Document:

Exhibit 10.1

 

LOAN AND
SECURITY AGREEMENT

 

THIS LOAN AND SECURITY
AGREEMENT (this “Agreement”) dated as of March 15, 2012 (the “Effective Date”) among
OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 133 North Fairfax Street, Alexandria, Virginia
22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders
listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its capacity as a Lender
and SILICON VALLEY BANK, a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“Bank”
or “SVB”) (each a “Lender” and collectively, the “Lenders”), and BAXANO,
INC., a Delaware corporation with offices located at 655 River Oaks Parkway, San Jose, CA 95143 (“Borrower”),
provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:

 

		1.	ACCOUNTING AND OTHER TERMS

 

1.1           Accounting
terms not defined in this Agreement shall be construed in accordance with GAAP. Calculations and determinations must be made in
accordance with GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13.
All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent
such terms are defined therein. All references to “Dollars” or “$” are United States Dollars, unless otherwise
noted.

 

		2.	LOANS AND TERMS OF PAYMENT

 

2.1           Promise
to Pay. Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced
to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance
with this Agreement.

 

		2.2	Term Loans.

 

(a)          Availability.
(i) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term loans to
Borrower in an aggregate amount of Three Million Dollars ($3,000,000) according to each Lender’s Term A Loan Commitment as
set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term A Loan”,
and collectively as the “Term A Loans”). After repayment, no Term A Loan may be re-borrowed.

 

(i)          Subject
to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Second Draw Period, to
make term loans to Borrower in an aggregate amount up to Two Million Dollars ($2,000,000) according to each Lender’s Term
B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term
B Loan”, and collectively as the “Term B Loans”). After repayment, no Term B Loan may be re-borrowed.

 

(ii)         Subject
to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Third Draw Period, to make
term loans to Borrower in an aggregate amount up to Three Million Dollars ($3,000,000) according to each Lender’s Term C
Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term
C Loan”, and collectively as the “Term C Loans”; each Term A Loan, Term B Loan or Term C Loan is hereinafter
referred to singly as a “Term Loan” and the Term A Loans, the Term B Loans and the Term C Loans are
hereinafter referred to collectively as the “Term Loans”). After repayment, no Term C Loan may be re-borrowed.

 

(b)          Repayment.
Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding
Date of any Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment
Date immediately preceding the Amortization Date. Borrower agrees to pay, on the Funding Date, any initial partial monthly interest
payment otherwise due for the period between the Funding Date of the Term Loan and the first Payment Date. Commencing on the Amortization
Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal
and interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent
manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined
in Section 2.3(a), and (3) a repayment schedule equal to thirty (30) months. All unpaid principal and accrued and unpaid interest
with respect to the Term Loans is due and payable in full on the Maturity Date. The Term Loans may only be prepaid in accordance
with Sections 2.2(c) and 2.2(d).

 

    	 

    	 

    

 

(c)          Mandatory
Prepayments. If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower shall immediately
pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all
outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (ii) the Final Payment,
(iii) the Prepayment Fee, plus (iv) all other Obligations that are due and payable, including Lenders’ Expenses and interest
at the Default Rate with respect to any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the
Maturity Date, if the Final Payment had not previously been paid in full in connection with the prepayment of the Term Loans in
full, Borrower shall pay to Collateral Agent, for payment to each Lender in accordance with its respective Pro Rata Share, the
Final Payment in respect of the Term Loan(s).

 

(d)          Permitted
Prepayment of Term Loans. Borrower shall have the option to prepay all, but not less than all, of the Term Loans advanced by
the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay
the Term Loans at least fifteen (15) days prior to such prepayment, and (ii) pays to the Lenders on the date of such prepayment,
payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding
principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Payment, (C) the
Prepayment Fee, plus (D) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the
Default Rate with respect to any past due amounts.

 

		2.3	Payment of Interest on the Credit Extensions.

 

(a)          Interest
Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a fixed per
annum rate (which rate shall be fixed for the duration of the applicable Term Loan) equal to the Basic Rate, determined by Collateral
Agent on the Funding Date of the applicable Term Loan, in each case, which interest shall be payable monthly in arrears in accordance
with Sections 2.2(b) and 2.3(e). Interest shall accrue on each Term Loan commencing on, and including, the Funding Date of such
Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such
Term Loan is paid in full.

 

(b)          Default
Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest
at a fixed per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “Default
Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights
or remedies of Collateral Agent.

 

(c)          360-Day
Year. Interest shall be computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) months of thirty
(30) days.

 

(d)          Debit
of Accounts. Collateral Agent and each Lender may debit (or ACH) any deposit accounts, maintained by Borrower or any of its
Subsidiaries, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes
the Lenders under the Loan Documents when due. Any such debits (or ACH activity) shall not constitute a set-off.

 

(e)          Payments.
Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to the respective
Lender to which such payments are owed, at such Lender’s office in immediately available funds on the date specified herein.
Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest
received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When a payment
is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable,
shall continue to accrue until paid. All payments to be made by Borrower hereunder or under any other Loan Document, including
payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment
or counterclaim, in lawful money of the United States and in immediately available funds.

 

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2.4           Secured
Promissory Notes. The Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit
D hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement. Borrower
irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of
receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s
Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment. The
outstanding amount of each Term Loan set forth on such Lender’s Secured Promissory Note Record shall be prima facie evidence
of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such
amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under
any Secured Promissory Note or any other Loan Document to make payments of principal of or interest on any Secured Promissory Note
when due. Upon receipt of an affidavit of an officer
of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note,
Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and
of like tenor.

 

		2.5	Fees. Borrower shall pay to Collateral Agent:

 

(a)          Facility
Fee. A fully earned, non-refundable facility fee of Forty Thousand Dollars ($40,000) to be shared between the Lenders pursuant
to their respective Commitment Percentages payable as follows: (i) Twenty Five Thousand Dollars ($25,000) of the facility fee shall
be due and payable on the Effective Date (receipt of which Collateral Agent hereby acknowledges) and (ii) the remaining Fifteen
Thousand Dollars ($15,000) of the facility fee shall be due and payable on the Funding Date of the Term C Loan;

 

(b)          Final
Payment. The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata
Shares;

 

(c)          Prepayment
Fee. The Prepayment Fee, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata
Shares; and

 

(d)          Lenders’
Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation
of this Agreement) incurred through and after the Effective Date, when due.

 

2.6           Withholding.
Payments received by the Lenders from Borrower hereunder will be made free and clear of and without deduction for any and all present
or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental
authority (including any interest, additions to tax or penalties applicable thereto). Specifically, however, if at any time any
Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction
from any such payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that the amount due from
Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that,
after the making of such required withholding or deduction, each Lender receives a net sum equal to the sum which it would have
received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant
Governmental Authority. Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders indicating
that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the
amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which
payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section
2.6 shall survive the termination of this Agreement.

 

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		3.	CONDITIONS OF LOANS

 

3.1          Conditions
Precedent to Initial Credit Extension. Subject to the terms of the Post Closing Letter, each Lender’s obligation to make
a Term A Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received,
in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as
Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:

 

(a)          original
Loan Documents, including, without limitation, the Loan Agreement, Secured Promissory Notes and Warrants, each, duly executed by
Borrower and each Subsidiary, as applicable;

 

(b)          duly
executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any of its Subsidiaries;

 

(c)          duly
executed original Secured Promissory Notes in favor of each Lender according to its Term A Loan Commitment Percentage;

 

(d)          the
Operating Documents and good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or equivalent
agency) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which
Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the
Effective Date;

 

(e)          a
completed Perfection Certificate for Borrower and each of its Subsidiaries;

 

(f)          the
Annual Projections, for the current calendar year;

 

(g)          duly
executed original officer’s certificate for Borrower and each Subsidiary that is a party to the Loan Documents, in a form
acceptable to Collateral Agent and the Lenders;

 

(h)          certified
copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches, as Collateral
Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any
such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will
be terminated or released;

 

(i)          a
landlord’s consent executed in favor of Collateral Agent in respect of all of Borrower’s and each Subsidiaries’
leased locations;

 

(j)          a
bailee waiver executed in favor of Collateral Agent in respect of each third party bailee where Borrower or any Subsidiary maintains
Collateral having a book value in excess of One Hundred Fifty Thousand Dollars ($150,000);

 

(k)          a
subordination agreement, duly executed by each holder of Subordinated Debt;

 

(l)          a
duly executed legal opinion of counsel to Borrower dated as of the Effective Date;

 

(m)          evidence
satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full force and
effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral
Agent, for the ratable benefit of the Lenders;

 

(n)          a
copy of any applicable Registration Rights Agreement or Investors’ Rights Agreement and any amendments thereto; and

 

(o)          payment
of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

 

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3.2          Conditions
Precedent to all Credit Extensions. The obligation of each Lender to make each Credit Extension, including the initial Credit
Extension, is subject to the following conditions precedent:

 

(a)          receipt
by the Lenders of an executed Disbursement Letter in the form of Exhibit B-1 attached hereto; and receipt by SVB of an executed
Loan Payment/Advance Request Form in the form of Exhibit B-2 attached hereto;

 

(b)          the
representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the date of
the Disbursement Letter (and the Loan Payment/Advance Request Form) and on the Funding Date of each Credit Extension; provided,
however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall
have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and
warranty on that date that the representations and warranties in Section 5 hereof are true, accurate and complete in all material
respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date;

 

(c)          in
such Lender’s sole, but reasonable, discretion, there has not been any Material Adverse Change or any material adverse deviation
by Borrower from the Annual Projections of Borrower presented to and accepted by Collateral Agent and each Lender;

 

(d)          to
the extent not delivered at the Effective Date, duly executed original Secured Promissory Notes and Warrants, in number, form and
content acceptable to each Lender, and in favor of each Lender according to its Commitment Percentage, with respect to each Credit
Extension made by such Lender after the Effective Date; and

 

(e)          payment
of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

 

3.3          Conditions
Precedent to the Term B Loan. The obligation of each Lender to make the Term B Loan is subject to the following conditions
precedent:

 

(a)          Borrower
shall have delivered to each Lender a Note and Warrant in respect of such Term B Loan; and

 

(b)          satisfaction
of the requirements of Section 3.5 below.

 

3.4          Conditions
Precedent to the Term C Loan. The obligation of each Lender to make the Term C Loan is subject to the following conditions
precedent:

 

(a)          Borrower
shall have delivered to each Lender a Note and Warrant in respect of such Term B Loan; and

 

(b)          satisfaction
of the requirements of Section 3.5 below.

 

3.5          Covenant
to Deliver. Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to Collateral
Agent under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension
made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent
or any Lender of Borrower’s obligation to deliver such item, and any such Credit Extension in the absence of a required item
shall be made in each Lender’s sole discretion.

 

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3.6           Procedures
for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth
in this Agreement, to obtain a Term Loan, Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail,
facsimile, or telephone by 12:00 noon Eastern time three (3) Business Days prior to the date the Term Loan is to be made. Together
with any such electronic, facsimile or telephonic notification, Borrower shall deliver to the Lenders by electronic mail or facsimile
a completed Disbursement Letter (and the Loan Payment/Advance Request Form, with respect to SVB) executed by a Responsible Officer
or his or her designee. The Lenders may rely on any telephone notice given by a person whom a Lender reasonably believes is a Responsible
Officer or designee. On the Funding Date, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account,
an amount equal to its Term Loan Commitment.

 

		4.	CREATION OF SECURITY INTEREST

 

4.1           Grant
of Security Interest. Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the payment
and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the
ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all
times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted
by the terms of this Agreement to have priority to Collateral Agent’s Lien. If Borrower shall acquire a commercial tort claim
(as defined in the Code), Borrower, shall promptly notify Collateral Agent in a writing signed by Borrower, as the case may be,
of the general details thereof (and further details as may be required by Collateral Agent) and grant to Collateral Agent, for
the ratable benefit of the Lenders, in such writing a security interest therein and in the proceeds thereof, all upon the terms
of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.

 

Borrower acknowledges
that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless of the terms
of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations
hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority perfected security
interest in the Collateral granted herein (subject only to Permitted Liens that may have superior priority to Bank’s Lien
in this Agreement).

 

If this Agreement is
terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity
obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations)
and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral Agent shall, at the sole
cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event
(x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this
Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable
to Bank in its good faith business judgment for Bank Services, if any. In the event such Bank Services consist of outstanding Letters
of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in
Dollars, then one hundred five percent (105%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then one
hundred ten percent (110%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees,
and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all
of the Obligations relating to such Letters of Credit.

 

4.2           Authorization
to File Financing Statements. Borrower hereby authorizes Collateral Agent to file financing statements or take any other action
required to perfect Collateral Agent’s security interests in the Collateral, without notice to Borrower, with all appropriate
jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents, including a notice that
any disposition of the Collateral, except to the extent permitted by the terms of this Agreement, by Borrower, or any other Person,
shall be deemed to violate the rights of Collateral Agent under the Code.

 

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		5.	REPRESENTATIONS AND WARRANTIES

 

Borrower represents
and warrants to Collateral Agent and the Lenders as follows at all times:

 

5.1           Due
Organization, Authorization: Power and Authority. Borrower and each of its Subsidiaries is duly existing and in good standing
as a Registered Organization in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified
and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership
of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material
Adverse Change. In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed
perfection certificate signed by an officer of Borrower or such Subsidiary (each a “Perfection Certificate”
and collectively, the “Perfection Certificates”). Borrower represents and warrants that (a) Borrower and each
of its Subsidiaries’ exact legal name is that which is indicated on its respective Perfection Certificate and on the signature
page of each Loan Document to which it is a party; (b) Borrower and each of its Subsidiaries is an organization of the type and
is organized in the jurisdiction set forth on its respective Perfection Certificate; (c) each Perfection Certificate accurately
sets forth each of Borrower’s and its Subsidiaries’ organizational identification number or accurately states that
Borrower or such Subsidiary has none; (d) each Perfection Certificate accurately sets forth Borrower’s and each of its Subsidiaries’
place of business, or, if more than one, its chief executive office as well as Borrower’s and each of its Subsidiaries’
mailing address (if different than its chief executive office); (e) Borrower and each of its Subsidiaries (and each of its respective
predecessors) have not, in the past five (5) years, changed its jurisdiction of organization, organizational structure or type,
or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificates
pertaining to Borrower and each of its Subsidiaries, is accurate and complete (it being understood and agreed that Borrower and
each of its Subsidiaries may from time to time update certain information in the Perfection Certificates (including the information
set forth in clause (d) above) after the Effective Date to the extent permitted by one or more specific provisions in this Agreement);
such updated Perfection Certificates subject to the review and approval of Collateral Agent. If Borrower or any of its Subsidiaries
is not now a Registered Organization but later becomes one, Borrower shall notify Collateral Agent of such occurrence and provide
Collateral Agent with such Person’s organizational identification number within five (5) Business Days of receiving such
organizational identification number.

