration Statement effective under the Securities Act at ____ [a.m.][p.m.] on __________, 2014,
and we have no knowledge, after a review of the Commission’s “Stop Orders” web page, that any stop order suspending
its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the Commission
and the Registrable Securities are available for resale under the Securities Act pursuant to the Registration Statement.

 

This letter shall serve
as our standing notice to you that the Common Stock may be freely transferred by the Purchasers pursuant to the Registration Statement.
You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock
to the Purchasers or the transferees of the Purchasers, as the case may be, as contemplated by the Company’s Irrevocable
Transfer Agent Instructions dated __________, 2014, provided at the time of such reissuance, the Company has not otherwise notified
you that the Registration Statement is unavailable for the resale of the Registrable Securities. This letter shall serve as our
standing instructions with regard to this matter.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	GOODWIN PROCTER LLP
	 	 	 	 	 
	 	 	By:	 	 

 

    	 

    	 

    

  

Exhibit G

 

Secretary’s Certificate

 

    	 

    	 

    

  

BAXANO
SURGICAL, INC.

 

Secretary’s
Certificate

 

The undersigned hereby certifies that he
is the duly elected, qualified and acting Secretary of Baxano Surgical, Inc., a Delaware corporation (the “Company”),
and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection
with the Securities Purchase Agreement, dated as of September [_], 2014, by and among the Company and the investors party thereto
(the “Securities Purchase Agreement”), and further certifies in his official capacity, in the name and on behalf
of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth
in the Securities Purchase Agreement.

 

		1.	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly
adopted by the Board of Directors of the Company at a meeting of the Board of Directors held on ___________, 2014. Such resolutions
have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect.

 

		2.	Attached hereto as Exhibit B is a true, correct and complete copy of the Certificate of
Incorporation of the Company, together with any and all amendments thereto currently in effect, and no action has been taken to
further amend, modify or repeal such Certificate of Incorporation, the same being in full force and effect in the attached form
as of the date hereof.

 

		3.	Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws of the Company
and any and all amendments thereto currently in effect, and no action has been taken to further amend, modify or repeal such Bylaws,
the same being in full force and effect in the attached form as of the date hereof.

 

		4.	Each person listed below has been duly elected or appointed to the position(s) indicated opposite
his name and is duly authorized to sign the Securities Purchase Agreement and each of the Transaction Documents on behalf of the
Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

 

	Name	 	Position	 	Signature
	 	 	 	 	 
	Ken Reali	 	Chief Executive Officer	 	 
	 	 	 	 	 
	Timothy M. Shannon	 	Chief Financial Officer	 	 

 

[Remainder of Page Intentionally Left
Blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the undersigned has
hereunto set his hand as of this ____ day of September, 2014.

 

	 	 
	 	Timothy M. Shannon
	 	Chief Financial Officer, Treasurer and Secretary

 

I, Ken Reali, President and Chief Executive
Officer, hereby certify that Timothy M. Shannon is the duly elected, qualified and acting Secretary of the Company and that the
signature set forth above is his true signature.

 

	 	 
	 	Ken Reali
	 	President and Chief Executive Officer

 

[Signature Page to Secretary’s Certificate]

 

    	 

    	 

    

 

Exhibit H

 

Officer’s Certificate

 

    	 

    	 

    

  

BAXANO
SURGICAL, INC.

 

Officer’s
Certificate

 

The undersigned, the President and Chief
Executive Officer of Baxano Surgical, Inc., a Delaware corporation (the “Company”), pursuant to Section 5.1(i)
of the Securities Purchase Agreement, dated as of September [__], 2014, by and among the Company and the investors signatory thereto
(the “Securities Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms
used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):

 

		1.	The representations and warranties of the Company contained in the Securities Purchase Agreement
are true and correct in all material respects (except for those representations and warranties which are qualified as to materiality,
in which case, such representations and warranties shall be true and correct in all respects) as of the date when made and as of
the date hereof, as though made on and as of such date, except for such representations and warranties that speak as of a specific
date.