 

The execution, delivery
and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly authorized,
and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective
Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable
thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award
of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or assets may be bound or affected,
(iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant
to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower or any of such Subsidiaries,
or their respective properties, is bound. Neither Borrower nor any of its Subsidiaries is in default under any agreement to which
it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material
Adverse Change.

 

		5.2	Collateral.

 

(a)          Borrower
and each its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which
it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower
nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other
than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered to Collateral
Agent in connection herewith with respect of which Borrower or such Subsidiary has given Collateral Agent notice and taken such
actions as are necessary to give Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations
of the Account Debtors.

 

(b)          On
the Effective Date, the Collateral is not in the possession of any third party bailee (such as a warehouse) except as disclosed
in the Perfection Certificate, and, as of the Effective Date, no such third party bailee possesses components of the Collateral
in excess of One Hundred Thousand Dollars ($100,000) except as disclosed in the Perfection Certificate. None of the components
of the Collateral shall be maintained at locations other than as disclosed in the Perfection Certificates on the Effective Date
or as permitted pursuant to Section 6.11.

 

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(c)          All
Inventory is in all material respects of good and marketable quality, free from material defects.

 

(d)          Borrower
and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of
all Liens other than Permitted Liens. Except as noted on the Perfection Certificates, neither Borrower nor any of its Subsidiaries
is a party to, nor is bound by, any material license or other material agreement with respect to which Borrower or such Subsidiary
is the licensee that (i) prohibits or otherwise restricts Borrower or its Subsidiaries from granting a security interest in Borrower’s
or such Subsidiaries’ interest in such material license or material agreement or any other property, or (ii) for which a
default under or termination of could interfere with Collateral Agent’s or any Lender’s right to sell any Collateral.
Borrower shall provide written notice to Collateral Agent and each Lender within ten (10) days of Borrower or any of its Subsidiaries
entering into or becoming bound by any license or agreement with respect to with Borrower or any Subsidiary is the licensee (other
than over-the-counter software that is commercially available to the public). Borrower shall, and shall cause its Subsidiaries
to, take such commercially reasonable steps as Collateral Agent and any Lender requests to obtain the consent of, or waiver by,
any Person whose consent or waiver is necessary for (i) all licenses or agreements with respect to which Borrower or any Subsidiary
is the licensee to be deemed “Collateral” and for Collateral Agent and each Lender to have a security interest in it
that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing
or entered into in the future, and (ii) Collateral Agent and each Lender shall have the ability in the event of a liquidation of
any Collateral to dispose of such Collateral in accordance with Collateral Agent’s and such Lender’s rights and remedies
under this Agreement and the other Loan Documents.

 

5.3           Litigation.
Except as disclosed (i) on the Perfection Certificates or (ii) in accordance with Section 6.9 hereof, there are no actions, suits,
investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower
or any of its Subsidiaries involving more than One Hundred Thousand Dollars ($100,000).

 

5.4           No
Material Deterioration in Financial Condition; Financial Statements. All consolidated financial statements for Borrower and
its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, in all material respects the consolidated
financial condition of Borrower and its Borrower’s Subsidiaries, and the consolidated results of operations of Borrower and
its Subsidiaries. There has not been any material deterioration in the consolidated financial condition of Borrower and its Subsidiaries
since the date of the most recent financial statements submitted to any Lender except as anticipated in the Annual Projections
delivered to Collateral Agent and Lenders on or prior to the date hereof.

 

5.5           Solvency.
Borrower and each of its Subsidiaries is Solvent.

 

5.6           Regulatory
Compliance. Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries
is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal
Reserve Board of Governors). Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair
Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate”
of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined
and used in the Public Utility Holding Company Act of 2005. Neither Borrower nor any of its Subsidiaries has violated any laws,
ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change. Neither Borrower’s
nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material
compliance with applicable laws. Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations
of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue
their respective businesses as currently conducted.

 

    	8

    	 

    

 

None of Borrower, any
of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting
or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism
Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of Borrower,
any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity
in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving
any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law.

 

5.7           Investments.
Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for
Permitted Investments.

 

5.8           Tax
Returns and Payments; Pension Contributions. Borrower and each of its Subsidiaries has timely filed all required tax returns
and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments,
deposits and contributions owed by Borrower and such Subsidiaries, in all jurisdictions in which Borrower or any such Subsidiary
is subject to taxes, including the United States, unless such taxes are being contested in accordance with the following sentence.
Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a)
in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted,
(b) notifies Collateral Agent in writing of the commencement of, and any material development in, the proceedings, and (c) posts
bonds or takes any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien
upon any of the Collateral that is other than a “Permitted Lien”. Neither Borrower nor any of its Subsidiaries is aware
of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result
in additional taxes becoming due and payable by Borrower or its Subsidiaries. Borrower and each of its Subsidiaries have paid all
amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and
neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have not permitted partial or complete
termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected
to result in any liability of Borrower or its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation
or its successors or any other Governmental Authority.

 

5.9           Use
of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business
requirements in accordance with the provisions of this Agreement, and not for personal, family, household or agricultural purposes.

 

5.10         Full
Disclosure. No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate
or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement
was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains
any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates
or statements not misleading (it being recognized that the projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections
and forecasts may differ from the projected or forecasted results). 

 

5.11         Definition
of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s
knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or
awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

 

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		6.	AFFIRMATIVE COVENANTS

 

Borrower shall, and
shall cause each of its Subsidiaries to, do all of the following:

 

6.1          Government
Compliance.

 

(a)          Maintain
its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain
qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change.
Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with
which could reasonably be expected to have a Material Adverse Change.

 

(b)          Obtain
and keep in full force and effect, all of the Governmental Approvals necessary for the performance by Borrower and its Subsidiaries
of their respective businesses and obligations under the Loan Documents and the grant of a security interest to Collateral Agent
for the ratable benefit of the Lenders in all of the Collateral. Borrower shall promptly provide copies to Collateral Agent of
any material Governmental Approvals obtained by Borrower or any of its Subsidiaries.

 

6.2          Financial
Statements, Reports, Certificates.

 

Deliver to each Lender:
(i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated
and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and
its Subsidiaries, for such month certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent; (ii) as
soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (or qualified
only for going concern) on the financial statements from an independent certified public accounting firm acceptable to Collateral
Agent in its reasonable discretion;
(iii) as soon as available after approval thereof by Borrower’s Board of Directors, but no later than ten (10) days after
the last day of each of Borrower’s fiscal years, Borrower’s annual financial projections for the entire current
fiscal year as approved by Borrower’s Board of Directors, which such annual financial projections shall be set forth in a
month-by-month format (such annual financial projections as originally delivered to Collateral Agent and the Lenders are referred
to herein as the “Annual Projections”; provided that, any revisions of the Annual Projections approved by Borrower’s
Board of Directors shall be delivered to Collateral Agent and the Lenders no later than seven (7) days after such approval); (iv) within
five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or
holders of Subordinated Debt; (v) in the event that Borrower becomes subject to the reporting requirements under the Securities
Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission, (vi) prompt notice of (A) any material change in the composition of the Intellectual Property, (B) notice
of the registration of any copyright, including any subsequent ownership right of Borrower or any of its Subsidiaries in or to
any copyright, patent or trademark, and (C) quarterly notice of Borrower’s knowledge of any event that could reasonably
be expected to materially and adversely affect the value of the Intellectual Property; (vii) as soon as available, but no later
than thirty (30) days after the last day of each month, copies of the month-end account statements for each deposit account or
securities account maintained by Borrower or its Subsidiaries, which statements may be provided to Collateral Agent and each Lender
by Borrower or directly from the applicable institution(s), and (viii) other financial information as reasonably requested by Collateral
Agent or any Lender. Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent
any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s
website on the internet at Borrower’s website address.

 

(a)          Concurrently
with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the
last day of each month, deliver to each Lender, a duly completed Compliance Certificate signed by a Responsible Officer.

 

(b)          Keep
proper books of record and account in accordance with GAAP in all material respects, in which full, true and correct entries shall
be made of all dealings and transactions in relation to its business and activities. Borrower shall, and shall cause each of its
Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business hours upon reasonable
prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and
inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral
audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than twice every year unless
(and more frequently if) an Event of Default has occurred and is continuing.

 

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6.3           Inventory;
Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower,
or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary
practices as they exist at the Effective Date. Borrower must promptly notify Collateral Agent and the Lenders of all returns, recoveries,
disputes and claims that involve more than One Hundred Fifty Thousand Dollars ($150,000) individually or in the aggregate in any
calendar year.

 

6.4           Taxes;
Pensions. Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely
pay, and require each of its Subsidiaries to timely file, all foreign, federal, state, and local taxes, assessments, deposits and
contributions owed by Borrower or its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of
Section 5.8 hereof, and shall deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all amounts
necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with the terms of such plans.

 

6.5           Insurance.
Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies
in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders. All
property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and waive
subrogation against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent, as
additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer shall
endeavor to give Collateral Agent at least thirty (30) days notice before canceling, amending, or declining to renew its policy.
At Collateral Agent’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.
Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit
of the Lenders, on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and
is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to One Hundred Fifty Thousand
Dollars ($150,000) with respect to any loss, but not exceeding One Hundred Fifty Thousand Dollars ($150,000), in the aggregate
for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property;
provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral
and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and (b)
after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall,
at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.
If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or
furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make, at Borrower’s expense,
all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies
Collateral Agent or such Lender deems prudent.

 

		6.6	Operating Accounts.

 

(a)          Maintain
all of Borrower’s and its Subsidiaries’, domestic Collateral Accounts with Silicon Valley Bank or its Affiliates in
accounts which are subject to a Control Agreement in favor of Collateral Agent.

 

(b)          Borrower
shall provide Collateral Agent five (5) days’ prior written notice before Borrower or any of its Subsidiaries establishes
any Collateral Account at or with any Person other than Silicon Valley Bank. In addition, for each Collateral Account that Borrower
or any of its Subsidiaries, at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or financial institution
at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument
with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account in accordance with
the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be terminated without
prior written consent of Collateral Agent. The provisions of the previous sentence shall not apply to deposit accounts exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any
of its Subsidiaries’, employees and identified to Collateral Agent by Borrower as such in the Perfection Certificates.

 

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(c)          Neither
Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except Collateral Accounts located in the United States
in accordance with Sections 6.6(a) and (b).

 

6.7          Protection
of Intellectual Property Rights. Borrower and each of its Subsidiaries shall: (a) use commercially reasonable efforts to protect,
defend and maintain the validity and enforceability of its Intellectual Property that is material to Borrower’s business;
(b) promptly advise Collateral Agent in writing of material infringement by a third party of its Intellectual Property; and (c)
not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public
without Collateral Agent’s prior written consent.

 

6.8          Litigation
Cooperation. Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral
Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s officers, employees
and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to
prosecute or defend any third-party suit or proceeding instituted by or against Collateral Agent or any Lender with respect to
any Collateral or relating to Borrower.

 

6.9          Notices
of Litigation and Default. Borrower will give prompt written notice to Collateral Agent and the Lenders of any litigation or
governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably
be expected to result in damages or costs to Borrower or any of its Subsidiaries of One Hundred Thousand Dollars ($100,000) or
more or which could reasonably be expected to have a Material Adverse Change. Without limiting or contradicting any other more
specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of
the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an
Event of Default, Borrower shall give written notice to Collateral Agent and the Lenders of such occurrence, which such notice
shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of
time, or both, would constitute an Event of Default.

 

6.10        Intentionally
Omitted.

 

6.11        Landlord
Waivers; Bailee Waivers. In the event that Borrower or any of its Subsidiaries, after the Effective Date, intends to add any
new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any
portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then Borrower or such Subsidiary will first receive
the written consent of Collateral Agent and, in the event that the Collateral at any such new location is valued in excess of One
Hundred Fifty Thousand Dollars ($150,000) in the aggregate, such bailee or landlord, as applicable, must execute and deliver a
bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the
addition of any new offices or business locations, or any such storage with or delivery to any such bailee, as the case may be.

 

6.12        Creation/Acquisition
of Subsidiaries. In the event Borrower, or any of its Subsidiaries creates or acquires any Subsidiary, Borrower shall provide
prior written notice to Collateral Agent and each Lender of the creation or acquisition of such new Subsidiary and take all such
action as may be reasonably required by Collateral Agent or any Lender to cause each such Subsidiary to become a co-Borrower hereunder
or to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security
interest in and to the assets of such Subsidiary (substantially as described on Exhibit A hereto); and Borrower shall
grant and pledge to Collateral Agent, for the ratable benefit of the Lenders, a perfected security interest in the stock, units
or other evidence of ownership of each such Subsidiary.

 

6.13        Further
Assurances.

 

(a)          Execute
any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral
Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

 

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(b)          Deliver
to Collateral Agent and Lenders, within five (5) days after the same are sent or received, copies of all material correspondence,
reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse
effect on any of the Governmental Approvals material to Borrower’s business or otherwise reasonably be expected to have a
Material Adverse Change.

 

7.           NEGATIVE
COVENANTS

 

Borrower shall not,
and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

 

7.1           Dispositions.
Convey, sell, lease, transfer, assign, dispose of or otherwise make cash payments consisting of (collectively, “Transfer”),
or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) consisting
of cash payments to trade creditors in the ordinary course of business consistent with the Annual Projections; (b) of Inventory
in the ordinary course of business; (c) of worn-out or obsolete Equipment; (d) in connection with Permitted Liens and Permitted
Investments; (e) Permitted Licenses. Without limiting the foregoing, Borrower may not make Transfers in addition to those
specifically enumerated above, unless and only to the extent the same are specifically reflected in the Annual Projections.

 

7.2           Changes
in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in
any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate
or dissolve; or (c) (i) any Key Person shall cease to be actively engaged in the management of Borrower unless a replacement
for such Key Person is approved by Borrower’s Board of Directors and engaged by Borrower within one
hundred twenty (120) days of such change, or (ii) enter into any transaction or series of related transactions in which
the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty nine
percent (49%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions
(other than by the sale of Borrower’s equity securities in a public offering, a private placement of public equity or to
venture capital investors so long as Borrower identifies to Collateral Agent the venture capital investors prior to the closing
of the transaction). Borrower shall not, without at least thirty (30) days’ prior written notice to Collateral Agent: (A) add
any new offices or business locations, including warehouses (unless such new offices or business locations contain less than One
Hundred Fifty Thousand Dollars ($150,000) in assets or property of Borrower or any of its Subsidiaries); (B) change its jurisdiction
of organization, (C) change its organizational structure or type, (D) change its legal name, or (E) change any organizational
number (if any) assigned by its jurisdiction of organization.

 

7.3           Mergers
or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or
acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another
Person. A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a “co-Borrower”
hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower provided Borrower
is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom.

 

7.4           Indebtedness.
Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

 

7.5           Encumbrance.
Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the
sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be
subject to the first priority security interest granted herein (except for Permitted Liens that are permitted by the terms of this
Agreement to have priority over Collateral Agent’s Lien), or enter into any agreement, document, instrument or other arrangement
(except with or in favor of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly
prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting
a security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except
as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

 

7.6           Maintenance
of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

 

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7.7           Distributions;
Investments. (a) Pay any dividends (other than dividends payable solely in capital stock) or make any distribution or payment
in respect of or redeem, retire or purchase any capital stock (other than repurchases pursuant to the terms of employee stock purchase
plans, employee restricted stock agreements, stockholder rights plans, director or consultant stock option plans, or similar plans,
provided such repurchases do not exceed One Hundred Fifty Thousand Dollars ($150,000) in the aggregate per fiscal year) or (b)
directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so.

 

7.8           Transactions
with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower
or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s
business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an
arm’s length transaction with a non-affiliated Person (b) Subordinated Debt or equity investments by Borrower’s investors
in Borrower or its Subsidiaries.

 

7.9           Subordinated
Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating
to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed
to the Lenders.

 

7.10         Compliance.
Become an “investment company” or a company controlled by an “investment company”, under the Investment
Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock
(as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension
for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction,
as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation,
if the violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; withdraw
or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence
of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be
expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other Governmental Authority.

 

7.11         Compliance
with Anti-Terrorism Laws. Collateral Agent hereby
notifies Borrower and each of its
Subsidiaries that pursuant to the requirements of Anti-Terrorism Laws, and Collateral Agent’s policies and practices, Collateral
Agent is required to obtain, verify and record certain information and documentation that identifies Borrower and
each of its Subsidiaries and their principals, which information includes the name and address of Borrower
and each of its Subsidiaries and their principals and such other information that will allow Collateral Agent to identify such
party in accordance with Anti-Terrorism Laws. Neither Borrower nor any of its Subsidiaries shall,
nor shall Borrower or any of its Subsidiaries
permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with
any Person listed on the OFAC Lists. Borrower
and each of its Subsidiaries shall immediately notify Collateral Agent if Borrower or such Subsidiary has
knowledge that Borrower, or any Subsidiary
or Affiliate of Borrower, is listed on
the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over
on charges involving money laundering or predicate crimes to money laundering. Neither Borrower nor any of its Subsidiaries
shall, nor shall Borrower
or any of its Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any business or engage in any transaction
or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods
or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti-Terrorism
Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

 

8.           EVENTS
OF DEFAULT

 

Any one of the following
shall constitute an event of default (an “Event of Default”) under this Agreement:

 

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8.1           Payment
Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay
any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace
period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof). During
the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during
the cure period);

 

8.2           Covenant
Default.

 

(a)          Borrower
or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2
(Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual
Property Rights), 6.9 (Notice of Litigation and Default), 6.11 (Landlord Waivers; Bailee Waivers), 6.12 (Creation/Acquisition of
Subsidiaries) or 6.13 (Further Assurances) or Borrower violates
any covenant in Section 7; or

 

(b)          Borrower,
or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement
contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such
other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days
after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period
or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to
attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event
of Default (but no Credit Extensions shall be made during such cure period). Grace periods provided under this Section shall not
apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above;

 

8.3           Investor
Abandonment. Any Lender determines in its good faith judgment, that (i) Borrower will not be able to satisfy the Obligations
as they become due and payable, and (ii) none of Borrower’s principal investors (defined as each investor that has designated
a member of Borrower’s Board of Directors) intends to fund such amounts as may be necessary to enable Borrower to satisfy
the Obligations as they become due and payable;

 

8.4           Attachment;
Levy; Restraint on Business.

 

(a)          (i)
The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of
any entity under control of Borrower or its Subsidiaries on deposit with any Lender or any Lender’s Affiliate or any bank
or other institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy,
or assessment is filed against Borrower or any of its Subsidiaries assets by any government agency, and the same under subclauses
(i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting
of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; and

 

(b)          (i)
any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into
possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries
from conducting any material part of its business;

 

8.5           Insolvency.
(a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding;
or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed or stayed within forty-five
(45) days (but no Credit Extensions shall be made while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding
is dismissed);

 

8.6           Other
Agreements. There is a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third party
or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness
in an amount in excess of One Hundred Fifty Thousand Dollars ($150,000) or that could reasonably be expected to have a Material
Adverse Change;

 

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8.7           Judgments.
One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least
One Hundred Fifty Thousand Dollars ($150,000) (not covered by independent third-party insurance as to which liability has been
accepted by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied,
unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made prior
to the satisfaction, vacation, or stay of such judgment, order or decree);

 

8.8           Misrepresentations.
Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty,
or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders
or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty,
or other statement is incorrect in any material respect when made;

 

8.9           Subordinated
Debt. A default or breach occurs under any agreement between Borrower or any of its Subsidiaries and any creditor of Borrower
or any of its Subsidiaries that signed a subordination, intercreditor, or other similar agreement with Collateral Agent or the
Lenders, or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches any terms of such agreement;

 

8.10         Governmental
Approvals. Any Governmental Approval shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed
in the ordinary course for a full term and such revocation, rescission, suspension, modification or non-renewal has resulted
in or could reasonably be expected to result in a Material Adverse Change; or

 

8.11         Lien
Priority. Any Lien created hereunder or by any other
Loan Document shall at any time fail to constitute a valid and perfected Lien on any of the Collateral purported to be secured
thereby, subject to no prior or equal Lien, other than Permitted Liens which are permitted to have priority in accordance with
the terms of this Agreement.

 

9.           RIGHTS
AND REMEDIES

 

9.1           Rights
and Remedies.

 

(a)          Upon
the occurrence and during the continuance of an Event of Default, Collateral Agent may, and
at the written direction of any Lender shall, without notice or demand, do any or all of the following: (i) deliver notice
of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Collateral
Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance money
or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral
Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any, of the Lenders to
advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower
and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral Agent or the Lenders).

 

(b)          Without
limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during the continuance
of an Event of Default, Collateral Agent shall have the right,
without notice or demand, to do any or all of the following:

 

(i)          foreclose
upon and/or sell or otherwise liquidate, the Collateral;

 

(ii)         apply
to the Obligations any (a) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, or (b) any
amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower; and/or

 

(iii)        commence
and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.

 

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(c)          Without
limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence and during
the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the
following:

 

(i)          settle
or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers
advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount
of such account;

 

(ii)         make
any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the
Collateral. Borrower shall assemble the Collateral if Collateral Agent requests and make it available in a location as Collateral
Agent reasonably designates. Collateral Agent may enter premises where the Collateral is located, take and maintain possession
of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy any of its premises,
without charge, to exercise any of Collateral Agent’s rights or remedies;

 

(iii)        ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, the Collateral. Collateral Agent
is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s and each of its
Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising
for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section
9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral
Agent, for the benefit of the Lenders;

 

(iv)        place
a “hold” on any account maintained with Collateral Agent or the Lenders and/or deliver a notice of exclusive control,
any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control
of any Collateral;

 

(v)         demand
and receive possession of Borrower’s Books;

 

(vi)        appoint
a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any competent
court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of
Borrower or any of its Subsidiaries;

 

(vii)       subject
to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan Documents
or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms
thereof);

 

(viii)      for
any Letters of Credit, demand that Borrower (i) deposit cash with Bank in an amount equal to (x) if such Letters of Credit are
denominated in Dollars, then one hundred five percent (105%); and (y) if such Letters of Credit are denominated in a Foreign Currency,
then one hundred ten percent (110%), of the Dollar Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn
(plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business
judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any
future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance
all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit; and

 

(ix)         terminate
any FX Contracts. 

 

Notwithstanding any provision of this Section
9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to exercise any and all
remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent
Circumstance. As used in the immediately preceding sentence, “Exigent Circumstance” means any event or circumstance
that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all
or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof,
destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or
reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to
result in a material diminution in value of the Collateral.

 

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9.2           Power
of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable upon the occurrence
and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name on any
checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or
bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts
directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest,
and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge
the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law
permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower’s or any of its Subsidiaries’
name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral
regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been
satisfied in full and Collateral Agent and the Lenders are under no further obligation to make Credit Extensions hereunder. Collateral
Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all of Collateral
Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity
obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to provide Credit
Extensions terminates.

 

9.3           Protective
Payments. If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any
premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this Agreement
or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral
Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral.
Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making
such payment at the time it is obtained or paid or within a reasonable time thereafter. No such payments by Collateral Agent are
deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default.

 

9.4           Application
of Payments and Proceeds. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during
the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments
at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or
any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral
Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations
in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the
proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’
Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the
United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations outstanding;
and fourth, to any other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the Loan Documents.
Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court
of competent jurisdiction may direct. In carrying out the foregoing, (x) amounts received shall be applied in the numerical order
provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive
a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant
thereto for such category. Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest
or obligation “ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share unless expressly
provided otherwise. Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may
be necessary to ensure the ratable repayment of each Lender’s portion of any Term Loan and the ratable distribution of interest,
fees and reimbursements paid or made by Borrower. Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not
be responsible for determining whether the other Lenders also received their scheduled payment on such date; provided, however,
if it is later determined that a Lender received more than its ratable share of scheduled payments made on any date or dates, then
such Lender shall remit to Collateral Agent or other Lenders such sums as may be necessary to ensure the ratable payment of such
scheduled payments, as instructed by Collateral Agent. If any payment or distribution of any kind or character, whether in cash,
properties or securities, shall be received by a Lender in excess of its ratable share, then the portion of such payment or distribution
in excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid over to
the other Lender for application to the payments of amounts due on the other Lenders’ claims. To the extent any payment for
the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to one another
as is necessary to ensure that such return of payment is on a pro rata basis. If any Lender shall obtain possession of any Collateral,
it shall hold such Collateral for itself and as agent and bailee for Collateral Agent and other Lenders for purposes of perfecting
Collateral Agent’s security interest therein.

 

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9.5           Liability
for Collateral. So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping
of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders
shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any
diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower
bears all risk of loss, damage or destruction of the Collateral.

 

9.6           No
Waiver; Remedies Cumulative. Failure by Collateral Agent or any Lender, at any time or times, to require strict performance
by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral
Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be
effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose
for which it is given. The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents
are cumulative. Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law,
or in equity. The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s
or any Lender’s waiver of any Event of Default is not a continuing waiver. Collateral Agent’s or any Lender’s
delay in exercising any remedy is not a waiver, election, or acquiescence.

 

9.7           Demand
Waiver. Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary
is liable.

 

10.         NOTICES

 

All notices, consents,
requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement
or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail
return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c) one (1)
Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered
by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address
indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing address or facsimile number by giving the other
party written notice thereof in accordance with the terms of this Section 10.

 

	If to Borrower:	 	
        BAXANO, INC.

        655 River Oaks Parkway

        San Jose, CA 95143

        Attn: George A. Harter, Jr., CFO

        Fax: (408) 514-2201

 

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	with a copy  (which shall not constitute notice) to:	 	
        Morrison Foerster LLP

        755 Page Mill Road

        Palo Alto, CA 94304

        Attn: Stephen Thau

        Fax: (650) 251-3745

	 	 	 
	If to Collateral Agent:	 	
        OXFORD FINANCE LLC

        133 North Fairfax Street

        Alexandria, Virginia 22314

        Attention: Legal Department

        Fax: (703) 519-5225

	 	 	 
	with a copy to 	 	
        SILICON VALLEY BANK

        2400 Hanover Street

        Palo Alto, California 94304

        Attn: Jason Hughes

        Fax: (650) 856-7879

	 	 	 
	with a copy to:	 	
        DLA Piper LLP (US)

        4365 Executive Drive, Suite 1100

        San Diego, California 92121-2133

        Attn: Troy Zander

        Fax: (858) 638-5086

 

11.         CHOICE
OF LAW, VENUE AND JURY TRIAL WAIVER, AND JUDICIAL REFERENCE

 

California law governs
the Loan Documents without regard to principles of conflicts of law. Borrower, Collateral Agent and each Lender each submit to
the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in
this Agreement shall be deemed to operate to preclude Collateral Agent or any Lender from bringing suit or taking other legal action
in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other
court order in favor of Collateral Agent or any Lender. Borrower expressly submits and consents in advance to such jurisdiction
in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of
personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief
as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued
in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified
mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of
this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

 

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, BORROWER, COLLATERAL AGENT AND EACH LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY
AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED
THIS WAIVER WITH ITS COUNSEL.

 

    	20

    	 

    

 

WITHOUT INTENDING IN ANY WAY TO LIMIT THE
PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury
is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any
time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding
Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section
638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal
courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court.
The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure
§§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including
without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.
All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed.
If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point
pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for
such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under
the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in
the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge
shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as
a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in
the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code
of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating
to the applicability, interpretation, and enforceability of this paragraph.

 

12.         GENERAL
PROVISIONS

 

12.1         Successors
and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may
not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s and each Lender’s
prior written consent (which may be granted or withheld in Collateral Agent’s and each Lender’s discretion, subject
to Section 12.6). The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge,
negotiate, or grant participation in
(any such sale, transfer, assignment,
negotiation, or grant of a participation,
a “Lender Transfer”) all or any part of, or any interest
in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents; provided, however,
that any such Lender Transfer (other than
a transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and benefits under this Agreement and
the other Loan Documents shall require the prior written consent of the Required Lenders (such approved assignee, an “Approved
Lender”). Borrower and Collateral
Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until
Collateral Agent shall have received and accepted an effective assignment agreement in form satisfactory to Collateral Agent executed,
delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such
Eligible Assignee or Approved Lender as Collateral Agent reasonably shall require. Notwithstanding anything to the contrary contained
herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer (i) in
respect of the Warrants or (ii) in connection with (x) assignments by a Lender due to a forced divestiture at the request of any
regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to a Lender’s
own financing or securitization transactions) shall be permitted, without Borrower’s consent, to any Person which is an Affiliate
or Subsidiary of Borrower, a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent.

 

12.2         Indemnification.
Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective directors, officers, employees,
agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an “Indemnified
Person”) harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”)
asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated
by the Loan Documents; and (b) all losses or Lenders’ Expenses incurred, or paid by Indemnified Person in connection with;
related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents between Collateral
Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses
directly caused by such Indemnified Person’s gross negligence or willful misconduct. Borrower
hereby further indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial,
administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and
including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers,
environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other
than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby
which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions
contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified
Person’s gross negligence or willful misconduct.

 

    	21

    	 

    

 

12.3         Time
of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

 

12.4         Severability
of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of
any provision.

 

12.5         Correction
of Loan Documents. Collateral Agent and the Lenders may correct patent errors and fill in any blanks in this Agreement and
the other Loan Documents consistent with the agreement of the parties.