 

		2.	The Company has performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to
the date hereof.

 

[Remainder of Page Intentionally Left
Blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate this ___ day of September, 2014.

 

	 	 
	 	Ken Reali
	 	President and Chief Executive Officer

 

[Signature Page to Officer’s Certificate]

 

    	 

    	 

    

 

Exhibit I

 

Russell Hirsch, M.D., Ph.D.

Jeffrey Fischgrund, M.D.

Paul LaViolette

Roderick A. Young

Mark Stautberg

James Shapiro

David Simpson

Ken Reali

Timothy M. Shannon

Stephanie Fitts

Greg Welsh

Stephen D. Ainsworth

Matthew Pickens

 

    	 

    	 

    

 

Exhibit J

 

Form of Lock-Up

 

    	 

    	 

    

 

EXHIBIT __

 

FORM OF LOCK-UP AGREEMENT

 

September __, 2014

 

Each Purchaser referenced below:

 

		Re:	Securities Purchase Agreement, dated as of September __, 2014 (the “Purchase Agreement”),
between Baxano Surgical, Inc., a Delaware corporation (the “Company”) and the purchasers signatory thereto (each,
a “Purchaser” and, collectively, the “Purchasers”)

 

Ladies and Gentlemen:

 

Defined terms
not otherwise defined in this letter agreement (the “Letter Agreement”) shall have the meanings set forth in
the Purchase Agreement. Pursuant to Section 4.23 of the Purchase Agreement and in satisfaction of a condition of the Company’s
obligations under the Purchase Agreement, the undersigned irrevocably agrees with the Company that, from the date hereof until
the 90th day following the Effective Date (such period, the “Restriction Period”), the undersigned
will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person in privity with the undersigned
or any Affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any shares of Common Stock or Common
Stock Equivalents beneficially owned, held or hereafter acquired by the undersigned (the “Securities”). Beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. In order to enforce this covenant, the Company
shall impose irrevocable stop-transfer instructions preventing the Transfer Agent from effecting any actions in violation of this
Letter Agreement.

 

The undersigned
acknowledges that the execution, delivery and performance of this Letter Agreement is a material inducement to each Purchaser to
complete the transactions contemplated by the Purchase Agreement and that each Purchaser (which shall be a third party beneficiary
of this Letter Agreement) and the Company shall be entitled to specific performance of the undersigned’s obligations hereunder.
The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from
the closing of the transactions contemplated by the Purchase Agreement.

 

    	 

    	 

    

 

This Letter Agreement
may not be amended or otherwise modified in any respect without the written consent of each of the Company, each Purchaser and
the undersigned. This Letter Agreement shall be construed and enforced in accordance with the laws of the State of New York without
regard to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court sitting in the Southern District of New York and the courts of the State of New York located in Manhattan,
for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction
of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action
or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices
to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. The undersigned agrees and understands that this Letter Agreement does
not intend to create any relationship between the undersigned and each Purchaser and that each Purchaser is not entitled to cast
any votes on the matters herein contemplated and that no issuance or sale of the Securities is created or intended by virtue of
this Letter Agreement.

 

By its signature below,
the Transfer Agent hereby acknowledges and agrees that, reflecting this Letter Agreement, it has placed an irrevocable stop transfer
instruction on all Securities beneficially owned by the undersigned until the end of the Restriction Period. This Letter Agreement
shall be binding on successors and assigns of the undersigned with respect to the Securities and any such successor or assign shall
enter into a similar agreement for the benefit of the Purchasers.

 

*** SIGNATURE PAGE FOLLOWS***

 

    	2

    	 

    

 

This Letter Agreement
may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.

  

	 	 
	Signature	 
	 	 
	 	 
	Print Name	 
	 	 
	 	 
	Position in Company	 
	 	 
	Address for Notice:	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

Number of shares of Common Stock

 

 

 

Number of shares of Common Stock underlying
subject to warrants, options, debentures or other convertible securities

 

By signing below, the
Company agrees to enforce the restrictions on transfer set forth in this Letter Agreement.