 

12.6         Amendments
in Writing; Integration. (a) No amendment, modification, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom,
shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders
provided that

 

(i)          no
such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan Commitment
or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent;

 

(ii)         no
such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without Collateral
Agent’s written consent or signature;

 

(iii)        no
such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce the
principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default
interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any payment
of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder
(other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders”
or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially
all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any
material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its Guaranty obligations
with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this
Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise
modify this Section 12.6 or the definitions of the terms used in this Section 12.6 insofar as the definitions affect the substance
of this Section 12.6; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights and obligations
under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect
to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions
of Section 9.4 or amend any of the definitions Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for
the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate
the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.10. It
is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification
of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the preceding sentence;

 

(iv)        the
provisions of the foregoing clauses (i), (ii) and (iii) are subject to the provisions of any interlender or agency agreement among
the Lenders and Collateral Agent pursuant to which any Lender may agree to give its consent in connection with any amendment, waiver
or modification of the Loan Documents only in the event of the unanimous agreement of all Lenders.

 

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(b)          Other
than as expressly provided for in Section 12.6(a)(i)-(iii), Collateral Agent may, if requested by the Required Lenders, from
time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

 

(c)          This
Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.
All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter
of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

 

12.7         Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, is an original, and all taken together, constitute one Agreement.

 

12.8         Survival.
All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has
terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which,
by their terms, are to survive the termination of this Agreement) have been satisfied. Without limiting the foregoing, except as
otherwise provided in Section 4.1, the grant of security interest by Borrower in Section 4.1 shall survive until the termination
of all Bank Services Agreements. The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well
as the confidentiality provisions in Section 12.9 below, shall survive until the statute of limitations with respect to such claim
or cause of action shall have run.

 

12.9         Confidentiality.
In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the same degree of care that
it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions
of this Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or in connection with a Lender’s
own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with
respect to such financing or securitization transaction; (b) to prospective transferees (other than those identified in (a) above)
or purchasers of any interest in the Credit Extensions (provided, however, the Lenders and Collateral Agent shall, except upon
the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s
agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, regulation, subpoena,
or other order, provided that Borrower is provided prompt notice in order to be able to seek a protective order or similar remedy,
so long as (i) such notice is not prohibited by such law, regulation, subpoena or order, and (ii) any failure of Collateral Agent
or a Lender to provide such notice shall not be deemed a breach of Collateral Agent’s or such Lender’s obligations
hereunder; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination
or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to
third party service providers of the Lenders and/or Collateral Agent, in each case so long as any such Person receiving Borrower’s
confidential information shall have executed a confidentiality agreement with the Lenders and Collateral Agent with terms no less
restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public
domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral Agent,
or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent through no fault of Lenders and/or
Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral
Agent does not know that the third party is prohibited from disclosing the information. Collateral Agent and the Lenders may use
confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes,
and market analysis, so long as Collateral Agent or the Lenders do not disclose Borrower’s identity or the identity of any
person associated with Borrower unless otherwise expressly permitted by this Agreement. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.9 supersede all prior agreements,
understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.9.

 

    	23

    	 

    

 

12.10         Right
of Set Off. Borrower hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set off as
security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and
against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of
Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral Agent
affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without
demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any liability
or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.
ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES
THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

12.11         Silicon
Valley Bank as Agent. Collateral Agent hereby appoints Silicon Valley Bank (“SVB”) as its agent (and SVB
hereby accepts such appointment) for the purpose of perfecting Collateral Agent’s Liens in assets which, in accordance with
Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control, including without limitation, all
deposit accounts maintained at SVB.

 

12.12         Cooperation
of Borrower. If necessary, Borrower agrees to (i) execute any documents (including new Secured Promissory Notes) reasonably
required to effectuate and acknowledge each assignment of a Term Loan Commitment or Loan to an assignee in accordance with Section
12.1, (ii) make Borrower’s management reasonably available to meet with Collateral Agent and prospective participants and
assignees of Term Loan Commitments or Credit Extensions (which meetings shall be conducted (a) during normal business hours and
with reasonable advance notice and (b) no more often than twice every twelve months, in each case unless an Event of Default has
occurred and is continuing), and (iii) assist Collateral Agent or the Lenders in the preparation of information relating to the
financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment or Term Loan reasonably may
request. Subject to the provisions of Section 12.9, Borrower authorizes each Lender to disclose to any prospective participant
or assignee of a Term Loan Commitment, any and all information in such Lender’s possession concerning Borrower and its financial
affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered
to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering
into this Agreement.

 

13.         DEFINITIONS

 

13.1         Definitions.
As used in this Agreement, the following terms have the following meanings:

 

“Account”
is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without
limitation, all accounts receivable and other sums owing to Borrower.

 

“Account Debtor”
is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

 

“Affiliate”
of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by
or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and,
for any Person that is a limited liability company, that Person’s managers and members.

 

“Agreement”
is defined in the preamble hereof.

 

“Amortization
Date” is, with respect to any Term Loan, April 1, 2013.

 

“Annual Projections”
is defined in Section 6.2(a).

 

“Anti-Terrorism
Laws” are any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September
24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

 

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“Approved
Fund” is any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged
in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course
of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any
entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered
or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an Affiliate
of a Person (other than a natural person) that administers or manages a Lender.

 

“Approved
Lender” is defined in Section 12.1.

 

“Bank Services” 
are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of
its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services
(including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services),
interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s
various agreements related thereto (each, a “Bank Services Agreement”).

 

“Bank”
is defined in the preamble hereof.

 

“Basic Rate”
is, with respect to a Term Loan, the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the
greater of (i) six and sixty eight one hundredths of one percent (6.68%) and (ii) the sum of (a) the three (3) month U.S. LIBOR
rate reported in the Wall Street Journal three (3) Business Days prior to the Funding Date of such Term Loan, plus (b) six
and one quarter percent (6.25%).

 

“Blocked Person”
is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person
owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in
any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism”
as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked
person” on the most current list published by OFAC or other similar list.

 

“Borrower”
is defined in the preamble hereof.

 

“Borrower’s
Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state
tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations
or financial condition, and all computer programs or storage or any equipment containing such information.

 

“Business
Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.

 

“Cash Equivalents”
are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more
than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue provided that the account
in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of Collateral Agent. For the
avoidance of doubt, the direct purchase by Borrower or any of its Subsidiaries of any Auction Rate Securities, or purchasing participations
in, or entering into any type of swap or other derivative transaction, or otherwise holding or engaging in any ownership interest
in any type of Auction Rate Security by Borrower or any of its Subsidiaries shall be conclusively determined by the Lenders as
an ineligible Cash Equivalent, and any such transaction shall expressly violate each other provision of this Agreement governing
Permitted Investments. Notwithstanding the foregoing, Cash Equivalents does not include and Borrower, and each of its Subsidiaries,
are prohibited from purchasing, purchasing participations in, entering into any type of swap or other equivalent derivative transaction,
or otherwise holding or engaging in any ownership interest in any type of debt instrument, including, without limitation, any corporate
or municipal bonds with a long-term nominal maturity for which the interest rate is reset through a dutch auction and more commonly
referred to as an auction rate security.

 

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“Claims”
are defined in Section 12.2.

 

“Code”
is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the
State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and
such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article
or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed
by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall
mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

“Collateral”
is any and all properties, rights and assets of Borrower described on Exhibit A.

 

“Collateral
Account” is any Deposit Account, Securities Account, or Commodity Account.

 

“Collateral
Agent” is, Oxford, not in its individual capacity, but solely in its capacity as agent on behalf of and for the benefit
of the Lenders.

 

“Commitment
Percentage” is set forth in Schedule 1.1, as amended from time to time.

 

“Commodity
Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter
be made.

 

“Communication”
is defined in Section 10.

 

“Compliance
Certificate” is that certain certificate in the form attached hereto as Exhibit C.

 

“Contingent
Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness,
lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed,
co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations
for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity
swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include
endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee
or other support arrangement.

 

“Control Agreement”
is any control agreement entered into among the depository institution at which Borrower or any of its Subsidiaries maintains a
Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains
a Securities Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent pursuant to which Collateral Agent
obtains control (within the meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account,
or Commodity Account.

 

“Credit Extension”
is any Term Loan or any other extension of credit by Collateral Agent or Lenders for Borrower’s benefit.

 

“Default Rate”
is defined in Section 2.3(b).

 

    	26

    	 

    

 

“Deposit Account”
is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

 

“Designated
Deposit Account” is Borrower’s deposit account, account number 3300491440,
maintained with Silicon Valley Bank.

 

“Disbursement
Letter” is that certain form attached hereto as Exhibit B-1.

 

“Dollar Equivalent”
is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated
in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign
Currency.

 

“Dollars,”
“dollars” and “$” each mean lawful money of the United States.

 

“Effective
Date” is defined in the preamble of this Agreement.

 

“Eligible
Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings
and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation
D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating
of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service,
Inc. at the date that it becomes a Lender or (B) has total assets in excess of Five Billion Dollars ($5,000,000,000), and in each
case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition
of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include,
unless an Event of Default has occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or
(ii) a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent. Notwithstanding the foregoing,
(x) in connection with assignments by a Lender due to a forced divestiture at the request of any regulatory agency, the restrictions
set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s
own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean
any Person or party providing such financing or formed to undertake such securitization transaction and any transferee of such
Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization
transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall release such Lender from any
of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall
have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent
executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding
such Eligible Assignee as Collateral Agent reasonably shall require.

 

“Equipment”
is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without
limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

 

“ERISA”
is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.

 

“Event of
Default” is defined in Section 8.

 

“Final Payment”
is a payment (in addition to and not a substitution for the regular monthly payments of principal plus
accrued interest) due on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment
of a Term Loan pursuant to Section 2.2(c) or (d), equal to the original principal amount of such Term Loan multiplied by the Final
Payment Percentage, payable to Lenders in accordance with their respective Pro Rata Shares.

 

    	27

    	 

    

 

“Final Payment
Percentage” is seven percent (7.00%).

 

“Foreign Currency”
means lawful money of a country other than the United States.

 

“Funding Date”
is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.

 

“FX Contract”
is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank
a specific amount of Foreign Currency on a specified date.

 

“GAAP”
is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession
in the United States, which are applicable to the circumstances as of the date of determination.

 

“General Intangibles”
are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term
as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade
secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise
agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds,
security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter
pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and
business interruption insurance), payments of insurance and rights to payment of any kind.

 

“Governmental
Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration,
filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

 

“Governmental
Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory organization.

 

“Guarantor”
is any Person providing a Guaranty in favor of Collateral Agent.

 

“Guaranty”
is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise
supplemented.

 

“Indebtedness”
is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations
for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital
lease obligations, and (d) Contingent Obligations.

 

“Indemnified
Person” is defined in Section 12.2.

 

“Insolvency
Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy
or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.

 

“Insolvent”
means not Solvent.

 

“Intellectual
Property” means all of Borrower’s or any Subsidiary’s right, title and interest in and to the following:

 

    	28

    	 

    

 

(a)          its
Copyrights, Trademarks and Patents;

 

(b)          any
and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating
manuals;

 

(c)          any
and all source code;

 

(d)          any
and all design rights which may be available to Borrower;

 

(e)          any
and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above;
and

 

(f)          all
amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

 

“Inventory”
is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter
be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work
in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody
or possession or in transit and including any returned goods and any documents of title representing any of the above.

 

“Investment”
is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance,
payment or capital contribution to any Person.

 

“Key Person”
is each of Borrower’s (i) Chief Executive Officer, who is Anthony J. Recupero as of the Effective Date and (ii) Chief Financial
Officer, who is George A. Harter, Jr. as of the Effective Date.

 

“Lender”
is any one of the Lenders.

 

“Lenders”
are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section
12.1.

 

“Lenders’
Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses,
as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection
with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan
Documents.

 

“Letter of
Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application,
guarantee, indemnity, or similar agreement.

 

“Lien”
is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily
incurred or arising by operation of law or otherwise against any property.

 

“Loan Documents”
are, collectively, this Agreement, the Warrants, the Perfection Certificates, each Compliance Certificate, each Disbursement Letter,
each Loan Payment/Advance Request Form and any Bank Services Agreement, the Post Closing Letter, any subordination agreements,
any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future agreement entered into
by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement,
all as amended, restated, or otherwise modified.

 

“Loan Payment/Advance
Request Form” is that certain form attached hereto as Exhibit B-2.

 

    	29

    	 

    

 

“Material
Adverse Change” is (a) a material impairment in the perfection or priority of Collateral Agent’s Lien in the Collateral
or in the value of such Collateral; (b) a material adverse change in the business, operations or condition (financial or otherwise)
or prospects of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

 

“Maturity
Date” is, for each Term Loan, the date which is twenty nine (29) months after the Amortization Date with respect to such
Term Loan.

 

“Obligations”
are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment
Fee, the Final Payment, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or
arising from, out of or under, this Agreement or, the other Loan Documents (other than the Warrants), or otherwise, including,
without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters
of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency
Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral
Agent, and the performance of Borrower’s duties under the Loan Documents (other than the Warrants).

 

“OFAC”
is the U.S. Department of Treasury Office of Foreign Assets Control.

 

“OFAC Lists”
are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No.
13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant
to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

 

“Operating
Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent
agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective
Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company,
its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement
(or similar agreement), each of the foregoing with all current amendments or modifications thereto.

 

“Payment Date”
is the first (1st) calendar day of each calendar month, beginning with May 1, 2012.

 

“Perfection
Certificate” and “Perfection Certificates” is defined in Section 5.1.

 

“Permitted
Indebtedness” is:

 

(a)          Borrower’s
Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;

 

(b)          Indebtedness
existing on the Effective Date and disclosed on the Perfection Certificate(s);

 

(c)          Subordinated
Debt;

 

(d)          unsecured
Indebtedness to trade creditors incurred in the ordinary course of business;

 

(e)          Indebtedness
consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries
to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (i) the
aggregate outstanding principal amount of all such Indebtedness does not exceed One Hundred Fifty Thousand Dollars ($150,000) at
any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property
so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition,
repair, improvement or construction is made);

 

    	30

    	 

    

 

 

(f)          Indebtedness
incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business; and

 

(g)          extensions,
refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (f) above, provided
that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms
upon Borrower, or its Subsidiary, as the case may be.

 

“Permitted
Investments” are:

 

(a)          Investments
disclosed on the Perfection Certificate(s) and existing on the Effective Date;

 

(b)          (i)
Investments consisting of Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy, as amended
from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral
Agent;

 

(c)          Investments
consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of Borrower;

 

(d)          Investments
consisting of deposit accounts in which Collateral Agent has a perfected security interest;

 

(e)          Investments
accepted in connection with Transfers permitted by Section 7.1;

 

(f)          Investments
consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of
business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries
pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

 

(g)          Investments
(including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; and

 

(h)          Investments
consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary.

 

“Permitted
Licenses” are non-exclusive and exclusive licenses for the use of the Intellectual Property of Borrower or any of its
Subsidiaries entered into in the ordinary course of business, provided, that, with respect to each such license, (i) no
Event of Default has occurred or is continuing at the time of such license; (ii) the license constitutes an arms-length transaction,
the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the
ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or
otherwise Transfer any Intellectual Property; (iii) in the case of any exclusive license, (x) Borrower delivers ten (10) Business
Days’ prior written notice and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and
delivers to Collateral Agent and the Lenders copies of the final executed licensing documents in connection with the exclusive
license promptly upon consummation thereof, (y) any such license is made in connection with a bona fide corporate collaboration
or partnership, and is approved by Borrower’s (or the applicable Subsidiary’s) board of directors, and (z) any such
license could not result in a legal transfer of title of the licensed property but may be exclusive in respects other than territory
and may be exclusive as to territory only as to discrete geographical areas outside of the United States; and (iv) all upfront
payments, royalties, milestone payments or other proceeds arising from the licensing agreement that are payable to Borrower or
any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement.

 

    	31

    	 

    

  

“Permitted
Liens” are:

 

(a)          Liens
existing on the Effective Date and disclosed on the Perfection Certificates or arising under this Agreement and the other Loan
Documents;

 

(b)          Liens
for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good
faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed
or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

 

(c)          liens
securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that (i) such
liens exist prior to the acquisition of, or attach substantially simultaneous with, or within 20 days after the, acquisition, lease,
repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii) such liens do not extend
to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs,
financed by such Indebtedness;

 

(d)          Liens
of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business
so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Fifty Thousand Dollars
($50,000), and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate
proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

 

(e)          Liens
to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations
incurred in the ordinary course of business (other than Liens imposed by ERISA);

 

(f)          Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but
any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness may not increase;

 

(g)          leases
or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person,
in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal
property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another
Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit
granting Collateral Agent or any Lender a security interest therein;

 

(h)          banker’s
liens, rights of setoff and Liens in favor of financial institutions incurred made in the ordinary course of business arising in
connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of
fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6(b) hereof;

 

(i)          Liens
arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7;
and

 

(j)          Liens
consisting of Permitted Licenses.

 

“Person”
is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

 

“Post Closing
Letter” is that certain Post Closing Letter dated as of the Effective Date by and between Collateral Agent and Borrower.

 

    	32

    	 

    

 

“Prepayment
Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary
prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:

 

(i)          for
a prepayment made on or after the Funding Date of such Term Loan through and including the first anniversary of the Funding Date
of such Term Loan, three percent (3.00%) of the principal amount of such Term Loan prepaid;

 

(ii)         for
a prepayment made after the date which is after the first anniversary of the Funding Date of such Term Loan through and including
the second anniversary of the Funding Date of such Term Loan, two percent (2.00%) of the principal amount of the Term Loans prepaid;
and

 

(iii)        for
a prepayment made after the second anniversary of the Funding Date of such Term Loan and prior to the Maturity Date, one percent
(1.00%) of the principal amount of the Term Loans prepaid.

 

“Pro Rata
Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded
to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate
outstanding principal amount of all Term Loans.

 

“Registered
Organization” is any “registered organization” as defined in the Code with such additions to such term as
may hereafter be made

 

“Required
Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original
Lender”) have not assigned or transferred any of their interests in their respective Term Loans, Lenders holding one
hundred percent (100%) of the aggregate outstanding principal balance of the Term Loans, or (ii) at any time from and after any
Original Lender has assigned or transferred any interest in its Term Loans, Lenders holding, sixty-six percent (66%) or more of
the aggregate outstanding principal balance of the Term Loans, plus, in respect of this clause (ii), (A) each Original Lender
that has not assigned or transferred any portion of its respective Term Loan, (B) each assignee of an Original Lender provided
such assignee was assigned or transferred and continues to hold one hundred percent (100%) of the assigning Original Lender’s
interest in the Term Loans and (C) any Person or party providing financing to an Original Lender or formed to undertake a securitization
transaction with respect to an Original Lender and any transferee of such Person or party upon the occurrence of a default, event
of default or similar occurrence with respect to such financing or securitization transaction (in each case in respect of clauses
(A), (B) and (C) of this clause (ii), whether or not such Lender is included within the Lenders holding sixty-six percent (66%)
of the Terms Loans). For purposes of this definition only, a Lender shall be deemed to include itself, and any Lender that is an
Affiliate or Approved Fund of such Lender.

 

“Requirement
of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible
Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.

 

“Revenue Event”
is the achievement by Borrower after the Effective Date of trailing twelve (12) months’ revenue of at least Eight Million
Dollars ($8,000,000), determined by Collateral Agent, based upon written evidence satisfactory to Collateral Agent, at the end
of any fiscal month of Borrower.

 

“Second Draw
Period” is the period commencing on the date of the occurrence of the Second Equity Event and ending on the earlier of
(i) September 15, 2012 or (ii) the occurrence of an Event of Default; provided, however, that the Second Draw Period shall not
commence if on the date of the occurrence of the Second Equity Event an Event of Default has occurred and is continuing.

 

    	33

    	 

    

 

“Second
Equity Event” is the receipt by Borrower on or after the Effective Date of unrestricted net cash proceeds of not less
than Seven Million Five Hundred Thousand Dollars ($7,500,000) from the issuance and sale by Borrower of its unsecured subordinated
convertible debt and/or equity securities.

 

“Secured Promissory
Note” is defined in Section 2.4.

 

“Secured Promissory
Note Record” is a record maintained by each Lender with respect to the outstanding Obligations owed by Borrower to Lender
and credits made thereto.

 

“Securities
Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter
be made.

 

“Solvent”
is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition
costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably small capital after
the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature.

 

“Subordinated
Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or
its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory
to Collateral Agent and the Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other
creditor), on terms acceptable to Collateral Agent and the Lenders.

 

“Subsidiary”
is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests
(in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or one or more
of Affiliates of such Person.

 

“Term Loan”
is defined in Section 2.2(a)(ii) hereof.

 

“Term A Loan”
is defined in Section 2.2(a)(i) hereof.

 

“Term B Loan”
is defined in Section 2.2(a)(ii) hereof.

 

“Term C Loan”
is defined in Section 2.2(a)(iii) hereof.

 

“Term Loan
Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on
Schedule 1.1. “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

 

“Third Draw
Period” is the period commencing on the date of the occurrence of the Revenue Event and ending on the earlier of (i)
December 31, 2012 or (ii) the occurrence of an Event of Default; provided, however, that the Third Draw Period shall not commence
if on the date of the occurrence of the Revenue Event an Event of Default has occurred and is continuing.

 

“Transfer”
is defined in Section 7.1.

 

“Warrants”
are those certain Warrants to Purchase Stock, substantially in the form of Exhibit E attached hereto, dated as of the Effective
Date, or any date thereafter, issued by Borrower in favor of each Lender or such Lender’s Affiliates.

 

[Balance of Page
Intentionally Left Blank]

 

    	34

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the Effective Date.

 

	BORROWER:	 
	 	 
	BAXANO, INC.	 
	 	 
	By 	/s/ George Harter	 
	Name: 	George Harter	 
	Title: 	CFO	 

 

	COLLATERAL AGENT AND LENDER:	 
	 	 
	OXFORD FINANCE LLC	 
	 	 
	By 	/s/ Mark Davis	 
	Name: 	Mark Davis	 
	Title: 	Vice President – Finance, Secretary & Treasurer	 

 

	LENDER:	 
	 	 
	SILICON VALLEY BANK	 
	 	 
	By 	/s/ Kevin Longo	 
	Name: 	Kevin Longo	 
	Title: 	Relationship Manager	 

 

[Signature
Page to Loan and Security Agreement]

 

    	 

    	 

    

 

SCHEDULE
1.1

 

Lenders and Commitments

 

Term A Loans

 

	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	OXFORD FINANCE LLC	 	$	1,500,000	 	 	 	50	%
	SILICON VALLEY BANK	 	$	1,500,000	 	 	 	50	%
	TOTAL	 	$	3,000,000	 	 	 	100.00	%

 

Term B Loans

 

	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	OXFORD FINANCE LLC	 	$	1,000,000	 	 	 	50	%
	SILICON VALLEY BANK	 	$	1,000,000	 	 	 	50	%
	TOTAL	 	$	2,000,000	 	 	 	100.00	%

 

Term C Loans

 

	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	OXFORD FINANCE LLC	 	$	1,500,000	 	 	 	50	%
	SILICON VALLEY BANK	 	$	1,500,000	 	 	 	50	%
	TOTAL	 	$	3,000,000	 	 	 	100.00	%

 

Aggregate (all Term Loans)

 

	Lender	 	Term Loan Commitment	 	 	Commitment Percentage	 
	OXFORD FINANCE LLC	 	$	4,000,000	 	 	 	50	%
	SILICON VALLEY BANK	 	$	4,000,000	 	 	 	50	%
	TOTAL	 	$	8,000,000	 	 	 	100.00	%

 

    	 

    	 

    

 

EXHIBIT A

 

Description of Collateral

 

The Collateral consists of all of Borrower’s
right, title and interest in and to the following personal property:

 

All goods, Accounts
(including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any
promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates
of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and
all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever
located; and

 

All Borrower’s
Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or
all of the foregoing.

 

Notwithstanding the
foregoing, the Collateral does not include any Intellectual Property; provided, however, the Collateral shall include all Accounts
and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security
interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that
are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include
the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts
and such other property of Borrower that are proceeds of the Intellectual Property.

 

Pursuant to the terms
of a certain negative pledge arrangement with Collateral Agent and the Lenders, Borrower has agreed not to encumber any of its
Intellectual Property.

 

    	 

    	 

    

 

EXHIBIT
B-1

 

Form of Disbursement Letter

 

[See attached]

 

    	 

    	 

    

 

DISBURSEMENT
LETTER

March 15, 2012

 

The undersigned, being the duly elected
and acting of BAXANO, INC., a Delaware corporation with offices located at 655 River Oaks Parkway, San Jose, CA 95143 (“Borrower”),
does hereby certify to OXFORD FINANCE LLC, (“Oxford” and “Lender”), as collateral
agent (the “Collateral Agent”) in connection with that certain Loan and Security Agreement dated as of March
15, 2012, by and among Borrower, Collateral Agent and the Lenders from time to time party thereto (the “Loan Agreement”;
with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that:

 

1.          The
representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are true and
correct in all material respects as of the date hereof.

 

2.          No
event or condition has occurred that would constitute an Event of Default under the Loan Agreement or any other Loan Document.

 

3.          Borrower
is in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement.

 

4.          All
conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof have
been satisfied or waived by Collateral Agent.

 

5.          No
Material Adverse Change has occurred.

 

6.          The
undersigned is a Responsible Officer.

 

[Balance of Page
Intentionally Left Blank]

 

    	 

    	 

    

 

7.          The
proceeds of the Term A Loan shall be disbursed as follows:

 

	Disbursement from Oxford:	 	 	 	 
	Loan Amount	 	$	1,500,000.00	 
	Plus:	 	 	 	 
	—Deposit Received	 	$	25,000.00	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(12,500.00	)
	—Interim Interest	 	$	(4,762.51	)
	—Lender’s Legal Fees	 	$	(43,788.35	)*
	 	 	 	 	 
	Net Proceeds due from Oxford:	 	$	1,463,949.14	 
	 	 	 	 	 
	Disbursement from SVB:	 	 	 	 
	Loan Amount	 	$	1,500,000.00	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(12,500.00	)
	—Interim Interest	 	$	(4,762.51	)
	 	 	 	 	 
	Net Proceeds due from SVB:	 	$	1,482,737.49	 
	 	 	 	 	 
	TOTAL TERM A LOAN NET PROCEEDS FROM LENDERS	 	$	2,946,686.63	 

  

8.          The
Term A Loan shall amortize in accordance with the Amortization Table attached hereto.

 

[Balance of Page
Intentionally Left Blank]

 

 

* Legal fees and costs
are through the Effective Date. Post-closing legal fees and costs, payable after the Effective Date, to be invoiced and paid post-closing.

 

    	 

    	 

    

 

[7.          The
proceeds of the Term B Loan shall be disbursed as follows:

 

	Disbursement from Oxford:	 	 	 	 
	Loan Amount	 	$	1,000,000.00	 
	Plus:	 	 	 	 
	—Deposit Received	 	$	____________	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(_________	)
	—Interim Interest	 	$	(_________	)
	—Lender’s Legal Fees	 	$	(_________	)*
	 	 	 	 	 
	Net Proceeds due from Oxford:	 	$	____________	 
	 	 	 	 	 
	Disbursement from SVB:	 	 	 	 
	Loan Amount	 	$	1,000,000.00	 
	Plus:	 	 	 	 
	—Deposit Received	 	$	____________	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(_________	)
	—Interim Interest	 	$	(_________	)
	 	 	 	 	 
	Net Proceeds due from SVB:	 	$	____________	 
	 	 	 	 	 
	TOTAL TERM B LOAN NET PROCEEDS FROM LENDERS	 	$	____________	 

  

8.          The
Term B Loan shall amortize in accordance with the Amortization Table attached hereto.]

 

[Balance of Page
Intentionally Left Blank]

 

 

* Legal fees and costs
are through the Effective Date. Post-closing legal fees and costs, payable after the Effective Date, to be invoiced and paid post-closing.

 

    	 

    	 

    

 

[7.          The
proceeds of the Term C Loan shall be disbursed as follows:

 

	Disbursement from Oxford:	 	 	 	 
	Loan Amount	 	$	1,500,000.00	 
	Plus:	 	 	 	 
	—Deposit Received	 	$	____________	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(_________	)
	—Interim Interest	 	$	(_________	)
	—Lender’s Legal Fees	 	$	(_________	)*
	 	 	 	 	 
	Net Proceeds due from Oxford:	 	$	____________	 
	 	 	 	 	 
	Disbursement from SVB:	 	 	 	 
	Loan Amount	 	$	1,500,000.00	 
	Plus:	 	 	 	 
	—Deposit Received	 	$	____________	 
	 	 	 	 	 
	Less:	 	 	 	 
	—Facility Fee	 	$	(_________	)
	—Interim Interest	 	$	(_________	)
	 	 	 	 	 
	Net Proceeds due from SVB:	 	$	____________	 
	 	 	 	 	 
	TOTAL TERM C LOAN NET PROCEEDS FROM LENDERS	 	$	____________	 

 

8.          The
Term C Loan shall amortize in accordance with the Amortization Table attached hereto.]

 

[Balance of Page
Intentionally Left Blank]

 

 

* Legal fees and costs
are through the Effective Date. Post-closing legal fees and costs, payable after the Effective Date, to be invoiced and paid post-closing.

 

    	 

    	 

    

 

9.          The
aggregate net proceeds of the Term Loans shall be transferred to the Designated Deposit Account as follows:

 

	Account Name:	BAXANO, INC.
	Bank Name:	Silicon Valley Bank
	Bank Address:	3003 Tasman Drive, Santa Clara, CA 95054
	Account Number:	3300491440
	ABA Number:	121140399

 

[Balance of Page Intentionally Left
Blank]

 

    	 

    	 

    

 

Dated as of the date first set forth above.

 

	BORROWER:	 
	 	 
	BAXANO, INC.	 
	 	 