 

	 	 
	 	 
	By: 	 
	Name:
	Title:

 

Acknowledged and agreed to

as of the date set forth above:

 

	[insert name of Transfer Agent]
	 	 
	By:	 
	Name:
	Title:

 

    	3

    	 

    

 

Schedules

 

    	 

    	 

    

 

 

SCHEDULES:

 

3.1(a) Subsidiaries

3.1(g) Capitalization

3.1(j) Material Changes/Compliance

3.1(m) Compliance

3.1(o) Title to Assets

3.1(u) Certain Fees

3.1(x) Registration Rights

3.1(y) Listing and Maintenance Requirements

3.1(cc) Solvency

3.1(uu) Ranking of Debentures

 

    	 

    	 

    

 

Schedule 3.1(a)

 

Subsidiaries

 

TranS1 GmbH

 

TranS1 GmbH has been in
the process of dissolution since 2011. The only remaining asset is an approximate Euro 30,000 cash balance maintained in escrow
subject to the settlement of a claim by the former General Manager of TranS1 GmbH.

 

    	 

    	 

    

 

Schedule 3.1(g)

 

Capitalization

 

Authorized Shares

 

150, 000,000 shares of Common Stock, $0.0001
par value per share

5,000,000 shares of Preferred Stock, $0.0001
par value per share (zero shares issued and outstanding)

 

Capitalization 

 

	Total Outstanding Common Stock as of 9/15/14	 	 	49,725,415	 
	 	 	 	 	 
	Shares underlying convertible debentures and related warrants and interest held by two institutional investors for April, 22, 2014	 	 	22,187,229	 
	Shares reserved for issuance to Lincoln Park Capital Fund, LLC	 	 	9,595,356	 
	Shares underlying warrant held by Hercules Technology Growth Capital, Inc. (“Hercules”)	 	 	1,176,471	 
	Shares underlying outstanding RSUs granted pursuant to Amended and Restated 2007 Stock Incentive Plan	 	 	1,844,671	 
	Shares underlying outstanding options granted pursuant to Amended and Restated 2000 Stock Incentive Plan	 	 	229,608	 
	Shares underlying outstanding options granted pursuant to Amended and Restated 2007 Stock Incentive Plan	 	 	3,686,849	 
	Shares reserved for issuance pursuant to Amended and Restated 2007 Stock Incentive Plan	 	 	2,086,480	 
	Shares reserved for issuance pursuant to Amended and Restated Employee Stock Purchase Plan	 	 	221,402	 
	Total Reserves	 	 	41,010,066	 

 

Shares of Common Stock Issued since
June 30, 2014

 

During the third quarter of 2014, the Company
issued approximately 1.1 million shares of Common Stock to Lincoln Park Capital Fund, LLC (“Lincoln Park”). As of September
16, 2014, the Company had issued approximately 4.3 million shares of Common Stock to Lincoln Park, leaving approximately $4.5 million
for future issuance of stock.

 

Stock Options Issued to Employees

 

The stock options included in the table
above include stock options awarded to employees through August 5, 2014.

 

Rights to Acquire Shares of Common Stock

 

In addition to the shares issuable pursuant
to the Company’s equity compensation plans and the Hercules warrant listed above, Hercules has the right to participate on
the same terms as other participants in certain types of broadly marketed equity financings of the Company in an aggregate amount
of up to $1,000,000 pursuant to the Loan and Security Agreement, dated December 3, 2013, between the Company and Hercules.

 

On August 1, 2014 the Company entered into
an independent sales representative agreement with Innotek Medical Products, Inc. which includes provisions regarding potential
future issuances of common stock.

 

    	 

    	 

    

 

Schedule
3.1(j)

 

Material
Changes 

 

Liquidity

 

The Company has incurred trade payables that
have aged beyond normal terms and are currently being serviced on a limited basis. Cumulative trade payables considered past due
as of 9/17/14 total approximately $2.9 million.

 

Certain vendors have indicated they will not
continue doing business with the Company until their account is current.