	By	 	 
	Name:	 	 
	Title:	 	 
	 	 
	COLLATERAL AGENT AND LENDER:	 
	 	 
	OXFORD FINANCE LLC	 
	 	 
	By	 	 
	Name:	 	 
	Title:	 	 

 

[Signature Page to Disbursement Letter]

 

    	 

    	 

    

 

AMORTIZATION
TABLE

(Term [A][B][C] Loan)

 

[See
attached]

 

    	 

    	 

    

  

EXHIBIT
B-2

 

Loan
Payment/Advance Request Form

 

Deadline
for same day processing is Noon Pacific Time*

 

	Fax To:  	Date: _____________________

 

Loan
Payment:

 

	 	 	  BAXANO, INC.
	 	 	 
	From Account #_____________________	 	  To Account #________________________________________
	(Deposit Account
    #)	 	(Loan Account #)
	Principal $__________________________	 	  and/or Interest $______________________________________
	 	 	 
	Authorized Signature: _____________________	 	  Phone Number: _________________________________
	Print Name/Title:  ________________________	 	 

 

	Loan Advance:
	 
	Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

 

	From Account #______________________	 	  To
    Account #_______________________________________
	(Loan
    Account #)	 	(Deposit
    Account #)
	 	 	 
	Amount
    of Advance $_________________	 	

 

	All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

 

	Authorized Signature: ______________________	 	  Phone Number: _________________________________
	Print Name/Title:  _________________________	 	 

 

Outgoing Wire Request:

Complete only if all or a portion of funds from the loan
advance above is to be wired.

Deadline for same day processing is noon, Pacific Time

 

	Beneficiary Name: ________________________	 	  Amount of Wire: $________________________________
	Beneficiary Bank:  ________________________	 	  Account Number:  ________________________________
	City and State: ___________________________	 	 
	 	 	 
	Beneficiary Bank Transit (ABA) #: __________	 	Beneficiary Bank Code (Swift, Sort, Chip, etc.): ____________
	 	 	(For International Wire Only)
	Intermediary Bank: _______________________	 	Transit (ABA) #:  ____________________________________

For
Further Credit to: _____________________________________________________________________________

 

Special Instruction: _______________________________________________________________________________

By signing below, I (we) acknowledge and agree that
my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the
agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

 

	Authorized Signature: _________________	 	  2nd Signature (if required): ____________________
	Print Name/Title: _____________________	 	  Print Name/Title:  ___________________________
	Telephone #:   ________________	 	  Telephone #:___________________

 

    	 

    	 

    

 

EXHIBIT
C

 

Compliance
Certificate

 

	TO:	OXFORD FINANCE LLC, as Collateral Agent and Lender

SILICON VALLEY BANK, as Lender
	 	 
	FROM:	BAXANO, INC.

  

The undersigned authorized officer (“Officer”)
of BAXANO, INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan
Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

 

(i)          Borrower
is in complete compliance for the period ending _______________ with all required covenants except as noted below;

 

(ii)         There
are no Events of Default, except as noted below;

 

(iii)        Except
as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material
respects on this date and for the period described in (i), above; provided, however, that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate
and complete in all material respects as of such date.

 

(iv)        Borrower,
and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s
Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower,
or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

 

(v)         No
Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits
of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

 

Attached are the required documents, if
any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that the attached financial statements
are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to
the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements,
for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.

 

    	 

    	 

    

 

Please indicate compliance status since
the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.

 

	 	Reporting Covenant	 	Requirement	 	 	 	Complies	 
	 		 		 	 	 	 	 	 	 	 
	1)	Financial statements	 	Monthly within 30 days	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2)	Annual (CPA Audited) statements	 	Within 180 days after Fiscal Year End	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3)	Annual Financial Projections/Budget (prepared on a monthly basis)	 	Annually (w/n 10 days of FYE). and when revised	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	4)	A/R & A/P agings	 	If applicable	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	5)	8-K, 10-K and 10-Q Filings	 	If applicable, within 5 days of filing	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	6)	Compliance Certificate	 	Monthly within 30 days	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	7)	IP Report	 	when required	 	 	 	Yes	 	No	N/A	 
	 	 	 	 	 	 	 	 	 	 	 	 
	8)	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period	 	 	 	$________	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	9)	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period	 	 	 	$________	 	 	 	 	 	 

 

	 	Deposit and Securities

Accounts	 	(Please list all accounts; attach separate sheet if additional space needed)	 
	 	Bank	 	Account Number	 	New Account?	 	Acct Control

Agmt in place?	 
	1)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	2)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	3)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	4)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	5)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	6)	 	 	 	 	Yes	No	 	Yes	No	 

 

	 	Other Matters	 	 	 	 
	 	Have there been any changes in management since the last Compliance Certificate?	Yes	No	 	 
	 	Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?	Yes	No	 	 
	 	Have there been any new or pending claims or causes of action against Borrower that involve more than $100,000?  	Yes	No	 	 

 

    	 

    	 

    

 

	 	Exceptions	 	 
	 	 	 	 
	 	Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if additional space needed.)	 	 
	 	 
	 	 
	 	 

 

	 	 	 	 	 	 LENDERS
    USE  ONLY	 	 
	 	BAXANO, INC.	 	DATE	 	 	 	 
	 	 	 	 	 	 	 	 
	 	By:                                     	 	 	 	 Received
    by:                	 	Verified
    by:                
	 		 	 	 	 	 	 
	 	Name:                                 	 	 	 	 Date:                          
    	 	Date:                
	 	Title:
                                      	 	 	 	 	 	 
	 	 	 	 	 	 Compliance
    Status	 	Yes          No

 

    	 

    	 

    

 

EXHIBIT D

 

Form
of Secured Promissory Note

 

[See
attached]

 

    	 

    	 

    

 

SECURED
PROMISSORY NOTE

(Term [A][B][C] Loan)

 

	$                                          	Dated:                                          

 

FOR VALUE RECEIVED,
the undersigned, BAXANO, INC., a Delaware corporation with offices located at 655 River Oaks Parkway, San Jose, CA 95143 (“Borrower”)
HEREBY PROMISES TO PAY to the order of [OXFORD FINANCE LLC][SILICON VALLEY BANK] (“Lender”) the principal amount
of [___________] MILLION DOLLARS ($______________) or such lesser amount as shall equal the outstanding principal balance of the
Term [A][B][C] Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term [A][B][C] Loan,
at the rates and in accordance with the terms of the Loan and Security Agreement dated March 15, 2012 by and among Borrower, Lender,
Oxford Finance LLC, as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented
or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount
and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement.
Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

 

Borrower agrees to pay any initial partial
monthly interest payment from the date the Term [A][B][C] Loan is made to Borrower under this Secured Promissory Note (this “Note”)
to the first Payment Date (“Interim Interest”) on the first Payment Date.

 

Principal, interest and all other amounts
due with respect to the Term [A][B][C] Loan, are payable in lawful money of the United States of America to Lender as set forth
in the Loan Agreement and this Note. The principal amount of this Note and the interest rate applicable thereto, and all payments
made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Note.

 

The Loan Agreement, among other things,
(a) provides for the making of a secured Term [A][B][C] Loan by Lender to Borrower, and (b) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events.

 

This Note may not be prepaid except as
set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

 

This Note and the obligation of Borrower
to repay the unpaid principal amount of the Term [A][B][C] Loan, interest on the Term [A][B][C] Loan and all other amounts due
Lender under the Loan Agreement is secured under the Loan Agreement.

 

Presentment for payment, demand, notice
of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement
of this Note are hereby waived.

 

Borrower shall pay all reasonable fees
and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement
or attempt to enforce any of Borrower’s obligations hereunder not performed when due.

 

This Note shall be governed by, and construed
and interpreted in accordance with, the internal laws of the State of California.

 

The ownership of an interest in this Note
shall be registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything else in this Note to the
contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered
on such record of ownership and the transferee is identified as the owner of an interest in the obligation. Borrower shall be entitled
to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or
entity.

 

[Balance of Page
Intentionally Left Blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

 

	 	 	BORROWER:
	 	 	 
	 	 	BAXANO, INC.
	 	 	 
	 	 	By	 
	 	 	Name:	 
	 	 	Title:	 

 

[Oxford Finance LLC][Silicon Valley Bank]

Term [A][B][C] Loan Note

 

    	 

    	 

    

 

LOAN INTEREST RATE
AND PAYMENTS OF PRINCIPAL

 

	Date	 	
        Principal

        Amount
	 	
        Interest
        Rate
	 	Scheduled

Payment Amount	 	Notation By
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

 

    	 

    	 

    

 

EXHIBIT E

 

Form
of Warrant

 

[See
attached]

 

    	 

    	 

    

 

CORPORATE BORROWING
CERTIFICATE

 

	Borrower:	BAXANO, INC.	Date: March 15, 2012
	Lenders	OXFORD FINANCE LLC, as Collateral Agent and Lender	 
	 	SILICON VALLEY BANK, as Lender	 

 

I hereby certify as follows,
as of the date set forth above:

 

1. I am the Secretary, Assistant Secretary
or other officer of Borrower. My title is as set forth below.

 

2. Borrower’s exact legal name is set forth above. Borrower
is a corporation existing under the laws of the State of Delaware.

 

3. Attached hereto as Exhibit A
and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Articles/Certificate of Incorporation
(including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph
2 above; and (ii) Borrower’s Bylaws. Neither such Articles/Certificate of Incorporation nor such Bylaws have been amended,
annulled, rescinded, revoked or supplemented, and such Articles/Certificate of Incorporation and such Bylaws remain in full force
and effect as of the date hereof.

 

4. The following resolutions were duly
and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous
written consent or other authorized corporate action). Such resolutions are in full force and effect as of the date hereof and
have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender
receives written notice of revocation from Borrower.

 

Resolved,
that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on
behalf of Borrower:

  

	Name	 	Title	 	Signature	 	
        Authorized to 

Add or Remove 

Signatories 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 ̈
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 ̈
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 ̈
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 ̈

 

Resolved
Further, that any one of the persons designated above with a checked box beside his or her name may, from time
to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.

 

Resolved
Further, that such individuals may, on behalf of Borrower:

 

Borrow Money. Borrow money
from the Lenders.

Execute Loan Documents.
Execute any loan documents any Lender requires.

Grant Security. Grant
Collateral Agent a security interest in any of Borrower’s assets.

Negotiate Items. Negotiate
or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive
cash or otherwise use the proceeds.

Issue Warrants. Issue
warrants for Borrower’s capital stock.

 

    	 

    	 

    

  

Further Acts. Designate
other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement
that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions.

 

Resolved
Further, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.

 

5. The persons listed above are Borrower’s
officers or employees with their titles and signatures shown next to their names.

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

*** If the Secretary,
Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one
of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

 

I, the __________________________
of Borrower, hereby certify as to paragraphs 1 through 5 above, as

[print title]

of the date set forth above.

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT A

 

Articles/Certificate of Incorporation
(including amendments)

 

[See attached] 

 

    	 

    	 

    

 

EXHIBIT B

 

Bylaws

 

[See attached]Exhibit 10.2

 

FIRST AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT
to Loan and Security Agreement (this “Amendment”) is entered into as of May 31, 2013, by and among OXFORD
FINANCE LLC, a Delaware limited liability company with an office located at 133 North Fairfax Street, Alexandria, Virginia
22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders
listed on Schedule 1.1 of the Loan Agreement (as defined below) or otherwise party thereto from time to time (each a “Lender”
and collectively, the “Lenders”) including Oxford in its capacity as a Lender and SILICON VALLEY BANK,
a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“Bank” or “SVB”),
and BAXANO SURGICAL, INC. (“New Borrower”) (formerly known as TRANS1 INC.), a Delaware
corporation with offices located at 110 Horizon Drive, Raleigh, NC 27615, as successor by merger to BAXANO, INC., a Delaware
corporation with offices located at 655 River Oaks Parkway, San Jose, CA 95143 (“Original Borrower”).

 

Recitals

 

A.           Lenders
and Original Borrower have entered into that certain Loan and Security Agreement dated as of March 15, 2012 (as the same may from
time to time be amended, modified, supplemented or restated, the “Loan Agreement”).

 

B.           Pursuant
to the Acquisition Documents (as defined below) New Borrower and Original Borrower intend to consummate the Merger (as defined
below)

 

C.           As
of the date hereof, the outstanding balance of the Term Loans is Two Million Eight Hundred Fifteen Thousand Two Hundred Sixty Three
65/100 Dollars ($2,815,263.65).

 

D.           Borrower
and Lenders desire to amend the Loan Agreement to (i) consent to the transactions contemplated by the Acquisition Documents; (ii)
add New Borrower as the “Borrower” under the Loan Agreement and (iii) make certain other revisions as more fully set
forth below.

 

E.           Lenders
have agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject
to the conditions and in reliance upon the representations and warranties set forth below.

 

Agreement

 

Now,
Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.          Definitions.
Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 

2.          Joinder.

 

2.1           New
Borrower. New Borrower hereby is added as the “Borrower” under the Loan Agreement. All references in the Agreement
to “Borrower” shall hereafter mean and include New Borrower; and New Borrower shall hereafter have all rights, duties
and obligations of “Borrower” thereunder.

 

2.2           Joinder
to Loan Agreement. New Borrower hereby joins the Loan Agreement and each of the Loan Documents, and agrees to comply with and
be bound by all of the terms, conditions and covenants of the Loan Agreement and Loan Documents, as if it were originally named
a “Borrower” therein. Without limiting the generality of the preceding sentence, New Borrower agrees that it will be
liable for the payment and performance of all obligations and liabilities of Borrower under the Loan Agreement, including, without
limitation, the Obligations. New Borrower may request Credit Extensions pursuant to the Loan Agreement. New Borrower hereunder
shall be obligated to repay all Credit Extensions made pursuant to the Loan Agreement.

 

    	 

    	 

    

 

2.3           Subrogation
and Similar Rights. New Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable
law and (b) any right to require Collateral Agent or any Lender to: (i) proceed against Original Borrower or any other person;
(ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Collateral Agent and any Lender may each exercise
or not exercise any right or remedy it has against Original Borrower or any security it holds (including the right to foreclose
by judicial or non-judicial sale) without affecting New Borrower’s liability. Notwithstanding any other provision of this
Amendment, the Loan Agreement, the Loan Documents or any related documents, until the Obligations have been indefeasibly paid in
full and at such time as each Lender’s obligation to make Credit Extensions has terminated, New Borrower irrevocably waives
all rights that it may have at law or in equity (including, without limitation, any law subrogating New Borrower to the rights
of Collateral Agent and/or Lenders under this Amendment and the Loan Agreement) to seek contribution, indemnification or any other
form of reimbursement from any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any
payment made by New Borrower with respect to the Obligations in connection with this Amendment, the Loan Agreement or otherwise
and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment
made by New Borrower with respect to the Obligations in connection with this Amendment, the Loan Agreement or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited under this section shall be null and void. If
any payment is made to New Borrower in contravention of this section, New Borrower shall hold such payment in trust for Collateral
Agent, for the ratable benefit of Lenders, and such payment shall be promptly delivered to Collateral Agent, for the ratable benefit
of Lenders, for application to the Obligations, whether matured or unmatured.

 

2.4           Grant
of Security Interest. To secure the prompt payment and performance of all of the Obligations, New Borrower hereby grants to
Collateral Agent, for the ratable benefit of Lenders, a continuing lien upon and security interest in all of New Borrower’s
now existing or hereafter arising rights and interest in the Collateral, whether now owned or existing or hereafter created, acquired,
or arising, and wherever located. New Borrower further covenants and agrees that by its execution hereof it shall provide all such
information, complete all such forms, and take all such actions, and enter into all such agreements, in form and substance reasonably
satisfactory to Collateral Agent and each Lender that are reasonably deemed necessary by Collateral Agent or any Lender in order
to grant a valid, perfected first priority security interest to Collateral Agent, for the ratable benefit of Lenders, in the Collateral,
subject only to Permitted Liens. New Borrower hereby authorizes Collateral Agent to file financing statements, without notice to
New Borrower, with all appropriate jurisdictions in order to perfect or protect Collateral Agent’s and/or any Lender’s
interest or rights hereunder, including a notice that any disposition of the Collateral, by New Borrower or any other Person, shall
be deemed to violate the rights of Collateral Agent and each Lender under the Code.

 

2.5           Representations
and Warranties. New Borrower hereby represents and warrants to Collateral Agent and each Lender that all representations and
warranties in the Loan Documents made on the part of Original Borrower are true and correct on the date hereof with respect to
New Borrower, with the same force and effect as if New Borrower were named as “Borrower” in the Loan Documents.

 

3.          Amendments
to Loan Agreement.

 

3.1           Section
6.3 (Inventory; Returns). Section 6.3 of the Loan Agreement hereby is amended and restated in its entirety to read as follows:

 

“6.3       Inventory;
Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower,
or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary
practices as they exist at the First Amendment Effective Date. Borrower must promptly notify Collateral Agent and the Lenders of
all returns, recoveries, disputes and claims that involve (i) more than One Hundred Fifty Thousand Dollars ($150,000) individually
or in the aggregate in any calendar year with respect to such returns, recoveries, disputes and claims in the U.S., or (ii) more
than Five Hundred Thousand Dollars ($500,000) individually or in the aggregate in any calendar year, with respect to all such returns,
recoveries, disputes and claims.”

 

    	 

    	 

    

 

3.2           Section
6.6 (Operating Accounts). Section 6.6 of the Loan Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)          Except
as permitted by Section 6.6(b), maintain its and its Subsidiaries’ operating and other deposit accounts and securities accounts
with Silicon Valley Bank and its Affiliates, which are subject to Control Agreements in form and substance satisfactory to, and
in favor of, Collateral Agent which accounts shall represent at least eighty percent (80%) of the dollar value of Borrower’s
and such Subsidiaries accounts at all financial institutions.

 

(b)          Borrower
shall provide Collateral Agent five (5) days’ prior written notice before Borrower or any of its Subsidiaries establishes
any Collateral Account at or with any Person other than Silicon Valley Bank. In addition, for each Collateral Account that Borrower
or any of its Subsidiaries at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or financial institution
at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument
with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account in accordance with
the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be terminated by Borrower
without prior written consent of Collateral Agent. The provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s,
or any of its Subsidiaries’, employees and identified to Collateral Agent by Borrower as such in the Perfection Certificates.”

 

3.3           Section
6.10 (Financial Covenant). Section 6.10 of the Loan Agreement hereby is amended and restated to read as follows:

 

“6.10       Equity
Event; Trans1 Germany Dissolution. Borrower (i) shall consummate the New Equity Event and (ii) provide Collateral Agent and
Lenders with evidence, in form and substance reasonably acceptable to Collateral Agent and Lenders that Trans1 Germany has been
dissolved; in each case by no later than December 31, 2013.”

 

3.4           Section
7.5 (Encumbrance). Section 7.5 of the Loan Agreement hereby is amended and restated in its entirety to read as follows:

 

“7.5         Encumbrance.
Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the
sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be
subject to the first priority security interest granted herein (except for Permitted Liens captured by subsections (c) and (h)
of the definition of “Permitted Liens”), or enter into any agreement, document, instrument or other arrangement (except
with or in favor of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits
or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security
interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise
permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.”

 

3.5           Section
7.12 (Trans1 Germany Assets). New Section 7.12 hereby is added to the Loan Agreement to read as follows:

 

“7.12       Trans1
Germany Assets. Permit the aggregate value of assets held by Trans1 Germany to exceed Fifty Thousand Euro (€50,000) at
any time.”

 

    	 

    	 

    

 

3.6           Section
8.3 (Material Adverse Change). Section 8.3 of the Loan Agreement hereby is amended and restated in its entirety to read as
follows:

 

“8.3         Material
Adverse Change. A Material Adverse Change occurs;”

 

3.7           Section
10 (Notices). The following notice addresses hereby are amended and restated in their entirety as follows:

 

	“If to Borrower:	TranS1 Inc.
	 	110 Horizon Drive
	 	Suite 230
	 	Raleigh, NC 27615
	 	Attn: Chief Financial Officer
	 	Telephone: (919) 825-0868
	 	 
	 	 
	with a copy  (which shall not constitute notice) to:	Smith, Anderson, Blount, Dorsett,
	 	Mitchell & Jernigan, L.L.P.
	 	Wells Fargo Capitol Center
	 	150 Fayetteville Street, Suite 2300
	 	Post Office Box 2611
	 	Raleigh, North Carolina 27601
	 	Attn: David L. Hayden
	 	Telephone: (919) 821-6755
	 	Fax: (919) 821-6800”

 

 

3.8           Section
13 (Definitions). The following terms and their definitions hereby are added or amended and restated in their entirety to read
in Section 13.1 of the Loan Agreement as follows:

 

“Acquisition
Agreement” means that certain Agreement and Plan of Merger by and among New Borrower, Original Borrower, RACERX ACQUISITION
CORP., a Delaware corporation and a wholly owned subsidiary of New Borrower, and Sumeet Jain and David Schulte, solely as the Securityholder
Representatives (as defined in, and following appointment pursuant to Section 10.14(a) of, the Acquisition Agreement), dated as
of March 3, 2013, and the schedules and exhibits thereto, if any.

 

“Acquisition
Documents” means the Acquisition Agreement and any other documents, instruments, certificates and/or agreements necessary
or related to, and/or executed in connection with, the Acquisition Agreement; all in form and substance reasonably acceptable to
Collateral Agent and Lenders.

 

“Amortization
Date” is, with respect to any Term Loan, December 1, 2013.

 

“Designated
Deposit Account” is Borrower’s deposit account, account number XXXXXXXXX6888, maintained with Silicon Valley Bank.

 

“First
Amendment Effective Date” means May 31, 2013.

 

“Key
Person” is each of New Borrower’s (i) Chief Executive Officer, who is Ken Reali as of the First Amendment Effective
Date and (ii) Chief Financial Officer, who is Joseph Slattery as of the First Amendment Effective Date.

 

    	 

    	 

    

 

“Loan
Documents” are, collectively, this Agreement, the Perfection Certificates, each Compliance Certificate, each Disbursement
Letter, each Loan Payment/Advance Request Form and any Bank Services Agreement, the Post Closing Letter to First Amendment, any
subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future
agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection
with this Agreement, all as amended, restated, or otherwise modified.

 

“Merger”
means the actions completed by the Acquisition Documents which will include the following effects (i) Original Borrower will merge
with and into RACERX ACQUISITION CORP., a wholly owned subsidiary of New Borrower with Original Borrower as the surviving entity;
(ii) Original Borrower will merge with and into New Borrower with New Borrower as the surviving entity and (iii) New Borrower will
change its name from “TRANS1 INC.” to “BAXANO SURGICAL, INC.”.

 

“New
Equity Event” means Borrower’s receipt of net cash proceeds of at least Ten Million Dollars ($10,000,000) (excluding
any Trans1 Securities Purchase Proceeds) from the sale of its equity securities after the First Amendment Effective Date.

 

“Post
Closing Letter to First Amendment” is that certain Post Closing Letter to First Amendment dated as of the First Amendment
Effective Date by and among Collateral Agent, the Lenders and Borrower.

 

“Prepayment
Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary
prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:

 

(i)          for
a prepayment made on or after the Funding Date of such Term Loan through and including the second anniversary of the First Amendment
Effective Date of such Term Loan, two percent (2.00%) of the principal amount of such Term Loan prepaid;

 

(ii)         for
a prepayment made after the second anniversary of the First Amendment Effective Date and prior to the Maturity Date, one percent
(1.00%) of the principal amount of the Term Loans prepaid.

 

“Required
Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original
Lender”) have not assigned or transferred any of their interests in their Term Loan, Lenders holding one hundred percent
(100%) of the aggregate outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender
has assigned or transferred any interest in its Term Loan, Lenders holding at least sixty six percent (66%) of the aggregate outstanding
principal balance of the Term Loan and, in respect of this clause (ii), (A) each Original Lender that has not assigned or transferred
any portion of its Term Loan, (B) each assignee or transferee of an Original Lender’s interest in the Term Loan, but only
to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any Person providing
financing to any Person described in clauses (A) and (B) above; provided, however, that this clause (C) shall only apply upon the
occurrence of a default, event of default or similar occurrence with respect to such financing.

 

“Trans1
Germany” means Trans1 GmbH, an entity organized under the laws of Germany.

 

“Trans1
Securities Purchase Proceeds” means the net cash proceeds received by Borrower pursuant to that certain Securities Purchase
Agreement dated as of March 3, 2013 by and among New Borrower and the investors party thereto.

 

3.9           Section
13 (Definitions). Subsection (b) of the defined term “Permitted Indebtedness” hereby is amended and restated in
its entirety as follows:

 

    	 

    	 

    

 

“(b)          Indebtedness
existing on the Effective Date or the First Amendment Effective Date and disclosed on the Perfection Certificate(s);”

 

3.10         Section
13 (Definitions). Subsection (e) of the defined term “Permitted Indebtedness” hereby is amended and restated in
its entirety as follows:

 

“(e)
Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or
any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person,
provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed Two Hundred Fifty Thousand
Dollars ($250,000) at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair
market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured
at the time of such acquisition, repair, improvement or construction is made);”

 

3.11         Section
13 (Definitions). Subsection (a) of the defined term “Permitted Investments” hereby is amended and restated in
its entirety as follows:

 

“(a)          Investments
disclosed on the Perfection Certificate(s) and existing on the Effective Date or the First Amendment Effective Date;”

 

3.12         Section
13 (Definitions). Subsection (a) of the defined term “Permitted Liens” hereby is amended and restated in its entirety
as follows:

 

“(a)          Liens
existing on the Effective Date or the First Amendment Effective Date and disclosed on the Perfection Certificates or arising under
this Agreement and the other Loan Documents;”

 

3.13         Exhibit
B-2 attached to the Loan Agreement hereby is replaced by Exhibit B-2 attached hereto.

 

3.14         Exhibit
C attached to the Loan Agreement hereby is replaced by Exhibit C attached hereto.

 

3.15         Exhibit
D attached hereto is hereby added to the existing Exhibit D attached to the Loan Agreement.

 

3.16         Collateral
Agent and Lenders hereby consent to Original Borrower’s entry into and performance under the Acquisition Documents and consummation
of the Merger.

 

3.17         Each
Lender hereby confirms in accordance with Section 1.6(b) of each of the Warrants that such Lender has elected to not exercise such
Warrants pursuant to either Section 1.1 or Section 1.2 thereof.

 

4.          Limitation
of Amendments.

 

4.1           The
amendments set forth in Section 3, above, are effective for the purposes set forth herein and shall be limited precisely
as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition
of any Loan Document, or (b) otherwise prejudice any right or remedy which Lenders may now have or may have in the future under
or in connection with any Loan Document.

 

4.2           This
Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect.

 

    	 

    	 

    

 

5.          Representations
and Warranties. To induce Lenders to enter into this Amendment, Borrower and Guarantor hereby represent and warrant to Lenders
as follows:

 

5.1           Immediately
after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate
and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

 

5.2           Borrower
and Guarantor have the power and authority to execute and deliver this Amendment and to perform their obligations under the Loan
Agreement, as amended by this Amendment;

 

5.3           The
organizational documents of Borrower and Guarantor delivered to Lenders on the date hereof remain true, accurate and complete and
have not been amended, supplemented or restated and are and continue to be in full force and effect;

 

5.4           The
execution and delivery by Borrower and Guarantor of this Amendment and the performance by Borrower and Guarantor of their obligations
under the Loan Agreement, as amended by this Amendment, have been duly authorized;

 

5.5           The
execution and delivery by Borrower and Guarantor of this Amendment and the performance by Borrower and Guarantor of their obligations
under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or
affecting Borrower or Guarantor, (b) any contractual restriction with a Person binding on Borrower or Guarantor, (c) any order,
judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower
or Guarantor, or (d) the organizational documents of Borrower or Guarantor;

 

5.6           The
execution and delivery by Borrower and Guarantor of this Amendment and the performance by Borrower and Guarantor of their obligations
under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower or Guarantor, except as already has been obtained or made; and

 

5.7           This
Amendment has been duly executed and delivered by Borrower and Guarantor and is the binding obligation of Borrower and Guarantor,
enforceable against Borrower and Guarantor in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating
to or affecting creditors’ rights.

 

6.          Counterparts.
This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute
one and the same instrument.

 

7.          Effectiveness.
This Amendment shall be deemed effective as of the effective time of the merger described in clause (i) of the definition of “Merger”
upon Collateral Agent’s receipt, in form and substance satisfactory to Collateral Agent and Lenders, of the following, duly
executed by all parties thereto, as applicable:

 

(a)          this
Amendment;

 

(b)          updated
Corporate Borrowing Certificate from New Borrower;

 

(c)          Amended
and Restated Secured Promissory Notes;

 

(d)          a
bailee waiver in respect of each third party bailee of New Borrower where Borrower or any Subsidiary maintains Collateral having
a book value in excess of One Hundred Fifty Thousand Dollars ($150,000);

 

    	 

    	 

    

 

(e)          a
landlord’s consent in respect of each of New Borrower’s leased locations;

 

(f)          a
Disbursement Letter;

 

(g)          Control
Agreements with respect to any Collateral Accounts maintained by New Borrower or any of its Subsidiaries;

 

(h)          a
completed Perfection Certificate for New Borrower;

 

(i)          evidence
that the insurance policies required by Section 6.5 of the Loan Agreement are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit
of the Lenders;

 

(j)          fully
executed copies of the Acquisition Documents, together with evidence reasonably satisfactory to Collateral Agent and the Lenders
that the transactions contemplated by the Acquisition Documents have been consummated;

 

(k)          evidence
of Borrower’s receipt of TranS1 Securities Purchase Proceeds in an amount equal to at least Seventeen Million Dollars ($17,000,000);

 

(l)          payment
of a fee in lieu of warrant in an amount equal to One Hundred Fifty Thousand Dollars ($150,000), receipt of which Collateral Agent
and the Lenders hereby acknowledge; and

 

(m)          Borrower’s
payment of all Lenders’ Expenses due and payable as of the First Amendment Effective Date, which may be debited from any
of Borrower’s accounts.