 

U.S. Government Settlement Agreement

 

On July 1, 2014, the Company agreed with
the U.S. Government to defer the scheduled payment of $0.7 million and is working with them to establish revised quarterly payments
to conclude over the original term ending July 1, 2015. The revised quarterly payment signed by the Company but not yet signed
by the U.S. Government calls for a $0.7 million payment on October 1, 2014 and payments of $0.9 million during 2015 on January,
2, April 1 and July 1. The Company expects to request deferral of the October 1, 2014 payment to the U.S. Government.

 

U.S. Government Corporate Integrity
Agreement

 

The Company entered into a Settlement Agreement
and Corporate Integrity Agreement (“CIA”) with certain U.S. government entities, which required the Company to hire
an Independent Review Organization (“IRO”) to assist the Company in evaluating its systems and processes related to
healthcare compliance. In a draft report, the IRO noted several non-conformities during the IRO Year 1 Transactional Review in
the overall processes, systems and in testing of specific transactions, and identified one area to contain a "material error"
which is defined as missing or incomplete control documents which has led the IRO to be unable to assess compliance to policies
and procedures.

 

    	 

    	 

    

 

Schedule 3.1(m)

 

Compliance

 

The disclosures set forth on Schedule 3.1(j)
are incorporated into this schedule by reference.

 

    	 

    	 

    

 

Schedule
3.1(o)

 

Title
to Assets

 

The Company has three capital leases for C-Arms
machines and Surgical lights for Labs in Raleigh, NC and San Jose, CA.

 

    	 

    	 

    

 

Schedule 3.1(u)

 

Certain
Fees 

 

The Company engaged Summer Street to act
as placement agent for the transactions contemplated by the Purchase Agreement at a 6% commission.

 

    	 

    	 

    

 

Schedule
3.1(x)

 

Registration
Rights

 

Pursuant to the Warrant Agreement, dated
December 3, 2013, between the Company and Hercules, Hercules holds piggyback registration rights for the shares issuable upon exercise
of its warrant with respect to any resale registration statement filed by the Company on behalf of any person other than the Company,
Lincoln Park and its affiliates prior to the date Hercules may sell all shares underlying its warrant without restriction pursuant
to Rule 144.

 

    	 

    	 

    

  

Schedule
3.1(y)

 

Listing
and Maintenance Requirements

 

NASDAQ Notification Letter

 

On June 3, 2014, the Company received a
notification letter from The NASDAQ OMX Group (“NASDAQ”) indicating that the bid price of the Company’s Common
Stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under
NASDAQ Listing Rule 5450(a)(1). If the Company fails to regain compliance with applicable NASDAQ rules, the Company’s Common
Stock may be subject to delisting by NASDAQ.

 

NASDAQ Compliance

 

The Company is required to maintain minimum
net stockholders’ equity of $10 million. At June 30, 2014, the Company’s reported net equity was $17,651,000. The Company’s
net stockholders’ equity may fall below the $10 million minimum during or before the fourth quarter of 2014.

 

    	 

    	 

    

 

Schedule 3.1(cc)

 

Solvency

 

The Company maintains the following Indebtedness
as of September 19, 2014:

 

		·	$7,500,000 senior secured term loan with Hercules Technology Growth Company

 

		·	$9,993,680 senior subordinated Convertible Debentures

 

		·	$17,871 capital lease obligations for Lab equipment (Stryker Finance)

 

		·	Three outstanding cash collaterized letters of credit with Silicon Valley Bank for $250,000 (SVBSF005937),
$150,000 (SVBSF008366), and $120,000 (SVBSF007136)

 

    	 

    	 

    

 

Schedule 3.1(uu)

 

Ranking of Debentures

 

		1.	Indebtedness incurred pursuant to that certain Loan and Security Agreement, dated as of December
3, 2013, by and between the Company and Hercules Technology Growth Capital, Inc., as amended.

 

		2.	Indebtedness incurred pursuant to that certain Securities Purchase Agreement, dated as of March
11, 2014, among the Company and the other parties thereto.

 

		3.	Debentures (each being pari passu with the other Debentures)

 

		4.	Reimbursement obligations in respect of three (3) letters of credit issued by Silicon Valley Bank.

 

		5.	Capital leases and purchase money indebtedness in respect of equipment.

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