 

[Balance of Page Intentionally Left
Blank]

 

    	 

    	 

    

 

In
Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first
written above.

 

	BORROWER:	 	 
	 	 	 
	BAXANO SURGICAL, INC.	 	 
	 	 	 
	By:	/s/ Joseph P. Slattery	 	 
	Name:	Joseph P. Slattery	 	 
	Title: 	EVP, CFO	 	 

 

	COLLATERAL AGENT:	 	 
	 	 	 
	OXFORD FINANCE LLC
	 	 	 
	By:	/s/ Mark Davis	 	 
	Name:	Mark Davis	 	 
	Title:	Vice President – Finance, Secretary & Treasurer	 	 

 

	LENDER:	 	 
	 	 	 
	OXFORD FINANCE FUNDING I, LLC
	By: Oxford Finance LLC, as servicer	 	 
	 	 	 
	By:	/s/ Mark Davis	 	 
	Name:	Mark Davis	 	 
	Title:	Vice President – Finance, Secretary & Treasurer	 	 

 

	LENDER:	 	 
	 	 	 
	SILICON VALLEY BANK
	 	 	 
	By:	/s/ Kevin Longo	 	 
	Name:	 Kevin Longo	 	 
	Title:	 Vice President	 	 

 

[Signature Page to First Amendment
to Loan and Security Agreement]

 

    	 

    	 

    

 

EXHIBIT
B-2

 

Loan
Payment/Advance Request Form

 

Deadline
for same day processing is Noon Pacific Time*

 

	Fax To: 	Date: _____________________

 

	Loan Payment:	 	 	 
	 	 	BAXANO SURGICAL, INC.	 
	 	 	 	 
	From Account #	 	 	To Account #	 	 
	 	(Deposit Account #)	 	 	(Loan Account #)	 
	Principal $	 	 	and/or Interest $	 	 
	 	 	 	 	 	 
	Authorized Signature:	 	 	Phone Number:	 	 
	Print Name/Title:	 	 	 	 	 
	 	 	 	 	 	 

 

	Loan Advance:	 	 	 
	 	 	 	 
	Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.	 
	 	 	 	 
	From Account #	 	 	To Account #	 	 
	 	(Loan Account #)	 	 	(Deposit Account #)	 
	Amount of Advance $	 	 	 	 
	 	 	 	 	 

	All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:
	 

	Authorized Signature:	 	 	Phone Number:	 

	Print Name/Title:	 	 	 	 
	 	 	 	 	 

  

	Outgoing Wire Request:
	Complete only if all or a portion of funds from the loan advance above is to be wired.
	Deadline for same day processing is noon, Pacific Time 
	 

	Beneficiary Name: 	 	 	Amount of Wire: 	$ 	 
	Beneficiary Bank: 	 	 	Account Number:	 
	City and State:	 	 	 	 
	 	 	 	 	 
	Beneficiary Bank Transit (ABA) #:	 	 	Beneficiary Bank Code (Swift, Sort, Chip, etc.):	 
	 	 	 	 (For International Wire Only)   		 
	 	 	 	 	 	 

	Intermediary Bank:	 	 	Transit (ABA) #:	 
	For Further Credit to:	 	 	 	 
	 	 	 	 	 
	Special Instruction:	 	 	 	 

	By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).
	 

	Authorized Signature: 	 	 	2nd Signature (if required):	 
	Print Name/Title: 	 	 	Print Name/Title: 	 
	Telephone #:	 	 	Telephone #:	 	 
	 	 	 	 	 	 

  

    	 

    	 

    

 

EXHIBIT
C

 

Compliance
Certificate

 

	TO:	
        OXFORD FINANCE LLC, as Collateral Agent and Lender

        SILICON VALLEY BANK, as Lender

	 	 
	FROM:	BAXANO SURGICAL, INC.

 

 

The undersigned authorized officer (“Officer”)
of BAXANO SURGICAL, INC. (“Borrower”), hereby certifies on behalf of Borrower and not in his or her individual
capacity, that in accordance with the terms and conditions of the Loan and Security Agreement by and among Borrower, Collateral
Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not
otherwise defined herein shall have the meanings given them in the Loan Agreement),

 

(i)          Borrower
is in complete compliance for the period ending _______________ with all required covenants except as noted below;

 

(ii)         There
are no Events of Default, except as noted below;

 

(iii)        Except
as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material
respects on this date and for the period described in (i), above; provided, however, that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate
and complete in all material respects as of such date.

 

(iv)        Borrower,
and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s
Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower,
or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

 

(v)         No
Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits
of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

 

Attached are the required documents, if any, supporting our
certification(s). The Officer, on behalf of Borrower and not in his or her individual capacity, further certifies that the attached
financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied
from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial
statements, for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.

 

    	 

    	 

    

 

Please indicate compliance status since the last Compliance
Certificate by circling Yes, No, or N/A under “Complies” column.

 

	 	 	Reporting Covenant	 	Requirement	 	 	 	 	Complies
	1)	 	Financial statements	 	Monthly within 30 days	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	2)	 	Annual (CPA Audited) statements	 	Within 180 days after Fiscal Year End	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	3)	 	Annual Financial Projections/Budget (prepared on a monthly basis)	 	Annually (w/n 10 days of FYE). and when revised	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	4)	 	A/R & A/P agings	 	If applicable	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	5)	 	8-K, 10-K and 10-Q Filings	 	If applicable, within 5 days of filing	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	6)	 	Compliance Certificate	 	Monthly within 30 days	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	7)	 	IP Report	 	when required	 	 	 	 	 	 	Yes	 	 	 	No	 	 	N/A
	8)	 	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period	 	 	 	$	 	 	 	 	 	 	 	 	 	 	 	 
	9)	 	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period	 	 	 	$	 	 	 	 	 	 	 	 	 	 	 	 

  

	 	Deposit and Securities Accounts	 	(Please list all accounts; attach separate sheet if additional space needed)
	 	 	 	 
	 	Bank	 	Account Number	 	New Account?	 	Acct Control

Agmt in place?
	1)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	2)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	3)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	4)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	5)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	6)	 	 	 	 	Yes	No	 	Yes	No	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Other Matters	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	Have there been any changes in management since the last Compliance Certificate?	 	 	Yes	 	No	 	 
	 	Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?	Yes	 	No	 	 
	 	
        Have there been any new or pending claims or causes
of action against Borrower that involve more than $100,000?
	Yes	 	No	 	 

 

    	 

    	 

    

 

	 	Exceptions	 	 
	 	 

                                                                  Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if additional space needed.)
	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	 	 	 	 	 	 	LENDERS USE ONLY	 	 
	 	BAXANO SURGICAL, INC.	 	DATE	 	 	 	 	 
	 	By:	 	 	 	 	Received by:	 	   Verified by:	 
	 	Name:	 	 	 	 	 	 	 	 
	 	Title:	 	 	 	 	Date:	 	   Date:	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Compliance Status	   Yes	No

 

    	 

    	 

    

 

EXHIBIT D (cont’d)

 

Form of Amended and Restated Note 

 

[See attached]

 

    	 

    	 

    

 

CORPORATE BORROWING CERTIFICATE

 

	Borrower:	BAXANO SURGICAL, INC.	Date: May 31, 2013
	Lenders	OXFORD FINANCE LLC, as Collateral Agent and Lender	 
	 	SILICON VALLEY BANK, as Lender	 
	 	 	 
	 	 	 	 

 

I hereby certify, on behalf of Borrower and
not in my individual capacity, as follows, as of the date set forth above:

 

1. I am the Secretary, Assistant Secretary
or other officer of Borrower. My title is as set forth below.

 

2. Borrower’s exact legal name is
set forth above. Borrower is a corporation existing under the laws of the State of Delaware.

 

3. Attached hereto as Exhibit A
and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Articles/Certificate of Incorporation
(including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph
2 above; and (ii) Borrower’s Bylaws. Neither such Articles/Certificate of Incorporation nor such Bylaws have been amended,
annulled, rescinded, revoked or supplemented, and such Articles/Certificate of Incorporation and such Bylaws remain in full force
and effect as of the date hereof.

 

4. The resolutions attached hereto as Exhibit
C were duly and validly adopted by the Board of Directors of TranS1 Inc. (n/k/a Baxano Surgical, Inc.) at a duly held meeting
of such directors (or pursuant to a unanimous written consent or other authorized corporate action). Such resolutions are in full
force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the
Lenders may rely on them until each Lender receives written notice of revocation from Borrower.

 

[Balance
of Page Intentionally Left Blank]

 

    	 

    	 

    

 

	Name	 	Title	 	Signature	 	Authorized to

        Add or Remove

         Signatories

	 	 	 	 	 	 	 
	 	 	 	 	 	 	
        □

        

	 	 	 	 	 	 	 
	 	 	 	 	 	 	
        □ 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	
        □

        

	 	 	 	 	 	 	 
	 	 	 	 	 	 	
        □ 

  

 5. The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

 

	By: 	 	 
	Name: 	 	 
	Title: 	 	 

 

*** If the Secretary,
Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one
of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

 

	I, the __________________________ of Borrower, hereby certify as to paragraphs 1 through 5 above, on 
	 	[print title]

behalf of Borrower as not in my individual
capacity as of the date set forth above.

 

	BAXANO SURGICAL, INC.

	 
	 	 	 
	By: 	 	 
	Name: 	 	 
	Title: 	 	 

    	 

    	 

    

 

EXHIBIT A

 

Articles/Certificate of Incorporation
(including amendments)

 

[See attached]

    	 

    	 

    

 

EXHIBIT B

 

Bylaws

 

[See attached]

 

    	 

    	 

    

 

EXHIBIT C

 

Resolutions

 

ASSUMPTION OF
BAXANO CREDIT FACILITY

 

WHEREAS, in connection with the Merger and
the Rollup Merger (the “Mergers”), the Board has previously determined that it is necessary and advisable for the Company
to assume and become the borrower under Baxano’s existing secured credit facility (the “Credit Facility”)
provided by Oxford Finance LLC and Silicon Valley Bank (the “Lenders”);

 

WHEREAS, the Credit Facility consists of
a $3,000,000 term loan accruing interest at a fixed rate of 6.72%, secured by a first priority security interest in substantially
all of Baxano’s personal property other than intellectual property;

 

WHEREAS, contemporaneously with the closing
of the Mergers, the Credit Facility would be amended to, among other things, (i) provide for amortization of principal (in the
form of level monthly payments of principal and interest) commencing December 2013, (ii) extend its maturity to May 2016 and (iii)
eliminate the associated Baxano warrants;

 

WHEREAS, to effect the Company’s assumption
of the Credit Facility:

 

		(i)	contemporaneously with the closing of the Mergers, the
Company would execute a First Amendment to the Loan and Security Agreement (the “First Amendment to Loan Agreement”),
dated as of March 15, 2012, among the Company and the Lenders (such amendment, together with such Loan and Security Agreement
as amended, collectively, the “Amended Loan Agreement”);

 

		(ii)	pursuant to the Amended Loan Agreement, the Company (x)
would become the borrower under the Credit Facility, (y) would secure its and its subsidiaries’ obligations under the Credit
Facility (and their obligations in respect of any account services or derivative transactions provided by the Lenders) by granting
the Lenders a lien on substantially all of the Company’s and its subsidiaries’ personal property, other than intellectual
property, and (z) would maintain a substantial majority of its deposit and securities accounts with Silicon Valley Bank;

 

		(iii)	contemporaneously with the closing of the Mergers, the
Company would execute one or more promissory notes (the “Notes,” together with the Amended Loan Agreement and
the other instruments, documents and agreements described therein, the “Loan Documents”)) in favor of the Lenders,
evidencing its obligations under the Amended Loan Agreement; and

 

		(iv)	after the closing of the Mergers, the Company may obtain
account services from, or enter into interest rate swaps, foreign exchange contracts, or other derivative transactions with, the
Lenders;

 

with the transactions described in
preceding clauses (i) through (iv), together with the other transactions contemplated by the agreements and documents described
therein, being referred to collectively as the “Loan Transactions”; and

 

WHEREAS, the Board has given due consideration
to the proposed Loan Transactions and Loan Documents and to such other factors as the Board has deemed relevant.

 

RESOLVED, that the Board has determined
that the Loan Transactions and the Loan Documents, including the Company’s assumption of the amended Credit Facility, are
in the best interests of the Company;

 

FURTHER RESOLVED, that the consummation
of the Loan Transactions and the performance of the Company’s obligations under the Loan Documents are authorized and approved;

 

    	 

    	 

    

 

FURTHER RESOLVED, that the officers of the
Company be, and each of them acting singly hereby is, expressly delegated authority and directed, in the name and on behalf of
the Company, to execute and deliver the First Amendment to Loan Agreement and the Notes, substantially in the forms attached hereto
as Exhibit C and Exhibit D, respectively, and the other Loan Documents referred to therein or contemplated thereby,
in each case with such modifications thereto as such officer may determine are necessary or advisable, the taking of any such action
and the execution and delivery of any such document to be conclusive evidence of the authority of the officer so acting pursuant
to these resolutions;

 

FURTHER RESOLVED, that the officers of the
Company be, and they hereby are, authorized, empowered and directed for and on behalf of the Company, to do or cause to be done
any and all such acts and things that they may deem necessary, appropriate or desirable in order to enable the Company fully and
promptly to perform all of its obligations under the Loan Documents, including, without limitation, requesting advances, effecting
prepayments, and incurring customary fees, expenses and filing fees in connection with the First Amendment to Loan Agreement; and

 

FURTHER RESOLVED, that the officers of the
Company, or any of them, be, and they hereby are, authorized in their discretion to abandon execution and delivery of the Loan
Documents without any further action by the Board.

 

...

 

General Authority

 

FURTHER RESOLVED, that the officers of the
Company be, and they hereby are, authorized, and directed, in the name and on behalf of the Company, to do and perform, or cause
to be done and performed, any and all such acts, deeds, and things, to make, execute, deliver, register, and file, or cause to
be made, executed, delivered, registered, and filed, all such agreements, undertakings, documents, notices, affidavits, instruments,
or certificates, in the name and on behalf of the Company, to incur and pay all such fees and expenses and to engage such persons
as each such officer may, in the judgment of such officer, deem necessary, proper, or desirable to effectuate or carry out fully
the intent and purposes of the foregoing resolutions, the taking of any such action to be conclusive evidence of the authority
of the officer so acting pursuant to these resolutions;

 

FURTHER RESOLVED, that the Board ratifies
and confirms any and all acts heretofore taken in connection with the foregoing resolutions and otherwise in contemplation of the
Merger, the Private Placement Transaction, the Certificate of Amendment, the Special Meeting and the assumption of the Credit Facility
by the duly elected officers and directors of the Company in good faith in their capacities as such as the valid and binding acts
of the Company duly approved by the Board; and

 

FURTHER RESOLVED, that the officers of the
Company be and are hereby directed to file these resolutions with the corporate records of the Company.

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